[Congressional Record (Bound Edition), Volume 151 (2005), Part 18]
[House]
[Pages 24029-24030]
[From the U.S. 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 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

[[Page 24030]]

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.

                          ____________________