Rural Enterprise Zone Act of 1989

Rural Enterprise Zone Act of 1989 - Title I: Designation of Rural Enterprise Zones - Amends the Internal Revenue Code to authorize the Secretary of Housing and Urban Development (Secretary) to designate rural enterprise zones for purposes of providing tax and regulatory relief and improving local services. Limits choices to areas nominated by States and local governments. Limits to 45 the total number of areas that may be designated, and the time period of the designation. Effects a designation only after the appropriate State or local government submits an inventory of the area's historic properties.

Authorizes the Secretary to designate a zone only if the area meets certain locational, demographic, unemployment, and poverty criteria. Requires nominating local governments, as a condition of the Secretary's designation, to agree in writing to follow a course of action that may include reducing tax rates, improving local services, simplifying or streamlining regulation of business, and providing job training to area residents.

Describes areas to which the Secretary must give preference in selecting areas for designation.

Requires the Secretary to report to the Congress every three years on the effects of such enterprise zones' designation in accomplishing the purposes of this Act.

Title II: Federal Income Tax Incentives - Subtitle A: Credits for Employers - Allows employers located in rural enterprise zones a ten percent income tax credit for qualified increased employment expenditures.

Subtitle B: Deferrals of Gain or Loss With Respect to Investment in Tangible Property in Rural Enterprise Zones - Allows the nonrecognition of gain on the sale or exchange of rural enterprise zone property if, within one year, the taxpayer uses the proceeds to acquire rural enterprise zone property. Permits property to remain qualified for purposes of such capital gains treatment after enterprise zone designation has been terminated, in certain cases.

Subtitle C: Rules Relating to Private Activity Bonds - Exempts: (1) rural enterprise zone property from limitations on the cost recovery deductions for property financed with tax-exempt bonds; and (2) bonds whose proceeds are used to finance rural enterprise facilities from termination of the small issue exemption. Requires that five percent of the private activity bond volume cap for a State that has one or more rural enterprise zones be set aside exclusively for use in these zones.

Subtitle D: Sense of the Congress with Respect to Tax Simplification - Expresses the sense of the Congress that the Secretary of the Treasury should simplify the administration and enforcement of any provision of the Internal Revenue Code affected by this Act.

Title III: Regulatory Flexibility - Amends Federal law to revise the definition of "small entity" for purposes of the analysis of regulatory functions to include qualified business, government, and nonprofit enterprises operating within rural enterprise zones.

Authorizes Federal agencies, upon request by a designating government, to waive or modify rules and regulations pertaining to the implementation of projects or activities within an enterprise zone. Requires agencies to approve the request if the resulting benefits of job creation, community development, or economic revitalization outweigh the public interest in retaining the rule unchanged.

Disallows waiver or modification of a rule that would directly violate a statutory requirement or present a danger to the public health and safety.

Amends the Department of Housing and Urban Development Act to direct the Secretary of Housing and Urban Development to promote the coordination of all enterprise zone programs and to consolidate all periodic reports required under such programs into one summary report.

Title IV: Establishment of Foreign-Trade Zones in Rural Enterprise Zones - Requires the Foreign-Trade Zone Board to consider on a priority basis and to expedite the processing of applications for the establishment of foreign-trade zones within rural enterprise zones. Requires the Secretary of the Treasury to give priority to, and expedite applications for, the establishment of ports of entry necessary to establish such zones.

Title V: Responsibilities of Federal Agencies in Rural Enterprise Zones - Directs each Federal agency, to the extent consistent with its primary mission, to seek to assist rural enterprise zones by appropriate means, including: (1) expedited processing; (2) priority funding; (3) program set-asides; and (4) technical assistance.