PACT Frequently Asked Questions

State agencies set the specific rules and processes controlling federal funding for many important services, including Medicare and Medicaid, Transitional Assistance for Needy Families, the Supplemental Nutrition Assistance Program (SNAP) and its Employment and Training component, Community Action Program, Workforce Innovation Act funding, Title I education grants and Community Development Block Grant and HOME Investment Partnerships programs. Within federal statutes and regulations governing this funding, states establish an administrative structure of local organizations, both public and private, that deliver the services. To the extent that Promise Zone strategies require federal action with respect to these programs, the participating federal agencies will consider such requests from the affected state agencies and the local organizations charged with program delivery. Such requests will be considered in the context of specific commitments to results, and the tracking of outcomes for assessment by all Promise Zone stakeholders and agencies.

The Promise Zone initiative supports local stakeholders who have come together to produce results, and who demonstrate commitment to stay the course. Commitment by local government to the goals of community revitalization – including creating jobs, increasing economic activity, increasing educational opportunities, reducing serious and violent crime, and leveraging private resources – is recognized as a major success factor in the sustainability and success of this work. Demonstrations of commitment by local government are weighted according to this importance in the selection criteria for the 2013 round of Promise Zones (see The opportunity to apply for a Promise Zone designation provides interested urban, rural and tribal communities and non-governmental partners with the opportunity to engage local government leadership and discuss the working relationship and commitments that would be necessary for success.

All partner agencies are eligible to receive Promise Zone benefits. However, the lead applicant of the Promise Zone will have to certify the partnership through a partner agreement. The agreement will have to be included in any future grant applications or request for benefits.

Preference points and priority considerations awarded under Promise Zones will be targeted to a broader set of programs related to place-based initiatives (beyond Promise Neighborhoods, Choice Neighborhoods and Byrne Criminal Justice Innovation) and with more weight than through the process used by Promise Neighborhoods, Choice Neighborhoods, and Byrne Criminal Justice Innovation.

Promise Zone designations will have a term of 10 years, and will be extended as necessary to capture the full term of availability of the Promise Zone tax incentives, if enacted.

Should Congress enact the Administration’s Promise Zones tax incentive proposal, private businesses would receive tax incentives for employing and investing in Promise Zones, to create jobs and attract additional private investments. The tax incentives would be available to businesses employing Promise Zone residents or investing in a geographic area encompassing the Promise Zone, and extending into a surrounding area not to exceed the eligible size and population as described in the Administration’s FY14 revenue proposals ( The maximum population of the area in which a Promise Zone tax incentive can be claimed is 200,000; Promise Zones can have smaller populations. Under the Administration’s proposal the Promise Zone tax incentives will remain available to businesses for 10 years.

When a Promise Zone is designated, the federal government will help them in their efforts to access the resources they need to carry out the strategic plan for which they were competitively selected. This doesn’t mean that the Promise Zone will be able to access any funding they request, but they will be provided preferred access, as permissible under program rules, to the federal resources required to carry out their competitively selected strategic plan, which could include resources from the following programs and offices.

  • Department of Housing and Urban Development: Choice Neighborhoods; Rental Assistance Demonstration;Neighborhood Stabilization Initiative; Integrated Planning and Implementation Strategy grants
  • Small Business Administration: Micro Entrepreneurship Initiative; HUBZone Program; Women’s BusinessCenter counseling/training; Start Young Initiative; Office of Native American Affairs technical assistance
  • Department of Justice: Byrne Criminal Justice Innovation Program; COPS Hiring Program
  • Department of Labor: Opportunity Youth Demonstration Project; YouthBuild; Reintegration of Ex-Offenders
  • Department of Treasury: Healthy Food Financing Initiative
  • Department of Health and Human Services: Community Health Centers; Community Services Block Grant;Healthy Start; Assets for Independence
  • Department of Agriculture: Community Facilities Grant Program; Self-Help Section 523 Technical AssistanceGrants; Housing Preservation Grant; Rural Community Development Initiative
  • Department of Commerce: Economic Development Assistance Program
  • Department of Education: Supplemental priority for certain K-12 and higher education competitive grantprograms, including Promise Neighborhoods
  • Corporation for National and Community Service: AmeriCorps VISTA

Promise Zones will not receive direct funding, but will benefit from technical assistance, federal staff support, and more extensive preference points and access to other federal grant programs. Should Congress enact proposed Promise Zone tax credits, private businesses would receive tax incentives for hiring and investing in Promise Zones.

The Promise Zones initiative will revitalize high-poverty communities across the country by attracting private investment, improving affordable housing, improving educational opportunities, providing tax incentives for hiring workers and investing in the Promise Zones, reducing violent crime, and assisting local leaders in navigating federal programs and cutting through red tape.

The Obama Administration will designate 20 communities over the next four years – including up to five this year – with this intense and layered approach to community revitalization.

That approach includes working with local leadership, and bringing to bear the resources of a number of the President’s signature revitalization initiatives from the Department of Education (ED), the Department of Housing and Urban Development (HUD), the Department of Agriculture, and the Department of Justice (DOJ), to ensure that federal programs and resources support the efforts to turn around 20 of the highest poverty urban, rural and tribal communities across the country.

The Administration will designate each of these Promise Zones through a transparent, competitive process. Urban neighborhoods, rural communities or tribal communities designated as Promise Zones will receive:

Promise Zones tax incentives, if enacted: Should Congress enact the Promise Zones tax credit (crafted on the proven model of Empowerment Zones tax credits), private businesses would receive tax incentives for hiring and investing in Promise Zones, to create jobs and attract additional private investments

Intensive Federal partnership: Through teams of federal staff that collaborate with the Promise Zone community and provide specialized technical assistance, these partnerships help communities break down regulatory and bureaucratic barriers, use existing funds more effectively, and implement their local revitalization visions.

The purpose of direct engagement between federal agencies and Promise Zone communities is to mirror at the federal level the capacity and drive that designated communities must have to get the job done. The approach will smooth the way for problem solving among siloed federal programs, identify ways to use existing funding allocations more efficiently, and expedite consideration of waivers of federal provisions where necessary and appropriate. The direct engagement will also allow peer exchange and technical assistance as the project moves through its various phases and focus areas.

Additional proven tools: Promise Zones will have increased access to investments that further the goals of job creation, additional private investment, increased economic activity, improved educational opportunity, and reduction in violent crime. Designees will receive competitive preference priority (e.g. additional points in competitions) for the Administration’s signature place-based investments. These funding sources will include:

    • Choice Neighborhoods (HUD): Choice Neighborhoods supports locally driven solutions fortransforming high-poverty neighborhoods by revitalizing distressed housing, improving educationalopportunities, and increasing local economic activity.
    • Promise Neighborhoods (ED): Based on the work of the Harlem Children’s Zone, PromiseNeighborhoods builds a pipeline from the earliest ages of educational support services around astrong school environment, focused on the goal of high school graduation and college matriculationfor every student.
    • Byrne Criminal Justice Innovation (DOJ): Targets neighborhoods with hot spots of violent andserious crime by employing data-driven, cross-sector strategies that show evidence of impact inreducing crime and violence

Preference points, technical assistance, access to grantee networks and other benefits will be directed to Promise Zones from additional federal programs at the Small Business Administration, Department of Labor, Department of Health and Human Services, Department of Agriculture, Department of Justice, Department of Housing and Urban Development, Department of Education and potentially other federal agencies.

The Promise Zones designation creates a mechanism for the federal government to partner with local leaders who are addressing multiple community revitalization challenges with on-the-ground technical assistance to help navigate federal programs and regulations. This intensive engagement will help communities make the most of funding that may already be available. Promise Zone designees will also receive, through upcoming federal competitive grant competitions, increased access to proven tools to help them carry out their strategies. Promise Zone designees will also receive, if enacted by Congress, employer tax incentives to create jobs for Zone residents and attract private capital to disinvested places. Altogether, this package of proven tools will help local leaders accelerate efforts to revitalize their communities.

The Promise Zones initiative is part of President Obama’s Ladders of Opportunity agenda, which holds that there’s a basic bargain in America. It says that no matter who you are or where you’re from, if you’re willing to work hard and play by the rules, you should be able to find a good job, feel secure in your community, and support a family. President Obama has fought for the middle class, and has made historic investments in making sure that there are ladders of opportunity for those working hard to make it to the middle class.

The President’s Ladders of Opportunity plan:

    • Rewards hard work by raising the minimum wage to $9.00: Right now, a full-time minimum wage worker makes $14,500 a year. That means too many Americans who are putting in an honest, hard day’s work areliving in poverty. That’s unacceptable. The President’s plan raises the minimum wage from $7.25 to $9.00,which would directly boost wages for 15 million workers and reduce poverty and inequality.
    • Provides high-quality preschool for every child: Let’s give every child the fair shot he or she deserves. For America to succeed in the 21st century, we must have the most dynamic, educated workforce in the world,and that education has to start early in life. But today, most four-year-olds aren’t in a high-quality public preschool program. The President’s plan partners with states to expand high-quality preschool to every child. In addition to providing access to high-quality preschool for every child, the President is proposing to make a significant investment in early learning opportunities for our youngest children—birth through age three—by expanding Early Head Start, child care, and other health and education programs.
    • Partners with communities to help them rebuild and put people back to work: A child’s zip code should never determine her destiny; but today, the community she grows up in impacts her odds of graduating high school, her health outcomes, and her lifetime economic opportunities. This year, the Administration will begin to partner with 20 communities that were hardest-hit by the recession to help get them back on their feet. Working with local leaders, the President’s plan targets resources at creating jobs, public safety,education, and housing.
    • Creates pathways to jobs for all Americans: The President’s plan offers incentives to companies that hire Americans who’ve got what it takes to fill a job opening, but have been out of work so long that no one will give them a chance anymore. His plan also supports summer and year-round jobs for low-income youth. This is in addition to his plan to equip Americans with the skills they need for the high-tech, high-wage jobs of the 21st century.
    • Strengthens families: The President is proposing to remove financial deterrents to marriage for low-income couples; as well as continuing to support the critical role that fathers play in enhancing the intellectual,emotional, and financial well-being of their sons and daughters.

Under the Promise Zones initiative, the federal government will invest and partner with high-poverty urban, rural, and tribal communities to create jobs, increase economic activity, improve educational opportunities, leverage private investment, and reduce violent crime.