Rural Enterprise Zone Development Act of 1981

Rural Enterprise Zone Development Act of 1981 - Title I: Declares the purpose of this Act to be to provide financial and technical assistance and tax incentives to help restore distressed rural areas.

Amends the Agricultural Act of 1961 to define "rural enterprise zone" (zone) as an area under at least one local government's jurisdiction with a population density of less than 200 people per square mile and a total population of between 5,000 and 50,000 people.

Requires a local entity to submit a zone plan to the Secretary of Agriculture for approval. Authorizes the Secretary to make: (1) development facility grants; (2) vocational education and agricultural extension service center loans; and (3) industrial and commercial activity loans and loan guarantees. Limits the number of annual zone designations. Authorizes appropriations for fiscal years 1983-1984.

Authorizes the Secretary of Commerce to make technical assistance grants and provide related aid to rural enterprise zones. Authorizes appropriations for fiscal years 1983-1984.

Title II: Tax Incentives for Small Businesses Located in Rural Enterprise Zones - Small Rural Business Program Tax Act of 1981 - Subtitle A: Designation of Eligible Areas and Businesses - Amends the Internal Revenue Code to add a new subchapter which sets forth criteria for the designation of rural enterprise zones and defines qualified small rural businesses for purposes of providing tax incentives for such businesses.

Empowers the Secretary of Agriculture to approve the designation of an area as a rural enterprise zone if a local government submits to the Secretary a plan which meets specified requirements for the establishment of such zones. Limits the number of zones which the Secretary may designate in any calendar year. Sets forth criteria relating to population, poverty, unemployment, and per capital income growth which the Secretary must consider in approving the designation of a rural enterprise zone.

Defines a "qualified small rural business" (small rural business) as an actively conducted trade or business which employs individuals who perform a specified number of hours of service for the business in a rural enterprise zone. Disqualifies any business which has had gross receipts in excess of $2,000,000 for any of the three preceding taxable years.

Subtitle B: Tax Incentives for Qualified Small Rural Businesses - Amends the Internal Revenue Code to reduce the capital gains tax rates of small rural businesses and investors in rural enterprise zones. Exempts the capital gains of small rural businesses from the minimum tax.

Excludes from gross income 50 percent of the total of small rural business income for a taxable year and interest on loans made to such businesses to finance business activity in a rural enterprise zone.

Allows small rural businesses a five percent tax credit for interest paid on loans used to finance business activity in a rural enterprise zone.

Allows a targeted jobs income tax credit for the hiring of employees for a small rural business.

Allows a small rural businesses and their employees a refundable income tax credit for training designed to improve the technical and managerial skills of such employees.

Allows a small rural business to elect to use the cash method of accounting. Authorizes accelerated depreciation for small rural business property. Increases by ten percent the investment tax credit for the rehabilitation expenditures of a small rural business.