House Passes New Markets Bill
By Eugene T. Lowe
By a vote of 394 to 27, the House approved the Community Renewal and New Markets Act of 2000 on July 25. A similar bill with bipartisan support is awaiting action in the Senate. The bill, H.R. 4923, has been supported by both House Speaker J. Dennis Hastert (ILL) and President Clinton. In remarks before the Conference of Mayors' Winter Meeting in January, Speaker Hastert asked mayors to support the New Markets Tax Credit. In addition to the New Markets Tax Credit, the Conference of Mayors also strongly supports the extension and expansion of Empowerment Zones, which is one of several provisions of the House bill.
The New Markets bill would provide billions of dollars in tax incentives with the purpose of encouraging investment in poor urban and rural communities. To accomplish this, the bill authorizes the New Markets Tax Credit, new empowerment zone incentives, America's Private Investment Companies (APICs) and the New Market Venture Capital (NMVC) program. The bill also would allow religious organizations to apply for drug abuse prevention and treatment funds on the same basis as other non-profit organizations.
With the New Market Venture Capital Fund, ten venture capital firms would be created to invest in businesses in lower income communities. Tax credits and loans would also be made available to help businesses grow.
The life of all existing empowerment zones would be extended through 2009, and tax incentives would be equalized for all empowerment zones. That is, the wage credit incentive in Round 1 and the bonding authority in Round 2 would be made available to all empowerment zones. There would also be new capital gains incentives for all empowerment zones. Moreover, a Round 3 is authorized that would create 9 new empowerment zones. The bill also creates 40 new Renewal Communities with a variety of tax incentives, loan guarantees, and tax breaks to help with environmental cleanup costs. As for the Round 2 empowerment zones, which have received only a portion of the funding necessary to implement their plans, the administration says that "it looks forward to securing the commitment for $200 million in appropriations ...as the bill moves forward."
President Clinton in commending the House on passage of the bill said: "At a time of unprecedented prosperity, too many Americans in our cities and rural areas do not have access to investment capital and economic opportunity. This legislation will spur more private sector investment in these new markets so that all Americans can fully participate in our thriving economy. I look forward to working with members of both parties in the House and the Senate this year to enact this historic and innovative legislation."