[Congressional Record Volume 148, Number 108 (Thursday, August 1, 2002)]
[Senate]
[Page S7904]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. LANDRIEU:
  S. 2837. A bill to amend the Internal Revenue Code of 1986 to allow 
businesses to qualify as renewal community businesses if such 
businesses employ residents of certain other renewal communities; to 
the Committee on Finance.
  Ms. LANDRIEU. Mr. President, I rise to introduce legislation to make 
a small change to the Renewal Community program that will make a big 
difference for the people of my State. This legislation will spur job 
growth and economic development in many impoverished areas that have 
been designated as renewal communities.
  Renewal communities were authorized under the Community Renewal Tax 
Relief Act of 2000. The Department of Housing and Urban Development has 
designated 40 urban and rural areas around the country as renewal 
communities that are eligible to share in an estimated $17 billion in 
tax incentives to stimulate job growth, promote economic development, 
and create affordable housing. The purpose of the Act is to help bring 
needed investment to areas with demonstrated economic distress. The 
poverty rate in renewal communities is at least 20 percent, and the 
unemployment rate is one-and-a-half times the national level. The 
households in the renewal communities have incomes that are 80 percent 
below the median income of households in their local jurisdictions.
  Businesses in renewal communities are eligible to receive wage 
credits, tax deductions, and capital gains exclusions for hiring 
workers living in the renewal communities. In order for businesses to 
qualify for participation in the program they must meet certain 
criteria. For example, at least fifty percent of the total gross income 
of a business must come from operations within the renewal community 
and a substantial part of its tangible property must lie within the 
renewal community. Furthermore, at least thirty-five percent of its 
employees must be residents of the renewal community and the employees' 
services must be performed in the renewal community.
  The Renewal Community program is targeted to help small businesses in 
poor communities. Through the tax benefits provided, the small and 
family-owned businesses are able to maintain their operations and 
continue supplying goods and services to their neighborhoods. These 
businesses are the true essence of the entrepreneurial spirit and are 
the engines of economic growth and development. The Renewal Community 
program also encourages the start of new businesses. Louisiana has 
really benefited from this program. It has been a catalyst in boosting 
local economics and cutting unemployment.
  Louisiana has four renewal communities. Some of them border one 
another. Under the rules of the program, however, a business cannot 
take advantage of the tax incentives if they hire someone who lives 
outside the renewal community, even if that person lives in the renewal 
community next door. In rural areas, this rule poses a problem for 
people living in one renewal community who often find jobs with 
companies in an adjacent renewal community.
  A good example of what I am talking about is in the northern part of 
Louisiana, home of the North Louisiana Renewal Community and the 
Ouachita Renewal Community. The City of Monroe is located at the heart 
of the Ouachita Renewal Community. Monroe serves as the hub for 
Northeast Louisiana. All around Monroe and the Ouachita Renewal 
Community there are parishes which all fall in the North Louisiana 
Renewal Community, Morehouse Parish to the north, Richland Parish to 
the east, Caldwell Parish to the south, and Lincoln Parish to the west. 
We know that many companies in the Ouachita Renewal Community would 
qualify for the tax benefits if they could count any employees they 
hired from the adjacent North Louisiana Renewal Community toward 
meeting the thirty-five percent requirement. My legislation will allow 
the employers in one renewal community to hire employees from an 
adjacent or nearby renewal community areas and still receive the tax 
benefits granted through the Act.
  The goal of the Renewal Community Program is to provide a vehicle for 
change in poverty stricken areas. It makes sense that we take steps to 
add flexibility to the program. Employees with a particular skill set 
may be better suited to work at companies located in an adjacent 
renewal community. My legislation provides employers and employees with 
the opportunity to take full advantage of the Renewal Community 
program.
  This legislation is an opportunity for continued assistance to low 
income people and economically distressed areas of our country. I urge 
my colleagues to support this bill.
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