[Congressional Record Volume 142, Number 17 (Wednesday, February 7, 1996)]
[Senate]
[Pages S1151-S1152]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         ADDITIONAL STATEMENTS

                                 ______


              COMMERCIAL REVITALIZATION TAX CREDIT OF 1995

 Mr. SPECTER. Mr. President, I strongly support S. 743, the 
Commercial Revitalization Tax Credit Act of 1995 [CRTC] and today I 
join several of my colleagues in cosponsoring this bill. I commend 
Senator Kay Bailey Hutchison for her sponsorship of this legislation 
designed to encourage business investment in economically distressed 
areas. I also want to commend my Pennsylvania colleague, Representative 
Phil English who has introduced this same legislation in the House. I 
believe this measure will help to create jobs and expand economic 
activity, in addition to improving the physical appearance and property 
values in these areas.
  Earlier in this session, I introduced legislation to replace our 
current cumbersome Tax Code with a simple and efficient 20-percent flat 
tax. My legislation, the Flat Tax Act of 1995 (S. 488) will bring 
tremendous economic growth to all areas of our country, and especially 
our cities by freeing up capital and lowering interest rates. While I 
continue to support the principles and necessity of a flat tax, I 
believe that in the interim we must proceed with measures such as the 
Commercial Revitalization Tax Credit Act to bring economic growth to 
our cities immediately.
  This legislation provides a targeted, limited tax credit to 
businesses to help defray their costs of construction, expansion, and 
renovation in urban areas. The CRTC would be another tool to aid 
localities and States in boosting jobs and business investment in 
America's most troubled neighborhoods. If enacted, estimates indicate 
the CRTC could attract over $7 billion in private sector investment to 
these communities, create thousands of jobs, and generate new tax 
revenue.
  America's urban areas serve an important role as centers of commerce, 
industry, education, health care, and culture. Yet these urban centers, 
particularly in the inner cities, also have special needs. As a 
Philadelphia resident, I have first-hand knowledge of the growing 
problems that plague our cities. I have long supported a variety of 
programs to assist our cities such as increased funding for community 
development block grants, extension of the low income housing tax 
credit, and legislation to establish enterprise and empowerment zones. 
I have also promoted legislation to provide targeted tax incentives for 
investing in minority- or women-owned small businesses.
  This issue of urban renewal is not new to me. In the 104th Congress, 
I introduced the New Urban Agenda Act of 1995--S. 17--which would 
redress urban decay and decline without massive Federal outlays. S. 17 
embodies many of the proposals of Philadelphia Mayor Edward G. Rendell. 
The bill is intended to stimulate the economies of our urban centers. 
Increased economic growth resulting in increased employment is the key 
to reversing current urban economic conditions. Specifically, my 
legislation would: First, require certain Federal and foreign aid 
purchases to be made from businesses operating with urban zones; 
second, favor distressed cities for the location or relocation of 
Federal facilities; third, expand the historic rehabilitation tax 
credit, expand the use of commercial industrial development bonds, and 
modify the arbitrage rebate rules concerning municipal bond interest; 
fourth, study streamlining Federal housing programs into block-grant 
form, and encourage community building by locating original tenants in 
new units on old sites; and fifth, ease environmental restrictions for 
governments, speed up the remediation process, and establish a pilot 
powerplant for the benefit of city residents and energy intensive 
industry.
  Mr. President, I believe the CRTC will complement my legislation 
because it would encourage new construction and rehabilitation of 
structures in distressed areas. The CRTC would provide businesses with 
the option of taking either a one time 20-percent tax credit against 
the cost of new construction or rehabilitation, or a tax credit of 5 
percent a year for 10 years. The credit is intended to help encourage 
businesses locate to economically distressed areas.
  The original concept of enterprise zones provided for broad based 
incentives for capital formation. Current these zones primarily 
encourage wage-based tax, and other investment incentives to locate 
within the zone. There is no incentive for a business within the zone 
to expand so that larger numbers of employees can be hired. That is a 
gap which the CRTC fills.
  I believe the CRTC will be an efficient and productive program. The 
tax credit will only be available after private sector investment has 
been made and the competed project is generating income. This bill 
authorizes a maximum of $1.5 billion in tax credits over a 5-year 
period. The credits will be allocated to each State according to a 
formula which takes into account the number of localities where over 
half the people earn less than 60 percent of the area's median income. 
Local governments, not the Federal Government, will determine their 
priority projects and forward them to the States which will allocate 
the tax credits according to an evaluation system which the States 
themselves establish.
  Furthrmore, communities which have already been designated as 
economic revitalization areas by the Federal, State, and local 
governments would now become eligible for the CRTC Program. This is 
particularly good news for Philadelphia, PA, and Camden, NJ, which were 
jointly chosen as 1 of 6 urban empowerment zones by the Department of 
Housing and Urban Development. The cities of Harrisburg and Pittsburgh, 
and Allegheny County in my home State were also designated as 
enterprise communities and will benefit from S. 743.
  Last June, the U.S. Conference of Mayors adopted the attached 
resolution sponsored by Edward Rendell, the mayor of Philadelphia, 
which endorsed the commercial revitalization tax credit. Other 
organizations which have endorsed this bill include the National 
Association of Counties, the American Institute of Architects, the 
National Association of Industrial Office Properties, the American 
Planning Association, the American Enterprise Zone Association, the 
Local Initiatives Support Corporation, the International Downtown 
Association, the National Congress of Community Economic Development, 
and the American Society of Landscape Architects.
  We must address any very serious issues--jobs, teenage pregnancy, 
welfare reform--if we are to save our cities. It may well be that many 
in America have given up on our cities. That is a stark statement, but 
it is one which I believe may be true, but, I have not given up. And I 
believe there are others in this body on both sides of the aisle who 
have not done so. There must be new strategies for dealing with the 
problems of urban America. The Commercial Tax Revitalization Tax Credit 


[[Page S1152]]
Act is one such strategy that strives toward the ultimate goal of 
restoring the former vitality of our cities which can only help make 
our country stronger and more competitive. The days of expansive 
Federal aid are clearly past, but that is no excuse for the National 
Government to turn a blind eye to the problems of the cities.
  The resolution follows:

        Resolution No. 62--Commercial Revitalization Tax Credit

       Whereas, many American urban centers and rural areas are 
     plagued by chronic economic distress, including aging 
     infrastructure and business disinvestment; and
       Whereas, to be successful in breaking the cycle of economic 
     erosion, unemployment and abandonment of older neighborhoods, 
     new measures must be taken to regenerate private investment; 
     and
       Whereas, new approaches must be fostered to address the 
     problems of our cities; and
       Whereas, Senator Kay Bailey Hutchison (TX) has introduced 
     the Commercial Revitalization Tax Credit Act (CRTCA) of 1995 
     to encourage business investment and reinvestment in 
     specially designated revitalization areas; and
       Whereas, the CRTCA would offer a 20 percent tax credit in 
     one year, or a 5 percent credit each year for 10 years, to 
     defray the cost of business construction, expansion or 
     rehabilitation in specially designated areas; and
       Whereas, tax policies designed to target private 
     entrepreneurial activities in declining urban and rural areas 
     enjoy bipartisan support, Now, therefore, be it
       Resolved, That The United States Conference of Mayors 
     strongly urges Congress to support this session the CRTCA; 
     and be it further
       Resolved, That The United States Conference of Mayors urges 
     Congress to approve this credit this session at the full 
     benefit level for which it is proposed.

                          ____________________