[Congressional Record Volume 142, Number 135 (Thursday, September 26, 1996)]
[Extensions of Remarks]
[Pages E1723-E1724]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




    IN ORDER TO SAVE THE COUNTRYSIDE, WE MUST STRENGTHEN OUR CITIES

                                 ______
                                 

                         HON. NANCY L. JOHNSON

                             of connecticut

                    in the house of representatives

                      Thursday, September 26, 1996

  Mrs. JOHNSON of Connecticut. Mr. Speaker, as recently as the 1960's, 
Charles Adams wrote in ``The City is the Frontier'': ``In our own era, 
the world's cities are witnessing their greatest surge in man's history 
 * * * From 1800 to 1950, the proportion of people living in cities 
with more than 20,000 people leaped from 2.4 to 21 percent. Our 
civilization is becoming urban, and the advance into the cities is one 
of the most spectacular social phenomena of our time. The city has 
become the frontier.''
  Today, the promise of the urban frontier seems to be little more than 
reminder of opportunity lost. In the latter half of this century, the 
Nation's landscape has been transformed by sprawling development and 
urban decay. The movement of families and businesses from our Nation's 
cities has reshaped the cities themselves, the suburbs, and the 
countryside. Much of this change has been positive, as families have 
built homes and communities, fulfilling the American dream; but a great 
deal has been lost as well.
  It is tragic that so many cities are dying at a time when the 
countryside is disappearing. The American Farmland Trust estimates that 
the United States converts to other uses 2 million acres of farmland 
annually, much of it on the edge of urban America. The USDA natural 
resources inventory found that developed land increased by 14 million 
acres between 1982 and 1992.
  As the cities are losing their manufacturing industries, 95 percent 
of the growth in office jobs occurs in low density suburbs. These 
office jobs accounted for 15 million of the 18 million new jobs in the 
1980's.
  There are many factors that have contributed to the mass migration 
away from the cities: a desire for greater personal safety, better 
schools, less congestion, and a way of life. The development of the 
Interstate Highway System, relatively inexpensive community expenses, 
and tax incentives for homeownership have made it easier for many 
people to move to the suburbs.
  Offsetting some of the costs associated with this trend--urban decay 
and the loss of open space--will require both private sector and public 
sector initiative. No single public policy proposal will address all of 
the problems. Today, I am introducing two bills addressing two of the 
many factors that contribute to sprawling development.
  The first is related to the costs of cleaning up contaminated land 
and buildings in urban areas so that they can be put to productive use. 
The rules surrounding the tax treatment of environmental remediation 
expenses are so convoluted and confusing it is no wonder that a number 
of businesses decide to sidestep them altogether and invest in 
previously undeveloped land and newer buildings outside of 
environmentally distressed urban areas.

  Repairs to business property can be deducted currently as a business 
expense, but capital expenditures that add to the value of property 
have to be capitalized. This means that some environmental remediation 
costs are treated as a business expense, but others are treated as 
capital expenditures, depending on the facts and circumstances of each 
case.
  The administration in its brownfields initiative has proposed to 
allow an immediate deduction for cleaning up certain hazardous 
substances in high-poverty areas, existing EPA brownfields pilot areas, 
and Federal empowerment zones and enterprise communities. This is 
commendable, as far as it goes, but there is a disturbing trend in 
urban policy to pick and choose among cities. If expensing 
environmental remediation costs is good tax policy and good urban 
policy, and I believe that it is, then it should apply in all 
communities. The bill I am introducing today would apply this policy to 
all property wherever located, and would expand the list of hazardous 
substances to include potentially hazardous materials such as asbestos, 
lead paint, petroleum products, and radon. This bill would remove the 
disincentive in current law to reinvestment in our cities and 
buildings.
  My second bill addresses a provision in current tax law that limits 
the deduction for a gift of appreciated property to 30 percent of 
adjusted gross income. Under current law, the limit for gifts of cash 
is 50 percent of adjusted gross income. My bill would raise the cap for 
qualified gifts of conservation land and easements from 30 percent to 
50 percent. Under the bill, any amount that cannot be deducted in the 
year in which the gift is made can be carried over to subsequent tax 
years until the deduction has been exhausted. Current law gives the 
donor 5 years in which to use up the deduction.
  Conservation easements are a partial interest in property transferred 
to an appropriate nonprofit or governmental entity. These easements 
restrict the development, management, or use of the land in order to 
keep the land in a natural state or to protect historic or scenic 
values. Easements are widely used by land trusts, conservation groups, 
and developers to protect valuable land.
  The 30-percent limit in current law actually works to the 
disadvantage of taxpayers who may be land rich but cash poor.

[[Page E1724]]

  Several of my colleagues have introduced important bills to encourage 
greater use of conservation easements. My bill addresses the 
disadvantage the 30-percent limit imposes on lower income taxpayers.
  Mr. Speaker, Gifford Pinchot, the founder of the U.S. Forest Service, 
once wrote that a nation ``deprived of its liberty may win it, a nation 
divided may unite, but a nation whose natural resources are destroyed 
must inevitably pay the penalty of poverty, degradation and decay.''
  In order to save the countryside, we must strengthen our cities. 
Thanks to the leadership of Chairman Bill Archer, fundamental tax 
reform will be near the top of the agenda of the next Congress. We need 
to take a look at the impact of tax policy on land use decisions in 
this country. The bills I am introducing today would go a long way 
toward correcting two serious problems in existing law.

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