[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 23 Introduced in Senate (IS)]







106th CONGRESS
  1st Session
                                 S. 23

         To promote a new urban agenda, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            January 19, 1999

Mr. Specter (for himself and Mr. Durbin) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
         To promote a new urban agenda, and for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``New Urban Agenda 
Act of 1999''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings and purposes.
       TITLE I--FEDERAL COMMITMENT TO URBAN ECONOMIC DEVELOPMENT

Sec. 101. Federal purchases from businesses in empowerment zones and 
                            enterprise communities.
Sec. 102. Minimum allocation of foreign assistance for purchase of 
                            certain United States goods.
Sec. 103. Preference for location of manufacturing outreach centers in 
                            urban areas.
Sec. 104. Preference for construction and improvement of Federal 
                            facilities in distressed urban areas.
Sec. 105. Definitions.
    TITLE II--TAX INCENTIVES TO STIMULATE URBAN ECONOMIC DEVELOPMENT

Sec. 201. Treatment of rehabilitation credit under passive activity 
                            limitations.
Sec. 202. Rehabilitation credit allowed to offset portion of 
                            alternative minimum tax.
Sec. 203. Commercial industrial development bonds.
Sec. 204. Increase in amount of qualified small issue bonds permitted 
                            for facilities to be used by related 
                            principal users.
Sec. 205. Simplification of arbitrage interest rebate waiver.
Sec. 206. Qualified residential rental project bonds partially exempt 
                            from State volume cap.
Sec. 207. Expansion of qualified wages subject to work opportunity 
                            credit.
Sec. 208. Exclusion for capital gains on certain investments within 
                            empowerment zones and enterprise 
                            communities.
             TITLE III--COMMUNITY-BASED HOUSING DEVELOPMENT

Sec. 301. Block grant study.
          TITLE IV--RESPONSE TO URBAN ENVIRONMENTAL CHALLENGES

Sec. 401. Release from liability of persons that fulfill requirements 
                            of State and local law.
Sec. 402. Brownfield program.
Sec. 403. Reauthorization of urban and community forestry assistance 
                            program.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--The Congress finds that--
            (1) cities in the United States have been facing an 
        economic downhill trend in the past several years; and
            (2) a new approach to help such cities prosper is 
        necessary.
    (b) Purposes.--It is the purpose of this Act to--
            (1) provide various incentives for the economic growth of 
        cities in the United States;
            (2) provide an economic agenda designed to reverse current 
        urban economic trends; and
            (3) revitalize the jobs and tax base of such cities without 
        significant new Federal outlays.

       TITLE I--FEDERAL COMMITMENT TO URBAN ECONOMIC DEVELOPMENT

SEC. 101. FEDERAL PURCHASES FROM BUSINESSES IN EMPOWERMENT ZONES AND 
              ENTERPRISE COMMUNITIES.

    (a) Requirements.--The Office of Federal Procurement Policy Act (41 
U.S.C. 401 et seq.) is amended by adding at the end the following new 
section:

     ``purchases from businesses in empowerment zones, enterprise 
                   communities, and enterprise zones

    ``Sec. 40. (a) Minimum Purchase Requirement.--Not less than 15 
percent of the total amount expended by executive agencies for the 
purchase of goods in a fiscal year shall be expended for the purchase 
of goods from businesses located in empowerment zones or enterprise 
communities.
    ``(b) Recycled Products.--To the maximum extent practicable 
consistent with applicable law, the head of an executive agency shall 
purchase recycled products that meet the needs of the executive agency 
from businesses located in empowerment zones or enterprise communities.
    ``(c) Regulations.--The Federal Acquisition Regulation shall 
include provisions that ensure the attainment of the minimum purchase 
requirement set out in subsection (a).
    ``(d) Definitions.--In this section:
            ``(1) The term `empowerment zone' means a zone designated 
        as an empowerment zone pursuant to subchapter U of chapter 1 of 
        the Internal Revenue Code of 1986 (26 U.S.C. 1391 et seq.).
            ``(2) The term `enterprise community' means a community 
        designated as an enterprise community pursuant to subchapter U 
        of chapter 1 of the Internal Revenue Code of 1986 (26 U.S.C. 
        1391 et seq.).''
    (b) GSA Assessment.--(1) Not later than December 31, 1999, the 
Administrator of General Services shall submit to Congress, in writing, 
the Administrator's assessment of the extent to which executive 
agencies are committed, by policy and practice, to encouraging and 
supporting economic renewal in empowerment zones and enterprise 
communities.
    (2) In this subsection, the term ``executive agency'' has the 
meaning given such term in section 4(1) of the Office of Federal 
Procurement Policy Act (41 U.S.C. 403(1)).
    (c) Effective Date.--Section 40 of the Office of Federal 
Procurement Policy Act, as added by subsection (a), shall take effect 
on the date of the enactment of this Act and shall apply with respect 
to fiscal years beginning after September 30, 1999.
    (d) Conforming Amendment.--The table of contents in section 1(b) of 
the Office of Federal Procurement Policy Act is amended by adding at 
the end the following new item:

``Sec. 40. Purchases from businesses in empowerment zones, enterprise 
                            communities and enterprise zones.''

SEC. 102. MINIMUM ALLOCATION OF FOREIGN ASSISTANCE FOR PURCHASE OF 
              CERTAIN UNITED STATES GOODS.

    (a) Allocation of Assistance.--Notwithstanding any other provision 
of law, effective beginning with fiscal year 2000, not less than 15 
percent of United States assistance provided in a fiscal year shall be 
provided in the form of credits which may only be used for the purchase 
of United States goods produced, manufactured, or assembled in 
empowerment zones or enterprise communities within the United States.
    (b) United States Assistance.--As used in this section, the term 
``United States assistance'' means--
            (1) any assistance under the Foreign Assistance Act of 1961 
        (22 U.S.C. 2151 et seq.);
            (2) sales or financing of sales under the Arms Export 
        Control Act (22 U.S.C. 2751 et seq.); and
            (3) assistance and other activities under the Support for 
        East European Democracy (SEED) Act of 1989 (22 U.S.C. 5401 et 
        seq.).

SEC. 103. PREFERENCE FOR LOCATION OF MANUFACTURING OUTREACH CENTERS IN 
              URBAN AREAS.

    (a) Designation.--In designating an organization as a manufacturing 
outreach center under subsection (c)(11) of section 5 of the Stevenson-
Wydler Technology Innovation Act of 1980 (15 U.S.C. 3704), the 
Secretary of Commerce shall, to the maximum extent practicable, 
designate organizations that are located in empowerment zones or 
enterprise communities.
    (b) Financial Assistance.--In utilizing a competitive, merit-based 
review process to determine the manufacturing outreach centers to which 
to provide financial assistance under such section, the Secretary shall 
give such additional preference to centers located in empowerment zones 
and enterprise communities as the Secretary determines appropriate in 
order to ensure the continuing existence of such centers in such zones 
and communities.

SEC. 104. PREFERENCE FOR CONSTRUCTION AND IMPROVEMENT OF FEDERAL 
              FACILITIES IN DISTRESSED URBAN AREAS.

    (a) Definitions.--In this section:
            (1) Distressed urban area.--The term ``distressed urban 
        area'' means a city having a population of more than 100,000 
        that, as determined by the Secretary of Housing and Urban 
        Development, meets the qualifications for making an urban 
        development action grant to a community experiencing severe 
        economic distress established for large cities and urban 
        counties under subpart G of part 570 of title 24, Code of 
        Federal Regulations (as in effect on April 1, 1998).
            (2) Executive agency.--The term ``Federal agency'' means an 
        Executive agency (as defined in section 105 of title 5, United 
        States Code).
            (3) Facility.--The term ``facility'' means any place where 
        employees of a Federal agency are regularly employed.
    (b) Preference.--Notwithstanding any other provision of law, in 
determining the location for the construction of a new facility of an 
Executive agency, in determining to improve an existing facility, or in 
determining the location to which to relocate functions of an Executive 
agency, the head of the Federal agency making the determination shall 
make best efforts to construct or improve the facility or to relocate 
the functions in a distressed urban area.
    (c) Urban Impact Statement.--A determination to construct a new 
facility of an Executive agency, to improve an existing facility, or to 
relocate the functions of an Executive agency shall not be made until 
the head of the Executive agency making the determination submits to 
the President a report that--
            (1) in the case of a facility to be constructed--
                    (A) identifies at least 1 distressed urban area 
                that would be an appropriate location for the facility;
                    (B) describes the costs and benefits arising from 
                the construction and use of the facility in the 
                distressed urban area, including the effects of the 
                construction and use on the rate of unemployment in the 
                distressed urban area; and
                    (C) describes the effect on the economy of the area 
                of the closure or consolidation, if any, of facilities 
                located in the distressed urban area during the 10-year 
                period ending on the date of the report, including the 
                number of Federal and non-Federal employment positions 
                terminated in the distressed urban area as a result of 
                the closure or consolidation;
            (2) in the case of a facility to be improved that is not 
        located in a distressed urban area--
                    (A) identifies at least 1 facility located in a 
                distressed urban area that would serve as an 
                appropriate alternative location for the facility;
                    (B) describes the costs and benefits arising from 
                the improvement and use of the facility located in the 
                distressed urban area as an alternative location for 
                the facility to be improved, including the effect of 
                the improvement and use of the facility on the rate of 
                unemployment in the distressed urban area; and
                    (C) describes the effect on the economy of the 
                distressed urban area of the closure or consolidation, 
                if any, of facilities located in the distressed urban 
                area during the 10-year period ending on the date of 
                the report, including the number of Federal and non-
                Federal employment positions terminated in the 
                distressed urban area as a result of the closure or 
                consolidation;
            (3) in the case of a facility to be improved that is 
        located in a distressed urban area--
                    (A) describes the costs and benefits arising from 
                the improvement and continuing use of the facility in 
                the distressed urban area, including the effect of the 
                improvement and continuing use on the rate of 
                unemployment in the distressed urban area; and
                    (B) describes the effect on the economy of the 
                distressed urban area of the closure or consolidation, 
                if any, of facilities located in the distressed urban 
                area during the 10-year period ending on the date of 
                the report, including the number of Federal and non-
                Federal employment positions terminated in the 
                distressed urban area as a result of the closure or 
                consolidation; or
            (4) in the case of a relocation of functions--
                    (A) identifies at least 1 distressed urban area 
                that would serve as an appropriate location for the 
                carrying out of the functions;
                    (B) describes the costs and benefits arising from 
                carrying out the functions in the distressed urban 
                area, including the effect of carrying out the 
                functions on the rate of unemployment in the distressed 
                urban area; and
                    (C) describes the effect on the economy of the 
                distressed urban area of the closure or consolidation, 
                if any, of facilities located in the distressed urban 
                area during the 10-year period ending on the date of 
                the report, including the number of Federal and non-
                Federal employment positions terminated in the 
                distressed urban area as a result of such closure or 
                consolidation.
    (d) Applicability to Department of Defense Facilities.--The 
requirements set forth in subsections (b) and (c) shall not apply to a 
determination to construct or improve a facility of the Department of 
Defense, or to relocate any functions of the Department of Defense, if 
the President determines that the waiver of the application of the 
requirements to that facility or relocation is in the national 
interest.

SEC. 105. DEFINITIONS.

    As used in this title:
            (1) The term ``empowerment zone'' means a zone designated 
        as an empowerment zone pursuant to subchapter U of chapter 1 of 
        the Internal Revenue Code of 1986 (26 U.S.C. 1391 et seq.).
            (2) The term ``enterprise community'' means a community 
        designated as an enterprise community pursuant to subchapter U 
        of chapter 1 of the Internal Revenue Code of 1986 (26 U.S.C. 
        1391 et seq.).

    TITLE II--TAX INCENTIVES TO STIMULATE URBAN ECONOMIC DEVELOPMENT

SEC. 201. TREATMENT OF REHABILITATION CREDIT UNDER PASSIVE ACTIVITY 
              LIMITATIONS.

    (a) General Rule.--Paragraphs (2) and (3) of section 469(i) of the 
Internal Revenue Code of 1986 (relating to $25,000 offset for rental 
real estate activities) are amended to read as follows:
            ``(2) Dollar limitations.--
                    ``(A) In general.--Except as otherwise provided in 
                this paragraph, the aggregate amount to which paragraph 
                (1) applies for any taxable year shall not exceed 
                $25,000, reduced (but not below zero) by 50 percent of 
                the amount (if any) by which the adjusted gross income 
                of the taxpayer for the taxable year exceeds $100,000.
                    ``(B) Phaseout not applicable to low-income housing 
                credit.--In the case of the portion of the passive 
                activity credit for any taxable year which is 
                attributable to any credit determined under section 
                42--
                            ``(i) subparagraph (A) shall not apply, and
                            ``(ii) paragraph (1) shall not apply to the 
                        extent that the deduction equivalent of such 
                        portion exceeds--
                                    ``(I) $25,000, reduced by
                                    ``(II) the aggregate amount of the 
                                passive activity loss (and the 
                                deduction equivalent of any passive 
                                activity credit which is not so 
                                attributable and is not attributable to 
                                the rehabilitation credit determined 
                                under section 47) to which paragraph 
                                (1) applies after the application of 
                                subparagraph (A).
                    ``(C) $55,500 limit for rehabilitation credits.--In 
                the case of the portion of the passive activity credit 
                for any taxable year which is attributable to the 
                rehabilitation credit determined under section 47--
                            ``(i) subparagraph (A) shall not apply, and
                            ``(ii) paragraph (1) shall not apply to the 
                        extent that the deduction equivalent of such 
                        portion exceeds--
                                    ``(I) $55,500, reduced by
                                    ``(II) the aggregate amount of the 
                                passive activity loss (and the 
                                deduction equivalent of any passive 
                                activity credit which is not so 
                                attributable) to which paragraph (1) 
                                applies for the taxable year after the 
                                application of subparagraphs (A) and 
                                (B).
            ``(3) Adjusted gross income.--For purposes of paragraph 
        (2)(A), adjusted gross income shall be determined without 
        regard to--
                    ``(A) any amount includable in gross income under 
                section 86,
                    ``(B) any amount excludable from gross income under 
                section 135, 911, 931, or 933,
                    ``(C) any amount allowable as a deduction under 
                section 219, and
                    ``(D) any passive activity loss.''
    (b) Conforming Amendments.--
            (1) Subparagraph (B) of section 469(i)(4) of the Internal 
        Revenue Code of 1986 is amended to read as follows:
                    ``(B) Reduction for surviving spouse's exemption.--
                For purposes of subparagraph (A), the $25,000 amounts 
                under paragraphs (2)(A) and (2)(B)(ii) and the $55,500 
                amount under paragraph (2)(C)(ii) shall each be reduced 
                by the amount of the exemption under paragraph (1) 
                (determined without regard to the reduction contained 
                in paragraph (2)(A)) which is allowable to the 
                surviving spouse of the decedent for the taxable year 
                ending with or within the taxable year of the estate.''
            (2) Subparagraph (A) of section 469(i)(5) of such Code is 
        amended by striking clauses (i), (ii), and (iii) and inserting 
        the following:
                            ``(i) `$12,500' for `$25,000' in 
                        subparagraphs (A) and (B)(ii) of paragraph (2),
                            ``(ii) `$50,000' for `$100,000' in 
                        paragraph (2)(A)'', and
                            ``(iii) `$27,750' for `$55,500' in 
                        paragraph (2)(C)(ii).''
            (3) The subsection heading for subsection (i) of section 
        469 of such Code is amended by striking ``$25,000''.
    (c) Effective Date.--The amendments made by this section shall 
apply to property placed in service on or after the date of enactment 
of this Act, in taxable years ending on or after such date.

SEC. 202. REHABILITATION CREDIT ALLOWED TO OFFSET PORTION OF 
              ALTERNATIVE MINIMUM TAX.

    (a) In General.--Section 38(c) of the Internal Revenue Code of 1986 
(relating to limitation based on amount of tax) is amended by 
redesignating paragraph (3) as paragraph (4) and by inserting after 
paragraph (2) the following:
            ``(3) Rehabilitation investment credit may offset portion 
        of minimum tax.--
                    ``(A) In general.--In the case of the 
                rehabilitation investment tax credit--
                            ``(i) this section and section 39 shall be 
                        applied separately with respect to such credit, 
                        and
                            ``(ii) for purposes of applying paragraph 
                        (1) to such credit--
                                    ``(I) the tentative minimum tax 
                                under subparagraph (A) thereof shall be 
                                reduced by the minimum tax offset 
                                amount determined under subparagraph 
                                (B) of this paragraph, and
                                    ``(II) the limitation under 
                                paragraph (1) (as modified by subclause 
                                (I)) shall be reduced by the credit 
                                allowed under subsection (a) for the 
                                taxable year (other than the 
                                rehabilitation investment tax credit).
                    ``(B) Minimum tax offset amount.--For purposes of 
                subparagraph (A)(ii)(I), the minimum tax offset amount 
                is an amount equal to--
                            ``(i) in the case of a taxpayer not 
                        described in clause (ii), the lesser of--
                                    ``(I) 25 percent of the tentative 
                                minimum tax for the taxable year, or
                                    ``(II) $20,000, or
                            ``(ii) in the case of a C corporation other 
                        than a closely held C corporation (as defined 
                        in section 469(j)(1)), 5 percent of the 
                        tentative minimum tax for the taxable year.
                    ``(C) Rehabilitation investment tax credit.--For 
                purposes of this paragraph, the term `regular 
                investment tax credit' means the portion of the credit 
                under subsection (a) which is attributable to the 
                credit determined under section 47.''
    (b) Conforming Amendment.--Section 38(d) of the Internal Revenue 
Code of 1986 (relating to components of investment credit) is amended 
by adding at the end the following:
            ``(4) Special rule for rehabilitation credit.--
        Notwithstanding paragraphs (1) and (2), the rehabilitation 
        investment tax credit (as defined in subsection (c)(2)(C)) 
        shall be treated as used last.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1998.

SEC. 203. COMMERCIAL INDUSTRIAL DEVELOPMENT BONDS.

    (a) Facility Bonds.--
            (1) In general.--Subsection (a) of section 142 of the 
        Internal Revenue Code of 1986 (relating to exempt facility 
        bond) is amended by striking ``or'' at the end of paragraph 
        (11), by striking the period at the end of paragraph (12) and 
        inserting a comma, and by adding at the end the following:
            ``(13) sports facilities,
            ``(14) convention or trade show facilities,
            ``(15) freestanding parking facilities,
            ``(16) air or water pollution control facilities, or
            ``(17) industrial parks.''
            (2) Industrial parks defined.--Section 142 of such Code is 
        amended by adding at the end the following:
    ``(k) Industrial Parks.--A facility shall be treated as described 
in subsection (a)(17) only if all of the property to be financed by the 
net proceeds of the issue--
            ``(1) is--
                    ``(A) land, and
                    ``(B) water, sewage, drainage, or similar 
                facilities, or transportation, power, or communication 
                facilities incidental to the use of such land as an 
                industrial park, and
            ``(2) is not structures or buildings (other than with 
        respect to facilities described in paragraph (1)(B)).''
            (3) Conforming amendments.--
                    (A) Section 147(c) of such Code (relating to 
                limitation on use for land acquisition) is amended by 
                adding at the end the following:
            ``(4) Special rule for industrial parks.--In the case of a 
        bond described in section 142(a)(17), paragraph (1)(A) shall be 
        applied by substituting `50 percent' for `25 percent'.''
                    (B) Section 147(e) of such Code (relating to no 
                portion of bonds may be issued for skyboxes, airplanes, 
                gambling establishments, etc.) is amended by striking 
                ``A private activity bond'' and inserting ``Except in 
                the case of a bond described in section 142(a)(13), a 
                private activity bond''.
    (b) Small Issue Bonds.--Section 144(a)(12) of the Internal Revenue 
Code of 1986 (relating to termination of qualified small issue bonds) 
is amended--
            (1) by striking ``any bond'' in subparagraph (A)(i) and 
        inserting ``any bond described in subparagraph (B)'',
            (2) by striking ``a bond'' in subparagraph (A)(ii) and 
        inserting ``a bond described in subparagraph (B)'', and
            (3) by striking subparagraph (B) and inserting the 
        following:
                    ``(B) Bonds for farming purposes.--A bond is 
                described in this subparagraph if it is issued as part 
                of an issue 95 percent or more of the net proceeds of 
                which are to be used to provide any land or property 
                not in accordance with section 147(c)(2).''
    (c) Effective Date.--The amendments made by this section shall 
apply to bonds issued after December 31, 1998.

SEC. 204. INCREASE IN AMOUNT OF QUALIFIED SMALL ISSUE BONDS PERMITTED 
              FOR FACILITIES TO BE USED BY RELATED PRINCIPAL USERS.

    (a) In General.--Clause (i) of section 144(a)(4)(A) of the Internal 
Revenue Code of 1986 (relating to $10,000,000 limit in certain cases) 
is amended by striking ``$10,000,000'' and inserting ``$50,000,000''.
    (b) Clerical Amendment.--The heading of paragraph (4) of section 
144(a) of the Internal Revenue Code of 1986 is amended by striking 
``$10,000,000'' and inserting ``$50,000,000''.
    (c) Effective Date.--The amendments made by this section shall 
apply to--
            (1) obligations issued after the date of enactment of this 
        Act, and
            (2) capital expenditures made after such date with respect 
        to obligations issued on or before such date.

SEC. 205. SIMPLIFICATION OF ARBITRAGE INTEREST REBATE WAIVER.

    (a) In General.--Clause (ii) of section 148(f)(4)(C) of the 
Internal Revenue Code of 1986 (relating to exception from rebate for 
certain proceeds to be used to finance construction expenditures) is 
amended to read as follows:
                            ``(ii) Spending requirement.--The spending 
                        requirement of this clause is met if 100 
                        percent of the available construction proceeds 
                        of the construction issue are spent for the 
                        governmental purposes of the issue within the 
                        3-year period beginning on the date the bonds 
                        are issued.''
    (b) Conforming Amendments.--
            (1) Clause (iii) of section 148(f)(4)(C) of the Internal 
        Revenue Code of 1986 (relating to exception for reasonable 
        retainage) is repealed.
            (2) Subclause (II) of section 148(f)(4)(C)(vi) of such Code 
        (relating to available construction proceeds) is amended by 
        striking ``2-year period'' and inserting ``3-year period''.
            (3) Subclause (I) of section 148(f)(4)(C)(vii) of such Code 
        (relating to election to pay penalty in lieu of rebate) is 
        amended by striking ``, with respect to each 6-month period 
        after the date the bonds were issued,'' and ``, as of the close 
        of such 6-month period,''.
            (4) Clause (viii) of section 148(f)(4)(C) of such Code 
        (relating to election to terminate 1\1/2\ percent penalty) is 
amended by striking ``to any 6-month period'' in the matter preceding 
subclause (I).
            (5) Clause (ii) of section 148(c)(2)(C) of such Code 
        (relating to bonds used to provide construction financing) is 
        amended by striking ``2 years'' and inserting ``3 years''.
    (c) Effective Date.--The amendments made by this section shall 
apply to bonds issued after the date of enactment of this Act.

SEC. 206. QUALIFIED RESIDENTIAL RENTAL PROJECT BONDS PARTIALLY EXEMPT 
              FROM STATE VOLUME CAP.

    (a) In General.--Section 146(g) of the Internal Revenue Code of 
1986 (relating to exception for certain bonds) is amended by striking 
``and'' at the end of paragraph (3), by striking the period at the end 
of paragraph (4) and inserting ``, and'', and by inserting after 
paragraph (4) the following:
            ``(5) 75 percent of any exempt facility bond issued as part 
        of an issue described in section 142(a)(7) (relating to 
        qualified residential rental projects).''
    (b) Effective Date.--The amendments made by this section shall 
apply to bonds issued after the date of enactment of this Act.

SEC. 207. EXPANSION OF QUALIFIED WAGES SUBJECT TO WORK OPPORTUNITY 
              CREDIT.

    (a) Increase in Percentage.--Section 51(a) of the Internal Revenue 
Code of 1986 (relating to determination of amount) is amended by 
striking ``40 percent'' and inserting ``50 percent''.
    (b) First 3 Years of Wages Subject to Credit.--Section 51 of the 
Internal Revenue Code of 1986 (relating to amount of credit) is 
amended--
            (1) in subsections (a) and (b)(3), by striking ``first-
        year''; and
            (2) in subsection (b)--
                    (A) by striking paragraphs (1) and (2) and 
                inserting the following:
            ``(1) In general.--The term `qualified wages' means the 
        wages paid or incurred by the employer during the taxable 
        year--
                    ``(A) with respect to an individual who is a member 
                of a targeted group, and
                    ``(B) attributable to service rendered by such 
                individual during the 3-year period beginning with the 
                day the individual begins work for the employer.''; and
                    (B) by redesignating paragraph (3) as paragraph 
                (2).
    (b) Effective Date.--The amendments made by this section shall 
apply to individuals who begin work for the employer after the date of 
enactment of this Act.

SEC. 208. EXCLUSION FOR CAPITAL GAINS ON CERTAIN INVESTMENTS WITHIN 
              EMPOWERMENT ZONES AND ENTERPRISE COMMUNITIES.

    (a) In General.--Part II of subchapter U of chapter 1 of the 
Internal Revenue Code of 1986 is amended by adding at the end the 
following new section:

``SEC. 1395. EXCLUSION FOR GAIN FROM ZONE OR COMMUNITY INVESTMENTS.

    ``(a) General Rule.--In the case of a taxpayer, gross income shall 
not include any qualified capital gain recognized on the sale or 
exchange of a qualified zone asset held for more than 3 years.
    ``(b) Qualified Zone Asset.--For purposes of this section--
            ``(1) In general.--The term `qualified zone asset' means, 
        with respect to any qualified small business--
                    ``(A) any qualified zone stock,
                    ``(B) any qualified zone property, and
                    ``(C) any qualified zone partnership interest.
            ``(2) Qualified small business.--
                    ``(A) In general.--The term `qualified small 
                business' means any entity or proprietorship the 
                aggregate gross assets (within the meaning of section 
                1202(d)(2)) of which do not exceed $50,000,000.
                    ``(B) Application of rules.--In determining if an 
                entity or proprietorship is a qualified small business, 
                rules similar to the rules of subsections (a) and (b) 
                of section 52 shall apply.
            ``(3) Qualified zone stock.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `qualified zone stock' means 
                any stock in a domestic corporation if--
                            ``(i) such stock is acquired by the 
                        taxpayer on original issue from the corporation 
                        solely in exchange for cash,
                            ``(ii) as of the time such stock was 
                        issued, such corporation was an enterprise zone 
                        business (or, in the case of a new corporation, 
                        such corporation was being organized for 
                        purposes of being an enterprise zone business), 
                        and
                            ``(iii) during substantially all of the 
                        taxpayer's holding period for such stock, such 
                        corporation qualified as an enterprise zone 
                        business.
                    ``(B) Redemptions.--The term `qualified zone stock' 
                shall not include any stock acquired from a corporation 
                which made a substantial stock redemption or 
                distribution (without a bona fide business purpose 
                therefor) in an attempt to avoid the purposes of this 
                section.
            ``(4) Qualified zone property.--
                    ``(A) In general.--The term `qualified zone 
                property' has the meaning given to such term by section 
                1397C, except that references to empowerment zones 
                shall be treated as including references to enterprise 
                communities.
            ``(5) Qualified zone partnership interest.--The term 
        `qualified zone partnership interest' means any interest in a 
        partnership if--
                    ``(A) such interest is acquired by the taxpayer 
                from the partnership solely in exchange for cash,
                    ``(B) as of the time such interest was acquired, 
                such partnership was an enterprise zone business (or, 
                in the case of a new partnership, such partnership was 
                being organized for purposes of being an enterprise 
                zone business), and
                    ``(C) during substantially all of the taxpayer's 
                holding period for such interest, such partnership 
                qualified as an enterprise zone business.
        A rule similar to the rule of paragraph (2)(B) shall apply for 
        purposes of this paragraph.
            ``(6) Treatment of subsequent purchasers.--The term 
        `qualified zone asset' includes any property which would be a 
        qualified zone asset but for paragraph (3)(A)(i), section 
        1397(a)(1)(B), or paragraph (5)(A) in the hands of the taxpayer 
        if such property was a qualified zone asset in the hands of any 
        prior holder.
            ``(7) 10-year safe harbor.--If any property ceases to be a 
        qualified zone asset by reason of paragraph (3)(A)(iii), 
        section 1397(a)(1)(C), or paragraph (5)(C) after the 10-year 
        period beginning on the date the taxpayer acquired such 
        property, such property shall continue to be treated as meeting 
        the requirements of such paragraph; except that the amount of 
        gain to which subsection (a) applies on any sale or exchange of 
        such property shall not exceed the amount which would be 
        qualified capital gain had such property been sold on the date 
        of such cessation.
            ``(8) Treatment of zone or community terminations.--The 
        termination of any designation of an area as an empowerment 
        zone or enterprise community shall be disregarded for purposes 
        of determining whether any property is a qualified zone asset.
    ``(c) Other Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Enterprise zone business.--For purposes of this 
        section, the term `enterprise zone business' has the meaning 
        given to such term by section 1394(b)(3).''
            ``(2) Qualified capital gain.--Except as otherwise provided 
        in this subsection, the term `qualified capital gain' means any 
        long-term capital gain.
            ``(3) Certain gain on real property not qualified.--The 
        term `qualified capital gain' shall not include any gain which 
        would be treated as ordinary income under section 1250 if 
        section 1250 applied to all depreciation rather than the 
        additional depreciation.
            ``(4) Gain attributable to periods after termination of 
        zone or community designation not qualified.--The term 
        `qualified capital gain' shall not include any gain 
        attributable to periods after the termination of any 
        designation of an area as an empowerment zone or enterprise 
        community.
    ``(d) Treatment of Pass-Thru Entities.--
            ``(1) Sales and exchanges.--Gain on the sale or exchange of 
        an interest in a pass-thru entity which is a qualified small 
        business held by the taxpayer (other than an interest in an 
        entity which was an enterprise zone business during 
        substantially all of the period the taxpayer held such 
        interest) for more than 3 years shall be treated as gain 
        described in subsection (a) to the extent such gain is 
        attributable to amounts which would be qualified capital gain 
        on qualified zone assets (determined as if such assets had been 
        sold on the date of the sale or exchange) held by such entity 
        for more than 3 years and throughout the period the taxpayer 
        held such interest. A rule similar to the rule of paragraph 
        (2)(B) shall apply for purposes of the preceding sentence.
            ``(2) Distributions.--
                    ``(A) In general.--Any amount included in income by 
                reason of holding an interest in a pass-thru entity 
                (other than an entity which was an enterprise zone 
                business during substantially all of the period the 
                taxpayer held the interest to which such inclusion 
                relates) shall be treated as gain described in 
                subsection (a) if such amount meets the requirements of 
                subparagraph (B).
                    ``(B) Requirements.--An amount meets the 
                requirements of this subparagraph if--
                            ``(i) such amount is attributable to gain 
                        on the sale or exchange by the pass-thru entity 
                        of property which is a qualified zone asset in 
                        the hands of such entity and which was held by 
                        such entity for the period required under 
                        subsection (a), and
                            ``(ii) such amount is includible in the 
                        gross income of the taxpayer by reason of the 
                        holding of an interest in such entity which was 
                        held by the taxpayer on the date on which such 
                        pass-thru entity acquired such asset and at all 
                        times thereafter before the disposition of such 
                        asset by such pass-thru entity.
                    ``(C) Limitation based on interest originally held 
                by taxpayer.--Subparagraph (A) shall not apply to any 
                amount to the extent such amount exceeds the amount to 
                which subparagraph (A) would have applied if such 
                amount were determined by reference to the interest the 
                taxpayer held in the pass-thru entity on the date the 
                qualified zone asset was acquired.
            ``(3) Pass-thru entity.--For purposes of this subsection, 
        the term `pass-thru entity' means--
                    ``(A) any partnership,
                    ``(B) any S corporation,
                    ``(C) any regulated investment company, and
                    ``(D) any common trust fund.
    ``(e) Sales and Exchanges of Interests in Partnerships and S 
Corporations Which Are Qualified Zone Businesses.--In the case of the 
sale or exchange of an interest in a partnership, or of stock in an S 
Corporation, which was an enterprise zone business during substantially 
all of the period the taxpayer held such interest or stock, is an 
enterprise zone business, the amount of qualified capital gain shall be 
determined without regard to--
            ``(1) any intangible, and any land, which is not an 
        integral part of any qualified business (as defined in section 
        1397B(d)), and
            ``(2) gain attributable to periods before the designation 
        of an area as an empowerment zone or enterprise community.
    ``(f) Certain Tax-Free and Other Transfers.--For purposes of this 
section--
            ``(1) In general.--In the case of a transfer of a qualified 
        zone asset to which this subsection applies, the transferee 
        shall be treated as--
                    ``(A) having acquired such asset in the same manner 
                as the transferor, and
                    ``(B) having held such asset during any continuous 
                period immediately preceding the transfer during which 
                it was held (or treated as held under this subsection) 
                by the transferor.
            ``(2) Transfers to which subsection applies.--This 
        subsection shall apply to any transfer--
                    ``(A) by gift,
                    ``(B) at death, or
                    ``(C) from a partnership to a partner thereof of a 
                qualified zone asset with respect to which the 
                requirements of subsection (d)(2) are met at the time 
                of the transfer (without regard to the 3-year holding 
                requirement).
            ``(3) Certain rules made applicable.--Rules similar to the 
        rules of section 1244(d)(2) shall apply for purposes of this 
        section.''
    (b) Conforming Amendments.--
            (1) Section 172(d)(2)(B) of the Internal Revenue Code of 
        1986 (relating to modifications with respect to net operating 
        loss deduction) is amended by striking ``section 1202'' and 
        inserting ``sections 1202 and 1395B''.
            (2) Section 642(c)(4) of such Code (relating to 
        adjustments) is amended by inserting ``or 1395B(a)'' after 
        ``section 1202(a)'' and by inserting ``or 1395B'' after 
        ``section 1202''.
            (3) Section 643(a)(3) of such Code (defining distributable 
        net income) is amended by striking ``section 1202'' and 
        inserting ``sections 1202 and 1395B''.
            (4) Section 691(c)(4) of such Code (relating to 
        coordination with capital gain provisions) is amended by 
        striking ``1202, and 1211'' and inserting ``1202, 1211, and 
        1395B''.
            (5) The second sentence of section 871(a)(2) of such Code 
        (relating to capital gains of aliens present in the United 
States 183 days or more) is amended by inserting ``or 1395B'' after 
``section 1202''.
            (6) Part II of subchapter U of chapter 1 of such Code is 
        amended to read as follows:

      ``PART II--INCENTIVES FOR EMPOWERMENT ZONES AND ENTERPRISE 
                             COMMUNITIES.''

            (7) The table of parts of subchapter U of chapter 1 of such 
        Code is amended to read as follows:

                              ``Part II. Incentives for empowerment 
                                        zones and enterprise 
                                        communities.''
            (8) The table of sections of part II of subchapter U of 
        chapter 1 of such Code is amended by adding at the end the 
        following new item:

                              ``Sec. 1395. Exclusion for gain from zone 
                                        or community investments.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1998.

SEC. 209. HOMEBUYER CREDIT FOR EMPOWERMENT ZONES AND ENTERPRISE 
              COMMUNITIES.

    (a) In General.--Part II of subchapter U of chapter 1 of the 
Internal Revenue Code of 1986, as amended by section 208, is amended by 
adding at the end the following new section:

``SEC. 1395A. HOMEBUYER CREDIT.

    ``(a) Allowance of Credit.--In the case of an individual who 
purchases a principal residence in an empowerment zone or enterprise 
community during any taxable year, there shall be allowed as a credit 
against the tax imposed by this chapter for the taxable year an amount 
equal to so much of the purchase price of the residence as does not 
exceed $5,000.
    ``(b) Limitations.--
            ``(1) Limitation based on modified adjusted gross income.--
                    ``(A) In general.--The amount allowable as a credit 
                under subsection (a) (determined without regard to this 
                subsection and subsection (d)) for the taxable year 
                shall be reduced (but not below zero) by the amount 
                which bears the same ratio to the credit so allowable 
                as--
                            ``(i) the excess (if any) of--
                                    ``(I) the taxpayer's modified 
                                adjusted gross income for such taxable 
                                year, over
                                    ``(II) $70,000 ($110,000 in the 
                                case of a joint return), bears to
                            ``(ii) $20,000.
                    ``(B) Modified adjusted gross income.--For purposes 
                of subparagraph (A), the term `modified adjusted gross 
                income' means the adjusted gross income of the taxpayer 
                for the taxable year increased by any amount excluded 
                from gross income under section 911, 931, or 933.
            ``(2) Purchase price limitation.--A credit shall not be 
        allowed under subsection (a) with respect to the purchase of a 
        residence the purchase price of which exceeds $225,000.
    ``(c) Principal Residence.--For purposes of this section, the term 
`principal residence' has the same meaning as when used in section 121.
    ``(d) Carryover of Credit.--If the credit allowable under 
subsection (a) exceeds the limitation imposed by section 26(a) for such 
taxable year reduced by the sum of the credits allowable under subpart 
A of part IV of subchapter A (other than this section), such excess 
shall be carried to the succeeding taxable year and added to the credit 
allowable under subsection (a) for such taxable year.
    ``(e) Special Rules.--For purposes of this section--
            ``(1) Allocation of dollar limitation.--
                    ``(A) Married individuals filing separately.--In 
                the case of a married individual filing a separate 
                return, subsection (a) shall be applied by substituting 
                `$2,500' for `$5,000'.
                    ``(B) Other taxpayers.--If 2 or more individuals 
                who are not married purchase a principal residence, the 
                amount of the credit allowed under subsection (a) shall 
                be allocated among such individuals in such manner as 
                the Secretary may prescribe, except that the total 
                amount of the credits allowed to all such individuals 
                shall not exceed $5,000.
            ``(2) Purchase.--
                    ``(A) In general.--The term `purchase' means any 
                acquisition, but only if--
                            ``(i) the property is not acquired from a 
                        person whose relationship to the person 
                        acquiring it would result in the disallowance 
                        of losses under section 267 or 707(b) (but, in 
                        applying section 267 (b) and (c) for purposes 
                        of this section, paragraph (4) of section 
                        267(c) shall be treated as providing that the 
                        family of an individual shall include only his 
                        spouse, ancestors, and lineal descendants), and
                            ``(ii) the basis of the property in the 
                        hands of the person acquiring it is not 
                        determined--
                                    ``(I) in whole or in part by 
                                reference to the adjusted basis of such 
                                property in the hands of the person 
                                from whom acquired, or
                                    ``(II) under section 1014(a) 
                                (relating to property acquired from a 
                                decedent).
                    ``(B) Construction.--A residence which is 
                constructed by the taxpayer shall be treated as 
                purchased by the taxpayer on the date the taxpayer 
                first occupies such residence.
            ``(3) Purchase price.--The term `purchase price' means the 
        adjusted basis of the principal residence on the date such 
        residence is purchased.
    ``(f) Reporting.--If the Secretary requires information reporting 
under section 6045 by a person described in subsection (e)(2) thereof 
to verify the eligibility of taxpayers for the credit allowable by this 
section, the exception provided by section 6045(e)(5) shall not apply.
    ``(g) Credit Treated as Nonrefundable Personal Credit.--For 
purposes of this title, the credit allowed by this section shall be 
treated as a credit allowable under subpart A of part IV of subchapter 
A of this chapter.
    ``(h) Basis Adjustment.--For purposes of this subtitle, if a credit 
is allowed under this section with respect to the purchase of any 
residence, the basis of such residence shall be reduced by the amount 
of the credit so allowed.
    ``(i) Application of Section.--This section shall apply to property 
purchased after December 31, 1998, and before January 1, 2002.''
    (b) Conforming Amendment.--The table of sections of part II of 
subchapter U of chapter 1 of such Code is amended by adding at the end 
the following new item:

                              ``Sec. 1395A. Homebuyer credit.''

             TITLE III--COMMUNITY-BASED HOUSING DEVELOPMENT

SEC. 301. BLOCK GRANT STUDY.

    (a) Study.--
            (1) In general.--The Secretary of Housing and Urban 
        Development shall conduct a study regarding--
                    (A) the feasibility of consolidating existing 
                public and low-income housing programs under the United 
                States Housing Act of 1937 into a comprehensive block 
                grant system of Federal aid that--
                            (i) provides assistance on an annual basis;
                            (ii) maximizes funding certainty and 
                        flexibility; and
                            (iii) minimizes paperwork and delay; and
                    (B) the possibility of administering future public 
                and low-income housing programs under the United States 
                Housing Act of 1937 in accordance with such a block 
                grant system.
            (2) Public housing/section 8 moving to work 
        demonstration.--In conducting the study described in paragraph 
        (1), the Secretary of Housing and Urban Development shall 
        consider data from and assessments of the demonstration program 
        conducted under section 204 of the Omnibus Consolidated 
        Rescissions and Appropriations Act of 1996 (Public Law 104-134, 
        110 Stat. 1321).
    (b) Report to Comptroller General.--Not later than 18 months after 
the date of enactment of this Act, the Secretary of Housing and Urban 
Development shall submit to the Comptroller General of the United 
States a report that includes--
            (1) the results of the study conducted under subsection 
        (a); and
            (2) any recommendations for legislation.
    (c) Report to Congress.--Not later than 24 months after the date of 
enactment of this Act, the Comptroller General of the United States 
shall submit to the Congress a report that includes--
            (1) an analysis of the report submitted under subsection 
        (b); and
            (2) any recommendations for legislation.

          TITLE IV--RESPONSE TO URBAN ENVIRONMENTAL CHALLENGES

SEC. 401. RELEASE FROM LIABILITY OF PERSONS THAT FULFILL REQUIREMENTS 
              OF STATE AND LOCAL LAW.

    Section 107 of the Comprehensive Environmental Response, 
Compensation, and Liability Act of 1980 (42 U.S.C. 9607) is amended by 
adding at the end the following:
    ``(o) Release From Liability of Persons That Fulfill Requirements 
of State and Local Law.--
            ``(1) Definitions.--In this subsection--
                    ``(A) Urban area.--The term `urban area' has the 
                meaning given the term in section 1393(a) of the 
                Internal Revenue Code of 1986.
                    ``(B) Urban nonlisted facility.--The term `urban 
                nonlisted facility' means a facility that is located in 
                an urban area and is not listed or proposed for listing 
                on the National Priorities List.
            ``(2) In general.--Neither the President nor any other 
        person may bring an administrative or judicial enforcement 
        action under this Act with respect to an urban nonlisted 
        facility against a person that has fulfilled all requirements 
        applicable to the person under State and local law to conduct a 
        response action at the urban nonlisted facility, as evidenced 
        by a release from liability issued by authorized State and 
        local officials, to the extent that the administrative or 
        judicial action would seek to require response action that is 
        within the scope of the response action conducted in accordance 
        with State and local law.''

SEC. 402. BROWNFIELD PROGRAM.

    Title I of the Comprehensive Environmental Response, Compensation, 
and Liability Act of 1980 (42 U.S.C. 9601 et seq.) is amended by adding 
at the end the following:

``SEC. 127. BROWNFIELD PROGRAM.

    ``(a) Definition of Brownfield Facility.--In this section--
            ``(1) In general.--The term `brownfield facility' means a 
        parcel of land that contains an abandoned, idled, or underused 
        commercial or industrial facility, the expansion or 
redevelopment of which is complicated by the presence or potential 
presence of a hazardous substance.
            ``(2) Exclusions.--The term `brownfield facility' does not 
        include--
                    ``(A) a facility that is the subject of a removal 
                or planned removal under this title;
                    ``(B) a facility that is listed or has been 
                proposed for listing on the National Priorities List or 
                that has been removed from the National Priorities 
                List;
                    ``(C) a facility that is subject to corrective 
                action under section 3004(u) or 3008(h) of the Solid 
                Waste Disposal Act (42 U.S.C. 6924(u) or 6928(h)) at 
                the time at which an application for a grant or loan 
                concerning the facility is submitted under this 
                section;
                    ``(D) a land disposal unit with respect to which--
                            ``(i) a closure notification under subtitle 
                        C of the Solid Waste Disposal Act (42 U.S.C. 
                        6921 et seq.) has been submitted; and
                            ``(ii) closure requirements have been 
                        specified in a closure plan or permit;
                    ``(E) a facility with respect to which an 
                administrative order on consent or judicial consent 
                decree requiring cleanup has been entered into by the 
                United States under this Act, the Solid Waste Disposal 
                Act (42 U.S.C. 6901 et seq.), the Federal Water 
                Pollution Control Act (33 U.S.C. 1251 et seq.), the 
                Toxic Substances Control Act (15 U.S.C. 2601 et seq.), 
                or the Safe Drinking Water Act (42 U.S.C. 300f et 
                seq.);
                    ``(F) a facility that is owned or operated by a 
                department, agency, or instrumentality of the United 
                States; or
                    ``(G) a portion of a facility, for which portion, 
                assistance for response activity has been obtained 
                under subtitle I of the Solid Waste Disposal Act (42 
                U.S.C. 6991 et seq.) from the Leaking Underground 
                Storage Tank Trust Fund established under section 9508 
                of the Internal Revenue Code of 1986.
    ``(b) Maintenance of Brownfield Program.--The Administrator shall 
maintain the brownfield program established by the Administrator before 
the date of enactment of this section.
    ``(c) Elements of Program.--In conducting the brownfield program, 
the Administrator may--
            ``(1) expend funds to identify and examine idle or 
        underused industrial and commercial facilities for inclusion in 
        the brownfield program; and
            ``(2) provide grants to State and local governments to 
        clean up brownfields and return brownfields to productive use.
    ``(d) Maximum Grant Amount.--A grant under subsection (c) shall not 
exceed $200,000 with respect to any brownfield facility.
    ``(e) Authorization of Appropriations.--There are authorized to be 
appropriated out of the Hazardous Substance Superfund to carry out this 
section--
            ``(1) $50,000,000 for fiscal year 2000;
            ``(2) $55,000,000 for fiscal year 2001; and
            ``(3) $60,000,000 for fiscal year 2002.''

SEC. 403. REAUTHORIZATION OF URBAN AND COMMUNITY FORESTRY ASSISTANCE 
              PROGRAM.

    Section 9(i) of the Cooperative Forestry Assistance Act of 1978 (16 
U.S.C. 2105(i)) is amended by striking ``$30,000,000 for each of the 
fiscal years 1991 through 1995'' and inserting ``$50,000,000 for each 
of fiscal years 2000 through 2005''.
                                 <all>