Statement of Susan Ramos, Executive Director,
 Booneville/Owsley County Industrial Authority, Booneville, Kentucky,
on behalf of Eastern Kentucky Renewal Community

Testimony Before the Subcommittee on Oversight
of the House Committee on Ways and Means

Hearing on Tax Incentives for Renewal Communities

May 21, 2002

On behalf of the Eastern Kentucky Renewal Community, I am honored to have this opportunity to speak to you concerning our Renewal Communities designation and how we plan to use these incentives to attract business investment into our community.  First, I want to thank the Chairman, all other Committee Members, and other Members of Congress who have worked to make this program possible.  I especially want to thank our Congressional Representative, Hal Rogers, for being here and introducing me today.  We are truly grateful.

You cannot imagine the excitement throughout our communities and the State of Kentucky when we were notified that we were designated a Renewal Community.  We realize that true economic development must come from within and are prepared to carry out the commitments made by the Eastern Kentucky Renewal Community. We have thought long and hard about what it is going to take to renew our community and we take seriously the commitment to make our Renewal Community a success. 

Our first steps have been taken with much enthusiasm and careful consideration.  We wanted our existing businesses and individual community members to know about this designation immediately.  In addition to distributing information to businesses about the substantial business incentives related to the designation, we have made a concerted effort to educate the people of our communities about how this designation will affect them personally as well.  In addition to the tax incentives for business, our local, regional, state, and Federal partners have made a commitment to the people of our community to increase the level and efficiency of local services, increase crime reduction strategies in order to make our communities a safer place to live, increase the economic development activities including access to jobs and job training, and to continue to improve industrial property in order to attract businesses and create much needed jobs.

We know that the majority of our business investment as a result of the Renewal Community incentives will come from our existing small businesses.  Therefore, our immediate reaction to the designation was to begin notifying our small businesses about the availability of these tax incentives.  We created our own unique way of getting the word out.  We ordered hundreds of copies of the IRS Publication 954 and several copies of the Tax Incentive Guide for Business.  This information was distributed by mail, individually, at public meetings, and in local restaurants where many of our business people eat lunch everyday.  This type of interaction has caused at least twenty of our existing businesses to begin seriously considering how they might expand, or how they might be able to hire more employees as a result of this designation.

We are also in the process of creating our Tax Incentive Utilization Plan and a creative marketing campaign to attract new businesses to our community.

Each county is conducting an assessment of buildings that house businesses, or could potentially house businesses, and are in need of major renovation or repair.  We are beginning to contact those building owners to discuss with them the possibilities of taking advantage of the Commercial Revitalization Deduction.  Not only will the owners benefit, but the community image will improve as well. 

Small business is at the heart of our community.  We are making sure that all of them get information about all of the incentives, especially the Renewal Community Wage Credit and the Work Opportunity Tax Credit.  This incentive alone will have a major impact on the profitability and sustainability of our small businesses.  One problem we are facing is that many small businesses, including farms, are family owned and operated.  Therefore, their employees do not qualify for these deductions. 

With our Pine Ridge Regional Industrial Authority, we plan to use the Increased Section 179 Deduction to attract businesses with heavy equipment and machinery needs that will rely on access to major, four-laned highways. 

We realize that we are not tax experts and that we have much to learn about the benefits of this program in order to effectively use the incentives to improve our economy.  So, the University of Kentucky stepped in, along with Morehead State University and the Wolfe County Extension Service, to host the Eastern Kentucky Renewal Community Tax Incentive Seminar.  Linda Schakel, a partner with the Ballard, Andrews and Ingersoll Law Firm in Washington, was the guest speaker.  She did an outstanding job of teaching us all more about these incentives and helping us to stir even more interest from our existing businesses. 

The University of Kentucky, through the Smart Business Recruitment Program, is working in our Renewal Community to help with tourism opportunities and economic development and planning.  They are about to conduct a targeted business/industry analysis, using the tax incentives associated with our designation, in order to create a more effective marketing effort using the incentives.

I have described only a few of our first steps as a Renewal Community and have given you a few examples of how we are using the Renewal Community incentives to attract business investment.  We are already experiencing success as a result of this designation and are excited about our future.

As Chairman Houghton stated in his hearing announcement, “These Renewal Communities are important….We are creating an environment where individuals can lift themselves and their families to a new level of security.”  We have certainly had our share of problems over the years, but as Duke Ellington said, “A problem is a chance for you to do your best.”  We are certainly doing our best, and hope that you are impressed with our achievements.

Again, on behalf of everyone in our Eastern Kentucky Renewal Community, I want to thank you for the opportunity to speak to you today.