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Congress Enacts New Markets/Renewal Communities Package On December 15, 2000, Congress passed legislation including a ten year, $26 billion package for community and urban renewal. The larger bill (H.R. 4577) was passed by the House by a vote of 292-60 and by the Senate on the same day by voice vote. The package creates 40 new GOP-backed "Renewal Communities," twelve of which would be in rural areas. Businesses in those areas would receive a 15 percent wage credit for the first $10,000 in wages for qualified employees, a deduction for building revitalization and other improvements, and a zero percent capital gains tax rate on qualifying assets held for more than five years. The community renewal component is worth $5.6 billion over ten years. The package would also create nine new administration-backed Empowerment Zones, adding to those already in existence and bringing the total to 40. Among other benefits, businesses in such zones would receive a 20 percent wage credit, but would not receive the zero percent capital gains tax rate in the GOP-backed renewal communities. The Empowerment Zone changes are worth $4.5 billion over ten years. Other major components of the package include a $5.9 billion increase in the Low-income Housing Tax Credit, a $4.4 billion New Markets Tax Credit which would offset the cost of private investments in low-income areas, and a $3.5 billion change in the tax treatment of private activity bonds, which can help states fund infrastructure projects like low income housing. Provisions were dropped from the final package that would create Individual Development Accounts (IDAs), which would match savings set aside by low income individuals. |
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Government: Executive Branch Government: Congress |
Organizations: Moderate/Liberal
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