[Congressional Record Volume 145, Number 114 (Thursday, August 5, 1999)]
[Extensions of Remarks]
[Page E1761]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

[[Page E1761]]



         INTRODUCTION OF THE NEW MARKETS TAX CREDIT ACT OF 1999

                                 ______
                                 

                         HON. CHARLES B. RANGEL

                              of new york

                    in the house of representatives

                        Thursday, August 5, 1999

  Mr. RANGEL. Mr. Speaker, today along with approximately 20 other 
Members, I am introducing legislation entitled the ``New Markets Tax 
Credit Act of 1999.'' The legislation is designed to spur $6 billion of 
private sector equity investments in businesses located in low- and 
moderate-income rural and urban communities.
  We should all be pleased with the economic growth that this country 
is experiencing. However, our current economic boom is not being 
enjoyed by all areas of the country. Many urban and rural low-income 
communities continue to have severe economic problems. Businesses in 
those areas often do not have access to the capital they need to grow 
and provide job opportunities for the residents of those areas. The 
residents of those areas lack access to basic businesses, such as 
grocery stores and other retail facilities, that all the rest of us 
take for granted.
  Unfortunately, business investment capital tends to flow to those 
areas of our country that already are experiencing rapid economic 
growth. We need to develop policies to direct some of that business 
capital to low-income communities. I believe that targeted tax credits 
can play an important role in this area by enhancing the economic 
return to the investor. The low-income housing tax credit is a very 
good example of how targeted tax credits can direct capital to needed 
investments.
  I am very pleased that the President's budget contains several 
proposals to promote efforts to attract business capital to low-income 
areas. The bill that we are introducing today is the tax portion of the 
President's proposal. He also has made other proposals designed to 
promote growth in emerging markets in this country, just as this 
Nation, through entities like the Overseas Private Investment 
Corporation, helps to promote growth in emerging markets overseas.
  The President's budget proposals this year are a continuation of the 
efforts of this administration in community development. I am very 
pleased that we have been able to enact several important community 
development tax initiatives with the President's support. The 
Empowerment Zone and Enterprise Community tax incentives and the 
brownfields tax incentives are important tools in assisting community 
development. I believe that the bill we are introducing today is 
another important tool needed to expand economic opportunity to all 
areas of this country. I look forward to working with the President and 
Members of this House and the Senate in enacting this important 
initiative.
  Following is a brief description of the bill:

           Description of the New Markets Tax Credit Proposal

       The bill provides an annual nonrefundable credit to 
     taxpayers who make qualified investments in selected 
     community development entities. The amount of the annual 
     credit is 6 percent of the amount of the investment and it is 
     allowed for the taxable year in which the investment is made 
     and the succeeding four taxable years. The credit is allowed 
     to the taxpayer who made the original investment and to 
     subsequent purchasers.
       An investment in a community development entity would be 
     eligible for the credit only if the Secretary of the Treasury 
     certifies that the entity is a qualified community 
     development entity and only if the entity uses the money it 
     receives to make investments in active businesses in low-
     income communities. Low-income communities are communities 
     with poverty rates of at least 20 percent or with median 
     family income which does not exceed 80 percent of the 
     statewide median family income (or in the case of urban 
     areas, 80 percent of the greater of the metropolitan area 
     median income or statewide median family income).
       The Secretary of the Treasury would certify entities as 
     being qualified community development entities if their 
     primary mission is serving or providing investment capital to 
     low-income communities and they maintain accountability to 
     residents of the communities in which they make their 
     investments.
       The amount of investments eligible for the credit is 
     limited to $1.2 billion for each of the years 2000 through 
     2004. The Secretary would allocate that limitation among the 
     qualified community development entities.

     

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