[Congressional Record Volume 153, Number 48 (Tuesday, March 20, 2007)]
[Senate]
[Pages S3391-S3393]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. SNOWE (for herself and Ms. Collins):
  S. 943. A bill to amend the Internal Revenue Code of 1986 to extend 
the period for which the designation of an area as an empowerment zone 
is in effect; to the Committee on Finance.
  Ms. SNOWE. Mr. President, I rise today with Senator Collins to 
introduce two pieces of legislation to help reverse the devastating 
population decline and economic distress that have plagued individuals 
and businesses in Aroostook County, the northernmost county in Maine, 
as well as in other parts of the country. What the first bill does is 
simple, it will bring all of Aroostook County under the Empowerment 
Zone (EZ) program. The legislation is identical to a bill that we 
introduced in the 108th Congress and was included in the FY 2004 
Agriculture Appropriations bill in 2003 as passed by the Senate. The 
second piece of legislation would enable those economically depressed 
communities, already taking advantage of these incentives, to secure 
the full 15 years of targeted growth originally granted to the areas 
first designated as Empowerment Zones.
  To fully grasp the importance of the former legislation, it is 
necessary to understand the unique situation facing the residents of 
Aroostook County. ``The County,'' as it is called by Mainers, is a vast 
and remote region of Maine. It shares more of its border with Canada 
than its neighboring Maine counties. It has the distinction of being 
the largest county east of the Mississippi River. Its geographic 
isolation is even more acute when considering that the county's 
relatively small population of 73,000 people are scattered throughout 
6,672 square miles of rural countryside. Aroostook County is home to 71 
organized townships, as well as 125 unorganized townships much of which 
is forest land and wilderness.
  As profoundly remote as this geographic isolation may seem, it is the

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economic isolation and the recent out-migration that has had the most 
devastating effect on the region. The economy of northern Maine has a 
historical dependence upon its natural resources, particularly forestry 
and agriculture. While these industries served the region well in 
previous decades, and continue to form the underpinnings of the local 
economy, many of these sectors have experienced decline and can no 
longer provide the number of quality jobs that residents require and 
deserve.

  While officials in the region have put forward a herculean effort to 
redevelop the region, with nearly 1,000 new jobs at the Loring Commerce 
Center alone, Aroostook County is still experiencing a significant 
``job deficit'', and as a result continues to lose population at an 
alarming rate. Since its peak in 1960, northern Maine's population has 
declined by 30 percent. Unfortunately, the Maine State Planning Office 
predicts that Aroostook County will continue losing population as more 
workers leave the area to seek opportunities and higher wages in 
southern Maine and the rest of New England.
  In January 2002, a portion of Aroostook County was one of two regions 
that received Empowerment Zone status from the USDA for out-migration. 
The entire county experienced an out-migration of 15 percent from 
86,936 in 1990 to 73,938 in 2000. Moreover, a staggering 40 percent of 
15- to 29-year-olds left during the last decade.
  The current zone boundaries were chosen based on the criteria that 
Empowerment Zones be no larger than 1,000 square miles, and have a 
maximum population of 30,000 for rural areas. The lines drawn for the 
Aroostook County Empowerment Zone were considered to be the most 
inclusive and reasonable given the constraints of the program. It 
should be noted as well that the boundaries were drawn based on the 
1990 census, making the data significantly outdated at the start, and 
included the former Loring Air Force Base and its population of nearly 
8,000 people, which had closed nearly 8 years before the designation, 
taking its military and much of its civilian workforces with it. The 
Maine State Planning Office estimated that the base closure resulted in 
the loss of 3,494 jobs directly related to the base and another 1,751 
in associated industry sectors for a total loss of $106.9 million 
annual payroll dollars.
  Some of the most distressed communities that have lost substantial 
population are not in the Empowerment Zone, and other communities, such 
as Houlton, literally are divided simply by a road, having one business 
on one side of the street with no Empowerment Zone designation across 
from a neighboring business on the other side of the street with full 
Empowerment Zone benefits. The economic factors for these communities 
and for these neighbors are the same as those areas within the 
Empowerment Zone. This designation is not meant to cause divisiveness 
within communities, it is created to augment a partnership for growth 
and to level the playing field for all Aroostook County communities who 
have equally suffered through continuing out-migration whether it be in 
Madawaska or Island Falls.
  The legislation I am introducing would provide economic development 
opportunities to all reaches of Aroostook County by extending 
Empowerment Zone status to the entire county. This inclusive approach 
recognizes that the economic hardship and population out-migration are 
issues that the entire region must confront, and, as evidenced by their 
successful Round III EZ application, they are attempting to confront. I 
believe the challenges faced by Aroostook County are significant, but 
not insurmountable. This legislation would make great strides in 
improving the communities and business in northern Maine, and I urge my 
colleagues to support this bill.
  With regards to the latter bill that I am offering today, I believe 
all Empowerment Zone communities need 15 years to reverse years of 
downward spiraling that originally effected their economies. I have 
long supported Empowerment Zone incentives and I believe that these 
targeted tax incentives provide struggling communities the best chance 
for sustained, long lasting economic renewal.
  In 1994, Congress designated the first Empowerment Zones setting 
2009, a 15-year time frame, as the date that these tax incentives would 
expire. The 2009 expiration date of Empowerment Zone status was held 
firm for Round II communities designated in 1997, and the Round III 
communities designated in 2002. As a result of the expiration date some 
communities such as Aroostook County, which was designated in 2002, are 
granted as few as 7 years to use tax incentives to overturn decades of 
decline and economic neglect.
  Unfortunately, Aroostook's economic problems will not be fixed within 
the 7 short years this area qualifies for Empowerment Zone tax 
incentives. Instead a long-term and lasting commitment of at least 15 
years is necessary to help Aroostook communities work their way to 
stronger economic prosperity. Many communities, such as Aroostook 
County, that were unable to qualify for Empowerment Zone status until 
2002, are in dire need of the long-term 15-year window in which to 
address their stubborn causes of poverty.
  Businesses operating within Empowerment Zones receive a 20 percent 
wage credit for the first $15,000 they pay in wages to local residents. 
Other tax incentives encourage businesses and industries to further 
commit to these communities. Companies with businesses in Empowerment 
Zones are eligible for an additional $35,000 worth of 179 business 
expensing--making these long-term business obligations more attractive, 
affordable and likely. Empowerment Zones are also eligible for expanded 
tax exempt financing for building the infrastructure communities need 
to attract long-term developers and business partners.
  To qualify for Empowerment Zone status, communities develop 
comprehensive strategic plans that depend on these tax incentives to 
help them transform their economies. Each community's plan focuses on 
establishing long-term partnerships among private businesses, non 
profits, state, local, and federal government agencies to help develop 
the local economy. Together these parties use the community's strategic 
blue print to implement interconnected projects that address the 
factors creating the area's economic sickness. These types of projects 
concentrate on building much-needed business and industrial 
infrastructure, developing an educated workforce, and diversifying 
local economies away from a reliance on one employer or industry.
  Through the Aroostook Partnership for Progress, and the businesses 
working in the Empowerment Zone, the County is making significant 
progress--the factors causing poverty in this rural part of Maine 
cannot be eradicated quickly. Aroostook County's strategic plan will 
take time to implement as infrastructure, industry and other 
initiatives produce greater economic capabilities and diversification. 
Though Aroostook County is working valiantly to overcome the factors 
causing their economic plight, they will need more than seven years to 
overcome 40 years of difficulties. I know that there are many other 
struggling Round II and Round III Empowerment Zone communities, such as 
Aroostook, who need the maximum, in order to reverse the poverty and 
underdevelopment also plaguing those areas.
  I urge my colleagues to recognize the urgency of making a long-term 
pledge to communities using Empowerment Zone incentives to work its way 
out of long-term poverty. I hope that each Senator will support the 
communities in their states, currently undertaking the painful process 
of economic transformation, by supporting passage of this economic 
development bill.
  I ask unanimous consent that the text of each bill be printed in the 
Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 942

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. MODIFICATION OF BOUNDARY OF AROOSTOOK COUNTY 
                   EMPOWERMENT ZONE.

       (a) In General.--The Aroostook County empowerment zone 
     shall include, in addition to the area designated as of the 
     date of the enactment of this Act, the remaining area of the 
     county not included in such designation, notwithstanding the 
     size requirement of section 1392(a)(3)(A) of the Internal 
     Revenue Code of 1986 and the population requirements of 
     section 1392(a)(1)(B) of such Code.

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       (b) Effective Date.--Subsection (a) shall take effect as of 
     the effective date of the designation of the Aroostook County 
     empowerment zone by the Secretary of Agriculture.
                                  ____


                                 S. 943

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. EXTENSION OF ROUND II AND ROUND III EMPOWERMENT 
                   ZONES.

       (a) In General.--Clause (i) of section 1391(d)(1)(A) of the 
     Internal Revenue Code of 1986 (relating to period for which 
     designation is in effect) is amended by inserting ``(December 
     31, 2016, in the case of any empowerment zone designated 
     under subsection (g) or (h))'' after ``2009''.
       (b) Conforming Amendment.--Paragraph (2) of section 1391(h) 
     of the Internal Revenue Code of 1986 (relating to additional 
     designations permitted) is amended by striking ``2009'' and 
     inserting ``2016''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

  Ms. COLLINS. Mr. President, I am pleased to join my colleague, 
Senator Olympia Snowe, in introducing legislation that will expand the 
borders of the Aroostook County Empowerment Zone to include the entire 
County so that the benefits of Empowerment Zone designation can be 
fully realized in northern Maine.
  The Department of Agriculture's Empowerment Zone program addresses a 
comprehensive range of community challenges, including many that have 
traditionally received little federal assistance, reflecting the fact 
that rural problems do not come in standardized packages but can vary 
widely from one place to another. The Empowerment Zone program 
represents a long-term partnership between the federal government and 
rural communities so that communities have enough time to implement 
projects to build the capacity to sustain their development beyond the 
term of the partnership. An Empowerment Zone designation gives 
designated regions potential access to federal grants for social 
services and community redevelopment as well as tax incentives to 
encourage economic growth.
  Aroostook County is the largest county east of the Mississippi River. 
Yet, despite the impressive character and work ethic of its citizens, 
the County has fallen on hard times. The 2000 Census indicated a 15 
percent loss in population since 1990. Loring Air Force Base, which was 
closed in 1994, also caused an immediate out-migration of 8,500 people 
and a further out-migration of families and businesses that depended on 
Loring for their customer base.
  In response to these developments, the Northern Maine Development 
Commission and other economic development organizations, the private 
business sector, and community leaders in Aroostook have joined forces 
to stabilize, diversify, and grow the area's economy. They have 
attracted some new industries and jobs. As a native of Aroostook 
County, I can attest to the strong community support that will ensure a 
continued successful partnership with the U.S. Department of 
Agriculture.
  Designating this region of the United States as an Empowerment Zone 
will help build its future economic prosperity. However, the 
restriction that the Empowerment Zone be limited to 1,000 square miles 
prevents all of Aroostook's small rural communities from benefitting 
from this program. Aroostook covers some 6,672 square miles but has a 
population of only 74,000. Including all of the County in the 
Empowerment Zone will guarantee that parts of the County will not be 
left behind in the quest for economic prosperity. It does little good 
to have a company move from one community to another within the County 
simply to take advantage of Empowerment Zone benefits.
  Senator Snowe and I introduced this legislation in both the 108th and 
109th Congresses. In fact, we were successful in getting this 
legislation passed in the Senate by attaching it to the fiscal year 
2004 Agriculture Appropriations bill. Unfortunately, this language was 
removed during conference negotiations with the House. Senator Snowe 
and I remain committed to bringing the benefits of the Empowerment Zone 
designation to all of Aroostook County's residents and will work to 
pass this legislation in both chambers during this Congress.
                                 ______