July 25, 2000 CONGRESSIONAL RECORD — HOUSE H6797 In 1976, the U.S. became a signatory to the after spending years on death row for crimes I hope that the authors of today's bill are International Covenant on Civil and Polit- they did not commit. truly serious about the need to prevent the ical Rights (CCPR), which 143 other nations It is cases like these that convinced such or- execution of the innocent, and that they will have also joined. Article 6(5) states, ‘‘Sen- ganizations as the American Bar Associa- tence of death shall not be imposed for join the 79 members of this HouseÐboth Re- crimes committed by persons below eighteen tionÐwhich has no position on the death pen- publicans and DemocratsÐwho have cospon- years of age and shall not be carried out on alty per seÐto call for a halt to executions sored the Innocence Protection Act. pregnant women.’’ The U.S. entered a partial until each jurisdiction can ensure that it has Madam Speaker, I have no further re- reservation to Article 6(5), which reads, ‘‘The taken steps to minimize the risk that innocent quests for time, and I yield back the United States reserves the right, subject to persons may be executed. balance of my time. its Constitutional constraints, to impose It is cases like these that convinced Gov- The SPEAKER pro tempore (Mrs. capital punishment on any person (other ernor RyanÐa Republican and a supporter of EMERSON). The question is on the mo- than a pregnant woman) duly convicted the death penaltyÐto put a stop to executions tion offered by the gentleman from Ar- under existing or future laws permitting the kansas (Mr. HUTCHINSON) that the imposition of capital punishment, including in Illinois until he could be certain that ``every- such punishment for crimes committed by one sentenced to death in Illinois is truly House suspend the rules and pass the persons below eighteen years of age.’’ [italics guilty.'' bill, H.R. 4888. added for emphasis] Thus, within the res- It is cases like these that should convince The question was taken. ervation itself, the U.S. bound itself not to every American that Governor Ryan and the Mr. HUTCHINSON. Madam Speaker, permit the execution of any woman who car- American Bar Association are right. We may on that I demand the yeas and nays. ries an unborn child. Congress has constitu- not all agree on the ultimate morality or utility The yeas and nays were ordered. tional authority to explicitly apply this of capital punishment. Indeed, you have be- The SPEAKER pro tempore. Pursu- treaty obligation to the states. fore you a pair of cosponsors who differ on ant to clause 8 of rule XX and the H.R. 4888’s definition of ‘‘child in utero’’ Chair’s prior announcement, further (‘‘a member of the species homo sapiens, at that question. I spent my career as a pros- any stage of development, who is carried in ecutor in opposition to the death penalty. Con- proceedings on this motion will be the womb’’) is taken verbatim from the Un- gressman LAHOOD is a supporter of the death postponed. born Victims of Violence Act (H.R. 2436), penalty. But we agree profoundly that a just f passed by the House on September 30, 1999, society cannot engage in the killing of the in- MESSAGE FROM THE SENATE by a vote of 254–172. (1999 House roll call no. nocent. We have come together in this bipar- 465) Similar definitions and terminology are tisan effort to help prevent what Governor A message from the Senate by Mr. found in numerous state laws. Like those Lundregan, one of its clerks, an- state laws, this bill has no effect on access to Ryan has called ``the ultimate nightmare, the state's taking of innocent life.'' nounced that the Senate has passed legal abortion, either for women on death with an amendment in which the con- row or anybody else. I have heard some suggest that the con- Vice President Gore, asked by NBC’s Tim cerns expressed by Governor Ryan are some- currence of the House is requested, a Russert whether he agreed with the current how peculiar to the State of Illinois. Nothing bill of the House of the following title: prohibition on federal executions of pregnant could be further from the truth. The system is H.R. 4461. An act making appropriations women, laughed and said, ‘‘I’d want to think fallible everywhere it is in place. for Agriculture, Rural Development, Food about it.’’ (Meet the Press, July 16, 2000) On Only last month we received fresh evidence and Drug Administration, and Related Agen- July 17, ‘‘Mr. Gore said he favored allowing cies programs for the fiscal year ending Sep- a pregnant woman to choose whether to of this with the release of the first comprehen- tember 30, 2001, and for other purposes. sive statistical study ever undertaken of mod- delay her execution until she gave birth. The message also announced that the ern American capital appeals. The study, led ‘The principle of a woman’s right to choose Senate insists upon its amendment to by Professor James Liebman of Columbia Uni- governs in that case,’ he said.’’ (The New the bill (H.R. 4461) ‘‘An Act making ap- York Times, July 18) Gore’s position implic- versity, looked at over 4,500 capital cases in propriations for Agriculture, Rural De- itly repudiates the innocent child principle 34 states over a 23-year period. According to velopment, Food and Drug Administra- embodied in the International Covenant on the study, the courts found serious, reversible tion, and Related Agencies programs Civil and Political Rights and in Title 18 error in 68 percent of the capital sentences U.S.C.A. Sect. 3596, both of which flatly pro- for the fiscal year ending September 30, handed down over this period. And when hibit the government from taking the child’s 2001, and for other purposes,’’ requests these individuals were retried, 82 percent of life. a conference with the House on the dis- them were found not to deserve the death Mr. DELAHUNT. Madam Speaker, I rise in agreeing votes of the two Houses there- penalty, and 7 percent were found innocent of support of the bill, which would prevent the on, and appoints Mr. COCHRAN, Mr. the capital crime altogether. execution of a woman who is carrying a child. SPECTER, Mr. BOND, Mr. GORTON, Mr. These are shocking statistics, Mr. Speaker. As the lead sponsor of the Innocence Pro- MCCONNELL, Mr. BURNS, Mr. STEVENS, It is hard to imagine many other human enter- tection Act, I commend the authors of the bill Mr. KOHL, Mr. HARKIN, Mr. DORGAN, prises that would continue to operate with for their concern that innocent human beings Mrs. FEINSTEIN, Mr. DURBIN, and Mr. such a sorry record. I dare say that if seven not be executed. However, I urge them to rec- BYRD to be the conferees on the part of out of every 10 NASA flights burned up in the ognize that there may also be a second inno- the Senate. upper atmosphere, we'd be reassessing the cent human being involved in such casesÐ f namely the mother herself. space program. If commercial airlines oper- Unfortunately, this very limited measure ated their planes with a 68 percent failure rate, COMMUNITY RENEWAL AND NEW does nothing to prevent the execution of an in- we'd all be taking the train. MARKETS ACT OF 2000 nocent adult human being for a crime she did Yet even if these statistics are wildly exag- Mr. ENGLISH. Mr. Speaker, I move not commit. gerated, where the taking of human life is in- to suspend the rules and pass the bill The Innocence Protection Act of 2000 (H.R. volved, it seems to me we must strive to reach (H.R. 4923) to amend the Internal Rev- 4167), which Mr. LAHOOD and I have intro- ``zero tolerance'' for error. As Governor Ryan enue Code of 1986 to provide tax incen- duced, would prevent such a thing from hap- recently said, ``99.5 percent isn't good tives for the renewal of distressed com- pening. Its two principal provisions concern enough'' when lives are in the balance. munities, to provide for 9 additional the two most important tools by which the pos- Nothing we can do will bring absolute cer- empowerment zones and increased tax sibility of error can be minimized: DNA testing tainty. Judges, jurors, police, eyewitnesses, incentives for empowerment zone de- and competent legal representation. defense attorneys, and prosecutors them- velopment, to encourage investments This legislation arose out of a growing na- selvesÐall are human beings, and all make in new markets, and for other pur- tional awareness that the machinery by which mistakes. As a prosecutor for over 20 years, poses. we try capital cases in this country has gone I certainly made my share of them. But we do The Clerk read as follows: have the means at our disposal to minimize seriously and dangerously awry. H.R. 4923 Since the reinstatement of the death penalty the possibility of error. And where lives are at Be it enacted by the Senate and House of Rep- in 1976, a total of 653 men and women have stake, we have a responsibility to put those resentatives of the United States of America in been executed in the United States, including tools to use. Congress assembled, 55 so far this year alone. During this same pe- The Innocence Protection Act will help en- SECTION 1. SHORT TITLE; ETC. riod, 87 peopleÐmore than one out of every sure that fewer mistakes are made in capital (a) SHORT TITLE.—This Act may be cited as 100 men and women sentenced to death in cases. And that when mistakes are made, the ‘‘Community Renewal and New Markets the United StatesÐhave been exonerated they are caught in time. Act of 2000’’.

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(b) AMENDMENT OF 1986 CODE.—Except as Sec. 702. Transfer of HUD assets in revital- scribed in subsection (d)(2) with respect to otherwise expressly provided, whenever in ization areas. such area is inadequate. this Act an amendment or repeal is ex- Sec. 703. Risk-sharing demonstration. ‘‘(4) LIMITATION ON DESIGNATIONS.— pressed in terms of an amendment to, or re- Sec. 704. Prevention and treatment of sub- ‘‘(A) PUBLICATION OF REGULATIONS.—The peal of, a section or other provision, the ref- stance abuse; services provided Secretary of Housing and Urban Develop- erence shall be considered to be made to a through religious organiza- ment shall prescribe by regulation no later section or other provision of the Internal tions. than 4 months after the date of the enact- Revenue Code of 1986. Sec. 705. New markets venture capital pro- ment of this section, after consultation with (c) TABLE OF CONTENTS.— gram. the officials described in paragraph (1)(B)— Sec. 1. Short title; etc. Sec. 706. BusinessLINC grants and coopera- ‘‘(i) the procedures for nominating an area tive agreements. TITLE I—TAX INCENTIVES FOR under paragraph (1)(A), RENEWAL COMMUNITIES TITLE I—TAX INCENTIVES FOR RENEWAL ‘‘(ii) the parameters relating to the size COMMUNITIES Sec. 101. Designation of and tax incentives and population characteristics of a renewal for renewal communities. SEC. 101. DESIGNATION OF AND TAX INCENTIVES community, and Sec. 102. Extension of expensing of environ- FOR RENEWAL COMMUNITIES. ‘‘(iii) the manner in which nominated areas mental remediation costs to re- (a) IN GENERAL.—Chapter 1 is amended by will be evaluated based on the criteria speci- newal communities; extension adding at the end the following new sub- fied in subsection (d). of termination date for renewal chapter: ‘‘(B) TIME LIMITATIONS.—The Secretary of communities and empowerment ‘‘Subchapter X—Renewal Communities Housing and Urban Development may des- ignate nominated areas as renewal commu- zones. ‘‘Part I. Designation. Sec. 103. Work opportunity credit for hiring nities only during the 24-month period begin- youth residing in renewal com- ‘‘Part II. Renewal community capital gain; ning on the first day of the first month fol- munities. renewal community business. lowing the month in which the regulations TITLE II—EXTENSION AND EXPANSION ‘‘Part III. Additional incentives. described in subparagraph (A) are prescribed. ‘‘(C) PROCEDURAL RULES.—The Secretary of OF EMPOWERMENT ZONE INCENTIVES ‘‘PART I—DESIGNATION Housing and Urban Development shall not Sec. 201. Authority to designate 9 additional ‘‘Sec. 1400E. Designation of renewal commu- empowerment zones. make any designation of a nominated area as nities. Sec. 202. Extension of enterprise zone treat- a renewal community under paragraph (2) ment through 2009. ‘‘SEC. 1400E. DESIGNATION OF RENEWAL COMMU- unless— Sec. 203. 20 percent employment credit for NITIES. ‘‘(i) the local governments and the States all empowerment zones ‘‘(a) DESIGNATION.— in which the nominated area is located have Sec. 204. Increased expensing under section ‘‘(1) DEFINITIONS.—For purposes of this the authority— 179. title, the term ‘renewal community’ means ‘‘(I) to nominate such area for designation Sec. 205. Higher limits on tax-exempt em- any area— as a renewal community, powerment zone facility bonds. ‘‘(A) which is nominated by one or more ‘‘(II) to make the State and local commit- Sec. 206. Nonrecognition of gain on rollover local governments and the State or States in ments described in subsection (d), and of empowerment zone invest- which it is located for designation as a re- ‘‘(III) to provide assurances satisfactory to ments. newal community (hereinafter in this sec- the Secretary of Housing and Urban Develop- Sec. 207. Increased exclusion of gain on sale tion referred to as a ‘nominated area’), and ment that such commitments will be ful- of empowerment zone stock. ‘‘(B) which the Secretary of Housing and filled, TITLE III—NEW MARKETS TAX CREDIT Urban Development designates as a renewal ‘‘(ii) a nomination regarding such area is community, after consultation with— Sec. 301. New markets tax credit. submitted in such a manner and in such ‘‘(i) the Secretaries of Agriculture, Com- form, and contains such information, as the TITLE IV—IMPROVEMENTS IN LOW- merce, Labor, and the Treasury; the Director INCOME HOUSING CREDIT Secretary of Housing and Urban Develop- of the Office of Management and Budget, and ment shall by regulation prescribe, and Sec. 401. Modification of State ceiling on the Administrator of the Small Business Ad- ‘‘(iii) the Secretary of Housing and Urban low-income housing credit. ministration, and Development determines that any informa- Sec. 402. Modification of criteria for allo- ‘‘(ii) in the case of an area on an Indian tion furnished is reasonably accurate. cating housing credits among reservation, the Secretary of the Interior. ‘‘(5) NOMINATION PROCESS FOR INDIAN RES- projects. UMBER OF DESIGNATIONS ‘‘(2) N .— ERVATIONS.—For purposes of this subchapter, Sec. 403. Additional responsibilities of hous- ‘‘(A) IN GENERAL.—The Secretary of Hous- ing credit agencies. in the case of a nominated area on an Indian ing and Urban Development may designate reservation, the reservation governing body Sec. 404. Modifications to rules relating to not more than 40 nominated areas as renewal basis of building which is eligi- (as determined by the Secretary of the Inte- communities. rior) shall be treated as being both the State ble for credit. ‘‘(B) MINIMUM DESIGNATION IN RURAL Sec. 405. Other modifications. and local governments with respect to such AREAS.—Of the areas designated under para- area. Sec. 406. Carryforward rules. graph (1), at least 8 must be areas— Sec. 407. Effective date. ‘‘(i) which are within a local government ‘‘(b) PERIOD FOR WHICH DESIGNATION ISIN TITLE V—PRIVATE ACTIVITY BOND jurisdiction or jurisdictions with a popu- EFFECT.— VOLUME CAP lation of less than 50,000, ‘‘(1) IN GENERAL.—Any designation of an Sec. 501. Acceleration of phase-in of increase ‘‘(ii) which are outside of a metropolitan area as a renewal community shall remain in in volume cap on private activ- statistical area (within the meaning of sec- effect during the period beginning on July 1, ity bonds. tion 143(k)(2)(B)), or 2001, and ending on the earliest of— TITLE VI—AMERICA’S PRIVATE ‘‘(iii) which are determined by the Sec- ‘‘(A) December 31, 2009, INVESTMENT COMPANIES retary of Housing and Urban Development, ‘‘(B) the termination date designated by Sec. 601. Short title. after consultation with the Secretary of the State and local governments in their Sec. 602. Findings and purposes. Commerce, to be rural areas. nomination, or Sec. 603. Definitions. ‘‘(3) AREAS DESIGNATED BASED ON DEGREE ‘‘(C) the date the Secretary of Housing and Sec. 604. Authorization. OF POVERTY, ETC.— Urban Development revokes such designa- Sec. 605. Selection of APICs. ‘‘(A) IN GENERAL.—Except as otherwise pro- tion. Sec. 606. Operations of APICs. vided in this section, the nominated areas ‘‘(2) REVOCATION OF DESIGNATION.—The Sec- Sec. 607. Credit enhancement by the Federal designated as renewal communities under retary of Housing and Urban Development Government. this subsection shall be those nominated may revoke the designation under this sec- Sec. 608. APIC requests for guarantee ac- areas with the highest average ranking with tion of an area if such Secretary determines tions. respect to the criteria described in subpara- that the local government or the State in Sec. 609. Examination and monitoring of graphs (B), (C), and (D) of subsection (c)(3). which the area is located— APICs. For purposes of the preceding sentence, an ‘‘(A) has modified the boundaries of the Sec. 610. Penalties. area shall be ranked within each such cri- area, or Sec. 611. Effective date. terion on the basis of the amount by which ‘‘(B) is not complying substantially with, Sec. 612. Sunset. the area exceeds such criterion, with the or fails to make progress in achieving, the TITLE VII—OTHER COMMUNITY RE- area which exceeds such criterion by the State or local commitments, respectively, NEWAL AND NEW MARKETS ASSIST- greatest amount given the highest ranking. described in subsection (d). ANCE ‘‘(B) EXCEPTION WHERE INADEQUATE COURSE ‘‘(3) EARLIER TERMINATION OF CERTAIN BEN- Sec. 701. Transfer of unoccupied and sub- OF ACTION, ETC.—An area shall not be des- EFITS IF EARLIER TERMINATION OF DESIGNA- standard HUD-held housing to ignated under subparagraph (A) if the Sec- TION.—If the designation of an area as a re- local governments and commu- retary of Housing and Urban Development newal community terminates before Decem- nity development corporations. determines that the course of action de- ber 31, 2009—

VerDate 11-MAY-2000 03:15 Jul 26, 2000 Jkt 079060 PO 00000 Frm 00020 Fmt 4634 Sfmt 0634 E:\CR\FM\A25JY7.010 pfrm02 PsN: H25PT1 July 25, 2000 CONGRESSIONAL RECORD — HOUSE H6799 ‘‘(A) the date of such termination shall be ments will follow a specified course of action ignation under section 1391 of any area as an substituted for ‘December 31, 2009’ in section which meets the requirements of paragraph empowerment zone or enterprise community 198(h) with respect to such area, and (2) and is designed to reduce the various bur- shall cease to be in effect as of the date that ‘‘(B) the day after the date of such termi- dens borne by employers or employees in the designation of any portion of such area nation shall be substituted for ‘January 1, such area, and as a renewal community takes effect. 2010’ each place it appears in sections 1400F ‘‘(B) the economic growth promotion re- ‘‘(f ) DEFINITIONS AND SPECIAL RULES.—For and 1400J with respect to such area. quirements of paragraph (3) are met. purposes of this subchapter— ‘‘(c) AREA AND ELIGIBILITY REQUIRE- ‘‘(2) COURSE OF ACTION.— ‘‘(1) GOVERNMENTS.—If more than one gov- MENTS.— ‘‘(A) IN GENERAL.—A course of action meets ernment seeks to nominate an area as a re- ‘‘(1) IN GENERAL.—The Secretary of Hous- the requirements of this paragraph if such newal community, any reference to, or re- ing and Urban Development may designate a course of action is a written document, quirement of, this section shall apply to all nominated area as a renewal community signed by a State (or local government) and such governments. under subsection (a) only if the area meets neighborhood organizations, which evidences ‘‘(2) LOCAL GOVERNMENT.—The term ‘local the requirements of paragraphs (2) and (3) of a partnership between such State or govern- government’ means— this subsection. ment and community-based organizations ‘‘(A) any county, city, town, township, par- ‘‘(2) AREA REQUIREMENTS.—A nominated and which commits each signatory to spe- ish, village, or other general purpose polit- area meets the requirements of this para- cific and measurable goals, actions, and ical subdivision of a State, and graph if— timetables. Such course of action shall in- ‘‘(B) any combination of political subdivi- ‘‘(A) the area is within the jurisdiction of clude at least 4 of the following: sions described in subparagraph (A) recog- one or more local governments, ‘‘(i) A reduction of tax rates or fees apply- nized by the Secretary of Housing and Urban ‘‘(B) the boundary of the area is contin- ing within the renewal community. Development. uous, and ‘‘(ii) An increase in the level of efficiency ‘‘(3) APPLICATION OF RULES RELATING TO ‘‘(C) the area— of local services within the renewal commu- CENSUS TRACTS.—The rules of section ‘‘(i) has a population of not more than nity. 1392(b)(4) shall apply. 200,000 and at least— ‘‘(iii) Crime reduction strategies, such as ‘‘(4) CENSUS DATA.—Population and poverty ‘‘(I) 4,000 if any portion of such area (other crime prevention (including the provision of rate shall be determined by using 1990 census than a rural area described in subsection crime prevention services by nongovern- data. (a)(2)(B)(i)) is located within a metropolitan mental entities). ‘‘(g) PRIORITY FOR DISTRICT OF COLUMBIA statistical area (within the meaning of sec- ‘‘(iv) Actions to reduce, remove, simplify, NOMINATED AREA.—For purposes of this tion 143(k)(2)(B)) which has a population of or streamline governmental requirements 50,000 or greater, or subchapter— applying within the renewal community. ‘‘(II) 1,000 in any other case, or ‘‘(1) IN GENERAL.—Any nominated area ‘‘(v) Involvement in the program by pri- ‘‘(ii) is entirely within an Indian reserva- within the District of Columbia shall be vate entities, organizations, neighborhood tion (as determined by the Secretary of the treated for purposes of subsection (a)(3) as organizations, and community groups, par- Interior). having the highest average with respect to ticularly those in the renewal community, ‘‘(3) ELIGIBILITY REQUIREMENTS.—A nomi- the criteria described in subparagraphs (B), including a commitment from such private nated area meets the requirements of this (C), and (D) of subsection (c)(3). paragraph if the State and the local govern- entities to provide jobs and job training for, ‘‘(2) DATE OF DESIGNATION.—Notwith- ments in which it is located certify in writ- and technical, financial, or other assistance standing subsection (b)(1), the designation of ing (and the Secretary of Housing and Urban to, employers, employees, and residents from a nominated area within the District of Co- Development, after such review of sup- the renewal community. lumbia as a renewal community shall take porting data as he deems appropriate, ac- ‘‘(vi) The gift (or sale at below fair market effect on January 1, 2003. cepts such certification) that— value) of surplus real property (such as land, ‘‘(3) NOMINATION.—The District of Colum- ‘‘(A) the area is one of pervasive poverty, homes, and commercial or industrial struc- bia shall be treated as being both a State and unemployment, and general distress; tures) in the renewal community to neigh- local government with respect to such area. borhood organizations, community develop- ‘‘(B) the unemployment rate in the area, as ‘‘PART II—RENEWAL COMMUNITY CAP- ment corporations, or private companies. determined by the most recent available ITAL GAIN; RENEWAL COMMUNITY BUSI- ‘‘(B) RECOGNITION OF PAST EFFORTS.—For data, was at least 11⁄2 times the national un- NESS employment rate for the period to which purposes of this section, in evaluating the course of action agreed to by any State or ‘‘Sec. 1400F. Renewal community capital such data relate; gain. ‘‘(C) the poverty rate for each population local government, the Secretary of Housing census tract within the nominated area is at and Urban Development shall take into ac- ‘‘Sec. 1400G. Renewal community business least 20 percent; and count the past efforts of such State or local defined. ‘‘(D) in the case of an urban area, at least government in reducing the various burdens ‘‘SEC. 1400F. RENEWAL COMMUNITY CAPITAL 70 percent of the households living in the borne by employers and employees in the GAIN. area have incomes below 80 percent of the area involved. ‘‘(a) GENERAL RULE.—Gross income does median income of households within the ju- ‘‘(3) ECONOMIC GROWTH PROMOTION REQUIRE- not include any qualified capital gain from risdiction of the local government (deter- MENTS.—The economic growth promotion re- the sale or exchange of a qualified commu- mined in the same manner as under section quirements of this paragraph are met with nity asset held for more than 5 years. 119(b)(2) of the Housing and Community De- respect to a nominated area if the local gov- ‘‘(b) QUALIFIED COMMUNITY ASSET.—For velopment Act of 1974). ernment and the State in which such area is purposes of this section— located certify in writing that such govern- ‘‘(4) CONSIDERATION OF HIGH INCIDENCE OF ‘‘(1) IN GENERAL.—The term ‘qualified com- ment and State (respectively) have repealed CRIME.—The Secretary of Housing and Urban munity asset’ means— Development shall take into account, in se- or reduced, will not enforce, or will reduce ‘‘(A) any qualified community stock, lecting nominated areas for designation as within the nominated area at least 4 of the ‘‘(B) any qualified community partnership renewal communities under this section, the following: interest, and extent to which such areas have a high inci- ‘‘(A) Licensing requirements for occupa- ‘‘(C) any qualified community business dence of crime. tions that do not ordinarily require a profes- property. sional degree. ‘‘(5) CONSIDERATION OF COMMUNITIES IDENTI- ‘‘(2) QUALIFIED COMMUNITY STOCK.— ‘‘(B) Zoning restrictions on home-based FIED IN GAO STUDY.—The Secretary of Hous- ‘‘(A) IN GENERAL.—Except as provided in ing and Urban Development shall take into businesses which do not create a public nui- subparagraph (B), the term ‘qualified com- account, in selecting nominated areas for sance. munity stock’ means any stock in a domes- designation as renewal communities under ‘‘(C) Permit requirements for street ven- tic corporation if— this section, if the area has census tracts dors who do not create a public nuisance. ‘‘(i) such stock is acquired by the taxpayer identified in the May 12, 1998, report of the ‘‘(D) Zoning or other restrictions that im- after June 30, 2001, and before January 1, General Accounting Office regarding the pede the formation of schools or child care 2010, at its original issue (directly or through identification of economically distressed centers. an underwriter) from the corporation solely areas. ‘‘(E) Franchises or other restrictions on in exchange for cash, ‘‘(d) REQUIRED STATE AND LOCAL COMMIT- competition for businesses providing public ‘‘(ii) as of the time such stock was issued, MENTS.— services, including taxicabs, jitneys, cable such corporation was a renewal community ‘‘(1) IN GENERAL.—The Secretary of Hous- television, or trash hauling. business (or, in the case of a new corpora- ing and Urban Development may designate This paragraph shall not apply to the extent tion, such corporation was being organized any nominated area as a renewal community that such regulation of businesses and occu- for purposes of being a renewal community under subsection (a) only if— pations is necessary for and well-tailored to business), and ‘‘(A) the local government and the State in the protection of health and safety. ‘‘(iii) during substantially all of the tax- which the area is located agree in writing ‘‘(e) COORDINATION WITH TREATMENT OF EM- payer’s holding period for such stock, such that, during any period during which the POWERMENT ZONES AND ENTERPRISE COMMU- corporation qualified as a renewal commu- area is a renewal community, such govern- NITIES.—For purposes of this title, the des- nity business.

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‘‘(B) REDEMPTIONS.—A rule similar to the ‘‘SEC. 1400G. RENEWAL COMMUNITY BUSINESS penditures (determined without regard to rule of section 1202(c)(3) shall apply for pur- DEFINED. such cost) with respect to such building. poses of this paragraph. ‘‘For purposes of this subchapter, the term ‘‘(ii) CREDITS.—The term ‘qualified revital- ‘‘(3) QUALIFIED COMMUNITY PARTNERSHIP IN- ‘renewal community business’ means any en- ization expenditure’ does not include any ex- TEREST.—The term ‘qualified community tity or proprietorship which would be a penditure which the taxpayer may take into partnership interest’ means any capital or qualified business entity or qualified propri- account in computing any credit allowable profits interest in a domestic partnership etorship under section 1397C if references to under this title unless the taxpayer elects to if— renewal communities were substituted for take the expenditure into account only for ‘‘(A) such interest is acquired by the tax- references to empowerment zones in such purposes of this section. payer after June 30, 2001, and before January section. ‘‘(c) DOLLAR LIMITATION.—The aggregate 1, 2010, from the partnership solely in ex- ‘‘PART III—ADDITIONAL INCENTIVES amount which may be treated as qualified change for cash, ‘‘Sec. 1400H. Renewal community employ- revitalization expenditures with respect to ‘‘(B) as of the time such interest was ac- ment credit. any qualified revitalization building shall quired, such partnership was a renewal com- ‘‘Sec. 1400I. Commercial revitalization de- not exceed the lesser of— munity business (or, in the case of a new duction. ‘‘(1) $10,000,000, or partnership, such partnership was being or- ‘‘Sec. 1400J. Increase in expensing under sec- ‘‘(2) the commercial revitalization expendi- ganized for purposes of being a renewal com- tion 179. ture amount allocated to such building munity business), and under this section by the commercial revi- ‘‘(C) during substantially all of the tax- ‘‘SEC. 1400H. RENEWAL COMMUNITY EMPLOY- MENT CREDIT. talization agency for the State in which the payer’s holding period for such interest, such ‘‘(a) IN GENERAL.—Subject to the modifica- building is located. partnership qualified as a renewal commu- tion in subsection (b), a renewal community ‘‘(d) COMMERCIAL REVITALIZATION EXPENDI- nity business. shall be treated as an empowerment zone for TURE AMOUNT.— A rule similar to the rule of paragraph (2)(B) purposes of section 1396 with respect to shall apply for purposes of this paragraph. ‘‘(1) IN GENERAL.—The aggregate commer- wages paid or incurred after June 30, 2001. cial revitalization expenditure amount ‘‘(4) QUALIFIED COMMUNITY BUSINESS PROP- ‘‘(b) MODIFICATION.—In applying section which a commercial revitalization agency ERTY.— 1396 with respect to renewal communities— may allocate for any calendar year is the ‘‘(A) IN GENERAL.—The term ‘qualified ‘‘(1) the applicable percentage shall be 15 amount of the State commercial revitaliza- community business property’ means tan- percent, and tion expenditure ceiling determined under gible property if— ‘‘(2) subsection (c) thereof shall be applied this paragraph for such calendar year for ‘‘(i) such property was acquired by the tax- by substituting ‘$10,000’ for ‘$15,000’ each such agency. payer by purchase (as defined in section place it appears. ‘‘(2) STATE COMMERCIAL REVITALIZATION EX- 179(d)(2)) after June 30, 2001, and before Janu- ‘‘SEC. 1400I. COMMERCIAL REVITALIZATION DE- PENDITURE CEILING.—The State commercial ary 1, 2010, DUCTION. revitalization expenditure ceiling applicable ‘‘(ii) the original use of such property in ‘‘(a) GENERAL RULE.—At the election of the to any State— the renewal community commences with the taxpayer, either— ‘‘(A) for the period after June 30, 2001, and taxpayer, and ‘‘(1) one-half of any qualified revitalization before January 1, 2002, is $6,000,000 for each ‘‘(iii) during substantially all of the tax- expenditures chargeable to capital account renewal community in the State, payer’s holding period for such property, with respect to any qualified revitalization ‘‘(B) for each calendar year after 2001 and substantially all of the use of such property building shall be allowable as a deduction for before 2010 is $12,000,000 for each renewal was in a renewal community business of the the taxable year in which the building is community in the State, and taxpayer. placed in service, or ‘‘(C) for each calendar year thereafter is ‘‘(B) SPECIAL RULE FOR SUBSTANTIAL IM- ‘‘(2) a deduction for all such expenditures zero. PROVEMENTS.—The requirements of clauses shall be allowable ratably over the 120- ‘‘(3) COMMERCIAL REVITALIZATION AGENCY.— (i) and (ii) of subparagraph (A) shall be treat- month period beginning with the month in For purposes of this section, the term ‘com- ed as satisfied with respect to— which the building is placed in service. mercial revitalization agency’ means any ‘‘(i) property which is substantially im- ‘‘(b) QUALIFIED REVITALIZATION BUILDINGS agency authorized by a State to carry out proved by the taxpayer before January 1, AND EXPENDITURES.—For purposes of this 2010, and section— this section. ‘‘(4) TIME AND MANNER OF ALLOCATIONS.— ‘‘(ii) any land on which such property is lo- ‘‘(1) QUALIFIED REVITALIZATION BUILDING.— cated. The term ‘qualified revitalization building’ Allocations under this section shall be made means any building (and its structural com- at the same time and in the same manner as The determination of whether a property is under paragraphs (1) and (7) of section 42(h). substantially improved shall be made under ponents) if— clause (ii) of section 1400B(b)(4)(B), except ‘‘(A) the building is placed in service by ‘‘(e) RESPONSIBILITIES OF COMMERCIAL RE- that ‘June 30, 2001’ shall be substituted for the taxpayer in a renewal community and VITALIZATION AGENCIES.— ‘December 31, 1997’ in such clause. the original use of the building begins with ‘‘(1) PLANS FOR ALLOCATION.—Notwith- ‘‘(c) QUALIFIED CAPITAL GAIN.—For pur- the taxpayer, or standing any other provision of this section, poses of this section— ‘‘(B) in the case of such building not de- the commercial revitalization expenditure ‘‘(1) IN GENERAL.—Except as otherwise pro- scribed in subparagraph (A), such building— amount with respect to any building shall be vided in this subsection, the term ‘qualified ‘‘(i) is substantially rehabilitated (within zero unless— capital gain‘ means any gain recognized on the meaning of section 47(c)(1)(C)) by the ‘‘(A) such amount was allocated pursuant the sale or exchange of— taxpayer, and to a qualified allocation plan of the commer- ‘‘(A) a capital asset, or ‘‘(ii) is placed in service by the taxpayer cial revitalization agency which is approved ‘‘(B) property used in the trade or business after the rehabilitation in a renewal commu- (in accordance with rules similar to the rules (as defined in section 1231(b)). nity. of section 147(f )(2) (other than subparagraph ‘‘(2) GAIN BEFORE JULY 1, 2001, OR AFTER 2014 ‘‘(2) QUALIFIED REVITALIZATION EXPENDI- (B)(ii) thereof)) by the governmental unit of NOT QUALIFIED.—The term ‘qualified capital TURE.— which such agency is a part; and gain’ shall not include any gain attributable ‘‘(A) IN GENERAL.—The term ‘qualified revi- ‘‘(B) such agency notifies the chief execu- to periods before July 1, 2001, or after Decem- talization expenditure’ means any amount tive officer (or its equivalent) of the local ju- ber 31, 2014. properly chargeable to capital account for risdiction within which the building is lo- ‘‘(3) CERTAIN RULES TO APPLY.—Rules simi- property for which depreciation is allowable cated of such allocation and provides such lar to the rules of paragraphs (3), (4), and (5) under section 168 (without regard to this sec- individual a reasonable opportunity to com- of section 1400B(e) shall apply for purposes of tion) and which is— ment on the allocation. this subsection. ‘‘(i) nonresidential real property (as de- ‘‘(2) QUALIFIED ALLOCATION PLAN.—For pur- ‘‘(d) CERTAIN RULES TO APPLY.—For pur- fined in section 168(e)), or poses of this subsection, the term ‘qualified poses of this section, rules similar to the ‘‘(ii) section 1250 property (as defined in allocation plan’ means any plan— rules of paragraphs (5), (6), and (7) of sub- section 1250(c)) which is functionally related ‘‘(A) which sets forth selection criteria to section (b), and subsections (f ) and (g), of and subordinate to property described in be used to determine priorities of the com- section 1400B shall apply; except that for clause (i). mercial revitalization agency which are ap- such purposes section 1400B(g)(2) shall be ap- ‘‘(B) CERTAIN EXPENDITURES NOT IN- propriate to local conditions, plied by substituting ‘July 1, 2001’ for ‘Janu- CLUDED.— ‘‘(B) which considers— ary 1, 1998’ and ‘December 31, 2014’ for ‘De- ‘‘(i) ACQUISITION COST.—In the case of a ‘‘(i) the degree to which a project contrib- cember 31, 2007’. building described in paragraph (1)(B), the utes to the implementation of a strategic ‘‘(e) REGULATIONS.—The Secretary shall cost of acquiring the building or interest plan that is devised for a renewal community prescribe such regulations as may be appro- therein shall be treated as a qualified revi- through a citizen participation process, priate to carry out the purposes of this sec- talization expenditure only to the extent ‘‘(ii) the amount of any increase in perma- tion, including regulations to prevent the that such cost does not exceed 30 percent of nent, full-time employment by reason of any avoidance of the purposes of this section. the aggregate qualified revitalization ex- project, and

VerDate 11-MAY-2000 03:15 Jul 26, 2000 Jkt 079060 PO 00000 Frm 00022 Fmt 4634 Sfmt 0634 E:\CR\FM\A25JY7.010 pfrm02 PsN: H25PT1 July 25, 2000 CONGRESSIONAL RECORD — HOUSE H6801 ‘‘(iii) the active involvement of residents utable to the commercial revitalization de- TITLE II—EXTENSION AND EXPANSION OF and nonprofit groups within the renewal duction under section 1400I.’’ EMPOWERMENT ZONE INCENTIVES community, and (2) Subparagraph (E) of section 469(i)(3), as SEC. 201. AUTHORITY TO DESIGNATE 9 ADDI- ‘‘(C) which provides a procedure that the redesignated by subparagraph (A), is amend- TIONAL EMPOWERMENT ZONES. agency (or its agent) will follow in moni- ed to read as follows: Section 1391 is amended by adding at the toring compliance with this section. ‘‘(E) ORDERING RULES TO REFLECT EXCEP- end the following new subsection: ‘‘(f) SPECIAL RULES.— TIONS AND SEPARATE PHASE-OUTS.—If subpara- ‘‘(h) ADDITIONAL DESIGNATIONS PER- ‘‘(1) DEDUCTION IN LIEU OF DEPRECIATION.— graph (B), (C), or (D) applies for a taxable MITTED.— The deduction provided by this section for year, paragraph (1) shall be applied— ‘‘(1) IN GENERAL.—In addition to the areas qualified revitalization expenditures shall— ‘‘(i) first to the portion of the passive ac- designated under subsections (a) and (g), the ‘‘(A) with respect to the deduction deter- tivity loss to which subparagraph (C) does appropriate Secretaries may designate in the mined under subsection (a)(1), be in lieu of not apply, aggregate an additional 9 nominated areas as any depreciation deduction otherwise allow- ‘‘(ii) second to the portion of the passive empowerment zones under this section, sub- able on account of 1⁄2 of such expenditures, activity credit to which subparagraph (B) or ject to the availability of eligible nominated and (D) does not apply, areas. Of that number, not more than 7 may ‘‘(B) with respect to the deduction deter- ‘‘(iii) third to the portion of such credit to be designated in urban areas and not more mined under subsection (a)(2), be in lieu of which subparagraph (B) applies, than 2 may be designated in rural areas. any depreciation deduction otherwise allow- ‘‘(iv) fourth to the portion of such loss to ‘‘(2) PERIOD DESIGNATIONS MAY BE MADE AND able on account of all of such expenditures. which subparagraph (C) applies, and TAKE EFFECT.—A designation may be made ‘‘(2) BASIS ADJUSTMENT, ETC.—For purposes ‘‘(v) then to the portion of such credit to under this subsection after the date of the of sections 1016 and 1250, the deduction under which subparagraph (D) applies.’’ enactment of this subsection and before Jan- this section shall be treated in the same (3)(A) Subparagraph (B) of section 469(i)(6) uary 1, 2002. Subject to subparagraphs (B) manner as a depreciation deduction. For pur- is amended by striking ‘‘or’’ at the end of and (C) of subsection (d)(1), such designa- poses of section 1250(b)(5), the straight line clause (i), by striking the period at the end tions shall remain in effect during the period method of adjustment shall be determined of clause (ii) and inserting ‘‘, or’’, and by beginning on January 1, 2002, and ending on without regard to this section. adding at the end the following new clause: December 31, 2009. ‘‘(3) SUBSTANTIAL REHABILITATIONS TREAT- ‘‘(iii) any deduction under section 1400I (re- ‘‘(3) MODIFICATIONS TO ELIGIBILITY CRI- ED AS SEPARATE BUILDINGS.—A substantial lating to commercial revitalization deduc- TERIA, ETC.—The rules of subsection (g)(3) rehabilitation (within the meaning of sec- tion).’’ shall apply to designations under this sub- tion 47(c)(1)(C)) of a building shall be treated (B) The heading for such subparagraph (B) section.’’ as a separate building for purposes of sub- is amended by striking ‘‘OR REHABILITATION SEC. 202. EXTENSION OF ENTERPRISE ZONE section (a). CREDIT’’ and inserting ‘‘, REHABILITATION TREATMENT THROUGH 2009. ‘‘(4) CLARIFICATION OF ALLOWANCE OF DE- CREDIT, OR COMMERCIAL REVITALIZATION DE- Subparagraph (A) of section 1391(d)(1) (re- DUCTION UNDER MINIMUM TAX.—Notwith- DUCTION’’. lating to period for which designation is in standing section 56(a)(1), the deduction under (c) CLERICAL AMENDMENT.—The table of effect) is amended to read as follows: this section shall be allowed in determining subchapters for chapter 1 is amended by add- ‘‘(A) December 31, 2009,’’. alternative minimum taxable income under ing at the end the following new item: SEC. 203. 20 PERCENT EMPLOYMENT CREDIT FOR section 55. ALL EMPOWERMENT ZONES ‘‘(g) REGULATIONS.—For purposes of this ‘‘Subchapter X. Renewal Communities.’’. (a) 20 PERCENT CREDIT.—Subsection (b) of section, the Secretary shall, by regulations, section 1396 (relating to empowerment zone provide for the application of rules similar SEC. 102. EXTENSION OF EXPENSING OF ENVI- employment credit) is amended to read as RONMENTAL REMEDIATION COSTS follows: to the rules of section 49 and subsections (a) TO RENEWAL COMMUNITIES; EXTEN- ‘‘(b) APPLICABLE PERCENTAGE.—For pur- and (b) of section 50. SION OF TERMINATION DATE FOR ‘‘(h) TERMINATION.—This section shall not RENEWAL COMMUNITIES AND EM- poses of this section, the applicable percent- apply to any building placed in service after POWERMENT ZONES. age is 20 percent.’’ December 31, 2009. (b) ALL EMPOWERMENT ZONES ELIGIBLE FOR (a) EXTENSION.— CREDIT.—Section 1396 is amended by striking ‘‘SEC. 1400J. INCREASE IN EXPENSING UNDER (1) IN GENERAL.—Subparagraph (A) of sec- SECTION 179. subsection (e). tion 198(c)(2) (defining targeted area) is (c) CONFORMING AMENDMENT.—Subsection ‘‘(a) IN GENERAL.—For purposes of section amended by striking ‘‘and’’ at the end of (d) of section 1400 is amended to read as fol- 1397A— clause (iii), by striking the period at the end lows: ‘‘(1) a renewal community shall be treated of clause (iv) and inserting ‘‘, and’’, and by ‘‘(d) SPECIAL RULE FOR APPLICATION OF EM- as an empowerment zone, adding at the end the following new clause: PLOYMENT CREDIT.—With respect to the DC ‘‘(2) a renewal community business shall be ‘‘(v) any renewal community (as defined in Zone, section 1396(d)(1)(B) (relating to em- treated as an empowerment zone business, section 1400E).’’ powerment zone employment credit) shall be and (2) EFFECTIVE DATE.—The amendment applied by substituting ‘the District of Co- ‘‘(3) qualified renewal property shall be made by paragraph (1) shall apply to expend- lumbia’ for ‘such empowerment zone’.’’ treated as enterprise zone property. itures paid or incurred after June 30, 2001. (d) EFFECTIVE DATE.—The amendments ‘‘(b) QUALIFIED RENEWAL PROPERTY.—For (b) EXTENSION OF TERMINATION DATE.—Sub- made by this section shall apply to wages purposes of this section— section (h) of section 198 is amended by in- paid or incurred after December 31, 2001. ‘‘(1) IN GENERAL.—The term ‘qualified re- serting before the period ‘‘(December 31, 2009, SEC. 204. INCREASED EXPENSING UNDER SEC- newal property’ means any property to in the case of an empowerment zone or re- TION 179. which section 168 applies (or would apply but newal community)’’. (a) IN GENERAL.—Subparagraph (A) of sec- for section 179) if— tion 1397A(a)(1) is amended by striking ‘‘(A) such property was acquired by the SEC. 103. WORK OPPORTUNITY CREDIT FOR HIR- ‘‘$20,000’’ and inserting ‘‘$35,000’’. ING YOUTH RESIDING IN RENEWAL taxpayer by purchase (as defined in section (b) EXPENSING FOR PROPERTY USED IN DE- COMMUNITIES. 179(d)(2)) after June 30, 2001, and before Janu- VELOPABLE SITES.—Section 1397A is amended ary 1, 2010, and (a) HIGH-RISK YOUTH.—Subparagraphs by striking subsection (c). ‘‘(B) such property would be qualified zone (A)(ii) and (B) of section 51(d)(5) are each (c) EFFECTIVE DATE.—The amendments property (as defined in section 1397D) if ref- amended by striking ‘‘empowerment zone or made by this section shall apply to taxable erences to renewal communities were sub- enterprise community’’ and inserting ‘‘em- years beginning after December 31, 2001. stituted for references to empowerment powerment zone, enterprise community, or SEC. 205. HIGHER LIMITS ON TAX-EXEMPT EM- zones in section 1397D. renewal community’’. POWERMENT ZONE FACILITY ‘‘(2) CERTAIN RULES TO APPLY.—The rules of BONDS. (b) QUALIFIED SUMMER YOUTH EMPLOYEE.— subsections (a)(2) and (b) of section 1397D Clause (iv) of section 51(d)(7)(A) is amended (a) IN GENERAL.—Paragraph (3) of section shall apply for purposes of this section.’’. by striking ‘‘empowerment zone or enter- 1394(f) (relating to bonds for empowerment (b) EXCEPTION FOR COMMERCIAL REVITAL- prise community’’ and inserting ‘‘empower- zones designated under section 1391(g)) is IZATION DEDUCTION FROM PASSIVE LOSS ment zone, enterprise community, or re- amended to read as follows: RULES.— newal community’’. ‘‘(3) EMPOWERMENT ZONE FACILITY BOND.— (1) Paragraph (3) of section 469(i) is amend- For purposes of this subsection, the term ed by redesignating subparagraphs (C), (D), (c) HEADINGS.—Paragraphs (5)(B) and (7)(C) ‘empowerment zone facility bond’ means any and (E) as subparagraphs (D), (E), and (F), re- of section 51(d) are each amended by insert- bond which would be described in subsection spectively, and by inserting after subpara- ing ‘‘OR COMMUNITY’’ in the heading after (a) if— graph (B) the following new subparagraph: ‘‘ZONE’’. ‘‘(A) in the case of obligations issued be- ‘‘(C) EXCEPTION FOR COMMERCIAL REVITAL- (d) EFFECTIVE DATE.—The amendments fore January 1, 2002, only empowerment IZATION DEDUCTION.—Subparagraph (A) shall made by this section shall apply to individ- zones designated under section 1391(g) were not apply to any portion of the passive activ- uals who begin work for the employer after taken into account under sections 1397C and ity loss for any taxable year which is attrib- June 30, 2001. 1397D, and

VerDate 11-MAY-2000 03:15 Jul 26, 2000 Jkt 079060 PO 00000 Frm 00023 Fmt 4634 Sfmt 0634 E:\CR\FM\A25JY7.010 pfrm02 PsN: H25PT1 H6802 CONGRESSIONAL RECORD — HOUSE July 25, 2000 ‘‘(B) in the case of obligations issued after subsection (a). This paragraph shall not stantially all of the taxpayer’s holding pe- December 31, 2001, all empowerment zones apply for purposes of section 1202. riod for such stock, paragraph (1) shall be ap- (other than the District of Columbia) were ‘‘(5) HOLDING PERIOD.—For purposes of de- plied by substituting ‘60 percent’ for ‘50 per- taken into account under sections 1397C and termining whether the nonrecognition of cent’. 1397D.’’ gain under subsection (a) applies to any ‘‘(B) CERTAIN RULES TO APPLY.—Rules simi- (b) EFFECTIVE DATE.—The amendments qualified empowerment zone asset which is lar to the rules of paragraphs (5) and (7) of made by this section shall apply to obliga- sold— section 1400B(b) shall apply for purposes of tions issued after December 31, 2001. ‘‘(A) the taxpayer’s holding period for such this paragraph. SEC. 206. NONRECOGNITION OF GAIN ON ROLL- asset and the asset referred to in subsection ‘‘(C) GAIN AFTER 2014 NOT QUALIFIED.—Sub- OVER OF EMPOWERMENT ZONE IN- (a)(1) shall be determined without regard to paragraph (A) shall not apply to gain attrib- VESTMENTS. section 1223, and utable to periods after December 31, 2014. (a) IN GENERAL.—Part III of subchapter U ‘‘(B) only the first year of the taxpayer’s ‘‘(D) TREATMENT OF DC ZONE.—The District of chapter 1 is amended— holding period for the asset referred to in of Columbia Enterprise Zone shall not be (1) by redesignating subpart C as subpart subsection (a)(1) shall be taken into account treated as an empowerment zone for pur- D, for purposes of paragraphs (2)(A)(iii), (3)(C), poses of this paragraph.’’ (2) by redesignating sections 1397B and and (4)(A)(iii) of section 1400F(b).’’ (b) CONFORMING AMENDMENT.—Paragraph 1397C as sections 1397C and 1397D, respec- (b) CONFORMING AMENDMENTS.— (8) of section 1(h) is amended by striking tively, and (1) Paragraph (23) of section 1016(a) is ‘‘means’’ and all that follows and inserting (3) by inserting after subpart B the fol- amended— ‘‘means the excess of— lowing new subpart: (A) by striking ‘‘or 1045’’ and inserting ‘‘(A) the gain which would be excluded ‘‘Subpart C—Nonrecognition of Gain on ‘‘1045, or 1397B’’, and from gross income under section 1202 but for Rollover of Empowerment Zone Investments (B) by striking ‘‘or 1045(b)(4)’’ and inserting the percentage limitation in section 1202(a), ‘‘1045(b)(4), or 1397B(b)(4)’’. over ‘‘Sec. 1397B. Nonrecognition of Gain on Roll- (2) Paragraph (15) of section 1223 is amend- ‘‘(B) the gain excluded from gross income over of Empowerment Zone In- ed to read as follows: under section 1202.’’ vestments. (c) EFFECTIVE DATE.—The amendments ‘‘(15) Except for purposes of sections made by this section shall apply to stock ac- ‘‘SEC. 1397B. NONRECOGNITION OF GAIN ON 1202(a)(2), 1202(c)(2)(A), 1400B(b), and 1400F(b), ROLLOVER OF EMPOWERMENT quired after the date of the enactment of in determining the period for which the tax- ZONE INVESTMENTS. this Act. payer has held property the acquisition of ‘‘(a) NONRECOGNITION OF GAIN.—In the case TITLE III—NEW MARKETS TAX CREDIT of any sale of a qualified empowerment zone which resulted under section 1045 or 1397B in SEC. 301. NEW MARKETS TAX CREDIT. asset held by the taxpayer for more than 1 the nonrecognition of any part of the gain realized on the sale of other property, there (a) IN GENERAL.—Subpart D of part IV of year and with respect to which such tax- subchapter A of chapter 1 (relating to busi- payer elects the application of this section, shall be included the period for which such other property has been held as of the date of ness-related credits) is amended by adding at gain from such sale shall be recognized only the end the following new section: to the extent that the amount realized on such sale.’’ ‘‘SEC. 45D. NEW MARKETS TAX CREDIT. such sale exceeds— (3) Paragraph (2) of section 1394(b) is ‘‘(a) ALLOWANCE OF CREDIT.— ‘‘(1) the cost of any qualified empowerment amended— (A) by striking ‘‘section 1397C’’ and insert- ‘‘(1) IN GENERAL.—For purposes of section zone asset (with respect to the same zone as 38, in the case of a taxpayer who holds a the asset sold) purchased by the taxpayer ing ‘‘section 1397D’’, and (B) by striking ‘‘section 1397C(a)(2)’’ and qualified equity investment on a credit al- during the 60-day period beginning on the lowance date of such investment which oc- date of such sale, reduced by inserting ‘‘section 1397D(a)(2)’’. (4) Paragraph (3) of section 1394(b) is curs during the taxable year, the new mar- ‘‘(2) any portion of such cost previously kets tax credit determined under this section taken into account under this section. amended— (A) by striking ‘‘section 1397B’’ each place for such taxable year is an amount equal to ‘‘(b) DEFINITIONS AND SPECIAL RULES.—For the applicable percentage of the amount paid purposes of this section— it appears and inserting ‘‘section 1397C’’, and (B) by striking ‘‘section 1397B(d)’’ and in- to the qualified community development en- ‘‘(1) QUALIFIED EMPOWERMENT ZONE tity for such investment at its original issue. ASSET.— serting ‘‘section 1397C(d)’’. (5) Sections 1400(e) and 1400B(c) are each ‘‘(2) APPLICABLE PERCENTAGE.—For pur- ‘‘(A) IN GENERAL.—The term ‘qualified em- poses of paragraph (1), the applicable per- powerment zone asset’ means any property amended by striking ‘‘section 1397B’’ each place it appears and inserting ‘‘section centage is— which would be a qualified community asset ‘‘(A) 5 percent with respect to the first 3 (as defined in section 1400F) if in section 1397C’’. (6) The table of subparts for part III of sub- credit allowance dates, and 1400F— ‘‘(B) 6 percent with respect to the remain- chapter U of chapter 1 is amended by strik- ‘‘(i) references to empowerment zones were der of the credit allowance dates. ing the last item and inserting the following substituted for references to renewal com- ‘‘(3) CREDIT ALLOWANCE DATE.—For pur- new items: munities, poses of paragraph (1), the term ‘credit al- ‘‘(ii) references to enterprise zone busi- ‘‘Subpart C. Nonrecognition of gain on roll- lowance date’ means, with respect to any nesses (as defined in section 1397C) were sub- over of empowerment zone in- qualified equity investment— stituted for references to renewal commu- vestments. ‘‘(A) the date on which such investment is nity businesses, and ‘‘Subpart D. General provisions.’’ initially made, and ‘‘(iii) the date of the enactment of this (7) The table of sections for subpart D of ‘‘(B) each of the 6 anniversary dates of paragraph were substituted for ‘December 31, such part III is amended to read as follows: such date thereafter. 2001’ each place it appears. ‘‘(b) QUALIFIED EQUITY INVESTMENT.—For ‘‘(B) TREATMENT OF DC ZONE.—The District ‘‘Sec. 1397C. Enterprise zone business de- purposes of this section— of Columbia Enterprise Zone shall not be fined. ‘‘(1) IN GENERAL.—The term ‘qualified eq- treated as an empowerment zone for pur- ‘‘Sec. 1397D. Qualified zone property de- uity investment’ means any equity invest- poses of this section. fined.’’ ment in a qualified community development ‘‘(2) CERTAIN GAIN NOT ELIGIBLE FOR ROLL- (c) EFFECTIVE DATE.—The amendments entity if— OVER.—This section shall not apply to— made by this section shall apply to qualified ‘‘(A) such investment is acquired by the ‘‘(A) any gain which is treated as ordinary empowerment zone assets acquired after the taxpayer at its original issue (directly or income for purposes of this subtitle, and date of the enactment of this Act. through an underwriter) solely in exchange ‘‘(B) any gain which is attributable to real SEC. 207. INCREASED EXCLUSION OF GAIN ON for cash, property, or an intangible asset, which is not SALE OF EMPOWERMENT ZONE ‘‘(B) substantially all of such cash is used an integral part of an enterprise zone busi- STOCK. by the qualified community development en- ness. (a) IN GENERAL.—Subsection (a) of section tity to make qualified low-income commu- ‘‘(3) PURCHASE.—A taxpayer shall be treat- 1202 is amended to read as follows: nity investments, and ed as having purchased any property if, but ‘‘(a) EXCLUSION.— ‘‘(C) such investment is designated for pur- for paragraph (4), the unadjusted basis of ‘‘(1) IN GENERAL.—In the case of a taxpayer poses of this section by the qualified commu- such property in the hands of the taxpayer other than a corporation, gross income shall nity development entity. would be its cost (within the meaning of sec- not include 50 percent of any gain from the Such term shall not include any equity in- tion 1012). sale or exchange of qualified small business vestment issued by a qualified community ‘‘(4) BASIS ADJUSTMENTS.—If gain from any stock held for more than 5 years. development entity more than 5 years after sale is not recognized by reason of subsection ‘‘(2) EMPOWERMENT ZONE BUSINESSES.— the date that such entity receives an alloca- (a), such gain shall be applied to reduce (in ‘‘(A) IN GENERAL.—In the case of qualified tion under subsection (f). Any allocation not the order acquired) the basis for determining small business stock acquired after the date used within such 5-year period may be reallo- gain or loss of any qualified empowerment of the enactment of this paragraph in a cor- cated by the Secretary under subsection (f). zone asset which is purchased by the tax- poration which is a qualified business entity ‘‘(2) LIMITATION.—The maximum amount of payer during the 60-day period described in (as defined in section 1397C(b)) during sub- equity investments issued by a qualified

VerDate 11-MAY-2000 03:15 Jul 26, 2000 Jkt 079060 PO 00000 Frm 00024 Fmt 4634 Sfmt 0634 E:\CR\FM\A25JY7.010 pfrm02 PsN: H25PT1 July 25, 2000 CONGRESSIONAL RECORD — HOUSE H6803 community development entity which may ‘‘(ii) a substantial portion of the use of the by the Secretary among qualified commu- be designated under paragraph (1)(C) by such tangible property of such entity (whether nity development entities selected by the entity shall not exceed the portion of the owned or leased) is within any low-income Secretary. In making allocations under the limitation amount allocated under sub- community, preceding sentence, the Secretary shall give section (f) to such entity. ‘‘(iii) a substantial portion of the services priority to entities with records of having ‘‘(3) SAFE HARBOR FOR DETERMINING USE OF performed for such entity by its employees successfully provided capital or technical as- CASH.—The requirement of paragraph (1)(B) are performed in any low-income commu- sistance to disadvantaged businesses or com- shall be treated as met if at least 85 percent nity, munities. of the aggregate gross assets of the qualified ‘‘(iv) less than 5 percent of the average of ‘‘(3) CARRYOVER OF UNUSED LIMITATION.—If community development entity are invested the aggregate unadjusted bases of the prop- the new markets tax credit limitation for in qualified low-income community invest- erty of such entity is attributable to collect- any calendar year exceeds the aggregate ments. ibles (as defined in section 408(m)(2)) other amount allocated under paragraph (2) for ‘‘(4) TREATMENT OF SUBSEQUENT PUR- than collectibles that are held primarily for such year, such limitation for the succeeding CHASERS.—The term ‘qualified equity invest- sale to customers in the ordinary course of calendar year shall be increased by the ment’ includes any equity investment which such business, and amount of such excess. No amount may be would (but for paragraph (1)(A)) be a quali- ‘‘(v) less than 5 percent of the average of carried under the preceding sentence to any fied equity investment in the hands of the the aggregate unadjusted bases of the prop- calendar year after 2014. taxpayer if such investment was a qualified erty of such entity is attributable to non- ‘‘(g) RECAPTURE OF CREDIT IN CERTAIN equity investment in the hands of a prior qualified financial property (as defined in CASES.— holder. section 1397C(e)). ‘‘(1) IN GENERAL.—If, at any time during ‘‘(5) REDEMPTIONS.—A rule similar to the ‘‘(B) PROPRIETORSHIP.—Such term shall in- the 7-year period beginning on the date of rule of section 1202(c)(3) shall apply for pur- clude any business carried on by an indi- the original issue of a qualified equity in- poses of this subsection. vidual as a proprietor if such business would vestment in a qualified community develop- ‘‘(6) EQUITY INVESTMENT.—The term ‘equity meet the requirements of subparagraph (A) ment entity, there is a recapture event with investment’ means— were it incorporated. respect to such investment, then the tax im- ‘‘(A) any stock (other than nonqualified ‘‘(C) PORTIONS OF BUSINESS MAY BE QUALI- posed by this chapter for the taxable year in preferred stock as defined in section FIED ACTIVE LOW-INCOME COMMUNITY BUSI- which such event occurs shall be increased 351(g)(2)) in an entity which is a corporation, NESS.—The term ‘qualified active low-income by the credit recapture amount. and community business’ includes any trades or ‘‘(2) CREDIT RECAPTURE AMOUNT.—For pur- ‘‘(B) any capital interest in an entity businesses which would qualify as a qualified poses of paragraph (1), the credit recapture which is a partnership. active low-income community business if amount is an amount equal to the sum of— such trades or businesses were separately in- ‘‘(c) QUALIFIED COMMUNITY DEVELOPMENT ‘‘(A) the aggregate decrease in the credits corporated. ENTITY.—For purposes of this section— allowed to the taxpayer under section 38 for ‘‘(3) QUALIFIED BUSINESS.—For purposes of ‘‘(1) IN GENERAL.—The term ‘qualified com- all prior taxable years which would have re- this subsection, the term ‘qualified business’ munity development entity’ means any do- sulted if no credit had been determined has the meaning given to such term by sec- under this section with respect to such in- mestic corporation or partnership if— tion 1397C(d); except that— vestment, plus ‘‘(A) the primary mission of the entity is ‘‘(A) in lieu of applying paragraph (2)(B) ‘‘(B) interest at the overpayment rate es- serving, or providing investment capital for, thereof, the rental to others of real property tablished under section 6621 on the amount low-income communities or low-income per- located in any low-income community shall determined under subparagraph (A) for each sons, be treated as a qualified business if there are prior taxable year for the period beginning ‘‘(B) the entity maintains accountability substantial improvements located on such on the due date for filing the return for the to residents of low-income communities property, prior taxable year involved. through representation on governing or advi- ‘‘(B) paragraph (3) thereof shall not apply, sory boards or otherwise, and and No deduction shall be allowed under this ‘‘(C) the entity is certified by the Sec- ‘‘(C) such term shall not include any busi- chapter for interest described in subpara- retary for purposes of this section as being a ness if a significant portion of the equity in- graph (B). qualified community development entity. terests in such business are held by any per- ‘‘(3) RECAPTURE EVENT.—For purposes of ‘‘(2) SPECIAL RULES FOR CERTAIN ORGANIZA- son who holds a significant portion of the eq- paragraph (1), there is a recapture event with TIONS.—The requirements of paragraph (1) uity investments in the community develop- respect to an equity investment in a quali- shall be treated as met by— ment entity. fied community development entity if— ‘‘(A) any specialized small business invest- ‘‘(e) LOW-INCOME COMMUNITY.—For pur- ‘‘(A) such entity ceases to be a qualified ment company (as defined in section poses of this section— community development entity, 1044(c)(3)), and ‘‘(1) IN GENERAL.—The term ‘low-income ‘‘(B) the proceeds of the investment cease ‘‘(B) any community development finan- community’ means any population census to be used as required of subsection (b)(1)(B), cial institution (as defined in section 103 of tract if— or the Community Development Banking and ‘‘(A) the poverty rate for such tract is at ‘‘(C) such investment is redeemed by such Financial Institutions Act of 1994 (12 U.S.C. least 20 percent, or entity. 4702)). ‘‘(B)(i) in the case of a tract not located ‘‘(4) SPECIAL RULES.— ‘‘(d) QUALIFIED LOW-INCOME COMMUNITY IN- within a metropolitan area, the median fam- ‘‘(A) TAX BENEFIT RULE.—The tax for the VESTMENTS.—For purposes of this section— ily income for such tract does not exceed 80 taxable year shall be increased under para- ‘‘(1) IN GENERAL.—The term ‘qualified low- percent of statewide median family income, graph (1) only with respect to credits allowed income community investment’ means— or by reason of this section which were used to ‘‘(A) any equity investment in, or loan to, ‘‘(ii) in the case of a tract located within a reduce tax liability. In the case of credits any qualified active low-income community metropolitan area, the median family in- not so used to reduce tax liability, the business, come for such tract does not exceed 80 per- carryforwards and carrybacks under section ‘‘(B) the purchase from another commu- cent of the greater of statewide median fam- 39 shall be appropriately adjusted. nity development entity of any loan made by ily income or the metropolitan area median ‘‘(B) NO CREDITS AGAINST TAX.—Any in- such entity which is a qualified low-income family income. crease in tax under this subsection shall not community investment, ‘‘(2) AREAS NOT WITHIN CENSUS TRACTS.—In be treated as a tax imposed by this chapter ‘‘(C) financial counseling and other serv- the case of an area which is not tracted for for purposes of determining the amount of ices specified in regulations prescribed by population census tracts, the equivalent any credit under this chapter or for purposes the Secretary to businesses located in, and county divisions (as defined by the Bureau of of section 55. residents of, low-income communities, and the Census for purposes of defining poverty ‘‘(h) BASIS REDUCTION.—The basis of any ‘‘(D) any equity investment in, or loan to, areas) shall be used for purposes of deter- qualified equity investment shall be reduced any qualified community development enti- mining poverty rates and median family in- by the amount of any credit determined ty. come. under this section with respect to such in- ‘‘(2) QUALIFIED ACTIVE LOW-INCOME COMMU- ‘‘(f) NATIONAL LIMITATION ON AMOUNT OF vestment. This subsection shall not apply for NITY BUSINESS.— INVESTMENTS DESIGNATED.— purposes of sections 1202, 1400B, and 1400F. ‘‘(A) IN GENERAL.—For purposes of para- ‘‘(1) IN GENERAL.—There is a new markets ‘‘(i) REGULATIONS.—The Secretary shall graph (1), the term ‘qualified active low-in- tax credit limitation for each calendar year. prescribe such regulations as may be appro- come community business’ means, with re- Such limitation is— priate to carry out this section, including spect to any taxable year, any corporation or ‘‘(A) $1,000,000,000 for 2001, regulations— partnership if for such year— ‘‘(B) $1,500,000,000 for 2002 and 2003, ‘‘(1) which limit the credit for investments ‘‘(i) at least 50 percent of the total gross ‘‘(C) $2,000,000,000 for 2004 and 2005, which are directly or indirectly subsidized by income of such entity is derived from the ac- ‘‘(E) $3,500,000,000 for 2006 and 2007. other Federal tax benefits (including the tive conduct of a qualified business within ‘‘(2) ALLOCATION OF LIMITATION.—The limi- credit under section 42 and the exclusion any low-income community, tation under paragraph (1) shall be allocated from gross income under section 103),

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‘‘(2) which prevent the abuse of the pur- ‘‘For calendar year: The applicable CATION PRIORITIES.—Subparagraph (A) of sec- poses of this section, amount is: tion 42(m)(1) (relating to responsibilities of ‘‘(3) which provide rules for determining 2001 ...... $1.35 housing credit agencies) is amended by strik- whether the requirement of subsection 2002 ...... 1.45 ing ‘‘and’’ at the end of clause (i), by striking (b)(1)(B) is treated as met, 2003 ...... 1.55 the period at the end of clause (ii) and insert- 2004 ...... 1.65 ‘‘(4) which impose appropriate reporting re- 2005 ...... 1.70 ing a comma, and by adding at the end the quirements, and 2006 and thereafter ...... 1.75.’’. following new clauses: ‘‘(5) which apply the provisions of this sec- (c) ADJUSTMENT OF STATE CEILING FOR IN- ‘‘(iii) a comprehensive market study of the tion to newly formed entities.’’ CREASES IN COST-OF-LIVING.—Paragraph (3) of housing needs of low-income individuals in (b) CREDIT MADE PART OF GENERAL BUSI- section 42(h) (relating to housing credit dol- the area to be served by the project is con- NESS CREDIT.— lar amount for agencies), as amended by sub- ducted before the credit allocation is made (1) IN GENERAL.—Subsection (b) of section section (c), is amended by adding at the end and at the developer’s expense by a disin- 38 is amended by striking ‘‘plus’’ at the end the following new subparagraph: terested party who is approved by such agen- of paragraph (11), by striking the period at ‘‘(I) COST-OF-LIVING ADJUSTMENT.— cy, and the end of paragraph (12) and inserting ‘‘, ‘‘(i) IN GENERAL.—In the case of a calendar ‘‘(iv) a written explanation is available to plus’’, and by adding at the end the following year after 2006, the $2,000,000 in subparagraph the general public for any allocation of a new paragraph: (C) and the $1.75 amount in subparagraph (H) housing credit dollar amount which is not ‘‘(13) the new markets tax credit deter- shall each be increased by an amount equal made in accordance with established prior- mined under section 45D(a).’’ to— ities and selection criteria of the housing (2) LIMITATION ON CARRYBACK.—Subsection ‘‘(I) such dollar amount, multiplied by credit agency.’’. (d) of section 39 is amended by adding at the ‘‘(II) the cost-of-living adjustment deter- (b) SITE VISITS.—Clause (iii) of section end the following new paragraph: mined under section 1(f)(3) for such calendar 42(m)(1)(B) (relating to qualified allocation ‘‘(9) NO CARRYBACK OF NEW MARKETS TAX year by substituting ‘calendar year 2005’ for plan) is amended by inserting before the pe- CREDIT BEFORE JANUARY 1, 2001.—No portion of ‘calendar year 1992’ in subparagraph (B) riod ‘‘and in monitoring for noncompliance the unused business credit for any taxable thereof. with habitability standards through regular year which is attributable to the credit ‘‘(ii) ROUNDING.— site visits’’. under section 45D may be carried back to a ‘‘(I) In the case of the amount in subpara- taxable year ending before January 1, 2001.’’ graph (C), any increase under clause (i) SEC. 404. MODIFICATIONS TO RULES RELATING which is not a multiple of $5,000 shall be TO BASIS OF BUILDING WHICH IS EL- (c) DEDUCTION FOR UNUSED CREDIT.—Sub- IGIBLE FOR CREDIT. section (c) of section 196 is amended by strik- rounded to the next lowest multiple of $5,000. (a) ADJUSTED BASIS TO INCLUDE PORTION OF ing ‘‘and’’ at the end of paragraph (7), by ‘‘(II) In the case of the amount in subpara- striking the period at the end of paragraph graph (H), any increase under clause (i) CERTAIN BUILDINGS USED BY LOW-INCOME IN- (8) and inserting ‘‘, and’’, and by adding at which is not a multiple of 5 cents shall be DIVIDUALS WHO ARE NOT TENANTS AND BY the end the following new paragraph: rounded to the next lowest multiple of 5 PROJECT EMPLOYEES.—Paragraph (4) of sec- ‘‘(9) the new markets tax credit determined cents.’’. tion 42(d) (relating to special rules relating under section 45D(a).’’ (d) CONFORMING AMENDMENTS.— to determination of adjusted basis) is (1) Section 42(h)(3)(C), as amended by sub- amended— (d) CLERICAL AMENDMENT.—The table of section (a), is amended— (1) by striking ‘‘subparagraph (B)’’ in sub- sections for subpart D of part IV of sub- (A) by striking ‘‘clause (ii)’’ in the matter paragraph (A) and inserting ‘‘subparagraphs chapter A of chapter 1 is amended by adding following clause (iv) and inserting ‘‘clause (B) and (C)’’; at the end the following new item: (i)’’; and (2) by redesignating subparagraph (C) as ‘‘Sec. 45D. New markets tax credit.’’ (B) by striking ‘‘clauses (i)’’ in the matter subparagraph (D); and following clause (iv) and inserting ‘‘clauses (3) by inserting after subparagraph (B) the (e) EFFECTIVE DATE.—The amendments (ii)’’. following new subparagraph: made by this section shall apply to invest- (2) Section 42(h)(3)(D)(ii) is amended— ‘‘(C) INCLUSION OF BASIS OF PROPERTY USED ments made after December 31, 2000. (A) by striking ‘‘subparagraph (C)(ii)’’ and TO PROVIDE SERVICES FOR CERTAIN NONTEN- (f) REGULATIONS ON ALLOCATION OF NA- inserting ‘‘subparagraph (C)(i)’’; and ANTS.— TIONAL LIMITATION.—Not later than 60 days (B) by striking ‘‘clauses (i)’’ in subclause ‘‘(i) IN GENERAL.—The adjusted basis of any after the date of the enactment of this Act, (II) and inserting ‘‘clauses (ii)’’. building located in a qualified census tract the Secretary of the Treasury or the Sec- (e) EFFECTIVE DATE.—The amendments (as defined in paragraph (5)(C)) shall be de- retary’s delegate shall prescribe regulations made by this section shall apply to calendar termined by taking into account the ad- which specify— years after 2000. justed basis of property (of a character sub- (1) how entities shall apply for an alloca- SEC. 402. MODIFICATION OF CRITERIA FOR ALLO- ject to the allowance for depreciation and tion under section 45D(f)(2) of the Internal CATING HOUSING CREDITS AMONG not otherwise taken into account) used Revenue Code of 1986, as added by this sec- PROJECTS. throughout the taxable year in providing tion, (a) SELECTION CRITERIA.—Subparagraph (C) any community service facility. (2) the competitive procedure through of section 42(m)(1) (relating to certain selec- ‘‘(ii) LIMITATION.—The increase in the ad- which such allocations are made, and tion criteria must be used) is amended— justed basis of any building which is taken (3) the actions that such Secretary or dele- (1) by inserting ‘‘, including whether the into account by reason of clause (i) shall not gate shall take to ensure that such alloca- project includes the use of existing housing exceed 10 percent of the eligible basis of the tions are properly made to appropriate enti- as part of a community revitalization plan’’ qualified low-income housing project of ties. before the comma at the end of clause (iii); which it is a part. For purposes of the pre- and ceding sentence, all community service fa- TITLE IV—IMPROVEMENTS IN LOW- (2) by striking clauses (v), (vi), and (vii) cilities which are part of the same qualified INCOME HOUSING CREDIT and inserting the following new clauses: low-income housing project shall be treated SEC. 401. MODIFICATION OF STATE CEILING ON ‘‘(v) tenant populations with special hous- as one facility. ing needs, LOW-INCOME HOUSING CREDIT. ‘‘(iii) COMMUNITY SERVICE FACILITY.—For ‘‘(vi) public housing waiting lists, (a) IN GENERAL.—Clauses (i) and (ii) of sec- purposes of this subparagraph, the term ‘‘(vii) tenant populations of individuals tion 42(h)(3)(C) (relating to State housing ‘community service facility’ means any fa- with children, and credit ceiling) are amended to read as fol- cility designed to serve primarily individuals ‘‘(viii) projects intended for eventual ten- lows: whose income is 60 percent or less of area ant ownership.’’. ‘‘(i) the unused State housing credit ceiling median income (within the meaning of sub- (b) PREFERENCE FOR COMMUNITY REVITAL- section (g)(1)(B)).’’. (if any) of such State for the preceding cal- IZATION PROJECTS LOCATED IN QUALIFIED CEN- endar year, SUS TRACTS.—Clause (ii) of section (b) CERTAIN NATIVE AMERICAN HOUSING AS- ‘‘(ii) the greater of— 42(m)(1)(B) is amended by striking ‘‘and’’ at SISTANCE DISREGARDED IN DETERMINING ‘‘(I) the applicable amount under subpara- the end of subclause (I), by adding ‘‘and’’ at WHETHER BUILDING IS FEDERALLY SUBSIDIZED graph (H) multiplied by the State popu- the end of subclause (II), and by inserting FOR PURPOSES OF THE LOW-INCOME HOUSING lation, or after subclause (II) the following new sub- CREDIT.—Subparagraph (E) of section 42(i)(2) ‘‘(II) $2,000,000,’’. clause: (relating to determination of whether build- (b) APPLICABLE AMOUNT.—Paragraph (3) of ‘‘(III) projects which are located in quali- ing is federally subsidized) is amended— section 42(h) (relating to housing credit dol- fied census tracts (as defined in subsection (1) in clause (i), by inserting ‘‘or the Native lar amount for agencies) is amended by add- (d)(5)(C)) and the development of which con- American Housing Assistance and Self-De- ing at the end the following new subpara- tributes to a concerted community revital- termination Act of 1996 (25 U.S.C. 4101 et graph: ization plan,’’. seq.) (as in effect on October 1, 1997)’’ after ‘‘(H) APPLICABLE AMOUNT OF STATE CEIL- SEC. 403. ADDITIONAL RESPONSIBILITIES OF ‘‘this subparagraph)’’; and ING.—For purposes of subparagraph (C)(ii), HOUSING CREDIT AGENCIES. (2) in the subparagraph heading, by insert- the applicable amount shall be determined (a) MARKET STUDY; PUBLIC DISCLOSURE OF ing ‘‘OR NATIVE AMERICAN HOUSING ASSIST- under the following table: RATIONALE FOR NOT FOLLOWING CREDIT ALLO- ANCE’’ after ‘‘HOME ASSISTANCE’’.

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(2) unequal access to economic opportuni- (i) in the case of a corporate entity, the (a) ALLOCATION OF CREDIT LIMIT TO CER- ties continues to make the social costs of paid-in capital and paid-in surplus of the cor- TAIN BUILDINGS.— joblessness and poverty to our Nation very porate entity; (1) The first sentence of section high; and (ii) in the case of a partnership entity, the 42(h)(1)(E)(ii) is amended by striking ‘‘(as of’’ (3) there are significant untapped markets contributed capital of the partners of the the first place it appears and inserting ‘‘(as in our Nation, and many of these are in areas partnership entity; of the later of the date which is 6 months that are underserved by institutions that can (iii) in the case of a limited liability com- after the date that the allocation was made make equity and credit investments. pany entity, the equity investment of the or’’. (b) PURPOSES.—The purposes of this title members of the limited liability company (2) The last sentence of section 42(h)(3)(C) are to— entity; and is amended by striking ‘‘project which’’ and (1) license private for profit community de- (iv) earnings from investments of the enti- inserting ‘‘project which fails to meet the 10 velopment entities that will focus on making ty that are not distributed to investors and percent test under paragraph (1)(E)(ii) on a equity and credit investments for large-scale are available for reinvestment by the entity. date after the close of the calendar year in business developments that benefit low-in- (B) EXCLUSIONS.—Such term does not in- which the allocation was made or which’’. come communities; clude any— (b) DETERMINATION OF WHETHER BUILDINGS (2) provide credit enhancement for those (i) funds borrowed by an entity from any ARE LOCATED IN HIGH COST AREAS.—The first entities for use in low-income communities; source or obtained through the issuance of sentence of section 42(d)(5)(C)(ii)(I) is and leverage; except that this clause may not be amended— (3) provide a vehicle under which the eco- construed to exclude amounts evidenced by a (1) by inserting ‘‘either’’ before ‘‘in which nomic and social returns on financial invest- legally binding and irrevocable investment 50 percent’’; and ments made pursuant to this title may be commitment in the entity, or the use by an (2) by inserting before the period ‘‘or which available both to the investors in these enti- entity of a pledge of such investment com- has a poverty rate of at least 25 percent’’. ties and to the residents of the low-income mitment to obtain bridge financing from a SEC. 406. CARRYFORWARD RULES. communities. private lender to fund the entity’s activities (a) IN GENERAL.—Clause (ii) of section on an interim basis; or 42(h)(3)(D) (relating to unused housing credit SEC. 603. DEFINITIONS. (ii) funds obtained directly or indirectly carryovers allocated among certain States) As used in this title: from any Federal, State, or local govern- is amended by striking ‘‘the excess’’ and all (1) ADMINISTRATOR.—The term ‘‘Adminis- ment or any government agency, except that follows and inserting ‘‘the excess (if trator’’ means the Administrator of the for— any) of— Small Business Administration. (I) funds invested by an employee welfare ‘‘(I) the unused State housing credit ceil- (2) AGENCY.—The term ‘‘agency’’ has the benefit plan or pension plan; and ing for the year preceding such year, over meaning given such term in section 551(1) of (II) credits against any Federal, State, or ‘‘(II) the aggregate housing credit dollar title 5, United States Code. local taxes. amount allocated for such year.’’. (3) APIC.—The term ‘‘APIC’’ means a busi- (10) QUALIFIED ACTIVE BUSINESS.—The term (b) CONFORMING AMENDMENT.—The second ness entity that has been licensed under the ‘‘qualified active business’’ means a business sentence of section 42(h)(3)(C) (relating to terms of this title as an America’s Private or trade— State housing credit ceiling) is amended by Investment Company, and the license of (A) that, at the time that an investment is striking ‘‘clauses (i) and (iii)’’ and inserting which has not been revoked. made in the business or trade, is deriving at ‘‘clauses (i) through (iv)’’. (4) COMMUNITY DEVELOPMENT ENTITY.—The least 50 percent of its gross income from the SEC. 407. EFFECTIVE DATE. term ‘‘community development entity’’ conduct of trade or business activities in Except as otherwise provided in this title, means an entity the primary mission of low-income communities; the amendments made by this title shall which is serving or providing investment (B) a substantial portion of the use of the apply to— capital for low-income communities or low- tangible property of which is used within (1) housing credit dollar amounts allocated income persons and which maintains ac- low-income communities; after December 31, 2000; and countability to residents of low-income com- (C) a substantial portion of the services (2) buildings placed in service after such munities. that the employees of which perform are per- date to the extent paragraph (1) of section (5) HUD.—The term ‘‘HUD’’ means the Sec- formed in low-income communities; and 42(h) of the Internal Revenue Code of 1986 retary of Housing and Urban Development or (D) less than 5 percent of the aggregate does not apply to any building by reason of the Department of Housing and Urban Devel- unadjusted bases of the property of which is paragraph (4) thereof, but only with respect opment, as the context requires. attributable to certain financial property, as to bonds issued after such date. (6) LICENSE.—The term ‘‘license’’ means a the Secretary shall set forth in regulations, TITLE V—PRIVATE ACTIVITY BOND license issued by HUD as provided in section or in collectibles, other than collectibles VOLUME CAP 604. held primarily for sale to customers. SEC. 501. ACCELERATION OF PHASE-IN OF IN- (7) LOW-INCOME COMMUNITY.—The term (11) QUALIFIED DEBENTURE.—The term CREASE IN VOLUME CAP ON PRI- ‘‘low-income community’’ means— ‘‘qualified debenture’’ means a debt instru- VATE ACTIVITY BONDS. (A) a census tract or tracts that have— ment having terms that meet the require- (a) IN GENERAL.—The table contained in (i) a poverty rate of 20 percent or greater, ments established pursuant to section section 146(d)(2) (relating to per capita limit; based on the most recent census data; or 606(c)(1). aggregate limit) is amended to read as fol- (ii) a median family income that does not (12) QUALIFIED LOW-INCOME COMMUNITY IN- lows: exceed 80 percent of the greater of (I) the me- VESTMENT.—The term ‘‘qualified low-income dian family income for the metropolitan community investment’’ mean an equity in- area in which such census tract or tracts are vestment in, or a loan to, a qualified active ‘‘Calendar business. Year Per Capita Limit Aggregate Limit located, or (II) the median family income for the State in which such census tract or (13) SECRETARY.—The term ‘‘Secretary’’ 2001 ...... $55.00 $165,000,000 tracts are located; or means the Secretary of Housing and Urban 2002 ...... 60.00 180,000,000 (B) a property that was located on a mili- Development, unless otherwise specified in 2003 ...... 65.00 195,000,000 tary installation that was closed or re- this title. 2004, 2005, 70.00 210,000,000 and 2006. aligned pursuant to title II of the Defense SEC. 604. AUTHORIZATION. Authorization Amendments and Base Clo- 2007 and 75.00 225,000,000.’’. (a) LICENSES.—The Secretary is authorized sure and Realignment Act (Public Law 100– thereafter. to license community development entities 526; 10 U.S.C. 2687 note), the Defense Base (b) EFFECTIVE DATE.—The amendment as America’s Private Investment Companies, Closure and Realignment Act of 1990 (part A made by this section shall apply to calendar in accordance with the terms of this title. of title XXIX of Public Law 101–510; 10 U.S.C. years beginning after 2000. 2687 note), section 2687 of title 10, United (b) REGULATIONS.—The Secretary shall reg- TITLE VI—AMERICA’S PRIVATE States Code, or any other similar law en- ulate APICs for compliance with sound fi- INVESTMENT COMPANIES acted after the date of the enactment of this nancial management practices, and the pro- SEC. 601. SHORT TITLE. Act that provides for closure or realignment gram and procedural goals of this title and This title may be cited as the ‘‘America’s of military installations. other related Acts, and other purposes as re- Private Investment Companies Act’’. (8) LOW-INCOME PERSON.—The term ‘‘low-in- quired or authorized by this title, or deter- SEC. 602. FINDINGS AND PURPOSES. come person’’ means a person who is a mem- mined by the Secretary. The Secretary shall (a) FINDINGS.—The Congress finds that— ber of a low-income family, as such term is issue such regulations as are necessary to (1) people living in distressed areas, both defined in section 104 of the Cranston-Gon- carry out the licensing and regulatory and urban and rural, that are characterized by zalez National Affordable Housing Act (42 other duties under this title, and may issue high levels of joblessness, poverty, and low U.S.C. 12704). notices and other guidance or directives as incomes have not benefited adequately from (9) PRIVATE EQUITY CAPITAL.— the Secretary determines are appropriate to the economic expansion experienced by the (A) IN GENERAL.—The term ‘‘private equity carry out such duties. Nation as a whole; capital’’— (c) USE OF CREDIT SUBSIDY FOR LICENSES.—

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(1) NUMBER OF LICENSES.—The number of impose fees and charges for application, re- (6) STATEMENT OF PUBLIC PURPOSE GOALS.— APICs licensed at any one time may not view, licensing, and regulation, or other ac- The entity shall prepare and submit to the exceed— tions under this title, and to pay for the Secretary a statement of the public purpose (A) the number that may be supported by costs of such activities from the fees and goals of the entity, which shall— the amount of budget authority appropriated charges collected. (A) set forth goals that shall promote com- in accordance with section 504(b) of the Fed- (f) GUARANTEE FEES.—The Secretary is au- munity and economic development, which eral Credit Reform Act of 1990 (2 U.S.C. 661c) thorized to set and collect fees for loan guar- shall include— for the cost (as such term is defined in sec- antee commitments and loan guarantees (i) making investments in low-income tion 502 of such Act) of the subsidy and the that the Secretary makes under this title. communities that further economic develop- investment strategies of such APICs; or (g) FUNDING.— ment objectives by targeting such invest- (B) to the extent the limitation under sec- (1) AUTHORIZATION OF APPROPRIATIONS FOR ments in businesses or trades that comply tion 605(e)(1) applies, the number authorized LOAN GUARANTEE COMMITMENTS.—For each of with the requirements under subparagraphs under such section. fiscal years 2000, 2001, 2002, 2003, and 2004, (A) through (C) of section 603(10) relating to (2) USE OF ADDITIONAL CREDIT SUBSIDY.— there is authorized to be appropriated up to low-income communities in a manner that Subject to the limitation under paragraph $36,000,000 for the cost (as such term is de- benefits low-income persons; (1), the Secretary may use any budget au- fined in section 502(5) of the Federal Credit (ii) creating jobs in low-income commu- thority available after credit subsidy has Reform Act of 1990) of annual loan guarantee nities for residents of such communities; been allocated for the APICs initially li- commitments under this title. Amounts ap- (iii) involving community-based organiza- censed pursuant to section 605 as follows: propriated under this paragraph shall remain tions and residents in community develop- (A) ADDITIONAL LICENSES.—To license addi- available until expended. ment activities; tional APICs. (2) AGGREGATE LOAN GUARANTEE COMMIT- (iv) such other goals as the Secretary shall (B) CREDIT SUBSIDY INCREASES.—To in- MENT LIMITATION.—The Secretary may make specify; and crease the credit subsidy allocated to an commitments to guarantee loans only to the (v) such elements as the entity may set APIC as an award for high performance extent that the total loan principal, any part forth to achieve specific public purpose under this title, except that such increases of which is guaranteed, will not exceed goals; may be made only in accordance with the $1,000,000,000, unless another such amount is (B) include such other elements as the Sec- following requirements and limitations: specified in appropriation Acts for any fiscal retary shall specify; and (i) TIMING.—An increase may only be pro- year. (C) include proposed measurements and vided for an APIC that has been licensed for (3) AUTHORIZATION OF APPROPRIATIONS FOR strategies for meeting the goals. a period of not less than 2 years. ADMINISTRATIVE EXPENSES.—For each of the (7) COMPLIANCE WITH LAWS.—The entity (ii) COMPETITION.—An increase may only be fiscal years 2000, 2001, 2002, 2003, and 2004, shall agree to comply with applicable laws, provided for a fiscal year pursuant to a com- there is authorized to be appropriated including Federal executive orders, Office of petition for such fiscal year among APICs el- $1,000,000 for administrative expenses for car- Management and Budget circulars, and re- igible for, and requesting, such an increase. rying out this title. The Secretary may quirements of the Department of the Treas- The competition shall be based upon criteria transfer amounts appropriated under this ury, and such operating and regulatory re- that the Secretary shall establish, which paragraph to any appropriation account of quirements as the Secretary may impose shall include the financial soundness and HUD or another agency, to carry out the pro- from time to time. performance of the APICs, as measured by gram under this title. Any agency to which (8) OTHER.—The entity shall satisfy any achievement of the public performance goals the Secretary may transfer amounts under other application requirements that the Sec- included in the APICs statements required this title is authorized to accept such trans- retary may impose by regulation or Federal under section 605(a)(6) and audits conducted ferred amounts in any appropriation account Register notice. under section 609(b)(2). Among the criteria of such agency. (b) COMPETITIONS.—The Secretary shall se- established by the Secretary to determine SEC. 605. SELECTION OF APICS. lect eligible entities under subsection (a) to priority for selection under this section, the be licensed under section 604 as APICs on the (a) ELIGIBLE APPLICANTS.—An entity shall Secretary shall include making investments basis of competitions. The Secretary shall be eligible to be selected for licensing under in and loans to qualified active businesses in announce each such competition by causing section 604 as an APIC only if the entity sub- urban or rural areas that have been des- a notice to be published in the Federal Reg- mits an application in compliance with the ignated under subchapter U of Chapter 1 of ister that invites applications for licenses the Internal Revenue Code of 1986 as em- requirements established pursuant to sub- and sets forth the requirements for applica- powerment zones or enterprise communities. section (b) and the entity meets or complies tion and such other terms of the competition (d) COOPERATION AND COORDINATION.— with the following requirements: not otherwise provided for, as determined by (1) PROGRAM POLICIES.—The Secretary is (1) ORGANIZATION.—The entity shall be a the Secretary. authorized to coordinate and cooperate, private, for-profit entity that qualifies as a (c) SELECTION.—In competitions under sub- through memoranda of understanding, an community development entity for the pur- section (b), the Secretary shall select eligi- APIC liaison committee, or otherwise, with poses of the New Markets Tax Credits, to the ble entities under subsection (a) for licensing the Administrator, the Secretary of the extent such credits are established under as APICs on the basis of— Treasury, and other agencies in the discre- Federal law. (1) the extent to which the entity is ex- tion of the Secretary, on implementation of (2) MINIMUM PRIVATE EQUITY CAPITAL.—The pected to achieve the goals of this title by this title, including regulation, examination, amount of private equity capital reasonably meeting or exceeding criteria established and monitoring of APICs under this title. available to the entity, as determined by the under subsection (d); and (2) FINANCIAL SOUNDNESS REQUIREMENTS.— Secretary, at the time that a license is ap- (2) to the extent practicable and subject to The Secretary shall consult with the Admin- proved may not be less than $25,000,000. the existence of approvable applications, en- istrator and the Secretary of the Treasury, (3) QUALIFIED MANAGEMENT.—The manage- suring geographical diversity among the ap- and may consult with such other heads of ment of the entity shall, in the determina- plicants selected and diversity of APICs in- agencies as the Secretary may consider ap- tion of the Secretary, meet such standards vestment strategies, so that urban and rural propriate, in establishing any regulations, as the Secretary shall establish to ensure communities are both served, in the deter- requirements, guidelines, or standards for fi- that the management of the APIC is quali- mination of the Secretary, by the program nancial soundness or management practices fied, and has the financial expertise, knowl- under this title. of APICs or entities applying for licensing as edge, experience, and capability necessary, (d) SELECTION CRITERIA.—The Secretary APICs. In implementing and monitoring to make investments for community and shall establish selection criteria for competi- compliance with any such regulations, re- economic development in low-income com- tions under subsection (b), which shall in- quirements, guidelines, and standards, the munities. clude the following criteria: Secretary shall enter into such agreements (4) CONFLICT OF INTEREST.—The entity shall (1) CAPACITY.— and memoranda of understanding with the demonstrate that, in accordance with sound (A) MANAGEMENT.—The extent to which Administrator and the Secretary of the financial management practices, the entity the entity’s management has the quality, ex- Treasury as may be appropriate to provide is structured to preclude financial conflict of perience, and expertise to make and manage for such officials to provide any assistance interest between the APIC and a manager or successful investments for community and that may be agreed to. investor. economic development in low-income com- (3) OPERATIONS.—The Secretary may carry (5) INVESTMENT STRATEGY.—The entity munities. out this title— shall prepare and submit to the Secretary an (B) STATE AND LOCAL COOPERATION.—The (A) directly, through agreements with investment strategy that includes bench- extent to which the entity demonstrates a other Federal entities under section 1535 of marks for evaluation of its progress, that in- capacity to cooperate with States or units of title 31, United States Code, or otherwise, or cludes an analysis of existing locally owned general local government and with commu- (B) indirectly, under contracts or agree- businesses in the communities in which the nity-based organizations and residents of ments, as the Secretary shall determine. investments under the strategy will be made, low-income communities. (e) FEES AND CHARGES FOR ADMINISTRATIVE that prioritizes such businesses for invest- (2) INVESTMENT STRATEGY.—The quality of COSTS.—To the extent provided in appropria- ment opportunities, and that fulfills the spe- the entity’s investment strategy submitted tions Acts, the Secretary is authorized to cific public purpose goals of the entity. in accordance with subsection (a)(5) and the

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extent to which the investment strategy fur- land under section 204 of the Hawaiian (2) SINGLE BUSINESS INVESTMENTS.—An thers the goals of this title pursuant to para- Homes Commission Act, 1920 (42 Stat. 108) or APIC shall not, as a matter of sound finan- graph (3) of this subsection. are acquired pursuant to such Act. The Sec- cial practice, invest in any one business an (3) PUBLIC PURPOSE GOALS.—With respect to retary may establish specific selection cri- amount that exceeds an amount equal to 35 the statement of public purpose goals of the teria for applicants under this paragraph. percent of the sum of— entity submitted in accordance with sub- (f) COMMUNICATIONS BETWEEN HUD AND AP- (A) the APIC’s private equity capital; plus section (a)(6), and the strategy and measure- PLICANTS.— (B) an amount equal to the percentage ments included therein— (1) IN GENERAL.—The Secretary shall set limit that the Secretary determines that an (A) the extent to which such goals promote forth in regulations the procedures under APIC may have outstanding at any one time, community and economic development; which HUD and applicants for APIC licenses, under subsection (c)(2)(A). (B) the extent to which such goals provide and others, may communicate. Such regula- (c) BORROWING POWERS; QUALIFIED DEBEN- for making qualified investments in low-in- tions shall— TURES.— come communities that further economic de- (A) specify by position the HUD officers (1) ISSUANCE.—An APIC may issue qualified velopment objectives, such as— and employees who may communicate with debentures. The Secretary shall, by regula- (i) creating, within 2 years of the comple- such applicants and others; tion, specify the terms and requirements for tion of the initial such investment, job op- (B) permit HUD officers and employees to debentures to be considered qualified deben- portunities, opportunities for ownership, and request and discuss with the applicant and tures for purposes of this title, except that other economic opportunities within a low- others (such as banks or other credit or busi- the term to maturity of any qualified deben- income community, both short-term and of a ness references, or potential investors, that ture may not exceed 21 years and each quali- longer duration; the applicant specifies in writing) any more fied debenture shall bear interest during all (ii) improving the economic vitality of a detailed information that may be desirable or any part of that time period at a rate or low-income community, including stimu- to facilitate HUD’s review of the applicant’s rates approved by the Secretary. lating other business development; application; (2) LEVERAGE LIMITS.—In general, as a mat- (iii) bringing new income into a low-in- (C) restrict HUD officers and employees ter of sound financial management come community and assisting in the revi- from revealing to any applicant— practices— talization of such community; (i) the fact or chances of award of a license (A) the total amount of qualified deben- (iv) converting real property for the pur- to such applicant, unless there has been a tures that an APIC issues under this title pose of creating a site for business incuba- public announcement of the results of the that an APIC may have outstanding at any tion and location, or business district revi- competition; and one time shall not exceed an amount equal talization; (ii) any information with respect to any to 200 percent of the private equity capital of (v) enhancing economic competition, in- other applicant; and the APIC, as determined by the Secretary; cluding the advancement of technology; (D) set forth requirements for making and and (vi) rural development; keeping records of any communications con- (B) an APIC shall not have more than (vii) mitigating, rehabilitating, and ducted under this subsection, including re- $300,000,000 in face value of qualified deben- reusing real property considered subject to quirements for making such records avail- tures issued under this title outstanding at the Solid Waste Disposal Act (42 U.S.C. 6901 able to the public after the award of licenses any one time. et seq.; commonly referred to as the Re- under an initial or subsequent notice, as ap- (3) REPAYMENT.— source Conservation and Recovery Act) or propriate, under subsection (a). (A) CONDITION OF BUSINESS WIND-UP.—An restoring coal mine-scarred land; (2) TIMING.—Regulations under this sub- APIC shall have repaid, or have otherwise (viii) creation of local wealth through in- section may be issued as interim rules for ef- been relieved of indebtedness, with respect to vestments in employee stock ownership com- fect on or before the date of publication of any interest or principal amounts of bor- panies or resident-owned ventures; and the first notice under subsection (a), and rowings under this subsection no less than 2 (ix) any other objective that the Secretary shall apply only with respect to applications years before the APIC may dissolve or other- may establish to further the purposes of this under such notice. Regulations to implement wise complete the wind-up of its business. title; this subsection with respect to any notice (B) TIMING.—An APIC may repay any in- (C) the quality of jobs to be created for after the first such notice shall be subject to terest or principal amounts of borrowings residents of low-income communities, taking notice and comment rulemaking. under this subsection at any time: Provided, into consideration such factors as the pay- (3) INAPPLICABILITY OF DEPARTMENT OF HUD That the repayment of such amounts shall ment of higher wages, job security, employ- ACT PROVISION.—Section 12(e)(2) of the De- not relieve an APIC of any duty otherwise ment benefits, opportunity for advancement, partment of Housing and Urban Development applicable to the APIC under this title, un- and personal asset building; Act (42 U.S.C. 3537a(e)(2)) is amended by in- less the Secretary orders such relief. (D) the extent to which achievement of serting before the period at the end the fol- (C) USE OF INVESTMENT PROCEEDS BEFORE such goals will involve community-based or- lowing: ‘‘or any license provided under the REPAYMENT.—Until an APIC has repaid all ganizations and residents in community de- America’s Private Investment Companies interest and principal amounts on APIC bor- velopment activities; and Act’’. rowings under this subsection, an APIC may (E) the extent to which the investments re- SEC. 606. OPERATIONS OF APICS. use the proceeds of investments, in accord- ferred to in subparagraph (B) are likely to (a) POWERS AND AUTHORITIES.— ance with regulations issued by the Sec- benefit existing small business in low-in- (1) IN GENERAL.—An APIC shall have any retary, only to— come communities or will encourage the powers or authorities that— (i) pay for proper costs and expenses the growth of small business in such commu- (A) the APIC derives from the jurisdiction APIC incurs in connection with such invest- nities. in which it is organized, or that the APIC ments; (4) OTHER.—Any other criteria that the otherwise has; (ii) pay for the reasonable administrative Secretary may establish to carry out the (B) may be conferred by a license under expenses of the APIC; purposes of this title. this title; and (iii) purchase Treasury securities; (e) FIRST YEAR REQUIREMENTS.— (C) the Secretary may prescribe by regula- (iv) repay interest and principal amounts (1) NUMERICAL LIMITATION.—The number of tion. on APIC borrowings under this subsection; APICs may not, at any time during the 1- (2) NEW MARKET ASSISTANCE.—Nothing in (v) make interest, dividend, or other dis- year period that begins upon the Secretary this title shall preclude an APIC or its inves- tributions to or on behalf of an investor; or awarding the first license for an APIC under tors from receiving an allocation of New (vi) undertake such other purposes as the this title, exceed 15. Market Tax Credits (to the extent such cred- Secretary may approve. (2) LIMITATION ON ALLOCATION OF AVAILABLE its are established under Federal law) if the (D) USE OF INVESTMENT PROCEEDS AFTER CREDIT SUBSIDY.—Of the amount of budget APIC satisfies any applicable terms and con- REPAYMENT.—After an APIC has repaid all authority initially made available for alloca- ditions under the Internal Revenue Code of interest and principal amounts on APIC bor- tion under this title for APICs, the amount 1986. rowings under this subsection, and subject to allocated for any single APIC may not ex- (b) INVESTMENT LIMITATIONS.— continuing compliance with subsection (a), ceed 20 percent. (1) QUALIFIED LOW-INCOME COMMUNITY IN- the APIC may use the proceeds from invest- (3) NATIVE AMERICAN PRIVATE INVESTMENT VESTMENTS.—Substantially all investments ments to make interest, dividend, or other COMPANY.—Subject only to the absence of an that an APIC makes shall be qualified low- distributions to or on behalf of investors in approvable application from an entity, dur- income community investments if the in- the nature of returns on capital, or the with- ing the 1-year period referred to in paragraph vestments are financed with— drawal of private equity capital, without re- (1), of the entities selected and licensed by (A) amounts available from the proceeds of gard to subparagraph (C) but in conformity the Secretary as APICs, at least one shall be the issuance of an APIC’s qualified debenture with the APIC’s investment strategy and an entity that has as its primary purpose the guaranteed under this title; statement of public purpose goals. making of qualified low-income community (B) proceeds of the sale of obligations de- (d) REUSE OF QUALIFIED DEBENTURE PRO- investments in areas that are within Indian scribed under subsection (c)(3)(C)(iii); or CEEDS.—An APIC may use the proceeds of country (as such term is defined in section (C) the use of private equity capital, as de- sale of Treasury securities purchased under 1151 of title 18, United States Code) or within termined by the Secretary, in an amount subsection (c)(3)(C)(iii) to make qualified lands that have status as Hawaiian home specified in the APIC’s license. low-income community investments, subject

VerDate 11-MAY-2000 03:15 Jul 26, 2000 Jkt 079060 PO 00000 Frm 00029 Fmt 4634 Sfmt 0634 E:\CR\FM\A25JY7.011 pfrm02 PsN: H25PT1 H6808 CONGRESSIONAL RECORD — HOUSE July 25, 2000 to the Secretary’s approval. In making the fied debenture with a debenture, another full (A) this title and other applicable laws, in- request for the Secretary’s approval, the faith and credit instrument, or any obliga- cluding any requirements established under APIC shall follow the procedures applicable tions of the United States, that may reason- this title by the Secretary; to an APIC’s request for HUD guarantee ac- ably substitute for such prepaid or defaulted (B) all terms and conditions of its license, tion, as the Secretary may modify such pro- qualified debenture. any cease-and-desist order issued under sec- cedures for implementation of this sub- (3) PROPORTIONATE REDUCTION OPTION.—In tion 610, and of any penalty or condition that section. Such procedures shall include the the event that the Secretary elects not to may have arisen from examination or moni- description and certifications that an APIC exercise the option under paragraph (2), and toring by the Secretary or otherwise, includ- must include in all requests for guarantee a qualified debenture in such trust is pre- ing the satisfaction of any financial audit ex- action, and the environmental certification paid, or in the event of default of a qualified ception that may have been outstanding; and applicable to initial expenditures for a debenture, the guarantee of timely payment (C) all requirements relating to the alloca- project or activity. of principal and interest on the trust certifi- tion and use of New Markets Tax Credits, to (e) ANTIPIRATING.—Notwithstanding any cate shall be reduced in proportion to the the extent such credits are established under other provision of law, an APIC may not use amount of principal and interest that such Federal law; and any private equity capital required to be prepaid qualified debenture represents in the (3) any other information or certification contributed under this title, or the proceeds trust. Interest on prepaid or defaulted quali- that the Secretary considers appropriate. from the sale of any qualified debenture fied debentures shall accrue and be guaran- (b) REQUESTS FOR GUARANTEE OF QUALIFIED under this title, to make an investment, as teed by the Secretary only through the date DEBENTURES THAT INCLUDE FUNDING FOR INI- determined by the Secretary, to assist di- of payment of the guarantee. During the TIAL EXPENDITURE FOR A PROJECT OR ACTIV- rectly in the relocation of any industrial or term of a trust certificate, it may be called ITY.—In addition to the description and cer- commercial plant, facility, or operation, for redemption due to prepayment or default tification that an APIC is required to supply from 1 area to another area, if the relocation of all qualified debentures that are in the in all requests for guarantee action under is likely to result in a significant loss of em- corpus of the trust. subsection (a), in the case of an APIC’s re- ployment in the labor market area from (d) FULL FAITH AND CREDIT BACKING OF quest for a guarantee that includes a quali- which the relocation occurs. GUARANTEES.—The full faith and credit of fied debenture, the proceeds of which the (f) EXCLUSION OF APIC FROM DEFINITION OF the United States is pledged to the timely APIC expects to be used as its initial expend- DEBTOR UNDER BANKRUPTCY PROVISIONS.— payment of all amounts which may be re- iture for a project or activity in which the Section 109(b)(2) of title 11, United States quired to be paid under any guarantee by the APIC intends to invest, and the expenditure Code, is amended by inserting before ‘‘credit Secretary pursuant to this section. for which would require an environmental union’’ the following: ‘‘America’s Private In- (e) SUBROGATION AND LIENS.— assessment under the National Environ- vestment Company licensed under the Amer- (1) SUBROGATION.—In the event the Sec- mental Policy Act of 1969 and other related ica’s Private Investment Companies Act,’’. retary pays a claim under a guarantee issued laws that further the purposes of such Act, SEC. 607. CREDIT ENHANCEMENT BY THE FED- under this section, the Secretary shall be such request for guarantee action shall in- ERAL GOVERNMENT. subrogated fully to the rights satisfied by clude evidence satisfactory to the Secretary (a) ISSUANCE AND GUARANTEE OF QUALIFIED such payment. of the certification of the completion of en- DEBENTURES.— (2) PRIORITY OF LIENS.—No State or local vironmental review of the project or activity (1) AUTHORITY.—To the extent consistent law, and no Federal law, shall preclude or required of the cognizant State or local gov- with the Federal Credit Reform Act of 1990, limit the exercise by the Secretary of its ernment under subsection (c). If the environ- the Secretary is authorized to make commit- ownership rights in the debentures in the mental review responsibility for the project ments to guarantee and guarantee the time- corpus of a trust under this section. or activity has not been assumed by a State ly payment of all principal and interest as (f) REGISTRATION.— or local government under subsection (c), scheduled on qualified debentures issued by (1) IN GENERAL.—The Secretary shall pro- then the Secretary shall be responsible for APICs. Such commitments and guarantees vide for a central registration of all trust carrying out the applicable responsibilities may only be made in accordance with the certificates issued pursuant to this section. under the National Environmental Policy terms and conditions established under para- (2) AGENTS.—The Secretary may contract Act of 1969 and other provisions of law that graph (2). with an agent or agents to carry out on be- further the purposes of such Act that relate (2) TERMS AND CONDITIONS.—The Secretary half of the Secretary the pooling and the to the project or activity, and the Secretary shall establish such terms and conditions as central registration functions of this section shall execute such responsibilities before the Secretary determines to be appropriate notwithstanding any other provision of law, acting on the APIC’s request for the guar- for commitments and guarantees under this including maintenance on behalf of and antee that is covered by this subsection. subsection, including terms and conditions under the direction of the Secretary, such (c) RESPONSIBILITY FOR ENVIRONMENTAL relating to amounts, expiration, number, pri- commercial bank accounts or investments in REVIEWS.— orities of repayment, security, collateral, obligations of the United States as may be (1) EXECUTION OF RESPONSIBILITY BY THE necessary to facilitate trusts backed by amortization, payment of interest (including SECRETARY.—This subsection shall apply to qualified debentures guaranteed under this the timing thereof), and fees and charges. guarantees by the Secretary of qualified de- title and the issuance of trust certificates to The terms and conditions applicable to any bentures under this title, the proceeds of facilitate formation of the corpus of the particular commitment or guarantee may be which would be used in connection with trusts. The Secretary may require such established in documents that the Secretary qualified low-income community invest- agent or agents to provide a fidelity bond or approves for such commitment or guarantee. ments of APICs under this title. insurance in such amounts as the Secretary (3) SENIORITY.—Notwithstanding any other (2) ASSUMPTION OF RESPONSIBILITY BY COG- determines to be necessary to protect the in- provision of Federal law or any law or the NIZANT UNIT OF GENERAL GOVERNMENT.— terests of the Government. constitution of any State, qualified deben- (A) GUARANTEE OF QUALIFIED DEBEN- (3) FORM.—Book-entry or other electronic TURES.—In order to assure that the policies tures guaranteed under this subsection by forms of registration for trust certificates the Secretary shall be senior to any other of the National Environmental Policy Act of under this title are authorized. 1969 and other provisions of law that further debt obligation, equity contribution or earn- (g) TIMING OF ISSUANCE OF GUARANTEES OF the purposes of such Act (as specified in reg- ings, or the distribution of dividends, inter- QUALIFIED DEBENTURES AND TRUST CERTIFI- ulations issued by the Secretary) are most est, or other amounts, of an APIC. CATES.—The Secretary may, from time to effectively implemented in connection with (b) ISSUANCE OF TRUST CERTIFICATES.—The time in the Secretary’s discretion, exercise Secretary, or an agent or entity selected by the authority to issue guarantees of quali- the expenditure of funds under this title, and the Secretary, is authorized to issue trust fied debentures under this title or trust cer- to assure to the public undiminished protec- certificates representing ownership of all or tificates under this title. tion of the environment, the Secretary may, under such regulations, in lieu of the envi- a fractional part of guaranteed qualified de- SEC. 608. APIC REQUESTS FOR GUARANTEE AC- bentures issued by APICs and held in trust. TIONS. ronmental protection procedures otherwise (c) GUARANTEE OF TRUST CERTIFICATES.— (a) IN GENERAL.—The Secretary may issue applicable, provide for the guarantee of (1) IN GENERAL.—The Secretary is author- a guarantee under this title for a qualified qualified debentures, any part of the pro- ized, upon such terms and conditions as the debenture that an APIC intends to issue only ceeds of which are to fund particular quali- Secretary determines to be appropriate, to pursuant to a request to the Secretary by fied low-income community investments of guarantee the timely payment of the prin- the APIC for such guarantee that is made in APICs under this title, if a State or unit of cipal of and interest on trust certificates accordance with regulations governing the general local government, as designated by issued by the Secretary, or an agent or other content and procedures for such requests, the Secretary in accordance with regulations entity, for purposes of this section. Such that the Secretary shall prescribe. Such reg- issued by the Secretary, assumes all of the guarantee shall be limited to the extent of ulations shall provide that each such request responsibilities for environmental review, principal and interest on the guaranteed shall include— decisionmaking, and action pursuant to the qualified debentures which compose the (1) a description of the manner in which National Environmental Policy Act of 1969 trust. the APIC intends to use the proceeds from and such other provisions of law that further (2) SUBSTITUTION OPTION.—The Secretary the qualified debenture; such Act as the regulations of the Secretary shall have the option to replace in the corpus (2) a certification by the APIC that the specify, that would otherwise apply to the of the trust any prepaid or defaulted quali- APIC is in substantial compliance with— Secretary were the Secretary to undertake

VerDate 11-MAY-2000 03:15 Jul 26, 2000 Jkt 079060 PO 00000 Frm 00030 Fmt 4634 Sfmt 0634 E:\CR\FM\A25JY7.012 pfrm02 PsN: H25PT1 July 25, 2000 CONGRESSIONAL RECORD — HOUSE H6809 the funding of such investments as a Federal (ii) is authorized and consents on behalf of General of the Department of the Treasury action. the State or unit of general local govern- and the Small Business Administration in (B) IMPLEMENTATION.—The Secretary shall ment and himself or herself to accept the ju- carrying out such function. issue regulations to carry out this sub- risdiction of the Federal courts for the pur- (d) ANNUAL REPORT BY SECRETARY.—The section only after consultation with the pose of enforcement of the responsibilities as Secretary shall submit a report to the Con- Council on Environmental Quality. Such reg- such an official. gress annually regarding the operations, ac- ulations shall— SEC. 609. EXAMINATION AND MONITORING OF tivities, financial health, and achievements (i) specify any other provisions of law APICS. of the APIC program under this title. The re- which further the purposes of the National (a) IN GENERAL.—The Secretary shall, port shall list each investment made by an Environmental Policy Act of 1969 and to under regulations, through audits, perform- APIC and include a summary of the exami- which the assumption of responsibility as ance agreements, license conditions, or oth- nations conducted under subsection (b)(3), provided in this subsection applies; erwise, examine and monitor the operations the guarantee actions of HUD, and any regu- (ii) provide eligibility criteria and proce- and activities of APICs for compliance with latory or policy actions taken by HUD. The dures for the designation of a State or unit sound financial management practices, and report shall distinguish recently licensed of general local government to assume all of for satisfaction of the program and proce- APICs from APICs that have held licenses the responsibilities in this subsection; dural goals of this title and other related for a longer period for purposes of indicating (iii) specify the purposes for which funds Acts. The Secretary may undertake any re- program activities and performance. may be committed without regard to the sponsibility under this section in coopera- (e) GAO REPORT.— procedure established under paragraph (3); tion with an APIC liaison committee, or any (1) REQUIREMENT.—Not later than 2 years (iv) provide for monitoring of the perform- agency that is a member of such a com- after the date of the enactment of this Act, ance of environmental reviews under this mittee, or other agency. the Comptroller General of the United States (b) MONITORING, UPDATING, AND PROGRAM subsection; shall submit a report to the Congress regard- REVIEW.— (v) in the discretion of the Secretary, pro- ing the operation of the program under this (1) REPORTING AND UPDATING.—The Sec- vide for the provision or facilitation of train- title for licensing and guarantees for APICs. retary shall establish such annual or more ing for such performance; and (2) CONTENTS.—The report shall include— frequent reporting requirements for APICs, (vi) subject to the discretion of the Sec- (A) an analysis of the operations and moni- and such requirements for the updating of retary, provide for suspension or termination toring by HUD of the APIC program under the statement of public purpose goals, in- by the Secretary of the assumption under this title; vestment strategy (including the bench- subparagraph (A). (B) the administrative and capacity needs marks in such strategy), and other docu- (C) RESPONSIBILITIES OF STATES AND UNITS of HUD required to ensure the integrity of ments that may have been used in the li- OF GENERAL LOCAL GOVERNMENT.—The Sec- the program; cense application process under this title, as retary’s duty under subparagraph (B) shall (C) the extent and adequacy of any credit the Secretary determines necessary to assist not be construed to limit any responsibility subsidy appropriated for the program; and the Secretary in monitoring the compliance assumed by a State or unit of general local (D) the management of financial risk and and performance of APICs. government with respect to any particular liability of the Federal Government under request for guarantee under subparagraph (2) ANNUAL AUDITS.—The Secretary shall the program. (A), or the use of funds for a qualified invest- require each APIC to have an independent ment. audit conducted annually of the operations SEC. 610. PENALTIES. (3) PROCEDURE.—Subject to compliance by of the APIC. The Secretary, in consultation (a) VIOLATIONS SUBJECT TO PENALTY.—The the APIC with the requirements of this title, with the Administrator and the Secretary of Secretary may impose a penalty under this the Secretary shall approve the request for the Treasury, shall establish requirements subsection on any APIC or manager of an guarantee of a qualified debenture, any part and standards for such audits, including re- APIC that, by any act, practice, or failure to of the proceeds of which is to fund particular quirements that such audits be conducted in act, engages in fraud, mismanagement, or qualified low-income community invest- accordance with generally accepted account- noncompliance with this title, the regula- ments of an APIC under this title, that is ing principles, that the APIC submit the re- tions under this title, or a condition of the subject to the procedures authorized by this sults of the audit to Secretary, and that APIC’s license under this title. The Sec- subsection only if, not less than 15 days prior specify the information to be submitted. retary shall, by regulation, identify, by ge- to such approval and prior to any commit- (3) EXAMINATIONS.—The Secretary shall, no neric description of a role or responsibilities, ment of funds to such investment (except for less often than once every 2 years, examine any manager of an APIC that is subject to a such purposes specified in the regulations the operations and portfolio of each APIC li- penalty under this section. issued under paragraph (2)(B)), the APIC sub- censed under this title for compliance with (b) PENALTIES REQUIRING NOTICE AND AN mits to the Secretary a request for guar- sound financial management practices, and OPPORTUNITY TO RESPOND.—If, after notice in antee of a qualified debenture that is accom- for compliance with this title. writing to an APIC or the manager of an panied by evidence of a certification of the (4) EXAMINATION STANDARDS.— APIC that the APIC or manager has engaged State or unit of general local government (A) SOUND FINANCIAL MANAGEMENT PRAC- in any action, practice, or failure to act which meets the requirements of paragraph TICES.—The Secretary shall examine each that, under subsection (a), is subject to a (4). The approval by the Secretary of any APIC to ensure, as a matter of sound finan- penalty, and after an opportunity for the such certification shall be deemed to satisfy cial management practices, substantial com- APIC or manager to respond to the notice, the Secretary’s responsibilities pursuant to pliance with this and other applicable laws, the Secretary determines that the APIC or paragraph (1) under the National Environ- including Federal executive orders, Depart- manager engaged in such action or failure to mental Policy Act of 1969 and such other pro- ment of Treasury and Office of Management act, the Secretary may, in addition to other visions of law as the regulations of the Sec- and Budget guidance, circulars, and applica- penalties imposed— retary specify insofar as those responsibil- tion and licensing requirements on a con- (1) assess a civil money penalty, except ities relate to the guarantees of qualified de- tinuing basis. The Secretary may, by regula- than any civil money penalty under this sub- bentures, any parts of the proceeds of which tion, establish any additional standards for section shall be in an amount not exceeding are to fund such investments, which are cov- sound financial management practices, in- $10,000; ered by such certification. cluding standards that address solvency and (2) issue an order to cease and desist with (4) CERTIFICATION.—A certification under financial exposure. respect to such action, practice, or failure to the procedures authorized by this subsection (B) PERFORMANCE AND OTHER EXAMINA- act of the APIC or manager; shall— TIONS.—The Secretary shall monitor each (3) suspend, or condition the use of, the (A) be in a form acceptable to the Sec- APIC’s progress in meeting the goals in the APIC’s license, including deferring, for the retary; APIC’s statement of public purpose goals, period of the suspension, any commitment to (B) be executed by the chief executive offi- executing the APIC’s investment strategy, guarantee any new qualified debenture of the cer or other officer of the State or unit of and other matters. APIC, except that any suspension or condi- general local government who qualifies (c) INSPECTOR GENERAL RESPONSIBILITY.— tion under this paragraph may not exceed 90 under regulations of the Secretary; In carrying out monitoring of HUD’s respon- days; and (C) specify that the State or unit of gen- sibilities under this title and for purposes of (4) impose any other penalty that the Sec- eral local government under this subsection ensuring that the program under this title is retary determines to be less burdensome to has fully carried out its responsibilities as operated in accordance with sound financial the APIC than a penalty under subsection described under paragraph (2); and management practices, the Inspector Gen- (c). (D) specify that the certifying officer— eral of the Department of Housing and Urban (c) PENALTIES REQUIRING NOTICE AND HEAR- (i) consents to assume the status of a re- Development shall consult with the Inspec- ING.—If, after notice in writing to an APIC or sponsible Federal official under the National tor General of the Department of the Treas- the manager of an APIC that an APIC or Environmental Policy Act of 1969 and each ury and the Inspector General of the Small manager has engaged in any action, practice, provision of law specified in regulations Business Administration, as appropriate, and or failure to act that, under subsection (a), is issued by the Secretary insofar as the provi- may enter into such agreements and memo- subject to a penalty, and after an oppor- sions of such Act or other such provision of randa of understanding as may be necessary tunity for administrative hearing, the Sec- law apply pursuant to paragraph (2); and to obtain the cooperation of the Inspectors retary determines that the APIC or manager

VerDate 11-MAY-2000 03:15 Jul 26, 2000 Jkt 079060 PO 00000 Frm 00031 Fmt 4634 Sfmt 0634 E:\CR\FM\A25JY7.012 pfrm02 PsN: H25PT1 H6810 CONGRESSIONAL RECORD — HOUSE July 25, 2000 engaged in such action or failure to act, the upon the expiration of the 6-month period 204(h) of the National Housing Act (12 U.S.C. Secretary may— beginning on the date of the enactment of 1710(h)); or (1) assess a civil money penalty against the this Act. ‘‘(ii) is an eligible asset under such section APIC or a manager in any amount; (b) ISSUANCE OF REGULATIONS AND GUIDE- 204(h), but— (2) require the APIC to divest any interest LINES.—Any authority under this title of the ‘‘(I) is not subject to a specific sale agree- in an investment, on such terms and condi- Secretary, the Administrator, and the Sec- ment under such section; and tions as the Secretary may impose; or retary of the Treasury to issue regulations, ‘‘(II) has been determined by the Secretary (3) revoke the APIC’s license. standards, guidelines, or licensing require- to be inappropriate for continued inclusion (d) EFFECTIVE DATE OF PENALTIES.— ments, and any authority of such officials to in the program under such section 204(h) pur- (1) PRIOR NOTICE REQUIREMENT.—Except as consult or enter into agreements or memo- suant to paragraph (10) of such section. provided in paragraph (2) of this subsection, randa of understanding regarding such ‘‘(3) TIMING.—The Secretary shall establish a penalty under subsection (b) or (c) shall issuance, shall take effect on the date of the procedures that provide for— not be due and payable and shall not other- enactment of this Act. ‘‘(A) time deadlines for transfers under this wise take effect or be subject to enforcement SEC. 612. SUNSET. subsection; by an order of a court, before notice of the After the expiration of the 5-year period ‘‘(B) notification to units of general local penalty is published in the Federal Register. beginning upon the date that the Secretary government and community development (2) CEASE-AND-DESIST ORDERS AND SUSPEN- awards the first license for an APIC under corporations of qualified HUD properties in SION OR CONDITIONING OF LICENSE.—In the this title— their jurisdictions; case of a cease-and-desist order under sub- (1) the Secretary may not license any ‘‘(C) such units and corporations to express section (b)(2) or the suspension or condi- APIC; and interest in the transfer under this subsection tioning of an APIC’s license under subsection (2) no amount may be appropriated for the of such properties; (b)(3), the following procedures shall apply: costs (as such term is defined in section 502 ‘‘(D) a right of first refusal for transfer of (A) ACTION WITHOUT PUBLISHED NOTICE.— of the Federal Credit Reform Act of 1990 (2 qualified HUD properties to units of general The Secretary may order an APIC or man- U.S.C. 661c)) of any guarantee under this local government and community develop- ager to cease and desist from an action, prac- title for any debenture issued by an APIC. ment corporations, under which— tice, or failure to act or may suspend or con- This section may not be construed to pro- ‘‘(i) the Secretary shall establish a period dition an APIC’s license, for not more than hibit, limit, or affect the award, allocation, during which the Secretary may not transfer 45 days without prior publication of notice in or use of any budget authority for the costs such properties except to such units and cor- the Federal Register, but such cease-and-de- of such guarantees that is appropriated be- porations; sist order or suspension or conditioning shall fore the expiration of such period. ‘‘(ii) the Secretary shall offer qualified take effect only after the Secretary has TITLE VII—OTHER COMMUNITY RENEWAL HUD properties that are single family prop- issued a written notice (which may include a AND NEW MARKETS ASSISTANCE erties for purchase by units of general local writing in electronic form) of such action to SEC. 701. TRANSFER OF UNOCCUPIED AND SUB- government at a cost of $1 for each property, the APIC. Notwithstanding subsection (b), STANDARD HUD-HELD HOUSING TO but only to the extent that the costs to the such written notice shall be effective with- LOCAL GOVERNMENTS AND COMMU- Federal Government of disposal at such price out regard to whether the APIC has been ac- NITY DEVELOPMENT CORPORA- do not exceed the costs to the Federal Gov- corded an opportunity to respond. Upon such TIONS. ernment of disposing of property subject to notice, such cease-and-desist order or sus- Section 204 of the Departments of Veterans the procedures for single family property es- pension or conditioning shall be subject to Affairs and Housing and Urban Development, tablished by the Secretary pursuant to the enforcement by an order of a court. and Independent Agencies Appropriations authority under the last sentence of section (B) PUBLICATION OF NOTICE OF SUSPENSION Act, 1997 (12 U.S.C. 1715z–11a) is amended— 204(g) of the National Housing Act (12 U.S.C. OR CONDITIONING OF LICENSE.—Upon a suspen- (1) by striking ‘‘FLEXIBLE AUTHORITY.—’’ 1710(g)); sion or conditioning of a license taking ef- and inserting ‘‘DISPOSITION OF HUD-OWNED ‘‘(iii) the Secretary may accept an offer to fect pursuant to subparagraph (A), the Sec- PROPERTIES. (a) FLEXIBLE AUTHORITY FOR purchase a property made by a community retary shall promptly cause a notice of sus- MULTIFAMILY PROJECTS.—’’; and development corporation only if the offer pension or conditioning of such license for a (2) by adding at the end the following new provides for purchase on a cost recovery period of not more than 90 days to be pub- subsection: basis; and lished in the Federal Register. The Secretary ‘‘(b) TRANSFER OF UNOCCUPIED AND SUB- ‘‘(iv) the Secretary shall accept an offer to shall provide the APIC an opportunity to re- STANDARD HOUSING TO LOCAL GOVERNMENTS purchase such a property that is made dur- spond to such notice. For purposes of the de- AND COMMUNITY DEVELOPMENT CORPORA- ing such period by such a unit or corporation termining the duration of the period of any TIONS.— and that complies with the requirements of suspension or conditioning under this sub- ‘‘(1) TRANSFER AUTHORITY.—Notwith- this paragraph; paragraph, the first day of such period shall standing the authority under subsection (a) ‘‘(E) a written explanation, to any unit of be the day of issuance of the written notice and the last sentence of section 204(g) of the general local government or community de- under this paragraph of the suspension or National Housing Act (12 U.S.C. 1710(g)), the velopment corporation making an offer to conditioning. Secretary of Housing and Urban Develop- purchase a qualified HUD property under (C) REVOCATION OF LICENSE.—During the ment shall transfer ownership of any quali- this subsection that is not accepted, of the period of the suspension or conditioning of fied HUD property, subject to the require- reason that such offer was not acceptable. an APIC’s license, the Secretary may take ments of this section, to a unit of general ‘‘(4) OTHER DISPOSITION.—With respect to action under subsection (c)(3) to revoke the local government having jurisdiction for the any qualified HUD property, if the Secretary license of the APIC, in accordance with the area in which the property is located or to a does not receive an acceptable offer to pur- procedures applicable to such subsection. community development corporation which chase the property pursuant to the procedure Notwithstanding any other provision of this operates within such a unit of general local established under paragraph (3), the Sec- section, if the Secretary takes such action, government in accordance with this sub- retary shall dispose of the property to the the Secretary may extend the suspension or section, but only to the extent that units of unit of general local government in which conditioning of the APIC’s license, for one or general local government and community property is located or to community devel- more periods of not more than 90 days each, development corporations consent to trans- opment corporations located in such unit of by causing notice of such action to be pub- fer and the Secretary determines that such general local government on a negotiated, lished in the Federal Register— transfer is practicable. competitive bid, or other basis, on such (i) for the first such extension, before the ‘‘(2) QUALIFIED HUD PROPERTIES.—For pur- terms as the Secretary deems appropriate. expiration of the period under subparagraph poses of this subsection, the term ‘qualified ‘‘(5) SATISFACTION OF INDEBTEDNESS.—Be- (B); and HUD property’ means any property for fore transferring ownership of any qualified (ii) for any subsequent extension, before which, as of the date that notification of the HUD property pursuant to this subsection, the expiration of the preceding extension pe- property is first made under paragraph the Secretary shall satisfy any indebtedness riod under this subparagraph. (3)(B), not less than 6 months have elapsed incurred in connection with the property to (D) TERM OF EFFECTIVENESS.—A cease-and- since the later of the date that the property be transferred, by canceling the indebted- desist order or the suspension or condi- was acquired by the Secretary or the date ness. tioning of an APIC’s license by the Secretary that the property was determined to be un- ‘‘(6) DETERMINATION OF STATUS OF PROP- under this paragraph shall remain in effect occupied or substandard, that is owned by ERTIES.—To ensure compliance with the re- in accordance with the terms of the order, the Secretary and is— quirements of this subsection, the Secretary suspension, or conditioning until final adju- ‘‘(A) an unoccupied multifamily housing shall take the following actions: dication in any action undertaken to chal- project; ‘‘(A) UPON ENACTMENT.—Upon the enact- lenge the order, or the suspension or condi- ‘‘(B) a substandard multifamily housing ment of this subsection, the Secretary shall tioning, or the revocation, of an APIC’s li- project; or promptly assess each residential property cense. ‘‘(C) an unoccupied single family property owned by the Secretary to determine wheth- SEC. 611. EFFECTIVE DATE. that— er such property is a qualified HUD property. (a) IN GENERAL.—Except as provided in ‘‘(i) has been determined by the Secretary ‘‘(B) UPON ACQUISITION.—Upon acquiring subsection (b), this title shall take effect not to be an eligible asset under section any residential property, the Secretary shall

VerDate 11-MAY-2000 03:15 Jul 26, 2000 Jkt 079060 PO 00000 Frm 00032 Fmt 4634 Sfmt 0634 E:\CR\FM\A25JY7.012 pfrm02 PsN: H25PT1 July 25, 2000 CONGRESSIONAL RECORD — HOUSE H6811 promptly determine whether the property is ‘‘(iv) is accessible through a public hallway (D) by striking paragraph (1) and inserting a qualified HUD property. in which there are no working light fixtures, the following new paragraph: ‘‘(C) UPDATES.—The Secretary shall peri- loose or missing steps or railings, and no ele- ‘‘(1) assume the first loss on any mortgage odically reassess the residential properties vator; or insured pursuant to section 203(b), 234, or 245 owned by the Secretary to determine wheth- ‘‘(v) has severe maintenance problems, in- that covers a one- to four-family dwelling er any such properties have become qualified cluding water leaks involving the roof, win- and is included in the program under this HUD properties. dows, doors, basement, or pipes or plumbing section, up to the percentage of loss that is ‘‘(7) TENANT LEASES.—This subsection shall fixtures, holes or open cracks in walls or set forth in the risk-sharing contract;’’; and not affect the terms or the enforceability of ceilings, severe paint peeling or broken plas- (E) in paragraph (2)— any contract or lease entered into with re- ter, and signs of rodent infestation. (i) by striking ‘‘carry out (under appro- spect to any residential property before the ‘‘(G) SINGLE FAMILY PROPERTY.—The term priate delegation) such’’ and inserting ‘‘dele- date that such property becomes a qualified ‘single family property’ means a 1- to 4-fam- gate underwriting,’’; and HUD property. ily residence. (ii) by striking ‘‘function’’ and inserting ‘‘(8) USE OF PROPERTY.—Property trans- ‘‘(H) SUBSTANDARD.—The term ‘sub- ‘‘functions’’; ferred under this subsection shall be used standard’ means, with respect to a multi- (5) in subsection (c)— only for appropriate neighborhood revitaliza- family housing project, that 25 percent or (A) in the first sentence— tion efforts, including homeownership, rent- more of the dwelling units in the project (i) by striking ‘‘of’’ the first place it ap- al units, commercial space, and parks, con- have severe physical problems. pears and insert ‘‘for’’; sistent with local zoning regulations, local ‘‘(I) UNIT OF GENERAL LOCAL GOVERNMENT.— (ii) by striking ‘‘insurance reserves’’ and building codes, and subdivision regulations The term ‘unit of general local government’ inserting ‘‘loss reserves’’; and and restrictions of record. has the meaning given such term in section (iii) by striking ‘‘such insurance’’ and in- ‘‘(9) INAPPLICABILITY TO PROPERTIES MADE 102(a) of the Housing and Community Devel- serting ‘‘such reserves’’; and AVAILABLE FOR HOMELESS.—Notwithstanding opment Act of 1974. (B) in the second sentence, by inserting ‘‘or any other provision of this subsection, this ‘‘(J) UNOCCUPIED.—The term ‘unoccupied’ insured community development financial subsection shall not apply to any properties means, with respect to a residential prop- institution’’ after ‘‘private mortgage insur- that the Secretary determines are to be erty, that the unit of general local govern- ance company’’; made available for use by the homeless pur- ment having jurisdiction over the area in (6) in subsection (d), by inserting ‘‘or in- suant to subpart E of part 291 of title 24, which the project is located has certified in sured community development financial in- Code of Federal Regulations, during the pe- writing that the property is not inhabited. stitution’’ after ‘‘private mortgage insurance riod that the properties are so available. ‘‘(12) REGULATIONS.— company’’; and ‘‘(10) PROTECTION OF EXISTING CONTRACTS.— ‘‘(A) INTERIM.—Not later than 30 days after (7) by adding at the end the following new This subsection may not be construed to the date of the enactment of this subsection, subsection: alter, affect, or annul any legally binding ob- the Secretary shall issue such interim regu- ‘‘(e) INSURED COMMUNITY DEVELOPMENT FI- ligations entered into with respect to a lations as are necessary to carry out this NANCIAL INSTITUTIONS.—For purposes of this qualified HUD property before the property subsection. section, the term ‘insured community devel- becomes a qualified HUD property. ‘‘(B) FINAL.—Not later than 60 days after opment financial institution’ means a com- ‘‘(11) DEFINITIONS.—For purposes of this the date of the enactment of this subsection, munity development financial institution, as subsection, the following definitions shall the Secretary shall issue such final regula- such term is defined in section 103 of Reigle apply: tions as are necessary to carry out this sub- Community Development and Regulatory ‘‘(A) COMMUNITY DEVELOPMENT CORPORA- section.’’. Improvement Act of 1994 (12 U.S.C. 4702) that TION.—The term ‘community development SEC. 702. TRANSFER OF HUD ASSETS IN REVITAL- is an insured depository institution (as such corporation’ means a nonprofit organization IZATION AREAS. term is defined in section 3 of the Federal whose primary purpose is to promote com- In carrying out the program under section Deposit Insurance Act (12 U.S.C. 1813)) or an munity development by providing housing 204(h) of the National Housing Act (12 U.S.C. insured credit union (as such term is defined opportunities for low-income families. 1710(h)), upon the request of the chief execu- in section 101 of the Federal Credit Union ‘‘(B) COST RECOVERY BASIS.—The term ‘cost tive officer of a county or the government of Act (12 U.S.C. 1752)).’’. appropriate jurisdiction and not later than recovery basis’ means, with respect to any SEC. 704. PREVENTION AND TREATMENT OF SUB- sale of a residential property by the Sec- 60 days after such request is made, the Sec- STANCE ABUSE; SERVICES PRO- retary, that the purchase price paid by the retary of Housing and Urban Development VIDED THROUGH RELIGIOUS ORGA- purchaser is equal to or greater than the sum shall designate as a revitalization area all NIZATIONS. of (i) the appraised value of the property, as portions of such county that meet the cri- Title V of the Public Health Service Act determined in accordance with such require- teria for such designation under paragraph (42 U.S.C. 290aa et seq.) is amended by adding ments as the Secretary shall establish, and (3) of such section. at the end the following part: (ii) the costs incurred by the Secretary in SEC. 703. RISK-SHARING DEMONSTRATION. ‘‘PART G—SERVICES PROVIDED THROUGH connection with such property during the pe- Section 249 of the National Housing Act (12 RELIGIOUS ORGANIZATIONS riod beginning on the date on which the Sec- U.S.C. 1715z–14) is amended— (1) by striking the section heading and in- ‘‘SEC. 581. APPLICABILITY TO DESIGNATED PRO- retary acquires title to the property and end- GRAMS. serting the following: ing on the date on which the sale is con- ‘‘(a) DESIGNATED PROGRAMS.—Subject to summated. ‘‘RISK-SHARING DEMONSTRATION’’; subsection (b), this part applies to discre- ‘‘(C) MULTIFAMILY HOUSING PROJECT.—The (2) by striking ‘‘reinsurance’’ each place tionary and formula grant programs admin- term ‘multifamily housing project’ has the such term appears and insert ‘‘risk-sharing’’; istered by the Substance Abuse and Mental meaning given the term in section 203 of the (3) in subsection (a)— Health Services Administration that make Housing and Community Development (A) in the first sentence, by inserting ‘‘and awards of financial assistance to public or Amendments of 1978. insured community development financial private entities for the purpose of carrying ‘‘(D) RESIDENTIAL PROPERTY.—The term institutions’’ after ‘‘private mortgage insur- out activities to prevent or treat substance ‘residential property’ means a property that ers’’; abuse (in this part referred to as a ‘des- is a multifamily housing project or a single (B) in the second sentence— ignated program’). Designated programs in- family property. (i) by striking ‘‘two’’ and inserting ‘‘4’’; clude the program under subpart II of part B ‘‘(E) SECRETARY.—The term ‘Secretary’ and of title XIX (relating to formula grants to means the Secretary of Housing and Urban (ii) by striking ‘‘March 15, 1988’’ and insert- the States). Development. ing ‘‘the expiration of the 5-year period be- ‘‘(b) LIMITATION.—This part does not apply ‘‘(F) SEVERE PHYSICAL PROBLEMS.—The ginning on the date of the enactment of the to any award of financial assistance under a term ‘severe physical problems’ means, with Community Renewal and New Market Act of designated program for a purpose other than respect to a dwelling unit, that the unit— 2000’’; and the purpose specified in subsection (a). ‘‘(i) lacks hot or cold piped water, a flush (C) in the last sentence, by striking ‘‘10 ‘‘(c) DEFINITIONS.—For purposes of this toilet, or both a bathtub and a shower in the percent’’ and inserting ‘‘20 percent’’; part (and subject to subsection (b)): unit, for the exclusive use of that unit; (4) in subsection (b)— ‘‘(1) The term ‘designated program’ has the ‘‘(ii) on not less than three separate occa- (A) in the first sentence, by inserting ‘‘and meaning given such term in subsection (a). sions during the preceding winter months, with insured community development finan- ‘‘(2) The term ‘financial assistance’ means was uncomfortably cold for a period of more cial institutions’’ before the period at the a grant, cooperative agreement, or contract. than 6 consecutive hours due to a malfunc- end; ‘‘(3) The term ‘program beneficiary’ means tion of the heating system for the unit; (B) in the first sentence, by striking an individual who receives program services. ‘‘(iii) has no functioning electrical service, ‘‘which have been determined to be qualified ‘‘(4) The term ‘program participant’ means exposed wiring, any room in which there is insurers under section 302(b)(2)(C)’’; a public or private entity that has received not a functioning electrical outlet, or has ex- (C) in the second sentence, by inserting financial assistance under a designated pro- perienced three or more blown fuses or ‘‘and insured community development finan- gram. tripped circuit breakers during the preceding cial institutions’’ after ‘‘private mortgage ‘‘(5) The term ‘program services’ means 90-day period; insurance companies’’; treatment for substance abuse, or preventive

VerDate 11-MAY-2000 03:15 Jul 26, 2000 Jkt 079060 PO 00000 Frm 00033 Fmt 4634 Sfmt 0634 E:\CR\FM\A25JY7.012 pfrm02 PsN: H25PT1 H6812 CONGRESSIONAL RECORD — HOUSE July 25, 2000 services regarding such abuse, provided pur- ‘‘(A) are from an alternative provider that SEC. 705. NEW MARKETS VENTURE CAPITAL PRO- suant to an award of financial assistance is accessible to, and has the capacity to pro- GRAM. under a designated program. vide such services to, such individual; and (a) SHORT TITLE.—This section may be ‘‘(6) The term ‘religious organization’ ‘‘(B) have a value that is not less than the cited as the ‘‘New Markets Venture Capital means a nonprofit religious organization. value of the services that the individual Program Act of 2000’’. (b) NEW MARKETS VENTURE CAPITAL PRO- ‘‘SEC. 582. RELIGIOUS ORGANIZATIONS AS PRO- would have received from the program par- GRAM PARTICIPANTS. ticipant to which the individual had such ob- GRAM.— Title III of the Small Business Investment ‘‘(a) IN GENERAL.—Notwithstanding any jection. Act of 1958 (15 U.S.C. 681 et seq.) is other provision of law, a religious organiza- ‘‘(2) NOTICES.—Appropriate Federal, State, tion, on the same basis as any other non- amended— or local governments that administer des- (1) in the heading for the title, by striking profit private provider— ignated programs or are program partici- ‘‘(1) may receive financial assistance under ‘‘SMALL BUSINESS INVESTMENT COMPA- pants shall ensure that notice is provided to NIES’’ and inserting ‘‘INVESTMENT DIVI- a designated program; and program beneficiaries or prospective pro- SION PROGRAMS’’; ‘‘(2) may be a provider of services under a gram beneficiaries of their rights under this (2) by inserting before the heading for sec- designated program. subsection. tion 301 the following: ‘‘(b) RELIGIOUS ORGANIZATIONS.—The pur- ‘‘(3) ADDITIONAL REQUIREMENTS.—A pro- ‘‘PART A—SMALL BUSINESS INVESTMENT pose of this section is to allow religious or- gram participant making a referral pursuant COMPANIES’’ ganizations to be program participants on to paragraph (1) shall— the same basis as any other nonprofit pri- ‘‘(A) prior to making such referral, con- ; and vate provider without impairing the reli- sider any list that the State or local govern- (3) by adding at the end the following: gious character of such organizations, and ment makes available of entities in the geo- ‘‘PART B—NEW MARKETS VENTURE CAPITAL without diminishing the religious freedom of graphic area that provide program services; PROGRAM program beneficiaries. and ‘‘SEC. 351. DEFINITIONS. ‘‘(c) NONDISCRIMINATION AGAINST RELIGIOUS ‘‘(B) ensure that the individual makes con- ‘‘In this part, the following definitions ORGANIZATIONS.— tact with the alternative provider to which apply: ‘‘(1) ELIGIBILITY AS PROGRAM PARTICI- the individual is referred. ‘‘(1) DEVELOPMENTAL VENTURE CAPITAL.— PANTS.—Religious organizations are eligible ‘‘(4) NONDISCRIMINATION.—A religious orga- The term ‘developmental venture capital’ to be program participants on the same basis nization that is a program participant shall means capital in the form of equity invest- as any other nonprofit private organization not in providing program services or engag- ments in businesses made with a primary ob- as long as the programs are implemented ing in outreach activities under designated jective of fostering economic development in consistent with the Establishment Clause programs discriminate against a program low- or moderate-income geographic areas. and Free Exercise Clause of the First beneficiary or prospective program bene- ‘‘(2) LOW- OR MODERATE-INCOME GEOGRAPHIC Amendment to the United States Constitu- ficiary on the basis of religion or religious AREA.—The term ‘low- or moderate-income tion. Nothing in this Act shall be construed belief. geographic area’ means— to restrict the ability of the Federal Govern- ‘‘(g) FISCAL ACCOUNTABILITY.— ‘‘(A) a census tract, or the equivalent ment, or a State or local government receiv- ‘‘(1) IN GENERAL.—Except as provided in county division as defined by the Bureau of ing funds under such programs, to apply to paragraph (2), any religious organization the Census for purposes of defining poverty religious organizations the same eligibility that is a program participant shall be sub- areas, in which— conditions in designated programs as are ap- ject to the same regulations as other recipi- ‘‘(i) the poverty rate is not less than 20 per- plied to any other nonprofit private organi- ents of awards of Federal financial assist- cent; zation. ance to account, in accordance with gen- ‘‘(ii) in the case of a census tract or divi- ‘‘(2) NONDISCRIMINATION.—Neither the Fed- erally accepted auditing principles, for the sion located within a metropolitan area, the eral Government nor a State or local govern- use of the funds provided under such awards. median family income for such tract or divi- ment receiving funds under designated pro- ‘‘(2) LIMITED AUDIT.—With respect to the sion does not exceed the greater of 80 percent grams shall discriminate against an organi- award involved, if a religious organization of the statewide median family income or 80 zation that is or applies to be a program par- that is a program participant maintains the percent of the metropolitan area median ticipant on the basis that the organization Federal funds in a separate account from family income; or has a religious character. non-Federal funds, then only the Federal ‘‘(iii) in the case of a census tract or divi- ‘‘(d) RELIGIOUS CHARACTER AND FREEDOM.— funds shall be subject to audit. sion not located within a metropolitan area, ‘‘(1) RELIGIOUS ORGANIZATIONS.—Except as ‘‘(h) COMPLIANCE.—With respect to compli- the median family income for such tract or provided in this section, any religious orga- ance with this section by an agency, a reli- division does not exceed 80 percent of the nization that is a program participant shall gious organization may obtain judicial re- statewide median family income; or retain its independence from Federal, State, view of agency action in accordance with ‘‘(B) any area located within— and local government, including such organi- chapter 7 of title 5, United States Code. ‘‘(i) a historically underutilized business zation’s control over the definition, develop- ‘‘SEC. 583. LIMITATIONS ON USE OF FUNDS FOR zone (HUBZone), as defined in section 3(p) of ment, practice, and expression of its reli- CERTAIN PURPOSES. the Small Business Act (15 U.S.C. 632(p)); gious beliefs. ‘‘No funds provided under a designated pro- ‘‘(ii) an urban empowerment zone or an ‘‘(2) ADDITIONAL SAFEGUARDS.—Neither the gram shall be expended for sectarian wor- urban enterprise community, as designated Federal Government nor a State shall re- ship, instruction, or proselytization. by the Secretary of the Department of Hous- quire a religious organization to— ‘‘SEC. 584. EDUCATIONAL REQUIREMENTS FOR ing and Urban Development; or ‘‘(A) alter its form of internal governance; PERSONNEL IN DRUG TREATMENT ‘‘(iii) a rural empowerment zone or a rural or PROGRAMS. enterprise community, as designated by the ‘‘(B) remove religious art, icons, scripture, ‘‘(a) FINDINGS.—The Congress finds that— Secretary of the Department of Agriculture. or other symbols; ‘‘(1) establishing unduly rigid or uniform ‘‘(3) NEW MARKETS VENTURE CAPITAL COM- in order to be a program participant. educational qualification for counselors and PANY.—The term ‘New Markets Venture Cap- ‘‘(e) EMPLOYMENT PRACTICES.—Nothing in other personnel in drug treatment programs ital company’ means a company that— this section shall be construed to modify or may undermine the effectiveness of such pro- ‘‘(A) has been granted final approval by the affect the provisions of any other Federal or grams; and Administration under section 354(e); and State law or regulation that relates to dis- ‘‘(2) such educational requirements for ‘‘(B) has entered into a participation agree- crimination in employment. A religious or- counselors and other personnel may hinder ment with the Administration. ganization’s exemption provided under sec- or prevent the provision of needed drug ‘‘(4) OPERATIONAL ASSISTANCE.—The term tion 702 of the Civil Rights Act of 1964 re- treatment services. ‘operational assistance’ means management, garding employment practices shall not be ‘‘(b) NONDISCRIMINATION.—In determining marketing, and other technical assistance affected by its participation in, or receipt of whether personnel of a program participant that assists a small business concern with funds from, a designated program. that has a record of successful drug treat- business development. ‘‘(f) RIGHTS OF PROGRAM BENEFICIARIES.— ment for the preceding three years have sat- ‘‘(5) PARTICIPATION AGREEMENT.—The term ‘‘(1) IN GENERAL.—If an individual who is a isfied State or local requirements for edu- ‘participation agreement’ means an agree- program beneficiary or a prospective pro- cation and training, a State or local govern- ment, between the Administration and a gram beneficiary objects to the religious ment shall not discriminate against edu- company granted final approval under sec- character of a program participant, within a cation and training provided to such per- tion 354(e), that— reasonable period of time after the date of sonnel by a religious organization, so long as ‘‘(A) details the company’s operating plan such objection such program participant such education and training includes basic and investment criteria; and shall refer such individual to, and the appro- content substantially equivalent to the con- ‘‘(B) requires the company to make invest- priate Federal, State, or local government tent provided by nonreligious organizations ments in smaller enterprises at least 80 per- that administers a designated program or is that the State or local government would cent of which are located in low- or mod- a program participant shall provide to such credit for purposes of determining whether erate-income geographic areas. individual (if otherwise eligible for such the relevant requirements have been satis- ‘‘(6) SPECIALIZED SMALL BUSINESS INVEST- services), program services that— fied.’’. MENT COMPANY.—The term ‘specialized small

VerDate 11-MAY-2000 03:15 Jul 26, 2000 Jkt 079060 PO 00000 Frm 00034 Fmt 4634 Sfmt 0634 E:\CR\FM\A25JY7.012 pfrm02 PsN: H25PT1 July 25, 2000 CONGRESSIONAL RECORD — HOUSE H6813 business investment company’ means any ‘‘(2) information regarding the community vide operational assistance to smaller enter- small business investment company that— development finance or relevant venture prises expected to be financed by the com- ‘‘(A) invests solely in small business con- capital qualifications and general reputation pany, each conditionally approved cerns that contribute to a well-balanced na- of the company’s management; company— tional economy by facilitating ownership in ‘‘(3) a description of how the company in- ‘‘(A) must have binding commitments (for such concerns by persons whose participa- tends to work with community organizations contribution in cash or in kind)— tion in the free enterprise system is ham- and to seek to address the unmet capital ‘‘(i) from any sources other than the Ad- pered because of social or economic dis- needs of the communities served; ministration that meet criteria established advantages; ‘‘(4) a proposal describing how the com- by the Administration; ‘‘(B) is organized or chartered under State pany will use the grant funds provided under ‘‘(ii) payable or available over a multiyear business or nonprofit corporations statutes, this part to provide operational assistance to period acceptable to the Administration (not or formed as a limited partnership; and smaller enterprises financed by the com- to exceed 10 years); and ‘‘(C) was licensed under section 301(d), as in pany, including information regarding ‘‘(iii) in an amount not less than 30 percent effect before September 30, 1996. whether the company will use licensed pro- of the total amount of capital and commit- ‘‘SEC. 352. PURPOSES. fessionals, where applicable, on the com- ments raised under paragraph (1); ‘‘The purposes of the New Markets Venture pany’s staff or from an outside entity; ‘‘(B) must have purchased an annuity— Capital Program established under this part ‘‘(5) with respect to binding commitments ‘‘(i) from an insurance company acceptable are— to be made to the company under this part, to the Administration; ‘‘(1) to promote economic development and an estimate of the ratio of cash to in-kind ‘‘(ii) using funds (other than the funds the creation of wealth and job opportunities contributions; raised under paragraph (1)) from any source in low- or moderate-income geographic areas ‘‘(6) a description of the criteria to be used other than the Administration; and and among individuals living in such areas to evaluate whether and to what extent the ‘‘(iii) that yields cash payments over a by encouraging developmental venture cap- company meets the objectives of the pro- multiyear period acceptable to the Adminis- ital investments in smaller enterprises pri- gram established under this part; tration (not to exceed 10 years) in an amount marily located in such areas; and ‘‘(7) information regarding the manage- not less than 30 percent of the total amount ‘‘(2) to establish a developmental venture ment and financial strength of any parent of capital and commitments raised under capital program, with the mission of address- firm, affiliated firm, or any other firm essen- paragraph (1); or ing the unmet equity investment needs of tial to the success of the company’s business ‘‘(C) must have binding commitments (for small enterprises located in low- and mod- plan; and contributions in cash or in kind) of the type erate-income geographic areas, to be admin- ‘‘(8) such other information as the Admin- described in subparagraph (A) and must have istered by the Administration— istration may require. purchased an annuity of the type described ‘‘(c) CONDITIONAL APPROVAL.— ‘‘(A) to enter into participation agree- in subparagraph (B), which in the aggregate ‘‘(1) IN GENERAL.—From among companies ments with New Markets Venture Capital make available, over a multiyear period ac- submitting applications under subsection companies; ceptable to the Administration (not to ex- (b), the Administration shall, in accordance ‘‘(B) to guarantee debentures of New Mar- ceed 10 years), an amount not less than 30 with this subsection, conditionally approve kets Venture Capital companies to enable percent of the total amount of capital and companies to participate in the New Markets each such company to make developmental commitments raised under paragraph (1). Venture Capital Program. venture capital investments in smaller en- ‘‘(e) FINAL APPROVAL.—The Administration ‘‘(2) SELECTION CRITERIA.—In selecting terprises in low- or moderate-income geo- shall grant to a company conditionally ap- companies under paragraph (1), the Adminis- graphic areas; and proved under subsection (c) final approval to tration shall consider the following: ‘‘(C) to make grants to New Markets Ven- participate in the program established under ‘‘(A) The likelihood that the company will ture Capital companies, and to other enti- this part after the company has met the re- meet the goals of its business plan. ties, for the purpose of providing operational quirements set forth in subsection (d). assistance to smaller enterprises financed, or ‘‘(B) The experience and background of the ‘‘SEC. 355. DEBENTURES. expected to be financed, by such companies. company’s management team. ‘‘(C) The need for developmental venture ‘‘(a) IN GENERAL.—The Administration ‘‘SEC. 353. ESTABLISHMENT. may guarantee the timely payment of prin- ‘‘In accordance with this part, the Admin- capital investments in the geographic areas cipal and interest, as scheduled, on deben- istration shall establish a New Markets Ven- in which the company intends to invest. tures issued by any New Markets Venture ture Capital Program, under which the Ad- ‘‘(D) The extent to which the company will Capital company. ministration may— concentrate its activities on serving the geo- ‘‘(b) TERMS AND CONDITIONS.—The Adminis- ‘‘(1) enter into participation agreements graphic areas in which it intends to invest. tration may make guarantees under this sec- with companies granted final approval under ‘‘(E) The likelihood that the company will tion on such terms and conditions as it section 354(e) for the purposes set forth in be able to satisfy the conditions under sub- deems appropriate, except that the term of section 352; section (d). any debenture guaranteed under this section ‘‘(2) guarantee the debentures issued by ‘‘(F) The extent to which the activities shall not exceed 15 years. New Markets Venture Capital companies as proposed by the company will expand eco- ‘‘(c) FULL FAITH AND CREDIT OF THE UNITED provided in section 355; and nomic opportunities in the geographic areas STATES.—The full faith and credit of the ‘‘(3) make grants to New Markets Venture in which the company intends to invest. United States is pledged to pay all amounts Capital companies, and to other entities, ‘‘(G) The strength of the company’s pro- that may be required to be paid under any under section 358. posal to provide operational assistance under guarantee under this part. ‘‘SEC. 354. SELECTION OF NEW MARKETS VEN- this part as the proposal relates to the abil- ‘‘(d) MAXIMUM GUARANTEE.— TURE CAPITAL COMPANIES. ity of the applicant to meet applicable cash ‘‘(1) IN GENERAL.—Under this section, the ‘‘(a) ELIGIBILITY.—A company shall be eli- requirements and properly utilize in-kind gible to apply to participate, as a New Mar- contributions, including the use of resources Administration may guarantee the deben- kets Venture Capital company, in the pro- for the services of licensed professionals tures issued by a New Markets Venture Cap- gram established under this part if— whether provided by persons on the com- ital company only to the extent that the ‘‘(1) the company is a newly formed for- pany’s staff or by persons outside of the com- total face amount of outstanding guaranteed profit entity or a newly formed for-profit pany. debentures of such company does not exceed subsidiary of an existing entity; ‘‘(H) Any other factors deemed appropriate 150 percent of the private capital of the com- ‘‘(2) the company has a management team by the Administration. pany, as determined by the Administration. with experience in community development ‘‘(3) NATIONWIDE DISTRIBUTION.—The Ad- ‘‘(2) TREATMENT OF CERTAIN FEDERAL financing or relevant venture capital financ- ministration shall select companies under FUNDS.—For the purposes of paragraph (1), ing; and paragraph (1) in such a way that promotes private capital shall include capital that is ‘‘(3) the company has a primary objective investment nationwide. considered to be Federal funds, if such cap- of economic development of low- or mod- ‘‘(d) REQUIREMENTS TO BE MET FOR FINAL ital is contributed by an investor other than erate-income geographic areas. APPROVAL.—The Administration shall grant an agency or department of the Federal Gov- ‘‘(b) APPLICATION.—To participate, as a each conditionally approved company a pe- ernment. New Markets Venture Capital company, in riod of time, not to exceed 2 years, to satisfy ‘‘SEC. 356. ISSUANCE AND GUARANTEE OF TRUST the program established under this part a the following requirements: CERTIFICATES. company meeting the eligibility require- ‘‘(1) CAPITAL REQUIREMENT.—Each condi- ‘‘(a) ISSUANCE.—The Administration may ments set forth in subsection (a) shall sub- tionally approved company must raise not issue trust certificates representing owner- mit an application to the Administration less than $5,000,000 of private capital or bind- ship of all or a fractional part of debentures that includes— ing capital commitments from 1 or more in- issued by a New Markets Venture Capital ‘‘(1) a business plan describing how the vestors (other than agencies or departments company and guaranteed by the Administra- company intends to make successful devel- of the Federal Government) who meet cri- tion under this part, if such certificates are opmental venture capital investments in teria established by the Administration. based on and backed by a trust or pool ap- identified low- or moderate-income geo- ‘‘(2) NONADMINISTRATION RESOURCES FOR proved by the Administration and composed graphic areas; OPERATIONAL ASSISTANCE.—In order to pro- solely of guaranteed debentures.

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‘‘(b) GUARANTEE.— tion 3(a)(42) of the Securities Exchange Act ‘‘(2) MATCHING REQUIREMENT.—The Admin- ‘‘(1) IN GENERAL.—The Administration of 1934 (15 U.S.C. 78c(a)(42)), trust certificates istration may require, as a condition of any may, under such terms and conditions as it issued under this section shall not be treated supplemental grant made under this sub- deems appropriate, guarantee the timely as government securities for the purposes of section, that the company or entity receiv- payment of the principal of and interest on that Act. ing the grant provide from resources (in cash trust certificates issued by the Administra- ‘‘SEC. 357. FEES. or in kind), other than those provided by the tion or its agents for purposes of this sec- ‘‘Except as provided in section 356(d), the Administration, a matching contribution tion. Administration may charge such fees as it equal to the amount of the supplemental ‘‘(2) LIMITATION.—Each guarantee under deems appropriate with respect to any guar- grant. this subsection shall be limited to the extent antee or grant issued under this part. ‘‘(c) LIMITATION.—None of the assistance of principal and interest on the guaranteed ‘‘SEC. 358. OPERATIONAL ASSISTANCE GRANTS. made available under this section may be debentures that compose the trust or pool. ‘‘(a) IN GENERAL.— used for any operating expense of a New Mar- ‘‘(3) PREPAYMENT OR DEFAULT.—In the ‘‘(1) AUTHORITY.—In accordance with this kets Venture Capital company or a special- event that a debenture in a trust or pool is section, the Administration may make ized small business investment company. prepaid, or in the event of default of such a grants to New Markets Venture Capital com- ‘‘SEC. 359. BANK PARTICIPATION. debenture, the guarantee of timely payment panies and to other entities, as authorized by ‘‘(a) IN GENERAL.—Except as provided in of principal and interest on the trust certifi- this part, to provide operational assistance subsection (b), any national bank, any mem- cates shall be reduced in proportion to the to smaller enterprises financed, or expected ber bank of the Federal Reserve System, and amount of principal and interest such pre- to be financed, by such companies or other (to the extent permitted under applicable paid debenture represents in the trust or entities. State law) any insured bank that is not a pool. Interest on prepaid or defaulted deben- ‘‘(2) TERMS.—Grants made under this sub- member of such system, may invest in any tures shall accrue and be guaranteed by the section shall be made over a multiyear pe- New Markets Venture Capital company, or Administration only through the date of riod not to exceed 10 years, under such other in any entity established to invest solely in payment of the guarantee. At any time dur- terms as the Administration may require. New Markets Venture Capital companies. ing its term, a trust certificate may be ‘‘(3) GRANTS TO SPECIALIZED SMALL BUSI- ‘‘(b) LIMITATION.—No bank described in called for redemption due to prepayment or NESS INVESTMENT COMPANIES.— subsection (a) may make investments de- default of all debentures. ‘‘(A) AUTHORITY.—In accordance with this scribed in such subsection that are greater ‘‘(c) FULL FAITH AND CREDIT OF THE UNITED section, the Administration may make than 5 percent of the capital and surplus of STATES.—The full faith and credit of the grants to specialized small business invest- the bank. United States is pledged to pay all amounts ment companies to provide operational as- that may be required to be paid under any ‘‘SEC. 360. FEDERAL FINANCING BANK. sistance to smaller enterprises financed, or guarantee of a trust certificate issued by the ‘‘Section 318 shall not apply to any deben- Administration or its agents under this sec- expected to be financed, by such companies ture issued by a New Markets Venture Cap- tion. after the effective date of the New Markets ital company under this part. ‘‘(d) FEES.—The Administration shall not Venture Capital Program Act of 2000. ‘‘SEC. 361. REPORTING REQUIREMENTS. ‘‘(B) USE OF FUNDS.— collect a fee for any guarantee of a trust cer- ‘‘Each New Markets Venture Capital com- ‘‘(i) IN GENERAL.—The proceeds of a grant tificate under this section, but any agent of pany that participates in the program estab- made under this paragraph may be used by the Administration may collect a fee ap- lished under this part shall provide to the the company receiving such grant only to proved by the Administration for the func- Administration such information as the Ad- provide operational assistance in connection tions described in subsection (f)(2). ministration may require, including— with an equity investment (made with cap- ‘‘(e) SUBROGATION AND OWNERSHIP ‘‘(1) information related to the measure- ital raised after the effective date of the New RIGHTS.— ment criteria that the company proposed in Markets Venture Capital Program Act of ‘‘(1) SUBROGATION.—In the event the Ad- its program application; and 2000) in a business located in a low- or mod- ministration pays a claim under a guarantee ‘‘(2) in each case in which the company erate-income geographic area. issued under this section, it shall be sub- under this part makes an investment in, or a ‘‘(ii) ADDITIONAL LIMITATION.—Operational rogated fully to the rights satisfied by such loan or grant to, a business that is not lo- assistance referred to in clause (i) may not payment. cated in a low- or moderate-income geo- be provided in connection with more than 1 ‘‘(2) OWNERSHIP RIGHTS.—No Federal, State, graphic area, a report on the number and equity investment. or local law shall preclude or limit the exer- percentage of employees of the business who ‘‘(C) SUBMISSION OF PLANS.—A specialized cise by the Administration of its ownership reside in such areas. rights in the debentures residing in a trust small business investment company shall be or pool against which trust certificates are eligible for a grant under this section only if ‘‘SEC. 362. EXAMINATIONS. issued under this section. the company submits to the Administrator, ‘‘(a) IN GENERAL.—Each New Markets Ven- ‘‘(f) MANAGEMENT AND ADMINISTRATION.— in such form and manner as the Adminis- ture Capital company that participates in ‘‘(1) REGISTRATION.— trator may require, a plan for use of the the program established under this part shall ‘‘(A) IN GENERAL.—The Administration grant. be subject to examinations made at the di- may provide for a central registration of all ‘‘(4) GRANT AMOUNT.— rection of the Investment Division of the Ad- trust certificates issued under this section. ‘‘(A) NEW MARKETS VENTURE CAPITAL COM- ministration in accordance with this section. ‘‘(B) FORMS OF REGISTRATION.—Nothing in PANIES.—The amount of a grant made under ‘‘(b) ASSISTANCE OF PRIVATE SECTOR ENTI- this subsection shall prohibit the use of a this subsection to a New Markets Venture TIES.—Examinations under this section may book entry or other electronic form of reg- Capital company shall be equal to the re- be conducted with the assistance of a private istration for trust certificates. sources (in cash or in kind) raised by the sector entity that has both the qualifica- ‘‘(2) CONTRACTING OF FUNCTIONS.— company under with section 354(d)(2). tions and the expertise necessary to conduct ‘‘(A) IN GENERAL.—The Administration ‘‘(B) OTHER ENTITIES.—The amount of a such examinations. may contract with an agent or agents to grant made under this subsection to any en- ‘‘(c) COSTS.— carry out on behalf of the Administration tity other than a New Markets Venture cap- ‘‘(1) ASSESSMENT.— the pooling and the central registration ital company shall be equal to the resources ‘‘(A) IN GENERAL.—The Administration functions provided for in this section includ- (in cash or in kind) raised by the entity in may assess the cost of examinations under ing, notwithstanding any other provision of accordance with the requirements applicable this section, including compensation of the law— to New Markets Venture Capital companies examiners, against the company examined. ‘‘(i) maintenance, on behalf of and under set forth in section 354(d)(2). ‘‘(B) PAYMENT.—Any company against the direction of the Administration, of such ‘‘(5) PRO RATA REDUCTIONS.—If the amount which the Administration assesses costs commercial bank accounts or investments in made available to carry out this section is under this paragraph shall pay such costs. obligations of the United States as may be insufficient for the Administration to pro- ‘‘(2) DEPOSIT OF FUNDS.—Funds collected necessary to facilitate the creation of trusts vide grants in the amounts provided for in under this section shall be deposited in the or pools backed by debentures guaranteed paragraph (4), the Administration shall account for salaries and expenses of the Ad- under this part; and make pro rata reductions in the amounts ministration. ‘‘(ii) the issuance of trust certificates to fa- otherwise payable to each company and enti- ‘‘SEC. 363. INJUNCTIONS AND OTHER ORDERS. cilitate the creation of such trusts or pools. ty under such paragraph. ‘‘(a) IN GENERAL.—Whenever, in the judg- ‘‘(B) FIDELITY BOND OR INSURANCE REQUIRE- ‘‘(b) SUPPLEMENTAL GRANTS.— ment of the Administration, a New Markets MENT.—Any agent performing functions on ‘‘(1) IN GENERAL.—The Administration may Venture Capital company or any other per- behalf of the Administration under this para- make supplemental grants to New Markets son has engaged or is about to engage in any graph shall provide a fidelity bond or insur- Venture Capital companies and to other en- acts or practices which constitute or will ance in such amounts as the Administration tities, as authorized by this part, under such constitute a violation of any provision of determines to be necessary to fully protect terms as the Administration may require, to this Act, or of any rule or regulation under the interests of the United States. provide additional operational assistance to this Act, or of any order issued under this ‘‘(3) APPLICABILITY OF THE SECURITIES EX- smaller enterprises financed, or expected to Act, the Administration may make applica- CHANGE ACT OF 1934.—Notwithstanding sec- be financed, by the companies. tion to the proper district court of the

VerDate 11-MAY-2000 03:15 Jul 26, 2000 Jkt 079060 PO 00000 Frm 00036 Fmt 4634 Sfmt 0634 E:\CR\FM\A25JY7.013 pfrm02 PsN: H25PT1 July 25, 2000 CONGRESSIONAL RECORD — HOUSE H6815

United States or a United States court of ‘‘(b) FIDUCIARY DUTIES.—It shall be unlaw- made available to a company licensed under any place subject to the jurisdiction of the ful for any officer, director, employee, agent, section 301(c) of this Act shall be determined United States for an order enjoining such or other participant in the management or by the amount of such company’s private acts or practices, or for an order enforcing conduct of the affairs of a New Markets Ven- capital— compliance with such provision, rule, regula- ture Capital company to engage in any act ‘‘(i) if the company has private capital of tion, or order, and such courts shall have ju- or practice, or to omit any act or practice, in not more than $15,000,000, the total amount risdiction of such actions and, upon a show- breach of the person’s fiduciary duty as such of leverage shall not exceed 300 percent of ing by the Administration that such New officer, director, employee, agent, or partici- private capital; Markets Venture Capital company or other pant if, as a result thereof, the company suf- ‘‘(ii) if the company has private capital of person has engaged or is about to engage in fers or is in imminent danger of suffering fi- more than $15,000,000 but not more than any such acts or practices, a permanent or nancial loss or other damage. $30,000,000, the total amount of leverage shall temporary injunction, restraining order, or ‘‘(c) UNLAWFUL ACTS.—Except with the not exceed $45,000,000 plus 200 percent of the other order, shall be granted without bond. written consent of the Administration, it amount of private capital over $15,000,000; ‘‘(b) JURISDICTION.—In any proceeding shall be unlawful— and under subsection (a), the court as a court of ‘‘(1) for any person to take office as an offi- ‘‘(iii) if the company has private capital of equity may, to such extent as it deems nec- cer, director, or employee of any New Mar- more than $30,000,000, the total amount of le- essary, take exclusive jurisdiction of the kets Venture Capital company, or to become verage shall not exceed $75,000,000 plus 100 New Market Venture Capital company and an agent or participant in the conduct of the percent of the amount of private capital over the assets thereof, wherever located, and the affairs or management of such a company, if $30,000,000 but not to exceed an additional court shall have jurisdiction in any such pro- the person— $15,000,000. ceeding to appoint a trustee or receiver to ‘‘(A) has been convicted of a felony, or any ‘‘(B) ADJUSTMENTS.— hold or administer under the direction of the other criminal offense involving dishonesty ‘‘(i) IN GENERAL.—The dollar amounts in court the assets so possessed. or breach of trust, or clauses (i), (ii), and (iii) of subparagraph (A) ‘‘(c) ADMINISTRATION AS TRUSTEE OR RE- ‘‘(B) has been found civilly liable in dam- shall be adjusted annually to reflect in- CEIVER.— ages, or has been permanently or tempo- creases in the Consumer Price Index estab- ‘‘(1) AUTHORITY.—The Administration may rarily enjoined by an order, judgment, or de- lished by the Bureau of Labor Statistics of act as trustee or receiver of a New Markets cree of a court of competent jurisdiction, by the Department of Labor. Venture Capital company. reason of any act or practice involving fraud, (ii) INITIAL ADJUSTMENTS.—The initial ad- ‘‘(2) APPOINTMENT.—Upon request of the or breach of trust; and justments made under this subparagraph Administration, the court may appoint the ‘‘(2) for any person continue to serve in after the date of enactment of the Small Administration to act as a trustee or re- any of the capacities described in paragraph Business Reauthorization Act of 1997 shall ceiver of a New Markets Venture Capital (1), if— reflect only increases from March 31, 1993. company unless the court deems such ap- ‘‘(A) the person is convicted of a felony, or ‘‘(C) INVESTMENTS IN LOW- OR MODERATE IN- pointment inequitable or otherwise inappro- any other criminal offense involving dishon- COME AREAS.—In calculating the outstanding priate by reason of the special circumstances esty or breach of trust, or leverage of a company for the purposes of involved. ‘‘(B) the person is found civilly liable in subparagraph (A), the Administrator shall ‘‘SEC. 364. ADDITIONAL PENALTIES FOR NON- damages, or is permanently or temporarily not include the amount of the cost basis of COMPLIANCE. enjoined by an order, judgment, or decree of any equity investment made by the company ‘‘(a) IN GENERAL.—With respect to any New a court of competent jurisdiction, by reason in a smaller enterprise located in a low- or Markets Venture Capital company that vio- of any act or practice involving fraud or moderate-income geographic area (as defined lates or fails to comply with any of the pro- breach of trust. in section 351), to the extent that the total of visions of this Act, of any regulation issued ‘‘SEC. 366. REMOVAL OR SUSPENSION OF DIREC- such amounts does not exceed 50 percent of under this Act, or of any participation agree- the company’s private capital.’’. ment entered into under this Act, the Ad- TORS OR OFFICERS. (2) MAXIMUM AGGREGATE LEVERAGE.—Sec- ministration may in accordance with this ‘‘Using the procedures for removing or sus- pending a director or an officer of a licensee tion 303(b)(4) of the Small Business Invest- section— ment Act of 1958 (15 U.S.C. 683(b)(4)) is ‘‘(1) void the participation agreement be- set forth in section 313 (to the extent such procedures are not inconsistent with the re- amended by adding at the end the following tween the Administration and the company; new subparagraph: and quirements of this part), the Administration ‘‘(D) INVESTMENTS IN LOW- OR MODERATE IN- ‘‘(2) cause the company to forfeit all of the may remove or suspend any director or offi- COME AREAS.—In calculating the aggregate rights and privileges derived by the company cer of any New Markets Venture Capital company. outstanding leverage of a company for the from this Act. purposes of subparagraph (A), the Adminis- ‘‘(b) ADJUDICATION OF NONCOMPLIANCE.— ‘‘SEC. 367. REGULATIONS. trator shall not include the amount of the ‘‘(1) IN GENERAL.—Before the Administra- ‘‘The Administration may issue such regu- cost basis of any equity investment made by tion may cause a New Markets Venture Cap- lations as it deems necessary to carry out the company in a smaller enterprise located ital company to forfeit rights or privileges the provisions of this part in accordance in a low- or moderate-income geographic under subsection (a), a court of the United with its purposes. area (as defined in section 351), to the extent States of competent jurisdiction must find ‘‘SEC. 368. AUTHORIZATIONS OF APPROPRIA- that the total of such amounts does not ex- that the company committed a violation, or TIONS. ceed 50 percent of the company’s private cap- failed to comply, in a cause of action ‘‘(a) IN GENERAL.—For fiscal years 2000 ital.’’. brought for that purpose in the district, ter- through 2005, the Administration is author- (e) BANKRUPTCY EXEMPTION FOR NEW MAR- ritory, or other place subject to the jurisdic- ized to be appropriated, to remain available KETS VENTURE CAPITAL COMPANIES.—Section tion of the United States, in which the prin- until expended— 109(b)(2) of title 11, United States Code, is cipal office of the company is located. ‘‘(1) such subsidy budget authority as may amended by inserting ‘‘a New Markets Ven- ‘‘(2) PARTIES AUTHORIZED TO FILE CAUSES OF be necessary to guarantee $150,000,000 of de- ture Capital company as defined in section ACTION.—Each cause of action brought by the bentures under this part; and 351 of the Small Business Investment Act of United States under this subsection shall be ‘‘(2) $30,000,000 to make grants under this 1958,’’ after ‘‘homestead association,’’. brought by the Administration or by the At- part. (f) FEDERAL SAVINGS ASSOCIATIONS.—Sec- torney General. ‘‘(b) FUNDS COLLECTED FOR EXAMINA- tion 5(c)(4) of the Home Owners’ Loan Act (12 ‘‘SEC. 365. UNLAWFUL ACTS AND OMISSIONS; TIONS.—Funds deposited under section U.S.C. 1464(c)(4)) is amended by adding at the BREACH OF FIDUCIARY DUTY. 362(c)(2) are authorized to be appropriated end the following: ‘‘(a) PARTIES DEEMED TO COMMIT A VIOLA- only for the costs of examinations under sec- ‘‘(F) NEW MARKETS VENTURE CAPITAL COM- TION.—Whenever any New Markets Venture tion 362 and for the costs of other oversight PANIES.—A Federal savings association may Capital company violates any provision of activities with respect to the program estab- invest in stock, obligations, or other securi- this Act, of a regulation issued under this lished under this part.’’. ties of any New Markets Venture Capital Act, or of a participation agreement entered (c) CONFORMING AMENDMENT.—Section company as defined in section 351 of the into under this Act, by reason of its failure 20(e)(1)(C) of the Small Business Act (15 Small Business investment Act of 1958, ex- to comply with its terms or by reason of its U.S.C 631 note) is amended by inserting cept that a Federal savings association may engaging in any act or practice that con- ‘‘part A of’’ before ‘‘title III’’. not make any investment under this sub- stitutes or will constitute a violation there- (d) CALCULATION OF MAXIMUM AMOUNT OF paragraph if its aggregate outstanding in- of, such violation shall also be deemed to be SBIC LEVERAGE.— vestment under this subparagraph would ex- a violation and an unlawful act committed (1) MAXIMUM LEVERAGE.—Section 303(b)(2) ceed 5 percent of the capital and surplus of by any person who, directly or indirectly, of the Small Business Investment Act of 1958 such savings association.’’. authorizes, orders, participates in, causes, (15 U.S.C. 683(b)(2)) is amended to read as fol- SEC. 706. BUSINESSLINC GRANTS AND COOPERA- brings about, counsels, aids, or abets in the lows: TIVE AGREEMENTS. commission of any acts, practices, or trans- ‘‘(2) MAXIMUM LEVERAGE.— Section 8 of the Small Business Act (15 actions that constitute or will constitute, in ‘‘(A) IN GENERAL.—After March 31, 1993, the U.S.C. 637) is amended by adding at the end whole or in part, such violation. maximum amount of outstanding leverage the following:

VerDate 11-MAY-2000 03:15 Jul 26, 2000 Jkt 079060 PO 00000 Frm 00037 Fmt 4634 Sfmt 0634 E:\CR\FM\A25JY7.013 pfrm02 PsN: H25PT1 H6816 CONGRESSIONAL RECORD — HOUSE July 25, 2000 ‘‘(m) BUSINESSLINC GRANTS AND COOPERA- need to revitalize our cities and many TECHNICAL EXPLANATION OF THE TAX TIVE AGREEMENTS.— of our depressed rural areas. This is the PROVISIONS IN H.R. 4923 THE ‘‘COMMU- ‘‘(1) IN GENERAL.—In accordance with this day we will provide communities the NITY RENEWAL AND NEW MARKETS subsection, the Administrator may make ACT OF 2000’’ tools they need to once again become grants to and enter into cooperative agree- (Prepared by the Staff of the Joint ments with any coalition of private entities, self-reliant, and with that we give peo- Committee on Taxation) public entities, or any combination of pri- ple more control over their own fu- I. INTRODUCTION vate and public entities— tures. ‘‘(A) to expand business-to-business rela- This document, prepared by the staff of the tionships between large and small busi- The Community Renewal and New Joint Committee on Taxation, provides a nesses; and Markets Act breathes new life into technical explanation of the tax provisions ‘‘(B) to provide businesses, directly or indi- areas that have become America’s for- contained in H.R. 4923, the ‘‘Community Re- newal and New Markets Act of 2000.’’ rectly, with online information and a data- gotten communities. With this legisla- base of companies´ ´ that are interested in tion, we empower impoverished cities II. SUMMARY mentor-protege programs or community- and towns to rise above the perils of H.R. 4923, the ‘‘Community Renewal and based, state-wide, or local business develop- New Markets Act of 2000,’’ provides addi- ment programs. poverty. We give them the mechanisms tional tax incentives for targeted areas that ‘‘(2) MATCHING REQUIREMENT.—Subject to needed to mold faith, family, hard are identified as areas of pervasive poverty, subparagraph (B), the Administrator may work, and cooperation into oppor- high unemployment, and general economic make a grant to a coalition under paragraph tunity, while expanding the commu- distress. The bill also increases the limits (1) only if the coalition provides for activi- nity leaders’ ability to attract new in- with respect to the low-income housing tax ties described in paragraph (1)(A) or (1)(B) an credit and the private activity bond volume amount, either in kind or in cash, equal to vestment and grow existing businesses. caps. the grant amount. This bipartisan community renewal Tax incentives for renewal communities ‘‘(3) AUTHORIZATION OF APPROPRIATIONS.— There is authorized to be appropriated to initiative will provide poor inner cities The bill authorizes the Secretary of HUD carry out this subsection $6,600,000, to re- and rural areas with workable mecha- to designate up to 40 ‘‘renewal communities’’ main available until expended, for each of nisms that allow them to evaluate the from areas nominated by States and local fiscal years 2001 through 2003.’’. needs in their communities and address governments. At least eight of the des- them. This bill creates 40 renewal com- ignated renewal communities must be in The SPEAKER pro tempore (Mr. rural areas. In general, nominated areas are SIMPSON). Pursuant to the rule, the munities with targeted pro-growth tax ranked based on a formula that takes into gentleman from Pennsylvania (Mr. benefits, homeownership opportunities, account the area’s poverty rate, median in- ENGLISH) and the gentleman from New and other incentives that address the come, and unemployment rate. A nominated York (Mr. RANGEL) each will control 20 principal hurdles facing budding small area within the District of Columbia will be minutes. businesses: raising capital and main- designated as a renewal community (without regard to its ranking) beginning in 2003. The Chair recognizes the gentleman taining cash flow. from Pennsylvania (Mr. ENGLISH). A nominated area that is designated as a In a renewal community, individuals renewal community is eligible for the fol- GENERAL LEAVE would not pay capital gains taxes on lowing tax incentives during the period be- Mr. ENGLISH. Mr. Speaker, I ask the sale of renewal community busi- ginning July 1, 2001, and ending December 31, unanimous consent that all Members 2009: (1) a 100-percent capital gains exclusion may have 5 legislative days within nesses and business assets held for for capital gain from the sale of qualifying which to revise and extend their re- more than 5 years. Small businesses assets acquired after June 30, 2001, and before marks, and include extraneous mate- would also be able to expense up to January 1, 2010, and held for more than five rial on the bill, H.R. 4923. $35,000 more in equipment than they years; (2) a 15 percent wage credit to employ- The SPEAKER pro tempore. Is there are able to under current law. And ers for the first $10,000 of qualified wages those who revitalize buildings located paid to each employee who (i) is a resident of objection to the request of the gen- the renewal community, and (ii) performs tleman from Pennsylvania? in these renewal communities will re- substantially all employment services with- There was no objection. ceive a special deduction. in the renewal community in a trade or busi- Mr. ENGLISH. Madam Speaker, I ask Beyond that, this bill will stimulate ness of the employer; (3) a ‘‘commercial revi- unanimous consent that both sides in talization expenditure’’ that allows tax- State efforts to build the necessary in- this debate control an additional 10 payers (to the extent allocated by the appro- frastructure and rebuild economically minutes. priate State agency for the period after June The SPEAKER pro tempore. Is there depressed areas by accelerating the 30, 2001) to deduct either (i) 50 percent of objection to the request of the gen- scheduled increase in the amount of qualifying expenditures for the taxable year in which a qualified building is placed in tleman from Pennsylvania? tax exempt private bonds. Even more importantly, we will increase the service, or (ii) all of the qualifying expendi- Mr. RANGEL. Mr. Speaker, I am in tures ratably over a 10-year period beginning support of the bill and, under the rules amount of low-income tax credits a with the month in which such building is of the House, the time that is allocated State can allocate. This translates into placed in service; (4) an additional $35,000 of to me should more properly be allo- more and better housing opportunities section 179 expensing for qualified renewal cated to someone that is in opposition for low-income families. property placed in service after June 30, 2001 to the bill. The gentleman from Vir- and before January 1, 2010 by a renewal com- Today, through a variety of incen- munity business; (5) the expensing of certain ginia (Mr. SCOTT) is in opposition, and tives, we will create a fertile environ- environmental remediation expenditures in- so I ask that the 20 minutes allotted to ment for growth, with targeted pro- curred after June 30, 2001, and before Janu- me be yielded to him. growth tax benefits, regulatory relief, ary 1, 2010 within a renewal community; and The SPEAKER pro tempore. Does the savings accounts, and homeownership (6) an expansion of the Work Opportunity gentleman object to the additional 10 opportunities, as well as provide for Tax Credit with respect to qualified individ- minutes? uals who live in a renewal community. the inclusion of local faith-based orga- Mr. RANGEL. No, I have no objec- Extension and expansion of empowerment zone tion. nizations. This is an opportunity for incentives The SPEAKER pro tempore. There Congress to aid in lifting up those who The bill extends the designation of em- being no objection to the request of the have already been left behind during a powerment zone status for existing zones gentleman from Pennsylvania, the gen- time when many are enjoying the bene- (other than the D.C. Enterprise Zone) tleman from Virginia (Mr. SCOTT) will fits of a prospering economy. through December 31, 2009. In addition, the 20-percent wage credit is made available to control 30 minutes in opposition. With this legislation, we will truly The Chair recognizes the gentleman all existing empowerment zones beginning in make a difference in people’s lives and 2002 (and remains at the 20-percent rate). from Pennsylvania (Mr. ENGLISH). allow more people to participate in the Furthermore, $35,000 (rather than $20,000) of Mr. ENGLISH. Mr. Speaker, I yield additional section 179 expensing is available 1 American Dream. myself 2 ⁄4 minutes. for qualified zone property placed in service Today, Mr. Speaker, we will vote on Mr. Speaker, I submit for the RECORD mate- in taxable years beginning after December landmark legislation that will provide rial from the Joint Committee on Taxation rel- 31, 2001, by a qualified zone business. The bill our communities with the tools they evant to this bill. also extends an empowerment zone’s status

VerDate 11-MAY-2000 03:15 Jul 26, 2000 Jkt 079060 PO 00000 Frm 00038 Fmt 4634 Sfmt 0634 E:\CR\FM\A25JY7.013 pfrm02 PsN: H25PT1 July 25, 2000 CONGRESSIONAL RECORD — HOUSE H6817 as a ‘‘target area’’ under section 198 (thus nesses and residents in low-income commu- 70 percent of the households have incomes permitting expensing of certain environ- nities. A ‘‘low-income community’’ generally below 80 percent of the median income of mental remediation costs) for costs incurred is defined as census tracts with either (1) households within the local government ju- after December 31, 2001, and before January poverty rates of at least 20 percent, or (2) risdiction; (3) the unemployment rate is at 1, 2010. Also beginning in 2002, certain busi- median family income which does not exceed least 1.5 times the national unemployment nesses in existing empowerment zones (other 80 percent of the greater of metropolitan rate; and (4) the area is one of pervasive pov- than the D.C. Enterprise Zone) become eligi- area income or statewide median family in- erty, unemployment, and general distress. ble for more generous tax-exempt bond rules. come. Those areas with the highest average rank- The bill also authorizes Secretaries of HUD Improvements in the low-income housing tax ing of eligibility factors (1), (2), and (3) above and Agriculture to designate nine additional credit would be designated as renewal commu- empowerment zones (seven to be located in nities. A nominated area within the District The bill increases the low-income housing urban areas and two in rural areas). The new of Columbia becomes a renewal community credit cap to $1.75 per resident between 2001 empowerment zones must be designated by (without regard to its ranking of eligibility and 2006 as follows: January 1, 2002, and the tax incentives with factors) provided that it satisfies the area respect to the new empowerment zones gen- Applicable and eligibility requirements and the required erally are available during the period begin- Calendar year credit amount State and local commitments described ning on January 1, 2002, and ending on De- 2001 ...... $1.35 below. The Secretary of HUD shall take into cember 31, 2009. Businesses in the new em- 2002 ...... 1.45 account in selecting areas for designation powerment zones are eligible for the same 2003 ...... 1.55 the extent to which such areas have a high tax incentives that, under this bill, are avail- 2004 ...... 1.65 incidence of crime, as well as whether the able to existing zones (i.e., a 20-percent wage 2005 ...... 1.70 area has census tracts identified in the May credit, $35,000 of additional section 179 ex- 2006 ...... 1.75 12, 1998, report of the General Accounting Of- pensing, the enhanced tax-exempt financing In addition, beginning in 2001, the per cap- fice regarding the identification of economi- benefits, and expensing of certain environ- ita cap is modified so that less populous cally distressed areas. mental remediation costs). States are given a minimum of $2 million of There are no geographic size limitations The bill permits a taxpayer to roll over annual credit cap. The $1.75 per capita credit placed on renewal communities. Instead, the gain from the sale or exchange of any quali- cap and the $2 million amount is indexed for boundary of a renewal community must be fied empowerment zone asset held for more inflation beginning in 2007. The bill also continuous. In addition, the renewal commu- than 1 year where the taxpayer uses the pro- makes several programmatic changes to the nity must have a minimum population of ceeds to purchase other qualifying empower- credit. 4,000 if the community is located within a metropolitan statistical area (at least 1,000 ment zone assets (in the same zone) within 60 Acceleration of phase-in of increase in private in all other cases) and a maximum popu- days of the sale of the original asset. In gen- activity bond volume cap eral, a qualifying empowerment zone asset lation of not more than 200,000. The popu- The bill accelerates the scheduled phased- refers to a stock or partnership investment lation limitations do not apply to any re- in increases in the present-law annual State in, or assets acquired by, a qualifying busi- newal community that is entirely within an private activity bond volume limits to $75 ness within an empowerment zone that is Indian reservation. per resident of each State or $225 million (if Required State and local communities.—In purchased by a taxpayer after the date of en- greater). The increase is phased in as follows, order for an area to be designated as a re- actment of the bill. beginning in calendar year 2001: The bill increases to 60 percent (from 50 newal community, State and local govern- ments are required to submit (1) a written percent) the exclusion of gain from the sale Calendar year Volume limit of qualifying small business stock held more course of action in which the State and local than five years where such stock also satis- 2001 ...... $55 per resident ($165 million if greater) governments promise to take at least four fies the requirements of a qualifying busi- 2002 ...... $60 per resident ($180 million if greater) governmental actions within the nominated 2003 ...... $65 per resident ($195 million if greater) area from a specified list of actions, and (2) ness under the empowerment zone rules. The 2004, 2005, 2006 ...... $70 per resident ($210 million if greater) a list of at least four economic measures the provision applies to qualifying small busi- 2007 and thereafter .. $75 per resident ($225 million if greater) State and local governments promise to take ness stock that is purchased after the date of (from a specified list of measures) if the area enactment of the bill. III. EXPLANATION OF THE TAX PROVISIONS IN H.R. 4923 is designated as a renewal community. Provide new markets tax credit Empowerment zones and enterprise a commu- The bill creates a new tax credit for quali- A. Renewal Community Provisions (Secs. nities seeking designation as renewal commu- fied equity investments made after Decem- 101–103 of the Bill) nities.—An empowerment zone or enterprise ber 31, 2000, to acquire stock in a community PRESENT LAW community can apply for designation as a re- development entity (‘‘CDE’’). The maximum In recent years, provisions have been added newal community. If a renewal community annual amount of qualifying equity invest- to the Internal Revenue Code that target designation is granted, then an area’s des- ments is capped as follows: specific geographic areas for special Federal ignation as an empowerment zone or enter- income tax treatment. As described in great- prise community ceases as of the date the Maximum qualifying area’s designation as a renewal community Calendar year equity investment er detail below, empowerment zones and en- terprise communities generally provide tax takes effect. 2001 ...... $1.0 billion incentives for businesses that locate within Tax incentives for renewal communities 2002–2003 ...... $1.5 billion per year 2004–2005 ...... $2.0 billion per year certain geographic areas designated by the The following tax incentives generally 2006–2007 ...... $3.5 billion per year Secretaries of Housing and Urban Develop- would be available during the period begin- ment (‘‘HUD’’) and Agriculture. ning July 1, 2001, and ending December 31, The amount of the credit allowed to the in- EXPLANATION OF PROVISION 2009. vestor is (1) a five-percent credit for the year The bill authorizes the designation of 40 100-percent capital gain exclusion.—The bill in which the equity interest is purchased ‘‘renewal communities’’ within which special provides a 100-percent capital gains exclu- from the CDE and for the first two anniver- tax incentives will be available. sion for gain from the sale of a qualified sary dates after the purchase from the CDE, community asset acquired after June 30, 2001 and (2) a six percent on each anniversary Designation process and before January 1, 2010, and held for more date thereafter for the following four years. Designation of 40 renewal communities.—Sec- than five years. A ‘‘qualified community The credit is recaptured if the entity fails to retary of HUD is authorized to designate up asset’’ includes: (1) qualified community continue to be a CDE or the interest is re- to 40 ‘‘renewal communities’’ from areas stock (meaning original-issue stock pur- deemed within seven years. nominated by States and local governments. chased for cash in a renewal community A CDE is any domestic corporation or At least eight of the designated communities business); (2) a qualified community partner- partnership (1) whose primary mission is must be in rural areas. The Secretary of ship interest (meaning a partnership interest serving or providing investment capital for HUD is required to publish (within four acquired for cash in a renewal community low-income communities or low-income per- months after enactment) regulations de- business); and (3) qualified community busi- sons, (2) that maintains accountability to scribing the nomination and selection proc- ness property (meaning tangible property residents of low-income communities ess. Designations of renewal communities originally used in a renewal community through representation on governing or advi- are to be made within 24 months after such business by the taxpayer) that is purchased sory boards, and (3) is certified by the Treas- regulations are published. The designation of or substantially improved after June 30, 2001. ury Department as an eligible CDE. A quali- an areas as a renewal community generally A ‘‘renewal community business’’ is simi- fied equity investment means stock or a will be effective on July 1, 2001, and will ter- lar to the present-law definition of an enter- similar equity interest acquired directly minate after December 31, 2009. prise zone business. Property will continue from a CDE for cash. Substantially all of the Eligiblity criteria.—To be designated as a re- to be a qualified community asset if sold (or cash must be used by the CDE to make in- newal community, a nominated areas must otherwise transferred) to a subsequent pur- vestments in, or loans to, qualified active meet the following criteria: (1) each census chaser, provided that the property continues businesses located in low-income commu- tract must have a poverty rate of at least 20 to represent an interest in (or tangible prop- nities, or certain financial services to busi- percent; (2) in the case of urban area, at least erty used in) a renewal community business.

VerDate 25-JUL-2000 05:04 Jul 26, 2000 Jkt 079060 PO 00000 Frm 00039 Fmt 4634 Sfmt 0634 E:\CR\FM\A25JY7.023 pfrm02 PsN: H25PT1 H6818 CONGRESSIONAL RECORD — HOUSE July 25, 2000 The termination of an area’s status as a re- 198 (which permits the expensing of environ- maximum of $20 million for each principal newal community will not affect whether mental remediation costs). Thus, taxpayers user for all zones and communities) do not property is a qualified community asset, but can elect to treat certain environmental re- apply to qualifying bonds issued for Round II any gain attributable to the period before mediation expenditures that otherwise would empowerment zones. The tax incentives with July 1, 2001, or after December 31, 2014, will be capitalized as deductible in the year paid respect to the Round II empowerment zones not be eligible for the exclusion. or incurred. This provision applies to expend- generally are available during the 10-year pe- Renewal community employment credit.—A itures incurred after June 30, 2001, and before riod of 1999 through 2008. 15-percent wage credit is available to em- January 1, 2010. EXPLANATION OF PROVISION ployers for the first $10,000 of qualified wages Extension of work opportunity tax credit Extension of tax incentives for Round I and paid to each employee who (1) is a resident of (‘‘WOTC’’).—The bill expands the high-risk Round II empowerment zones the renewal community, and (2) performs youth and qualified summer youth cat- substantially all employment services with- egories in the WOTC to include qualified in- The designation of empowerment zone sta- in the renewal community in a trade or busi- dividuals who live in a renewal community. tus for Round I and Round II empowerment zones (other than the District of Columbia ness of the employer. The wage credit rate EFFECTIVE DATE applies to qualifying wages paid after June Enterprise Zone) is extended through Decem- Renewal communities must be designated ber 31, 2009. In addition, the 20-percent wage 30, 2001, and before January 1, 2010. within 24 months after publication of regula- Wages that qualify for the credit are wages credit is made available in all Round I and II tions by HUD. The tax benefits available in that are considered ‘‘qualified zone wages’’ empowerment zones for qualifying wages renewal communities are effective for the for purposes of the empowerment zone wage paid or incurred after December 31, 2001. The period beginning July 1, 2001, and ending De- credit (including coordination with the Work credit rate remains at 20 percent (rather cember 31, 2009. Opportunity Tax Credit). In general, any tax- than being phased down) through December able business carrying out activities in the B. Extension and Expansion of Empower- 31, 2009, in Round I and Round II empower- renewal community may claim the wage ment Zone Incentives (secs. 201–205 of the ment zones. credit. bill) In addition, $35,000 (rather than $20,000) of Commercial revitalization deduction.—The PRESENT LAW additional section 179 expensing is available bill allows each State to allocate up to $12 Round I empowerment zones for qualified zone property placed in service million of ‘‘commercial revitalization ex- The Omnibus Budget Reconciliation Act of in taxable years beginning after December penditures’’ to each renewal community lo- 1993 (‘‘OBRA 1993’’) authorized the designa- 31, 2001, by a qualified business in any of the cated within the State for each calendar tion of nine empowerment zones (‘‘Round I empowerment zones. Businesses in the D.C. year after 2001 and before 2010 ($6 million for empowerment zones’’) and 95 enterprise com- Enterprise Zone are entitled to the addi- the period of July 1, 2001 through December munities to provide tax incentives for busi- tional section 179 expensing until the termi- 31, 2001). The appropriate State agency will nesses to locate within targeted areas des- nation of the D.C. zone designation. The bill make the allocations pursuant to a qualified ignated by the Secretaries of HUD and Agri- also extends an empowerment zone’s status allocation plan. culture. The targeted areas must have a con- as a ‘‘targeted area’’ under section 198 (thus A ‘‘commercial revitalization expenditure’’ dition of pervasive poverty, high unemploy- permitting expensing of environmental re- means the cost of a new building or the cost ment, and general economic distress, and mediation costs). The bill applies to expenses of substantially rehabilitating an existing satisfy certain eligibility criteria, including incurred after December 31, 2001, and before building. The building must be used for com- specified poverty rates and population and January 1, 2010. Businesses located in Round I empower- mercial purposes and be located in a renewal geographic size limitations. Six of the em- ment zones (other than the D.C. Enterprise community. In the case of the rehabilitation powerment zones are located in urban areas Zone) also are eligible for the more generous of an existing building, the cost of acquiring and three are located in rural areas. The tax-exempt bond rules that apply under the building will be treated as qualifying ex- Taxpayer Relief Act of 1997 (‘‘1997 Act’’) au- present law to businesses in the Round II penditures only to the extent that such costs thorized the designation of two additional empowerment zones (sec. 1394(f)). The bill ap- do not exceed 30 percent of the other reha- Round I urban empowerment zones. bilitation expenditures. The qualifying ex- Businesses in the 11 Round I empowerment plies to tax-exempt bonds issued after De- penditures for any building cannot exceed $10 zones qualify for the following tax incen- cember 31, 2001. Bonds that have been issued million. tives: (1) a 20-percent wage credit for the by businesses in Round I zones before Janu- A taxpayer can elect either to (a) deduct first $15,000 of wages paid to a zone resident ary 1, 2002, are not taken into account in ap- one-half of the commercial revitalization ex- who works in the empowerment zone, (2) an plying the limitations on the amount of new penditures for the taxable year the building additional $20,000 of section 179 expensing for empowerment zone facility bonds that can be is placed in service or (b) amortize all the ex- qualifying zone property, and (3) expanded issued under the bill. penditures ratably over the 120-month period tax-exempt financing for certain qualifying Nine new empowerment zones beginning with the month the building is zone facilities. Businesses in the enterprise The Secretaries of HUD and Agriculture placed in service. No depreciation is allowed communities are eligible for the expanded are authorized to designate nine additional for amounts deducted under this provision. tax-exempt financing benefits, but not the empowerment zones (‘‘Round III empower- The adjusted basis is reduced by the amount other tax incentives available to empower- ment zones’’). Seven of the Round III em- of the commercial revitalization deduction, ment zones. The tax incentives with respect powerment zones would be located in urban and the deduction is treated as a deprecia- to the empowerment zones designated by areas, and two would be located in rural tion deduction in applying the depreciation OBRA 1993 generally are available during the areas. recapture rules (e.g., sec. 1250). 10-year period of 1995 through 2004. The tax The eligibility and selection criteria for The commercial revitalization deduction is incentives with respect to the two additional the Round III empowerment zones are the treated in the same manner as the low in- Round I empowerment zones generally are same as the criteria that applied to the come housing credit in applying the passive available during the 10-year period of 2000 Round II empowerment zones. The Round III loss rules (sec. 469). Thus, up to $25,000 of de- through 2009 (except for the wage credit, empowerment zones must be designated by ductions (together with the other deductions which expires after 2007). January 1, 2002, and the tax incentives with and credits not subject to the passive loss respect to the Round III empowerment zones limitation by reason of section 469(i)) are al- Round II empowerment zones generally are available during the period be- lowed to an individual taxpayer regardless of The 1997 Act also authorized the designa- ginning on January 1, 2002, and ending on De- the taxpayer’s adjusted gross income. The tion of 20 additional empowerment zones (‘‘Round II empowerment zones’’), of which cember 31, 2009. commercial revitalization deduction is al- Businesses in the Round III empowerment lowed in computing a taxpayer’s alternative 15 are located in urban areas and five are lo- cated in rural areas. Businesses in the Round zones are eligible for the same tax incentives minimum taxable income. that, under the bill, are available to Round I Additional section 179 expensing.—A renewal II empowerment zones are not eligible for and Round II empowerment zones (i.e., a 20- community business is allowed an additional the wage credit, but are eligible to receive percent wage credit, an additional $35,000 of $35,000 of section 179 expensing for qualified up to $20,000 of additional section 179 expens- section 179 expensing, and the enhanced tax- renewal property placed in service after June ing. Businesses in the Round II empower- exempt financing benefits presently avail- 30, 2001, and before January 1, 2010. The sec- ment zones also are eligible for more gen- able to Round II empowerment zones). The tion 179 expensing allowed to a taxpayer is erous tax-exempt financing benefits than Round III empowerment zones also are con- phased out by the amount by which 50 per- those available in the Round I empowerment sidered ‘‘targeted areas’’ for purposes of per- cent of the cost of qualified renewal property zones. Specifically, the tax-exempt financing mitting expensing of certain environmental placed in service during the year by the tax- benefits for the Round II empowerment zones remediation costs under section 198. payer exceeds $200,000. The term ‘‘qualified are not subject to the State private activity renewal property’’ is similar to the defini- bond volume caps (but are subject to sepa- EFFECTIVE DATE tion of ‘‘qualified zone property’’ under sec- rate per-zone volume limitations), and the The extension of the existing empower- tion 1397C. per-business size limitations that apply to ment zone designations is effective after the Expensing of environmental remediation costs the Round I empowerment zones and enter- date of enactment. (‘‘brownfields’’).—A renewal community is prise communities (i.e., $3 million for each The extension of the tax benefits to exist- treated as a ‘‘targeted area’’ under section qualified enterprise zone business with a ing empowerment zones (i.e., the expanded

VerDate 25-JUL-2000 05:04 Jul 26, 2000 Jkt 079060 PO 00000 Frm 00040 Fmt 4634 Sfmt 0634 E:\CR\FM\A25JY7.026 pfrm02 PsN: H25PT1 July 25, 2000 CONGRESSIONAL RECORD — HOUSE H6819 wage credit, the additional section 179 ex- income communities. For example, tax in- at least 20 percent (based on the most recent pensing, the brownfields designation, and the centives are available to taxpayers that in- census data), or (2) median family income more generous tax-exempt bond rules gen- vest in specialized small business investment which does not exceed 80 percent of the erally is effective after December 31, 2001. companies licensed by the Small Business greater of metropolitan area income or The new Round III empowerment zones Administration to make loans to, or equity statewide median family income (for a non- must be designated by January 1, 2002, and investments in, small businesses owned by metropolitan census tract, 80 percent of non- the tax incentives with respect to the Round persons who are socially or economically dis- metropolitan statewide median family in- III empowerment zones generally are avail- advantaged. come). able during the period beginning on January EXPLANATION OF PROVISION A ‘‘qualified active business’’ is defined as 1, 2002, and ending on December 31, 2009. The bill creates a new tax credit for quali- a business which satisfies the following re- C. Rollover of gain from the sale of a quali- fied equity investments made to acquire quirements: (1) at least 50 percent of the fied empowerment zone investment (sec. stock in a selected community development total gross income of the business is derived 206 of the bill) entity (‘‘CDE’’). The maximum annual from the active conduct of trade or business PRESENT LAW amount of qualifying equity investments is activities in low-income communities; (2) a In general, gain or loss is recognized on capped as follows: substantial portion of the use of the tangible any sale, exchange, or other disposition of property of such business is used within low- property. A taxpayer (other than a corpora- Calendar year Maximum qualifying equity investment income communities; (3) a substantial por- tion of the services performed for such busi- tion) may elect to roll over without payment 2001 ...... $1.0 billion of tax any capital gain realized upon the sale 2002–2003 ...... $1.5 billion per year ness by its employees is performed in low-in- of qualified small business stock held for 2004–2005 ...... $2.0 billion per year come communities; and (4) less than 5 per- more than six months where the taxpayer 2006–2007 ...... $3.5 billion per year cent of the average aggregate of unadjusted uses the proceeds to purchase other qualified bases of the property of such business is at- The amount of the new tax credit to the in- small business stock within 60 days of the tributable to certain financial property or to vestor (either the original purchaser or a sale of the original stock. collectibles held for sale to customers). subsequent holder) is (1) a five-percent credit EXPLANATION OF PROVISION There is no requirement that employees of for the year in which the equity interest is the business be residents of the low income Under the bill, a taxpayer can elect to roll purchased from the CDE and the first two community. over capital gain from the sale or exchange anniversary dates after the interest is pur- Rental of improved commercial real estate of any qualified empowerment zone asset chased from the CDE, and (2) a six percent located in a low-income community is a purchased after the date of enactment and credit on each anniversary date thereafter qualified active business, regardless of the held for more than one year (‘‘original zone for the following four years. The taxpayer’s characteristics of the commercial tenants of asset’’) where the taxpayer uses the proceeds basis in the investment is reduced by the the property. The purchase and holding of to purchase other qualifying empowerment amount of the credit (other than for pur- unimproved real estate is not a qualified ac- zone assets in the same zone (‘‘replacement poses of calculating the capital gain exclu- tive business. In addition, a qualified active zone asset’’) within 60 days of the sale of the sion under sections 1202, 1400B, and 1400F). business does not include (a) any business original zone asset. The holding period of the The credit is subject to the general business consisting predominantly of the develop- replacement zone asset includes the holding credit rules. ment or holding of intangibles for sale or li- period of the original zone asset, except that A CDE is any domestic corporation or cense; (b) operation of any facility described the replacement zone asset must actually be partnership (1) whose primary mission is in sec. 144(c)(6)(B); or (c) any business if a held for more than one year to qualify for serving or providing investment capital for significant equity interest in such business another tax-free rollover. The basis of the re- low-income communities or low-income per- is held by a person who also holds a signifi- placement zone asset is reduced by the gain sons, (2) that maintains accountability to cant equity interest in the CDE. A qualified not recognized on the rollover. However, if residents of low-income communities active business can include an organization the replacement zone asset is qualified small through representation on governing or advi- that is organized on a non-profit basis. business stock (as defined in sec. 1202), the sory boards, or otherwise and (3) is certified EFFECTIVE DATE exclusion under section 1202 would not apply by the Treasury Department as an eligible to gain accrued on the the original zone as- CDE. No later than 60 days after enactment, The provision is effective for qualified in- sets. A ‘‘qualified empowerment zone asset’’ the Treasury Department shall issue regula- vestment made after December 31, 2000. means an asset that would be a qualified tions that specify objective criteria to be F. INCREASE LOW-INCOME HOUSING TAX CRED- community asset if the empowerment zone used by the Treasury to allocate the credits IT CAP AND RELATED PROGRAM MODIFICA- were a renewal community (and the asset is among eligible CDEs. In allocating the cred- TIONS (SECS. 401–407 OF THE BILL) acquired after the date of enactment of the its, the Treasury Department will give pri- PRESENT LAW bill). Assets in the D.C. Enterprise Zone are ority to entities with records of having suc- The low-income housing tax credit may be not eligible for the tax-free rollover treat- cessfully provided capital or technical assist- claimed annually over a 10-year period for ment. ance to disadvantaged businesses or commu- the cost of rental housing occupied by ten- EFFECTIVE DATE nities. ants having incomes below specified levels. The provision is effective for qualifying as- If a CDE fails to sell equity interests to in- The credit percentage of newly constructed sets purchased after the date of enactment. vestors up to the amount authorized within or substantially rehabilitated housing that D. Increased exclusion of gain from the sale five years of the authorization, then the re- is not Federally subsidized is adjusted of qualifying empowerment zone stock maining authorization is canceled. The monthly by the IRS so that the 10 annual in- (sec. 207 of the bill) Treasury Department can authorize another stallments have a present value of 70 percent CDE to issue equity interests for the unused of the total qualified expenditures. The cred- PRESENT LAW portion. No authorization can be made after Under present law, an individual, subject it percentage for new substantially rehabili- 2014. tated housing also receiving most other Fed- to limitations, may exclude 50 percent of the A ‘‘qualified equity investment’’ is defined eral subsidies and for existing housing is cal- gain from the sale of qualifying small busi- as stock or a similar equity interest acquired culated to have a present value of 30 percent ness stock held more than five years (sec. directly from a CDE in exchange for cash. of the total qualified expenditures. The new 1202). Substantially all of the investment proceeds credit authority provided annually is $1.25 EXPLANATION OF PROVISION must be used by the CDE to make ‘‘qualified per resident of each State. Projects that also low-income community investments,’’ mean- The exclusion for small business stock is receive financing with proceeds of tax-ex- ing equity investments in, or loans to, quali- increased to 60 percent for stock purchased empt bonds issued subject to the private fied active businesses located in low-income after the date of enactment in a corporation bond volume limit and receive the low in- communities, certain financial counseling that is a qualified business entity and that is come housing credit outside the State’s cred- and other services specified in regulations to held for more then five years. A ‘‘qualified it cap. business entity’’ means a corporation that businesses and residents in low-income com- satisfies the requirements of a qualifying munities. EXPLANATION OF PROVISION business under the empowerment zone rules The stock or equity interest cannot be re- The bill increases the annual State credit (sec. 1379B(b)) during substantially all the deemed (or otherwise cashed out) by the CDE caps from $1.25 to $1.75 per resident during taxpayer’s holding period. for at least seven years. If an entity fails to the period between years 2001 and 2006 as fol- EFFECTIVE DATE be a CDE during the seven-year period fol- lows: lowing the taxpayer’s investment, or if the The provision is effective for qualified Applicable equity interest is redeemed by the issuing stock purchased after the date of enactment. Calendar year credit amount CDE during that seven-year period, then any 2001 ...... $1.35 E. New markets tax credit (sec. 301 of the credits claimed with respect to the equity in- 2002 ...... 1.45 bill) terest are recaptured (with interest) and no 2003 ...... 1.55 PRESENT LAW further credits are allowed. 2004 ...... 1.65 Some tax incentives are available to tax- A ‘‘low-income community’’ is defined as 2005 ...... 1.70 payers making investments and loans in low- census tracts with either (1) poverty rates of 2006 ...... 1.75

VerDate 25-JUL-2000 05:04 Jul 26, 2000 Jkt 079060 PO 00000 Frm 00041 Fmt 4634 Sfmt 0634 E:\CR\FM\A25JY7.028 pfrm02 PsN: H25PT1 H6820 CONGRESSIONAL RECORD — HOUSE July 25, 2000 In addition, beginning in 2001, the per cap- sons (‘‘private activity bonds’’) is taxable un- subject to other limits on their volume ita cap is modified so that small population less the activities are specified in the Code. (qualified veterans’ mortgage bonds and cer- states are given a minimum of $2 million of Private activity bonds on which interest tain empowerment zone and enterprise com- annual credit cap. The $1.75 per capita credit may be tax exempt include bonds for pri- munity bonds). The current annual volume cap and the $2 million amount are indexed vately-operated transportation facilities limits are $50 per resident of the State or for inflation beginning in 2007. The bill also (airports, docks and wharves, mass transit, $150 million (if greater). An increase in these makes several programmatic changes to the and high speed rail facilities), privately- volume limits to $75 per resident or $225 mil- credit. owned or privately-provided municipal serv- lion (if greater) is scheduled to be phased-in EFFECTIVE DATE ices (water, sewer, solid waste disposal, and during calendar years 2003–2007. certain electric and heating facilities), eco- The provisions generally are effective for EXPLANATION OF PROVISION nomic development (small manufacturing fa- calendar years after December 31, 2000, and The bill accelerates the currently sched- cilities and redevelopment in economically buildings placed in service after such date in uled phased increase in the present-law an- depressed areas), certain social programs the case of projects that also receive financ- nual State private activity bond volume lim- (low-income rental housing, qualified mort- ing with proceeds of tax-exempt bonds sub- its to $75 per resident of each State or $225 gage bonds, student loan bonds, and exempt ject to the private activity bond volume million (if greater). The increase is phased-in activities of charitable organizations de- limit which are issued after such date. as follows, beginning in calendar year 2001: scribed in Code sec. 501(c)(3)). G. INCREASE IN PRIVATE ACTIVITY BOND The volume of tax-exempt private activity Calendar year Volume limit STATE VOLUME LIMITS (SEC. 501 OF THE BILL) bonds that States and local governments PRESENT LAW may issue in each calendar year is limited by 2001 ...... $55 per resident ($165 million if greater) 2002 ...... $60 per resident ($180 million if greater) Interest on bonds issued by States and State-wide volume limits. The volume limits 2003 ...... $65 per resident ($195 million if greater) local governments is excluded from income if do not apply to private activity bonds to fi- 2004, 2005, 2006 ...... $70 per resident ($210 million if greater) the proceeds of the bonds are used to finance nance airports, docks and wharves, certain 2007 and thereafter .. $75 per resident ($225 million if greater) activities conducted or paid for by the gov- governmentally owned, but privately oper- ernmental units. Interest on bonds issued by ated, solid waste disposal facilities, certain EFFECTIVE DATE these governmental units to finance activi- high speed rail facilities, and certain types The volume limit increases are effective ties carried out and paid for by private per- of private activity tax-exempt bonds that are beginning in calendar year 2001. ESTIMATED REVENUE EFFECTS ON H.R. 4923, THE ‘‘COMMUNITY RENEWAL AND NEW MARKETS ACT OF 2000’’—FISCAL YEARS 2001–2005 [Millions of Dollars]

Provision Effective 2001 2002 2003 2004 2005 2001–05

1. Designate 40 renewal communities, 8 of which are in rural areas, to receive the following tax benefits: 0% capital gains tax rate on quali- fying assets held more than 5 years; deduction for qualified revitalization expenditures, capped at $6 million per community in 2001 and $12 million thereafter; an additional $35,000 of section 179 expensing; expensing of qualifying environmental remediation costs; a wage credit of 15% on first $10,000 of qualified wages ...... DOE 1 ¥75 ¥545 ¥576 ¥578 ¥606 ¥2,380 2. Provide new markets tax credit with allocation authority of $1.0 billion in 2001, $1.5 billion in 2002 and 2003, $2.0 billion in 2004 and 2005, and $3.5 billion in 2006 and 2007 ...... ima 12/31/00 ¥2 ¥18 ¥115 ¥246 ¥365 ¥747 3. Designate 9 new empowerment zones, extend present-law empowerment zone designations through 12/31/09, expand the 20% wage credit to all empowerment zones, increase the additional section 179 expensing to $35,000 for all empowerment zones including D.C. in 2002, and extend the more favorable round II tax exempt financing rules to all existing and new empowerment zones excluding D.C...... DOE 2 ...... ¥246 ¥476 ¥474 ¥541 ¥1,737 4. Capital gain rollover of empowerment zone assets and increased exclusion of gain on sale of certain empowerment zone investments ...... ima DOE (3) ¥3 ¥15 ¥32 ¥52 ¥102 5. Improvements in the Low-Income Housing Credit—increase per capita credit to $1.35 in 2001, $1.45 in 2002, $1.55 in 2003, $1.65 in 2004, $1.70 in 2005, $1.75 in 2006, and indexed for inflation thereafter; $2 million small State minimum beginning in 2001 and indexed for inflation beginning in 2007; modify stacking rules and credit allocation rules; certain Native American housing assistance disregarded in determining whether building is Federally subsidized for purposes of the low-income housing credit ...... tyba 12/31/00 ¥4 ¥24 ¥68 ¥140 ¥239 ¥475 6. Accelerate 5-year phasein of private activity bond volume cap ...... cyba 12/31/00 ¥10 ¥39 ¥80 ¥122 ¥155 ¥406 Net total ...... ¥91 ¥875 ¥1,330 ¥1,592 ¥1,958 ¥5,847 1 The Secretary of Housing and Urban Development must prescribe regulations for the nomination process no later than 4 months after the date of enactment. 2 Area may be designated as an empowerment zone any time after the date of enactment and before 1/1/02. The tax benefits generally become effective after 12/31/01 and terminate on 12/31/09. 3 Loss of less than $500,000. Note: Details may not add to totals due to rounding. Legend for ‘‘Effective’’ column: cyba = calendar years beginning after; DOE = date of enactment; ima = investments made after; tyba = taxable years beginning after.

Mr. ENGLISH. Mr. Speaker, I reserve For example, Mr. Speaker, the Su- gious liberties by failing to protect the balance of my time. preme Court, in various cases, has them from discrimination based on Mr. SCOTT. Mr. Speaker, I yield my- ruled that we cannot constitutionally their refusal to participate in religious self such time as I may consume. fund pervasively sectarian organiza- activities by a tax-funded religious Mr. Speaker, first of all, this is an tions. And they use several standards: provider.’’ The provision further awkward process because the bill was one, whether or not the program is lo- threatens to excessively entangle the just printed up late last night, and we cated near a house of worship; an abun- institutions of church and State, and have not gotten a final version of it. I dance of religious symbols on the they oppose the charitable choice pro- assume it is the same version that we premises; religious discrimination in visions. saw a couple of days ago. the institution’s hiring practices; the This bill contains some provisions presence of religious activities; the The list includes the American Asso- that are truly troublesome; and we are purposeful articulation of a religious ciation of University Women, the in the process right now, because we mission. American Baptist Churches, the Amer- are under suspension of the rules, Well, if we look at those problems ican Civil Liberties Union, the Amer- where there is no opportunity to and then we look at charitable choice, ican Jewish Congress, the Americans amend the bill to eliminate the prob- where this bill will allow the direct United for Separation of Church and lem created by the charitable choice funding of churches located near a State, the Baptist Joint Committee for provisions of the bill. Now, usually, house of worship, this is in a house of Public Affairs, and that is just through even if we have a closed rule and can- worship. An abundance of religious the B’s in the list. That is why this not offer amendments, at least we have symbols. The bill specifically says we provision should be deleted. a rule and we can argue about whether cannot require the removal of religious or not we should have had the oppor- symbols. Religious discrimination in Mr. Speaker, there is another prob- tunity to offer an amendment. But we an institution’s hiring practices. That lem with the bill, and that is the way do not even have that. We have to vote is in the bill. They can discriminate. it deals with drug treatment programs. this thing up or down. Presence of religious activities. It is in By specifically funding the church-run We have heard comments about the the church. So on and so forth. drug programs, we fund in the bill find- good in the bill. The charitable choice This is so clearly pervasively sec- ings by Congress, and let me read them provision is a provision that will allow tarian, and, Mr. Speaker, that is why so my colleagues will know what is in direct funding of churches, and that many organizations have written us. In the bill: ‘‘Congress finds that estab- creates a number of problems constitu- one letter, that came today, a group lishing unduly rigid or uniform edu- tionally as well as how it is imple- wrote, ‘‘This charitable choice provi- cational qualifications for counselors mented. sion threatens the beneficiaries’ reli- and other personnel in drug treatment

VerDate 25-JUL-2000 05:04 Jul 26, 2000 Jkt 079060 PO 00000 Frm 00042 Fmt 4634 Sfmt 0634 E:\CR\FM\A25JY7.030 pfrm02 PsN: H25PT1 July 25, 2000 CONGRESSIONAL RECORD — HOUSE H6821 programs may undermine the effective- zations should not be barred from Fed- Committee on Ways and Means and ness of such programs, and such edu- eral funds because they are a Christian generally for these kinds of commu- cational requirements for counselors organization and they like to hire nities. I know he represents a number and other personnel may hinder or pre- Christians.’’ of distressed communities. I just want vent the provision of needed drug Mr. Speaker, there was a time when to thank him for his role in getting treatment services.’’ some Americans because of their reli- this bill out here. b 1200 gion were not considered qualified for Before I make my statement, I want certain jobs. In fact, before 1960 it was to take a few minutes or a brief mo- It further says that ‘‘the Government thought a Catholic could not be elected ment to respond to the comments made shall not discriminate against edu- president. And before the civil rights by my friend, the gentleman from Vir- cation and training provided to such laws of the 1960s, people of certain reli- ginia (Mr. SCOTT). It is a sign of his personnel by religious organizations so gions suffered invidious discrimination typical principle stand and his elo- long as education and training includes in employment routinely. quence that he made such a powerful basic content substantially equivalent Fortunately, the civil rights laws of statement. to the content provided by nonreligious the 1960’s put an end to that practice But let me just say that the part of organizations that the state or local and we no longer see signs suggesting the bill that he is referring to is a pro- government would credit for purposes that those of certain religions need not vision that simply allows faith-based of determining whether the relevant apply for certain jobs. drug and alcohol counseling groups to requirements have been satisfied.’’ Now, when those civil rights laws participate in Federal programs in this That is a provision that has provoked were passed, there was a common sense sense, that a voucher would be given to a number of drug counseling organiza- exception that allowed religious orga- people who have substance abuse or al- tions to write to oppose the bill, in- nizations to discriminate based on reli- cohol problems, and they could, if they cluding the American Counseling Asso- gion. When, for example, a Catholic wished, use that voucher at a faith- ciation, the American Mental Health church hires a priest, they can, of based program if they think that would Counselors Association, the American course, require that the prospective be more effective and if that fits with Public Health Association, the Amer- priest be Catholic. Or when a Jewish their life. ican Psychological Association, the synagogue hires a rabbi, they can, of This is similar to what we already do American Society for Addiction Medi- course, require that the rabbi be Jew- with regard to day-care programs, with cine, and the Anxiety Disorder Associa- ish. But those exemptions apply to pri- regard to community service block tion of America. That just gets us vate funds, not Federal funds. grants. It is similar to what we did in down through the A’s. Many religious organizations already the welfare reform bill. It simply gives There is another provision in here sponsor Federal funds. Catholic char- individuals a choice. And the reason is, that adds insult to injury; and that is, ities will sponsor federally funded pro- quite frankly, that these groups are if a person does not want to participate grams. But one does not have to be highly effective in stopping drug abuse. in the church-run program, that they Catholic to get a job because the civil They have a 60 to 80 percent cure rate. are entitled to be referred to a separate rights laws apply to Federal funds. It is kind of foolish to operate a Fed- but equal program somewhere else. Lutheran Family Services sponsors eral drug and alcohol substance abuse I think it is an insult to suggest that Federally funded programs, but one program and exclude from participa- Brown v. Board of Education is not does not have to be Lutheran to get a tion those groups which have the alive and well in America. job. Yet, section 582(e) specifically pro- greatest success in stopping drug or al- But there is a final provision in the vides that programs’ sponsors can look cohol abuse. We simply want them to bill that I think is particularly egre- a job applicant in the eye and say that, be in in the same basis in which we gious, and this is a provision that al- although this is being run with Federal have allowed similar groups to partici- lows the sponsors of Federal programs taxpayers’ money, they do not qualify pate in similar programs. to discriminate in their hiring based on for a job because they do not hire their There is no constitutional problem religion. kind because of their religion. because the choice vests in the indi- There is a provision in section 582(e) That is wrong. This bill should not vidual. There is no more problem here of the bill that says specifically that pass with this. We do not have an op- than there is when a student uses a the title VII prohibition against dis- portunity to amend the bill because of Pell Grant to go to Notre Dame or Ye- crimination in hiring based on religion the procedural situation we are in. shiva. It is the same principle. will not apply to these programs. This bill, therefore, ought to be op- I understand the concern of the gen- Civil rights laws should apply to fed- posed because it is unconstitutional, tleman, and I too regret that we erally funded programs, Mr. Speaker. because it funds pervasively sectarian brought this up under a summary pro- The idea that religious bigotry might organizations. It ought to be opposed cedure. And yet I would say it has been take place with Federal funds in this because it insults professional drug so long since we have passed a com- bill is not speculative. The bill specifi- counselors by denigrating their profes- prehensive program designed to help cally provides that religious sponsors sional credentials. And the bill ought poor people in this country that I will are not covered by title VII of the Civil to be opposed because it brings back take it any way I can get it. If this is Rights Act. separate but equal in drug programs the only way I can get it here, I will During the prior debates we have had and specifically provides for religious say to the gentleman I will take it this on charitable choice, we have heard bigotry in hiring with taxpayers’ way. how this would work. Cited on page money. I am sorry that he did not have more H 4687 of the CONGRESSIONAL RECORD on Mr. Speaker, I frankly do not care chance to study it and to comment June 22 of last year, the gentleman how much money might come to my upon it, and I appreciate his position. from Texas (Mr. EDWARDS) asked a community. I am not going to turn the Let me just say that this is the most major sponsor of charitable choice if a clock back on fundamental civil and significant anti-poverty program to religious organization using Federal constitutional rights. come out of Washington in decades. It funds could fire or refuse to hire a per- Mr. Speaker, I reserve the balance of is significant not only in its size and fectly qualified employee because of my time. its scope but also in the fact that it that person’s religion; and the response Mr. ENGLISH. Mr. Speaker, it is a represents a true bipartisan consensus. from the supporter of charitable great privilege for me to yield 4 min- This bill is strongly supported by the choice, which was never disputed dur- utes to the gentleman from Missouri President of the United States, without ing that debate or subsequent debates (Mr. TALENT) one of the most active whose advocacy it would not be here. It was, ‘‘a Jewish organization can fire a advocates of community renewal legis- is strongly supported by my friend, the Protestant if they choose.’’ lation over the last few Congresses. gentlewoman´ from New York (Ms. Last month, the supporter of chari- Mr. TALENT. Mr. Speaker, I thank VELAZQUEZ); by my friend, the gen- table choice was quoted in Congres- the gentleman for yielding me the tleman from Chicago (Mr. DAVIS); by sional Quarterly saying that ‘‘organi- time. I appreciate his advocacy on the the gentleman from Oklahoma (Mr.

VerDate 25-JUL-2000 05:08 Jul 26, 2000 Jkt 079060 PO 00000 Frm 00043 Fmt 4634 Sfmt 0634 E:\CR\FM\K25JY7.051 pfrm02 PsN: H25PT1 H6822 CONGRESSIONAL RECORD — HOUSE July 25, 2000 WATTS), who will speak later; by the from Oklahoma (Mr. WATTS), the gen- stitutional questions, and these things gentleman from Pennsylvania (Mr. tleman from Louisiana (Mr. JEFFER- have to be studied. But also we know ENGLISH); by me; by, of course, the gen- SON), the gentleman from Illinois (Mr. when we are talking about treating tleman from New York (Mr. RANGEL), DAVIS) and to see what we have that people in drugs that we know that the distinguished ranking member on has worked with empowerment zones; there are institutions that spiritually the Committee on Ways and Means, what we can do to improve upon these do better than other people that have who graciously allowed his friend, the things and to see what concepts really been trained but still do not have the gentleman from Virginia (Mr. SCOTT), worked in order to get access to cap- people that have the type of faith to have the time to speak in opposi- ital, which is so necessary if we are which is necessary in order to do it. tion; and because it represents prin- going to talk about economic growth. When we start walking down this ciples we all agree on now. The jobs from our communities, most road, we take some gambles because We know the Federal Government of the jobs in the United States, they Minister Farakan has been very, very cannot get people out of poverty by do not come from the big firms. They good in making certain that people itself. We also know that individuals come from small business people that who are drug addicts, people who vio- cannot just pull themselves up by the hire people from the community. And late the law, people who go back to jail bootstraps when they are raised in it is these people that cannot get peo- time and time again that he has been communities where families are in dis- ple to really invest so that they can ex- able to cause these people to join the tress, where the institutions of private pand and really hire more people from Muslim religion, not drink alcohol, not society that the rest of us relied upon the community. be promiscuous, and not to do drugs. But we have all types of programs to to help us grow and to be nurtured no b 1215 longer exist. But they can do it with encourage investment overseas. We help. They can do it with help from have the Overseas Protection Insur- And so when you are saying that you their neighbors. And that is the key. ance Corporation that allows for people want it for one faith-based organiza- This bill is designed to increase the to feel more secure. And so, what we tion, you open the door for others. I tools, the prestige, the visibility of re- have done is to snatch some of those hope these type of things can be cor- development groups, of neighborhood included in the bill and let people be rected. But I want to commend the intermediaries who are rebuilding the able to feel just as secure as investing members of the committees for work- infrastructure of life in poor urban and in their own community as they would ing together in a bipartisan way and rural communities around America. overseas. giving us a chance to vote for some- I have traveled, as have many of the We hear a lot of talk when trade bills thing. other advocates for this bill, around come to the House floor about how im- Mr. ENGLISH. Mr. Speaker, I yield 1 this country. I talked to people in San portant it is going to be for us to ex- minute to the gentlewoman from Con- Antonio and Washington and Missouri pand our markets, how important ex- necticut (Mrs. JOHNSON), a distin- and Indianapolis about what they are ports are going to be, how important it guished member of the Committee on doing to help their neighbors. This are is to get people to increase demand. Ways and Means who has been fighting rebuilding these communities. Well, if it can work for overseas mar- for low-income housing. They are going to do it I think, Mr. kets, why can it not work for Ameri- Mrs. JOHNSON of Connecticut. Mr. Speaker, whether we do anything cans? We have got 2 million people Speaker, I thank the gentleman for about it or not. But we have the privi- locked up in jail in these United yielding time, and I rise in strong sup- lege and the opportunity to help them States, more than all of the people in port of this bipartisan legislation with this bill. China, higher per capita than any na- which will help revitalize our most dis- I am pleased and proud to be part of tion in the world. And we know that, advantaged communities. It simply a body that has come together without with the proper education and eco- gives communities the tools they need regard to party; that has set aside ideo- nomic opportunity, it did not have to to revitalize their neighborhoods. It in- logical baggage; that has worked with be this way. cludes pro-growth tax incentives, the President of the United States, who We spend billions of dollars just brownfields cleanup, regulatory relief, has taken the lead with the Speaker of keeping them in jail; where that, if we all things that will help create jobs in the House. could create an education and eco- our distressed cities. Let us get this bill passed, move it nomic growth situation where they I want to talk about one provision over to the Senate, and show the peo- know that they would be a part of it, that not only deals with the regenera- ple we can get this done for the most they would opt not for jail but opt to tion of the economic base of our cities vulnerable among our fellow citizens. be a part of the prosperity that we are but will enable people to live close to Mr. SCOTT. Mr. Speaker, I yield 5 enjoying. their jobs by expanding the number of minutes to the gentleman from New So if we are concerned about creating affordable housing units in our dis- York (Mr. RANGEL) the ranking mem- markets, why can we not go to the tressed neighborhoods. This bill in- ber of the Committee on Ways and poorer communities that we have to cludes an increase in the low-income Means. start talking about the same full em- housing tax credit cap and important (Mr. RANGEL asked and was given ployment that we have on the national reforms to that program. Increasing permission to revise and extend his re- average to make certain that every the cap has the overwhelming support marks.) block, every road, every village, every of the Members of this House and will Mr. RANGEL. Mr. Speaker, I rise in community knows what the concept of result in an expansion of the Federal- support of this piece of legislation. It full employment can be. State program that has produced more might be the most historic bipartisan And when people have money that, affordable rental housing across Amer- piece of legislation that we have been after they pay their expenses for shel- ica than any other program; but due to able to agree on passed and signed into ter and food and education and health inflation, its value and its power in our law in this session. care and start saving, it means that lives has been eroded 50 percent. It is very unusual when the President there is more money available for more I ask strong support of the bill of my of the United States can get together people to be able to expand their busi- colleagues. with the Speaker and say that some- nesses. But the most important thing Mr. SCOTT. Mr. Speaker, I yield my- thing has to be done when we find this is that they will have what? Disposable self 30 seconds, and that is to comment country enjoying such a robust econ- income, so that they would again get from a letter that I have received from omy and yet, know, that in many of more bang for the buck, as we find that several national organizations which the rural and inner-city areas, they people that now have such limited in- says that the National Institute of have not the slightest idea as to what comes will have more incomes to buy Drug Addiction said that it is not the Chairman Greenspan is talking about the things so America can continue position to support these claims of 60 and to see how the Speaker was able to manufacturing. to 80 percent cure rates. One commonly work with the gentleman from Mis- The gentleman from Virginia (Mr. cited study which is nearly 30 years old souri (Mr. TALENT), the gentleman SCOTT) raises some legitimate con- has never been repeated and was not

VerDate 25-JUL-2000 05:08 Jul 26, 2000 Jkt 079060 PO 00000 Frm 00044 Fmt 4634 Sfmt 0634 E:\CR\FM\K25JY7.090 pfrm02 PsN: H25PT1 July 25, 2000 CONGRESSIONAL RECORD — HOUSE H6823 published in a peer review journal. This APIC is structured to make max- and suburban and middle class could letter was signed by, as I indicated, imum use of scarce Federal resources. benefit from it as well. Almost every about 20 or 30 national drug abuse orga- Without going into the details, the bot- member of the Committee on Ways and nizations. tom line is that a Federal credit sub- Means signed the letter asking that it Mr. Speaker, I yield such time as he sidy of only $36 million a year as deter- be included as part of this bipartisan may consume to the gentleman from mined by OMB will create at least $7.5 package. Pennsylvania (Mr. KANJORSKI). billion in targeted investments over Mr. Speaker, my hope is that as we Mr. KANJORSKI. Mr. Speaker, I ask the next 5 years. move through this process that we can unanimous consent because of the re- I would also like to note that this work together, the chairman, the rank- quest for additional time on both sides bill includes a number of other critical ing member, the Speaker as well as the that the Chair allow 10 minutes addi- Democratic and presidential initia- White House, to include expanded ef- tional debate on both sides of the aisle. tives, including the new markets tax forts to clean up so-called brownfields. The SPEAKER pro tempore (Mr. credit, the new markets venture cap- It is all about jobs. The average clean- SIMPSON). Is there objection to the re- ital program, the creation of nine addi- up of a brownfield is only about quest of the gentleman from Pennsyl- tional empowerment zones, and a 40 $500,000; but if you think of those com- vania? percent increase in the volume cap for munities, and every community has Without objection, each side is recog- the low-income housing tax credit. one, has those blighted areas in com- nized for an additional 10 minutes. I would urge passage of this bill and munities that we can recycle, reuse There was no objection. Mr. SCOTT. Mr. Speaker, I yield 3 immediate Senate action, also. and revitalize, it will help every Amer- Mr. ENGLISH. Mr. Speaker, it gives minutes to the gentleman from New ican community. I ask that it be in- me a great deal of pleasure to yield 2 cluded as we move through the process. York (Mr. LAFALCE), the ranking mem- minutes to the distinguished gen- ber of the Committee on Banking and Thank you for this opportunity to speak re- Financial Services. tleman from Illinois (Mr. WELLER), one garding H.R. 4923, the Community Renewal (Mr. LAFALCE asked and was given of the leaders on the Committee on and New Markets Act. While I stand in support permission to revise and extend his re- Ways and Means on the issue of of this bill, I would like to offer my concerns marks.) brownfields remediation. regarding a provision which was not included Mr. LAFALCE. I thank the gen- (Mr. WELLER asked and was given in this bill. tleman for yielding me this time. permission to revise and extend his re- For the past several months, I have been Mr. Speaker, an important compo- marks.) working with several of my colleagues on the nent of today’s bill is title VI, Amer- Mr. WELLER. Mr. Speaker, I rise in Ways and Means Committee to expand the el- ica’s private investment companies, strong support of this bipartisan effort igible sites allowed to deduct the cost of envi- also known as APIC. This title incor- to help blighted communities across ronmental remediation expenditures under porates the text of H.R. 2764 as passed America. I stand in strong support par- Section 198 of the Code to include all by the House Committee on Banking ticularly of the expansion of the low- brownfield sites. This provision has broad bi- and Financial Services earlier this income housing tax credit provisions, partisan support with 22 cosponsors from the spring. H.R. 2764 was introduced by my- something that benefits every commu- Ways and Means Committee. A similar provi- self, the gentleman from Pennsylvania nity in America. sion was included in the Taxpayer Refund and I thought I would take my time just (Mr. KANJORSKI), the ´ gentlewoman Relief Act of 1999 and the Senate's version of from New York (Ms. VELAZQUEZ), and a to draw attention to an issue I feel last year's extenders bill S. 1792. We had number of other Democrats last year. that we could do more for in this legis- hoped to have this provision included in H.R. APIC is a component of the adminis- lation as it moves through the legisla- 4923, but were not afforded the opportunity tration’s new markets initiative and tive process, and that is the issue of because the bill was never brought before the was in fact the first component of the brownfields. People often wonder, what Ways and Means Committee. new markets initiative to receive con- is a brownfield? As you drive through Brownfields sites exist throughout all of our gressional approval through a bipar- your rural or your suburban or middle- districtsÐabandoned eyesores that blight our tisan vote of the House Committee on class community or inner-city commu- urban, rural and suburban communities drag Banking and Financial Services earlier nity, you see that old abandoned gas down local economies. Many brownfields this spring. station that no one ever buys and fixes properties are located in prime business loca- Approval of APIC represents a bold up or you see that old industrial park tions near critical infrastructure, including effort to bring economic opportunities on the side of town that no one ever transportation, and close to a productive work- and quality jobs to individuals and buys and recycles or reuses or revital- force. As Members of Congress, we should be communities being left behind our izes, and you find out the chief reason striving to enact policies that put as many of strong economic expansion. APIC is is because it needs some environmental these sites as possible back into productive structured to ensure that Federal re- cleanup; and because of that financial use, contributing to the economic and pro- sources are targeted to create opportu- liability, investors are hesitant to buy ducing good paying jobs where they are need- nities for lower-income families and in- it. ed most. dividuals. This is accomplished by pro- In 1997 as part of the Balanced Budg- The first step towards doing this is to reme- viding $1 billion a year in Federal loan et Act, a group of us worked success- diate these sites environmentally. The U.S. guarantees to a number of different fully to provide a tax incentive, a tax Conference of Mayors estimates that there are APICs, private investment companies, incentive which attracted private in- over 400,000 brownfields sites across the which will be established specifically vestors to buy these old brownfields, to country. We clearly cannot limit the treatment to invest in businesses operating in clean them up; and because of fiscal of Section 198 to merely targeted areas. De- low-income communities. concerns at the time, we left it tar- velopment of these sites will help restore Under the legislation, substantially geted to low-income areas. Since then, many blighted areas, create jobs where unem- all investments made with APIC-guar- as that provision has been working to ployment is high and ease pressure to de- anteed loans or equity used to support clean up and revitalize low-income velop beyond the fringes of communities. such loans must be made in low-income areas, the folks that live in the rural Small, urban centered businesses often ben- communities, defined as census tracts and suburban and middle-class commu- efit most directly by this redevelopment. with poverty rates in excess of 20 per- nities have often said, Hey, wait a sec- Some estimates suggest that there may be cent or median family income levels ond here. There are 425,000 brownfields as many as 150,000 brownfield sites in urban below 80 percent of the local or State across America. Only about one-fifth of areas and up to as many as 425,000 nation- median. And successful APIC licensees those qualify for the current tax incen- wide. In a recent survey, the U.S. Conference must pursue public-purpose goals, tive. Why not help those blighted areas of Mayors study estimates that approximately. which include creating good-paying in those communities as well. 21,000 brownfield sites exist in 210 cities sur- jobs, making investments in low-in- A group of us, in fact 22 of us on the veyed (large and small). This represents al- come communities, and working with Committee on Ways and Means, co- most 81,000 acres of land. Two-thirds of the community-based organizations and sponsored legislation to eliminate that 210 cities surveyed estimated that if their local residents. targeting so every community, rural brownfields sites were redeveloped, it would

VerDate 25-JUL-2000 05:31 Jul 26, 2000 Jkt 079060 PO 00000 Frm 00045 Fmt 4634 Sfmt 9920 E:\CR\FM\K25JY7.056 pfrm02 PsN: H25PT1 H6824 CONGRESSIONAL RECORD — HOUSE July 25, 2000 bring in additional tax revenues between $878 clude all brownfield sites. Simply lifting this up a whole new marketplace for Amer- million and $2.4 billion annually. More than targeting requirement would lower the cost ican companies, and this is what our 550,000 jobs could be created on former of the measure to only $43 million. new enterprise will do. It will harness Thank you for your consideration of this the entrepreneurial power that exists brownfields sites. It is estimated that the aver- important issue. age cost of brownfields cleanup is $500,000. Sincerely, in these cities and towns. This initia- In Chicago, Illinois, there are an estimated Phil Crane, Clay Shaw, Nancy Johnson, tive will rebuild these communities by 2,000 brownfield sites. According to the Con- Amo Houghton, Wally Herger, Jim providing the necessary anchors, and ference of Mayors study, if these sites in Chi- McCrery, Dave Camp, Jim Ramstad, not just a quick fix, that will lead to cago were cleaned up it would mean a $78 Jim Nussle, Jennifer Dunn, Mac Col- real growth and opportunity. million increase in tax revenue and an in- lins, Rob Portman, Phil English, Wes Today, we are sending a message to crease in 34,000 jobs. This would be very im- Watkins, JD Hayworth, Jerry Weller, every American, from the family in portant to the local economy. Kenny Hulshof, Scott McInnis, Ron rural Appalachia who does not even Mr. Speaker, I ask that you and Chairman Lewis, Mark Foley. Charlie Rangel, Pete Stark, Bob Matsui, have safe drinking water, to the Latina ARCHER continue to work with myself and Bill Coyne, Sandy Levin, Ben Cardin, living in ‘‘el barrio’’ trying to make other members of the Ways and Means Com- Jim McDermott, Gerald Kleczka, John ends meet and the African American mittee who are interested in removing the tar- Lewis, Richard Neal, Michael McNulty, youth looking for an alternative to geting requirement on the existing brownfields William Jefferson, John Tanner, Xavier running with the local gang. This eco- expensing provision to allow brownfield sites Becerra, Karen Thurman, Lloyd nomic boom must benefit everyone and to be cleaned up in all of our districts. I ask Doggett. to ensure that they too will be able to that this provision be included in the Con- Mr. SCOTT. Mr. Speaker, I yield 3 live the beauty of their dreams. ference Report on H.R. 4923. minutes to the gentlewoman´ from New I urge passage of this legislation. CONGRESS OF THE UNITED STATES, York (Ms. VELAZQUEZ), who is the Mr. ENGLISH. Mr. Speaker, it gives Washington, DC, June 9, 2000. ranking member of the Committee on me great pleasure to yield 4 minutes to Hon. BILL ARCHER, Small Business.´ the distinguished gentleman from Chairman, House Ways and Means Committee, (Ms. VELAZQUEZ asked and was Oklahoma (Mr. WATTS), one of the Longworth House Office Building, Wash- given permission to revise and extend most distinguished advocates of com- ington, DC. her remarks.) munity renewal in the House. DEAR CHAIRMAN ARCHER: This letter is to ´ urge you to include in your chairman’s mark Ms. VELAZQUEZ. Mr. Speaker, I rise Mr. WATTS of Oklahoma. Mr. Speak- for the pending Community Revitalization in strong support of H.R. 4923. One of er, today I rise in support of H.R. 4923, tax package a provision included in H.R. America’s most resolute first ladies, the Community Renewal and New Mar- 4003, which expands the eligible sites allowed Eleanor Roosevelt, once said, ‘‘The fu- kets Act, which I was proud to sponsor to deduct the cost of environmental remedi- ture belongs to those who believe in along with my good friends and col- ation expenditures under Section 198 of the the beauty of their dreams.’’ leagues, the gentleman from Missouri Code to include all brownfield sites. We have heard throughout the last 10 (Mr. TALENT) and the gentleman from As you know, this provision has broad bi- years how America is in the greatest partisan support with 22 cosponsors from the Illinois (Mr. DAVIS). Ways and Means Committee. A similar pro- economic expansion in our history. America is truly blessed as we con- vision was included in the Taxpayer Refund Jobs have been created at an expo- tinue in the longest economic boom in and Relief Act of 1999 and the Senate’s nential rate and prosperity is every- our history. But with all this extraor- version of last year’s extenders bill, S. 1792. where. Well, almost everywhere. You dinary prosperity in every region of the The community revitalization tax package see, even in these times of great pros- country, there is still an unseen hunger agreed to by President Clinton and Speaker perity, many Americans are being left that we ignore at great moral peril. It Hastert, acknowledges the importance of behind. Too many areas across our Na- is a hunger that comes from struggling cleaning up so called ‘‘brownfields’’ by allow- ing the expensing of clean up costs for such tion have not seen the economic boom neighborhoods where vacant properties sites located within the newly added em- that has benefited so many of their fel- become home to crack users who de- powerment zones and renewal communities. low citizens. stroy the sense of safety and security a This validates the appropriateness of the ex- Indeed, the statistics show that our community needs to grow and prosper. pensing policy enacted in 1997 when Section communities have unemployment rates These are the neighborhoods where po- 198 was added to the Code. that are in some cases double the na- tential business sites are neglected be- However, brownfields are not limited to tional average. What they have seen is cause of the cost of environmental empowerment zones and renewal commu- more of the same: poverty, joblessness cleanup. These are the neighborhoods nities. Brownfields sites exist throughout our districts—abandoned eyesores that and hopelessness. where venture capital does not ven- blight our urban, rural and suburban com- Today, we have taken a large step to- ture. munities and drag down local economies. ward breaking that cycle, and breaking Despite the strongest economic Many brownfields properties are located in it permanently. H.R. 4923, the Commu- growth in this Nation’s history, too prime business locations near critical infra- nity Renewal and New Markets Act of many people living in America’s poor- structure, including transportation, and 2000, is an unequaled effort providing a est neighborhoods are still being left close to a productive workforce. As Members real chance for business owners and en- behind. Today, we can do something of Congress, we should be striving to enact trepreneurs in rural and urban cities about that by voting for H.R. 4923. policies that put as many of these sites as This legislation establishes a model possible back into productive use, contrib- and towns throughout America. This uting to the economy and producing good legislation will help attract investors that merges new ideas about venture paying jobs where they are needed most. to places with high unemployment and capital, regulatory reform, drug and al- The first step towards doing this is to re- too little hope for determining their cohol rehabilitation, housing and mediate these sties environmentally. The own future. homeownership, environmental clean- U.S. Conference of Mayors estimates that One of the sections of this bill, the up, commercial revitalization and tax there are over 400,000 brownfields sites across New Markets Venture Capital Pro- incentives. the country. We clearly cannot limit the gram, provides venture capital, the I want to commend the gentleman treatment of Section 198 to merely targeted areas. Development of these sites will help principal financial tool that has cre- from Texas (Mr. ARCHER) and the gen- restore many blighted areas, create jobs ated a multitude of Internet and high- tleman from New York (Mr. RANGEL) where unemployment is high and ease pres- tech companies that currently and the gentleman from Pennsylvania sure to develop beyond the fringes of commu- dot.coms the American business land- (Mr. ENGLISH) for working so hard to nities. Small, urban centered businesses scape. make important tax aspects of this bill often benefit most directly by this redevel- In short, NMVCs are public-private work. I also want to commend the gen- opment. partnerships that bring equity invest- tleman from Iowa (Mr. LEACH) and the Again, we urge you to include in your ment and technical assistance to those gentleman from New York (Mr. LA- mark for the community revitalization package the provision in H.R. 4003 which ex- areas that need it the most. FALCE) and the gentleman from New pands the eligible sites allowed to deduct the Mr. Speaker, by creating these long- York (Mr. LAZIO) for their hard work cost of environmental remediation expendi- term partnerships between the private on the housing and community devel- tures under Section 198 of the Code to in- sector and government, we are opening opment provisions. I also commend the

VerDate 11-MAY-2000 03:15 Jul 26, 2000 Jkt 079060 PO 00000 Frm 00046 Fmt 4634 Sfmt 0634 E:\CR\FM\A25JY7.014 pfrm02 PsN: H25PT1 July 25, 2000 CONGRESSIONAL RECORD — HOUSE H6825 gentlewoman´ from New York (Ms. This compromise occurs because of a areas without bringing back the envi- VELAZQUEZ), who worked tirelessly lot of good people in this body, in the ronment of those areas. We need a Fed- with the gentleman from Missouri (Mr. Senate, and, particularly, the Presi- eral vehicle to accomplish that end. TALENT) on the small business provi- dent of the United States, have the This amendment that was supposed sions. dream of extending American oppor- to be part of this bill in the House, and I want to especially thank my origi- tunity to those distressed communities I think was agreed to by the Speaker in nal cosponsors, the gentleman from and pockets of America that have not Chicago with the President last No- Missouri (Mr. TALENT) and the gen- participated in the economic boom of vember, does not appear in the context tleman from Illinois (Mr. DAVIS), who the last 8 years. of this bill. I think we all have to be shared this vision and worked tire- Last year, I had the occasion to trav- good sports. Sometimes we are not lessly over the years to keep this legis- el with the President of the United happy with what happens, but I hope lation moving. States the length and width of this that the Senate will attach that country. We stopped in more than a b 1230 amendment to the bill as it proceeds. dozen communities and saw their Mr. Speaker, I urge my colleagues on Mr. Speaker, I also want to thank needs. Each night at dinner or some both sides of the aisle in conference to Reverend Floyd Flake, who made a tre- other gathering, we discussed what we support that plan. In the meantime mendous contribution to this legisla- saw that day. We concluded that there trying to be a sport and a player on the tion when he served with us here in was not a uniform problem in America, team for progress, I compliment both Congress. and not any one single community was sides of the aisle and the leadership in Most importantly, I want to thank the same as another community, in proceeding through with this bill the gentleman from Illinois (Mr. terms of its base problem. In other today. HASTERT), Speaker of the House, for words, Mr. Speaker, there is no silver Mr. Speaker, I urge all of my col- not simply endorsing this bill, but for bullet to bring economic opportunity leagues in the House to support H.R. embracing this bill, and devoting him- and improved quality of life to many of 4923. It is the right thing to do at the self to hours of negotiations with the those citizens that do not share it right time. In the midst of American White House and the President to come today. prosperity we should give those dis- to the product we are voting on today. I think this legislation does go a tressed communities across America an Friends, today we can deliver hope great distance in starting to develop opportunity to share in the benefits and opportunity to America’s most dis- tools that will help economically lag- that most of Americans have shared in tressed communities. Make a dif- ging communities. Whether it be the for the last 8 years. ference. Vote ‘‘yes’’ for the Community Indian tribes of South Dakota or the Mr. ENGLISH. Mr. Speaker, how Renewal and New Markets Act and cre- inner city of Hartford, Connecticut, or much time is remaining on both sides? ate homeownership and opportunity in the Delta of Mississippi, all of these The SPEAKER pro tempore (Mr. savings and get rid of these blighted communities will find something with- SIMPSON). The gentleman from Penn- spots in these communities with the in this bill that can lead them along sylvania (Mr. ENGLISH) has 27 minutes brownfields effort. the road to more economic develop- remaining, and the gentleman from Let me say before I close, I would ment and increased economic oppor- Virginia (Mr. SCOTT) has 151⁄2 minutes like to thank the gentleman from New tunity for their citizens. remaining. York (Mr. RANGEL), who has fought I would hope, as this bill proceeds Mr. ENGLISH. Mr. Speaker, I yield 3 tirelessly to raise the cap on the pri- from the House to conference with the minutes to the distinguished gen- vate activities bonds. This is the only Senate, that my friends in the House tleman from New York (Mr. LAZIO), the way that many of these communities will recognize that there are other chairman of the Subcommittee on will get assistance, going in and taking good demonstration projects that are Housing and Community Opportunity. rundown housing complexes or com- being attached as part of this bill, par- Mr. LAZIO. Mr. Speaker, let me say plexes that financial institutions will ticularly in the Senate. Our colleague how wonderful it feels for me to be in not invest in; but by raising the cap on in Pennsylvania, Senator SANTORUM, this Chamber and to hear a broad base these private activity bonds, we can for example, has added a demonstra- of support for this incredibly impor- get private investment to purchase tion project to renew areas by attack- tant piece of legislation. On the right, these bonds that will give the capital ing regional problems comprehen- on the left, there are things that we needed to rehab these different housing sively. love about this bill. efforts within these communities. I ap- Included in the Senate version of the Mr. Chairman, I want to thank the preciate that effort as well. bill by Senator SANTORUM will be the gentleman from Texas (Chairman I want to thank the gentleman from Anthracite Region Redevelopment Act. ARCHER) and the gentleman from Iowa Pennsylvania (Mr. ENGLISH), again, for The gentleman from Pennsylvania (Mr. (Chairman LEACH) for their leadership his efforts on the Committee on Ways SHERWOOD) on the Republican side and in helping to refine this bill. I also and Means. I support this plan. The gentleman want to thank the ranking members, Mr. SCOTT. Mr. Speaker, I yield 4 from Pennsylvania (Mr. GEKAS) and the the gentleman from New York (Mr. minutes to the gentleman from Penn- gentleman from Pennsylvania (Mr. RANGEL), the gentleman from New sylvania, (Mr. KANJORSKI), the ranking HOLDEN) also support this proposal York (Mr. LAFALCE), for all of their member of the Subcommittee on Cap- from the standpoint that it represents work. I want to thank the people who ital Markets, Securities and Govern- an approach and a methodology to at- created the original dream of this bill, ment Sponsored Enterprises of the tack land destroyed as a result of prior the gentleman from Oklahoma (Mr. Committee on Banking and Financial mining practices with a renewal and a WATTS), the gentleman from Missouri Services. reclamation project that is self-funded (Mr. TALENT), and the gentleman from Mr. KANJORSKI. Mr. Speaker, I and operated by the local community. Illinois (Mr. DAVIS), for their persist- thank my friend from Virginia (Mr. It costs this government the least ence in moving this bill forward. SCOTT) for the opportunity to rise in amount of money to accomplish this There are so many people to thank, favor of passage of this bill today, but greatest end. including the gentleman from Pennsyl- not in total satisfaction, because H.R. It is intended that we take that dem- vania (Mr. ENGLISH) for his remarkable 4923 represents a compromise. onstration project and one day move it help, and I am very proud to have Unfortunately, when we have a com- across the coal mines of America, from played a role in the development of promise, we often do not have every- Pennsylvania to Alabama and from this legislation. thing that one would think is needed. Alabama to Montana. We can use the I am proud to speak here in support But not to make the perfect the enemy project to examine those areas that of this bill that will help revitalize and of the good, I think it is important have suffered horrendous environ- renew some of our most underserved that my colleagues in the House sup- mental destruction over the last 100 and most challenged communities. As port this bill to move the process years. To a large extent we cannot you know, Mr. Speaker, this Congress along. bring back the economies of those has a substantial record of legislative

VerDate 25-JUL-2000 05:08 Jul 26, 2000 Jkt 079060 PO 00000 Frm 00047 Fmt 4634 Sfmt 0634 E:\CR\FM\K25JY7.059 pfrm02 PsN: H25PT1 H6826 CONGRESSIONAL RECORD — HOUSE July 25, 2000 achievement in the area of housing and borhoods, and I urge its strong support this land. Every community, no matter community development. Earlier this and adoption. how poor, has people in it that care year, the House passed H.R. 1776, the Mr. SCOTT. Mr. Speaker, I yield 3 deeply for their neighbors. Every com- American Homeownership Act. minutes to the gentleman from Chi- munity, no matter how high the crime Before that, Congress passed H.R. 202, cago, Illinois (Mr. DAVIS). rate, has neighbors who look out for a bill to protect America’s seniors. And (Mr. DAVIS of Illinois asked and was each other. with this bill today, we bring tax in- given permission to revise and extend The American people are the greatest centives. We bring regulatory relief, his remarks.) untapped resource of community re- and we bring economic investment to Mr. DAVIS of Illinois. Mr. Speaker, newal in this country. By allowing our struggling inner cities and rural first of all, I rise in serious and enthu- faith-based organizations to do what areas. siastic support of this legislation. I they do best, care for people and help This legislation does many things, want to commend the gentleman from them grow, we will see a revolution of including the expansion of the low-in- Missouri (Mr. TALENT) and the gen- prosperity, even in our most distressed come housing tax credit, and I am tleman from Oklahoma (Mr. WATTS) for neighborhoods. happy to see this. If we would have de- the longstanding pursuit that they Statistics have shown conclusively veloped a program from scratch, we have had of this legislation. that faith-based, community-based or- would develop this program, a program I also want to take the opportunity ganizations are vastly more successful that puts private sector capital at risk, to thank all of those committees that at turning lives and neighborhoods that forces the private sector to do the have been a part of processing it up to around than any government program. due diligence and do the research to this point. Teen Challenge, a program in Penn- make sure that the program works, to I also want to thank President Clin- sylvania that has operated for over 40 make sure that we get to a mixed-in- ton and Speaker HASTERT for following years, it is a faith-based drug treat- come development so that there are through, following up on the commit- ment program that keeps the individ- role models for our children, people ments that they made to people as uals in their program for a year. They going to work during the day. they traveled all around America, track their graduates for 7 years after It is a wonderful program, and it de- looking at communities where people they graduate. I have seen two studies, serves our continued support; and we had lost hope, where people had given one 70 percent, one 86 percent success are doing it here today. I am proud of up, where people felt that there was rate. the fact that we took APIC and ex- nothing really for them. The Government programs do not tended it so that our Native Americans Now we come with legislation that track their people that go through will have a chance at that dream as not only provides hope, but provides their programs, and many of them re- well, because this dream is not just for money, resources, venture capital, pro- cycle. The genius of this legislation is some, it is for everybody. vides an opportunity to attract and that it replaces faceless bureaucracies I am proud of the fact that people bring new businesses to communities with the power of neighborly compas- like Taylor Pennington and her hus- where there have not been any for sion. Through tax incentives and the band and their newborn baby who were years and years. Wage incentives, so creation of 40 new renewal commu- living in a cramped, dirty, dilapidated that you can hire people who have been nities, this bill says to leaders in dis- studio apartment will now have the unemployed, opportunities for people tressed communities, ‘‘You go on and ability to move into a new housing tax to know that they, too, are part of do what you do best. We know you’ll do credit property that will give them a America. a better job than we can.’’ sense of self, where they can organize Mr. Speaker, I know that some of my b 1245 their lives and dream those dreams we colleagues are concerned about the want for all of our children, because of charitable-choice provisions of this leg- Mr. Speaker, this legislation is tell- the work here. islation; but I tell my colleagues, all of ing the American people that they hold I am proud of the fact that this bill my research indicates that this legisla- the power of change, that they hold the establishes renewable communities tion breaks no new ground in that key to the future. throughout our Nations and that places arena. There are already charitable Finally, Mr. Speaker, I am hopeful like Harlem and the South Bronx and choices in the welfare bill that we cur- that the conference committee will in- Troy, New York, will be eligible for rently operate under. There are already sert the Individual Development Ac- employment wage credits. These cred- charitable choices in some of the com- count legislation language in the bill, its will help encourage employment of munity development activities that we as the Senate version of the bill con- our young men and women, offer an al- all need and make use of. tains that language. As cochairman of ternative to the illegal drug economy So while I am concerned seriously the Renewal Alliance, along with my that dominates too many of our inner about the Constitution and upholding cochair in the Senate, Senator cities. the law, this legislation is in compli- SANTORUM, we have been promoting By encouraging employment, young ance with both. And I would urge a yes this legislation for 3 years. people will learn the principles of ac- vote, a vote for the renewal, not only I want to commend the gentleman countability, responsibility, and punc- of people’s minds, but the renewal of from Missouri (Mr. TALENT), the gen- tuality that are necessary for success- their communities. tleman from Oklahoma (Mr. WATTS), ful careers. I remember a passage of scripture in and the President and the Speaker for I am particularly proud that because of our the Bible that says, And they rebuilt their commitment to this legislation. efforts, Native Americans will not be excluded the walls because the people had a Mr. Speaker, I urge adoption of the from this program as they most likely would mind to work. This legislation would bill. have been without our intervention. We in- not only work for renewal commu- Mr. Speaker, I am pleased that H.R. 4106, sisted on measures devoted to investing in nities, but it would work for all of the Savings for Working Families Act, was in- Native American landsÐa Native American America; and I urge that we vote its cluded in the Senate's version of the Commu- Private Investment Corporation. In 1996, we passage. nity Renewal and New Markets Act. passed the Native American Housing and Mr. ENGLISH. Mr. Speaker, I yield 3 H.R. 4106, which I introduced with Con- Self-Determination Act to increase the creation minutes to the distinguished gen- gressman STENHOLM, creates the first nation- of much needed housing on American Indian tleman from Pennsylvania (Mr. PITTS), wide Individual Development Account pro- reservations. In the same manner with this bill chairman of the Subcommittee on Em- gram. we continue to respond to the needs of our powerment of the Committee on Small These matched savings accounts are re- Native American citizens. Business. stricted to three uses: (1) buying a first home, Mr. Speaker, for decades, we have (Mr. PITTS asked and was given per- (2) receiving post-secondary education or witnessed a devastating impact that mission to revise and extend his re- training, or (3) starting a small business. failed public policies have had on too marks.) Mr. Speaker, America is in a period of un- many of our American cities. This bill Mr. PITTS. Mr. Speaker, the Amer- precedented growth. It is impossible for many brings new ideas to America’s neigh- ican people are the greatest resource of to take advantage of this economic boom

VerDate 25-JUL-2000 05:31 Jul 26, 2000 Jkt 079060 PO 00000 Frm 00048 Fmt 4634 Sfmt 9920 E:\CR\FM\K25JY7.061 pfrm02 PsN: H25PT1 July 25, 2000 CONGRESSIONAL RECORD — HOUSE H6827 when one-fifth of American households do not REQUEST TO BE ADDED AS COSPONSOR OF H.R. jobs. What a contrast to the new econ- have a bank account. 4923 omy boom towns like Seattle and Port- H.R. 4106 will help American families attain Mr. FATTAH. Mr. Speaker, I ask land. APIC and other programs in this the American dream. While I am a strong sup- unanimous consent that my name be bill will work, because they bring pri- porter of the bill before us today, I urge my added as a cosponsor of this legislation. vate sector solutions that have worked colleagues to consider including IDAs when The SPEAKER pro tempore (Mr. so well in other areas to our distressed this legislation goes to conference. SIMPSON). The Chair is unable to enter- rural and urban areas that have been H.R. 4106 provides a tax credit to financial tain that request. The sponsor of the left behind. institutions and businesses that match the bill may add a cosponsor. I urge my colleagues to support this savings of the working poor through IDAs. Mr. FATTAH. Mr. Speaker, I rise in bipartisan legislation. IDAs are matched savings accounts restricted support of this legislation. It provides Mr. SCOTT. Mr. Speaker, I yield 3 to three uses: (1) buying a first home, (2) re- a host of rules focused at the needs of minutes to the gentlewoman from Cali- ceiving post-secondary education or training, communities in which this economic fornia (Ms. WATERS). or (3) starting a small business. All matched expansion has not yet reached, and Ms. WATERS. Mr. Speaker, I rise to dollars are paid directly to the qualified finan- many of which have been referenced raise some questions about the bill, cial institution and payments from the IDA are earlier today. I think that is appro- and I would like to take this oppor- made directly to the asset provider. IDAs priate that this Congress move in this tunity to explain that this is the kind would be available to low-income citizens or direction. of legislation that really tests what I want to compliment the gentleman legal residents of the U.S. you stand for. from Pennsylvania (Mr. ENGLISH) and Of course, this is good legislation Mr. Speaker, there is an old joke that says also others who have been involved in that includes in it a lot of the answers the scariest thing an American citizen can moving this legislation forward, the to questions about what are we going hear is the phrase: ``Hello, I'm from the federal gentleman from Missouri (Mr. TALENT) to do about inner cities, how are we government and I'm here to help you.'' and the gentleman from Oklahoma going to get some investment. This And, although it's a joke, I think there is (Mr. WATTS); but on my side of the will do a lot of that. We all support em- some real wisdom there. aisle the gentleman from Illinois (Mr. powerment zones, we all support ven- Many of us in this chamber can remember DAVIS) and the gentleman from New ture capital, we all support more hous- Lyndon Johnson's first 100 days, when he set York (Mr. RANGEL) have done an ex- ing opportunities, and the President about trying to solve every problem faced by traordinary job. put a lot of time into it. the American people. I just want to say that the Presi- This is oiled, this is greased. Both He planned a War on Poverty, which was dent’s support for the New Markets ini- sides of the aisle have agreed that this designed to eradicate povertyÐforever. tiatives indicates once again that we legislation should pass. So for those of Well, almost 40 years later we still have can, working together, perhaps provide us who raise questions, we raise them poverty, and we have families who have been hope in places where hope is necessary. knowing that, nine times out of ten, stuck in poverty for generations now. I just want to say that in this Con- this legislation is going to pass. Why is that? gress, to the degree that we focus in on However, this should not have been Well, I would submit to my colleagues that substantive relief for people who face on the suspension calendar. It is on the governmentÐas a ruleÐis unfit to solve the present problems, I think that we can suspension calendar, which eliminates greatest problems of society. all be proud of our work, and this legis- the opportunity for us to make amend- Can government create a work ethic? lation is another example of it. ments. Why would we want to make No. Mr. ENGLISH. Mr. Speaker, I yield 2 amendments? For several reasons. I am Can government make people moral? minutes to the distinguished gentle- raising questions on three grounds. No. woman from Oregon (Ms. HOOLEY), a I object, first of all, to the placement distinguished supporter of this legisla- of H.R. 4923, the Community Renewal Can government force families to stay to- tion who has given this legislation a and New Market Act, on the suspension gether or communities to prosper? strong bipartisan tilt. calendar. No and no. (Ms. HOOLEY of Oregon asked and Second, I have serious concerns re- That was the problem with the Great Soci- was given permission to revise and ex- garding the use of Federal dollars for ety. tend her remarks.) the funding of religious-based institu- It denied the fact that our societyÐand yes, Ms. HOOLEY of Oregon. Mr. Speaker, tions which may use the funds in a dis- it is a great oneÐis not only of the people, but first of all, I want to commend the criminatory manner. I want to tell also by the people. President, Speaker HASTERT, and the you, the Founding Fathers did a good Mr. SCOTT. Mr. Speaker, I yield my- other Members who worked so hard in job of separating state and religion, self 30 seconds at this point to com- a variety of committees. This bill is and they did this for a lot of reasons. ment on some previous speakers, one of about hope and opportunity, to make People should be free to worship their whom said there is no new ground. Re- sure that all people can share in our God as they see fit, but also the gov- search has found that under the Wel- economic good times. ernment must never have such a strong fare Reform and Community Develop- As an original cosponsor of the hand that they can determine what ment Block Grant, the recipients of American Private Investment Compa- happens in any religion. those programs have not taken advan- nies Act, I have supported the Presi- Now, we have advanced in this coun- tage of the opportunity to discriminate dent’s New Markets proposals because try to the point where we protect the that is specifically provided in those it will bring investments to areas left rights of people to work and to partici- bills. They have not taken advantage behind. pate where tax dollars are involved. of it, but that would be new ground if In my home state of Oregon, the When we talk about giving these tax we expand it, and organizations do Portland area has been booming from dollars to religious institutions, we are take advantage of it. an infusion of high-tech jobs, but many now talking in this legislation about Furthermore, Mr. Speaker, a 1998 rural areas have actually experienced allowing them to discriminate based on GAO report found the following: Other reduced employment. religion. This is discrimination creep. treatment approaches such as faith- Last year, our largest newspaper, the What we are doing is opening up the based strategies have not yet to be rig- Oregonian, published an article called door so that we say it is all right, orously examined by the research com- ‘‘A Growing Gap’’ which stated, ‘‘Or- 501(c)(3), if you are a religious institu- munity. egon’s rural counties aren’t keeping tion to discriminate, but when the Mr. Speaker, I yield 1 minute to the pace with Portland. Despite a decade of other 501(c)(3)s come in and say, well, gentleman from Pennsylvania (Mr. prosperity, inequalities not only exist, we want to discriminate based on the FATTAH). but they appear to be growing.’’ fact that we have the kind of work that (Mr. FATTAH asked and was given One machinist was quoted as saying we are doing that is so special, that is permission to revise and extend his re- that in his hometown, people are so important, that we should be al- marks.) standing in line for minimum wage lowed to determine who can get a job

VerDate 25-JUL-2000 05:31 Jul 26, 2000 Jkt 079060 PO 00000 Frm 00049 Fmt 4634 Sfmt 0634 E:\CR\FM\A25JY7.016 pfrm02 PsN: H25PT1 H6828 CONGRESSIONAL RECORD — HOUSE July 25, 2000 and who cannot get a job. So we are is looking down at us. It is Moses, and the minority leaders in their commu- opening up the door, and certainly we he is looking down at ‘‘In God We nities. should have a debate about that on the Trust.’’ But this bill does not go that In my hometown, Reverend Jesse floor of this Congress. We should not far. It does not mandate that every- White has a computer program, as does change our discrimination laws in this body be in a Chamber that says ‘‘In Otha Aden, a pastor in Fort Wayne; so manner without a debate. So I have God We Trust.’’ does Reverend Jesse Beasley is working real concerns about that. It gives some flexibility as we try to with a program, Reverend Mike Nichol- Third, I am concerned about what address the problems of the cities of son has put together a community seems to be a blanket approval of reli- this country and the low-income areas housing program through the Associ- gious-based drug treatment programs of this country. Problems which are ated Black Churches. I have worked at the expense of State-funded pro- heavily rooted in economics, and this with George Middleton, who has taken grams. We do not know who is the best, bill has wonderful things in economics his savings to help build a community there is not enough information for it, but are also matters of how to reach center because his faith has motivated but we should give everybody an equal the soul, how to reach the families, him to do so, and Andre Patterson. I opportunity without allowing discrimi- how to help people who are hurting, have worked with Reverend Marshall nation. who are broken, who are hungry, who White, who has a program for music, Mr. ENGLISH. Mr. Speaker, I yield 1 are struggling with drug and alcohol that in San Antonio, Texas, is one of minute to the distinguished gentleman abuse, and this bill does open that. the most remarkable programs in the from North Carolina (Mr. HAYES). The question was raised, have we de- United States. Freddie Garcia, a Mr. HAYES. Mr. Speaker, I thank bated it in this House? We have de- former cocaine addict, has run a pro- the gentleman for yielding me time. bated it in this House five times. We gram that has brought thousands to Mr. Speaker, I might recall for the passed it in welfare reform, we passed change their lives, many of whom are gentlewoman the remarks of the gen- it in social services reform, both signed currently ministers and who are back tleman from Missouri (Mr. TALENT), by the President. We passed it in juve- on the streets. I personally have met that this does not in any way impose nile justice; we passed it in housing. faith-based treatment on anyone. It over 200 former addicts in San Antonio Every time this House has passed this in two different visits who have had simply gives the opportunity for very bill. Every time we debated it. We have successful efforts to be available to a their lives changed and are now reach- debated it here, we have debated it in wide cross-section of individuals. ing young people in the neighborhoods the Senate, we debated it in con- Mr. Speaker, I rise today in full and going door-to-door working in the dif- enthusiastic support of this bill. I want ference. Some people do not like the ferent housing units in the city. bill, and they do not like it that there to commend my colleagues who have b 1300 should even be a choice that people worked so hard to bring this legislation Bishop Raul Gonzalez in Hartford, to the floor, the gentleman from Okla- should have religious options. Furthermore, the President of the Connecticut, has had a tremendous homa (Mr. WATTS) and the gentleman United States has signed off on this program to reach out through Youth from Missouri (Mr. TALENT). Challenge to young people who are Mr. Speaker, while this bill is meant compromise, Governor Bush of Texas struggling with drug and alcohol addic- to address faltering local economies has been very innovative in using around the Nation, I want to address faith-based organizations as alter- tion. He has reached into their hearts the situation in our rural areas in natives in prison reform and actually and tried to change their lives. North Carolina’s eighth district. Wash- in alcohol and drug assistance. Vice It is not enough just to give some- ington is finally waking up to the fact President GORE has on his home page body a job who has messed up. One has that success on Wall Street does not that in the specific instance of alcohol to change both the soul and the ability automatically translate into success and drug abuse, that faith-based orga- to have a job. It is not enough some- on Main Street. In fact, while many in nizations ought to be allowed to be times just to change somebody inter- our Nation reap the benefits of a record used. nally either and help them get off drug economy, in the rural communities The Drug Czar of the United States, and alcohol abuse. If they are going to they continue to suffer with few local General Barry McCaffrey says, live in a place that is unsafe, is intoler- jobs and opportunities. ONDCP applauds your work with President able living conditions and they do not Mr. Speaker, the first bill I intro- Clinton on this historic initiative. We wel- have anything to do, they will fall back duced after coming to Congress was the come broad involvement by private volun- into drug and alcohol abuse. That is teer and religious groups in support of the what is so great about this bill is it Rural Economic Development and Op- national drug control strategy. Throughout portunities Act. This bill was meant to mixes the two. the country, faith-based organizations are Reverend Eugene Rivers, and I have a spur employment in rural areas by ex- making significant contributions to edu- tending a modest tax credit for job cre- cating our youngsters about the dangers of number of things I am going to insert ation in these areas. The Community substance abuse and helping many thousands in the RECORD, but this Newsweek Renewal and New Market Act captures of addicted Americans to achieve and main- story shows the debate of faith-based and implements the spirit of that bill, tain recovery through the added motivation organizations and what he has done and I am proud to support this legisla- faith can provide. working with gangs in Massachusetts. tion today. There is no question that at the min- When one talks to the people in the Mr. ENGLISH. Mr. Speaker, I yield 5 imum, faith-based organizations are as street there who have been working minutes to the distinguished gen- effective as other programs in alcohol with these kids they say, Why, if we tleman from Indiana (Mr. SOUDER). and drug abuse. The fact is the Amer- are faith-based, can we not get any (Mr. SOUDER asked and was given ican Journal of Drug and Alcohol money if we have all of these groups permission to revise and extend his re- Abuse found that faith-based addiction that have nothing to do with religion marks.) programs are much more likely, up to who are ineffective, who had no impact Mr. SOUDER. Mr. Speaker, one thing 45 percent, to report success. Any study in our community, yet the people who we need to clarify right off the bat is that has been done, non-biased, shows live here, who are active in the commu- what the intent of the Founding Fa- in fact they are cheaper to administer, nity, have not been able to get access thers was, in fact, in religion; and this because you have so many volunteers to the funds? bill does not go near that far. In fact, and other people willing to produce it, This bill will rectify that; and I con- the Founding Fathers printed twice so it helps the taxpayers and the indi- gratulate my friends, the gentleman copies of Bibles to be distributed in vidual. from Missouri (Mr. TALENT) and the American schools because there was a Now, one of the great ironies of this gentleman from Oklahoma (Mr. shortage of Bibles, and they printed as I work with this in the City of Fort WATTS), on their efforts. them with taxpayer dollars. This bill Wayne that I represent is many of BISHOP RAUL GONZALEZ, EXECUTIVE does not do that. these programs that people are so DIRECTOR, YOUTH CHALLENGE Furthermore, anybody in this House afraid of that are effective are in fact ‘‘Youth Challenge has now expanded to 25 gallery can see of all the lawgivers, one run by the communities themselves, by centers in 10 states and foreign countries. It

VerDate 25-JUL-2000 04:17 Jul 26, 2000 Jkt 079060 PO 00000 Frm 00050 Fmt 4634 Sfmt 0634 E:\CR\FM\K25JY7.071 pfrm02 PsN: H25PT1 July 25, 2000 CONGRESSIONAL RECORD — HOUSE H6829 has grown because it is based on a model of I believe that if you know the Lord you youth crime and self-destructive behavior discipleship, where ‘‘sons’’ of Youth Chal- can have the power to deliver a person from among young people as they have made op- lenge, who have a common heart and vision, addiction. If you don’t, but have all the edu- portunities available for productive activi- go into the world to serve others. In Guate- cation in the world, you are not going to de- ties and engendered a substantial change in mala, we have a drug program for males. We liver anybody. Yale University is only a half the lives and lifestyles of the individuals it have food programs, which we call ‘‘love an hour from us, and they haven’t been able serves. kitchens.’’ We begin by going into the to deliver nobody. The most they have done Youth Challenge’s auxiliary activities in- streets, offering drug addicts and alcoholics is to give out needles. Not far away, in Mas- clude the following: food and clothing. From there, we share the sachusetts, there is Harvard University. Family Support: Youth Challenge works gospel them food, we witness to them, and They haven’t been able to do anything about very closely with the family of the substance we convince them to enter the drug program. the drug crisis expect document it. Yet, if user in a family counseling setting to sup- We also have strong prison ministries. somebody believes in Jesus Christ and has port them in accepting and dealing with their loved one’s addiction. Many of our chaplains are, themselves, doing the power working through him, he’s able to time—some for as many as 40 or 60 years. Prison Outreach: Youth Challenge is cur- deliver people. I know because that is what rently providing services to six prisons, two they are some of our best and most com- happened to me 29 years ago, when a group of mitted pastors, because they ain’t going no- of which have extremely high Spanish-speak- people laid hands on me. I met someone who ing populations and are visited weekly by where. Members of our prison churches actu- knew God and I was set free.’’ ally tithe of soap and toothpaste and things Youth Challenge. like that. We provide our services gratis. We School Presentations: At the request of C. YOUTH CHALLENGE CASE STUDY local school district authorities, Youth Chal- only ask the families to donate at ten dollars (By Collette Caprara) a week, if they can. lenge staff members offer presentations in Our Youth Challenge ministers are com- Bishop Raul Gonzalez, stately and com- both the primary and secondary schools mitted and impassioned because they under- manding, yet embracing in his love, is the within the greater Hartford area. stand that we are in a virtual war and that founder and director of Youth Challenge of Street Outreach: Youth Challenge staff this revolution is forever. Hartford, CT, and the founder of Youth Chal- volunteer as street workers where they make Not long ago, an AP story noted the find- lenge programs in Puerto Rico, Florida, and initial contact with troubled individuals and ings of a 13-member group of experts on a the Bronx, New York. Raul is a devoted hus- provide access to treatment in a familiar panel set up by the UN. They announced that band of his wife ‘‘Willie’’ and father of four non-threatening environment. drug use is growing among youth in the children. He was also the son of an abusive Youth Activities: Youth Challenge works United States. Now, the UN didn’t have to alcoholic father whose own life was nearly with local neighborhood groups in the inner- spend all that money conducting that study. annihilated by a heroine addiction. But then city to provide services for at-risk children, They could have just asked us who are work- he emerged into a new life with an including classes and group activities to pro- ing on the streets, and we would have told unshakeable commitment to free men, mote positive values, an uplifting self image, them that drug abuse was growing! All the women, and youths from the chains of drug constructive relationships, and character de- ministers of Youth Challenge stay in touch and alcohol abuse. velopment. Referred Services: A number of govern- with what’s happening on the streets. From The philosophy of the program is the de- ment agencies and private organizations the beginning, I made that our policy and I velopment of self-respect, confidence, and a refer their clients to Youth Challenge to as- think that is one reason that our program capacity to enjoy life through discipline, sist them in addressing substance abuse. has lasted so long. proper counsel, and attitude. The basis of the I’ve been involved in outreach to addicts Youth Challenge approach is a total living Among these agencies and programs are: the for 30 years. Thousands of people have come environment of personal and group inter- State of Connecticut Department of Correc- through our doors. We have tracked what action, with structured activity. The overall tions, the State of Connecticut Department happens to them, and we have documented a objective is to engender a total change in of Education, the Probation Department of success rate that ranges from 60 to 80 per- values and lifestyles among the young men the State of Connecticut, Connecticut Valley cent. and women who are served through the pro- Hospital, the State of Connecticut Depart- Our program has made unique progress as gram. A trained and capable staff provide an ment of Parole, the Department of Mental a faith-based organization, because we have atmosphere of warmth, trust, support, and Health and Addiction Services, and the Sal- been able to break ground in working coop- love that many of the residents never before vation Army. In addition, Dr. Raul Gonzalez eratively with the state. We are licensed, and experienced. Residents participate in a vari- has been a consultant to the military and its no demands have been placed on us to cease ety of individual and group activities, and Drug Education Program. preaching the gospel of Jesus Christ. We are also engage in supervised housework duties CENTRAL FACILITIES ‘‘professional’’ without being ‘‘professional- according to a daily schedule. The primary Youth Challenge’s main offices and male ized.’’ I’m governed by a board. We have a goal of all the activities in which the resi- induction services are located at the commu- men’s home, a women’s home, and a training dents are involved is to instill a sense of self- nity residence at 15–19 May Street in Hart- center in Connecticut. discipline and self-worth, which equips them ford. This facility provides initial phases of Our relationship with the State did not to live as responsible, productive citizens treatment for 15 residents. Here, the incen- come overnight. For five years, I fought the when they graduate from the program. In- tive to forsake the drug habit is engendered regulators on the issue of licensure. I lost in stilled in Youth Challenges’ students is the and the desire to pursue a new life is in- the first count, where the decision was made conviction that, not only can they be drug stilled. This induction phase includes coun- by one judge. Then we took our case to a free, but they can be positive assets to their seling, classes, and group activities, and court with three judges. Eventually, our case community. lasts approximately four months or until the was heard by five judges. Our position was Youth Challenge has expanded throughout individual is ready to move to the second that we were a religious organization, not a the nation, establishing centers in 25 loca- phase. ‘‘drug treatment service’’ and that, as such, tions, within the United States, Central The goal of this program is the develop- we shouldn’t need a license. We said, ‘‘Okay, America, and the Caribbean, with a remark- ment of self respect, confidence, and a capac- before you guys demand that we apply for a ably high success rate. Studies of program ity to enjoy life through discipline, coun- license, we want you to look at our mate- participants indicate that 70 percent of seling, and positive attitude. A total living rials.’’ And we brought in a pile of Bibles and Youth Challenge’s graduates never return to environment of personal and group inter- stack of scriptural readings. Our lawyer is drugs. Youth Challenge centers have accept- action, with structured activity, provides retired, but was at the top of his field, and he ed more than 2,500 drug- and alcohol-depend- the basis of this approach. The Youth Challenge Mission for Women, proved that Youth Challenge taught more ent in their programs. Its staff is comprised which opened in 1981, follows the same pro- scripture than any seminary in new England. of individuals from a spectrum of ethnic What I learned from this experience was gram format as the male services program. backgrounds who have successfully over- that when the state wants to do something, It is licensed to accommodate 8 residents and come drug and alcohol dependency, and its they just do it. Forget about this separation is located at 32 Atwood Street in Hartford. doors are open to individuals of all races, of church and state deal. They see what they Long-range training for men is also pro- creeds, and ethnic backgrounds. The Youth want to see. You know what they did to us? vided at the Youth Challenge Training Cen- They actually licensed our Bible training Challenge Men’s Induction center offers a bi- ter, a 21-acre farm located in Moosup, CT. center. That’s how my license reads—‘‘Youth lingual program of counseling and classes. The facilities can presently house 9 students. Challenge Bible Training Center.’’ So the PROGRAM ACTIVITIES The training that began at the induction state thinks it has the power even to license Youth Challenge is actively involved in center continues at the training center, as the Bible! I could have fought them and re- both the treatment and prevention aspects of individuals are challenged to develop, at pro- fused to be licensed and gone to jail, but drug and alcohol problems. Along with its gressive levels, the personal, social, aca- they would have closed us down. So I was primary mission of being a residential reha- demic, and vocational aspects of their lives. forced to accept the license. In spite of their bilitation program for troubled individuals, Here, a vocational training program helps its regulations and guidelines, I believe if they Youth Challenge has established several ac- residents to develop job skills and a strong leave programs like ours alone, we would do tive satellite programs that augment its work ethic. Opportunities for academic ad- a better job. But it was not an option for basic mission. These auxiliary programs vancement, including GED classes are also them to leave us alone. have had a substantial impact on deterring available.

VerDate 25-JUL-2000 05:31 Jul 26, 2000 Jkt 079060 PO 00000 Frm 00051 Fmt 4634 Sfmt 0634 E:\CR\FM\A25JY7.032 pfrm02 PsN: H25PT1 H6830 CONGRESSIONAL RECORD — HOUSE July 25, 2000 The third phase of training is internship. ministry and the entire realm of individuals In Garcia’s world, there is no room for so- Participants in the program complete six whose lives are dominated by addictions. cial and economic analysis, psychiatry and months of supervised, on-the-job training. psychology. Man sins, or he repents. He is This service solidifies gains that they have [From the Houston Chronicle, Mar. 6, 1995] lost, or he is saved. made in the induction center and in the WELFARE FROM THE STREETS Such a view of drug abuse makes state offi- training center throughout the twelve pre- cials uneasy. Rehabilitation, they say, is not (By Thaddeus Herrick) ceding months and provides an opportunity an exercise in black and white. to continue to develop their personal skills SAN ANTONIO—On a vacant lot deep in the ‘‘I’m not one to say God’s not in the mir- and ability to relate and work with other barrio, amid neglected bungalows and gang acle business,’’ says John Cook, a spokesman people. After their internship, graduates of graffiti, reformed junkie and born-again for the Texas Commission on Alcohol and the program move into staff trainee posi- preacher Freddie Garcia is waging war on Drug Abuse. ‘‘But addiction is not a moral tions in one of the Youth Challenge centers the welfare state. issue. It’s a disease,’’ he claims. or they can become active in the re-entry He grasps a homeless ex-con named Chris- Garcia, however, insists he gets results: program where they obtain gainful employ- topher by the collar, beseeching him to ac- Nearly two out of three of the people who ment while continuing to reside in the sup- cept Jesus in voice that recalls both his study the Bible at Victory Fellowship for portive environment of the Youth Challenge Mexican-American heritage and his street- three to six months overcome their addiction facility. Program graduates may also choose wise past. to drugs or alcohol, he says. to move out of the center to pursue their ‘‘Lord Jesus, I’m a sinner,’’ Garcia cries, At the very least, the scene at Victory Fel- long-term goals, often reuniting with their urging his convert to repeat after him. ‘‘I lowship on San Antonio’s West 39th Street family, entering long-term careers, and fur- ask forgiveness. Forgive all my sins. Jesus, looks convincing. A group of addicts, arms in thering their education. come into my heart.’’ the air, stages a heated mini-revival inside The Corinthian School of Urban Ministry, No tax dollars. No bureaucracy. No Wash- the center. Outside, 100 down-and-out men operated by Youth Challenge, provides col- ington. and women gather in clusters for Bible lege-level scriptural education and training Just this vacant lot and a barracks of sorts study. in faith-based, non-clinical counseling tech- for drug addicts, prostitutes and other urban One group stands, waving arms frantically. niques. After completing the school’s train- flotsam—and plenty of Bibles. ‘‘Lord, you are more beautiful than dia- ing curriculum, graduates continue on-the- Sound like House Speaker Newt Gingrich’s monds,’’ they sing, ‘‘and nothing I desire job training as junior and senior counselors. answer to welfare reform? It pretty much is. compares with you.’’ This hands-on residential experience, which Garcia’s successful venture is called Vic- In the men’s bunkroom, a heroin addict includes eighteen months of the National tory Fellowship. It claims to have cured named Paul and an alcoholic called Sam, Teen Challenge curriculum, equips Youth 13,000 people of drug addiction and alco- both new arrivals, work their way through Challenge ministers to become disciples and holism over the past 25 years throughout the the Old Testament with a counselor, a empathetic counselors whose firsthand expe- Southwest and overseas and has made Garcia former drug abuser himself. rience gives them the power to engender a Gingrich poster boy. ‘‘I been in the state hospital in Austin,’’ At a news conference earlier this month, transformations in others who suffer the says Sam. ‘‘I don’t want no other program the Republican speaker urged policy makers bondage of addiction. but this one.’’ to take note of the 56-year-old preacher and While Garcia cannot document his success A GOAL OF COMPLETE AND LASTING FREEDOM his organization. rate, his anti-drug efforts were praised by FROM ADDICTION Indeed, Gingrich and his allies believe Gar- President Bush in 1990. Then in early Feb- Most conventional drug treatment pro- cia represents the solution to the war on ruary, Gingrich held Garcia up as a model in grams refer to former addicts as ‘‘recov- poverty: personal experience, faith and local the war against the welfare state. ering,’’ implying that the process is never know-how. ‘‘But rather than study him,’’ said Ging- fully complete and that progress is always in ‘‘People like Freddie share the same zip rich at a Washington press conference, ‘‘the a state of jeopardy, as recidivism looms in code with the ones they’re helping,’’ says bureaucracy has tried to put folks like the background. In contrast, Youth Chal- Robert Wodson, president of the National Freddie out of business because they don’t lenge is built on the premise that complete Center for Neighborhood Enterprise, a Wash- have Ph.D.s or can’t fill out the paperwork.’’ and total freedom from addiction is possible ington-based group favoring Gingrich’s free- Experts agree that Garcia’s role as a recov- through Christ. In the words of Raul Gon- market ideas. ‘‘I can’t imagine that would be ered drug addict is central to his program. In zalez, ‘‘We don’t say that you will live in the the case with a psychiatrist.’’ fact, all the Victory Fellowship Bible in- shadow of a relapse.’’ The high success rates Experts, even those from opposing political structors are recoveredd addicts, most of and low recidivism rates of Youth Challenge camps, agree that Garcia’s success should be them felons. and other faith-based programs give cre- studied. They warn, however, against com- ‘‘People like this play an important leader- dence to their methodology of dramatic pletely localizing anti-poverty efforts. ship role,’’ says Weir. ‘‘They’ve done a ter- transformation when contrasted with con- ‘‘What concerns me,’’ says Margaret Weir rific job when not a lot of other organiza- ventional ‘‘recovery’’ in which relapse is of the Brookings Institute, a Washington tions have.’’ common. think-tank often allied with Democratic Still, Weir warns there is a danger in sug- As Bishop Raul Gonzalez explains, the no- causes, ‘‘is that this could become a excuse gesting that those who fall on hard times— tion of ‘‘sonship’’ is central to its effective for state and federal governments to wash and the struggling communities where they intervention. Residents at Youth Challenge their hands of the inner cities.’’ live—must right themselves. centers are not considered as clients, but are An unassuming man when he’s not saving ‘‘There’s a bit of false populism here,’’ she welcomed into a ‘‘family’’ that provides a souls, Garcia was raised on San Antonio’s says. ‘‘The problems of the inner city are sense of love and belonging that replaces the poor East Side where he says he fell into a largely economic problems that neighbor- false sense of identity and family structure miserable, angry, heroin-addicted life. hoods have no control over.’’ which attracts many young people to gangs. ‘‘He and his girl, Ninfa, lived on the Nevertheless, Gingrich has assembled a Na- The father-son, father-daughter relation- streets,’’ reads the back cover of Garcia’s tional Leadership Task Force on Grassroots ships expand through discipleship to embrace self-published autobiography. ‘‘They aban- Alternatives for Public Policy, a group rep- ‘‘grandchildren’’—a third level of individuals doned their first child, aborted their second resenting Victory Fellowship and several who are reached by its healing powers. As a and brought their third infant along while dozen other mostly faith-based programs, to new generation of sons are embraced by they burglarized and scored drugs.’’ offer ideas on legislation that would, in the grassroots disciples, the mantle of leadership In 1966, strung out on the streets of Los an- House speaker’s words, ‘‘end the welfare is passed and the family structure expands. geles, Garcia accepted a friend’s invitation state.’’ In Youth Challenge, Bishop Gonzalez and to seek help at a Christian home called Teen Woodson of the National Center for Neigh- his family exhibit a standard of parental love Challenge. borhood Enterprise says its March 15 task that lasts a lifetime, not just for eighteen Several months later, Garcia says, he force report to Gingrich will tout the months of treatment. ‘‘We all need three fa- stumbled to the altar during a revival and, achievements and cost-efficiency of organi- thers,’’ he explains, ‘‘Our Heavenly Father, tears filling his eyes, asked Jesus to zations such as Victory Fellowship. our physical father, and a spiritual father.’’ ‘‘pasame quebrada,’’ or ‘‘give me a break.’’ The task force will also urge federal and The powerful paradigm of sonship and pa- He then set out to convert others. After state leaders to fund faith-based groups rental love is markedly different from con- graduating from the Latin American Bible (though Garcia says he wants no money) and ventional drug treatment programs that are Institute in La Puente, Calif., Garcia re- relax the regulations that groups such as based on a professional-client model. Youth turned to San Antonio and opened a home Victory Fellowship face. Challenge residents and staff resemble a for barrio drug addicts. Today, there are five ‘‘Too often,’’ says Garcia, sounding a dis- family, or a ‘‘living body,’’ as opposed to San Antonio homes under the Victory Fel- tinctly Gingrich theme, ‘‘the government re- therapeutic programs that often ‘‘ware- lowship umbrella. wards failure and punishes success.’’ house’’ clients in an institutional setting. ‘‘We teach Jesus in the morning, Jesus at For example, Garcia would prefer to adver- The Youth Challenge program is truly ‘‘spir- noon, Jesus at night,’’ says Garcia. ‘‘You tise Victory Fellowship as a ‘‘rehabilitation it filled,’’ and is based on a heartfelt com- leave Jesus out, man, you’re like every other center.’’ When he tried that, however, the mitment to serve those who are within the treatment program in the United States.’’ Texas Commission on Alcohol and Drug

VerDate 25-JUL-2000 06:13 Jul 26, 2000 Jkt 079060 PO 00000 Frm 00052 Fmt 4634 Sfmt 0634 E:\CR\FM\A25JY7.034 pfrm02 PsN: H25PT1 July 25, 2000 CONGRESSIONAL RECORD — HOUSE H6831 Abuse gave him an ultimatum: Apply for a ‘‘We have tremendous potential in the [From the San Antonio Express-News, Apr. 7, drug-rehab license or advertise as a church. city,’’ he said. 1996] But getting a license to treat drug addic- EASTER SPECIAL TO EX-ADDICTS tion would mean meeting state health and [From the San Antonio Express-News, Feb. (By J. Michael Parker) safety codes. Even Garcia admits that would 21, 1996] Every day is Easter at Victory Fellowship. be tough, since his shelters seldom turn GOP TEAM PRAISES DRUG REHABILITATION The holiest feast on the Christian cal- away the desperate no matter how full. PROGRAM endar, Easter celebrates what Christianity It would also mean having licensed coun- (By Maria F. Durand) selors, which would mean hiring staff with calls the central event of salvation history— college degrees. Garcia says he does fine with A San Antonio faith-based drug rehabilita- Jesus’ Resurrection from the dead and the dropouts from the barrio. tion program that has been heralded nation- triumph of salvation over sin. ‘‘My people have educations you can’t get wide as a model of grass-roots community But at Victory Fellowship, the Resurrec- at Yale University,’’ he says. intervention won kudos Tuesday from mem- tion isn’t merely an event to be commemo- bers of a Republican congressional team rated. [From the San Antonio Express-News, Feb. 6, charged with restructuring welfare. It’s a miracle that happens whenever a 1997] ‘‘It’s the most impressive of its kind I’ve drug addict turns from his destructive life- seen,’’ U.S. Rep. J.C. Watts, R–Okla., said STATE OF THE UNION RECOGNITION COSTS SAN style and dedicates his life to Jesus Christ. during a visit to Victory Fellowship, a Chris- ANTONIO IN LIMELIGHT Throughout San Antonio, many churches tian-based program that receives no federal are filled this day with symbols of new life (By Brenda Rodriguez) or state funds. such as lilies, water and light. For the first time during a State of the Watts is co-chair of the Task Force on Em- But here, reality speaks for itself. Union address, two of the Alamo City’s na- powerment and Race Relations. Once on fire with chemicals that consigned tive sons who rose from humble beginnings ‘‘We need to put these kinds of community them to a form of living death, these people, to prominence were recognized for their pub- values back into the programs,’’ said U.S. most in their early 20s, now are on fire with lic service. Rep. Jim Talent, R–Missouri, another co- faith. President Clinton took a few minutes from chair of the Republican team. ‘‘We need to When they sing, ‘‘I once was lost but now his hourlong speech to Congress Tuesday encourage what the system has been discour- am found, was blind but now I see,’’ they night to pay tribute to U.S. Rep. Frank aging.’’ mean it literally. Tejeda, who died last week after a battle During an hour-long noon service, a long They’re on a high they say they’ll never re- with brain cancer. list of recovering drug addicts told similar gret. He also recognized Henry Cisneros, the stories of recovery and clean lifestyles. Their worship crackles with emotion. They former San Antonio mayor who spent four People like David Cortez, George Juarez sing, praise God and applaud his name with years as Clinton’s secretary of Housing and and Ernest Guerrero, who now work in many a fervor rarely seen in conventional church- Urban Development. of the center’s outreach programs, lauded es. Republican Rep. J.C. Watts—during re- Jesus as their savior. ‘‘Nothing is greater than the love of Part of the Republican proposals for wel- marks in response to the president’s ad- Jesus!’’ shouted minister Juan Rivera, one of fare reform include dropping many of the dress—also praised Freddy Garcia for helping Pastor Freddie Garcia’s first converts in guidelines prohibiting federal funds from people kick their drug addictions. 1973, as he led a recent worship service in the ‘‘We are the incubator for great Hispanic going to faith-based organizations. The GOP old church at Buena Vista and South Cibolo leadership,’’ political scientist Richard also wants to turn more administrative streets. Gambitta said about Tuesday night’s local power over to local organizations. Rivera had been on heroin for six years, honors. ‘‘Clearly San Antonio is a city on the Republicans plan to announce welfare re- burglarizing homes to support his habit. He rise.’’ form legislation next week in Washington. described a life of misery, pain, confusion, Tejeda’s mother, Lillie, and sister Mary Most groups working with community- causing suffering to people he loved, being Alice Lara sat behind first lady Hillary based organizations agree that more power chased by police and sitting in jail won- Rodham Clinton and Tipper Gore as the should go to local agencies and many regula- dering where he’d gone wrong. He wanted to president commended the late congressman tions should be eliminated. be saved. for his military bravery and public service. ‘‘Solutions should be local. Federal inter- ‘‘I remember thinking once, ‘If only I could The president had extended a special invi- vention is not good,’’ said Beverly Watts be born again, I wouldn’t choose this life. I’d tation for the family to attend the address. Davis, executive director for San Antonio warn others to stay away from it,’ ’’ he said. The Tejeda family would not comment Fighting Back of United Way. But he didn’t want Jesus. Wednesday about the trip to Washington. Victory Fellowship was founded by former With help from her daughter, Lillie Tejeda drug addict Freddie Garcia in 1972. ‘‘I’d been told since I was a kid that God stood proudly before Congress as they ap- ‘‘The only way that we would get federal would punish me. I’d seen friends killed in plauded her son’s accomplishments. funds is if there were no strings attached,’’ my neighborhood and I thought it was pun- Tejeda, a decorated Vietnam veteran, was said Garcia, who receives much of his fund- ishment from God,’’ Rivera said. buried with full military honors Monday at ing from private donations. ‘‘I am not ‘‘I thought he was going to get me sooner Fort Sam Houston National Cemetery. against the funds. I am against the regula- or later,’’ he said. The president also saluted Cisneros, who tions that make no sense.’’ In his first worship service at what until left the Cabinet in January and now will However, while programs like Victory Fel- recently was called Victory Outreach, he re- head the Spanish-language television net- lowship serve some, they cannot help every- called Garcia announced that ‘‘Jesus is work Univision in Los Angeles. one. here.’’ But Cisneros will not stray far from the ‘‘For some clients who can identify with a ‘‘I was so naive, I turned around to look at political limelight. He will join Gen. Colin higher power, the program works, but it him. I didn’t see him. Powell and Vice President Al Gore in leading doesn’t work with all the clients,’’ said ‘‘I figured I was so sinful that he wasn’t the president’s Summit of Service in Phila- Cindy Ford, executive director of the San confirming my relationship with him,’’ Ri- delphia in April. Antonio Council on Alcohol and Drug Abuse. vera recalled. ‘‘Henry Cisneros remains the most viable While praising the success of faith-based But Garcia told him Jesus would forgive political candidate in the state of Texas,’’ programs, local agencies insist federal dol- him and make him a new person if he would Gamibtta said. ‘‘Henry Cisneros without lars must continue. accept Jesus. question is a superstar.’’ ‘‘It’s really sad with everything else going When he did, and saw other ex-addicts wel- In Watts’ Republican Party response to the and what the state is doing to drug rehabili- come him as a new brother in faith, ‘‘it was State of the Union address, he said Garcia is tation, for the federal funds to be drying up totally mind-blowing,’’ he recalled. ‘‘the state of the union.’’ too,’’ Watts Davis said. Rivera said he learned—and has spent his Garcia, a recovering drug addict, is the A state-funded drug detoxication center entire life since then telling other addicts— founder and director of Victory Fellowship, a here was closed late last year. Now Bexar that no sin is beyond God’s power to forgive. Christian ministry that helps people over- County has no detoxication center. Rivera said only Jesus saved him from his come drug and alcohol dependencies. Still, Robert Woodson, president of the Na- sinful past. Garcia said he was surprised Watts men- tional Center for Neighborhood Enterprise, ‘‘I had no will to change on my own, and tioned his efforts in his speech. The Okla- who brought the congressional team to San all the drug treatment programs I’d tried homa representative visited the ministry Antonio, said the success rates for faith- had failed. last spring during a trip to the Alamo City. based centers is unparalleled and the meth- ‘‘Drugs were like a water current pulling ‘‘You don’t hear about anybody from our ods must be examined. me under, and I was drowning, but Jesus barrios being mentioned,’’ Garcia said. ‘‘I ‘‘We should undertake a major national reached down and pulled me out,’’ he said. know (Watts) knows our program is for study to compare the cost per day and the Easter, Rivera said, has a special meaning real.’’ outcomes of faith-based programs with con- for one who’s come out of a life of drugs and Gambitta added that such grassroots ef- ventional programs,’’ Woodson said. ‘‘We are crime. forts by San Antonians will continue to gar- interested in looking for a more effective op- ‘‘I really am a new man, I’ve been clean for ner recognition. tion to fighting drug abuse.’’ 23 years, and my faith goes beyond a couple

VerDate 25-JUL-2000 04:17 Jul 26, 2000 Jkt 079060 PO 00000 Frm 00053 Fmt 4634 Sfmt 0634 E:\CR\FM\A25JY7.037 pfrm02 PsN: H25PT1 H6832 CONGRESSIONAL RECORD — HOUSE July 25, 2000 of hours on Sunday morning. It permeates Victory Fellowship is the personal min- They are welcomed with food, a clean bunk every aspect of my life. istry of ex-addicts Freddie and Ninfa Garcia, and security: San Antonio’s gangs know that ‘‘Every day is Easter here. When I see who, as he puts it, ‘‘used to run in the streets Freddie Garcia’s Victory Fellowship centers young guys coming off the street and turn- and rob people, Bonnie and Clyde style.’’ are havens, and anyone inside is off limits to ing to Jesus, it’s an opportunity for me to Their 1966 conversion came through ex-ad- attack. thank God for what he’s done for all of us,’’ dicts with the famed Teen Challenge pro- If the newcomers decide to stay and kick Rivera said. gram, founded by David Wilkerson, author of their drug habits, they are surrounded by James Valdez, 25; Ernest Guerrero, 22; and ‘‘The Cross and the Switchblade.’’ former addicts, prostitutes and criminals Johnny Samudio, 22, have been among the Today, the Garcias say the Victory Fellow- who pray with them, hold them close and beneficiaries of Rivera’s and Garcia’s ship program has reclaimed no fewer than clean up their messes. ministry. 13,000 hard-core addicts from the streets. The withdrawal is unmedicated and the They’re taking leadership classes so they, Program leaders say they have a 70 percent violent suffering lasts for hours. So do the too, can help change young addicts into pro- cure rate with people who stick with it for prayers, rubdowns and ministering by people ductive servants of Jesus Christ. nine months, and they do it all with a who believe their own addictions were cured They’ve also performed with other ex-ad- $60,000-a-year budget, funded entirely by pri- by the power of Jesus Christ. dicts in a skit, ‘‘The Junkie,’’ depicting the vate donations. ‘‘We see a lot of miracles here,’’ said Alma destructiveness and despair of gang life and Other substance-abuse treatment centers Herrera, who with her husband, Roman, is the joy of feeling loved and cared for. with multimillion-dollar budgets have cure among Victory home’s house parents. ‘‘My mother used to cry a lot for me. Now rates around 10 percent. ‘‘The saying ‘Once a junkie, always a junk- she cries for joy,’’ Valdez said. Members of Congress such as Sen. John ie’ is not true,’’ said Victory Fellowship co- ‘‘Everyone of us here has been brought Ashcroft, Missouri Republican, who pushed pastor and ex-addict Juan Rivera. back to life. It shows that nothing is greater for ‘‘charitable choice’’ in the welfare law Once the purging is over, the newcomer is than the love of God,’’ he said. often refer to successes such as Victory Fel- adopted into a family of believers whose Valdez said he had turned to crack cocaine lowship and Teen Challenge as examples of daily lives are filled with prayer, chores, out of boredom. he spent several years on programs government should be supporting. Bible study, singling and fellowship. Wit- crack, losing jobs and stealing to support his But Mr. Garcia and other religious leaders nessing is conducted in housing projects, habit. aren’t convinced that the government can gang-infested streets and prisons. ‘‘All the guys I’d never wanted to hang help them. Each Victory home is headed by a married around with before became my best friends,’’ ‘‘I don’t want no grants,’’ Mr. Garcia said couple who act as parents setting the stand- he recalled. at a recent seminar on charitable choice ard for love, discipline and structure. Men But when his mother took him to Garcia’s sponsored in San Antonio by the National work with men, and women work with Victory Home—the fellowship’s residence for Center for Neighborhood Enterprise (NCNE). women. They focus on building a person’s recovering addicts at 1030 S.W. 39th St.—his ‘‘I’m a church. All I want is for you to character, self-discipline and understanding life changed. leave me alone,’’ he said. of life as taught in the new Testament. ‘‘It’s easy to do things that are wrong, but Under charitable choice, welfare recipients The privately funded two-year program is it takes a real man to do what’s right. It’s a receiving vouchers for a variety of services— offered at no cost to the ex-addicts. After great feeling to know you can be right with job training, food pantries, homes for unwed graduation, the men and women often end up God by confessing your sins and giving your mothers, drug and alcohol treatment, day in school or in jobs. Some married couples life to him,’’ Valdez said. care—should be able to redeem them with a volunteer to start Victory homes in other Samudio said many youngsters deny God faith-based group. towns, where they will recruit addicts to a because violence, crime and family neglect Charities are prohibited from using the ‘‘new drug-free life in the Lord.’’ are all around them. government money for sectarian worship, in- [From the Wall Street Journal, Dec. 14, 1993] struction or proselytism. ‘‘I want to be an example of the change THE WRONG FIX Jesus can bring in their lives. I want to be a Texas Gov. George W. Bush has made char- (By Robert L. Woodson Sr.) man of God. itable choice a priority and asked state agen- ‘‘We tell them about Jesus and show them cies to report to him on their progress by Surgeon General Joycelyn Elders’s recent a different lifestyle. We show that we care May 1. comments that America’s crime rate could about them,’’ he said. ‘‘I envision a new welfare system—an ener- drop ‘‘markedly’’ if illicit drugs were legal- Guerrero said his older brother, who is gized, competitive program where a person ized epitomizes the tragic failure of serving a 10-year prison sentence for murder, who needs help would get a debit card, re- accommodationists to take a moral stand wrote him from prison and told him to get deemable not just at a government-spon- against an immoral activity. out of gangs and drugs. sored agency, but at the Salvation Army or Tragically, the person who should be at the ‘‘Gang life was fun for a while, but I lost a church or a day care facility or a private- helm of a massive effort to dissuade a new everything. My mind was only on cocaine. sector job-training program,’’ the Repub- generation from involvement with drugs can- ‘‘I found drug-dealing everywhere I went. I lican has said. not seem to bring herself to declare that ac- became depressed and wanted to kill my- One bill would ‘‘exempt’’ some faith-based tions detrimental to one’s personal health self,’’ Guerrero recalled, adding: substance-abuse centers from state regula- and to the well-being of society are wrong ‘‘Once, I put a 12-gauge shotgun to my tions. Such programs would have to register and deserve no tolerance. Dr. Elders assumes head, but I realized that if I killed myself, I’d with the state, say in their literature that drug use to be an unavoidable ‘‘given’’ for go to hell.’’ they are exempt, and refrain from offering which the best goal is simple damage He said he cried out to God for help, and medical care or detoxification. control. God saved his life by taking away his desire Another bill would allow ‘‘alternative ac- In addition, Dr. Elders’s argument in favor for drugs. Now he wants to help youths and creditation’’ systems in lieu of state licens- of drug legalization is riddled with factual gang members reject drugs as well. ing for some programs. errors. For example, experiments with legal- Getting government funding flowing to ‘‘I was dead in the world,’’ Guerrero said, ization abroad have not been the successes programs that ‘‘transform’’ troubled people ‘‘but now I’m alive here.’’ she assumes them to be. The majority have into responsible citizens has been NCNE now been reversed as was the failed ‘‘Needle founder Robert L. Woodson Sr.’s message for [From the Washington Times, Mar. 26, 1997] Park’’ experiment in Zurich—a free-drugs 20 years. zone designed to control drug use and stem ABUSE PROGRAM BELIEVES IN ABILITY WITH- The recent NCNE seminar explored peer the spread of AIDS. Predictably, this park OUT STATE AID: FAITH-BASED EFFORT accreditation plans and alternative licensing quickly became a nest of chaos and licen- SERVES AS EXAMPLE plans as ways to make charitable choice tiousness that spilled into the surrounding (By Cheryl Wetzstein) work. community. Needles were passed around, de- One by one, a parade of healthy, well- But the fear of government heavy-handed- spite the availability of a clean-needle pro- groomed men take the microphone at the ness—now and later—is pervasive. gram, and the used, bloody needles were cast church stage at Victory Temple. ‘‘Shekels come with shackles,’’ one pro- on curbsides and surrounding sidewalks, ‘‘My name is Troy,’’ says one man dressed gram director warned. jeopardizing innocent pedestrians. in a white T-shirt and camouflage pants. ‘‘I ‘‘Yeah, and when the state comes after Dr. Elders says that legalizing drugs was a heroin addict for 23 years. Now I have you, they go after your jugular,’’ said Raul abroad has not increased drug use, but Hu- been clean for eight months, and I give all Gonzalez, executive director of Youth Chal- bert Williams, president of the Washington- the honor and glory to Jesus Christ.’’ The 600 lenge of Greater Hartford in Connecticut. based Police Foundation, says that a more men and women in the audience cheer, clap relevant example is our nation’s own past and stamp their feet. ADDICTS GET TOUGH LOVE AT VICTORY and trajectory: Since the repeal of Prohibi- Similar stories come from Martin, Juan, (By Cheryl Wetzstein) tion, ‘‘the amount of people using alcohol Noel, Roman and dozens of other men, whose The people come to the modest Victory has increased significantly, and there’s no only visible signs of decades of drug abuse homes day and night. Some shake from early reason to think the number of people using and gang life are the tattoos on their mus- drug withdrawal. Others are fresh from pris- drugs will not increase significantly if drugs cular arms. on or fleeing a gang contract. are legalized.’’

VerDate 25-JUL-2000 05:54 Jul 26, 2000 Jkt 079060 PO 00000 Frm 00054 Fmt 4634 Sfmt 0634 E:\CR\FM\A25JY7.040 pfrm02 PsN: H25PT1 July 25, 2000 CONGRESSIONAL RECORD — HOUSE H6833 In a twist of logic, Dr. Elders reasons that gangbanger named Selvin Brown—‘‘a sassy, warns that as the teenage population swells because ‘‘many times they’re robbing, steal- smartass, tough-talking, gunslinging mother in the next decade, ‘‘there will be virtual ing and all of these things to get money to shut your mouth,’’ he says, not without apartheid in these cities if the black church buy drugs,’’ legalization would help by mak- some appreciation. Brown took the reverend doesn’t step into the breach.’’ ing drugs a little less expensive. But even if into crackhouses, introduced him to the Washington is starting to take notice, too. drugs were legalized, regulations regarding neighborhood. And he gave Rivers, a Pente- The 1996 welfare bill gives states the option their use would be enough to engender a costal, a lesson in why God was losing to to fund church groups in place of welfare black market and related criminal activity. gangs in the battle for the souls of inner-city agencies. Research on the effectiveness of Rather than conduct a study on the pos- kids. ‘‘Selvin explained to us, ‘I’m there faith-based programs is so far largely anec- sible effects of legalizing drugs. Dr. Elders when Johnny goes out for a loaf of bread for dotal. ‘‘But there is a lot of interest in this should direct her resources to another type Mama. I’m there, you’re not. I win, you lose, area now, because secular institutions have of research. In the same afflicted neighbor- It’s all about being there’.’’ failed,’’ says Bernardine Watson, a vice hoods where men, women and children hud- Ten years later, as the Baker House kids president of the nonprofit Public/Private dle on street corners and in dilapidated file out into the sunshine, Rivers turns from Ventures. ‘‘Anybody who wants to fund buildings to deal and use drugs, there are his full-contact pastoring—a mix of street faith-based programs is looking at the Baker others who have not succumbed to their lure. slang and stern lessons—to tell a group of House model. Conservatives like it because These models of success should be the focus police officers from Tulsa, Okla., about of the crime angle; liberals like it because of of Dr. Elders’s scrutiny—and their behavior, Selvin Brown. Baker House is Rivers’ answer the youth angle.’’ vision and values the cornerstone for drug- to Selvin: it’s run by a dozen people, some of When Rivers first came to Dorchester, the prevention programs. whom have given up professorships, military cops say, he believed there was no such thing In numerous cases throughout the nation, careers and positions in finance to be there. as a bad kid. That has changed. Now, ‘‘min- low-income people who have opened their The Tulsa cops are only the latest in a re- isters will come to us about a kid, say he’s menacing the community,’’ says Lt. Gary homes as safe havens for neighborhood chil- cent stream of law-enforcement emissaries French, who works with Rivers. The Boston dren have proved that personal investment who have come to Rivers’ domain, a rec cen- police estimate that 150 to 250 kids are re- and the consistent example set by just one ter and parish house that Rivers says serves sponsible for most of the violent crime in the adult can change the futures of inner-city more than 1,300 kids a year, to watch, listen city. ‘‘We can disrupt a gang by incarcer- children—even those with unstable home and talk about the hottest new topic in ating the most aggressive player,’’ says lives. The community activists with first- crime fighting: the power of religion. For French. ‘‘But we can also disrupt it by get- hand knowledge of what succeeds in reaching decades, liberals and conservatives have ar- ting the fringe players into alternative pro- young people should be at the forefront in gued past each other about the crisis in the grams,’’ like those provided by Baker House. designing drug-prevention policies. The prob- inner city. The right was obsessed with The exchange works both ways. ‘‘Right lem, at its root, is a matter of values and crime, out-of-wedlock births and the ‘‘re- now,’’ says Rivers, ‘‘any cop in Dorchester morals, and those who have claimed success sponsibility’’ of the underclass; the left only can dump a kid off in Baker House, and say, are those who have addressed the issue on wanted to talk about poverty, the need for ‘Look, I’m gonna crack this kid’s skull, take this level. government intervention and the ‘‘rights’’ of him.’ So we have taken the pressure off the The surgeon general should also take her the poor. Now both sides are beginning to police to play heavies.’’ notepad to San Antonio to study the activi- form an unlikely alliance founded on the At 2 a.m. in his cramped row house, Gene ties of rehabilitated addict Freddie Garcia, idea that the only way to rescue kids from Rivers is still keyed up. ‘‘The great thing whose outreach program has changed the the seductions of the drug and gang cultures about serving the poor,’’ he says, ‘‘is that lives of more than 13,000 addicts in its 25 is with another, more powerful set of values: there is no competition. These young males, years of operation. She should then travel to a substitute family for young people who al- ain’t no black preacher want to be around Hartford, Conn., to learn from Raul most never have two parents, and may not these boys. You see [he names several kids at Gonzales, also a recovered addict, who has even have one, at home. And the only insti- Baker House] coming, you go the other reached out to thousands of substance abus- tution with the spiritual message and the way.’’ He is on the short side, maybe five ers through a men’s residential center, a physical presence to offer those traditional feet six—by his own description, a ‘‘pushy, women’s mission and a center that includes values, these strange bedfellows have con- aggressive, interloper-would-be-usurper, academic, vocational and social development cluded, is the church. As the Tulsa cops sit around the Baker with this kind of guerrilla campaign.’’ In training. House oak table, Rivers tells them about a battle mode, he is scandalously impolitic. He Dr. Elders should take the time to speak grievous stabbing inside the nearby Morning refers to the mainline black churches as ‘‘the with a few of Mr. Garcia’s former hardcore Star Baptist Church in 1992. During a funeral major crime families’’ and is a critic of addicts who are now leading productive lives, service for a young murder victim, a gang Henry Louis Gates Jr., chair of Afro-Amer- and to some of the hundreds of families re- chased another kid into the church, beating ican studies at Harvard, whom he has called unified and healed through Mr. Gonzales’s ef- and stabbing his in front of a crowd of ‘‘the emcee at the Cotton Club on the forts. She should ask them if their lives and mourners. For the clergy, says Rivers, ‘‘this Charles.’’ His own critics—‘‘[it’s a] long the lives of their children would have been was a wake-up call. We had to be out on the list,’’ he says—dismiss him as a ‘‘black Ras- any better had someone legalized the drugs streets,’’ just like Selvin Brown was. While putin’’ who has duped white people into that had once controlled their destinies. the mainline Boston churches issued a de- thinking he has power in the black commu- [From Newsweek, June 1, 1998] nunciation of the violence, a group of min- nity. He holds no degrees from college or di- SAVIOR OF THE STREETS isters from smaller churches, mostly shoe- vinity school; his service on a recent Sunday An ex-gang member who went to Harvard, string Pentecostal or Baptist, met in Rivers’ drew just 19 congregants. Gene Rivers is an impolitic preacher on the house to discuss a more radical response: Yet Rivers is becoming a national figure. cutting edge of a hot idea: can religion walking the hoods, engaging the gangs, pull- He has met with the president, been courted fight crime and save kids? ing kids out. Instead of bickering with po- by the Christian Coalition and served on the lice, the ministers vowed to work with them, religion panel at Colin Powell’s 1997 Vol- (By John Leland) identifying the hardest cases. ‘‘The deal we unteerism Summit. Though Rivers comes Patriot’s Day is a city holiday in Boston, cut was, ‘Take this one off the streets, we from what he calls a ‘‘radical reform’’ line, but the Rev. Eugene Rivers, a compact, can deal with him in a prison ministry’,’’ the his arguments for black self-help, and his un- graying black man in a blue dress shirt Rev. Jeffrey Brown, a Rivers ally, tells the willingness to make liberal excuses for urban frayed at the elbows, is working hard. ‘‘Yo, Tulsa delegation. The cops, in turn, would pathologies, have endeared him to the right. wazzup, G money?’’ he greats a teenager, rely on the clergy to work with the more ‘‘There’s been more litmus-test stuff from slapping him five. He wheels on another. winnable kids. the left than from the right,’’ he says. (Riv- ‘‘Take your hat off, son. Yes, what? No, yes, Since the 1992 alliance, and a reorganiza- ers’ ministry condemns homosexuality and sir, we don’t speak no Ebonics here.’’ It is tion of the Boston police and probation de- abortion.) ‘‘One of the good things about the just noon on a spring day, and already the partments, juvenile crime here has fallen right is that they’re sufficiently indifferent Ella J. Baker House—a grand, bowfront Vic- dramatically. Rivers is now trying to forge a toward the concerns of blacks that they torian in Dorchester, one of the poorest similar coalition of churches nationwide. It don’t bother you.’’ His alliance with DiIulio neighborhoods in Boston—is full of fires: a won’t be easy: his brand of street-smart cha- has given Rivers a boost in policy circles. man’s teenage son has brought home a dan- risma is not easily transferable, and the ‘‘Gene and John are very odd soulmates,’’ gerous pit-bull terrier; a pregnant 16-year- work is house by house, block by block. But says Rivers’ wife, Jacqueline, who trains old’s parents have kicked her out of the ‘‘at the end of the day,’’ he says, ‘‘the black inner-city teachers in the Boston Algebra house; the Negros Latinos, the house base- church is the last institution left standing.’’ Project. ‘‘One is so far left he’s right, the ball team, need uniforms and a gang-neutral The noted conservative criminologist John other is so far right he’s left. They really field. Rivers, 48, darts from one to the next, DiIulio Jr., best known for predicting a com- think alike.’’ a fixer, embattled but engaged. ing wave of inner-city ‘‘superpredators,’’ has The walls of Rivers’ house still bear the When he first moved into this neighbor- become an improbable friend and ally. In bullet holes from two shootings, one a ran- hood, as a refugee from Harvard, Rivers apocalyptic tones, Rivers—a forceful speaker dom spray, the second by a drug dealer Riv- sought out a local drug dealer and who is sometimes accused of grandstanding— ers had tried to move from a neighborhood

VerDate 25-JUL-2000 04:17 Jul 26, 2000 Jkt 079060 PO 00000 Frm 00055 Fmt 4634 Sfmt 0634 E:\CR\FM\A25JY7.050 pfrm02 PsN: H25PT1 H6834 CONGRESSIONAL RECORD — HOUSE July 25, 2000 park. He roots around for a 1992 essay he with a case of ‘‘survivor’s guilt’’ that has itself to solve the problem of violence, and wrote for the Boston Review, entitled ‘‘On been his motivating force ever since. ‘‘I we had very little interaction with the cler- the Responsibility of Intellectuals in the Age promised the Lord that if he would let me gy. By the early ’90s, however, it became of Crack.’’ It, like his other writings, argues survive, I would never turn my back on these clear that our ‘‘get tough’’ policies just that after the victories of the civil-rights kids,’’ Rivers says. He got a woman pregnant weren’t working. The 1992 stabbing incident movement, the black middle class, particu- and drifted to New Haven, Conn., where he at Morning Star Baptist Church—there was a larly middle-class churches, abandoned the met Kwame Toure, then known as Stokely melee during a funeral—only underscored black poor. The signature phrases of these Carmichael of the Black Panthers. Taking how bad things had gotten. We finally saw articles—‘‘virtual apartheid,’’ a ‘‘crisis of occasional courses at Yale, he carved three that we couldn’t simply arrest our way out moral and cultural authority’’—swim identities for himself, collecting welfare of the escalating bloodshed. throughout his conversation, crusty set checks in Philadelphia, New York and New It was time for real collaboration. We real- pieces amid his staccato improvisations. Haven. Finally, another mentor—Martin ized that preachers have tremendous credi- ‘‘When he talks slang, I don’t understand Kilson, an iconoclastic black professor at bility as leaders in the community and that him,’’ says Police Lieutenant French. ‘‘And Harvard—discovered Rivers and lured him to having them working with us out in the when he talks the Harvard level, I don’t un- Cambridge. Rivers raged against the privi- streets would have a powerful impact. For derstand him, either.’’ leged black students of Harvard—including, their part, the clergy saw cops doing their Rivers was born in 1950 in Boston, the eld- at first, a Jamaican woman named Jac- best to get inner-city kids into summer est of three children. His mother was a queline Cooke—and left, angry, in 1983. He camps and to get them mentors. We both nurse, a Pentecostal; his father, who moved and Cooke married three years later. knew that what children need is an alter- out when Gene was 3, was a painter, a Mus- On a school holiday at Baker House, Rivers native to crime. lim, who later became art director for the is showing two boys the documentary ‘‘Eyes The alliance that resulted works because Nation of Islam’s paper, Muhammad Speaks. on the Prize,’’ the installment about Fred the police and the ministers really do have a Both parents were black nationalists and in- Hampton and the black Panther Party. The common goal: keeping kids from getting tellectuals. ‘‘What my mother instilled was boys are 12 and 13; Rivers takes satisfaction killed. And it’s not as if we don’t know who that life is duty,’’ he says. ‘‘Life itself is a in calling the younger boy, who appeared is at risk: of the 155 young people who died holy war.’’ Rivers grew up in rugged north- pseudonymously in a 1997 New Yorker arti- from violence between 1990 and 1994, two west Philadelphia, where he was forcefully cle, ‘‘America’s worst nightmare.’’ The kids thirds had prior arrests—an average of 9.4 ar- inducted into the Somersville street gang at are to write reports on the video for which rests for every victim. For the first time, we the age of 12. ‘‘There was a side of my life no- Rivers gives them a few bucks. He hugs the can really concentrate on these specific kids body understood. At age 13, 14 and 15, I re- boy, pays him, and the kids are off. and make honest assessments of what has to member studying Andrew Wyeth, the Bran- ‘‘Kareem,’’ as The New Yorker called the be done with them. We can put our heads to- dywine tradition. [And I’m] in a street gang boy, was Baker House’s most critical case a gether and say this kid has gotten into trou- with a lot of hoodlums. You learn to lead a year ago, and he is still. His day with Rivers ble, but he’s a good kid—let’s try extra hard double life. I’ve always had that tension.’’ began when he showed up at the Rev.’s house to get him the services he needs. This one, Whenever Rivers describes the violent po- for breakfast; it will end around 11 at night, we can’t save—and if we don’t get him off tential of the Dorchester kids, his voice liv- when he asks Rivers for a lift to the city bus, the streets and into prison, he’s not going to ens with a certain rogue romance. ‘‘This bound for wherever, Rivers doesn’t worry make it. ain’t Yuppie kids, this ain’t Cosby kids,’’ he that Kareem will get home safely. ‘‘I’m wor- With a clear, structured communication trumpets at one point. In part this is because ried about whether other people will.’’ For network now in place, we didn’t have to wait he’s playing to a public that finds lurid gang Rivers, Kareem is a test. ‘‘[Kareem]’s father for three or four homicides before realizing violence a sexier topic than, say, urban pov- got murdered,’’ says Rivers. ‘‘His mother we had a problem with the Bloods and Crips erty. But it’s also because he savors that lives in the street more than he does. If you gangs. We’ve got cops and clergy out there, street edge. Mark Scott, who runs the day- can get [Kareem], you’ve got the whole visiting 36 schools and countless homes try- to-day affairs of Baker House, thinks Rivers neighborhood.’’ ing to identify gang wannabes. When there is would be bored in a straighter life. ‘‘He’s pas- In the early days, Rivers pushed religion gang warfare we call members in for an open tor of the church, but he’s also pastored by harder on the kids, but found that it intimi- session with representatives from the D.A.’s the people around him, especially Jackie.’’ dated—and turned off—many of them. So office, the probation officers, social-service Scott believes that Baker House has saved now he keeps preaching to a minimum. But workers and neighborhood ministers and say, Rivers, keeping him on the street but out of the men and women who are giving their ‘‘Look, the community is telling you to stop. trouble, giving him a channel for his anger. lives to Baker House still see faith at the If it doesn’t, the whole system you see here As he describes his own past, Rivers’ tone heart of their mission. ‘‘Bob Moses and is going to indict you, sentence you and send becomes more sober. He’s riding in Jackie’s SNCC, Fred Hampton in Chicago, these folk you to prison.’’ Volvo—Rivers doesn’t have a license—listen- laid their lives down,’’ says Rivers. ‘‘My un- ing to NPR and heading to pick up their two derstanding is that those acts of heroism THE NEW HOLY WAR kids, Malcolm and Sojourner, 10 and 8, near were very Christian acts, in the tradition of their private school in tony Beacon Hill. It (By Kenneth L. Woodward) the martyrs. I live in Dorchester and have does not strike him as a contradiction to Check out any dying neighborhood in weathered what we’ve weathered because send his kids to private school. ‘‘I said, inner-city America and this is what you’ll that’s my understanding of radical disciple- ‘Jackie, I’m not a liberal. I’m not going to find: the church and the liquor store are the ship. There is no crown without the cross. have my kid go to school where the kids are last establishments to leave. Many of the Most folk aren’t ready to hear that.’’ churches are Roman Catholic, built big and so completely antisocial that Malcolm will At the end of a long day, a half dozen solid to serve Irish, Italian, Polish and other end up resenting black kids. No no no no Baker House members gather for a prayer European immigrants. Today, most of the no’.’’ As Jackie drives, Rivers continues his meeting: Ivy League refugees, MIT doctor- parishioners are Hispanic, Asian or African- own story. When he was 13, his life was for- ates. Their testimony is an ecstatic, Pente- American. And the parish schools where dili- ever changed by the Rev. Billy Graham’s costal affair, full of hand-clapping and spon- gent nuns once tutored white ethnic children radio program. Rivers was being menaced by taneous witness. After half an hour, Rivers through English, math and first holy com- an older, bigger kid from a rival gang called ducks out momentarily, passing the recep- munion now cater mostly to kids who are the Lane, and Graham’s words struck him. tionist, a single mother he’d counseled years neither white nor Catholic. Other Christian ‘‘He asked, was I ready to meet my creator? before. ‘‘Hallelujah, praise Jesus,’’ he says— congregations moved up and out when the At that point, that was not a farfetched pos- then, without pause, ‘‘Did you page [a city inner city went poor and black. The Catholic sibility. I had a fear of death, which my con- official]?’’ This is the refracted life of the Church is the church that stayed. Around version experience transformed. My response Rev. Eugene Rivers, drawing upon Harvard the corner are other, newer churches, some to fear is faith.’’ and the Philadelphia street gangs, the Eventually the Rev. Benjamin Smith, a with Spanish names. Many are little more church and the state. Rivers checks his legendary Philadelphia inner-city evan- than basement ‘‘blessing stations’’ and store- pager. The Urban Institute is in for a visit; gelical, pulled Rivers out of the gang and front congregations: Pentecostal, Holiness, his wife is on the other line. He ducks back into the Pentecostal community. But he was Jesus-Saves Baptist, Apostolic This or into the prayer meeting and gives thanks at odds here, too, a bookish intellectual in a Prophesy That—the kind of churches that once more, and once more again. working-class church. He dropped in and out spring up wherever the promise of this life is of two art schools; he read Herbert Marcuse so bleak that the promise of the next is all COPS, CRIME AND CLERGY and Noam Chomsky, getting deeper into rad- there is to count on. ical political thought. The 1969 deaths of BOSTON’S COMMISH ON HOW THE NEW ALLIANCE These churches can’t keep kids out of Black Panthers Fred Hampton and Mark BETWEEN POLICE AND PREACHERS WORKS gangs, fight crime and rescue the nation’s Clark—men his own age, killed in a police (By Paul F. Evans) inner cities by themselves. But none of this raid—shook his moral center, as Graham had I was a beat cop in Gene Rivers’ Dorchester is likely to happen without them. After years before. The nonviolent movement of neighborhood in the early ’70s, but back then spending 30 years and billions in fighting the ’60s had crashed around him. Rivers was our paths wouldn’t have crossed. At the poverty, and decades trying to arrest our angry and confused, ‘‘buck wild,’’ scorched time, the police force didn’t look beyond way out of the problem of crime, Washington

VerDate 25-JUL-2000 04:17 Jul 26, 2000 Jkt 079060 PO 00000 Frm 00056 Fmt 4634 Sfmt 0634 E:\CR\FM\A25JY7.054 pfrm02 PsN: H25PT1 July 25, 2000 CONGRESSIONAL RECORD — HOUSE H6835 has belatedly discovered the wisdom of em- goods with those of civil society and the cause they don’t come well packaged,’’ says powering local churches to do what govern- state. Charity, yes, but also social justice. In John DiIulio, a Princeton professor who la- ment alone has so far failed to accomplish— all these ways we become our brother’s keep- bors at providing the statistical proof that provide the kinds of direct services and in- er. such efforts are paying off. ‘‘Corporate grant spired commitment needed to restore the na- For people of faith, there’s more than one makers are afraid of real God-talk. They pre- tion’s deteriorating urban core. In Congress, way to give this vision flesh. In 1967, riots fer secular rehabilitation to spiritual trans- a bipartisan coalition has swung behind a se- left Newark’s Central Ward for dead. That’s formation.’’ ries of policy changes—broadly called ‘‘char- when Msgr. William Linder began to put to- That may soon change—and must, both in itable choice’’—which allow federal, state gether the New Community Corporation the capital and in corporate America, if reli- and local funds to flow to faith-based anti- with government funds and corporate sub- gion is to really work in the inner city. How- poverty groups. Among the latest initiatives sidies. Operating out of St. Rose of Lima par- ever appealing it sounds, ‘‘the churches can’t is a $500 tax credit for those who contribute ish, Linder has built 3,100 nonprofit housing do it alone,’’ says Mark Scott, an associate to poverty-fighting programs, including units for inner-city residents. The corpora- of Rivers’ in Boston. ‘‘We’re the glue of civic churches. ‘‘Those from the left are disillu- tion runs its own shopping center anchored life, addressing values and spiritual issues sioned with government efforts,’’ says Indi- by Pathmark, the first supermarket to open that the government can’t address. But just ana’s Sen. Dan Coats, a conservative Repub- in the neighborhood in 25 years. Over the saying ‘let the churches do it,’ without the lican, ‘‘and those coming from the right are years Linder has gotten more than 3,000 peo- government, won’t work. not comfortable with the let-the-market- ple off welfare, employing more than half of He’s right. But as Scott and Rivers well sort-it-out thinking.’’ There are limita- them in the corporation’s own nursing home, know, the Devil may be in the details. In of- tions—money is always scarce, and the ap- day-care centers and health services—includ- fering tax credits to those who support faith- peal of a preacher’s personality in the ’hood ing one for children who have HIV-positive. based programs, for example, Coats wants to is hard to replicate. But for people of faith, There’s an automotive institute that trains make sure the money doesn’t go for ‘‘a new the redemption of the nation’s inner cities is mechanics, a credit union for small loans satellite dish for the church.’’ Rivers is one a calling, not a caseload. The God they bring and another corporation to provide credit for of many black ministers who think the sen- into crime-infested streets is both the Old local businesses. ‘‘Developing a community ator’s caution is justified. He is repulsed by Testament Jehovah of law and order and the is a comprehensive task,’’ says Linder, an black denominations like the National Bap- New Testament’s merciful Jesus. A powerful application of Christian values. ‘‘The whole tist Convention, whose president, the Rev. combination—particularly if you add federal issue is—how do you respect the dignity of a Henry Lyons, has been charged with divert- funding to the mix. person?’’ ing church funds for his personal use. The When it comes to rousing a congregation, If the New Community Corporation shows NBC board supports Lyons, who denies the or working one-on-one, there’s nothing like what one priest can accomplish, Cleveland’s charges. Some church bureaucracies, Rivers the coiled power of a charismatic preacher. ‘‘Church in the City’’ program demonstrates says, are like Caribbean governments—they But when it’s jobs and housing and a vision how much more has to be done. Five years ignore their own poor and reward politically for the long haul, only Catholic leaders with ago, Bishop Anthony Pilla looked at the mi- connected stars of the pulpit. ‘‘The way it is a grasp of the wider common weal need gration of Cleveland’s Catholics and con- now, the black church structure undermines apply. That’s why in urban areas like Bos- cluded that his was ‘‘quickly becoming a any system of moral or financial account- ton, Newark and Philadelphia, clergy are suburban diocese.’’ Over the previous four ability,’’ Rivers argues. ‘‘It simply perpet- learning to reach across denominational decades, the city’s 2:1 population ratio over uates a circulation of crooks in which young- lines and tap each other’s strengths. When the suburbs had been reversed. There’s noth- er clergy are encouraged to imitate the old the Rev. Eugene Rivers, a black Pentecostal, ing in the Bible that says ‘‘Thou shalt not dirty bulls.’’ needs access to Boston’s power brokers, he move to the ’burbs.’’ But Pilla, who grew up Rivers and like-minded clergy everywhere dials the phone that rings beside the bed of in Cleveland’s Little Italy, thinks the church think they can do things differently. Indeed, Cardinal Bernard Law. ‘‘He’s my patrone,’’ is obligated not to desert the poor who have one of the emerging battlegrounds in the says Rivers. ‘‘I don’t need an archdiocese be- no choice but to make the inner city home. inner city’s holy war lies between the cause the cardinal already has one.’’ And it’s As bishop, there are some economies Pilla churches themselves. In this post-civil-rights come in handy: in a city with a traditionally can command. Cleveland’s Catholic Charities era, those congregations that prove their Irish Catholic police force and a history of Corporation, which uses both government faith with honest deeds will attract this lat- racial tension between cops and community, funds and contributions from the pews, offers est—and perhaps last—infusion of outside Law has been a key ally of the black clergy grants for inner-city projects. Like other funds. The poor have always looked to their to deracialize law enforcement. Catholic bishops, Pilla has also twinned city churches—for hope as well as for healing. It’s a win-win proposition. Rivers reaches parishes with more prosperous ones in the Will they be disappointed? an at-risk, non-Catholic population with suburbs. The goal is partly financial—to what the cardinal calls ‘‘a pro-poor, pro-fam- allow the better-off to help keep up those THE GOSPEL OF ST. JOHN ily, pro-life platform that I can enthusiasti- parishes in need—and partly social—to es- (By Howard Fineman) cally support.’’ That support includes the tablish Catholic solidarity across the bound- John Ashcroft’s Washington seems worlds moral authority and institutional experience aries separating safe from dangerous neigh- away from Eugene Rivers’ Boston. A first- of a church that counts nearly half the Bos- borhoods. term Republican senator, Ashcroft is an ton area’s population as members. In turn, What Pilla does best is exhort others to antitax, pro-death-penalty conservative from says Rivers, ‘‘we’ve got the local talent—the find answers to the inner city’s needs. Next the Missouri Ozarks, at home with rural forgotten 40 percent of the inner-city blacks month, for example, Third Federal Savings accouterments: his bass boat, his dirt bike, who are working, support families and go to will begin construction of its new head- his farm. But though they’ve never met, Riv- church. We’ve got the clergy pool, the en- quarters in the old Polish neighborhood just ers and Ashcroft are soul brothers of sorts, ergy—we can make the conversions and put outside the city’s high-rise downtown core. moved by the same Pentecostal roots and so- the Spirit into the letter of the law.’’ The bank’s budget has grown from $6 million ciological rationale to pursue a similar mis- But there is much more to inner-city ecu- to $18 million, and instead of a functional sion: expanding the use of religious institu- menism than institutional cooperation. corporate center, chairman Marc Stefanski— tions to reclaim the lives—and lethal Movements need vision, and in the social inspired by Pilla—is creating a capacious streets—of the cities. teachings of the Catholic Church, black building that will anchor the neighborhood While Rivers works Dorchester, Ashcroft Protestant clergy like Rivers have discov- with space for retail shops and a small plaza. ministers to Capitol Hill—and is eyeing a ered a body of thought that fits the problems Because they represent the institutional run for the presidency in 2000. The devout of the inner city into a coherent Christian commitment of the church that stayed, son and grandson of Assembly of God clergy- perspective. Unlike the individualisms of the Catholic bishops like Pilla can attract the men, he’s leading a crusader to open the fed- secular left and right, Catholic doctrine con- kind of government and corporate funds that eral treasury to churches (and other reli- ceives society as an interdependent organism produce housing, jobs and educational oppor- gious institutions) who do the kind of social- rather than a social contract between iso- tunities for the inner-city poor. (Not for welfare work now handled mostly by govern- lated individuals. Rights and duties flow nothing does Andrew Cuomo, head of the De- ment. ‘‘Government bureaucracy looks at from the sacredness of every human person, partment of Housing and Urban Develop- people by criteria, by type,’’ he told News- justice seeks the common good, the state en- ment, keep a Jesuit priest, Father Joseph week. ‘‘Religious people are concerned with sures public order. In this view, persons are Hacala, on his staff.) But inner-city America the whole individual, with his whole life— inherently social and proper human develop- is honeycombed with fledgling operations by even his eternal life. That’s how you build ment requires civic space for a range of in- black evangelicals like Rivers whose faith- self-esteem.’’ stitutions: family, neighborhood, religious based approach to at-risk youths produces It’s long been political and constitutional and other voluntary associations like labor hard-won individual conversions. They wres- heresy to suggest that federal money be used unions and political parties. Catholic lingo tle black males from drug dealers and men- in this way. But violent gangs and govern- such as ‘‘social solidarity’’ in matters of pub- tor kids who never knew their fathers. Cu- ment failures—and the election-year demand lic policy speaks directly to the needs of mulatively, their victories are impressive. for welfare reform—gave Ashcroft an open- inner-city populations. In short, the moral ‘‘But corporate America balks at giving ing. The 1996 welfare law contains his ‘‘chari- community is one that balances individual money directly to these Pentecostals be- table choice’’ provision, which allows states

VerDate 25-JUL-2000 04:17 Jul 26, 2000 Jkt 079060 PO 00000 Frm 00057 Fmt 4634 Sfmt 0634 E:\CR\FM\A25JY7.059 pfrm02 PsN: H25PT1 H6836 CONGRESSIONAL RECORD — HOUSE July 25, 2000 to contract with ‘‘faith-based’’ organizations funding like the first round counter- Full funding for empowerment zones to provide welfare services. The groups can’t parts. Instead, they have received two unleashes tremendous potential for proselytize, but they can keep the ‘‘religious installments in appropriation bills that growth and economic development in character’’ of their facilities and, subject to were far below the Federal commit- places like El Paso under Round II. financial audits, remain exempt from most federal workplace regulation. The measure is ment. Each of these communities have laid being challenged in court, but Ashcroft is Now, although this particular bill out long-term plans and proposals marching ahead with a new one, which would does not specifically mention the fund- which will deal with high unemploy- extend charitable choice to include drug ing for Round II zones directly, I am ment, in some cases like El Paso with treatment, juvenile-crime prevention and very pleased that the President of the unemployment running consistently even low-income housing. He got bipartisan United States and the Speaker of the twice the level of the national unem- support in 1996 and hopes for more this year. House have reached an agreement that ployment rate. These communities Ashcroft, 55, comes by his faith in the was announced at a press conference at faith-based honestly. His late father was have already been slated for assistance, president of a sectarian college and a leading the White House a short time ago, and we are pleased this morning that figure in Springfield, the Ozarks city where $200 million for Round IIs were that assistance will be forthcoming. Ashcroft jokingly calls ‘‘the Rome, the Jeru- agreed to, and also I would like to say Mr. Speaker, I intend to vote for and salem’’ of the Assembly of God. The denomi- that I am very pleased that the Speak- support this bipartisan legislation. nation’s tenets: no drinking, no smoking, no er has personally assured me that dis- Mr. SCOTT. Mr. Speaker, I yield 11⁄2 gambling, no dancing, no sex before mar- cretionary funding to keep our existing minutes to the gentlewoman from Ohio riage—but plenty of missionary work and zones operational will be included in (Mrs. JONES). gospel singing in celebration of the Holy the final appropriations process. (Mrs. JONES of Ohio asked and was Spirit. On the eve of his Senate swearing in, This is extremely important for all of given permission to revise and extend Ashcroft was blessed by a laying on of hands, and his head was ‘‘anointed with oil’’ in Old our Round II zones and the hopes that her remarks.) Testament fashion. He hosts a voluntary de- our citizens have for the potential that Mrs. JONES of Ohio. Mr. Speaker, I votion in his office every morning. this brings. rise today in support of H.R. 4923, the Too churchy and remote to be a major The employer wage tax credit, al- Community Renewal and New Markets player? Look closer. For college Ashcroft ready extended to Round I designa- Act. However, I do want to say I share chose Yale (he played rugby but wrote home tions, is included in this bill and is an the concerns of my colleague, the gen- every day), followed by law school at the extremely important component of our tleman from Virginia (Mr. SCOTT), with University of Chicago. His wife, whom he ability to empower these communities. regard to the issues of religious free- met at Chicago, teaches law in Washington at Howard University. Those of us representing these dis- dom and the application of religion to Having never heard the ‘‘call’’ to the min- tressed communities in Congress un- someone’s requirement or ability to be istry, Ashcroft instead is listening to what derstand the vital need to have full served or have a part in a particular the Lord may tell him about the White funding in Round II. This bill helps us program. House. Only He knows whether the Monica move toward that initiative, helps us I am a freshman Member of Congress. Lewinsky affair will lead the public—or even bring to our communities renewed hope I serve on the Committee on Banking Republican primary voters—to yearn for an and empowerment to be able to create and Financial Services and the Com- abstemious, high-collar figure. mittee on Small Business. I chose Meanwhile, Ashcroft is as systematic those jobs and do those things that so about politics as his father was about many of us want to see. those committees because in Cleve- preaching. He’s won five statewide races in a Mr. Speaker, once again I want to land, Ohio, the 11th Congressional Dis- classic ‘‘swing’’ state (two for attorney gen- congratulate and thank all of those trict, from 1986 through 1997 the aver- eral, two for governor, one for the Senate). who have been involved in this process. age income dropped 10 percent. Within He sings barbershop with Trent Lott and is I look forward to this enactment. I the State of Ohio, it rose an average of close to Dr. James Dobson and Pat Robert- urge strong support of this initiative. 5 percent. That is, in part, because the son. Aided by Christian Coalition members, Mr. SCOTT. Mr. Speaker, I yield 2 city has lost high-paying blue collar he won a presidential straw poll in South minutes to the gentleman from Texas Carolina last week and hosted a smart- jobs and has gained jobs in the service money fund-raiser at a bistro in Washington. (Mr. REYES). sector where the salaries on average This week he campaigns in California. And Mr. REYES. Mr. Speaker, I thank the are lower by 13 percent. who knows? He might even find support on gentleman from Virginia (Mr. SCOTT) I believe that this legislation will the streets of Boston. for yielding me this time. allow communities like the City of Mr. ENGLISH. Mr. Speaker, I yield 3 Mr. Speaker, this morning I was here Cleveland to be revived. We have had minutes to the distinguished gen- to express my deep frustration at our great housing starts in Cleveland, new tleman from New Jersey (Mr. inability, while on the one hand bring- housing coming up in areas where we LOBIONDO). ing up this suspension bill for the Com- had riots a few years ago. What is not (Mr. LOBIONDO asked and was given munity Renewal and New Markets Act, there is what makes a full community, permission to revise and extend his re- at the same time when we were unable and that is businesses and opportuni- marks.) to get full funding for Round II em- ties for employment right in one’s own Mr. LOBIONDO. Mr. Speaker, I rise in powerment zones. After I just heard my neighborhood, and opportunities for very strong support of H.R. 4923, the colleague make mention that there has young people to see that the people in Community Renewal and New Markets been an agreement that there will be their communities own businesses and Act. I want to thank all those who $200 million for Round II, I am obvi- can employ persons right in their own played such a crucial role in bringing ously pleased, as El Paso is one of the neighborhood. this bill to the floor. I especially want areas that was designated under Round I rise in strong support of this act be- to thank our speaker, the gentleman II as an empowerment zone. cause I believe it will provide that op- from Illinois (Mr. HASTERT), for his It is important to note, Mr. Speaker, portunity and will clean up some of the work, his tireless efforts, to make sure that over the 10-year life of the pro- neighborhoods through brownfields this initiative moves forward. gram, urban empowerment zones were support. I support everyone who stood Three years ago, Congress authorized supposed to receive $100 million. How- in support of this legislation. and the administration designated 20 ever, in fiscal years 1999 and 2000, Mr. ENGLISH. Mr. Speaker, I yield 5 Round II empowerment zones. My amounts less than $4 million each year minutes to the distinguished gen- home county of Cumberland County, were appropriated for each urban em- tleman from Missouri (Mr. TALENT), New Jersey, in the Second Congres- powerment zone. Moreover, in this fis- one of the authors of this legislation. sional District, is one of those Round II cal year, up until a few moments ago, Mr. TALENT. Mr. Speaker, I thank empowerment zones. We have tremen- we had been led to believe that there the gentleman from Pennsylvania (Mr. dous potential for our community to were zero dollars for empowerment ENGLISH) for yielding me this time. create new jobs, to retain existing jobs, zones. This is good news for El Paso. It Mr. Speaker, I will say to the Mem- to help both socially and economically is good news for all the communities bers of this House this is deja vu all in our community. that have been counting on and have over again. It is the second time I have However, Mr. Speaker, the Round II been planning on a 10-year basis for stood up in support of this bill. I think zones have not received full multiyear money for their empowerment zones. it is worth it.

VerDate 25-JUL-2000 04:17 Jul 26, 2000 Jkt 079060 PO 00000 Frm 00058 Fmt 4634 Sfmt 0634 E:\CR\FM\A25JY7.063 pfrm02 PsN: H25PT1 July 25, 2000 CONGRESSIONAL RECORD — HOUSE H6837 I want to compliment the gentle- have had from community redevelop- the empowerment zones and provide woman from Ohio (Mrs. JONES) on her ment organizations. bonding capacity. remarks. Let me pick up on what she The new market tax credit, new mar- b 1315 said because she mentioned she is a ket venture capital companies which And so this is certainly one of those freshman. She is a very aggressive lady my friend, the ´gentlewoman from New who advocates for her community. She York (Ms. VELAZQUEZ), worked so hard bills where 99 percent of the bill is just is on the Committee on Small Business on and which has been part of the a magnificent bill. There is 1 percent of and the Committee on Banking and Fi- President’s vision for over a year, these the bill that causes some serious prob- nancial Services because she recognizes are similar to small business invest- lems. And, unfortunately, they are con- that in the new world of economic em- ment corporations which we already stitutional problems that the gen- powerment and community renewal have. What they do is they will be pri- tleman from Virginia (Mr. SCOTT) has the key is drawing in private sector in- vate equity investment corporations. described eloquently in his comments. They involve the ability of religious vestment into these distressed neigh- They will raise private capital. The institutions to discriminate against ap- borhoods and private sector invest- Federal Government will, through the plicants for employment who may not ments that make sense in terms of pri- sale of the ventures, allow them to agree with their religious tenets. And vate sector standards. That is the key draw down additional capital, and they what I am trusting is that as I vote for to the future. She sees it, and this is a must invest it in these distressed this bill and support the 99 percent fa- lady with ties and bonds to her commu- neighborhoods. This idea is pulsating vorable, that the Court will see fit to nity. She is hearing it from the organi- with the vision that this is correct, right the legal and constitutional that these neighborhoods are places zations that are making a difference in wrong with this bill. I appreciate the where the economy can prosper. these communities, as I have heard it, gentleman from Virginia yielding me There are thousands of budding en- and as the other sponsors of this bill this time for me to voice my support of trepreneurs in these neighborhoods, have heard it as well. the bill. Let me go through some of the provi- and all they need is some investment Mr. SCOTT. Mr. Speaker, I yield my- sions in this bill so the House can see capital and some advice. We should not self the balance of the time. how comprehensive it is in proving out look on these neighborhoods as liabil- Mr. Speaker, as many of my col- this principle I just mentioned and not ities. They are assets, and the new leagues have pointed out, there is a lot just private sector investment, drug market venture capital companies are of good in the bill. But there clearly and alcohol counseling, which we have premised on that assumption. are constitutional problems with fund- talked about, homeownership, all of There are parts of this bill I like ing pervasively sectarian organiza- these provisions that are necessary to more than other parts, obviously, be- tions. There are problems with the rebuilding of neighborhoods, because cause I have been sponsoring them for drug counseling provisions. these are not neighborhoods with hous- a long time. There is not a part of this In a letter of July 12 of this year to ing problems or drug problems or po- bill I disagree with. This is not a case Members of Congress, the National As- lice problems or educational problems. where anybody in this coalition has sociation of State Alcohol and Drug These are people who have all of the had to accept something they really do Abuse Directors wrote the following: needs and the range of needs that peo- not like in order to get something that ‘‘There is a strong national consensus ple have, and we need to address them they do. That is one of the things that around the core competencies that a all at once; and we can do it through is exciting about it. substance abuse practitioner must these community organizations. I do not think I need my whole 5 min- demonstrate in order for them to be ef- The bill provides, as others have utes. I will say I appreciated so much fective,’’ and they go on to talk about talked about, for the establishment of the comments on the part of the spon- the importance of State regulations, renewal communities within which sors in support of this bill and also the which is essentially overturned in this there will be very significant tax and principled and eloquent statement of bill. regulatory relief designed to draw in concern by my friend, the gentleman Mr. Speaker, there is in the bill a private venture capital, a zero capital from Virginia (Mr. SCOTT). Let us go provision that specifically allows reli- gains rate, zero percent capital gains ahead and pass this bill. We still have gious discrimination in employment. for investments made and held for 5 Senate passage. We still have con- So we are faced with a situation that years in these communities; commer- ference, but let us not stop this now. reminds me of the question, ‘‘Other cial revitalization deduction which the We do not have a lot of time left in than that, Mrs. Lincoln, how did you gentleman from Pennsylvania has this session. It is almost a miracle we like the play?’’ Other than the provi- fought so hard for, who encouraged in- are able to do this on a bipartisan basis sions that are constitutionally prob- vestors and companies to rehab build- in an election year. Let us continue the lematic, other than the drug coun- ings in these neighborhoods; increased miracle and do something for these seling certification problems, other expenses for small business, up to neighborhoods which are doing so than the separate-but-equal drug pro- $35,000 in deductions for equipment much for themselves. grams, other than the discrimination more than they can currently take, Mr. SCOTT. Mr. Speaker, I yield 2 in employment, how do we like the and employment wage credit for busi- minutes to the gentleman from North bill? nesses to hire people from these neigh- Carolina (Mr. WATT). Mr. Speaker, I think we ought to borhoods; brownfields credit. Mr. WATT of North Carolina. Mr. vote against the bill, allow the bill to This, coupled with regulatory relief Speaker, I have been in this body 8 be amended so that we can enjoy the and municipalities that wish to be a re- years almost now, and I think I have good and favorable things in the bill. newal community, must include agree- never seen a bill come to the floor that Mr. Speaker, I yield back the balance ments with these neighborhood organi- I thought was a perfect bill. Sometimes of my time. zations about things like infrastruc- we have 99 percent terrible things in a Mr. ENGLISH. Mr. Speaker, I yield ture investment, or taxes in those com- bill and one good thing that tempts one myself the balance of my time. munities, or community policing; to vote for it. Sometimes there is 99 Mr. Speaker, this legislation is truly again, raising the visibility and the percent good in a bill and one very bad landmark legislation. I have listened prestige of these neighborhood organi- provision that tempts one to vote to some of the criticisms from the zations. against it. That is the situation we are other side of the legislation and I have Homeownership provisions, requires in in this case, because the over- been pleased to see the bipartisan char- HUD to sell to neighborhood develop- whelming balance of the argument acter of its support. Every one of the ment organizations substandard hous- about this bill is favorable. It is a mag- objections that have been raised to this ing so that HUD can no longer not do nificent bill that will help to stimulate legislation have been before this House anything itself with housing, nor inner city communities, rural commu- in the past and have been set aside. refuse to give the housing to people nities in need of employment and revi- They should not deter us from moving who will do something with it. This is talization. It will bring private funds forward and doing the right thing, be- a constant complaint I have and others back into our communities and extend cause this legislation, Mr. Speaker,

VerDate 25-JUL-2000 04:17 Jul 26, 2000 Jkt 079060 PO 00000 Frm 00059 Fmt 4634 Sfmt 0634 E:\CR\FM\K25JY7.091 pfrm02 PsN: H25PT1 H6838 CONGRESSIONAL RECORD — HOUSE July 25, 2000 will place a new emphasis in this House expanded under this bill. The proposal has not partment or the Small Business Administration on distressed communities. It will give been adequately scored to take government (SBA), HUD has no expertise in managing a those distressed communities and their loan guarantee risk into consideration, and is large-scale business investment program. inhabitants the opportunity to partici- to be administered by the Department of For the reasons outlined above, we believe pate in our national growth and in our Housing and Urban Development (HUD), that the APIC program is not the preferred national opportunity. which is inadequately prepared for the respon- means of addressing poverty and unemploy- We have an opportunity to move op- sibility. ment in economically distressed urban and portunities to where the needs are. A lack of capital is not keeping businesses rural areas. Its band-aid approach as a gov- That is something that at a time of ris- from investing in these areas, especially not ernment subsidized investment program does ing growth and rising tides, we need to the large-scale, established businesses that not reduce the cost of business in these make a priority if our society is going the APIC program would targetÐthe problem areas, aside from reducing the cost of capital to create opportunity for Americans is the high cost of doing business. Instead of for large companies who can easily find funds and focus not only on liberty, but also attacking the fundamental problems of these in the private market. The best way to pro- on equal opportunity. areas, a program such as APIC reduces urban mote economic growth is to reduce federal, Mr. Speaker, in passing this legisla- and rural areas' incentives to change what state and local tax and regulatory burdens, tion, we will give thousands of low-in- makes investment in these communities dif- which would encourage local entrepreneursÐ come Americans a stake in the Amer- ficult in the first placeÐpenalizing tax rates, with their own capital at riskÐto determine ican dream. And as we do so, we have burdensome regulatory policies, a lack of what works best in their community. an opportunity to greenline many of pubic infrastructure, and high crime rates. Mr. GARY MILLER of California. Mr. Speak- our distressed communities. All too Further, a lack of venture capital is not an er, I rise today to speak about the American often in the past, our distressed rural issue. The companies the APIC proposal tar- Community Renewal Act and one of the provi- and urban communities have experi- gets are not entrepreneurial start-ups, nor are sions relating to a very worthwhile and suc- enced redlining, a loss of opportunity they small businesses. They are companies cessful program called the low income hous- for investment. Today, we are creating like Safeway or Wal-Mart. Location of venture ing tax credit. This program provides low and incentives which would effectively capital is also not an issue. In today's informa- very low income families with affordable rental greenline those communities and at- tion economy where technology facilitates housing and represents the best of the fed- tract new investment, new jobs, and long-distance interpersonal communication, eral/state public/private partnerships in hous- new opportunity and create new tools venture capital flows to where it can earn a ing. The low income housing tax credit en- to allow local people to design local in- high rate of return, whether the investment is courages investors to fund the required risk stitutions to their needs. in Chicago or the Appalachian Mountains. equity for construction and rehabilitation of In western Pennsylvania, we have At least eight federal programs already exist rental housing. Currently, the tax credit is the communities in my district like that have similar goals as the APIC program. primary federal support for expanding the na- Farrell, Pennsylvania, and some of the We understand each program is structured tion's stock of affordable housing. Roughly, neighborhoods even of my hometown of slightly differently and awards loans and 35,000 new and 35,000 rehabilitated rental Erie, who could benefit enormously grants differently than APICs, but the outcome units are created each year with this state-ad- from these new, nonbureaucratic tools. remains the same. These include Community ministered program. Mr. Speaker, we have passed many Development Block Grants (CDBG) Section What concerns me is the portion of the tax bills in this House. We have passed 108 Loan Guarantees, Community Develop- American Community Renewal Act which a marriage penalty credit, we have ment Financial Institutions (CDFIs), Small would reform the way in which the program passed pension reform, we have passed Business Investment Companies (SBICs), and works today. This reform would have the ef- a taxpayer Bill of Rights, too. We have the Business and Industry Loan program ad- fect of requiring states to give a preference in passed small business incentives and ministered by the USDA. their credit allocation to housing rehabilitation we voted to eliminate the death tax. The APIC proposed creates quasi-GSEs, by in qualified census tracts where more than 50 We have gotten rid of an antiquated relying on government subsidies to back ``pri- percent of the households have incomes at phone tax in action in the House and vate'' loans. This is not a private market initia- less than 60 percent of the area median in- we will be moving soon to repeal a tax tive. HUD is granted authority to create a sec- come. on Social Security benefits. ondary market in APIC debt, similar to how I have no quarrel with states allocating the We have passed many tax bills in this Ginnie Mae guarantees mortgage debt. Cre- tax credit to areas in need of community revi- House. Why do we not today pass a tax ation of this secondary market further lowers talization for rehabilitation of existing units. bill to provide relief for those commu- the cost of capital, but increases taxpayer risk. However, the beauty of this program is the nities who all too often have been left In fact, under H.R. 4923, APICs are ex- balance struck between federal tax incentives behind? In passing this legislation, we pected to lose $6 million for every $1 billion in- and state administration. I do not want us at are committing ourselves to a vision of vested. CBO believes that this loss could be the federal level dictating to the states that the a growing prosperous America and cre- greater if the true value of risk is calculated. credits should go to any particular area. States ating a land of opportunity where op- In addition, CBO wrote that although the APIC already have the discretion to give preference portunity truly exists for every Amer- legislation ``authorizes the appropriation of $36 in allocating the credit to projects going into ican. million annually for the subsidy cost of loan areas in need of revitalization or rehabilitation Mr. Speaker, I urge all of my col- guarantees and $1 million annually for admin- of existing units in under served areas. I just leagues to join me in passing this legis- istrative expenses...based on the experi- do not believe the federal government should lation. ence of similar loan guarantee programs ad- be in the business of forcing this upon the Mr. RYAN of Wisconsin. Mr. Speaker, today ministered by the SBA. CBO estimates that states. While I have no doubt that this provi- we are voting on H.R. 4923, the Community the subsidy cost to guarantee $1 billion in sion included in the package is well inten- Renewal and New Markets Act, which in- loans under the APIC program would cost tioned I believe it would have a negative im- cludes a provision to create several very large about $50 million annually.'' Based on SBA pact on the programs and the states which ad- investment companies targeted toward the programs, ``CBO expects that APIC borrowers minister it. I hope that this bill can move for- inner cities and rural communities. would default on between 25 and 30 percent ward and that at the appropriate time we can The American Private Investment Compa- of the guaranteed loans.'' revisit this issue and clarify this provision. nies' (APIC) proposed goal of bringing large- To put this in perspective, CRS contrasts Mr. UDALL of Colorado. Mr. Speaker, I rise scale businesses to economically distressed the expected 3.6 percent subsidy rate with in support of H.R. 4923, the Community Re- communities is a laudable and important goal. both CDFIs and SBICs. CDFIs have a FY1999 newal and New Markets Act. H.R. 4923 pro- However, the APIC proposed under the Com- subsidy rate of over 39 percent and SBICs vides tax credits, regulatory assistance and munity Renewal and New Markets Act accepts have a subsidy rate of 25 percent (as of access to capital aimed primarily at economi- the various impediments to investing in the 1996). Accordingly, CRS, as well as CBO, the cally disadvantaged communities. inner city and rural communities and simply of- proposed 3.6 percent subsidy rate far too low. Since joining the Small Business Com- fers businesses a subsidy for risky investment. Finally, HUD is a highly political department mittee, I have been committed to seeing the Further, the legislation duplicates several ex- and has demonstrated a lack of success in President's New Markets Initiative enacted into isting programs, including Small Business In- handling new programs, such as the commu- law. As we consider H.R. 4923 today, I would vestment Companies (SBICs) which are also nity builders program. Unlike the Treasury De- like to call my colleague's attention to a pair

VerDate 25-JUL-2000 04:17 Jul 26, 2000 Jkt 079060 PO 00000 Frm 00060 Fmt 4634 Sfmt 9920 E:\CR\FM\K25JY7.078 pfrm02 PsN: H25PT1 July 25, 2000 CONGRESSIONAL RECORD — HOUSE H6839 of provisions in this bill offered by the Small powerment Zones and Secretary Andrew increase will have the greatest impact on Business Committee. I am proud to have Cuomo to my district to view firsthand the crit- business there, because approximately 57% of worked on these bi-partisan, commonsense ical need for community development in my workers are within $1.00 of the current min- imum wage, far in excess of any other U.S. Small Business Committee provisions, the district. jurisdiction. Moreover, unemployment in New Markets Venture Capital Program and Across our nation, I have seen and heard Puerto Rico, despite massive infrastructure BusinessLINC. firsthand the benefits of EZs in distressed development and local tax incentives, stub- The New Markets Venture Capital Program communities. This initiative continues to be bornly remains approximately 11 percent; (NMVC) creates a public private partnership to one of our nation's leading programs in the per capita incomes remain less than 1⁄2 of any fund businesses located principally in low-in- fight against poverty. Although, there are state; a very substantial number of the come areas. The New Markets Initiative's pri- clearly some provisions in this bill that cause American citizens in Puerto Rico have in- me concern, I am positive this measure will comes below the poverty line. mary objective is the establishment of a ven- The job creation incentives of H.R. 2138 ture capital program with the specific mission equip small businesses, and communities with could alleviate these economic hardships. of identifying and providing for the investment the tools needed to combat poverty. That bill would provide the incentives of sec- needs of small entrepreneurs in low-to-mod- In closing, I urge my colleagues to support tion 30A to new companies and new lines of erate income communities, including inner-city H.R. 4923 and make economic revitalization a businesses and it would extend the section and rural areas. This program represents the reality for many of our communities. 30A program beyond 2005, when it is cur- heart and soul of the New Markets Initiative. Mr. CRANE. Mr. Speaker, I want to com- rently scheduled to terminate. mend you, Chairman ARCHER and Represent- These are essential components of an effi- NMVC takes the concept of venture capital, in cient job creations incentive uniquely tai- atives WATTS and TALENT for the hard work a public-private partnership, and applies it di- lored to the needs of Puerto Rico. rectly to areas untouched by economic pros- and excellent result represented by the legisla- We urge you to consider the principles in perity. The SBA is planning to name 10 tion before us here today. This bill applies Re- H.R. 2138 as you craft community revitaliza- NMVC's throughout the country. The NMVC's publican principles of economic growth and tion tax incentives. This bill recognizes that will receive a $15 million appropriation for loan opportunity to those communities that have the economic strength of this country is in the private sector. Enactment of this legisla- guarantees that translates into $150 million in not fully participated in the strong economic growth experienced by much of our nation in tion will help keep Puerto Rico on the road loans. to economic growth through principles in BusinessLINC encourages large businesses the last several years. which we all believe. to team with small businesses and entre- Having said this, however, I need to men- Sincerely, preneurs located in low income areas. This tion one important issue that has not yet been Charles B. Rangel, Xavier Becerra, Pat- grant program helps promote business-to-busi- addressed. This legislation, while helping rick J. Kennedy, Richard Neal, Robert ness networking through local third-party enti- many American communities, does little or T. Matsui, E. Clay Shaw, Jr., Phil ties such as Chambers of Commerce. In addi- nothing for the American citizens of Puerto English, Mark Foley, Michael R. tion, the program provides funds to these local Rico, citizens whose island is in dire need of McNulty, Philip M. Crane, Nancy John- son, Dave Camp, Jim Ramstad, Jen- business organizations for technical assist- economic development. I have introduced leg- islation in this Congress, H.R. 2138, that will nifer Dunn, Tom Davis, J.D. Hayworth, ance programs, such as marketing and busi- Amo Houghton, Members of Congress. ness plans. apply the job creation incentives of section 30A of the tax code to U.S. companies doing Mr. LEACH. Mr. Speaker, I rise today in Across this country, more than 34.5 million strong support of the legislation before us, in people live below the poverty line. In this time business in Puerto Rico for new and ex- panded activities. My legislation applies to particular Title VI, the American Private Invest- of unparalleled economic growth and pros- ment Companies (APIC) section that the perity, the Community Renewal and New Mar- Puerto Rico the same objectives of the Com- munity Renewal legislation to encourage pri- Banking Committee approved in April. These kets Act is truly needed to harness the entre- APICs are designed to create new investment preneurial power that exists in these cities and vate sector investment and job growth in areas which need it the most. in those communities and the people of these towns, and to insure that our nation's eco- communities who are not fully participating in nomic growth touches all. While I certainly support the legislation be- fore us here today, I hope that we will be able the economic good times most Americans are Ms. JACKSON-LEE of Texas. Mr. Speaker, currently enjoying. I am in strong support of H.R. 4923, the Com- to address as expeditiously as possible, the concerns I am raising with regard to Puerto Let me say at the outset Chairman Green- munity Renewal and New Markets Act. This span was before the Banking Committee Rico. I believe it is only fair that the opportuni- legislation enables distressed communities today to talk about the longest economic ex- ties for economic development and economic with the tools needed for community develop- pansion in the nation's post-World War II his- prosperity are extended to our American citi- ment. tory which has provided jobs for more Ameri- zens in Puerto Rico as well. I submit for the As you know, the Empowerment Zone and cans than ever before. As he noted, the un- RECORD a copy of a letter sent to Ways and Enterprise Community (EZ/EC) Initiative is a employment rate is low; inflation is in check; Means Chairman ARCHER from a number of key element to President Clinton's job creation productivity growth is the highest in 15 years; my colleagues expressing the very concerns I strategy for America. It create jobs and busi- and not only is the federal budget in balance, have articulated here. I look forward to work- ness opportunities in the most economically but to the astonishment of most, surpluses are ing with my colleagues on this important issue. distressed areas of inner cities and the rural forecast for the foreseeable future. heartland. The EZ/EC effort provides tax in- CONGRESS OF THE UNITED STATES, Sustained economic growth has occurred in centives and performance grants and loans to HOUSE OF REPRESENTATIVES, part due to significant private sector produc- Washington, DC, July 18, 2000. create jobs and expand business opportuni- tivity increases, in part as a result of a mix of ties. It also focuses on activities to support Hon. BILL ARCHER, Chairman, Committee on Ways and Means, fiscal and monetary policies which, perhaps, people looking for work: job training, childcare, House of Representatives, Longworth House for the first time in decades are working in and transportation. Office Building, Washington, DC. sync, rather than in juxtaposition. H.R. 4923, will establish 40 new renewable DEAR MR. CHAIRMAN: In the coming months One of the stark difficulties in our economy, communities across our nation and in areas we will consider exciting new initiatives to however, is that the gap between the well-to- where pervasive poverty and high unemploy- encourage private sector community eco- do and the less well off is widening. While job ment exist. Furthermore, this bill will authorize nomic development and job growth in areas opportunities are expanding to the most dis- various tax incentives for individuals and busi- that have not fully kept up with the eco- advantaged parts of the population, clearly nesses located within these renewable com- nomic expansion of the past decade. We are also considering tax proposals that will help more can be done so that all Americans have munities. Some of these incentives include tax business offset the impact of another in- the opportunity to work at fulfilling jobs and to credits for private investors in poor neighbor- crease in the minimum wage. provide for their families. hoods, and loans and technical assistance to These initiatives are an important part of The portion of the legislation before us help small businesses in low income areas. the economic agenda that you have been under the Banking Committee's jurisdiction Most importantly, the bill will authorize the fighting for as Chairman, to encourage the would spur companies to make equity invest- creation of nine additional EZs in low income growth of a vibrant private sector as the ments in distressed areas. These companies neighborhoods. In my district, the 18th Con- foundation for continued economic pros- would be licensed by HUD as for-profit private perity in all American communities. gressional District of Houston, Texas, there is Toward that goal, we urge you to include venture capital firms and provided government an urgent need for community redevelopment. incentives for job creation in Puerto Rico in guarantees of company debentures, provided In fact, I was glad to invite both Alvin Brown, these programs. As you know, the minimum the licensee brings at least $25 million in pri- Director of the White House Office of Em- wage increase will apply in Puerto Rico. This vate equity capital and substantially serves

VerDate 25-JUL-2000 04:17 Jul 26, 2000 Jkt 079060 PO 00000 Frm 00061 Fmt 4634 Sfmt 9920 E:\CR\FM\A25JY7.043 pfrm02 PsN: H25PT1 H6840 CONGRESSIONAL RECORD — HOUSE July 25, 2000 low-income distressed neighborhoods and House suspend the rules and pass the Istook Mink Shadegg Jackson-Lee Moakley Shaw communities. bill, H.R. 4923. (TX) Mollohan Shays The Administration has testified that APICs, The question was taken. Jefferson Moore Sherwood licensed and guaranteed by the Federal gov- Mr. ENGLISH. Mr. Speaker, I object John Moran (KS) Shimkus ernment, would provide the type of incentives Johnson (CT) Moran (VA) Shows to the vote on the ground that a Johnson, E.B. Morella Shuster necessary for developments such as shopping quorum is not present and make the Johnson, Sam Murtha Simpson centers and manufacturing facilities that would point of order that a quorum is not Jones (NC) Myrick Sisisky otherwise not locate in some of our most dis- present. Jones (OH) Nadler Skeen Kanjorski Napolitano Skelton tressed communities. The SPEAKER pro tempore. Evi- Kaptur Neal Slaughter Before closing, I would also like to briefly dently a quorum is not present. Kasich Nethercutt Smith (MI) mention the FHA Risk Sharing Demonstration The Sergeant at Arms will notify ab- Kelly Ney Smith (NJ) Kennedy Northup Smith (TX) Program Proposal that will allow the FHA to sent Members. risk-share 20 percent of its mortgage loan Kildee Norwood Snyder ANNOUNCEMENT BY THE SPEAKER PRO TEMPORE Kilpatrick Nussle Souder portfolio on a demonstration level with commu- Kind (WI) Oberstar Spence nity development financial institutions. This will The SPEAKER pro tempore. Pursu- King (NY) Obey Spratt help more individuals purchase homes who ant to clause 8 of rule XX, following Kingston Ortiz Stabenow Kleczka Ose Stearns normally don't qualify for loans because of a this 15-minute vote on H.R. 4923, the Chair will put the question on motions Klink Owens Stenholm high risk credit history. This provision is similar Knollenberg Oxley Strickland to Section 206 of H.R. 1776, which the House to suspend the rules on which further Kolbe Packard Stump approved earlier this year. proceedings were postponed earlier Kucinich Pallone Stupak today in the following order: Kuykendall Pascrell Sununu In addition, another important provision of LaFalce Pastor Sweeney this bill allows for transferring substandard, va- H.R. 4923, the pending vote; LaHood Pease Talent cant, HUD-held properties into the possession H.R. 4888, by the yeas and nays; Lantos Peterson (MN) Tancredo H.R. 4864, by the yeas and nays. Largent Peterson (PA) Tanner of local governments and community develop- Larson Petri Tauscher ment corporations for homeownership and The Chair will reduce to 5 minutes Latham Phelps Tauzin community revitalization efforts in distressed the time for each electronic vote after LaTourette Pickering Taylor (MS) the first vote in this series. Lazio Pickett Taylor (NC) communities. Ineffective federal housing poli- Leach Pitts Terry cies regarding the disposition of federally held The vote was taken by electronic de- Lee Pombo Thomas properties can negatively impact the economic vice, and there were—yeas 394, nays 27, Levin Pomeroy Thompson (CA) vitality of neighborhoods. HUD's management not voting 14, as follows: Lewis (CA) Porter Thompson (MS) Lewis (GA) Portman Thornberry of its property disposition program for FHA [Roll No. 430] Lewis (KY) Price (NC) Thune foreclosed homes has made it difficult for YEAS—394 Linder Pryce (OH) Thurman many communities to maintain property values Lipinski Quinn Tiahrt Abercrombie Cardin Fletcher LoBiondo Radanovich Tierney and dedicated homeowners. According to Aderholt Carson Foley Lowey Rahall Toomey Congressional testimony by HUD's Inspector Allen Castle Forbes Lucas (KY) Ramstad Towns General, at the end of January 2000, HUD's Andrews Chabot Ford Lucas (OK) Rangel Traficant Archer Chambliss Fossella real estate-owned inventory totaled 47,711 Luther Regula Turner Armey Chenoweth-Hage Fowler Maloney (CT) Reyes Udall (CO) properties, 42 percent of which had been in Baca Clay Franks (NJ) Maloney (NY) Reynolds Udall (NM) the inventory 6 months or more, and 17 per- Bachus Clayton Frelinghuysen Manzullo Riley Upton cent of which had been in the inventory 12 Baird Clement Frost Markey Rivers Velazquez Baker Clyburn Gallegly Martinez Rodriguez Vitter months or more. Baldacci Coble Ganske Mascara Roemer Walden HUD's foreclosed, vacant and substandard Ballenger Coburn Gekas Matsui Rogan Walsh single-family properties are widely perceived Barcia Collins Gephardt McCarthy (MO) Rogers Wamp as contributing to increased crime, urban Barr Combest Gibbons McCarthy (NY) Rohrabacher Watkins Barrett (NE) Condit Gilchrest McCrery Rothman Watt (NC) blight, and the overall decline of working-class Barrett (WI) Cook Gillmor McGovern Roukema Watts (OK) neighborhoods. Bartlett Cooksey Gonzalez McHugh Roybal-Allard Weiner This bill requires HUD to transfer, to the Bass Costello Goode McInnis Royce Weldon (FL) Bateman Cox Goodlatte maximum extent practicable, ownership of eli- McIntyre Rush Weldon (PA) Becerra Coyne Goodling McKeon Ryan (WI) Weller gible properties (HUD-owned substandard Bentsen Cramer Goss McKinney Ryun (KS) Wexler multifamily, unoccupied multifamily, or unoccu- Bereuter Crane Graham McNulty Salmon Weygand pied single-family properties) to a unit of local Berkley Crowley Granger Meehan Sanchez Whitfield Berman Cubin Green (TX) Meek (FL) Sandlin Wicker government having jurisdiction for the area Berry Cummings Green (WI) Meeks (NY) Sanford Wilson where the property is located, or to a commu- Biggert Cunningham Greenwood Metcalf Sawyer Wise nity development corporation within such juris- Bilbray Davis (FL) Gutknecht Mica Saxton Wolf Bilirakis Davis (IL) Hall (OH) diction, on certain terms and conditions. In Millender- Scarborough Woolsey Bishop Davis (VA) Hall (TX) McDonald Schaffer Wu cases where single-family property is trans- Blagojevich Deal Hansen Miller (FL) Sensenbrenner Wynn ferred to a local unit of government, this sec- Bliley DeGette Hastert Miller, Gary Serrano Young (AK) Blumenauer Delahunt Hastings (WA) Minge Sessions Young (FL) tion requires a $1 purchase program, con- Blunt DeLauro Hayes sistent with current HUD policy. Boehlert DeLay Hayworth NAYS—27 In closing, I would like to note that Rep- Boehner DeMint Hefley Ackerman Hastings (FL) Sabo resentative LAZIO, Chairman of the Housing Bonilla Deutsch Herger Baldwin Jackson (IL) Sanders Bonior Diaz-Balart Hill (IN) Conyers Lofgren Schakowsky Subcommittee, along with Representatives Bono Dickey Hill (MT) WATTS, and TALENT and Banking Committee DeFazio McDermott Scott Borski Dicks Hilleary Farr Miller, George Sherman Ranking Member LAFALCE, are to be congratu- Boswell Dingell Hilliard Filner Olver Stark lated for their hard work on the legislative Boucher Dixon Hinchey Frank (MA) Paul Visclosky Boyd Doggett Hinojosa package before us. In addition, the leadership Gejdenson Payne Waters Brady (PA) Dooley Hobson Gutierrez Pelosi Waxman of Speaker HASTERT has been critical in put- Brady (TX) Doolittle Hoeffel ting this entire package together. His commit- Brown (FL) Doyle Hoekstra NOT VOTING—14 Brown (OH) Dreier Holden Barton Gordon Menendez ment to work bipartisanly with the President to Bryant Duncan Holt Danner Jenkins Ros-Lehtinen advance this important legislative package de- Burr Dunn Hooley Edwards Lampson Smith (WA) Burton Ehlers Horn serves our commendation. I urge adoption of Ewing McCollum Vento Buyer Ehrlich Hostettler the bill. Gilman McIntosh Mr. ENGLISH. Mr. Speaker, I yield Callahan Emerson Houghton Calvert Engel Hoyer b 1344 back the balance of my time. Camp English Hulshof The SPEAKER pro tempore (Mr. Campbell Eshoo Hunter Messrs. MCDERMOTT, DEFAZIO, SIMPSON). The question is on the mo- Canady Etheridge Hutchinson GUTIERREZ, WAXMAN and SHER- Cannon Evans Hyde tion offered by the gentleman from Capps Everett Inslee MAN changed their vote from ‘‘yea’’ to Pennsylvania (Mr. ENGLISH) that the Capuano Fattah Isakson ‘‘nay’’.

VerDate 25-JUL-2000 04:17 Jul 26, 2000 Jkt 079060 PO 00000 Frm 00062 Fmt 4634 Sfmt 0634 E:\CR\FM\A25JY7.100 pfrm02 PsN: H25PT1 July 25, 2000 CONGRESSIONAL RECORD — HOUSE H6841 Mrs. MEEK of Florida and Ms. JACK- Franks (NJ) Lucas (KY) Ryan (WI) ANSWERED ‘‘PRESENT’’—2 Frelinghuysen Lucas (OK) Ryun (KS) SON-LEE of Texas changed their vote Johnson (CT) LaFalce Frost Luther Sabo from ‘‘nay’’ to ‘‘yea’’. Gallegly Maloney (CT) Salmon NOT VOTING—15 So (two-thirds having voted in favor Gejdenson Maloney (NY) Sanchez Barton Gilman McIntosh Gekas Manzullo Sanders thereof) the rules were suspended and Danner Gordon Menendez Gephardt Markey Sandlin the bill was passed. Edwards Jenkins Ros-Lehtinen Gibbons Martinez Sanford Ewing Lampson Smith (WA) The result of the vote was announced Gilchrest Mascara Sawyer Ganske McCollum Vento as above recorded. Gillmor Matsui Saxton Gonzalez McCarthy (MO) Scarborough A motion to reconsider was laid on Schaffer b 1354 the table. Goode McCarthy (NY) Goodlatte McCrery Schakowsky So (two-thirds having voted in favor Scott f Goodling McDermott thereof) the rules were suspended and Goss McGovern Sensenbrenner Graham McHugh Serrano the bill was passed. b 1345 Sessions Granger McInnis The result of the vote was announced Shadegg Green (TX) McIntyre ANNOUNCEMENT BY THE SPEAKER Shaw as above recorded. Green (WI) McKeon Shays A motion to reconsider was laid on Greenwood McKinney The SPEAKER. Pursuant to the pro- Sherman Gutierrez McNulty the table. visions of clause 8 of rule XX, the Chair Sherwood Gutknecht Meehan Shimkus f will reduce to 5 minutes the period of Hall (OH) Meek (FL) time within which a vote by electronic Shows Hall (TX) Meeks (NY) Shuster VETERANS CLAIMS ASSISTANCE Hansen Metcalf device may be taken on each additional Simpson ACT OF 2000 motion to suspend the rules on which Hastings (FL) Mica Sisisky Hastings (WA) Millender- Skeen The SPEAKER pro tempore (Mr. the Chair has postponed further pro- Hayes McDonald Skelton SIMPSON). The pending business is the ceedings. Hayworth Miller (FL) Slaughter Hefley Miller, Gary question of suspending the rules and f Smith (MI) Herger Miller, George Smith (NJ) passing the bill, H.R. 4864, as amended. Hill (IN) Minge Smith (TX) The Clerk read the title of the bill. INNOCENT CHILD PROTECTION ACT Hill (MT) Mink Snyder OF 2000 Hilleary Moakley Souder The SPEAKER pro tempore. The Hilliard Mollohan Spence question is on the motion offered by The SPEAKER. The pending business Hinchey Moore Spratt the gentleman from Arizona (Mr. is the question of suspending the rules Hinojosa Moran (KS) Stabenow STUMP) that the House suspend the Moran (VA) Stark and passing the bill, H.R. 4888. Hobson rules and pass the bill, H.R. 4864, as The Clerk read the title of the bill. Hoeffel Morella Stearns Hoekstra Murtha Stenholm amended, on which the yeas and nays The SPEAKER. The question is on Holden Myrick Strickland are ordered. the motion offered by the gentleman Holt Nadler Stump This will be a 5-minute vote. from Arkansas (Mr. HUTCHINSON) that Hooley Napolitano Stupak Sununu The vote was taken by electronic de- the House suspend the rules and pass Horn Neal Hostettler Nethercutt Sweeney vice, and there were—yeas 414, nays 0, the bill, H.R. 4888, on which the yeas Houghton Ney Talent not voting 20, as follows: and nays are ordered. Hoyer Northup Tancredo [Roll No. 432] The vote was taken by electronic de- Hulshof Norwood Tanner Hunter Nussle Tauscher YEAS—414 vice, and there were—yeas 417, nays 0, Tauzin Hutchinson Oberstar Abercrombie Burton Dicks answered ‘‘present’’ 2, not voting 15, as Hyde Obey Taylor (MS) Taylor (NC) Ackerman Buyer Dingell follows: Inslee Olver Terry Aderholt Callahan Dixon Isakson Ortiz [Roll No. 431] Thomas Allen Calvert Doggett Istook Ose Thompson (CA) Andrews Camp Dooley YEAS—417 Jackson (IL) Owens Thompson (MS) Archer Campbell Doolittle Jackson-Lee Oxley Abercrombie Boyd Cunningham Thornberry Armey Canady Doyle (TX) Packard Ackerman Brady (PA) Davis (FL) Thune Baca Cannon Dreier Aderholt Brady (TX) Davis (IL) Jefferson Pallone Thurman Bachus Capps Duncan Allen Brown (FL) Davis (VA) John Pascrell Tiahrt Baird Capuano Dunn Andrews Brown (OH) Deal Johnson, E. B. Pastor Tierney Baker Cardin Ehlers Archer Bryant DeFazio Johnson, Sam Paul Toomey Baldacci Carson Ehrlich Armey Burr DeGette Jones (NC) Payne Towns Baldwin Castle Emerson Baca Burton Delahunt Jones (OH) Pease Traficant Ballenger Chabot Engel Bachus Buyer DeLauro Kanjorski Pelosi Turner Barcia Chambliss English Baird Callahan DeLay Kaptur Peterson (MN) Udall (CO) Barr Chenoweth-Hage Eshoo Baker Calvert DeMint Kasich Peterson (PA) Udall (NM) Barrett (NE) Clay Etheridge Baldacci Camp Deutsch Kelly Petri Upton Barrett (WI) Clayton Evans Baldwin Campbell Diaz-Balart Kennedy Phelps Velazquez Bartlett Clement Everett Ballenger Canady Dickey Kildee Pickering Visclosky Bass Clyburn Farr Barcia Cannon Dicks Kilpatrick Pickett Vitter Bateman Coble Fattah Barr Capps Dingell Kind (WI) Pitts Walden Becerra Collins Filner Barrett (NE) Capuano Dixon King (NY) Pombo Walsh Bentsen Combest Fletcher Barrett (WI) Cardin Doggett Kingston Pomeroy Wamp Bereuter Condit Foley Bartlett Carson Dooley Kleczka Porter Waters Berkley Conyers Forbes Bass Castle Doolittle Klink Portman Watkins Berman Cook Ford Bateman Chabot Doyle Knollenberg Price (NC) Watt (NC) Berry Cooksey Fossella Becerra Chambliss Dreier Biggert Costello Fowler Kolbe Pryce (OH) Watts (OK) Bentsen Chenoweth-Hage Duncan Bilirakis Cox Frank (MA) Kucinich Quinn Waxman Bereuter Clay Dunn Bishop Coyne Franks (NJ) Kuykendall Radanovich Weiner Berkley Clayton Ehlers Blagojevich Cramer Frelinghuysen LaHood Rahall Weldon (FL) Berman Clement Ehrlich Bliley Crane Frost Lantos Ramstad Weldon (PA) Berry Clyburn Emerson Blumenauer Crowley Gallegly Largent Rangel Weller Biggert Coble Engel Blunt Cubin Ganske Larson Regula Wexler Bilbray Coburn English Weygand Boehlert Cummings Gejdenson Bilirakis Collins Eshoo Latham Reyes Boehner Cunningham Gekas LaTourette Reynolds Whitfield Bishop Combest Etheridge Wicker Bonilla Davis (FL) Gephardt Blagojevich Condit Evans Lazio Riley Bonior Davis (IL) Gibbons Leach Rivers Wilson Bliley Conyers Everett Wise Bono Davis (VA) Gilchrest Lee Rodriguez Blumenauer Cook Farr Wolf Borski Deal Gillmor Levin Roemer Blunt Cooksey Fattah Woolsey Boswell DeFazio Gonzalez Lewis (CA) Rogan Boehlert Costello Filner Wu Boucher DeGette Goode Lewis (GA) Rogers Boehner Cox Fletcher Wynn Boyd Delahunt Goodlatte Lewis (KY) Rohrabacher Bonilla Coyne Foley Young (AK) Brady (PA) DeLauro Goodling Bonior Cramer Forbes Linder Rothman Young (FL) Brady (TX) DeLay Goss Bono Crane Ford Lipinski Roukema Brown (FL) DeMint Graham Borski Crowley Fossella LoBiondo Roybal-Allard Brown (OH) Deutsch Granger Boswell Cubin Fowler Lofgren Royce Bryant Diaz-Balart Green (TX) Boucher Cummings Frank (MA) Lowey Rush Burr Dickey Green (WI)

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