Renewing Communities by Helping
Summary of Business Provisions in H.R. 3467,
Community Renewal Act of 1996
Although the title of this bill, sponsored by Rep. Jim Talent (R-MO) and
Rep. J.C. Watts (R-OK), emphasizes that it will save children, the most
interesting part is how it proposes to do so: By encouraging investment and
development in America's economically-depressed areas. Indeed, one of this
bill's primary focuses is on how not only to save business in these areas, but
how to make them thrive.
The bill includes numerous provisions that should attract the attention and
support of businesses:
- The Establishment of Renewal Communities: One-hundred communities, 10%
of which must be in rural areas, will be designated as renewal communities.
The eligibility requirements for renewal communities require a course of action
to be written and signed by State or local governments and neighborhood
organizations. The course of action include the following activities:
A reduction of tax rates or fees applying within the renewal community.
Actions to reduce, remove, simplify, or streamline governmental
requirements applying within the renewal community.State or local income
tax benefits for fees paid for services performed by a nongovernmental entity
which were formerly performed by a governmental entity.The gift (or
sale at below fair market value) of surplus realty (such as land, homes, and
commercial or industrial structures) in the renewal community to neighborhood
organizations, community development corporations, or private companies.
- The local or state government a renewal community is located
in must also meet some economic growth requirements by certifying in writing
that the following will be repealed or not enforced within a renewal community
unless such regulation of businesses and occupations is necessary or
well-tailored to the protection of health and safety:Licensing
requirements for occupations that do not ordinarily require a professional
degree;Zoning restrictions on home-based businesses which do not create
a public nuisance;Permit requirements for street vendors who do not
create a public nuisance; Zoning or other restrictions that impede the
formation of schools or child care centers; and,Franchises or other
restrictions on competition for businesses providing public services, including
but not limited to taxicabs, jitneys, cable television, or trash hauling.
- A Zero Tax on Capital Gains: There will be no taxation on
any qualified capital gain recognized on the sale or exchange of a qualified
community asset held for more than five years. A qualified community asset
includes qualified community stock, qualified community business property, and
qualified community partnership interest.
- Tax Deductions on the Purchase of Community Stock: The
purchase of renewal community stock shall be allowed as a deduction with the
maximum amount allowed being $100,000 for any taxable year, and when added to
the aggregate amount from prior years, not exceeding $500,000.
- A Commercial Revitalization Tax Credit: Businesses that
construct, expand, or rehabilitate facilities in renewal communities could
receive a 20% tax credit on eligible expenses the year a qualified
revitalization building is placed in service. Another alternative allows
businesses to receive a 5% percent tax credit per year for ten years.
- The Expansion of the Work Opportunity Tax Credit to
High-Risk Employees: Businesses who hire -- regardless of their place of
residence -- members of needy families receiving welfare assistance, food stamp
recipients, veterans, ex-felons, and people with mental and physical
disabilities will receive the work opportunity tax credit if the employee
meets the necessary qualifications. Businesses who hire youth between the ages
of 18-25 residing in renewal communities, and summer youth employees be +?9
9 -9 ; 1s of age whose principal abode is within renewal communities will also
receive the tax credit if they employee qualifies.
- Investment By Financial Institutions in Renewal Communities:
Federal financial supervisory agencies may grant Community Reinvestment Act
credit (as defined by the 1977 Community Reinvestment Act) to regulated
financial institutions that cooperate with community development organizations
within renewal communities to provide capital investment and bank lending.
- Elimination of FDA User Fee for Developing Drugs to Help
People: Qualified renewal community businesses that are manufacturing drugs or
have applications or supplements for a drug pending will not have to pay a fee,
as is usually required.
-Summary prepared by Arturo Silva of The National Center for Public
The National Center for Public Policy Research
20 F Street NW, Suite 700 ,
Washington, D.C. 20001
Fax (301) 498-1301
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