Internet Tax, New Markets Tax Credits, Unfunded Mandates Focus of Urban Economic Policy Committee Meeting
By Larry Jones
July 12, 2004
Jackson Mayor Harvey Johnson led mayors on the Urban Economic Policy Committee through an ambitious agenda on June 26. The committee head from five speakers and took action on seven resolutions.
Internet Tax Moratorium
On pending Internet Tax legislation, Jonathon Jones, chief of staff for Senator Thomas Carper (DE), told mayors that the House and Senate passed significantly different Internet Tax Moratorium bills and so far no plans have been made to appoint a panel to resolve the differences. The Senate bill, which is supported by the Conference, would extend the moratorium on state and local taxes on internet access fees for four years and make modest changes in the definition of internet access to ensure that digital subscriber lines and all other forms on Internet access are treated equitably. The House bill would permanently extend the moratorium and expand the definition of Internet access to prevent state and local governments from collecting taxes on telecommunication services. Jones assured mayors that Senator Carper would continue to work with mayors and other officials to enact final legislation in line with the Senate version of the bill.
New Market Tax Credit
Arthur A. Garcia, director the Treasury Department's Community Development Financial Institutions Fund provided an update on the agency's implementation of the New Markets Tax Credits program, which awards tax credits as an incentive to attract businesses to distressed communities. Since the beginning of the program, he said the agency has awarded $6 billion in tax credits and it will be awarding another $9 billion over the next three years. Notice of the next round of awards will be published in the Federal Register by the end of July and awards will be made by the end of September. Elyse Cheery, chief executive officer of Boston Community Capital also spoke about the local experience working with the program.
Paul Posner, managing director of the Government Accounting Office, Federal Budget Analysis, Strategic Issues Team, discussed the findings from a May report on the implementation of the Unfunded Mandates Reform Act, which was enacted in 1995 to restrict the number of federal mandates imposed on state and local governments. Posner said that while the report shows that UMRA has restricted the number of mandates, there are definitional and procedural flaws in the legislation that have allowed a number of mandates and costly federal actions to be enacted.
Tax Increment Financing
Charles Johnson from the Atlanta firm of Holland and Knight discussed his work with cities and counties in arranging tax increment financing, which allows local governments to capture tax revenues attributable to increases in property values.
Adopted Urban Economic Policy Resolutions
Earned Income Tax Credit Pre-Certification - urges Congress to address any government delays in sending tax returns to hard working low income individuals who file for returns under the Earned Income Tax Credit (EITC), when such delays are due to the implementation of the Internal Revenue Service new certification and pre-certification procedures; and calls on Congress to prohibit any further implementation of these requirements without Congressional authorization; and urges Congress and the IRS to simplify the EITC so that all who are eligible can and will apply for the tax credit.
Sale Lease-back Financing - urges all members of Congress to support final legislation that would allow the continuation of sale-leaseback financing, including a provision providing for a transition period to allow all pending transactions to move thorough the approval process under existing tax rules; and provisions changing the tax rules for future transactions by limiting the availability of transactions involving foreign assets and by imposing new requirements on transactions involving domestic assets.
Temporary Moratorium on Internet Access Fees - urges all members of Congress to support the Senate version (S. 150) of legislation to reinstate a moratorium on state and local taxes on Internet access fees, which calls for a four-year extension of the law and includes provisions protecting current taxes. It also urges members of Congress to oppose any compromise that embraces the permanent moratorium or the expanded definition of Internet access outlined in the House bill (H.R. 49).
National Priorities for America's Working Families - urges Congress and the Administration to recommit to national priorities that address the unmet needs of working Americans while providing the necessary resources to adequately protect our armed forces in Iraq. Urges support for the passage of the legislation increasing the minimum wage and expanding college student aid programs, fully funding workforce development programs and increasing funds for housing, infrastructure investments, education and health care.
Local Involvement in the 2010 - urges Congress and the Administration to commit additional funds to improve local involvement in the 2010 census: by establishing a senior level position for a person who could work closely with local governments in developing plans for improving the address list for the 2010 census; by establishing priorities for dealing with address list problems; and by testing procedures designed to better list and enumerate the most problematic address types in the 2006 test census.
Tort Reform - urges Congress and the Administration to enact tort reform legislation to limit awards of attorney's fees in actions involving municipalities under federal law to amounts that are appropriately proportionate, so that spurious claims do not permit plaintiffs' attorneys to obtain unjust awards; and to ensure that federal judgements against individual local government employees based on their willful misconduct, are collectable only from those employees, and not from their government employers.
Funding for Closed Military Bases - urges Congress and the Administration to adequately fund the clean up and environmental remediation of closed military bases in a manner that fosters their prompt conversion to productive civilian reuse.