[Congressional Record Volume 151, Number 139 (Thursday, October 27, 2005)]
[House]
[Pages H9335-H9336]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
LIMITING THE GULF REGION REDEVELOPMENT TAX BENEFITS
The SPEAKER pro tempore. Under a previous order of the House, the
gentleman from Virginia (Mr. Wolf) is recognized for 5 minutes.
Mr. WOLF. Mr. Speaker, every American was touched by stories of the
people of the gulf region who lost so much as a result of the recent
hurricanes. The American people have responded with overwhelming
compassion with record donations of cash, food and clothing, and
Congress, too, has a role in helping the people and the region to
rebuild.
However, as Congress begins its work on the hurricane tax incentive
package to help the gulf region rebuild, it needs to recall its long
history of limiting the benefits of redevelopment tax breaks to certain
businesses.
Regardless what section of the Tax Code is used to spur reinvestment
and revitalization in the gulf region, Congress has limited the
businesses that receive certain tax benefits. The history of targeting
Federal tax breaks to certain businesses ought to continue.
{time} 1700
This limitation makes sense, particularly in light of the tight
budgets facing our Nation today. Congress's history of limiting Federal
redevelopment tax benefits goes back more than 20 years.
Federal law pertaining to tax exempt benefits of small bonds
prohibits tax benefits from being extended to ``any private or
commercial golf course, country club, massage parlor, tennis club,
skating facility, including roller skating, skateboard, and ice
skating, racquet sports facility, including any handball or racquetball
court, hot tub facility, suntan facility or racetrack.'' Congress does
not want to give money to the gambling industry to rebuild when we
should be doing it to help the poor and the needy.
In the accompanying Senate committee report, the committee expressed
concern with ``the use of small issue industrial development bonds,
IDBs, to finance a variety of types of facilities, from private
recreational facilities to fast food restaurants, that generally may be
less deserving of a Federal credit subsidy than other types of
facilities.''
A few years later, in Public Law 99-514, Congress qualified
redevelopment bonds and expanded the list of businesses that would be
prohibited from receiving tax benefits to include any private or
commercial golf course, country club, massage parlor, hot tub facility,
suntan facility, racetrack or other facility used for gambling, or any
store the principal business of which is the sale of alcoholic
beverages for consumption off premises.
When the Enterprise Zone tax structure was enacted, Congress once
again prohibited the benefits from being extended to certain businesses
following the limits laid out in 26 U.S.C. Sec. 144, which I will
include for the Record.
Just as Congress expressed concern about allowing Federal tax
benefits to flow to less deserving businesses more than 20 years ago,
Congress today should again be concerned about the same issue as it
works to assemble the Gulf Opportunity Zone tax package.
As Congress considers cuts to Medicaid, food stamps, the student loan
program, foster care, child support, and other programs to offset the
cost of hurricane recovery, we must be sure that tax incentives only go
to worthy businesses. Federal tax dollars need to be focused on those
who truly need the government's help like the poor, vulnerable, and
elderly.
I believe fair-minded Americans would support tax incentives to spur
business reinvestment along the hurricane-ravaged gulf coast to help
victims there rebuild their lives; but I also believe the American
people would draw the line, as Congress has historically done, in using
taxpayer dollars to assist businesses such massage parlors, casinos,
golf courses, and liquor stores.
Allowing gambling conglomerates, for example, which are reporting
billion-dollar record profits to take advantage of tax breaks does not
make sense. Gambling operators do not need any incentive to rebuild and
according to press reports, have already vowed to come back ``bigger
and better'' than before the hurricane.
Particularly when faced with tough budget choices, Congress ought not
abandon its history of limiting tax benefits to more deserving
businesses. Regardless of what section of the Tax Code is used to spur
business investment in the region, bonds, Enterprise Zone tax credit
zone, expensing and depreciation or any other tax incentive, Congress
should target the limited Federal resources available to more deserving
businesses.
Mr. Speaker, giving tax breaks to massage parlors, casinos, liquor
stores and golf courses while we cut Federal programs for the less
fortunate cannot be explained to the American people. Congress must be
sure these tax benefits of the gulf rebuilding package do not go to
massage parlors, casinos, liquor stores, and golf courses.
Every American was touched by stories of the people of the Gulf
region who lost so much as a result of the recent hurricanes. The
American people have responded with overwhelming compassion with record
donations of cash, food and clothing. Congress, too, has a role in
helping the people and region rebuild.
However, as Congress begins its work on the hurricane tax incentive
package to help
[[Page H9336]]
the Gulf region rebuild, it needs to recall its long history of
limiting the benefits of redevelopment tax breaks to certain
businesses. Regardless what section of the tax code is used to spur
reinvestment and revitalization in the Gulf region, Congress has
limited the businesses that receive certain tax benefits. This history
of targeting federal tax breaks to certain businesses ought to
continue. This limitation makes sense, particularly in light of the
tight budgets facing our nation today.
Congress's history of limiting federal redevelopment tax benefits
goes back more than 20 years. Federal law pertaining to tax exempt
benefits of small bonds prohibits tax benefits from being extended to
any private or commercial golf course, country club, massage parlor,
tennis club, skating facility (including roller skating, skateboard,
and ice skating), racquet sports facility (including any handball or
racquetball court), hot tub facility, suntan facility, or racetrack.
(26 USC Sec. 144(a)(8)(B))
In the accompanying Senate committee report, the committee expressed
concern with ``the use of small issue industrial development bonds
(IDBs) to finance a variety of types of facilities, from private
recreational facilities to fast food restaurants, that generally may be
less deserving of a federal credit subsidy than other types of
facilities.'' (Page 169 of Senate Report No. 97-494 for P.L. 97-248)
A few years later, in P.L. 99-514 Congress created qualified
redevelopment bonds and expanded the list of businesses that would be
prohibited from receiving tax benefits to include any private or
commercial golf course, country club, massage parlor, hot tub facility,
suntan facility, racetrack or other facility used for gambling, or any
store the principal business of which is the sale of alcoholic
beverages for consumption off premises. (26 USC Sec. 144( c)( 6)(B))
When the Enterprise Zone tax structure was enacted, Congress once again
prohibited the benefits from being extended to certain businesses
following the limits laid out in 26 USC Sec. 144(c)(6)(B). (26 USC Sec.
1397C)
Just as Congress expressed concern about allowing federal tax
benefits to flow to less deserving businesses more than 20 years ago,
Congress today should again be concerned about the same issue as it
works to assemble the Gulf Opportunity Zone tax package. As Congress
considers cuts to Medicaid, food stamps, the student loan program,
foster care, child support, and other social programs to offset the
costs of hurricane recovery, we must be sure that tax incentives only
go to worthy businesses. Federal tax dollars need to be focused on
those who truly need the government's help, like the poor, vulnerable
and elderly.
I believe fair-minded Americans would support tax incentives to spur
business reinvestment along the hurricane-ravaged Gulf coast to help
victims there rebuild their lives. But I also believe they would draw
the line--as Congress has historically done--in using taxpayer dollars
to assist businesses such as massage parlors, casinos, golf courses and
liquor stores. Allowing gambling conglomerates, for example,--which are
reporting billion dollar profits--to take advantage of tax breaks
doesn't make sense. Gambling operators don't need any incentive to
rebuild and, according to press reports, have already vowed to come
back ``bigger and better'' than before the hurricanes struck.
Particularly while faced with tough budget choices, Congress ought
not abandon its history of limiting tax benefits to more deserving
businesses. Regardless of what section of the tax code is used to spur
business investment in the region--bonds, enterprise zone tax credits,
expensing and depreciation or any other tax incentive--Congress should
target the limited federal resources available to more deserving
businesses. Giving tax breaks to massage parlors, casinos, liquor
stores and golf courses while we cut federal programs for the less
fortunate cannot be explained to the American people.
Congress must be sure these tax benefits of the Gulf rebuilding
package do not go to the massage parlors, casinos, liquor stores and
golf courses.
____________________