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STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
(Senate - October 03, 2000)

Text of this article available as: TXT PDF [Pages S9702-S9758] STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS By Mr. MURKOWSKI: S. 3150. A bill to convey certain real property located in Tongass National Forest to Daniel J. Gross, Sr., and Douglas K. Gross, and for other purposes; to the Committee on Energy and Natural Resources. the heritage land transfer act of 2000 Mr. MURKOWSKI. Mr. President, I rise today to introduce the Heritage Land Transfer Act of 2000. This legislation, while inconsequential when compared to many of the issues we deal with in the U.S. Congress, is extremely important to two of my oldest constituents, Douglas and Daniel Gross. These two brothers along with the other members of the Gross family are amongst Alaska's earliest pioneers. These two brothers have spent over 80 years drawing their existence out of the harsh Southeastern Alaskan environment. Through all these years, they managed to raise their families and contributed to building the great State that I have the privilege of representing. I would also point out that Douglas and Daniel Gross served our Nation during World War II at its time of greatest need--now these two veterans need our help to right a wrong that has been vested upon them through no fault of their own. ``The Heritage Land Transfer Act of 2000'' directs the Forest Service to convey 160 acres to Daniel and Douglas Gross. This granting of clear title would fix a problem that has plagued the family for the past 20 years. The need for this action arises from the fact that no records remain to substantial the family's claim that they homesteaded on Greens Point in the 1930's. Family homesteading records were destroyed when the Gross home burned to the ground in 1935-1936 and to make matters worse, the Forest Service is unable to locate any documentation to substantiate the Gross family claim. With neither title nor documentation, Doug and Dan Gross are unable to produce any legal record of ownership to the land their parents homesteaded. The paper records, however, are the only things missing. The Forest Service willingly acknowledges that a large body of evidence exists that clearly establishes the fact that the family built a home on Greens Point in the 1930's, that they grew and sold vegetables from this farmstead, and that they were good neighbors to many people caught out in our famous Alaskan storms. While the family and the Forest Service have searched in vain for written records, there is one piece of physical evidence to substantiate the family claim. On September 11, 1989, Alaska State Senator Robin Taylor traveled to the Gross property on the Stikine River for the purpose of locating a witness tree which would provide objective proof to the Gross family claim of homestead. In a letter Senator Taylor sent to Richard Kohrt, Wrangell District Ranger, Tongass National Forest he wrote ``I was present when Mr. Bungy, United States Forest Service specialist, sawed and chopped open the large spruce tree which the Gross Brothers had identified from memory as being a witness tree. Mr. Bungy verified that the large blaze uncovered was of the exact age that coincided with the Gross claim. By counting the annual growth rings it coincided with the many affidavits and statements of witness about the Gross claim of homestead.'' There is no question that the family settled on the Green Point property on the Stikine River in the 1930's. They raised all of their children on their property and were good friends to all who lived and worked throughout the region. I have in my possession many affidavits, each one testifying to the settlement of the Gross family along the Stikine River. I offer the following quotations typical of these testaments: ``In the early 1930's I spent a lot of time up the Stikine River at the Gross Ranch. They had a large two story home and a huge garden . . .'' ``I stayed with Mr. and Mrs. Bill Gross in the middle thirties. Bessie Gross took care of my brother Gilbert and I while my mother and father were out fishing, they had a house and garden on the river which everyone knows as the Gross place even to this day . . .'' ``I stayed with Bessie Gross and Family during the late 1930's in their place up the river . . .'' And another from Mr. Harry Sundberg, a gillnet fisherman, used to fish in ``what was known locally as the Gross homestead.'' Mr. Sundberg goes on to say ``While most people during that period did not file on the land they occupied, I distinctly recall that our conversations included the fact that they had applied for their application to own property similar to Captain Lee, who owned the property directly south of them on the mainland.'' The Homestead Act requires residency for a minimum of 3 years. These affidavits, and many others, verify the Gross families life on this property since the early 1930's. In a letter from the Department of Agriculture to Senator Stevens they write ``Even though it's clear the Gross family homesteaded on the property, there is no evidence or record that they completed the process to obtain title.'' Another letter from the Department of Agriculture states ``the Forest Service does not and has not refuted your claim that you and/or your family resided at Greens Point in the 1930's.'' An Alaska Magazine article written in 1984 references the ``Gross place'' along the Stikine River. The Homestead Act authorized the transfer of 160 acre parcels of federal land to private owners. The Gross Homestead is 160.8 acres. A tree, both Daniel and Douglas Gross remember being used as a survey marker when they were boys, was examined in 1989 and found to have a flat face blazed into the wood approximately 50 years [[Page S9703]] prior. This is not a coincidence. It is proof this land was surveyed when the family claims it was surveyed. This family has lived on, and made use of this land for 70 years. It is time for them to be named the legal title holders, and to complete the already started process of shuffling paper. ______ By Mr. ROTH (for himself, Mr. Moynihan, Mr. Grassley, Mr. Baucus, Mr. Hatch, Mr. Rockefeller, Mr. Murkowski, Mr. Breaux, Mr. Jeffords, Mr. Conrad, Mr. Mack, Mr. Graham, Mr. Thompson, Mr. Kerrey, Mr. Robb, and Mr. Bryan): S. 3152. A bill to amend the Internal Revenue Code of 1986 to provide tax incentives for distressed areas, and for other purposes; read the first time. community renewal and new markets act of 2000 Mr. ROTH. Mr. President, today I am, along with 14 cosponsors from the Finance Committee, introducing a Community Renewal tax reduction bill that will help all America benefit from today's economic boom. As you know, the House bill embodies an agreement between the House and the Administration. Personally, I think that it would be wrong for the Senate to be silent in this process. It is important for this body to at least have a voice in crafting this legislation. While I would have preferred that this legislation to have been reported from the Finance Committee, I believe my bill represents the Committee's will. It is largely composed of the Chairman's mark and amendments submitted by the Committee's members. Every Member of the Finance Committee had input into this bill. In the regular course of Finance Committee business, we would have reported this bill out of the Committee with an overwhelming vote in support. And the fact that 15 members on both sides of the aisle have joined me as original cosponsors, I believe, attests to the Finance Committee's approval of this legislation. It goes without saying that America's communities are important. I believe that there are many ways in which we can extend help to them. I also feel that any time we can work together with the Administration to cut taxes we must try and see it to fruition. While I listened to the concerns of every senator--both on and off the Finance committee--who approached me with a provision in which they were interested, I did not incorporate them all. I did not because I could not without the cost of the bill growing out of control. It is important that we not forget communities that may not have received as much as others from America's economic boom. However, it is also important that we consider the size of this bill in the context of other tax relief priorities that remain. These other priorities are marriage tax relief, retirement security, education, estate tax relief, small business tax relief, and other items. Community renewal tax relief must fit within the overall framework of the tax relief agenda. This Finance Committee bill is fair and it is in line with the revenue loss of the package, proposed by Senators Santorum, Abraham, and Lieberman, which was considered earlier this year in the Senate. In designing this bill, members of the Finance Committee decided not to turn this bill into a grab bag of special interest provisions. This Finance Committee bill includes a variety of proposals that will further the bill's goals of community renewal--rationalizing and simplifying what was and, was proposed to be, a hodge-podge of often conflicting provisions. It includes an immediate--let me emphasize immediate--increase in the volume caps for low-income housing tax credits and private activity bonds. It also addresses many, many important problems left out of the House and Administration proposal. Among other things, this package contains an energy and conservation component, a farm relief component, an Individual Development Account proposal, an extension of the adoption credit and the enhanced deduction for computer donations, a program to develop high speed rail around the country, and a broadband Internet incentive that will make sure that no one gets left on the wrong side of the digital divide. One provision that I particularly want to talk about is the tax credit for renovating historic homes. This was one of Senator John Chafee's signature items and I am pleased to include it in the Finance Committee bill, not only because I support it, but as a tribute to our good friend. We all know that if he were here, he would have fought hard for this tax incentive. In fact, Senator Lincoln Chafee came to see me earlier this year. Lincoln told that in his dad's last speech, John talked about the importance of the tax credit and said that it was something he wanted to get done before he left the Senate. Unfortunately, he is not with us today, but hopefully we can complete this unfinished business for him. This is a fair package and a generous package. I believe it is one that this Senate should feel comfortable embracing. I hope each of you who has not done so, will do so. Mr. MOYNIHAN. Mr. President, last week the Finance Committee was scheduled to mark up the ``Community Renewal and New Markets Act of 2000,'' but the legislation became burdened by extraneous matters, and the Committee was unable to complete the mark-up. I rise today to join my good friend and Chairman of the Finance Committee, Senator Roth, in introducing the ``Community Renewal and New Markets Act of 2000'' as an original bill with 15 cosponsors from the Finance Committee. Sir, we all should be grateful for Senator Roth's leadership in this matter. Community renewal is an effort to rebuild American communities, which is based on an agreement reached between the President and the Speaker of the House that this is legislation we ought to have. The signals are clear: the legislation will be enacted this year with or without us. Today, Senator Roth and I give a voice in this process to the Finance Committee and the Senate. Mr. President, this bill represents the will of the Finance Committee. It incorporates the worthwhile ideas of its members, including the work of my good friend, Senator Robb, who, along with Senator Rockefeller, has worked tirelessly to provide meaningful incentives for investment in distressed communities. I also take a moment of the Senate's time to echo Senator Roth's tribute to Senator John Chafee. It is fitting that we should enact, in a bipartisan bill, the tax credit for renovating historic homes in honor of a great Senator. Substantively, the Community Renewal legislation is significant in several respects. First, it provides a notable measure of tax simplification, even as it accomplishes a worthwhile goal--tax benefits for investment in poor communities. While the bill designates 30 new ``Renewal Zones,'' it also conforms the tax incentives available to individuals and businesses investing in any of the zone designations, current or future. Our legislation smartly unifies these Empowerment and Renewal Zones and creates a common set of incentives. This is the right kind of legislation. I also note, Mr. President, with some appreciation, two provisions that will make transportation and data transmission very quick indeed. The bill includes provisions to accelerate and expand access to high- technology infrastructure for all communities. First, it authorizes $10 billion of tax credit bonds for Amtrak to develop high-speed railways. High-speed railways have the potential to connect the very communities targeted by this legislation and provide them with greater access to information. Second, the bill includes a proposal that I first introduced on June 8, 2000. That proposal, which now has 52 Senate supporters, provides graduated tax credits for deployment of high-speed communications-- called ``broadband''--to residential and rural communities. Current market forces are driving deployment of broadband technology almost exclusively to urban businesses and wealthy households. The proposal in the bill will encourage broadband providers to act quickly to deploy broadband to Americans in all communities. Mr. President, if you will allow me one further observation, as I am compelled to compliment the bill in one other respect. Consistent with the purpose of this legislation, it includes a [[Page S9704]] tax incentive for investment in labor in Puerto Rico. The provision does not accomplish all that I had hoped it would, but I believe it represents a positive step forward. It extends to Puerto Rico tax incentives for job creation similar to the ones in other areas of the bill, and it does so, quite simply, through an existing tax-code provision, the Puerto Rico economic activity credit. Mr. President, I again applaud the leadership of our revered Chairman and proudly join him in introducing the Community Renewal and New Markets Act of 2000. Mr. MACK. Mr. President, as a co-sponsor of the Community Renewal and New Markets Act of 2000, I want to commend Chairman Roth for his usual fine work in assembling a bill that garners the support of such a large number of our Finance Committee colleagues. I am pleased that a number of items in this bill are provisions that are extremely important to me, and I would like to speak briefly concerning them. But I also want to draw attention to some provisions in this bill that I do not favor. As this bill stands in the place of what would have been a bill reported out of the Committee on Finance, it reflects the compromises that are inherent in the committee process. Unlike typical bills, of which it is reasonable to assume that every provision is supported by every co-sponsor, probably every co-sponsor of this bill can find provisions contained in it that he does not support. Of many, there are two that I find most troubling: the ``new markets tax credit,'' and the ``individual development accounts.'' These two provisions are appropriations masquerading as tax cuts. Under the new markets tax credit, the Secretary of the Treasury would annually pay dividends to investors in ``community development entities,'' which must be certified by the Treasury Department and which must have as their primary mission investing in low-income people or communities. This proposal is premised on the belief that an entity that lacks a profit-motive, under federal bureaucratic supervision, will be an attractive investment for people if dividends are guaranteed. It is the sort of scheme that could only be dreamed up by people who have spent their entire careers in government. A simpler way to direct capital to investment-starved pockets is by eliminating the tax on capital gains--this is the decentralized, market-oriented approach. The ``individual development accounts'' would launder government- matching funds for low income savers through financial institutions. This new entitlement cannot be justified. It is true that, by some measures, the savings rate in the United States appears low. Simple logic dictates that the savings rate have been lowered due to federal tax policies, which impose several layers of taxation upon income that is saved. It is one thing to address this problem at the source, by removing the extra taxation on savings--a we do to the extent that people can make deductible contributions to traditional IRAs and contributions to Roth IRAs. But to give people money to reward them for saving is pure income redistribution, a misuse of the taxpayers' money. Despite my disagreement with some of the provisions of this bill, I am pleased that the bill contains several initiatives that I have proposed over the past few Congresses. The Low Income Housing Tax Credit is boosted to make up for over a decade's worth of inflation, and is indexed to prevent this problem from reoccurring. The First-Time Homebuyer Tax Credit for the District of Columbia is extended and the marriage penalty in the credit is eliminated. Section 1706 of the Tax Reform Act of 1986, which discriminates against high technology workers and the companies that hire them, is repealed. Not-for-hire disaster insurance funds, in my state of Florida and several others, are made tax-exempt entities. I am most encouraged by the extension of my zero percent capital gains tax rate proposal to businesses in the entire District of Columbia, and to businesses in all empowerment and renewal zones. Although I am concerned that the lengthy, five-year holding period is unwise and undermines the power of the proposal, I am nevertheless pleased that the idea is spreading and people are coming to see capitalism as the only true cure for poverty. Mr. ROTH. Mr. President, along with Senator Moynihan and the other members of the committee I ask unanimous consent that S. 3152, the Community Renewal and New Markets Act of 2000 be printed in the Record. I also ask unanimous consent that a technical explanation of S. 3152, which has been prepared by the Joint Committee on Taxation, be printed in the Record, at a cost of $4,290.00, immediately following the text of the bill. There being no objection, the material was ordered to be printed in the Record, as follows: S. 3152 Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE; ETC. (a) Short Title.--This Act may be cited as the ``Community Renewal and New Markets Act of 2000''. (b) Amendment of 1986 Code.--Except as otherwise expressly provided, whenever in this Act an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986. (c) Table of Contents.-- Sec. 1. Short title; etc. TITLE I--INCENTIVES FOR DISTRESSED COMMUNITIES Subtitle A--Designation and Treatment of Renewal Zones Sec. 101. Designation and treatment of renewal zones. Subtitle B--Modification of Incentives for Empowerment Zones Sec. 111. Extension of empowerment zone treatment through 2009. Sec. 112. 15 percent employment credit for all empowerment zones Sec. 113. Increased expensing under section 179. Sec. 114. Higher limits on tax-exempt empowerment zone facility bonds. Sec. 115. Empowerment zone capital gain. Sec. 116. Funding for Round II empowerment zones. Subtitle C--Modification of Tax Incentives for DC Zone Sec. 121. Extension of DC zone through 2006. Sec. 122. Extension of DC zero percent capital gains rate. Sec. 123. Gross income test for DC zone businesses. Sec. 124. Expansion of DC homebuyer tax credit. Subtitle D--New Markets Tax Credit Sec. 131. New markets tax credit. Subtitle E--Modification of Tax Incentives for Puerto Rico Sec. 141. Modification of Puerto Rico economic activity tax credit. Subtitle F--Individual Development Accounts Sec. 151. Definitions. Sec. 152. Structure and administration of qualified individual development account programs. Sec. 153. Procedures for opening an individual development account and qualifying for matching funds. Sec. 154. Contributions to individual development accounts. Sec. 155. Deposits by qualified individual development account programs. Sec. 156. Withdrawal procedures. Sec. 157. Certification and termination of qualified individual development account programs. Sec. 158. Reporting, monitoring, and evaluation. Sec. 159. Account funds of program participants disregarded for purposes of certain means-tested Federal programs. Sec. 160. Matching funds for individual development accounts provided through a tax credit for qualified financial institutions. Sec. 161. Designation of earned income tax credit payments for deposit to individual development accounts. Subtitle G--Additional Incentives Sec. 171. Exclusion of certain amounts received under the National Health Service Corps Scholarship Program and the F. Edward Hebert Armed Forces Health Professions Scholarship and Financial Assistance Program. Sec. 172. Extension of enhanced deduction for corporate donations of computer technology. Sec. 173. Extension of adoption tax credit. Sec. 174. Tax treatment of Alaska Native Settlement Trusts. Sec. 175. Treatment of Indian tribal governments under Federal Unemployment Tax Act. Sec. 176. Increase in social services block grant for FY 2001. TITLE II--TAX INCENTIVES FOR AFFORDABLE HOUSING Subtitle A--Low-Income Housing Credit Sec. 201. Modification of State ceiling on low-income housing credit. [[Page S9705]] Sec. 202. Modification to rules relating to basis of building which is eligible for credit. Subtitle B--Historic Homes Sec. 211. Tax credit for renovating historic homes. Subtitle C--Forgiven Mortgage Obligations Sec. 221. Exclusion from gross income for certain forgiven mortgage obligations. Subtitle D--Mortgage Revenue Bonds Sec. 231. Increase in purchase price limitation under mortgage subsidy bond rules based on median family income. Sec. 232. Mortgage financing for residences located in presidentially declared disaster areas. Subtitle E--Property and Casualty Insurance Sec. 241. Exemption from income tax for State-created organizations providing property and casualty insurance for property for which such coverage is otherwise unavailable. TITLE III--TAX INCENTIVES FOR URBAN AND RURAL INFRASTRUCTURE Sec. 301. Increase in State ceiling on private activity bonds. Sec. 302. Modifications to expensing of environmental remediation costs. Sec. 303. Broadband internet access tax credit. Sec. 304. Credit to holders of qualified Amtrak bonds. Sec. 305. Clarification of contribution in aid of construction. Sec. 306. Recovery period for depreciation of certain leasehold improvements. TITLE IV--TAX RELIEF FOR FARMERS Sec. 401. Farm, fishing, and ranch risk management accounts. Sec. 402. Written agreement relating to exclusion of certain farm rental income from net earnings from self-employment. Sec. 403. Treatment of conservation reserve program payments as rentals from real estate. Sec. 404. Exemption of agricultural bonds from State volume cap. Sec. 405. Modifications to section 512(b)(13). Sec. 406. Charitable deduction for contributions of food inventory. Sec. 407. Income averaging for farmers and fishermen not to increase alternative minimum tax liability. Sec. 408. Cooperative marketing includes value-added processing through animals. Sec. 409. Declaratory judgment relief for section 521 cooperatives. Sec. 410. Small ethanol producer credit. Sec. 411. Payment of dividends on stock of cooperatives without reducing patronage dividends. TITLE V--TAX INCENTIVES FOR THE PRODUCTION OF ENERGY Sec. 501. Election to expense geological and geophysical expenditures. Sec. 502. Election to expense delay rental payments Sec. 503. 5-year net operating loss carryback for losses attributable to operating mineral interests of independent oil and gas producers. Sec. 504. Temporary suspension of percentage of depletion deduction limitation based on 65 percent of taxable income. Sec. 505. Tax credit for marginal domestic oil and natural gas well production. Sec. 506. Natural gas gathering lines treated as 7-year property. Sec. 507. Clarification of treatment of pipeline transportation income. TITLE VI--TAX INCENTIVES FOR CONSERVATION Sec. 601. Exclusion of 50 percent of gain on sales of land or interests in land or water to eligible entities for conservation purposes. Sec. 602. Expansion of estate tax exclusion for real property subject to qualified conservation easement. Sec. 603. Tax exclusion for cost-sharing payments under partners for wildlife program. Sec. 604. Incentive for certain energy efficient property used in business. Sec. 605. Extension and modification of tax credit for electricity produced from biomass. Sec. 606. Tax credit for certain energy efficient motor vehicles. TITLE VII--ADDITIONAL TAX PROVISIONS Sec. 701. Limitation on use of nonaccrual experience method of accounting. Sec. 702. Repeal of section 530(d) of the Revenue Act of 1978. Sec. 703. Expansion of exemption from personal holding company tax for lending or finance companies. Sec. 704. Charitable contribution deduction for certain expenses incurred in support of Native Alaskan subsistence whaling. Sec. 705. Imposition of excise tax on persons who acquire structured settlement payments in factoring transactions. TITLE I--INCENTIVES FOR DISTRESSED COMMUNITIES Subtitle A--Designation and Treatment of Renewal Zones SEC. 101. DESIGNATION AND TREATMENT OF RENEWAL ZONES. (a) In General.--Chapter 1 is amended by adding at the end the following new subchapter: ``Subchapter X--Designation and Treatment of Renewal Zones ``Sec. 1400E. Designation and treatment of renewal zones. ``SEC. 1400E. DESIGNATION AND TREATMENT OF RENEWAL ZONES. ``(a) Treatment of Designation.--For purposes of this title, any area designated as a renewal zone under this section shall be treated as an empowerment zone. ``(b) Designation.-- ``(1) Renewal zone defined.--For purposes of this title, the term `renewal zone' means any area-- ``(A) which is nominated by one or more local governments and the State or States in which it is located for designation as a renewal zone (hereafter in this section referred to as a `nominated area'), and ``(B) which the appropriate Secretary designates as a renewal zone. ``(2) Number of designations.-- ``(A) In general.--The appropriate Secretaries may designate not more than 30 nominated areas as renewal zones. ``(B) Minimum designation in rural areas.--Of the areas designated under subparagraph (A), at least 6 must be areas-- ``(i) which are within a local government jurisdiction or jurisdictions with a population of less than 50,000, or ``(ii) which satisfy the requirements of section 1393(a)(2). ``(3) Areas designated based on degree of poverty, etc.-- ``(A) In general.--Except as otherwise provided in this section, the nominated areas designated as renewal zones under this subsection shall be those nominated areas with the highest average ranking with respect to the criteria described in subparagraphs (B), (C), and (D) of subsection (d)(3). For purposes of the preceding sentence, an area shall be ranked within each such criterion on the basis of the amount by which the area exceeds such criterion, with the area which exceeds such criterion by the greatest amount given the highest ranking. ``(B) Exception where inadequate course of action, etc.--An area shall not be designated under subparagraph (A) if the appropriate Secretary determines that the course of action described in subsection (e)(2) with respect to such area is inadequate. ``(C) Priority for 1 nominated area in each state.--For purposes of this subchapter, 1 nominated area within each State without any area designated as an empowerment zone under section 1391 or 1400 shall be treated for purposes of this paragraph as having the highest average with respect to the criteria described in subparagraphs (B), (C), and (D) of subsection (d)(3). ``(4) Limitation on designations.-- ``(A) Publication of regulations.--The Secretary of Housing and Urban Development shall prescribe by regulation not later than 4 months after the date of the enactment of this section, after consultation with the Secretary of Agriculture-- ``(i) the procedures for nominating an area under paragraph (1)(A), ``(ii) the parameters relating to the size and population characteristics of a renewal zone, and ``(iii) the manner in which nominated areas will be evaluated based on the criteria specified in subsection (e). ``(B) Time limitations.--The appropriate Secretaries may designate nominated areas as renewal zones only during the period beginning on the first day of the first month following the month in which the regulations described in subparagraph (A) are prescribed and ending on December 31, 2001. ``(C) Procedural rules.--The appropriate Secretary shall not make any designation of a nominated area as a renewal zone under paragraph (2) unless-- ``(i) the local governments and the States in which the nominated area is located have the authority-- ``(I) to nominate such area for designation as a renewal zone, ``(II) to make the State and local commitments described in subsection (e), and ``(III) to provide assurances satisfactory to the appropriate Secretary that such commitments will be fulfilled, ``(ii) a nomination regarding such area is submitted in such a manner and in such form, and contains such information, as the appropriate Secretary shall by regulation prescribe, and ``(iii) the appropriate Secretary determines that any information furnished is reasonably accurate. ``(5) Nomination process for indian reservations.--For purposes of this subchapter, in the case of a nominated area on an Indian reservation, the reservation governing body (as determined by the Secretary of the Interior) shall be treated as being both the State and local governments with respect to such area. ``(c) Period for Which Designation Is in Effect.-- ``(1) In general.--Any designation of an area as a renewal zone shall remain in effect during the period beginning on January 1, 2002, and ending on the earliest of-- ``(A) December 31, 2009, [[Page S9706]] ``(B) the termination date designated by the State and local governments in their nomination, or ``(C) the date the appropriate Secretary revokes such designation. ``(2) Revocation of designation.--The appropriate Secretary may revoke the designation under this section of an area if such Secretary determines that the local government or the State in which the area is located-- ``(A) has modified the boundaries of the area, or ``(B) is not complying substantially with, or fails to make progress in achieving, the State or local commitments, respectively, described in subsection (e). ``(d) Area and Eligibility Requirements.-- ``(1) In general.--The appropriate Secretary may designate a nominated area as a renewal zone under subsection (b) only if the area meets the requirements of paragraphs (2) and (3) of this subsection. ``(2) Area requirements.--A nominated area meets the requirements of this paragraph if-- ``(A) the area is within the jurisdiction of one or more local governments, ``(B) the boundary of the area is continuous, and ``(C) the area-- ``(i) has a population of not more than 200,000 and at least-- ``(I) 4,000 if any portion of such area (other than a rural area described in subsection (b)(2)(B)(i)) is located within a metropolitan statistical area (within the meaning of section 143(k)(2)(B)) which has a population of 50,000 or greater, or ``(II) 1,000 in any other case, or ``(ii) is entirely within an Indian reservation (as determined by the Secretary of the Interior). ``(3) Eligibility requirements.--A nominated area meets the requirements of this paragraph if the State and the local governments in which it is located certify in writing (and the appropriate Secretary, after such review of supporting data as such Secretary deems appropriate, accepts such certification) that-- ``(A) the area is one of pervasive poverty, unemployment, and general distress, ``(B) the unemployment rate in the area, as determined by the most recent available data, was at least 1\1/2\ times the national unemployment rate for the period to which such data relate, ``(C) the poverty rate for each population census tract within the nominated area is at least 20 percent, and ``(D) in the case of an urban area, at least 70 percent of the households living in the area have incomes below 80 percent of the median income of households within the jurisdiction of the local government (determined in the same manner as under section 119(b)(2) of the Housing and Community Development Act of 1974). ``(4) Consideration of other factors.--The appropriate Secretary, in selecting any nominated area for designation as a renewal zone under this section-- ``(A) shall take into account-- ``(i) the extent to which such area has a high incidence of crime, ``(ii) if such area has census tracts identified in the May 12, 1998, report of the General Accounting Office regarding the identification of economically distressed areas, or ``(iii) if such area (or portion thereof) has previously been designated as an enterprise community under section 1391, and ``(B) with respect to 1 of the areas to be designated under subsection (b)(2)(B), may, in lieu of any criteria described in paragraph (3), take into account the existence of outmigration from the area. ``(e) Required State and Local Commitments.-- ``(1) In general.--The appropriate Secretary may designate any nominated area as a renewal zone under subsection (b) only if the local government and the State in which the area is located agree in writing that, during any period during which the area is a renewal zone, such governments will follow a specified course of action which meets the requirements of paragraph (2) and is designed to reduce the various burdens borne by employers or employees in such area. ``(2) Course of action.-- ``(A) In general.--A course of action meets the requirements of this paragraph if such course of action is a written document, signed by a State (or local government) and neighborhood organizations, which evidences a partnership between such State or government and community-based organizations and which commits each signatory to specific and measurable goals, actions, and timetables. Such course of action shall include at least 4 of the following: ``(i) A reduction of tax rates or fees applying within the renewal zone. ``(ii) An increase in the level of efficiency of local services within the renewal zone. ``(iii) Crime reduction strategies, such as crime prevention (including the provision of crime prevention services by nongovernmental entities). ``(iv) Actions to reduce, remove, simplify, or streamline governmental requirements applying within the renewal zone. ``(v) Involvement in the program by private entities, organizations, neighborhood organizations, and community groups, particularly those in the renewal zone, including a commitment from such private entities to provide jobs and job training for, and technical, financial, or other assistance to, employers, employees, and residents from the renewal zone. ``(vi) The gift (or sale at below fair market value) of surplus real property (such as land, homes, and commercial or industrial structures) in the renewal zone to neighborhood organizations, community development corporations, or private companies. ``(B) Recognition of past efforts.--For purposes of this section, in evaluating the course of action agreed to by any State or local government, the appropriate Secretary shall take into account the past efforts of such State or local government in reducing the various burdens borne by employers and employees in the area involved. ``(f) Coordination With Treatment of Enterprise Communities.--For purposes of this title, the designation under section 1391 of any area as an enterprise community shall cease to be in effect as of the date that the designation of any portion of such area as a renewal zone takes effect. ``(g) Definitions and Special Rules.--For purposes of this subchapter-- ``(1) Appropriate secretary.--The term `appropriate Secretary' has the meaning given such term by section 1393(a)(1). ``(2) Governments.--If more than one government seeks to nominate an area as a renewal zone, any reference to, or requirement of, this section shall apply to all such governments. ``(3) Local government.--The term `local government' means-- ``(A) any county, city, town, township, parish, village, or other general purpose political subdivision of a State, and ``(B) any combination of political subdivisions described in subparagraph (A) recognized by the appropriate Secretary. ``(4) Application of rules relating to census tracts.--The rules of section 1392(b)(4) shall apply. ``(5) Census data.--Population and poverty rate shall be determined by using 1990 census data.''. (b) Audit and Report.--Not later than January 31 of 2004, 2007, and 2010, the Comptroller General of the United States shall, pursuant to an audit of the renewal zone program established under section 1400E of the Internal Revenue Code of 1986 (as added by subsection (a)), report to Congress on such program and its effect on poverty, unemployment, and economic growth within the designated renewal zones. (c) Clerical Amendment.--The table of subchapters for chapter 1 is amended by adding at the end the following new item: ``Subchapter X. Designation and Treatment of Renewal Zones.''. Subtitle B--Modification of Incentives for Empowerment Zones SEC. 111. EXTENSION OF EMPOWERMENT ZONE TREATMENT THROUGH 2009. Subparagraph (A) of section 1391(d)(1) (relating to period for which designation is in effect) is amended to read as follows: ``(A)(i) in the case of an empowerment zone, December 31, 2009, or ``(ii) in the case of an enterprise community, the close of the 10th calendar year beginning on or after such date of designation,''. SEC. 112. 15 PERCENT EMPLOYMENT CREDIT FOR ALL EMPOWERMENT ZONES (a) 15 Percent Credit.--Subsection (b) of section 1396 (relating to empowerment zone employment credit) is amended-- (1) by striking paragraph (1) and inserting the following new paragraph: ``(1) In general.--Except as provided in paragraph (2), the applicable percentage is 15 percent.'', (2) by inserting ``and thereafter'' after ``2005'' in the table contained in paragraph (2), and (3) by striking the items relating to calendar years 2006 and 2007 in such table. (b) All Empowerment Zones Eligible for Credit.--Section 1396 is amended by striking subsection (e). (c) Conforming Amendment.--Subsection (d) of section 1400 is amended to read as follows: ``(d) Special Rule for Application of Employment Credit.-- With respect to the DC Zone, section 1396(d)(1)(B) (relating to empowerment zone employment credit) shall be applied by substituting `the District of Columbia' for `such empowerment zone'.''. (d) Effective Date.--The amendments made by this section shall apply to wages paid or incurred after December 31, 2001. SEC. 113. INCREASED EXPENSING UNDER SECTION 179. (a) In General.--Subparagraph (A) of section 1397A(a)(1) is amended by striking ``$20,000'' and inserting ``$35,000''. (b) Expensing for Property Used in Developable Sites.-- Section 1397A is amended by striking subsection (c). (c) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2001. SEC. 114. HIGHER LIMITS ON TAX-EXEMPT EMPOWERMENT ZONE FACILITY BONDS. (a) In General.--Paragraph (3) of section 1394(f) (relating to bonds for empowerment zones designated under section 1391(g)) is amended to read as follows: ``(3) Empowerment zone facility bond.--For purposes of this subsection, the term `empowerment zone facility bond' means any bond which would be described in subsection (a) if-- [[Page S9707]] ``(A) in the case of obligations issued before January 1, 2002, only empowerment zones designated under section 1391(g) were taken into account under sections 1397C and 1397D, and ``(B) in the case of obligations issued after December 31, 2001, all empowerment zones (other than the District of Columbia) were taken into account under sections 1397C and 1397D.''. (b) Effective Date.--The amendments made by this section shall apply to obligations issued after December 31, 2001. SEC. 115. EMPOWERMENT ZONE CAPITAL GAIN. (a) In General.--Part III of subchapter U of chapter 1 is amended-- (1) by redesignating subpart C as subpart D; (2) by redesignating sections 1397B and 1397C as sections 1397C and 1397D, respectively; and (3) by inserting after subpart B the following new subpart: ``Subpart C--Empowerment Zone Capital Gain ``Sec. 1397B. Empowerment zone capital gain. ``SEC. 1397B. EMPOWERMENT ZONE CAPITAL GAIN. ``(a) General Rule.--Gross income shall not include qualified capital gain from the sale or exchange of any qualified empowerment zone asset held for more than 5 years. ``(b) Per Taxpayer Limitation.-- ``(1) In general.--The amount of eligible gain which may be taken into account under subsection (a) for the taxable year with respect to any taxpayer shall not exceed $25,000,000, reduced by the aggregate amount of eligible gain taken into account under subsection (a) for prior taxable years with respect to such taxpayer. ``(2) Eligible gain.--For purposes of this subsection, `eligible gain'' means any gain from the sale or exchange of a qualified empowerment zone asset held for more than 5 years. ``(3) Treatment of married individuals.-- ``(A) Separate returns.--In the case of a separate return by a married individual, paragraph (1) shall be applied by substituting `$12,500,000' for `$25,000,000'. ``(B) Allocation of exclusion.--In the case of a joint return, the amount of gain taken into account under subsection (a) shall be allocated equally between the spouses for purposes of applying this subsection to subsequent taxable years. ``(C) Marital status.--For purposes of this subsection, marital status shall be determined under section 7703. ``(4) Treatment of corporate taxpayers.--For purposes of this subsection-- ``(A) all corporations which are members of the same controlled group of corporations (within the meaning of section 52(a)) shall be treated as 1 taxpayer, and ``(B) any gain excluded under subsection (a) by a predecessor of any C corporation shall be treated as having been excluded by such C corporation. ``(c) Qualified Empowerment Zone Asset.--For purposes of this section-- ``(1) In general.--The term `qualified empowerment zone asset' means-- ``(A) any qualified empowerment zone stock, ``(B) any qualified empowerment zone partnership interest, and ``(C) any qualified empowerment zone business property. ``(2) Qualified empowerment zone stock.-- ``(A) In general.--Except as provided in subparagraph (B), the term `qualified empowerment zone stock' means any stock in a domestic corporation if-- ``(i) such stock is acquired by the taxpayer after the date of the enactment of this section (December 31, 2001, in the case of a renewal zone) and before January 1, 2010, at its original issue (directly or through an underwriter) from the corporation solely in exchange for cash, ``(ii) as of the time such stock was issued, such corporation was an enterprise zone business (or, in the case of a new corporation, such corporation was being organized for purposes of being an enterprise zone business), and ``(iii) during substantially all of the taxpayer's holding period for such stock, such corporation qualified as an enterprise zone business. ``(B) Redemptions.--A rule similar to the rule of section 1202(c)(3) shall apply for purposes of this paragraph. ``(3) Qualified empowerment zone partnership interest.--The term `qualified empowerment zone partnership interest' means any capital or profits interest in a domestic partnership if-- ``(A) such interest is acquired by the taxpayer after the date of the enactment of this section (December 31, 2001, in the case of a renewal zone) and before January 1, 2010, from the partnership solely in exchange for cash, ``(B) as of the time such interest was acquired, such partnership was an enterprise zone business (or, in the case of a new partnership, such partnership was being organized for purposes of being an enterprise zone business), and ``(C) during substantially all of the taxpayer's holding period for such interest, such partnership qualified as an enterprise zone business. A rule similar to the rule of section 1202(c)(3) shall apply for purposes of this paragraph. ``(4) Qualified empowerment zone business property.-- ``(A) In general.--The term `qualified empowerment zone business property' means tangible property if-- ``(i) such property was acquired by the taxpayer by purchase (as defined in section 179(d)(2)) after the date of the enactment of this section (December 31, 2001, in the case of a renewal zone) and before January 1, 2010, ``(ii) the original use of such property in the empowerment zone commences with the taxpayer, and ``(iii) during substantially all of the taxpayer's holding period for such property, substantially all of the use of such property was in an enterprise zone business of the taxpayer. ``(B) Special rule for substantial improvements.--The requirements of clauses (i) and (ii) of subparagraph (A) shall be treated as satisfied with respect to-- ``(i) property which is substantially improved by the taxpayer before January 1, 2010, and ``(ii) any land on which such property is located. The determination of whether a property is substantially improved shall be made under clause (ii) of section 1400B(b)(4)(B), except that `the date of the enactment of this section' shall be substituted for `December 31, 1997' in such clause. ``(c) Qualified Capital Gain.--For purposes of this section-- ``(1) In general.--Except as otherwise provided in this subsection, the term `qualified capital gain` means any gain recognized on the sale or exchange of-- ``(A) a capital asset, or ``(B) property used in the trade or business (as defined in section 1231(b)). ``(2) Gain before effective date or after 2014 not qualified.--The term `qualified capital gain' shall not include any gain attributable to periods before the date of the enactment of this section (January 1, 2002, in the case of a renewal zone) or after December 31, 2014. ``(3) Certain rules to apply.--Rules similar to the rules of paragraphs (3), (4), and (5) of section 1400B(e) shall apply for purposes of this subsection. ``(d) Certain Rules To Apply.--For purposes of this section, rules similar to the rules of paragraphs (5), (6), and (7) of subsection (b), and subsections (f ) and (g), of section 1400B shall apply; except that for such purposes section 1400B(g)(2) shall be applied by substituting-- ``(1) `the day after the date of the enactment of section 1397B' for `January 1, 1998', and ``(2) `December 31, 2014' for `December 31, 2011'. ``(e) Regulations.--The Secretary shall prescribe such regulations as may be appropriate to carry out the purposes of this section, including regulations to prevent the avoidance of the purposes of this section.''. (b) Conforming Amendments.-- (1) Paragraph (2) of section 1394(b) is amended-- (A) by striking ``section 1397C'' and inserting ``section 1397D''; and (B) by striking ``section 1397C(a)(2)'' and inserting ``section 1397D(a)(2)''. (2) Paragraph (3) of section 1394(b) is amended-- (A) by striking ``section 1397B'' each place it appears and inserting ``section 1397C''; and (B) by striking ``section 1397B(d)'' and inserting ``section 1397C(d)''. (3) Sections 1400(e) and 1400B(c) are each amended by striking ``section 1397B'' each place it appears and inserting ``section 1397C''. (4) The table of subparts for part III of subchapter U of chapter 1 is amended by striking the last item and inserting the following new items: ``Subpart C. Empowerment zone capital gain. ``Subpart D. General provisions.''. (5) The table of sections for subpart D of such part III is amended to read as follows: ``Sec. 1397C. Enterprise zone business defined. ``Sec. 1397D. Qualified zone property defined.''. (c) Effective Date.--The amendments made by this section shall apply to qualified empowerment zone assets acquired after the date of the enactment of this Act. SEC. 116. FUNDING FOR ROUND II EMPOWERMENT ZONES. (a) Entitlement.--Section 2007(a)(1) of the Social Security Act (42 U.S.C. 1397f(a)(1)) is amended-- (1) in subparagraph (A), by striking ``in the State; and'' and inserting ``that is in the State and is designated pursuant to section 1391(b) of the Internal Revenue Code of 1986;''; and (2) by adding after subparagraph (B) the following new subparagraphs: ``(C)(i) 1 grant under this section for each qualified empowerment zone that is in an urban area in the State and is designated pursuant to section 1391(g) of such Code; and ``(ii) 1 grant under this section for each qualified empowerment zone that is in a rural area in the State and is designated pursuant to section 1391(g) of such Code; and ``(D) 1 grant under this section for each qualified enterprise community that is in the State, is designated pursuant to section 1391(b)(1) of such Code, and is in existence on the date of enactment of this subparagraph.''. (b) Amount of Grants.--Section 2007(a)(2) of the Social Security Act (42 U.S.C. 1397f(a)(2)) is amended-- [[Page S9708]] (1) in the heading of subparagraph (A), by inserting ``Original'' before ``Empowerment''; (2) in subparagraph (A), in the matter preceding clause (i), by inserting ``referred to in paragraph (1)(A)'' after ``empowerment zone''; (3) by redesignating subparagraph (C) as subparagraph (F); and (4) by inserting after subparagraph (B) the following new subparagraphs: ``(C) Additional empowerment grants.--The amount of the grant to a State under this section for a qualified empowerment zone referred to in paragraph (1)(C) shall be-- ``(i) if the zone is in an urban area, $5,000,000 for fiscal year 2001; or ``(ii) if the zone is in a rural area, $2,000,000 for fiscal year 2001. ``(D) Additional enterprise community grants.--The amount of the grant to a State under this section for a qualified enterprise community referred to in paragraph (1)(D) shall be $250,000.''. (c) Timing of Grants.--Section 2007(a)(3) of the Social Security Act (42 U.S.C. 1397f(a)(3)) is amended-- (1) in the heading of subparagraph (A), by inserting ``Original'' before ``Qualified''; (2) in subparagraph (A), in the matter preceding clause (i), by inserting ``referred to in paragraph (1)(A)'' after ``empowerment zone''; and (3) by adding after subparagraph (B) the following new subparagraphs: ``(C) Additional qualified empowerment zones.--With respect to each qualified empowerment zone referred to in paragraph (1)(C), the Secretary shall make 1 grant under this section to the State in which the zone lies, on January 1, 2002. ``(D) Additional qualified enterprise communities.--With respect to each qualified enterprise community referred to in paragraph (1)(D), the Secretary shall make 1 grant under this section to the State in which the community lies on January 1, 2002.''. (d) Funding.--Section 2007(a)(4) of the Social Security Act (42 U.S.C. 1397f(a)(4)) is amended-- (1) by striking ``(4) Funding.--$1,000,000,000'' and inserting the following: ``(4) Funding.-- ``(A) Original grants.--$1,000,000,000''; (2) by inserting ``for empowerment zones and enterprise communities described in subparagraphs (A) and (B) of paragraph (1)'' before the period; and (3) by adding after and below the end the following new subparagraphs: ``(B) Additional empowerment zone grants.--$85,000,000 shall be made available to the Secretary for grants under this section for empowerment zones referred to in paragraph (1)(C). ``(C) Additional enterprise community grants.--$22,000,000 shall be made available to the Secretary for grants under this section for enterprise communities referred to in paragraph (1)(D).''. (e) Direct Funding for Indian Tribes.-- (1) In general.--Section 2007(a) of the Social Security Act (42 U.S.C. 1397f(a)) is amended by adding at the end the following new paragraph: ``(5) Direct funding for indian tribes.-- ``(A) In general.--The Secretary may make a grant under this section directly to the governing body of an Indian tribe if-- ``(i) the tribe is identified in the strategic plan of a qualified empowerment zone or qualified enterprise community as the entity that assumes sole or primary responsibility for carrying out activities and projects under the grant; and ``(ii) the grant is to be used for activities and projects that are-- ``(I) included in the strategic plan of the qualified empowerment zone or qualified enterprise community, consistent with this section; and ``(II) approved by the Secretary of Agriculture, in the case of a qualified empowerment zone or qualified enterprise community in a rural area, or the Secretary of Housing and Urban Development, in the case of a qualified empowerment zone or qualified enterprise community in an urban area. ``(B) Rules of interpretation.-- ``(i) If grant under this section is made directly to the governing body of an Indian tribe under subparagraph (A), the tribe shall be considered a State for purposes of this section. ``(ii) This subparagraph shall not be construed as making applicable to this section the provisions of the Indian Self- Determination and Education Assistance Act.''. (2) Definitions.--Section 2007(f) of such Act (42 U.S.C. 1397f(f)) is amended by adding at the end the following new paragraph: ``(7) Indian tribe.--The term `Indian tribe' means any Indian tribe, band, nation, or other organized group or community, including any Alaska Native village or regional or village corporation as defined in or established pursuant to the Alaska Native Claims Settlement Act, which is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians.''. Subtitle C--Modification of Tax Incentives for DC Zone SEC. 121. EXTENSION OF DC ZONE THROUGH 2006. (a) In General.--The following provisions are amended by striking ``2002'' each place it appears and inserting ``2006'': (1) Section 1400(f). (2) Section 1400A(b). (b) Zero Capital Gains Rate.--Section 1400B (relating to zero percent capital gains rate) is amended-- (1) by striking ``2003'' each place it appears and inserting ``2007'', and (2) by striking ``2007'' each place it appears and inserting ``2011''. SEC. 122. EXTENSION OF DC ZERO PERCENT CAPITAL GAINS RATE. (a) In General.--Section 1400B (relating to zero percent capital gains rate) is amended by adding at the end the following new subsection: ``(h) Extension to Entire District of Columbia.--In applying this section to any stock or partnership interest which is originally issued after December 31, 2000, or any tangible property acquired by the taxpayer by purchase after December 31, 2000-- ``(1) subsection (d) shall be applied without regard to paragraph (2) thereof, and ``(2) subsections (e)(2) and (g)(2) shall be applied by substituting `January 1, 2001' for `January 1, 1998'.''. (b) Effective Date.--The amendment made by this section shall take effect on January 1, 2001. SEC. 123. GROSS INCOME TEST FOR DC ZONE BUSINESSES. (a) In General.--Section 1400B(c) (defining DC Zone business) is amended by adding ``and'' at the end of paragraph (1), by striking paragraph (2), and by redesignating paragraph (3) as paragraph (2). (b) Effective Date.--The amendment made by this section shall apply to stock and partnership interests originally issued after, and property originally acquired by the taxpayer after, December 31, 2000. SEC. 124. EXPANSION OF DC HOMEBUYER TAX CREDIT. (a) Extension.--Section 1400C(i) (relating to application of section) is amended by striking ``2002'' and inserting ``2004''. (b) Expansion of Income Limitation.--Section 1400C(b)(1) (relating to limitation based on modified adjusted gross income) is amended-- (1) by striking ``$110,000'' in subparagraph (A)(i) and inserting ``$140,000'', and (2) by inserting ``($40,000 in the case of a joint return)'' after ``$20,000'' in subparagraph (B). (c) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2000. Subtitle D--New Markets Tax Credit SEC. 131. NEW MARKETS TAX CREDIT. (a) In General.--Subpart D of part IV of subchapter A of chapter 1 (relating to business-related credits) is amended by adding at the end the following new section: ``SEC. 45D. NEW MARKETS TAX CREDIT. ``(a) Allowance of Credit.-- ``(1) In general.--For purposes of section 38, in the case of a taxpayer who holds a qualified equity investment on a credit allowance date of such investment which occurs during the taxable year, the new markets tax credit determined under this section for such taxable year is an amount equal to the applicable percentage of the amount paid to the qualified community development entity for such investment at its original issue. ``(2) Applicable percentage.--For purposes of paragraph (1), the applicable percentage is-- ``(A) 5 percent with respect to the first three cred

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STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
(Senate - October 03, 2000)

Text of this article available as: TXT PDF [Pages S9702-S9758] STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS By Mr. MURKOWSKI: S. 3150. A bill to convey certain real property located in Tongass National Forest to Daniel J. Gross, Sr., and Douglas K. Gross, and for other purposes; to the Committee on Energy and Natural Resources. the heritage land transfer act of 2000 Mr. MURKOWSKI. Mr. President, I rise today to introduce the Heritage Land Transfer Act of 2000. This legislation, while inconsequential when compared to many of the issues we deal with in the U.S. Congress, is extremely important to two of my oldest constituents, Douglas and Daniel Gross. These two brothers along with the other members of the Gross family are amongst Alaska's earliest pioneers. These two brothers have spent over 80 years drawing their existence out of the harsh Southeastern Alaskan environment. Through all these years, they managed to raise their families and contributed to building the great State that I have the privilege of representing. I would also point out that Douglas and Daniel Gross served our Nation during World War II at its time of greatest need--now these two veterans need our help to right a wrong that has been vested upon them through no fault of their own. ``The Heritage Land Transfer Act of 2000'' directs the Forest Service to convey 160 acres to Daniel and Douglas Gross. This granting of clear title would fix a problem that has plagued the family for the past 20 years. The need for this action arises from the fact that no records remain to substantial the family's claim that they homesteaded on Greens Point in the 1930's. Family homesteading records were destroyed when the Gross home burned to the ground in 1935-1936 and to make matters worse, the Forest Service is unable to locate any documentation to substantiate the Gross family claim. With neither title nor documentation, Doug and Dan Gross are unable to produce any legal record of ownership to the land their parents homesteaded. The paper records, however, are the only things missing. The Forest Service willingly acknowledges that a large body of evidence exists that clearly establishes the fact that the family built a home on Greens Point in the 1930's, that they grew and sold vegetables from this farmstead, and that they were good neighbors to many people caught out in our famous Alaskan storms. While the family and the Forest Service have searched in vain for written records, there is one piece of physical evidence to substantiate the family claim. On September 11, 1989, Alaska State Senator Robin Taylor traveled to the Gross property on the Stikine River for the purpose of locating a witness tree which would provide objective proof to the Gross family claim of homestead. In a letter Senator Taylor sent to Richard Kohrt, Wrangell District Ranger, Tongass National Forest he wrote ``I was present when Mr. Bungy, United States Forest Service specialist, sawed and chopped open the large spruce tree which the Gross Brothers had identified from memory as being a witness tree. Mr. Bungy verified that the large blaze uncovered was of the exact age that coincided with the Gross claim. By counting the annual growth rings it coincided with the many affidavits and statements of witness about the Gross claim of homestead.'' There is no question that the family settled on the Green Point property on the Stikine River in the 1930's. They raised all of their children on their property and were good friends to all who lived and worked throughout the region. I have in my possession many affidavits, each one testifying to the settlement of the Gross family along the Stikine River. I offer the following quotations typical of these testaments: ``In the early 1930's I spent a lot of time up the Stikine River at the Gross Ranch. They had a large two story home and a huge garden . . .'' ``I stayed with Mr. and Mrs. Bill Gross in the middle thirties. Bessie Gross took care of my brother Gilbert and I while my mother and father were out fishing, they had a house and garden on the river which everyone knows as the Gross place even to this day . . .'' ``I stayed with Bessie Gross and Family during the late 1930's in their place up the river . . .'' And another from Mr. Harry Sundberg, a gillnet fisherman, used to fish in ``what was known locally as the Gross homestead.'' Mr. Sundberg goes on to say ``While most people during that period did not file on the land they occupied, I distinctly recall that our conversations included the fact that they had applied for their application to own property similar to Captain Lee, who owned the property directly south of them on the mainland.'' The Homestead Act requires residency for a minimum of 3 years. These affidavits, and many others, verify the Gross families life on this property since the early 1930's. In a letter from the Department of Agriculture to Senator Stevens they write ``Even though it's clear the Gross family homesteaded on the property, there is no evidence or record that they completed the process to obtain title.'' Another letter from the Department of Agriculture states ``the Forest Service does not and has not refuted your claim that you and/or your family resided at Greens Point in the 1930's.'' An Alaska Magazine article written in 1984 references the ``Gross place'' along the Stikine River. The Homestead Act authorized the transfer of 160 acre parcels of federal land to private owners. The Gross Homestead is 160.8 acres. A tree, both Daniel and Douglas Gross remember being used as a survey marker when they were boys, was examined in 1989 and found to have a flat face blazed into the wood approximately 50 years [[Page S9703]] prior. This is not a coincidence. It is proof this land was surveyed when the family claims it was surveyed. This family has lived on, and made use of this land for 70 years. It is time for them to be named the legal title holders, and to complete the already started process of shuffling paper. ______ By Mr. ROTH (for himself, Mr. Moynihan, Mr. Grassley, Mr. Baucus, Mr. Hatch, Mr. Rockefeller, Mr. Murkowski, Mr. Breaux, Mr. Jeffords, Mr. Conrad, Mr. Mack, Mr. Graham, Mr. Thompson, Mr. Kerrey, Mr. Robb, and Mr. Bryan): S. 3152. A bill to amend the Internal Revenue Code of 1986 to provide tax incentives for distressed areas, and for other purposes; read the first time. community renewal and new markets act of 2000 Mr. ROTH. Mr. President, today I am, along with 14 cosponsors from the Finance Committee, introducing a Community Renewal tax reduction bill that will help all America benefit from today's economic boom. As you know, the House bill embodies an agreement between the House and the Administration. Personally, I think that it would be wrong for the Senate to be silent in this process. It is important for this body to at least have a voice in crafting this legislation. While I would have preferred that this legislation to have been reported from the Finance Committee, I believe my bill represents the Committee's will. It is largely composed of the Chairman's mark and amendments submitted by the Committee's members. Every Member of the Finance Committee had input into this bill. In the regular course of Finance Committee business, we would have reported this bill out of the Committee with an overwhelming vote in support. And the fact that 15 members on both sides of the aisle have joined me as original cosponsors, I believe, attests to the Finance Committee's approval of this legislation. It goes without saying that America's communities are important. I believe that there are many ways in which we can extend help to them. I also feel that any time we can work together with the Administration to cut taxes we must try and see it to fruition. While I listened to the concerns of every senator--both on and off the Finance committee--who approached me with a provision in which they were interested, I did not incorporate them all. I did not because I could not without the cost of the bill growing out of control. It is important that we not forget communities that may not have received as much as others from America's economic boom. However, it is also important that we consider the size of this bill in the context of other tax relief priorities that remain. These other priorities are marriage tax relief, retirement security, education, estate tax relief, small business tax relief, and other items. Community renewal tax relief must fit within the overall framework of the tax relief agenda. This Finance Committee bill is fair and it is in line with the revenue loss of the package, proposed by Senators Santorum, Abraham, and Lieberman, which was considered earlier this year in the Senate. In designing this bill, members of the Finance Committee decided not to turn this bill into a grab bag of special interest provisions. This Finance Committee bill includes a variety of proposals that will further the bill's goals of community renewal--rationalizing and simplifying what was and, was proposed to be, a hodge-podge of often conflicting provisions. It includes an immediate--let me emphasize immediate--increase in the volume caps for low-income housing tax credits and private activity bonds. It also addresses many, many important problems left out of the House and Administration proposal. Among other things, this package contains an energy and conservation component, a farm relief component, an Individual Development Account proposal, an extension of the adoption credit and the enhanced deduction for computer donations, a program to develop high speed rail around the country, and a broadband Internet incentive that will make sure that no one gets left on the wrong side of the digital divide. One provision that I particularly want to talk about is the tax credit for renovating historic homes. This was one of Senator John Chafee's signature items and I am pleased to include it in the Finance Committee bill, not only because I support it, but as a tribute to our good friend. We all know that if he were here, he would have fought hard for this tax incentive. In fact, Senator Lincoln Chafee came to see me earlier this year. Lincoln told that in his dad's last speech, John talked about the importance of the tax credit and said that it was something he wanted to get done before he left the Senate. Unfortunately, he is not with us today, but hopefully we can complete this unfinished business for him. This is a fair package and a generous package. I believe it is one that this Senate should feel comfortable embracing. I hope each of you who has not done so, will do so. Mr. MOYNIHAN. Mr. President, last week the Finance Committee was scheduled to mark up the ``Community Renewal and New Markets Act of 2000,'' but the legislation became burdened by extraneous matters, and the Committee was unable to complete the mark-up. I rise today to join my good friend and Chairman of the Finance Committee, Senator Roth, in introducing the ``Community Renewal and New Markets Act of 2000'' as an original bill with 15 cosponsors from the Finance Committee. Sir, we all should be grateful for Senator Roth's leadership in this matter. Community renewal is an effort to rebuild American communities, which is based on an agreement reached between the President and the Speaker of the House that this is legislation we ought to have. The signals are clear: the legislation will be enacted this year with or without us. Today, Senator Roth and I give a voice in this process to the Finance Committee and the Senate. Mr. President, this bill represents the will of the Finance Committee. It incorporates the worthwhile ideas of its members, including the work of my good friend, Senator Robb, who, along with Senator Rockefeller, has worked tirelessly to provide meaningful incentives for investment in distressed communities. I also take a moment of the Senate's time to echo Senator Roth's tribute to Senator John Chafee. It is fitting that we should enact, in a bipartisan bill, the tax credit for renovating historic homes in honor of a great Senator. Substantively, the Community Renewal legislation is significant in several respects. First, it provides a notable measure of tax simplification, even as it accomplishes a worthwhile goal--tax benefits for investment in poor communities. While the bill designates 30 new ``Renewal Zones,'' it also conforms the tax incentives available to individuals and businesses investing in any of the zone designations, current or future. Our legislation smartly unifies these Empowerment and Renewal Zones and creates a common set of incentives. This is the right kind of legislation. I also note, Mr. President, with some appreciation, two provisions that will make transportation and data transmission very quick indeed. The bill includes provisions to accelerate and expand access to high- technology infrastructure for all communities. First, it authorizes $10 billion of tax credit bonds for Amtrak to develop high-speed railways. High-speed railways have the potential to connect the very communities targeted by this legislation and provide them with greater access to information. Second, the bill includes a proposal that I first introduced on June 8, 2000. That proposal, which now has 52 Senate supporters, provides graduated tax credits for deployment of high-speed communications-- called ``broadband''--to residential and rural communities. Current market forces are driving deployment of broadband technology almost exclusively to urban businesses and wealthy households. The proposal in the bill will encourage broadband providers to act quickly to deploy broadband to Americans in all communities. Mr. President, if you will allow me one further observation, as I am compelled to compliment the bill in one other respect. Consistent with the purpose of this legislation, it includes a [[Page S9704]] tax incentive for investment in labor in Puerto Rico. The provision does not accomplish all that I had hoped it would, but I believe it represents a positive step forward. It extends to Puerto Rico tax incentives for job creation similar to the ones in other areas of the bill, and it does so, quite simply, through an existing tax-code provision, the Puerto Rico economic activity credit. Mr. President, I again applaud the leadership of our revered Chairman and proudly join him in introducing the Community Renewal and New Markets Act of 2000. Mr. MACK. Mr. President, as a co-sponsor of the Community Renewal and New Markets Act of 2000, I want to commend Chairman Roth for his usual fine work in assembling a bill that garners the support of such a large number of our Finance Committee colleagues. I am pleased that a number of items in this bill are provisions that are extremely important to me, and I would like to speak briefly concerning them. But I also want to draw attention to some provisions in this bill that I do not favor. As this bill stands in the place of what would have been a bill reported out of the Committee on Finance, it reflects the compromises that are inherent in the committee process. Unlike typical bills, of which it is reasonable to assume that every provision is supported by every co-sponsor, probably every co-sponsor of this bill can find provisions contained in it that he does not support. Of many, there are two that I find most troubling: the ``new markets tax credit,'' and the ``individual development accounts.'' These two provisions are appropriations masquerading as tax cuts. Under the new markets tax credit, the Secretary of the Treasury would annually pay dividends to investors in ``community development entities,'' which must be certified by the Treasury Department and which must have as their primary mission investing in low-income people or communities. This proposal is premised on the belief that an entity that lacks a profit-motive, under federal bureaucratic supervision, will be an attractive investment for people if dividends are guaranteed. It is the sort of scheme that could only be dreamed up by people who have spent their entire careers in government. A simpler way to direct capital to investment-starved pockets is by eliminating the tax on capital gains--this is the decentralized, market-oriented approach. The ``individual development accounts'' would launder government- matching funds for low income savers through financial institutions. This new entitlement cannot be justified. It is true that, by some measures, the savings rate in the United States appears low. Simple logic dictates that the savings rate have been lowered due to federal tax policies, which impose several layers of taxation upon income that is saved. It is one thing to address this problem at the source, by removing the extra taxation on savings--a we do to the extent that people can make deductible contributions to traditional IRAs and contributions to Roth IRAs. But to give people money to reward them for saving is pure income redistribution, a misuse of the taxpayers' money. Despite my disagreement with some of the provisions of this bill, I am pleased that the bill contains several initiatives that I have proposed over the past few Congresses. The Low Income Housing Tax Credit is boosted to make up for over a decade's worth of inflation, and is indexed to prevent this problem from reoccurring. The First-Time Homebuyer Tax Credit for the District of Columbia is extended and the marriage penalty in the credit is eliminated. Section 1706 of the Tax Reform Act of 1986, which discriminates against high technology workers and the companies that hire them, is repealed. Not-for-hire disaster insurance funds, in my state of Florida and several others, are made tax-exempt entities. I am most encouraged by the extension of my zero percent capital gains tax rate proposal to businesses in the entire District of Columbia, and to businesses in all empowerment and renewal zones. Although I am concerned that the lengthy, five-year holding period is unwise and undermines the power of the proposal, I am nevertheless pleased that the idea is spreading and people are coming to see capitalism as the only true cure for poverty. Mr. ROTH. Mr. President, along with Senator Moynihan and the other members of the committee I ask unanimous consent that S. 3152, the Community Renewal and New Markets Act of 2000 be printed in the Record. I also ask unanimous consent that a technical explanation of S. 3152, which has been prepared by the Joint Committee on Taxation, be printed in the Record, at a cost of $4,290.00, immediately following the text of the bill. There being no objection, the material was ordered to be printed in the Record, as follows: S. 3152 Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE; ETC. (a) Short Title.--This Act may be cited as the ``Community Renewal and New Markets Act of 2000''. (b) Amendment of 1986 Code.--Except as otherwise expressly provided, whenever in this Act an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986. (c) Table of Contents.-- Sec. 1. Short title; etc. TITLE I--INCENTIVES FOR DISTRESSED COMMUNITIES Subtitle A--Designation and Treatment of Renewal Zones Sec. 101. Designation and treatment of renewal zones. Subtitle B--Modification of Incentives for Empowerment Zones Sec. 111. Extension of empowerment zone treatment through 2009. Sec. 112. 15 percent employment credit for all empowerment zones Sec. 113. Increased expensing under section 179. Sec. 114. Higher limits on tax-exempt empowerment zone facility bonds. Sec. 115. Empowerment zone capital gain. Sec. 116. Funding for Round II empowerment zones. Subtitle C--Modification of Tax Incentives for DC Zone Sec. 121. Extension of DC zone through 2006. Sec. 122. Extension of DC zero percent capital gains rate. Sec. 123. Gross income test for DC zone businesses. Sec. 124. Expansion of DC homebuyer tax credit. Subtitle D--New Markets Tax Credit Sec. 131. New markets tax credit. Subtitle E--Modification of Tax Incentives for Puerto Rico Sec. 141. Modification of Puerto Rico economic activity tax credit. Subtitle F--Individual Development Accounts Sec. 151. Definitions. Sec. 152. Structure and administration of qualified individual development account programs. Sec. 153. Procedures for opening an individual development account and qualifying for matching funds. Sec. 154. Contributions to individual development accounts. Sec. 155. Deposits by qualified individual development account programs. Sec. 156. Withdrawal procedures. Sec. 157. Certification and termination of qualified individual development account programs. Sec. 158. Reporting, monitoring, and evaluation. Sec. 159. Account funds of program participants disregarded for purposes of certain means-tested Federal programs. Sec. 160. Matching funds for individual development accounts provided through a tax credit for qualified financial institutions. Sec. 161. Designation of earned income tax credit payments for deposit to individual development accounts. Subtitle G--Additional Incentives Sec. 171. Exclusion of certain amounts received under the National Health Service Corps Scholarship Program and the F. Edward Hebert Armed Forces Health Professions Scholarship and Financial Assistance Program. Sec. 172. Extension of enhanced deduction for corporate donations of computer technology. Sec. 173. Extension of adoption tax credit. Sec. 174. Tax treatment of Alaska Native Settlement Trusts. Sec. 175. Treatment of Indian tribal governments under Federal Unemployment Tax Act. Sec. 176. Increase in social services block grant for FY 2001. TITLE II--TAX INCENTIVES FOR AFFORDABLE HOUSING Subtitle A--Low-Income Housing Credit Sec. 201. Modification of State ceiling on low-income housing credit. [[Page S9705]] Sec. 202. Modification to rules relating to basis of building which is eligible for credit. Subtitle B--Historic Homes Sec. 211. Tax credit for renovating historic homes. Subtitle C--Forgiven Mortgage Obligations Sec. 221. Exclusion from gross income for certain forgiven mortgage obligations. Subtitle D--Mortgage Revenue Bonds Sec. 231. Increase in purchase price limitation under mortgage subsidy bond rules based on median family income. Sec. 232. Mortgage financing for residences located in presidentially declared disaster areas. Subtitle E--Property and Casualty Insurance Sec. 241. Exemption from income tax for State-created organizations providing property and casualty insurance for property for which such coverage is otherwise unavailable. TITLE III--TAX INCENTIVES FOR URBAN AND RURAL INFRASTRUCTURE Sec. 301. Increase in State ceiling on private activity bonds. Sec. 302. Modifications to expensing of environmental remediation costs. Sec. 303. Broadband internet access tax credit. Sec. 304. Credit to holders of qualified Amtrak bonds. Sec. 305. Clarification of contribution in aid of construction. Sec. 306. Recovery period for depreciation of certain leasehold improvements. TITLE IV--TAX RELIEF FOR FARMERS Sec. 401. Farm, fishing, and ranch risk management accounts. Sec. 402. Written agreement relating to exclusion of certain farm rental income from net earnings from self-employment. Sec. 403. Treatment of conservation reserve program payments as rentals from real estate. Sec. 404. Exemption of agricultural bonds from State volume cap. Sec. 405. Modifications to section 512(b)(13). Sec. 406. Charitable deduction for contributions of food inventory. Sec. 407. Income averaging for farmers and fishermen not to increase alternative minimum tax liability. Sec. 408. Cooperative marketing includes value-added processing through animals. Sec. 409. Declaratory judgment relief for section 521 cooperatives. Sec. 410. Small ethanol producer credit. Sec. 411. Payment of dividends on stock of cooperatives without reducing patronage dividends. TITLE V--TAX INCENTIVES FOR THE PRODUCTION OF ENERGY Sec. 501. Election to expense geological and geophysical expenditures. Sec. 502. Election to expense delay rental payments Sec. 503. 5-year net operating loss carryback for losses attributable to operating mineral interests of independent oil and gas producers. Sec. 504. Temporary suspension of percentage of depletion deduction limitation based on 65 percent of taxable income. Sec. 505. Tax credit for marginal domestic oil and natural gas well production. Sec. 506. Natural gas gathering lines treated as 7-year property. Sec. 507. Clarification of treatment of pipeline transportation income. TITLE VI--TAX INCENTIVES FOR CONSERVATION Sec. 601. Exclusion of 50 percent of gain on sales of land or interests in land or water to eligible entities for conservation purposes. Sec. 602. Expansion of estate tax exclusion for real property subject to qualified conservation easement. Sec. 603. Tax exclusion for cost-sharing payments under partners for wildlife program. Sec. 604. Incentive for certain energy efficient property used in business. Sec. 605. Extension and modification of tax credit for electricity produced from biomass. Sec. 606. Tax credit for certain energy efficient motor vehicles. TITLE VII--ADDITIONAL TAX PROVISIONS Sec. 701. Limitation on use of nonaccrual experience method of accounting. Sec. 702. Repeal of section 530(d) of the Revenue Act of 1978. Sec. 703. Expansion of exemption from personal holding company tax for lending or finance companies. Sec. 704. Charitable contribution deduction for certain expenses incurred in support of Native Alaskan subsistence whaling. Sec. 705. Imposition of excise tax on persons who acquire structured settlement payments in factoring transactions. TITLE I--INCENTIVES FOR DISTRESSED COMMUNITIES Subtitle A--Designation and Treatment of Renewal Zones SEC. 101. DESIGNATION AND TREATMENT OF RENEWAL ZONES. (a) In General.--Chapter 1 is amended by adding at the end the following new subchapter: ``Subchapter X--Designation and Treatment of Renewal Zones ``Sec. 1400E. Designation and treatment of renewal zones. ``SEC. 1400E. DESIGNATION AND TREATMENT OF RENEWAL ZONES. ``(a) Treatment of Designation.--For purposes of this title, any area designated as a renewal zone under this section shall be treated as an empowerment zone. ``(b) Designation.-- ``(1) Renewal zone defined.--For purposes of this title, the term `renewal zone' means any area-- ``(A) which is nominated by one or more local governments and the State or States in which it is located for designation as a renewal zone (hereafter in this section referred to as a `nominated area'), and ``(B) which the appropriate Secretary designates as a renewal zone. ``(2) Number of designations.-- ``(A) In general.--The appropriate Secretaries may designate not more than 30 nominated areas as renewal zones. ``(B) Minimum designation in rural areas.--Of the areas designated under subparagraph (A), at least 6 must be areas-- ``(i) which are within a local government jurisdiction or jurisdictions with a population of less than 50,000, or ``(ii) which satisfy the requirements of section 1393(a)(2). ``(3) Areas designated based on degree of poverty, etc.-- ``(A) In general.--Except as otherwise provided in this section, the nominated areas designated as renewal zones under this subsection shall be those nominated areas with the highest average ranking with respect to the criteria described in subparagraphs (B), (C), and (D) of subsection (d)(3). For purposes of the preceding sentence, an area shall be ranked within each such criterion on the basis of the amount by which the area exceeds such criterion, with the area which exceeds such criterion by the greatest amount given the highest ranking. ``(B) Exception where inadequate course of action, etc.--An area shall not be designated under subparagraph (A) if the appropriate Secretary determines that the course of action described in subsection (e)(2) with respect to such area is inadequate. ``(C) Priority for 1 nominated area in each state.--For purposes of this subchapter, 1 nominated area within each State without any area designated as an empowerment zone under section 1391 or 1400 shall be treated for purposes of this paragraph as having the highest average with respect to the criteria described in subparagraphs (B), (C), and (D) of subsection (d)(3). ``(4) Limitation on designations.-- ``(A) Publication of regulations.--The Secretary of Housing and Urban Development shall prescribe by regulation not later than 4 months after the date of the enactment of this section, after consultation with the Secretary of Agriculture-- ``(i) the procedures for nominating an area under paragraph (1)(A), ``(ii) the parameters relating to the size and population characteristics of a renewal zone, and ``(iii) the manner in which nominated areas will be evaluated based on the criteria specified in subsection (e). ``(B) Time limitations.--The appropriate Secretaries may designate nominated areas as renewal zones only during the period beginning on the first day of the first month following the month in which the regulations described in subparagraph (A) are prescribed and ending on December 31, 2001. ``(C) Procedural rules.--The appropriate Secretary shall not make any designation of a nominated area as a renewal zone under paragraph (2) unless-- ``(i) the local governments and the States in which the nominated area is located have the authority-- ``(I) to nominate such area for designation as a renewal zone, ``(II) to make the State and local commitments described in subsection (e), and ``(III) to provide assurances satisfactory to the appropriate Secretary that such commitments will be fulfilled, ``(ii) a nomination regarding such area is submitted in such a manner and in such form, and contains such information, as the appropriate Secretary shall by regulation prescribe, and ``(iii) the appropriate Secretary determines that any information furnished is reasonably accurate. ``(5) Nomination process for indian reservations.--For purposes of this subchapter, in the case of a nominated area on an Indian reservation, the reservation governing body (as determined by the Secretary of the Interior) shall be treated as being both the State and local governments with respect to such area. ``(c) Period for Which Designation Is in Effect.-- ``(1) In general.--Any designation of an area as a renewal zone shall remain in effect during the period beginning on January 1, 2002, and ending on the earliest of-- ``(A) December 31, 2009, [[Page S9706]] ``(B) the termination date designated by the State and local governments in their nomination, or ``(C) the date the appropriate Secretary revokes such designation. ``(2) Revocation of designation.--The appropriate Secretary may revoke the designation under this section of an area if such Secretary determines that the local government or the State in which the area is located-- ``(A) has modified the boundaries of the area, or ``(B) is not complying substantially with, or fails to make progress in achieving, the State or local commitments, respectively, described in subsection (e). ``(d) Area and Eligibility Requirements.-- ``(1) In general.--The appropriate Secretary may designate a nominated area as a renewal zone under subsection (b) only if the area meets the requirements of paragraphs (2) and (3) of this subsection. ``(2) Area requirements.--A nominated area meets the requirements of this paragraph if-- ``(A) the area is within the jurisdiction of one or more local governments, ``(B) the boundary of the area is continuous, and ``(C) the area-- ``(i) has a population of not more than 200,000 and at least-- ``(I) 4,000 if any portion of such area (other than a rural area described in subsection (b)(2)(B)(i)) is located within a metropolitan statistical area (within the meaning of section 143(k)(2)(B)) which has a population of 50,000 or greater, or ``(II) 1,000 in any other case, or ``(ii) is entirely within an Indian reservation (as determined by the Secretary of the Interior). ``(3) Eligibility requirements.--A nominated area meets the requirements of this paragraph if the State and the local governments in which it is located certify in writing (and the appropriate Secretary, after such review of supporting data as such Secretary deems appropriate, accepts such certification) that-- ``(A) the area is one of pervasive poverty, unemployment, and general distress, ``(B) the unemployment rate in the area, as determined by the most recent available data, was at least 1\1/2\ times the national unemployment rate for the period to which such data relate, ``(C) the poverty rate for each population census tract within the nominated area is at least 20 percent, and ``(D) in the case of an urban area, at least 70 percent of the households living in the area have incomes below 80 percent of the median income of households within the jurisdiction of the local government (determined in the same manner as under section 119(b)(2) of the Housing and Community Development Act of 1974). ``(4) Consideration of other factors.--The appropriate Secretary, in selecting any nominated area for designation as a renewal zone under this section-- ``(A) shall take into account-- ``(i) the extent to which such area has a high incidence of crime, ``(ii) if such area has census tracts identified in the May 12, 1998, report of the General Accounting Office regarding the identification of economically distressed areas, or ``(iii) if such area (or portion thereof) has previously been designated as an enterprise community under section 1391, and ``(B) with respect to 1 of the areas to be designated under subsection (b)(2)(B), may, in lieu of any criteria described in paragraph (3), take into account the existence of outmigration from the area. ``(e) Required State and Local Commitments.-- ``(1) In general.--The appropriate Secretary may designate any nominated area as a renewal zone under subsection (b) only if the local government and the State in which the area is located agree in writing that, during any period during which the area is a renewal zone, such governments will follow a specified course of action which meets the requirements of paragraph (2) and is designed to reduce the various burdens borne by employers or employees in such area. ``(2) Course of action.-- ``(A) In general.--A course of action meets the requirements of this paragraph if such course of action is a written document, signed by a State (or local government) and neighborhood organizations, which evidences a partnership between such State or government and community-based organizations and which commits each signatory to specific and measurable goals, actions, and timetables. Such course of action shall include at least 4 of the following: ``(i) A reduction of tax rates or fees applying within the renewal zone. ``(ii) An increase in the level of efficiency of local services within the renewal zone. ``(iii) Crime reduction strategies, such as crime prevention (including the provision of crime prevention services by nongovernmental entities). ``(iv) Actions to reduce, remove, simplify, or streamline governmental requirements applying within the renewal zone. ``(v) Involvement in the program by private entities, organizations, neighborhood organizations, and community groups, particularly those in the renewal zone, including a commitment from such private entities to provide jobs and job training for, and technical, financial, or other assistance to, employers, employees, and residents from the renewal zone. ``(vi) The gift (or sale at below fair market value) of surplus real property (such as land, homes, and commercial or industrial structures) in the renewal zone to neighborhood organizations, community development corporations, or private companies. ``(B) Recognition of past efforts.--For purposes of this section, in evaluating the course of action agreed to by any State or local government, the appropriate Secretary shall take into account the past efforts of such State or local government in reducing the various burdens borne by employers and employees in the area involved. ``(f) Coordination With Treatment of Enterprise Communities.--For purposes of this title, the designation under section 1391 of any area as an enterprise community shall cease to be in effect as of the date that the designation of any portion of such area as a renewal zone takes effect. ``(g) Definitions and Special Rules.--For purposes of this subchapter-- ``(1) Appropriate secretary.--The term `appropriate Secretary' has the meaning given such term by section 1393(a)(1). ``(2) Governments.--If more than one government seeks to nominate an area as a renewal zone, any reference to, or requirement of, this section shall apply to all such governments. ``(3) Local government.--The term `local government' means-- ``(A) any county, city, town, township, parish, village, or other general purpose political subdivision of a State, and ``(B) any combination of political subdivisions described in subparagraph (A) recognized by the appropriate Secretary. ``(4) Application of rules relating to census tracts.--The rules of section 1392(b)(4) shall apply. ``(5) Census data.--Population and poverty rate shall be determined by using 1990 census data.''. (b) Audit and Report.--Not later than January 31 of 2004, 2007, and 2010, the Comptroller General of the United States shall, pursuant to an audit of the renewal zone program established under section 1400E of the Internal Revenue Code of 1986 (as added by subsection (a)), report to Congress on such program and its effect on poverty, unemployment, and economic growth within the designated renewal zones. (c) Clerical Amendment.--The table of subchapters for chapter 1 is amended by adding at the end the following new item: ``Subchapter X. Designation and Treatment of Renewal Zones.''. Subtitle B--Modification of Incentives for Empowerment Zones SEC. 111. EXTENSION OF EMPOWERMENT ZONE TREATMENT THROUGH 2009. Subparagraph (A) of section 1391(d)(1) (relating to period for which designation is in effect) is amended to read as follows: ``(A)(i) in the case of an empowerment zone, December 31, 2009, or ``(ii) in the case of an enterprise community, the close of the 10th calendar year beginning on or after such date of designation,''. SEC. 112. 15 PERCENT EMPLOYMENT CREDIT FOR ALL EMPOWERMENT ZONES (a) 15 Percent Credit.--Subsection (b) of section 1396 (relating to empowerment zone employment credit) is amended-- (1) by striking paragraph (1) and inserting the following new paragraph: ``(1) In general.--Except as provided in paragraph (2), the applicable percentage is 15 percent.'', (2) by inserting ``and thereafter'' after ``2005'' in the table contained in paragraph (2), and (3) by striking the items relating to calendar years 2006 and 2007 in such table. (b) All Empowerment Zones Eligible for Credit.--Section 1396 is amended by striking subsection (e). (c) Conforming Amendment.--Subsection (d) of section 1400 is amended to read as follows: ``(d) Special Rule for Application of Employment Credit.-- With respect to the DC Zone, section 1396(d)(1)(B) (relating to empowerment zone employment credit) shall be applied by substituting `the District of Columbia' for `such empowerment zone'.''. (d) Effective Date.--The amendments made by this section shall apply to wages paid or incurred after December 31, 2001. SEC. 113. INCREASED EXPENSING UNDER SECTION 179. (a) In General.--Subparagraph (A) of section 1397A(a)(1) is amended by striking ``$20,000'' and inserting ``$35,000''. (b) Expensing for Property Used in Developable Sites.-- Section 1397A is amended by striking subsection (c). (c) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2001. SEC. 114. HIGHER LIMITS ON TAX-EXEMPT EMPOWERMENT ZONE FACILITY BONDS. (a) In General.--Paragraph (3) of section 1394(f) (relating to bonds for empowerment zones designated under section 1391(g)) is amended to read as follows: ``(3) Empowerment zone facility bond.--For purposes of this subsection, the term `empowerment zone facility bond' means any bond which would be described in subsection (a) if-- [[Page S9707]] ``(A) in the case of obligations issued before January 1, 2002, only empowerment zones designated under section 1391(g) were taken into account under sections 1397C and 1397D, and ``(B) in the case of obligations issued after December 31, 2001, all empowerment zones (other than the District of Columbia) were taken into account under sections 1397C and 1397D.''. (b) Effective Date.--The amendments made by this section shall apply to obligations issued after December 31, 2001. SEC. 115. EMPOWERMENT ZONE CAPITAL GAIN. (a) In General.--Part III of subchapter U of chapter 1 is amended-- (1) by redesignating subpart C as subpart D; (2) by redesignating sections 1397B and 1397C as sections 1397C and 1397D, respectively; and (3) by inserting after subpart B the following new subpart: ``Subpart C--Empowerment Zone Capital Gain ``Sec. 1397B. Empowerment zone capital gain. ``SEC. 1397B. EMPOWERMENT ZONE CAPITAL GAIN. ``(a) General Rule.--Gross income shall not include qualified capital gain from the sale or exchange of any qualified empowerment zone asset held for more than 5 years. ``(b) Per Taxpayer Limitation.-- ``(1) In general.--The amount of eligible gain which may be taken into account under subsection (a) for the taxable year with respect to any taxpayer shall not exceed $25,000,000, reduced by the aggregate amount of eligible gain taken into account under subsection (a) for prior taxable years with respect to such taxpayer. ``(2) Eligible gain.--For purposes of this subsection, `eligible gain'' means any gain from the sale or exchange of a qualified empowerment zone asset held for more than 5 years. ``(3) Treatment of married individuals.-- ``(A) Separate returns.--In the case of a separate return by a married individual, paragraph (1) shall be applied by substituting `$12,500,000' for `$25,000,000'. ``(B) Allocation of exclusion.--In the case of a joint return, the amount of gain taken into account under subsection (a) shall be allocated equally between the spouses for purposes of applying this subsection to subsequent taxable years. ``(C) Marital status.--For purposes of this subsection, marital status shall be determined under section 7703. ``(4) Treatment of corporate taxpayers.--For purposes of this subsection-- ``(A) all corporations which are members of the same controlled group of corporations (within the meaning of section 52(a)) shall be treated as 1 taxpayer, and ``(B) any gain excluded under subsection (a) by a predecessor of any C corporation shall be treated as having been excluded by such C corporation. ``(c) Qualified Empowerment Zone Asset.--For purposes of this section-- ``(1) In general.--The term `qualified empowerment zone asset' means-- ``(A) any qualified empowerment zone stock, ``(B) any qualified empowerment zone partnership interest, and ``(C) any qualified empowerment zone business property. ``(2) Qualified empowerment zone stock.-- ``(A) In general.--Except as provided in subparagraph (B), the term `qualified empowerment zone stock' means any stock in a domestic corporation if-- ``(i) such stock is acquired by the taxpayer after the date of the enactment of this section (December 31, 2001, in the case of a renewal zone) and before January 1, 2010, at its original issue (directly or through an underwriter) from the corporation solely in exchange for cash, ``(ii) as of the time such stock was issued, such corporation was an enterprise zone business (or, in the case of a new corporation, such corporation was being organized for purposes of being an enterprise zone business), and ``(iii) during substantially all of the taxpayer's holding period for such stock, such corporation qualified as an enterprise zone business. ``(B) Redemptions.--A rule similar to the rule of section 1202(c)(3) shall apply for purposes of this paragraph. ``(3) Qualified empowerment zone partnership interest.--The term `qualified empowerment zone partnership interest' means any capital or profits interest in a domestic partnership if-- ``(A) such interest is acquired by the taxpayer after the date of the enactment of this section (December 31, 2001, in the case of a renewal zone) and before January 1, 2010, from the partnership solely in exchange for cash, ``(B) as of the time such interest was acquired, such partnership was an enterprise zone business (or, in the case of a new partnership, such partnership was being organized for purposes of being an enterprise zone business), and ``(C) during substantially all of the taxpayer's holding period for such interest, such partnership qualified as an enterprise zone business. A rule similar to the rule of section 1202(c)(3) shall apply for purposes of this paragraph. ``(4) Qualified empowerment zone business property.-- ``(A) In general.--The term `qualified empowerment zone business property' means tangible property if-- ``(i) such property was acquired by the taxpayer by purchase (as defined in section 179(d)(2)) after the date of the enactment of this section (December 31, 2001, in the case of a renewal zone) and before January 1, 2010, ``(ii) the original use of such property in the empowerment zone commences with the taxpayer, and ``(iii) during substantially all of the taxpayer's holding period for such property, substantially all of the use of such property was in an enterprise zone business of the taxpayer. ``(B) Special rule for substantial improvements.--The requirements of clauses (i) and (ii) of subparagraph (A) shall be treated as satisfied with respect to-- ``(i) property which is substantially improved by the taxpayer before January 1, 2010, and ``(ii) any land on which such property is located. The determination of whether a property is substantially improved shall be made under clause (ii) of section 1400B(b)(4)(B), except that `the date of the enactment of this section' shall be substituted for `December 31, 1997' in such clause. ``(c) Qualified Capital Gain.--For purposes of this section-- ``(1) In general.--Except as otherwise provided in this subsection, the term `qualified capital gain` means any gain recognized on the sale or exchange of-- ``(A) a capital asset, or ``(B) property used in the trade or business (as defined in section 1231(b)). ``(2) Gain before effective date or after 2014 not qualified.--The term `qualified capital gain' shall not include any gain attributable to periods before the date of the enactment of this section (January 1, 2002, in the case of a renewal zone) or after December 31, 2014. ``(3) Certain rules to apply.--Rules similar to the rules of paragraphs (3), (4), and (5) of section 1400B(e) shall apply for purposes of this subsection. ``(d) Certain Rules To Apply.--For purposes of this section, rules similar to the rules of paragraphs (5), (6), and (7) of subsection (b), and subsections (f ) and (g), of section 1400B shall apply; except that for such purposes section 1400B(g)(2) shall be applied by substituting-- ``(1) `the day after the date of the enactment of section 1397B' for `January 1, 1998', and ``(2) `December 31, 2014' for `December 31, 2011'. ``(e) Regulations.--The Secretary shall prescribe such regulations as may be appropriate to carry out the purposes of this section, including regulations to prevent the avoidance of the purposes of this section.''. (b) Conforming Amendments.-- (1) Paragraph (2) of section 1394(b) is amended-- (A) by striking ``section 1397C'' and inserting ``section 1397D''; and (B) by striking ``section 1397C(a)(2)'' and inserting ``section 1397D(a)(2)''. (2) Paragraph (3) of section 1394(b) is amended-- (A) by striking ``section 1397B'' each place it appears and inserting ``section 1397C''; and (B) by striking ``section 1397B(d)'' and inserting ``section 1397C(d)''. (3) Sections 1400(e) and 1400B(c) are each amended by striking ``section 1397B'' each place it appears and inserting ``section 1397C''. (4) The table of subparts for part III of subchapter U of chapter 1 is amended by striking the last item and inserting the following new items: ``Subpart C. Empowerment zone capital gain. ``Subpart D. General provisions.''. (5) The table of sections for subpart D of such part III is amended to read as follows: ``Sec. 1397C. Enterprise zone business defined. ``Sec. 1397D. Qualified zone property defined.''. (c) Effective Date.--The amendments made by this section shall apply to qualified empowerment zone assets acquired after the date of the enactment of this Act. SEC. 116. FUNDING FOR ROUND II EMPOWERMENT ZONES. (a) Entitlement.--Section 2007(a)(1) of the Social Security Act (42 U.S.C. 1397f(a)(1)) is amended-- (1) in subparagraph (A), by striking ``in the State; and'' and inserting ``that is in the State and is designated pursuant to section 1391(b) of the Internal Revenue Code of 1986;''; and (2) by adding after subparagraph (B) the following new subparagraphs: ``(C)(i) 1 grant under this section for each qualified empowerment zone that is in an urban area in the State and is designated pursuant to section 1391(g) of such Code; and ``(ii) 1 grant under this section for each qualified empowerment zone that is in a rural area in the State and is designated pursuant to section 1391(g) of such Code; and ``(D) 1 grant under this section for each qualified enterprise community that is in the State, is designated pursuant to section 1391(b)(1) of such Code, and is in existence on the date of enactment of this subparagraph.''. (b) Amount of Grants.--Section 2007(a)(2) of the Social Security Act (42 U.S.C. 1397f(a)(2)) is amended-- [[Page S9708]] (1) in the heading of subparagraph (A), by inserting ``Original'' before ``Empowerment''; (2) in subparagraph (A), in the matter preceding clause (i), by inserting ``referred to in paragraph (1)(A)'' after ``empowerment zone''; (3) by redesignating subparagraph (C) as subparagraph (F); and (4) by inserting after subparagraph (B) the following new subparagraphs: ``(C) Additional empowerment grants.--The amount of the grant to a State under this section for a qualified empowerment zone referred to in paragraph (1)(C) shall be-- ``(i) if the zone is in an urban area, $5,000,000 for fiscal year 2001; or ``(ii) if the zone is in a rural area, $2,000,000 for fiscal year 2001. ``(D) Additional enterprise community grants.--The amount of the grant to a State under this section for a qualified enterprise community referred to in paragraph (1)(D) shall be $250,000.''. (c) Timing of Grants.--Section 2007(a)(3) of the Social Security Act (42 U.S.C. 1397f(a)(3)) is amended-- (1) in the heading of subparagraph (A), by inserting ``Original'' before ``Qualified''; (2) in subparagraph (A), in the matter preceding clause (i), by inserting ``referred to in paragraph (1)(A)'' after ``empowerment zone''; and (3) by adding after subparagraph (B) the following new subparagraphs: ``(C) Additional qualified empowerment zones.--With respect to each qualified empowerment zone referred to in paragraph (1)(C), the Secretary shall make 1 grant under this section to the State in which the zone lies, on January 1, 2002. ``(D) Additional qualified enterprise communities.--With respect to each qualified enterprise community referred to in paragraph (1)(D), the Secretary shall make 1 grant under this section to the State in which the community lies on January 1, 2002.''. (d) Funding.--Section 2007(a)(4) of the Social Security Act (42 U.S.C. 1397f(a)(4)) is amended-- (1) by striking ``(4) Funding.--$1,000,000,000'' and inserting the following: ``(4) Funding.-- ``(A) Original grants.--$1,000,000,000''; (2) by inserting ``for empowerment zones and enterprise communities described in subparagraphs (A) and (B) of paragraph (1)'' before the period; and (3) by adding after and below the end the following new subparagraphs: ``(B) Additional empowerment zone grants.--$85,000,000 shall be made available to the Secretary for grants under this section for empowerment zones referred to in paragraph (1)(C). ``(C) Additional enterprise community grants.--$22,000,000 shall be made available to the Secretary for grants under this section for enterprise communities referred to in paragraph (1)(D).''. (e) Direct Funding for Indian Tribes.-- (1) In general.--Section 2007(a) of the Social Security Act (42 U.S.C. 1397f(a)) is amended by adding at the end the following new paragraph: ``(5) Direct funding for indian tribes.-- ``(A) In general.--The Secretary may make a grant under this section directly to the governing body of an Indian tribe if-- ``(i) the tribe is identified in the strategic plan of a qualified empowerment zone or qualified enterprise community as the entity that assumes sole or primary responsibility for carrying out activities and projects under the grant; and ``(ii) the grant is to be used for activities and projects that are-- ``(I) included in the strategic plan of the qualified empowerment zone or qualified enterprise community, consistent with this section; and ``(II) approved by the Secretary of Agriculture, in the case of a qualified empowerment zone or qualified enterprise community in a rural area, or the Secretary of Housing and Urban Development, in the case of a qualified empowerment zone or qualified enterprise community in an urban area. ``(B) Rules of interpretation.-- ``(i) If grant under this section is made directly to the governing body of an Indian tribe under subparagraph (A), the tribe shall be considered a State for purposes of this section. ``(ii) This subparagraph shall not be construed as making applicable to this section the provisions of the Indian Self- Determination and Education Assistance Act.''. (2) Definitions.--Section 2007(f) of such Act (42 U.S.C. 1397f(f)) is amended by adding at the end the following new paragraph: ``(7) Indian tribe.--The term `Indian tribe' means any Indian tribe, band, nation, or other organized group or community, including any Alaska Native village or regional or village corporation as defined in or established pursuant to the Alaska Native Claims Settlement Act, which is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians.''. Subtitle C--Modification of Tax Incentives for DC Zone SEC. 121. EXTENSION OF DC ZONE THROUGH 2006. (a) In General.--The following provisions are amended by striking ``2002'' each place it appears and inserting ``2006'': (1) Section 1400(f). (2) Section 1400A(b). (b) Zero Capital Gains Rate.--Section 1400B (relating to zero percent capital gains rate) is amended-- (1) by striking ``2003'' each place it appears and inserting ``2007'', and (2) by striking ``2007'' each place it appears and inserting ``2011''. SEC. 122. EXTENSION OF DC ZERO PERCENT CAPITAL GAINS RATE. (a) In General.--Section 1400B (relating to zero percent capital gains rate) is amended by adding at the end the following new subsection: ``(h) Extension to Entire District of Columbia.--In applying this section to any stock or partnership interest which is originally issued after December 31, 2000, or any tangible property acquired by the taxpayer by purchase after December 31, 2000-- ``(1) subsection (d) shall be applied without regard to paragraph (2) thereof, and ``(2) subsections (e)(2) and (g)(2) shall be applied by substituting `January 1, 2001' for `January 1, 1998'.''. (b) Effective Date.--The amendment made by this section shall take effect on January 1, 2001. SEC. 123. GROSS INCOME TEST FOR DC ZONE BUSINESSES. (a) In General.--Section 1400B(c) (defining DC Zone business) is amended by adding ``and'' at the end of paragraph (1), by striking paragraph (2), and by redesignating paragraph (3) as paragraph (2). (b) Effective Date.--The amendment made by this section shall apply to stock and partnership interests originally issued after, and property originally acquired by the taxpayer after, December 31, 2000. SEC. 124. EXPANSION OF DC HOMEBUYER TAX CREDIT. (a) Extension.--Section 1400C(i) (relating to application of section) is amended by striking ``2002'' and inserting ``2004''. (b) Expansion of Income Limitation.--Section 1400C(b)(1) (relating to limitation based on modified adjusted gross income) is amended-- (1) by striking ``$110,000'' in subparagraph (A)(i) and inserting ``$140,000'', and (2) by inserting ``($40,000 in the case of a joint return)'' after ``$20,000'' in subparagraph (B). (c) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2000. Subtitle D--New Markets Tax Credit SEC. 131. NEW MARKETS TAX CREDIT. (a) In General.--Subpart D of part IV of subchapter A of chapter 1 (relating to business-related credits) is amended by adding at the end the following new section: ``SEC. 45D. NEW MARKETS TAX CREDIT. ``(a) Allowance of Credit.-- ``(1) In general.--For purposes of section 38, in the case of a taxpayer who holds a qualified equity investment on a credit allowance date of such investment which occurs during the taxable year, the new markets tax credit determined under this section for such taxable year is an amount equal to the applicable percentage of the amount paid to the qualified community development entity for such investment at its original issue. ``(2) Applicable percentage.--For purposes of paragraph (1), the applicable percentage is-- ``(A) 5 percent with respect to the first

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STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
(Senate - October 03, 2000)

Text of this article available as: TXT PDF [Pages S9702-S9758] STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS By Mr. MURKOWSKI: S. 3150. A bill to convey certain real property located in Tongass National Forest to Daniel J. Gross, Sr., and Douglas K. Gross, and for other purposes; to the Committee on Energy and Natural Resources. the heritage land transfer act of 2000 Mr. MURKOWSKI. Mr. President, I rise today to introduce the Heritage Land Transfer Act of 2000. This legislation, while inconsequential when compared to many of the issues we deal with in the U.S. Congress, is extremely important to two of my oldest constituents, Douglas and Daniel Gross. These two brothers along with the other members of the Gross family are amongst Alaska's earliest pioneers. These two brothers have spent over 80 years drawing their existence out of the harsh Southeastern Alaskan environment. Through all these years, they managed to raise their families and contributed to building the great State that I have the privilege of representing. I would also point out that Douglas and Daniel Gross served our Nation during World War II at its time of greatest need--now these two veterans need our help to right a wrong that has been vested upon them through no fault of their own. ``The Heritage Land Transfer Act of 2000'' directs the Forest Service to convey 160 acres to Daniel and Douglas Gross. This granting of clear title would fix a problem that has plagued the family for the past 20 years. The need for this action arises from the fact that no records remain to substantial the family's claim that they homesteaded on Greens Point in the 1930's. Family homesteading records were destroyed when the Gross home burned to the ground in 1935-1936 and to make matters worse, the Forest Service is unable to locate any documentation to substantiate the Gross family claim. With neither title nor documentation, Doug and Dan Gross are unable to produce any legal record of ownership to the land their parents homesteaded. The paper records, however, are the only things missing. The Forest Service willingly acknowledges that a large body of evidence exists that clearly establishes the fact that the family built a home on Greens Point in the 1930's, that they grew and sold vegetables from this farmstead, and that they were good neighbors to many people caught out in our famous Alaskan storms. While the family and the Forest Service have searched in vain for written records, there is one piece of physical evidence to substantiate the family claim. On September 11, 1989, Alaska State Senator Robin Taylor traveled to the Gross property on the Stikine River for the purpose of locating a witness tree which would provide objective proof to the Gross family claim of homestead. In a letter Senator Taylor sent to Richard Kohrt, Wrangell District Ranger, Tongass National Forest he wrote ``I was present when Mr. Bungy, United States Forest Service specialist, sawed and chopped open the large spruce tree which the Gross Brothers had identified from memory as being a witness tree. Mr. Bungy verified that the large blaze uncovered was of the exact age that coincided with the Gross claim. By counting the annual growth rings it coincided with the many affidavits and statements of witness about the Gross claim of homestead.'' There is no question that the family settled on the Green Point property on the Stikine River in the 1930's. They raised all of their children on their property and were good friends to all who lived and worked throughout the region. I have in my possession many affidavits, each one testifying to the settlement of the Gross family along the Stikine River. I offer the following quotations typical of these testaments: ``In the early 1930's I spent a lot of time up the Stikine River at the Gross Ranch. They had a large two story home and a huge garden . . .'' ``I stayed with Mr. and Mrs. Bill Gross in the middle thirties. Bessie Gross took care of my brother Gilbert and I while my mother and father were out fishing, they had a house and garden on the river which everyone knows as the Gross place even to this day . . .'' ``I stayed with Bessie Gross and Family during the late 1930's in their place up the river . . .'' And another from Mr. Harry Sundberg, a gillnet fisherman, used to fish in ``what was known locally as the Gross homestead.'' Mr. Sundberg goes on to say ``While most people during that period did not file on the land they occupied, I distinctly recall that our conversations included the fact that they had applied for their application to own property similar to Captain Lee, who owned the property directly south of them on the mainland.'' The Homestead Act requires residency for a minimum of 3 years. These affidavits, and many others, verify the Gross families life on this property since the early 1930's. In a letter from the Department of Agriculture to Senator Stevens they write ``Even though it's clear the Gross family homesteaded on the property, there is no evidence or record that they completed the process to obtain title.'' Another letter from the Department of Agriculture states ``the Forest Service does not and has not refuted your claim that you and/or your family resided at Greens Point in the 1930's.'' An Alaska Magazine article written in 1984 references the ``Gross place'' along the Stikine River. The Homestead Act authorized the transfer of 160 acre parcels of federal land to private owners. The Gross Homestead is 160.8 acres. A tree, both Daniel and Douglas Gross remember being used as a survey marker when they were boys, was examined in 1989 and found to have a flat face blazed into the wood approximately 50 years [[Page S9703]] prior. This is not a coincidence. It is proof this land was surveyed when the family claims it was surveyed. This family has lived on, and made use of this land for 70 years. It is time for them to be named the legal title holders, and to complete the already started process of shuffling paper. ______ By Mr. ROTH (for himself, Mr. Moynihan, Mr. Grassley, Mr. Baucus, Mr. Hatch, Mr. Rockefeller, Mr. Murkowski, Mr. Breaux, Mr. Jeffords, Mr. Conrad, Mr. Mack, Mr. Graham, Mr. Thompson, Mr. Kerrey, Mr. Robb, and Mr. Bryan): S. 3152. A bill to amend the Internal Revenue Code of 1986 to provide tax incentives for distressed areas, and for other purposes; read the first time. community renewal and new markets act of 2000 Mr. ROTH. Mr. President, today I am, along with 14 cosponsors from the Finance Committee, introducing a Community Renewal tax reduction bill that will help all America benefit from today's economic boom. As you know, the House bill embodies an agreement between the House and the Administration. Personally, I think that it would be wrong for the Senate to be silent in this process. It is important for this body to at least have a voice in crafting this legislation. While I would have preferred that this legislation to have been reported from the Finance Committee, I believe my bill represents the Committee's will. It is largely composed of the Chairman's mark and amendments submitted by the Committee's members. Every Member of the Finance Committee had input into this bill. In the regular course of Finance Committee business, we would have reported this bill out of the Committee with an overwhelming vote in support. And the fact that 15 members on both sides of the aisle have joined me as original cosponsors, I believe, attests to the Finance Committee's approval of this legislation. It goes without saying that America's communities are important. I believe that there are many ways in which we can extend help to them. I also feel that any time we can work together with the Administration to cut taxes we must try and see it to fruition. While I listened to the concerns of every senator--both on and off the Finance committee--who approached me with a provision in which they were interested, I did not incorporate them all. I did not because I could not without the cost of the bill growing out of control. It is important that we not forget communities that may not have received as much as others from America's economic boom. However, it is also important that we consider the size of this bill in the context of other tax relief priorities that remain. These other priorities are marriage tax relief, retirement security, education, estate tax relief, small business tax relief, and other items. Community renewal tax relief must fit within the overall framework of the tax relief agenda. This Finance Committee bill is fair and it is in line with the revenue loss of the package, proposed by Senators Santorum, Abraham, and Lieberman, which was considered earlier this year in the Senate. In designing this bill, members of the Finance Committee decided not to turn this bill into a grab bag of special interest provisions. This Finance Committee bill includes a variety of proposals that will further the bill's goals of community renewal--rationalizing and simplifying what was and, was proposed to be, a hodge-podge of often conflicting provisions. It includes an immediate--let me emphasize immediate--increase in the volume caps for low-income housing tax credits and private activity bonds. It also addresses many, many important problems left out of the House and Administration proposal. Among other things, this package contains an energy and conservation component, a farm relief component, an Individual Development Account proposal, an extension of the adoption credit and the enhanced deduction for computer donations, a program to develop high speed rail around the country, and a broadband Internet incentive that will make sure that no one gets left on the wrong side of the digital divide. One provision that I particularly want to talk about is the tax credit for renovating historic homes. This was one of Senator John Chafee's signature items and I am pleased to include it in the Finance Committee bill, not only because I support it, but as a tribute to our good friend. We all know that if he were here, he would have fought hard for this tax incentive. In fact, Senator Lincoln Chafee came to see me earlier this year. Lincoln told that in his dad's last speech, John talked about the importance of the tax credit and said that it was something he wanted to get done before he left the Senate. Unfortunately, he is not with us today, but hopefully we can complete this unfinished business for him. This is a fair package and a generous package. I believe it is one that this Senate should feel comfortable embracing. I hope each of you who has not done so, will do so. Mr. MOYNIHAN. Mr. President, last week the Finance Committee was scheduled to mark up the ``Community Renewal and New Markets Act of 2000,'' but the legislation became burdened by extraneous matters, and the Committee was unable to complete the mark-up. I rise today to join my good friend and Chairman of the Finance Committee, Senator Roth, in introducing the ``Community Renewal and New Markets Act of 2000'' as an original bill with 15 cosponsors from the Finance Committee. Sir, we all should be grateful for Senator Roth's leadership in this matter. Community renewal is an effort to rebuild American communities, which is based on an agreement reached between the President and the Speaker of the House that this is legislation we ought to have. The signals are clear: the legislation will be enacted this year with or without us. Today, Senator Roth and I give a voice in this process to the Finance Committee and the Senate. Mr. President, this bill represents the will of the Finance Committee. It incorporates the worthwhile ideas of its members, including the work of my good friend, Senator Robb, who, along with Senator Rockefeller, has worked tirelessly to provide meaningful incentives for investment in distressed communities. I also take a moment of the Senate's time to echo Senator Roth's tribute to Senator John Chafee. It is fitting that we should enact, in a bipartisan bill, the tax credit for renovating historic homes in honor of a great Senator. Substantively, the Community Renewal legislation is significant in several respects. First, it provides a notable measure of tax simplification, even as it accomplishes a worthwhile goal--tax benefits for investment in poor communities. While the bill designates 30 new ``Renewal Zones,'' it also conforms the tax incentives available to individuals and businesses investing in any of the zone designations, current or future. Our legislation smartly unifies these Empowerment and Renewal Zones and creates a common set of incentives. This is the right kind of legislation. I also note, Mr. President, with some appreciation, two provisions that will make transportation and data transmission very quick indeed. The bill includes provisions to accelerate and expand access to high- technology infrastructure for all communities. First, it authorizes $10 billion of tax credit bonds for Amtrak to develop high-speed railways. High-speed railways have the potential to connect the very communities targeted by this legislation and provide them with greater access to information. Second, the bill includes a proposal that I first introduced on June 8, 2000. That proposal, which now has 52 Senate supporters, provides graduated tax credits for deployment of high-speed communications-- called ``broadband''--to residential and rural communities. Current market forces are driving deployment of broadband technology almost exclusively to urban businesses and wealthy households. The proposal in the bill will encourage broadband providers to act quickly to deploy broadband to Americans in all communities. Mr. President, if you will allow me one further observation, as I am compelled to compliment the bill in one other respect. Consistent with the purpose of this legislation, it includes a [[Page S9704]] tax incentive for investment in labor in Puerto Rico. The provision does not accomplish all that I had hoped it would, but I believe it represents a positive step forward. It extends to Puerto Rico tax incentives for job creation similar to the ones in other areas of the bill, and it does so, quite simply, through an existing tax-code provision, the Puerto Rico economic activity credit. Mr. President, I again applaud the leadership of our revered Chairman and proudly join him in introducing the Community Renewal and New Markets Act of 2000. Mr. MACK. Mr. President, as a co-sponsor of the Community Renewal and New Markets Act of 2000, I want to commend Chairman Roth for his usual fine work in assembling a bill that garners the support of such a large number of our Finance Committee colleagues. I am pleased that a number of items in this bill are provisions that are extremely important to me, and I would like to speak briefly concerning them. But I also want to draw attention to some provisions in this bill that I do not favor. As this bill stands in the place of what would have been a bill reported out of the Committee on Finance, it reflects the compromises that are inherent in the committee process. Unlike typical bills, of which it is reasonable to assume that every provision is supported by every co-sponsor, probably every co-sponsor of this bill can find provisions contained in it that he does not support. Of many, there are two that I find most troubling: the ``new markets tax credit,'' and the ``individual development accounts.'' These two provisions are appropriations masquerading as tax cuts. Under the new markets tax credit, the Secretary of the Treasury would annually pay dividends to investors in ``community development entities,'' which must be certified by the Treasury Department and which must have as their primary mission investing in low-income people or communities. This proposal is premised on the belief that an entity that lacks a profit-motive, under federal bureaucratic supervision, will be an attractive investment for people if dividends are guaranteed. It is the sort of scheme that could only be dreamed up by people who have spent their entire careers in government. A simpler way to direct capital to investment-starved pockets is by eliminating the tax on capital gains--this is the decentralized, market-oriented approach. The ``individual development accounts'' would launder government- matching funds for low income savers through financial institutions. This new entitlement cannot be justified. It is true that, by some measures, the savings rate in the United States appears low. Simple logic dictates that the savings rate have been lowered due to federal tax policies, which impose several layers of taxation upon income that is saved. It is one thing to address this problem at the source, by removing the extra taxation on savings--a we do to the extent that people can make deductible contributions to traditional IRAs and contributions to Roth IRAs. But to give people money to reward them for saving is pure income redistribution, a misuse of the taxpayers' money. Despite my disagreement with some of the provisions of this bill, I am pleased that the bill contains several initiatives that I have proposed over the past few Congresses. The Low Income Housing Tax Credit is boosted to make up for over a decade's worth of inflation, and is indexed to prevent this problem from reoccurring. The First-Time Homebuyer Tax Credit for the District of Columbia is extended and the marriage penalty in the credit is eliminated. Section 1706 of the Tax Reform Act of 1986, which discriminates against high technology workers and the companies that hire them, is repealed. Not-for-hire disaster insurance funds, in my state of Florida and several others, are made tax-exempt entities. I am most encouraged by the extension of my zero percent capital gains tax rate proposal to businesses in the entire District of Columbia, and to businesses in all empowerment and renewal zones. Although I am concerned that the lengthy, five-year holding period is unwise and undermines the power of the proposal, I am nevertheless pleased that the idea is spreading and people are coming to see capitalism as the only true cure for poverty. Mr. ROTH. Mr. President, along with Senator Moynihan and the other members of the committee I ask unanimous consent that S. 3152, the Community Renewal and New Markets Act of 2000 be printed in the Record. I also ask unanimous consent that a technical explanation of S. 3152, which has been prepared by the Joint Committee on Taxation, be printed in the Record, at a cost of $4,290.00, immediately following the text of the bill. There being no objection, the material was ordered to be printed in the Record, as follows: S. 3152 Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE; ETC. (a) Short Title.--This Act may be cited as the ``Community Renewal and New Markets Act of 2000''. (b) Amendment of 1986 Code.--Except as otherwise expressly provided, whenever in this Act an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986. (c) Table of Contents.-- Sec. 1. Short title; etc. TITLE I--INCENTIVES FOR DISTRESSED COMMUNITIES Subtitle A--Designation and Treatment of Renewal Zones Sec. 101. Designation and treatment of renewal zones. Subtitle B--Modification of Incentives for Empowerment Zones Sec. 111. Extension of empowerment zone treatment through 2009. Sec. 112. 15 percent employment credit for all empowerment zones Sec. 113. Increased expensing under section 179. Sec. 114. Higher limits on tax-exempt empowerment zone facility bonds. Sec. 115. Empowerment zone capital gain. Sec. 116. Funding for Round II empowerment zones. Subtitle C--Modification of Tax Incentives for DC Zone Sec. 121. Extension of DC zone through 2006. Sec. 122. Extension of DC zero percent capital gains rate. Sec. 123. Gross income test for DC zone businesses. Sec. 124. Expansion of DC homebuyer tax credit. Subtitle D--New Markets Tax Credit Sec. 131. New markets tax credit. Subtitle E--Modification of Tax Incentives for Puerto Rico Sec. 141. Modification of Puerto Rico economic activity tax credit. Subtitle F--Individual Development Accounts Sec. 151. Definitions. Sec. 152. Structure and administration of qualified individual development account programs. Sec. 153. Procedures for opening an individual development account and qualifying for matching funds. Sec. 154. Contributions to individual development accounts. Sec. 155. Deposits by qualified individual development account programs. Sec. 156. Withdrawal procedures. Sec. 157. Certification and termination of qualified individual development account programs. Sec. 158. Reporting, monitoring, and evaluation. Sec. 159. Account funds of program participants disregarded for purposes of certain means-tested Federal programs. Sec. 160. Matching funds for individual development accounts provided through a tax credit for qualified financial institutions. Sec. 161. Designation of earned income tax credit payments for deposit to individual development accounts. Subtitle G--Additional Incentives Sec. 171. Exclusion of certain amounts received under the National Health Service Corps Scholarship Program and the F. Edward Hebert Armed Forces Health Professions Scholarship and Financial Assistance Program. Sec. 172. Extension of enhanced deduction for corporate donations of computer technology. Sec. 173. Extension of adoption tax credit. Sec. 174. Tax treatment of Alaska Native Settlement Trusts. Sec. 175. Treatment of Indian tribal governments under Federal Unemployment Tax Act. Sec. 176. Increase in social services block grant for FY 2001. TITLE II--TAX INCENTIVES FOR AFFORDABLE HOUSING Subtitle A--Low-Income Housing Credit Sec. 201. Modification of State ceiling on low-income housing credit. [[Page S9705]] Sec. 202. Modification to rules relating to basis of building which is eligible for credit. Subtitle B--Historic Homes Sec. 211. Tax credit for renovating historic homes. Subtitle C--Forgiven Mortgage Obligations Sec. 221. Exclusion from gross income for certain forgiven mortgage obligations. Subtitle D--Mortgage Revenue Bonds Sec. 231. Increase in purchase price limitation under mortgage subsidy bond rules based on median family income. Sec. 232. Mortgage financing for residences located in presidentially declared disaster areas. Subtitle E--Property and Casualty Insurance Sec. 241. Exemption from income tax for State-created organizations providing property and casualty insurance for property for which such coverage is otherwise unavailable. TITLE III--TAX INCENTIVES FOR URBAN AND RURAL INFRASTRUCTURE Sec. 301. Increase in State ceiling on private activity bonds. Sec. 302. Modifications to expensing of environmental remediation costs. Sec. 303. Broadband internet access tax credit. Sec. 304. Credit to holders of qualified Amtrak bonds. Sec. 305. Clarification of contribution in aid of construction. Sec. 306. Recovery period for depreciation of certain leasehold improvements. TITLE IV--TAX RELIEF FOR FARMERS Sec. 401. Farm, fishing, and ranch risk management accounts. Sec. 402. Written agreement relating to exclusion of certain farm rental income from net earnings from self-employment. Sec. 403. Treatment of conservation reserve program payments as rentals from real estate. Sec. 404. Exemption of agricultural bonds from State volume cap. Sec. 405. Modifications to section 512(b)(13). Sec. 406. Charitable deduction for contributions of food inventory. Sec. 407. Income averaging for farmers and fishermen not to increase alternative minimum tax liability. Sec. 408. Cooperative marketing includes value-added processing through animals. Sec. 409. Declaratory judgment relief for section 521 cooperatives. Sec. 410. Small ethanol producer credit. Sec. 411. Payment of dividends on stock of cooperatives without reducing patronage dividends. TITLE V--TAX INCENTIVES FOR THE PRODUCTION OF ENERGY Sec. 501. Election to expense geological and geophysical expenditures. Sec. 502. Election to expense delay rental payments Sec. 503. 5-year net operating loss carryback for losses attributable to operating mineral interests of independent oil and gas producers. Sec. 504. Temporary suspension of percentage of depletion deduction limitation based on 65 percent of taxable income. Sec. 505. Tax credit for marginal domestic oil and natural gas well production. Sec. 506. Natural gas gathering lines treated as 7-year property. Sec. 507. Clarification of treatment of pipeline transportation income. TITLE VI--TAX INCENTIVES FOR CONSERVATION Sec. 601. Exclusion of 50 percent of gain on sales of land or interests in land or water to eligible entities for conservation purposes. Sec. 602. Expansion of estate tax exclusion for real property subject to qualified conservation easement. Sec. 603. Tax exclusion for cost-sharing payments under partners for wildlife program. Sec. 604. Incentive for certain energy efficient property used in business. Sec. 605. Extension and modification of tax credit for electricity produced from biomass. Sec. 606. Tax credit for certain energy efficient motor vehicles. TITLE VII--ADDITIONAL TAX PROVISIONS Sec. 701. Limitation on use of nonaccrual experience method of accounting. Sec. 702. Repeal of section 530(d) of the Revenue Act of 1978. Sec. 703. Expansion of exemption from personal holding company tax for lending or finance companies. Sec. 704. Charitable contribution deduction for certain expenses incurred in support of Native Alaskan subsistence whaling. Sec. 705. Imposition of excise tax on persons who acquire structured settlement payments in factoring transactions. TITLE I--INCENTIVES FOR DISTRESSED COMMUNITIES Subtitle A--Designation and Treatment of Renewal Zones SEC. 101. DESIGNATION AND TREATMENT OF RENEWAL ZONES. (a) In General.--Chapter 1 is amended by adding at the end the following new subchapter: ``Subchapter X--Designation and Treatment of Renewal Zones ``Sec. 1400E. Designation and treatment of renewal zones. ``SEC. 1400E. DESIGNATION AND TREATMENT OF RENEWAL ZONES. ``(a) Treatment of Designation.--For purposes of this title, any area designated as a renewal zone under this section shall be treated as an empowerment zone. ``(b) Designation.-- ``(1) Renewal zone defined.--For purposes of this title, the term `renewal zone' means any area-- ``(A) which is nominated by one or more local governments and the State or States in which it is located for designation as a renewal zone (hereafter in this section referred to as a `nominated area'), and ``(B) which the appropriate Secretary designates as a renewal zone. ``(2) Number of designations.-- ``(A) In general.--The appropriate Secretaries may designate not more than 30 nominated areas as renewal zones. ``(B) Minimum designation in rural areas.--Of the areas designated under subparagraph (A), at least 6 must be areas-- ``(i) which are within a local government jurisdiction or jurisdictions with a population of less than 50,000, or ``(ii) which satisfy the requirements of section 1393(a)(2). ``(3) Areas designated based on degree of poverty, etc.-- ``(A) In general.--Except as otherwise provided in this section, the nominated areas designated as renewal zones under this subsection shall be those nominated areas with the highest average ranking with respect to the criteria described in subparagraphs (B), (C), and (D) of subsection (d)(3). For purposes of the preceding sentence, an area shall be ranked within each such criterion on the basis of the amount by which the area exceeds such criterion, with the area which exceeds such criterion by the greatest amount given the highest ranking. ``(B) Exception where inadequate course of action, etc.--An area shall not be designated under subparagraph (A) if the appropriate Secretary determines that the course of action described in subsection (e)(2) with respect to such area is inadequate. ``(C) Priority for 1 nominated area in each state.--For purposes of this subchapter, 1 nominated area within each State without any area designated as an empowerment zone under section 1391 or 1400 shall be treated for purposes of this paragraph as having the highest average with respect to the criteria described in subparagraphs (B), (C), and (D) of subsection (d)(3). ``(4) Limitation on designations.-- ``(A) Publication of regulations.--The Secretary of Housing and Urban Development shall prescribe by regulation not later than 4 months after the date of the enactment of this section, after consultation with the Secretary of Agriculture-- ``(i) the procedures for nominating an area under paragraph (1)(A), ``(ii) the parameters relating to the size and population characteristics of a renewal zone, and ``(iii) the manner in which nominated areas will be evaluated based on the criteria specified in subsection (e). ``(B) Time limitations.--The appropriate Secretaries may designate nominated areas as renewal zones only during the period beginning on the first day of the first month following the month in which the regulations described in subparagraph (A) are prescribed and ending on December 31, 2001. ``(C) Procedural rules.--The appropriate Secretary shall not make any designation of a nominated area as a renewal zone under paragraph (2) unless-- ``(i) the local governments and the States in which the nominated area is located have the authority-- ``(I) to nominate such area for designation as a renewal zone, ``(II) to make the State and local commitments described in subsection (e), and ``(III) to provide assurances satisfactory to the appropriate Secretary that such commitments will be fulfilled, ``(ii) a nomination regarding such area is submitted in such a manner and in such form, and contains such information, as the appropriate Secretary shall by regulation prescribe, and ``(iii) the appropriate Secretary determines that any information furnished is reasonably accurate. ``(5) Nomination process for indian reservations.--For purposes of this subchapter, in the case of a nominated area on an Indian reservation, the reservation governing body (as determined by the Secretary of the Interior) shall be treated as being both the State and local governments with respect to such area. ``(c) Period for Which Designation Is in Effect.-- ``(1) In general.--Any designation of an area as a renewal zone shall remain in effect during the period beginning on January 1, 2002, and ending on the earliest of-- ``(A) December 31, 2009, [[Page S9706]] ``(B) the termination date designated by the State and local governments in their nomination, or ``(C) the date the appropriate Secretary revokes such designation. ``(2) Revocation of designation.--The appropriate Secretary may revoke the designation under this section of an area if such Secretary determines that the local government or the State in which the area is located-- ``(A) has modified the boundaries of the area, or ``(B) is not complying substantially with, or fails to make progress in achieving, the State or local commitments, respectively, described in subsection (e). ``(d) Area and Eligibility Requirements.-- ``(1) In general.--The appropriate Secretary may designate a nominated area as a renewal zone under subsection (b) only if the area meets the requirements of paragraphs (2) and (3) of this subsection. ``(2) Area requirements.--A nominated area meets the requirements of this paragraph if-- ``(A) the area is within the jurisdiction of one or more local governments, ``(B) the boundary of the area is continuous, and ``(C) the area-- ``(i) has a population of not more than 200,000 and at least-- ``(I) 4,000 if any portion of such area (other than a rural area described in subsection (b)(2)(B)(i)) is located within a metropolitan statistical area (within the meaning of section 143(k)(2)(B)) which has a population of 50,000 or greater, or ``(II) 1,000 in any other case, or ``(ii) is entirely within an Indian reservation (as determined by the Secretary of the Interior). ``(3) Eligibility requirements.--A nominated area meets the requirements of this paragraph if the State and the local governments in which it is located certify in writing (and the appropriate Secretary, after such review of supporting data as such Secretary deems appropriate, accepts such certification) that-- ``(A) the area is one of pervasive poverty, unemployment, and general distress, ``(B) the unemployment rate in the area, as determined by the most recent available data, was at least 1\1/2\ times the national unemployment rate for the period to which such data relate, ``(C) the poverty rate for each population census tract within the nominated area is at least 20 percent, and ``(D) in the case of an urban area, at least 70 percent of the households living in the area have incomes below 80 percent of the median income of households within the jurisdiction of the local government (determined in the same manner as under section 119(b)(2) of the Housing and Community Development Act of 1974). ``(4) Consideration of other factors.--The appropriate Secretary, in selecting any nominated area for designation as a renewal zone under this section-- ``(A) shall take into account-- ``(i) the extent to which such area has a high incidence of crime, ``(ii) if such area has census tracts identified in the May 12, 1998, report of the General Accounting Office regarding the identification of economically distressed areas, or ``(iii) if such area (or portion thereof) has previously been designated as an enterprise community under section 1391, and ``(B) with respect to 1 of the areas to be designated under subsection (b)(2)(B), may, in lieu of any criteria described in paragraph (3), take into account the existence of outmigration from the area. ``(e) Required State and Local Commitments.-- ``(1) In general.--The appropriate Secretary may designate any nominated area as a renewal zone under subsection (b) only if the local government and the State in which the area is located agree in writing that, during any period during which the area is a renewal zone, such governments will follow a specified course of action which meets the requirements of paragraph (2) and is designed to reduce the various burdens borne by employers or employees in such area. ``(2) Course of action.-- ``(A) In general.--A course of action meets the requirements of this paragraph if such course of action is a written document, signed by a State (or local government) and neighborhood organizations, which evidences a partnership between such State or government and community-based organizations and which commits each signatory to specific and measurable goals, actions, and timetables. Such course of action shall include at least 4 of the following: ``(i) A reduction of tax rates or fees applying within the renewal zone. ``(ii) An increase in the level of efficiency of local services within the renewal zone. ``(iii) Crime reduction strategies, such as crime prevention (including the provision of crime prevention services by nongovernmental entities). ``(iv) Actions to reduce, remove, simplify, or streamline governmental requirements applying within the renewal zone. ``(v) Involvement in the program by private entities, organizations, neighborhood organizations, and community groups, particularly those in the renewal zone, including a commitment from such private entities to provide jobs and job training for, and technical, financial, or other assistance to, employers, employees, and residents from the renewal zone. ``(vi) The gift (or sale at below fair market value) of surplus real property (such as land, homes, and commercial or industrial structures) in the renewal zone to neighborhood organizations, community development corporations, or private companies. ``(B) Recognition of past efforts.--For purposes of this section, in evaluating the course of action agreed to by any State or local government, the appropriate Secretary shall take into account the past efforts of such State or local government in reducing the various burdens borne by employers and employees in the area involved. ``(f) Coordination With Treatment of Enterprise Communities.--For purposes of this title, the designation under section 1391 of any area as an enterprise community shall cease to be in effect as of the date that the designation of any portion of such area as a renewal zone takes effect. ``(g) Definitions and Special Rules.--For purposes of this subchapter-- ``(1) Appropriate secretary.--The term `appropriate Secretary' has the meaning given such term by section 1393(a)(1). ``(2) Governments.--If more than one government seeks to nominate an area as a renewal zone, any reference to, or requirement of, this section shall apply to all such governments. ``(3) Local government.--The term `local government' means-- ``(A) any county, city, town, township, parish, village, or other general purpose political subdivision of a State, and ``(B) any combination of political subdivisions described in subparagraph (A) recognized by the appropriate Secretary. ``(4) Application of rules relating to census tracts.--The rules of section 1392(b)(4) shall apply. ``(5) Census data.--Population and poverty rate shall be determined by using 1990 census data.''. (b) Audit and Report.--Not later than January 31 of 2004, 2007, and 2010, the Comptroller General of the United States shall, pursuant to an audit of the renewal zone program established under section 1400E of the Internal Revenue Code of 1986 (as added by subsection (a)), report to Congress on such program and its effect on poverty, unemployment, and economic growth within the designated renewal zones. (c) Clerical Amendment.--The table of subchapters for chapter 1 is amended by adding at the end the following new item: ``Subchapter X. Designation and Treatment of Renewal Zones.''. Subtitle B--Modification of Incentives for Empowerment Zones SEC. 111. EXTENSION OF EMPOWERMENT ZONE TREATMENT THROUGH 2009. Subparagraph (A) of section 1391(d)(1) (relating to period for which designation is in effect) is amended to read as follows: ``(A)(i) in the case of an empowerment zone, December 31, 2009, or ``(ii) in the case of an enterprise community, the close of the 10th calendar year beginning on or after such date of designation,''. SEC. 112. 15 PERCENT EMPLOYMENT CREDIT FOR ALL EMPOWERMENT ZONES (a) 15 Percent Credit.--Subsection (b) of section 1396 (relating to empowerment zone employment credit) is amended-- (1) by striking paragraph (1) and inserting the following new paragraph: ``(1) In general.--Except as provided in paragraph (2), the applicable percentage is 15 percent.'', (2) by inserting ``and thereafter'' after ``2005'' in the table contained in paragraph (2), and (3) by striking the items relating to calendar years 2006 and 2007 in such table. (b) All Empowerment Zones Eligible for Credit.--Section 1396 is amended by striking subsection (e). (c) Conforming Amendment.--Subsection (d) of section 1400 is amended to read as follows: ``(d) Special Rule for Application of Employment Credit.-- With respect to the DC Zone, section 1396(d)(1)(B) (relating to empowerment zone employment credit) shall be applied by substituting `the District of Columbia' for `such empowerment zone'.''. (d) Effective Date.--The amendments made by this section shall apply to wages paid or incurred after December 31, 2001. SEC. 113. INCREASED EXPENSING UNDER SECTION 179. (a) In General.--Subparagraph (A) of section 1397A(a)(1) is amended by striking ``$20,000'' and inserting ``$35,000''. (b) Expensing for Property Used in Developable Sites.-- Section 1397A is amended by striking subsection (c). (c) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2001. SEC. 114. HIGHER LIMITS ON TAX-EXEMPT EMPOWERMENT ZONE FACILITY BONDS. (a) In General.--Paragraph (3) of section 1394(f) (relating to bonds for empowerment zones designated under section 1391(g)) is amended to read as follows: ``(3) Empowerment zone facility bond.--For purposes of this subsection, the term `empowerment zone facility bond' means any bond which would be described in subsection (a) if-- [[Page S9707]] ``(A) in the case of obligations issued before January 1, 2002, only empowerment zones designated under section 1391(g) were taken into account under sections 1397C and 1397D, and ``(B) in the case of obligations issued after December 31, 2001, all empowerment zones (other than the District of Columbia) were taken into account under sections 1397C and 1397D.''. (b) Effective Date.--The amendments made by this section shall apply to obligations issued after December 31, 2001. SEC. 115. EMPOWERMENT ZONE CAPITAL GAIN. (a) In General.--Part III of subchapter U of chapter 1 is amended-- (1) by redesignating subpart C as subpart D; (2) by redesignating sections 1397B and 1397C as sections 1397C and 1397D, respectively; and (3) by inserting after subpart B the following new subpart: ``Subpart C--Empowerment Zone Capital Gain ``Sec. 1397B. Empowerment zone capital gain. ``SEC. 1397B. EMPOWERMENT ZONE CAPITAL GAIN. ``(a) General Rule.--Gross income shall not include qualified capital gain from the sale or exchange of any qualified empowerment zone asset held for more than 5 years. ``(b) Per Taxpayer Limitation.-- ``(1) In general.--The amount of eligible gain which may be taken into account under subsection (a) for the taxable year with respect to any taxpayer shall not exceed $25,000,000, reduced by the aggregate amount of eligible gain taken into account under subsection (a) for prior taxable years with respect to such taxpayer. ``(2) Eligible gain.--For purposes of this subsection, `eligible gain'' means any gain from the sale or exchange of a qualified empowerment zone asset held for more than 5 years. ``(3) Treatment of married individuals.-- ``(A) Separate returns.--In the case of a separate return by a married individual, paragraph (1) shall be applied by substituting `$12,500,000' for `$25,000,000'. ``(B) Allocation of exclusion.--In the case of a joint return, the amount of gain taken into account under subsection (a) shall be allocated equally between the spouses for purposes of applying this subsection to subsequent taxable years. ``(C) Marital status.--For purposes of this subsection, marital status shall be determined under section 7703. ``(4) Treatment of corporate taxpayers.--For purposes of this subsection-- ``(A) all corporations which are members of the same controlled group of corporations (within the meaning of section 52(a)) shall be treated as 1 taxpayer, and ``(B) any gain excluded under subsection (a) by a predecessor of any C corporation shall be treated as having been excluded by such C corporation. ``(c) Qualified Empowerment Zone Asset.--For purposes of this section-- ``(1) In general.--The term `qualified empowerment zone asset' means-- ``(A) any qualified empowerment zone stock, ``(B) any qualified empowerment zone partnership interest, and ``(C) any qualified empowerment zone business property. ``(2) Qualified empowerment zone stock.-- ``(A) In general.--Except as provided in subparagraph (B), the term `qualified empowerment zone stock' means any stock in a domestic corporation if-- ``(i) such stock is acquired by the taxpayer after the date of the enactment of this section (December 31, 2001, in the case of a renewal zone) and before January 1, 2010, at its original issue (directly or through an underwriter) from the corporation solely in exchange for cash, ``(ii) as of the time such stock was issued, such corporation was an enterprise zone business (or, in the case of a new corporation, such corporation was being organized for purposes of being an enterprise zone business), and ``(iii) during substantially all of the taxpayer's holding period for such stock, such corporation qualified as an enterprise zone business. ``(B) Redemptions.--A rule similar to the rule of section 1202(c)(3) shall apply for purposes of this paragraph. ``(3) Qualified empowerment zone partnership interest.--The term `qualified empowerment zone partnership interest' means any capital or profits interest in a domestic partnership if-- ``(A) such interest is acquired by the taxpayer after the date of the enactment of this section (December 31, 2001, in the case of a renewal zone) and before January 1, 2010, from the partnership solely in exchange for cash, ``(B) as of the time such interest was acquired, such partnership was an enterprise zone business (or, in the case of a new partnership, such partnership was being organized for purposes of being an enterprise zone business), and ``(C) during substantially all of the taxpayer's holding period for such interest, such partnership qualified as an enterprise zone business. A rule similar to the rule of section 1202(c)(3) shall apply for purposes of this paragraph. ``(4) Qualified empowerment zone business property.-- ``(A) In general.--The term `qualified empowerment zone business property' means tangible property if-- ``(i) such property was acquired by the taxpayer by purchase (as defined in section 179(d)(2)) after the date of the enactment of this section (December 31, 2001, in the case of a renewal zone) and before January 1, 2010, ``(ii) the original use of such property in the empowerment zone commences with the taxpayer, and ``(iii) during substantially all of the taxpayer's holding period for such property, substantially all of the use of such property was in an enterprise zone business of the taxpayer. ``(B) Special rule for substantial improvements.--The requirements of clauses (i) and (ii) of subparagraph (A) shall be treated as satisfied with respect to-- ``(i) property which is substantially improved by the taxpayer before January 1, 2010, and ``(ii) any land on which such property is located. The determination of whether a property is substantially improved shall be made under clause (ii) of section 1400B(b)(4)(B), except that `the date of the enactment of this section' shall be substituted for `December 31, 1997' in such clause. ``(c) Qualified Capital Gain.--For purposes of this section-- ``(1) In general.--Except as otherwise provided in this subsection, the term `qualified capital gain` means any gain recognized on the sale or exchange of-- ``(A) a capital asset, or ``(B) property used in the trade or business (as defined in section 1231(b)). ``(2) Gain before effective date or after 2014 not qualified.--The term `qualified capital gain' shall not include any gain attributable to periods before the date of the enactment of this section (January 1, 2002, in the case of a renewal zone) or after December 31, 2014. ``(3) Certain rules to apply.--Rules similar to the rules of paragraphs (3), (4), and (5) of section 1400B(e) shall apply for purposes of this subsection. ``(d) Certain Rules To Apply.--For purposes of this section, rules similar to the rules of paragraphs (5), (6), and (7) of subsection (b), and subsections (f ) and (g), of section 1400B shall apply; except that for such purposes section 1400B(g)(2) shall be applied by substituting-- ``(1) `the day after the date of the enactment of section 1397B' for `January 1, 1998', and ``(2) `December 31, 2014' for `December 31, 2011'. ``(e) Regulations.--The Secretary shall prescribe such regulations as may be appropriate to carry out the purposes of this section, including regulations to prevent the avoidance of the purposes of this section.''. (b) Conforming Amendments.-- (1) Paragraph (2) of section 1394(b) is amended-- (A) by striking ``section 1397C'' and inserting ``section 1397D''; and (B) by striking ``section 1397C(a)(2)'' and inserting ``section 1397D(a)(2)''. (2) Paragraph (3) of section 1394(b) is amended-- (A) by striking ``section 1397B'' each place it appears and inserting ``section 1397C''; and (B) by striking ``section 1397B(d)'' and inserting ``section 1397C(d)''. (3) Sections 1400(e) and 1400B(c) are each amended by striking ``section 1397B'' each place it appears and inserting ``section 1397C''. (4) The table of subparts for part III of subchapter U of chapter 1 is amended by striking the last item and inserting the following new items: ``Subpart C. Empowerment zone capital gain. ``Subpart D. General provisions.''. (5) The table of sections for subpart D of such part III is amended to read as follows: ``Sec. 1397C. Enterprise zone business defined. ``Sec. 1397D. Qualified zone property defined.''. (c) Effective Date.--The amendments made by this section shall apply to qualified empowerment zone assets acquired after the date of the enactment of this Act. SEC. 116. FUNDING FOR ROUND II EMPOWERMENT ZONES. (a) Entitlement.--Section 2007(a)(1) of the Social Security Act (42 U.S.C. 1397f(a)(1)) is amended-- (1) in subparagraph (A), by striking ``in the State; and'' and inserting ``that is in the State and is designated pursuant to section 1391(b) of the Internal Revenue Code of 1986;''; and (2) by adding after subparagraph (B) the following new subparagraphs: ``(C)(i) 1 grant under this section for each qualified empowerment zone that is in an urban area in the State and is designated pursuant to section 1391(g) of such Code; and ``(ii) 1 grant under this section for each qualified empowerment zone that is in a rural area in the State and is designated pursuant to section 1391(g) of such Code; and ``(D) 1 grant under this section for each qualified enterprise community that is in the State, is designated pursuant to section 1391(b)(1) of such Code, and is in existence on the date of enactment of this subparagraph.''. (b) Amount of Grants.--Section 2007(a)(2) of the Social Security Act (42 U.S.C. 1397f(a)(2)) is amended-- [[Page S9708]] (1) in the heading of subparagraph (A), by inserting ``Original'' before ``Empowerment''; (2) in subparagraph (A), in the matter preceding clause (i), by inserting ``referred to in paragraph (1)(A)'' after ``empowerment zone''; (3) by redesignating subparagraph (C) as subparagraph (F); and (4) by inserting after subparagraph (B) the following new subparagraphs: ``(C) Additional empowerment grants.--The amount of the grant to a State under this section for a qualified empowerment zone referred to in paragraph (1)(C) shall be-- ``(i) if the zone is in an urban area, $5,000,000 for fiscal year 2001; or ``(ii) if the zone is in a rural area, $2,000,000 for fiscal year 2001. ``(D) Additional enterprise community grants.--The amount of the grant to a State under this section for a qualified enterprise community referred to in paragraph (1)(D) shall be $250,000.''. (c) Timing of Grants.--Section 2007(a)(3) of the Social Security Act (42 U.S.C. 1397f(a)(3)) is amended-- (1) in the heading of subparagraph (A), by inserting ``Original'' before ``Qualified''; (2) in subparagraph (A), in the matter preceding clause (i), by inserting ``referred to in paragraph (1)(A)'' after ``empowerment zone''; and (3) by adding after subparagraph (B) the following new subparagraphs: ``(C) Additional qualified empowerment zones.--With respect to each qualified empowerment zone referred to in paragraph (1)(C), the Secretary shall make 1 grant under this section to the State in which the zone lies, on January 1, 2002. ``(D) Additional qualified enterprise communities.--With respect to each qualified enterprise community referred to in paragraph (1)(D), the Secretary shall make 1 grant under this section to the State in which the community lies on January 1, 2002.''. (d) Funding.--Section 2007(a)(4) of the Social Security Act (42 U.S.C. 1397f(a)(4)) is amended-- (1) by striking ``(4) Funding.--$1,000,000,000'' and inserting the following: ``(4) Funding.-- ``(A) Original grants.--$1,000,000,000''; (2) by inserting ``for empowerment zones and enterprise communities described in subparagraphs (A) and (B) of paragraph (1)'' before the period; and (3) by adding after and below the end the following new subparagraphs: ``(B) Additional empowerment zone grants.--$85,000,000 shall be made available to the Secretary for grants under this section for empowerment zones referred to in paragraph (1)(C). ``(C) Additional enterprise community grants.--$22,000,000 shall be made available to the Secretary for grants under this section for enterprise communities referred to in paragraph (1)(D).''. (e) Direct Funding for Indian Tribes.-- (1) In general.--Section 2007(a) of the Social Security Act (42 U.S.C. 1397f(a)) is amended by adding at the end the following new paragraph: ``(5) Direct funding for indian tribes.-- ``(A) In general.--The Secretary may make a grant under this section directly to the governing body of an Indian tribe if-- ``(i) the tribe is identified in the strategic plan of a qualified empowerment zone or qualified enterprise community as the entity that assumes sole or primary responsibility for carrying out activities and projects under the grant; and ``(ii) the grant is to be used for activities and projects that are-- ``(I) included in the strategic plan of the qualified empowerment zone or qualified enterprise community, consistent with this section; and ``(II) approved by the Secretary of Agriculture, in the case of a qualified empowerment zone or qualified enterprise community in a rural area, or the Secretary of Housing and Urban Development, in the case of a qualified empowerment zone or qualified enterprise community in an urban area. ``(B) Rules of interpretation.-- ``(i) If grant under this section is made directly to the governing body of an Indian tribe under subparagraph (A), the tribe shall be considered a State for purposes of this section. ``(ii) This subparagraph shall not be construed as making applicable to this section the provisions of the Indian Self- Determination and Education Assistance Act.''. (2) Definitions.--Section 2007(f) of such Act (42 U.S.C. 1397f(f)) is amended by adding at the end the following new paragraph: ``(7) Indian tribe.--The term `Indian tribe' means any Indian tribe, band, nation, or other organized group or community, including any Alaska Native village or regional or village corporation as defined in or established pursuant to the Alaska Native Claims Settlement Act, which is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians.''. Subtitle C--Modification of Tax Incentives for DC Zone SEC. 121. EXTENSION OF DC ZONE THROUGH 2006. (a) In General.--The following provisions are amended by striking ``2002'' each place it appears and inserting ``2006'': (1) Section 1400(f). (2) Section 1400A(b). (b) Zero Capital Gains Rate.--Section 1400B (relating to zero percent capital gains rate) is amended-- (1) by striking ``2003'' each place it appears and inserting ``2007'', and (2) by striking ``2007'' each place it appears and inserting ``2011''. SEC. 122. EXTENSION OF DC ZERO PERCENT CAPITAL GAINS RATE. (a) In General.--Section 1400B (relating to zero percent capital gains rate) is amended by adding at the end the following new subsection: ``(h) Extension to Entire District of Columbia.--In applying this section to any stock or partnership interest which is originally issued after December 31, 2000, or any tangible property acquired by the taxpayer by purchase after December 31, 2000-- ``(1) subsection (d) shall be applied without regard to paragraph (2) thereof, and ``(2) subsections (e)(2) and (g)(2) shall be applied by substituting `January 1, 2001' for `January 1, 1998'.''. (b) Effective Date.--The amendment made by this section shall take effect on January 1, 2001. SEC. 123. GROSS INCOME TEST FOR DC ZONE BUSINESSES. (a) In General.--Section 1400B(c) (defining DC Zone business) is amended by adding ``and'' at the end of paragraph (1), by striking paragraph (2), and by redesignating paragraph (3) as paragraph (2). (b) Effective Date.--The amendment made by this section shall apply to stock and partnership interests originally issued after, and property originally acquired by the taxpayer after, December 31, 2000. SEC. 124. EXPANSION OF DC HOMEBUYER TAX CREDIT. (a) Extension.--Section 1400C(i) (relating to application of section) is amended by striking ``2002'' and inserting ``2004''. (b) Expansion of Income Limitation.--Section 1400C(b)(1) (relating to limitation based on modified adjusted gross income) is amended-- (1) by striking ``$110,000'' in subparagraph (A)(i) and inserting ``$140,000'', and (2) by inserting ``($40,000 in the case of a joint return)'' after ``$20,000'' in subparagraph (B). (c) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2000. Subtitle D--New Markets Tax Credit SEC. 131. NEW MARKETS TAX CREDIT. (a) In General.--Subpart D of part IV of subchapter A of chapter 1 (relating to business-related credits) is amended by adding at the end the following new section: ``SEC. 45D. NEW MARKETS TAX CREDIT. ``(a) Allowance of Credit.-- ``(1) In general.--For purposes of section 38, in the case of a taxpayer who holds a qualified equity investment on a credit allowance date of such investment which occurs during the taxable year, the new markets tax credit determined under this section for such taxable year is an amount equal to the applicable percentage of the amount paid to the qualified community development entity for such investment at its original issue. ``(2) Applicable percentage.--For purposes of paragraph (1), the applicable percentage is-- ``(A) 5 percent with respect to the first three cred

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STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
(Senate - October 03, 2000)

Text of this article available as: TXT PDF [Pages S9702-S9758] STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS By Mr. MURKOWSKI: S. 3150. A bill to convey certain real property located in Tongass National Forest to Daniel J. Gross, Sr., and Douglas K. Gross, and for other purposes; to the Committee on Energy and Natural Resources. the heritage land transfer act of 2000 Mr. MURKOWSKI. Mr. President, I rise today to introduce the Heritage Land Transfer Act of 2000. This legislation, while inconsequential when compared to many of the issues we deal with in the U.S. Congress, is extremely important to two of my oldest constituents, Douglas and Daniel Gross. These two brothers along with the other members of the Gross family are amongst Alaska's earliest pioneers. These two brothers have spent over 80 years drawing their existence out of the harsh Southeastern Alaskan environment. Through all these years, they managed to raise their families and contributed to building the great State that I have the privilege of representing. I would also point out that Douglas and Daniel Gross served our Nation during World War II at its time of greatest need--now these two veterans need our help to right a wrong that has been vested upon them through no fault of their own. ``The Heritage Land Transfer Act of 2000'' directs the Forest Service to convey 160 acres to Daniel and Douglas Gross. This granting of clear title would fix a problem that has plagued the family for the past 20 years. The need for this action arises from the fact that no records remain to substantial the family's claim that they homesteaded on Greens Point in the 1930's. Family homesteading records were destroyed when the Gross home burned to the ground in 1935-1936 and to make matters worse, the Forest Service is unable to locate any documentation to substantiate the Gross family claim. With neither title nor documentation, Doug and Dan Gross are unable to produce any legal record of ownership to the land their parents homesteaded. The paper records, however, are the only things missing. The Forest Service willingly acknowledges that a large body of evidence exists that clearly establishes the fact that the family built a home on Greens Point in the 1930's, that they grew and sold vegetables from this farmstead, and that they were good neighbors to many people caught out in our famous Alaskan storms. While the family and the Forest Service have searched in vain for written records, there is one piece of physical evidence to substantiate the family claim. On September 11, 1989, Alaska State Senator Robin Taylor traveled to the Gross property on the Stikine River for the purpose of locating a witness tree which would provide objective proof to the Gross family claim of homestead. In a letter Senator Taylor sent to Richard Kohrt, Wrangell District Ranger, Tongass National Forest he wrote ``I was present when Mr. Bungy, United States Forest Service specialist, sawed and chopped open the large spruce tree which the Gross Brothers had identified from memory as being a witness tree. Mr. Bungy verified that the large blaze uncovered was of the exact age that coincided with the Gross claim. By counting the annual growth rings it coincided with the many affidavits and statements of witness about the Gross claim of homestead.'' There is no question that the family settled on the Green Point property on the Stikine River in the 1930's. They raised all of their children on their property and were good friends to all who lived and worked throughout the region. I have in my possession many affidavits, each one testifying to the settlement of the Gross family along the Stikine River. I offer the following quotations typical of these testaments: ``In the early 1930's I spent a lot of time up the Stikine River at the Gross Ranch. They had a large two story home and a huge garden . . .'' ``I stayed with Mr. and Mrs. Bill Gross in the middle thirties. Bessie Gross took care of my brother Gilbert and I while my mother and father were out fishing, they had a house and garden on the river which everyone knows as the Gross place even to this day . . .'' ``I stayed with Bessie Gross and Family during the late 1930's in their place up the river . . .'' And another from Mr. Harry Sundberg, a gillnet fisherman, used to fish in ``what was known locally as the Gross homestead.'' Mr. Sundberg goes on to say ``While most people during that period did not file on the land they occupied, I distinctly recall that our conversations included the fact that they had applied for their application to own property similar to Captain Lee, who owned the property directly south of them on the mainland.'' The Homestead Act requires residency for a minimum of 3 years. These affidavits, and many others, verify the Gross families life on this property since the early 1930's. In a letter from the Department of Agriculture to Senator Stevens they write ``Even though it's clear the Gross family homesteaded on the property, there is no evidence or record that they completed the process to obtain title.'' Another letter from the Department of Agriculture states ``the Forest Service does not and has not refuted your claim that you and/or your family resided at Greens Point in the 1930's.'' An Alaska Magazine article written in 1984 references the ``Gross place'' along the Stikine River. The Homestead Act authorized the transfer of 160 acre parcels of federal land to private owners. The Gross Homestead is 160.8 acres. A tree, both Daniel and Douglas Gross remember being used as a survey marker when they were boys, was examined in 1989 and found to have a flat face blazed into the wood approximately 50 years [[Page S9703]] prior. This is not a coincidence. It is proof this land was surveyed when the family claims it was surveyed. This family has lived on, and made use of this land for 70 years. It is time for them to be named the legal title holders, and to complete the already started process of shuffling paper. ______ By Mr. ROTH (for himself, Mr. Moynihan, Mr. Grassley, Mr. Baucus, Mr. Hatch, Mr. Rockefeller, Mr. Murkowski, Mr. Breaux, Mr. Jeffords, Mr. Conrad, Mr. Mack, Mr. Graham, Mr. Thompson, Mr. Kerrey, Mr. Robb, and Mr. Bryan): S. 3152. A bill to amend the Internal Revenue Code of 1986 to provide tax incentives for distressed areas, and for other purposes; read the first time. community renewal and new markets act of 2000 Mr. ROTH. Mr. President, today I am, along with 14 cosponsors from the Finance Committee, introducing a Community Renewal tax reduction bill that will help all America benefit from today's economic boom. As you know, the House bill embodies an agreement between the House and the Administration. Personally, I think that it would be wrong for the Senate to be silent in this process. It is important for this body to at least have a voice in crafting this legislation. While I would have preferred that this legislation to have been reported from the Finance Committee, I believe my bill represents the Committee's will. It is largely composed of the Chairman's mark and amendments submitted by the Committee's members. Every Member of the Finance Committee had input into this bill. In the regular course of Finance Committee business, we would have reported this bill out of the Committee with an overwhelming vote in support. And the fact that 15 members on both sides of the aisle have joined me as original cosponsors, I believe, attests to the Finance Committee's approval of this legislation. It goes without saying that America's communities are important. I believe that there are many ways in which we can extend help to them. I also feel that any time we can work together with the Administration to cut taxes we must try and see it to fruition. While I listened to the concerns of every senator--both on and off the Finance committee--who approached me with a provision in which they were interested, I did not incorporate them all. I did not because I could not without the cost of the bill growing out of control. It is important that we not forget communities that may not have received as much as others from America's economic boom. However, it is also important that we consider the size of this bill in the context of other tax relief priorities that remain. These other priorities are marriage tax relief, retirement security, education, estate tax relief, small business tax relief, and other items. Community renewal tax relief must fit within the overall framework of the tax relief agenda. This Finance Committee bill is fair and it is in line with the revenue loss of the package, proposed by Senators Santorum, Abraham, and Lieberman, which was considered earlier this year in the Senate. In designing this bill, members of the Finance Committee decided not to turn this bill into a grab bag of special interest provisions. This Finance Committee bill includes a variety of proposals that will further the bill's goals of community renewal--rationalizing and simplifying what was and, was proposed to be, a hodge-podge of often conflicting provisions. It includes an immediate--let me emphasize immediate--increase in the volume caps for low-income housing tax credits and private activity bonds. It also addresses many, many important problems left out of the House and Administration proposal. Among other things, this package contains an energy and conservation component, a farm relief component, an Individual Development Account proposal, an extension of the adoption credit and the enhanced deduction for computer donations, a program to develop high speed rail around the country, and a broadband Internet incentive that will make sure that no one gets left on the wrong side of the digital divide. One provision that I particularly want to talk about is the tax credit for renovating historic homes. This was one of Senator John Chafee's signature items and I am pleased to include it in the Finance Committee bill, not only because I support it, but as a tribute to our good friend. We all know that if he were here, he would have fought hard for this tax incentive. In fact, Senator Lincoln Chafee came to see me earlier this year. Lincoln told that in his dad's last speech, John talked about the importance of the tax credit and said that it was something he wanted to get done before he left the Senate. Unfortunately, he is not with us today, but hopefully we can complete this unfinished business for him. This is a fair package and a generous package. I believe it is one that this Senate should feel comfortable embracing. I hope each of you who has not done so, will do so. Mr. MOYNIHAN. Mr. President, last week the Finance Committee was scheduled to mark up the ``Community Renewal and New Markets Act of 2000,'' but the legislation became burdened by extraneous matters, and the Committee was unable to complete the mark-up. I rise today to join my good friend and Chairman of the Finance Committee, Senator Roth, in introducing the ``Community Renewal and New Markets Act of 2000'' as an original bill with 15 cosponsors from the Finance Committee. Sir, we all should be grateful for Senator Roth's leadership in this matter. Community renewal is an effort to rebuild American communities, which is based on an agreement reached between the President and the Speaker of the House that this is legislation we ought to have. The signals are clear: the legislation will be enacted this year with or without us. Today, Senator Roth and I give a voice in this process to the Finance Committee and the Senate. Mr. President, this bill represents the will of the Finance Committee. It incorporates the worthwhile ideas of its members, including the work of my good friend, Senator Robb, who, along with Senator Rockefeller, has worked tirelessly to provide meaningful incentives for investment in distressed communities. I also take a moment of the Senate's time to echo Senator Roth's tribute to Senator John Chafee. It is fitting that we should enact, in a bipartisan bill, the tax credit for renovating historic homes in honor of a great Senator. Substantively, the Community Renewal legislation is significant in several respects. First, it provides a notable measure of tax simplification, even as it accomplishes a worthwhile goal--tax benefits for investment in poor communities. While the bill designates 30 new ``Renewal Zones,'' it also conforms the tax incentives available to individuals and businesses investing in any of the zone designations, current or future. Our legislation smartly unifies these Empowerment and Renewal Zones and creates a common set of incentives. This is the right kind of legislation. I also note, Mr. President, with some appreciation, two provisions that will make transportation and data transmission very quick indeed. The bill includes provisions to accelerate and expand access to high- technology infrastructure for all communities. First, it authorizes $10 billion of tax credit bonds for Amtrak to develop high-speed railways. High-speed railways have the potential to connect the very communities targeted by this legislation and provide them with greater access to information. Second, the bill includes a proposal that I first introduced on June 8, 2000. That proposal, which now has 52 Senate supporters, provides graduated tax credits for deployment of high-speed communications-- called ``broadband''--to residential and rural communities. Current market forces are driving deployment of broadband technology almost exclusively to urban businesses and wealthy households. The proposal in the bill will encourage broadband providers to act quickly to deploy broadband to Americans in all communities. Mr. President, if you will allow me one further observation, as I am compelled to compliment the bill in one other respect. Consistent with the purpose of this legislation, it includes a [[Page S9704]] tax incentive for investment in labor in Puerto Rico. The provision does not accomplish all that I had hoped it would, but I believe it represents a positive step forward. It extends to Puerto Rico tax incentives for job creation similar to the ones in other areas of the bill, and it does so, quite simply, through an existing tax-code provision, the Puerto Rico economic activity credit. Mr. President, I again applaud the leadership of our revered Chairman and proudly join him in introducing the Community Renewal and New Markets Act of 2000. Mr. MACK. Mr. President, as a co-sponsor of the Community Renewal and New Markets Act of 2000, I want to commend Chairman Roth for his usual fine work in assembling a bill that garners the support of such a large number of our Finance Committee colleagues. I am pleased that a number of items in this bill are provisions that are extremely important to me, and I would like to speak briefly concerning them. But I also want to draw attention to some provisions in this bill that I do not favor. As this bill stands in the place of what would have been a bill reported out of the Committee on Finance, it reflects the compromises that are inherent in the committee process. Unlike typical bills, of which it is reasonable to assume that every provision is supported by every co-sponsor, probably every co-sponsor of this bill can find provisions contained in it that he does not support. Of many, there are two that I find most troubling: the ``new markets tax credit,'' and the ``individual development accounts.'' These two provisions are appropriations masquerading as tax cuts. Under the new markets tax credit, the Secretary of the Treasury would annually pay dividends to investors in ``community development entities,'' which must be certified by the Treasury Department and which must have as their primary mission investing in low-income people or communities. This proposal is premised on the belief that an entity that lacks a profit-motive, under federal bureaucratic supervision, will be an attractive investment for people if dividends are guaranteed. It is the sort of scheme that could only be dreamed up by people who have spent their entire careers in government. A simpler way to direct capital to investment-starved pockets is by eliminating the tax on capital gains--this is the decentralized, market-oriented approach. The ``individual development accounts'' would launder government- matching funds for low income savers through financial institutions. This new entitlement cannot be justified. It is true that, by some measures, the savings rate in the United States appears low. Simple logic dictates that the savings rate have been lowered due to federal tax policies, which impose several layers of taxation upon income that is saved. It is one thing to address this problem at the source, by removing the extra taxation on savings--a we do to the extent that people can make deductible contributions to traditional IRAs and contributions to Roth IRAs. But to give people money to reward them for saving is pure income redistribution, a misuse of the taxpayers' money. Despite my disagreement with some of the provisions of this bill, I am pleased that the bill contains several initiatives that I have proposed over the past few Congresses. The Low Income Housing Tax Credit is boosted to make up for over a decade's worth of inflation, and is indexed to prevent this problem from reoccurring. The First-Time Homebuyer Tax Credit for the District of Columbia is extended and the marriage penalty in the credit is eliminated. Section 1706 of the Tax Reform Act of 1986, which discriminates against high technology workers and the companies that hire them, is repealed. Not-for-hire disaster insurance funds, in my state of Florida and several others, are made tax-exempt entities. I am most encouraged by the extension of my zero percent capital gains tax rate proposal to businesses in the entire District of Columbia, and to businesses in all empowerment and renewal zones. Although I am concerned that the lengthy, five-year holding period is unwise and undermines the power of the proposal, I am nevertheless pleased that the idea is spreading and people are coming to see capitalism as the only true cure for poverty. Mr. ROTH. Mr. President, along with Senator Moynihan and the other members of the committee I ask unanimous consent that S. 3152, the Community Renewal and New Markets Act of 2000 be printed in the Record. I also ask unanimous consent that a technical explanation of S. 3152, which has been prepared by the Joint Committee on Taxation, be printed in the Record, at a cost of $4,290.00, immediately following the text of the bill. There being no objection, the material was ordered to be printed in the Record, as follows: S. 3152 Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE; ETC. (a) Short Title.--This Act may be cited as the ``Community Renewal and New Markets Act of 2000''. (b) Amendment of 1986 Code.--Except as otherwise expressly provided, whenever in this Act an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986. (c) Table of Contents.-- Sec. 1. Short title; etc. TITLE I--INCENTIVES FOR DISTRESSED COMMUNITIES Subtitle A--Designation and Treatment of Renewal Zones Sec. 101. Designation and treatment of renewal zones. Subtitle B--Modification of Incentives for Empowerment Zones Sec. 111. Extension of empowerment zone treatment through 2009. Sec. 112. 15 percent employment credit for all empowerment zones Sec. 113. Increased expensing under section 179. Sec. 114. Higher limits on tax-exempt empowerment zone facility bonds. Sec. 115. Empowerment zone capital gain. Sec. 116. Funding for Round II empowerment zones. Subtitle C--Modification of Tax Incentives for DC Zone Sec. 121. Extension of DC zone through 2006. Sec. 122. Extension of DC zero percent capital gains rate. Sec. 123. Gross income test for DC zone businesses. Sec. 124. Expansion of DC homebuyer tax credit. Subtitle D--New Markets Tax Credit Sec. 131. New markets tax credit. Subtitle E--Modification of Tax Incentives for Puerto Rico Sec. 141. Modification of Puerto Rico economic activity tax credit. Subtitle F--Individual Development Accounts Sec. 151. Definitions. Sec. 152. Structure and administration of qualified individual development account programs. Sec. 153. Procedures for opening an individual development account and qualifying for matching funds. Sec. 154. Contributions to individual development accounts. Sec. 155. Deposits by qualified individual development account programs. Sec. 156. Withdrawal procedures. Sec. 157. Certification and termination of qualified individual development account programs. Sec. 158. Reporting, monitoring, and evaluation. Sec. 159. Account funds of program participants disregarded for purposes of certain means-tested Federal programs. Sec. 160. Matching funds for individual development accounts provided through a tax credit for qualified financial institutions. Sec. 161. Designation of earned income tax credit payments for deposit to individual development accounts. Subtitle G--Additional Incentives Sec. 171. Exclusion of certain amounts received under the National Health Service Corps Scholarship Program and the F. Edward Hebert Armed Forces Health Professions Scholarship and Financial Assistance Program. Sec. 172. Extension of enhanced deduction for corporate donations of computer technology. Sec. 173. Extension of adoption tax credit. Sec. 174. Tax treatment of Alaska Native Settlement Trusts. Sec. 175. Treatment of Indian tribal governments under Federal Unemployment Tax Act. Sec. 176. Increase in social services block grant for FY 2001. TITLE II--TAX INCENTIVES FOR AFFORDABLE HOUSING Subtitle A--Low-Income Housing Credit Sec. 201. Modification of State ceiling on low-income housing credit. [[Page S9705]] Sec. 202. Modification to rules relating to basis of building which is eligible for credit. Subtitle B--Historic Homes Sec. 211. Tax credit for renovating historic homes. Subtitle C--Forgiven Mortgage Obligations Sec. 221. Exclusion from gross income for certain forgiven mortgage obligations. Subtitle D--Mortgage Revenue Bonds Sec. 231. Increase in purchase price limitation under mortgage subsidy bond rules based on median family income. Sec. 232. Mortgage financing for residences located in presidentially declared disaster areas. Subtitle E--Property and Casualty Insurance Sec. 241. Exemption from income tax for State-created organizations providing property and casualty insurance for property for which such coverage is otherwise unavailable. TITLE III--TAX INCENTIVES FOR URBAN AND RURAL INFRASTRUCTURE Sec. 301. Increase in State ceiling on private activity bonds. Sec. 302. Modifications to expensing of environmental remediation costs. Sec. 303. Broadband internet access tax credit. Sec. 304. Credit to holders of qualified Amtrak bonds. Sec. 305. Clarification of contribution in aid of construction. Sec. 306. Recovery period for depreciation of certain leasehold improvements. TITLE IV--TAX RELIEF FOR FARMERS Sec. 401. Farm, fishing, and ranch risk management accounts. Sec. 402. Written agreement relating to exclusion of certain farm rental income from net earnings from self-employment. Sec. 403. Treatment of conservation reserve program payments as rentals from real estate. Sec. 404. Exemption of agricultural bonds from State volume cap. Sec. 405. Modifications to section 512(b)(13). Sec. 406. Charitable deduction for contributions of food inventory. Sec. 407. Income averaging for farmers and fishermen not to increase alternative minimum tax liability. Sec. 408. Cooperative marketing includes value-added processing through animals. Sec. 409. Declaratory judgment relief for section 521 cooperatives. Sec. 410. Small ethanol producer credit. Sec. 411. Payment of dividends on stock of cooperatives without reducing patronage dividends. TITLE V--TAX INCENTIVES FOR THE PRODUCTION OF ENERGY Sec. 501. Election to expense geological and geophysical expenditures. Sec. 502. Election to expense delay rental payments Sec. 503. 5-year net operating loss carryback for losses attributable to operating mineral interests of independent oil and gas producers. Sec. 504. Temporary suspension of percentage of depletion deduction limitation based on 65 percent of taxable income. Sec. 505. Tax credit for marginal domestic oil and natural gas well production. Sec. 506. Natural gas gathering lines treated as 7-year property. Sec. 507. Clarification of treatment of pipeline transportation income. TITLE VI--TAX INCENTIVES FOR CONSERVATION Sec. 601. Exclusion of 50 percent of gain on sales of land or interests in land or water to eligible entities for conservation purposes. Sec. 602. Expansion of estate tax exclusion for real property subject to qualified conservation easement. Sec. 603. Tax exclusion for cost-sharing payments under partners for wildlife program. Sec. 604. Incentive for certain energy efficient property used in business. Sec. 605. Extension and modification of tax credit for electricity produced from biomass. Sec. 606. Tax credit for certain energy efficient motor vehicles. TITLE VII--ADDITIONAL TAX PROVISIONS Sec. 701. Limitation on use of nonaccrual experience method of accounting. Sec. 702. Repeal of section 530(d) of the Revenue Act of 1978. Sec. 703. Expansion of exemption from personal holding company tax for lending or finance companies. Sec. 704. Charitable contribution deduction for certain expenses incurred in support of Native Alaskan subsistence whaling. Sec. 705. Imposition of excise tax on persons who acquire structured settlement payments in factoring transactions. TITLE I--INCENTIVES FOR DISTRESSED COMMUNITIES Subtitle A--Designation and Treatment of Renewal Zones SEC. 101. DESIGNATION AND TREATMENT OF RENEWAL ZONES. (a) In General.--Chapter 1 is amended by adding at the end the following new subchapter: ``Subchapter X--Designation and Treatment of Renewal Zones ``Sec. 1400E. Designation and treatment of renewal zones. ``SEC. 1400E. DESIGNATION AND TREATMENT OF RENEWAL ZONES. ``(a) Treatment of Designation.--For purposes of this title, any area designated as a renewal zone under this section shall be treated as an empowerment zone. ``(b) Designation.-- ``(1) Renewal zone defined.--For purposes of this title, the term `renewal zone' means any area-- ``(A) which is nominated by one or more local governments and the State or States in which it is located for designation as a renewal zone (hereafter in this section referred to as a `nominated area'), and ``(B) which the appropriate Secretary designates as a renewal zone. ``(2) Number of designations.-- ``(A) In general.--The appropriate Secretaries may designate not more than 30 nominated areas as renewal zones. ``(B) Minimum designation in rural areas.--Of the areas designated under subparagraph (A), at least 6 must be areas-- ``(i) which are within a local government jurisdiction or jurisdictions with a population of less than 50,000, or ``(ii) which satisfy the requirements of section 1393(a)(2). ``(3) Areas designated based on degree of poverty, etc.-- ``(A) In general.--Except as otherwise provided in this section, the nominated areas designated as renewal zones under this subsection shall be those nominated areas with the highest average ranking with respect to the criteria described in subparagraphs (B), (C), and (D) of subsection (d)(3). For purposes of the preceding sentence, an area shall be ranked within each such criterion on the basis of the amount by which the area exceeds such criterion, with the area which exceeds such criterion by the greatest amount given the highest ranking. ``(B) Exception where inadequate course of action, etc.--An area shall not be designated under subparagraph (A) if the appropriate Secretary determines that the course of action described in subsection (e)(2) with respect to such area is inadequate. ``(C) Priority for 1 nominated area in each state.--For purposes of this subchapter, 1 nominated area within each State without any area designated as an empowerment zone under section 1391 or 1400 shall be treated for purposes of this paragraph as having the highest average with respect to the criteria described in subparagraphs (B), (C), and (D) of subsection (d)(3). ``(4) Limitation on designations.-- ``(A) Publication of regulations.--The Secretary of Housing and Urban Development shall prescribe by regulation not later than 4 months after the date of the enactment of this section, after consultation with the Secretary of Agriculture-- ``(i) the procedures for nominating an area under paragraph (1)(A), ``(ii) the parameters relating to the size and population characteristics of a renewal zone, and ``(iii) the manner in which nominated areas will be evaluated based on the criteria specified in subsection (e). ``(B) Time limitations.--The appropriate Secretaries may designate nominated areas as renewal zones only during the period beginning on the first day of the first month following the month in which the regulations described in subparagraph (A) are prescribed and ending on December 31, 2001. ``(C) Procedural rules.--The appropriate Secretary shall not make any designation of a nominated area as a renewal zone under paragraph (2) unless-- ``(i) the local governments and the States in which the nominated area is located have the authority-- ``(I) to nominate such area for designation as a renewal zone, ``(II) to make the State and local commitments described in subsection (e), and ``(III) to provide assurances satisfactory to the appropriate Secretary that such commitments will be fulfilled, ``(ii) a nomination regarding such area is submitted in such a manner and in such form, and contains such information, as the appropriate Secretary shall by regulation prescribe, and ``(iii) the appropriate Secretary determines that any information furnished is reasonably accurate. ``(5) Nomination process for indian reservations.--For purposes of this subchapter, in the case of a nominated area on an Indian reservation, the reservation governing body (as determined by the Secretary of the Interior) shall be treated as being both the State and local governments with respect to such area. ``(c) Period for Which Designation Is in Effect.-- ``(1) In general.--Any designation of an area as a renewal zone shall remain in effect during the period beginning on January 1, 2002, and ending on the earliest of-- ``(A) December 31, 2009, [[Page S9706]] ``(B) the termination date designated by the State and local governments in their nomination, or ``(C) the date the appropriate Secretary revokes such designation. ``(2) Revocation of designation.--The appropriate Secretary may revoke the designation under this section of an area if such Secretary determines that the local government or the State in which the area is located-- ``(A) has modified the boundaries of the area, or ``(B) is not complying substantially with, or fails to make progress in achieving, the State or local commitments, respectively, described in subsection (e). ``(d) Area and Eligibility Requirements.-- ``(1) In general.--The appropriate Secretary may designate a nominated area as a renewal zone under subsection (b) only if the area meets the requirements of paragraphs (2) and (3) of this subsection. ``(2) Area requirements.--A nominated area meets the requirements of this paragraph if-- ``(A) the area is within the jurisdiction of one or more local governments, ``(B) the boundary of the area is continuous, and ``(C) the area-- ``(i) has a population of not more than 200,000 and at least-- ``(I) 4,000 if any portion of such area (other than a rural area described in subsection (b)(2)(B)(i)) is located within a metropolitan statistical area (within the meaning of section 143(k)(2)(B)) which has a population of 50,000 or greater, or ``(II) 1,000 in any other case, or ``(ii) is entirely within an Indian reservation (as determined by the Secretary of the Interior). ``(3) Eligibility requirements.--A nominated area meets the requirements of this paragraph if the State and the local governments in which it is located certify in writing (and the appropriate Secretary, after such review of supporting data as such Secretary deems appropriate, accepts such certification) that-- ``(A) the area is one of pervasive poverty, unemployment, and general distress, ``(B) the unemployment rate in the area, as determined by the most recent available data, was at least 1\1/2\ times the national unemployment rate for the period to which such data relate, ``(C) the poverty rate for each population census tract within the nominated area is at least 20 percent, and ``(D) in the case of an urban area, at least 70 percent of the households living in the area have incomes below 80 percent of the median income of households within the jurisdiction of the local government (determined in the same manner as under section 119(b)(2) of the Housing and Community Development Act of 1974). ``(4) Consideration of other factors.--The appropriate Secretary, in selecting any nominated area for designation as a renewal zone under this section-- ``(A) shall take into account-- ``(i) the extent to which such area has a high incidence of crime, ``(ii) if such area has census tracts identified in the May 12, 1998, report of the General Accounting Office regarding the identification of economically distressed areas, or ``(iii) if such area (or portion thereof) has previously been designated as an enterprise community under section 1391, and ``(B) with respect to 1 of the areas to be designated under subsection (b)(2)(B), may, in lieu of any criteria described in paragraph (3), take into account the existence of outmigration from the area. ``(e) Required State and Local Commitments.-- ``(1) In general.--The appropriate Secretary may designate any nominated area as a renewal zone under subsection (b) only if the local government and the State in which the area is located agree in writing that, during any period during which the area is a renewal zone, such governments will follow a specified course of action which meets the requirements of paragraph (2) and is designed to reduce the various burdens borne by employers or employees in such area. ``(2) Course of action.-- ``(A) In general.--A course of action meets the requirements of this paragraph if such course of action is a written document, signed by a State (or local government) and neighborhood organizations, which evidences a partnership between such State or government and community-based organizations and which commits each signatory to specific and measurable goals, actions, and timetables. Such course of action shall include at least 4 of the following: ``(i) A reduction of tax rates or fees applying within the renewal zone. ``(ii) An increase in the level of efficiency of local services within the renewal zone. ``(iii) Crime reduction strategies, such as crime prevention (including the provision of crime prevention services by nongovernmental entities). ``(iv) Actions to reduce, remove, simplify, or streamline governmental requirements applying within the renewal zone. ``(v) Involvement in the program by private entities, organizations, neighborhood organizations, and community groups, particularly those in the renewal zone, including a commitment from such private entities to provide jobs and job training for, and technical, financial, or other assistance to, employers, employees, and residents from the renewal zone. ``(vi) The gift (or sale at below fair market value) of surplus real property (such as land, homes, and commercial or industrial structures) in the renewal zone to neighborhood organizations, community development corporations, or private companies. ``(B) Recognition of past efforts.--For purposes of this section, in evaluating the course of action agreed to by any State or local government, the appropriate Secretary shall take into account the past efforts of such State or local government in reducing the various burdens borne by employers and employees in the area involved. ``(f) Coordination With Treatment of Enterprise Communities.--For purposes of this title, the designation under section 1391 of any area as an enterprise community shall cease to be in effect as of the date that the designation of any portion of such area as a renewal zone takes effect. ``(g) Definitions and Special Rules.--For purposes of this subchapter-- ``(1) Appropriate secretary.--The term `appropriate Secretary' has the meaning given such term by section 1393(a)(1). ``(2) Governments.--If more than one government seeks to nominate an area as a renewal zone, any reference to, or requirement of, this section shall apply to all such governments. ``(3) Local government.--The term `local government' means-- ``(A) any county, city, town, township, parish, village, or other general purpose political subdivision of a State, and ``(B) any combination of political subdivisions described in subparagraph (A) recognized by the appropriate Secretary. ``(4) Application of rules relating to census tracts.--The rules of section 1392(b)(4) shall apply. ``(5) Census data.--Population and poverty rate shall be determined by using 1990 census data.''. (b) Audit and Report.--Not later than January 31 of 2004, 2007, and 2010, the Comptroller General of the United States shall, pursuant to an audit of the renewal zone program established under section 1400E of the Internal Revenue Code of 1986 (as added by subsection (a)), report to Congress on such program and its effect on poverty, unemployment, and economic growth within the designated renewal zones. (c) Clerical Amendment.--The table of subchapters for chapter 1 is amended by adding at the end the following new item: ``Subchapter X. Designation and Treatment of Renewal Zones.''. Subtitle B--Modification of Incentives for Empowerment Zones SEC. 111. EXTENSION OF EMPOWERMENT ZONE TREATMENT THROUGH 2009. Subparagraph (A) of section 1391(d)(1) (relating to period for which designation is in effect) is amended to read as follows: ``(A)(i) in the case of an empowerment zone, December 31, 2009, or ``(ii) in the case of an enterprise community, the close of the 10th calendar year beginning on or after such date of designation,''. SEC. 112. 15 PERCENT EMPLOYMENT CREDIT FOR ALL EMPOWERMENT ZONES (a) 15 Percent Credit.--Subsection (b) of section 1396 (relating to empowerment zone employment credit) is amended-- (1) by striking paragraph (1) and inserting the following new paragraph: ``(1) In general.--Except as provided in paragraph (2), the applicable percentage is 15 percent.'', (2) by inserting ``and thereafter'' after ``2005'' in the table contained in paragraph (2), and (3) by striking the items relating to calendar years 2006 and 2007 in such table. (b) All Empowerment Zones Eligible for Credit.--Section 1396 is amended by striking subsection (e). (c) Conforming Amendment.--Subsection (d) of section 1400 is amended to read as follows: ``(d) Special Rule for Application of Employment Credit.-- With respect to the DC Zone, section 1396(d)(1)(B) (relating to empowerment zone employment credit) shall be applied by substituting `the District of Columbia' for `such empowerment zone'.''. (d) Effective Date.--The amendments made by this section shall apply to wages paid or incurred after December 31, 2001. SEC. 113. INCREASED EXPENSING UNDER SECTION 179. (a) In General.--Subparagraph (A) of section 1397A(a)(1) is amended by striking ``$20,000'' and inserting ``$35,000''. (b) Expensing for Property Used in Developable Sites.-- Section 1397A is amended by striking subsection (c). (c) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2001. SEC. 114. HIGHER LIMITS ON TAX-EXEMPT EMPOWERMENT ZONE FACILITY BONDS. (a) In General.--Paragraph (3) of section 1394(f) (relating to bonds for empowerment zones designated under section 1391(g)) is amended to read as follows: ``(3) Empowerment zone facility bond.--For purposes of this subsection, the term `empowerment zone facility bond' means any bond which would be described in subsection (a) if-- [[Page S9707]] ``(A) in the case of obligations issued before January 1, 2002, only empowerment zones designated under section 1391(g) were taken into account under sections 1397C and 1397D, and ``(B) in the case of obligations issued after December 31, 2001, all empowerment zones (other than the District of Columbia) were taken into account under sections 1397C and 1397D.''. (b) Effective Date.--The amendments made by this section shall apply to obligations issued after December 31, 2001. SEC. 115. EMPOWERMENT ZONE CAPITAL GAIN. (a) In General.--Part III of subchapter U of chapter 1 is amended-- (1) by redesignating subpart C as subpart D; (2) by redesignating sections 1397B and 1397C as sections 1397C and 1397D, respectively; and (3) by inserting after subpart B the following new subpart: ``Subpart C--Empowerment Zone Capital Gain ``Sec. 1397B. Empowerment zone capital gain. ``SEC. 1397B. EMPOWERMENT ZONE CAPITAL GAIN. ``(a) General Rule.--Gross income shall not include qualified capital gain from the sale or exchange of any qualified empowerment zone asset held for more than 5 years. ``(b) Per Taxpayer Limitation.-- ``(1) In general.--The amount of eligible gain which may be taken into account under subsection (a) for the taxable year with respect to any taxpayer shall not exceed $25,000,000, reduced by the aggregate amount of eligible gain taken into account under subsection (a) for prior taxable years with respect to such taxpayer. ``(2) Eligible gain.--For purposes of this subsection, `eligible gain'' means any gain from the sale or exchange of a qualified empowerment zone asset held for more than 5 years. ``(3) Treatment of married individuals.-- ``(A) Separate returns.--In the case of a separate return by a married individual, paragraph (1) shall be applied by substituting `$12,500,000' for `$25,000,000'. ``(B) Allocation of exclusion.--In the case of a joint return, the amount of gain taken into account under subsection (a) shall be allocated equally between the spouses for purposes of applying this subsection to subsequent taxable years. ``(C) Marital status.--For purposes of this subsection, marital status shall be determined under section 7703. ``(4) Treatment of corporate taxpayers.--For purposes of this subsection-- ``(A) all corporations which are members of the same controlled group of corporations (within the meaning of section 52(a)) shall be treated as 1 taxpayer, and ``(B) any gain excluded under subsection (a) by a predecessor of any C corporation shall be treated as having been excluded by such C corporation. ``(c) Qualified Empowerment Zone Asset.--For purposes of this section-- ``(1) In general.--The term `qualified empowerment zone asset' means-- ``(A) any qualified empowerment zone stock, ``(B) any qualified empowerment zone partnership interest, and ``(C) any qualified empowerment zone business property. ``(2) Qualified empowerment zone stock.-- ``(A) In general.--Except as provided in subparagraph (B), the term `qualified empowerment zone stock' means any stock in a domestic corporation if-- ``(i) such stock is acquired by the taxpayer after the date of the enactment of this section (December 31, 2001, in the case of a renewal zone) and before January 1, 2010, at its original issue (directly or through an underwriter) from the corporation solely in exchange for cash, ``(ii) as of the time such stock was issued, such corporation was an enterprise zone business (or, in the case of a new corporation, such corporation was being organized for purposes of being an enterprise zone business), and ``(iii) during substantially all of the taxpayer's holding period for such stock, such corporation qualified as an enterprise zone business. ``(B) Redemptions.--A rule similar to the rule of section 1202(c)(3) shall apply for purposes of this paragraph. ``(3) Qualified empowerment zone partnership interest.--The term `qualified empowerment zone partnership interest' means any capital or profits interest in a domestic partnership if-- ``(A) such interest is acquired by the taxpayer after the date of the enactment of this section (December 31, 2001, in the case of a renewal zone) and before January 1, 2010, from the partnership solely in exchange for cash, ``(B) as of the time such interest was acquired, such partnership was an enterprise zone business (or, in the case of a new partnership, such partnership was being organized for purposes of being an enterprise zone business), and ``(C) during substantially all of the taxpayer's holding period for such interest, such partnership qualified as an enterprise zone business. A rule similar to the rule of section 1202(c)(3) shall apply for purposes of this paragraph. ``(4) Qualified empowerment zone business property.-- ``(A) In general.--The term `qualified empowerment zone business property' means tangible property if-- ``(i) such property was acquired by the taxpayer by purchase (as defined in section 179(d)(2)) after the date of the enactment of this section (December 31, 2001, in the case of a renewal zone) and before January 1, 2010, ``(ii) the original use of such property in the empowerment zone commences with the taxpayer, and ``(iii) during substantially all of the taxpayer's holding period for such property, substantially all of the use of such property was in an enterprise zone business of the taxpayer. ``(B) Special rule for substantial improvements.--The requirements of clauses (i) and (ii) of subparagraph (A) shall be treated as satisfied with respect to-- ``(i) property which is substantially improved by the taxpayer before January 1, 2010, and ``(ii) any land on which such property is located. The determination of whether a property is substantially improved shall be made under clause (ii) of section 1400B(b)(4)(B), except that `the date of the enactment of this section' shall be substituted for `December 31, 1997' in such clause. ``(c) Qualified Capital Gain.--For purposes of this section-- ``(1) In general.--Except as otherwise provided in this subsection, the term `qualified capital gain` means any gain recognized on the sale or exchange of-- ``(A) a capital asset, or ``(B) property used in the trade or business (as defined in section 1231(b)). ``(2) Gain before effective date or after 2014 not qualified.--The term `qualified capital gain' shall not include any gain attributable to periods before the date of the enactment of this section (January 1, 2002, in the case of a renewal zone) or after December 31, 2014. ``(3) Certain rules to apply.--Rules similar to the rules of paragraphs (3), (4), and (5) of section 1400B(e) shall apply for purposes of this subsection. ``(d) Certain Rules To Apply.--For purposes of this section, rules similar to the rules of paragraphs (5), (6), and (7) of subsection (b), and subsections (f ) and (g), of section 1400B shall apply; except that for such purposes section 1400B(g)(2) shall be applied by substituting-- ``(1) `the day after the date of the enactment of section 1397B' for `January 1, 1998', and ``(2) `December 31, 2014' for `December 31, 2011'. ``(e) Regulations.--The Secretary shall prescribe such regulations as may be appropriate to carry out the purposes of this section, including regulations to prevent the avoidance of the purposes of this section.''. (b) Conforming Amendments.-- (1) Paragraph (2) of section 1394(b) is amended-- (A) by striking ``section 1397C'' and inserting ``section 1397D''; and (B) by striking ``section 1397C(a)(2)'' and inserting ``section 1397D(a)(2)''. (2) Paragraph (3) of section 1394(b) is amended-- (A) by striking ``section 1397B'' each place it appears and inserting ``section 1397C''; and (B) by striking ``section 1397B(d)'' and inserting ``section 1397C(d)''. (3) Sections 1400(e) and 1400B(c) are each amended by striking ``section 1397B'' each place it appears and inserting ``section 1397C''. (4) The table of subparts for part III of subchapter U of chapter 1 is amended by striking the last item and inserting the following new items: ``Subpart C. Empowerment zone capital gain. ``Subpart D. General provisions.''. (5) The table of sections for subpart D of such part III is amended to read as follows: ``Sec. 1397C. Enterprise zone business defined. ``Sec. 1397D. Qualified zone property defined.''. (c) Effective Date.--The amendments made by this section shall apply to qualified empowerment zone assets acquired after the date of the enactment of this Act. SEC. 116. FUNDING FOR ROUND II EMPOWERMENT ZONES. (a) Entitlement.--Section 2007(a)(1) of the Social Security Act (42 U.S.C. 1397f(a)(1)) is amended-- (1) in subparagraph (A), by striking ``in the State; and'' and inserting ``that is in the State and is designated pursuant to section 1391(b) of the Internal Revenue Code of 1986;''; and (2) by adding after subparagraph (B) the following new subparagraphs: ``(C)(i) 1 grant under this section for each qualified empowerment zone that is in an urban area in the State and is designated pursuant to section 1391(g) of such Code; and ``(ii) 1 grant under this section for each qualified empowerment zone that is in a rural area in the State and is designated pursuant to section 1391(g) of such Code; and ``(D) 1 grant under this section for each qualified enterprise community that is in the State, is designated pursuant to section 1391(b)(1) of such Code, and is in existence on the date of enactment of this subparagraph.''. (b) Amount of Grants.--Section 2007(a)(2) of the Social Security Act (42 U.S.C. 1397f(a)(2)) is amended-- [[Page S9708]] (1) in the heading of subparagraph (A), by inserting ``Original'' before ``Empowerment''; (2) in subparagraph (A), in the matter preceding clause (i), by inserting ``referred to in paragraph (1)(A)'' after ``empowerment zone''; (3) by redesignating subparagraph (C) as subparagraph (F); and (4) by inserting after subparagraph (B) the following new subparagraphs: ``(C) Additional empowerment grants.--The amount of the grant to a State under this section for a qualified empowerment zone referred to in paragraph (1)(C) shall be-- ``(i) if the zone is in an urban area, $5,000,000 for fiscal year 2001; or ``(ii) if the zone is in a rural area, $2,000,000 for fiscal year 2001. ``(D) Additional enterprise community grants.--The amount of the grant to a State under this section for a qualified enterprise community referred to in paragraph (1)(D) shall be $250,000.''. (c) Timing of Grants.--Section 2007(a)(3) of the Social Security Act (42 U.S.C. 1397f(a)(3)) is amended-- (1) in the heading of subparagraph (A), by inserting ``Original'' before ``Qualified''; (2) in subparagraph (A), in the matter preceding clause (i), by inserting ``referred to in paragraph (1)(A)'' after ``empowerment zone''; and (3) by adding after subparagraph (B) the following new subparagraphs: ``(C) Additional qualified empowerment zones.--With respect to each qualified empowerment zone referred to in paragraph (1)(C), the Secretary shall make 1 grant under this section to the State in which the zone lies, on January 1, 2002. ``(D) Additional qualified enterprise communities.--With respect to each qualified enterprise community referred to in paragraph (1)(D), the Secretary shall make 1 grant under this section to the State in which the community lies on January 1, 2002.''. (d) Funding.--Section 2007(a)(4) of the Social Security Act (42 U.S.C. 1397f(a)(4)) is amended-- (1) by striking ``(4) Funding.--$1,000,000,000'' and inserting the following: ``(4) Funding.-- ``(A) Original grants.--$1,000,000,000''; (2) by inserting ``for empowerment zones and enterprise communities described in subparagraphs (A) and (B) of paragraph (1)'' before the period; and (3) by adding after and below the end the following new subparagraphs: ``(B) Additional empowerment zone grants.--$85,000,000 shall be made available to the Secretary for grants under this section for empowerment zones referred to in paragraph (1)(C). ``(C) Additional enterprise community grants.--$22,000,000 shall be made available to the Secretary for grants under this section for enterprise communities referred to in paragraph (1)(D).''. (e) Direct Funding for Indian Tribes.-- (1) In general.--Section 2007(a) of the Social Security Act (42 U.S.C. 1397f(a)) is amended by adding at the end the following new paragraph: ``(5) Direct funding for indian tribes.-- ``(A) In general.--The Secretary may make a grant under this section directly to the governing body of an Indian tribe if-- ``(i) the tribe is identified in the strategic plan of a qualified empowerment zone or qualified enterprise community as the entity that assumes sole or primary responsibility for carrying out activities and projects under the grant; and ``(ii) the grant is to be used for activities and projects that are-- ``(I) included in the strategic plan of the qualified empowerment zone or qualified enterprise community, consistent with this section; and ``(II) approved by the Secretary of Agriculture, in the case of a qualified empowerment zone or qualified enterprise community in a rural area, or the Secretary of Housing and Urban Development, in the case of a qualified empowerment zone or qualified enterprise community in an urban area. ``(B) Rules of interpretation.-- ``(i) If grant under this section is made directly to the governing body of an Indian tribe under subparagraph (A), the tribe shall be considered a State for purposes of this section. ``(ii) This subparagraph shall not be construed as making applicable to this section the provisions of the Indian Self- Determination and Education Assistance Act.''. (2) Definitions.--Section 2007(f) of such Act (42 U.S.C. 1397f(f)) is amended by adding at the end the following new paragraph: ``(7) Indian tribe.--The term `Indian tribe' means any Indian tribe, band, nation, or other organized group or community, including any Alaska Native village or regional or village corporation as defined in or established pursuant to the Alaska Native Claims Settlement Act, which is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians.''. Subtitle C--Modification of Tax Incentives for DC Zone SEC. 121. EXTENSION OF DC ZONE THROUGH 2006. (a) In General.--The following provisions are amended by striking ``2002'' each place it appears and inserting ``2006'': (1) Section 1400(f). (2) Section 1400A(b). (b) Zero Capital Gains Rate.--Section 1400B (relating to zero percent capital gains rate) is amended-- (1) by striking ``2003'' each place it appears and inserting ``2007'', and (2) by striking ``2007'' each place it appears and inserting ``2011''. SEC. 122. EXTENSION OF DC ZERO PERCENT CAPITAL GAINS RATE. (a) In General.--Section 1400B (relating to zero percent capital gains rate) is amended by adding at the end the following new subsection: ``(h) Extension to Entire District of Columbia.--In applying this section to any stock or partnership interest which is originally issued after December 31, 2000, or any tangible property acquired by the taxpayer by purchase after December 31, 2000-- ``(1) subsection (d) shall be applied without regard to paragraph (2) thereof, and ``(2) subsections (e)(2) and (g)(2) shall be applied by substituting `January 1, 2001' for `January 1, 1998'.''. (b) Effective Date.--The amendment made by this section shall take effect on January 1, 2001. SEC. 123. GROSS INCOME TEST FOR DC ZONE BUSINESSES. (a) In General.--Section 1400B(c) (defining DC Zone business) is amended by adding ``and'' at the end of paragraph (1), by striking paragraph (2), and by redesignating paragraph (3) as paragraph (2). (b) Effective Date.--The amendment made by this section shall apply to stock and partnership interests originally issued after, and property originally acquired by the taxpayer after, December 31, 2000. SEC. 124. EXPANSION OF DC HOMEBUYER TAX CREDIT. (a) Extension.--Section 1400C(i) (relating to application of section) is amended by striking ``2002'' and inserting ``2004''. (b) Expansion of Income Limitation.--Section 1400C(b)(1) (relating to limitation based on modified adjusted gross income) is amended-- (1) by striking ``$110,000'' in subparagraph (A)(i) and inserting ``$140,000'', and (2) by inserting ``($40,000 in the case of a joint return)'' after ``$20,000'' in subparagraph (B). (c) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2000. Subtitle D--New Markets Tax Credit SEC. 131. NEW MARKETS TAX CREDIT. (a) In General.--Subpart D of part IV of subchapter A of chapter 1 (relating to business-related credits) is amended by adding at the end the following new section: ``SEC. 45D. NEW MARKETS TAX CREDIT. ``(a) Allowance of Credit.-- ``(1) In general.--For purposes of section 38, in the case of a taxpayer who holds a qualified equity investment on a credit allowance date of such investment which occurs during the taxable year, the new markets tax credit determined under this section for such taxable year is an amount equal to the applicable percentage of the amount paid to the qualified community development entity for such investment at its original issue. ``(2) Applicable percentage.--For purposes of paragraph (1), the applicable percentage is-- ``(A) 5 percent with respect to the first