[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3643 Introduced in House (IH)]







105th CONGRESS
  2d Session
                                H. R. 3643

To amend the Internal Revenue Code of 1986 to increase job creation and 
   small business expansion and formation in economically distressed 
                      United States insular areas.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 1, 1998

  Ms. Christian-Green (for herself and Mr. Underwood) introduced the 
 following bill; which was referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to increase job creation and 
   small business expansion and formation in economically distressed 
                      United States insular areas.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. UNITED STATES INSULAR AREA EMPOWERMENT ZONES.

    (a) Designation.--Subsection (b) of section 1391 of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
paragraph:
            ``(3) United states insular area empowerment zones.--
                    ``(A) Designation.--In addition to the areas 
                designated under paragraph (2), the Secretary of 
                Housing and Urban Development shall designate in the 
                aggregate 2 nominated insular areas as empowerment 
                zones under this section, subject to the availability 
                of nominated areas.
                    ``(B) Period designations may be made.--
                Notwithstanding subsection (c), a designation may be 
                made under this paragraph after the date of the 
                enactment of this paragraph and before January 1, 
                2001.''
    (b) Eligibility Criteria.--Subsection (a) of section 1392 of such 
Code is amended by adding at the end the following new paragraph:
            ``(5) United states insular area empowerment zones.--In the 
        case of a nominated insular area under section 1391(b)(3)--
                    ``(A) Population.--Such area has a maximum 
                population of 200,000.
                    ``(B) Size.--Such area is the possession of the 
                United States in its entirety.
                    ``(C) Inapplicable requirements.--Paragraphs (1), 
                (3), and (4) shall not apply.''
    (c) Definitions and Special Rules.--Subsection (a) of section 1393 
of such Code is amended by adding at the end the following new 
paragraph:
            ``(10) Special rule for insular areas.--In the case of 
        insular areas--
                    ``(A) Appropriate secretary.--The term `appropriate 
                Secretary' means the Secretary of Housing and Urban 
                Development.
                    ``(B) Nominated area.--The term `nominated area' 
                means a nominated insular area.
                    ``(C) Nominated insular area.--The term `nominated 
                insular area' means an insular area which is nominated 
                for designation under section 1391(b)(3).
                    ``(D) State.--The term `State' includes an insular 
                area of the United States.''
    (d) Limitation on Amount of Tax-Exempt Enterprise Zone Facility 
Bonds.--Subsection (c) of section 1394 of such Code is amended by 
adding at the end the following new paragraph:
            ``(3) Special rule for united states insular area 
        empowerment zone.--In the case of an empowerment zone 
        designated under section 1391(b)(3), paragraph (1)(A) shall be 
        applied by substituting `$1,000,000' for `$3,000,000'.''
    (e) Applicable Percentage Relating to Empowerment Zone Employment 
Credit.--
            (1) In general.--Subsection (b) of section 1396 of such 
        Code is amended by adding at the end the following new 
        paragraph:
            ``(2) Special Rule for united states insular areas.--With 
        respect to each empowerment zone designated pursuant to section 
        1391(b)(3), the following table shall apply in lieu of the 
        table in paragraph (1):

        ``In the case of wages paid or
                                                         The applicable
          incurred during calendar year--
                                                        percentage is--
            2000 through 2004..............................       20   
            2005...........................................       15   
            2006...........................................       10   
            2007...........................................     5.''.  

            (2) Conforming amendment.--Paragraph (1) of section 1396(b) 
        of such Code is amended by striking ``paragraph (2)'' and 
        inserting ``paragraphs (2) and (3)''.
    (f) Definition of Insular Area.--Subsection (a) of section 7701 of 
such Code is amended by adding at the end the following new paragraph:
            ``(47) Insular area.--The term `insular area' means a 
        possession of the United States.''.
    (g) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
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