[Congressional Record Volume 144, Number 135 (Thursday, October 1, 1998)]
[House]
[Page H9210]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             PASS TAXPAYER RELIEF ACT FOR NEW URBAN POLICY

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Pennsylvania (Mr. English) is recognized for 5 minutes.
  Mr. ENGLISH of Pennsylvania. Mr. Speaker, in recent days, a lot of 
people have heard about the Republican tax plan that passed the House 
as part of a 90-10 plan, which sets aside 90 percent of the existing 
surplus to save Social Security and also sets aside 10 percent of the 
surplus to provide needed tax relief and tax reform.
  People in the discussions on this tax plan have focused on some of 
the more prominent aspects of it. It provides marriage penalty relief 
that would benefit 40 percent of the couples in America; it provides 
full deductibility for health insurance; it provides a deduction for 
small savers, up to $200, that can be written off for individuals, or 
$400 for couples, in interest income; it expands access to prepaid 
tuition plans so that private colleges can set up prepaid tuition plans 
and allow people with a tax break to prepurchase tuition and bank it 
for the future, making college much more affordable; the plan allows 
small businesses an expensing provision, a greater ability to deduct 
equipment that they purchase; and also provides tax relief for farmers 
and ranchers.
  In my view, as a member of the Committee on Ways and Means, these 
provisions will go a long way to relieving the tax burden on the middle 
class and small business owners of this country. However, we have not 
focused on another aspect of this legislation which will help thousands 
of people living in the most distressed communities in our Nation and 
give them hope.
  With the 1996 welfare reform law, Republicans began encouraging and 
empowering individuals, yet we are told by leaders in some of our 
communities that we need to go further in revitalizing lower-income 
communities. These communities have been telling us that to truly 
succeed, it is vital that the government support market-based private 
economic growth in these areas that are economically depressed. And for 
that reason the chairman of the Committee on Ways and Means included in 
his mark a provision relating to the American Community Renewal 
Project.
  The Taxpayer Relief Act would allow the designation of up to 20 
renewal communities so that we can offer targeted, aggressive tax cuts 
and regulatory relief for those communities that need them the most. 
What we are trying to do is to green line depressed communities for 
investment, empower the poor, and, at the same time, not create new 
layers of bureaucracy.
  Under this provision, the Secretary of Housing and Urban Development 
will be able to designate renewal communities, 20 percent of which must 
be in rural areas. These designations would be effective for 7 years. 
Areas that have been nominated would have to meet certain criteria to 
achieve these breaks. One is it would have to have an unemployment rate 
of at least 1\1/2\ times that of the national rate; it would have to 
have a poverty rate of at least 20 percent; and, in urban areas, at 
least 70 percent of the households in the area would have to have 
incomes below 80 percent of the median income households in the 
metropolitan statistical area.
  In other words, these tax breaks are not tax cuts for the rich, but 
they are targeted for those who most need economic growth. Areas would 
also have to meet certain population criteria.
  This may sound complicated, but it is done to ensure that the areas 
nominated are truly economically depressed urban areas where Federal 
dollars can truly make a difference.
  When I look around my district, Mr. Speaker, I look at communities 
like we have in Farrell, Pennsylvania, which is clearly economically 
depressed, which is financially distressed as far as the municipal 
financial condition, it has a high poverty rate, but, at the same time, 
it has a good work ethic and a marvelous sense of community and 
neighborhood. With the assistance of these targeted breaks, a community 
like Farrell could definitely benefit, attract jobs, attract investment 
and empower people and allow them to form capital.
  Once designated, these renewal areas are eligible for a variety of 
incentives, including a 100 percent exclusion from capital gains for 
certain qualified renewal community assets held more than 5 years; an 
additional, additional on top of what is already in the bill, $35,000 
of expensing for small businesses; a work opportunity tax credit to 
offset the cost of hiring individuals, and a variety of other 
incentives. It also includes family development accounts for the 
working poor.
  We need to pass this for a new urban policy.

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