FOR IMMEDIATE RELEASE, Contact: (202) 225-7601
March 10, 2000
No. OV-16
Congressman Amo Houghton (R-NY), Chairman, Subcommittee on Oversight of the Committee on Ways and Means, today announced that the Subcommittee will hold a hearing on tax incentives to assist distressed communities. The hearing will take place on Tuesday, March 21, 2000, in room B-318 Rayburn House Office Building, beginning at 2:00 p.m.
Oral testimony at this hearing will be from invited witnesses only. Invited witnesses will include a representative of the U.S. Department of the Treasury, representatives of State and local governments, and community development experts. However, any individual or organization not scheduled for an oral appearance may submit a written statement for consideration by the Committee and for inclusion in the printed record of the hearing.
BACKGROUND:
The Omnibus Budget Reconciliation Act of 1993 (OBRA 93) authorized the U.S. Department of Housing and Urban Development and the U.S. Department of Agriculture to designate 10 empowerment zones (6 urban, 3 rural, and 1 Indian reservation) and 100 enterprise communities (65 urban, 30 rural, and 5 Indian reservations) based on certain eligibility requirements, including specified poverty rates and population and geographic size limits. Qualified businesses operating in these designated areas are eligible for specified tax incentives.
For qualified businesses operating in these empowerment zones, the following tax incentives were established: (1) a 20 percent wage credit for the first $15,000 in wages paid to a zone resident who also worked within the zone, (2) an additional $20,000 limit for expensing under section 179, and (3) special tax-exempt financing. Qualified businesses operating in enterprise communities were eligible for the tax-exempt financing but not the wage credit or additional section 179 expensing limit.
The Tax Relief Act of 1997 (97 Act) established two more urban empowerment zones (effective January 1, 2000) in which qualified businesses would be eligible to use each of the tax incentives created in OBRA 93. The legislation also created 20 additional urban and rural empowerment zones (effective January 1, 1999) in which qualified businesses could utilize the increased 179 expensing limits and the tax-exempt financing, but not the wage credit.
Portions of the District of Columbia were designated an enterprise community in 1994 pursuant to OBRA 93, and qualified businesses were eligible for tax-exempt financing. The 97 Act designated a District enterprise zone which included the enterprise community designated in OBRA 93 and several other tracts. Qualified businesses operating in the newly designated enterprise zone were eligible for each of the tax incentives created in OBRA 93 for empowerment zones. In addition, the 97 Act provided for a 0 percent capital gains rate upon the sale of qualified assets held for five years or longer in the District and a $5,000 credit for first-time home buyers in the District.
Reps. J.C. Watts, Jr. (R-OK) and James M. Talent (R-MO) have introduced H.R. 815, the "American Community Renewal Act of 1999," and Rep. Tom Davis (R-VA) is developing a proposal for the District of Columbia. The Administration has proposed a "New Markets" incentive, extending and expanding the empowerment zone incentives, and expanding specialized small business investment company incentives.
In announcing the hearing, Chairman Houghton stated: "The challenge of revitalizing distressed communities is critically important. I know this first hand because the current economic boom hasn't reached every community in New York's Southern tier. We can't afford to leave anyone behind. We need to take a good look at how well tax incentives in current law are working, as well as proposals to expand incentives to help the communities which need it most."
FOCUS OF THE HEARING:
The hearing will examine the operation of current law tax incentives for distressed communities, as well as several proposals.
DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:
Any person or organization wishing to submit a written statement for the printed record of the hearing should submit six (6) single-spaced copies of their statement, along with an IBM compatible 3.5-inch diskette in WordPerfect or MS Word format, with their name, address, and hearing date noted on a label, by the close of business, Tuesday, April 4, 2000, to A.L. Singleton, Chief of Staff, Committee on Ways and Means, U.S. House of Representatives, 1102 Longworth House Office Building, Washington, D.C. 20515. If those filing written statements wish to have their statements distributed to the press and interested public at the hearing, they may deliver 200 additional copies for this purpose to the Subcommittee on Oversight office, room 1136 Longworth House Office Building, by close of business the day before the hearing.
FORMATTING REQUIREMENTS:
Each statement presented for printing to the Committee by a witness, any written statement or exhibit submitted for the printed record or any written comments in response to a request for written comments must conform to the guidelines listed below. Any statement or exhibit not in compliance with these guidelines will not be printed, but will be maintained in the Committee files for review and use by the Committee.
1. All statements and any accompanying exhibits for printing must be submitted on an IBM compatible 3.5-inch diskette in WordPerfect or MS Word format, typed in single space and may not exceed a total of 10 pages including attachments. Witnesses are advised that the Committee will rely on electronic submissions for printing the official hearing record.
2. Copies of whole documents submitted as exhibit material will not be accepted for printing. Instead, exhibit material should be referenced and quoted or paraphrased. All exhibit material not meeting these specifications will be maintained in the Committee files for review and use by the Committee.
3. A witness appearing at a public hearing, or submitting a statement for the record of a public hearing, or submitting written comments in response to a published request for comments by the Committee, must include on his statement or submission a list of all clients, persons, or organizations on whose behalf the witness appears.
4. A supplemental sheet must accompany each statement listing the name, company, address, telephone and fax numbers where the witness or the designated representative may be reached. This supplemental sheet will not be included in the printed record.
The above restrictions and limitations apply only to material being submitted for printing. Statements and exhibits or supplementary material submitted solely for distribution to the Members, the press, and the public during the course of a public hearing may be submitted in other forms.
The
Committee seeks to make its facilities accessible to persons with
disabilities. If you are in need of special accommodations, please
call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event
(four business days notice is requested). Questions with regard to
special accommodation needs in general (including availability of
Committee materials in alternative formats) may be directed to the
Committee as noted above.