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Extensions of Remarks January 9, 1969 EXTENSIONS OF REMARKS 101 EXTENSIONS OF REMARKS TAX INCENTIVES NEEDED TO AT­ I strongly urge that hearings be held areas wm be lPft with an over-concentration of less productive people and wm find it in­ TRACT INDUSTRY TO RURAL on this matter and that this basic prin­ creasingly diftlcult to support basic public AMERICA ciple of full employment through tax in­ services. centives be adopted and endorsed by the Thus, the problem is a critical one. Congress. HON. JOE L. EVINS 11. Some existing programs and new pro­ The above-mentioned excerpts follow: posals for rural development OF TENNESSEE A BRIEF FAVORING TAX INCENTIVES FOR THE The Area Redevelopment Act of 1961 (P.L. IN THE HOUSE OF REPRESENTATIVES DEVELOPMENT OF RURAL AREAS 87-27) helped to alleviate unemployment Friday, January 3, 1969 INTRODUCTION in economically depressed rural areas. It pro­ Mr. EVINS of Tennessee. Mr. Speaker, This paper was prepared at the request of vided occupational training and encouraged a Congressional office desiring to support the the development of physical plant and indus­ I am today introducing a bill that could ideal of tax incentives for the development trial expansion in an effort to reduce out­ well be the economic salvation for our of rural areas. migration. By 1965, when it was terminated and basically replaced by the Public Works small town and rural areas-and the I. The development problem in rural areas basic solution to the problem of out­ and Economic Development Act of 1965 (P.L. migration to our metropolitan areas. The rural areas of our Nation have held 89-136), it was credited with some 65,000 their own in population but have grown more new jobs in rural areas. I refer to the Rural Development In­ slowly than any other sector. Between 1960 The Appalachian Regional Development centive Act of 1969 which I am intro­ and 1965, the greatest population growth, Act of 1965 (P.L. 89-4) established a program ducing today to utilize the creative ener­ over 15 percent, was experienced in the met­ Appalachian region. It is designed to im­ gies of our great free enterprise system ropolitan suburbs. The next greatest growth of cooperative development of the depressed to provide jobs and opportunities for our (6 percent) occurred in non-metropolitan prove the public facilities and service-base people in rural America. towns with over 10,000 population. The cen­ of the Region to support private investment This bill provides for tax incentives to tral cities in metropolitan areas followed rather than directly to finance industries. It encourage business and industry to lo­ with 3.5 percent, Finally, with 3.3 percent encourages coordinated programs for overall came the "non-metropolitan remainders," or development of the region, including high­ cate or expand in our rural and small­ rural areas, consisting of towns below 10,000 ways, health facilities and vocational and town areas. population, rural villages and farms. technical schools. The bill specifically provides that those The slow rate of growth in rural areas was The Public Works and Economic Develop­ areas certified by the Bureau of the Cen­ due to a decline of 4 million in farm popula­ ment Act of 1965 (P.L. 89-136), provided some sus as hard hit by outmigration will be tion during the period and a considerable regional development for other areas like that eligible under the provisions of the act. out-migration from rural areas generally. for the Appalachian region (the mountain­ The bill provides for an added 7-per­ According to an April 1968 report of the Ad­ ous portions of Missouri, Arkansas and Okla­ cent investment tax credit-in addition visory Commission on Intergovernmental Re­ homa, the Upper Great Lakes Region and lations, entitled, "Urban and Rural America: portions of New England). It also provided to the existing 7-percent credit-for Policies for Future Growth," the migrants some direct assistance. By June 1968, some those industries locating or expanding in from depressed areas included more than a 1,300 local areas had some kind of EDA as­ low-income rural areas. proportionate share of the better educated sistance or development program. In about The bill provides the alternative of ac­ and skilled, leaving behind an over-represen­ 600 areas some 560 million had been put celerated tax amortization over a ·period tation of the less productive sector of the into public works projects to improve the in­ of 60 months of investment in buildings work force: blue collar workers, the less frastructure necessary for business growth. and depreciable real estate. skilled, Negroes and the aged. The migrants Some 60 percent of the projects and 80 per­ We must all recognize the fact that our from rural areas, particularly the less skilled, cent of the over $100 million of business have migrated to the central cities where they loans went to areas under 10,000 population major cities are caught in a population have contributed to the economic and social and to firms employing less than 250. (EDA strangulation, and that our small towns problems of the urban ghettoes. It has been may lend up to 65 percent of aggregate cost, are caught in a population decimation. estimated that over Ys of the growth of the at least 20 percent must come from private This bill would help to ease the urban central cities has been due to in-migr~tion, lenders, and at least 5 percent from a State strangulation by alleviating the causes of almost entirely from the rural areas. or a public community or area organization). the rural outmigration. The result has been a less-than-desirable It has been estimated that 70,000 to 75,000 I want to point out, Mr. Speaker, that rate of economic growth in rural areas. This jobs in rural areas have been developed since is so because economic growth is related di­ 1965. President-elect Nixon ha'J endorsed the rectly to rates of increase in total population The Department of Agriculture adminis­ general principle of tax incentives to en­ and inversely to rates of increase in the non­ ters many community development pro­ courage employment through our free white proportion. The ACm report points out grams. These include loans and grants for enterprise system. also that rural America is consistently in the water and sewer systeinS, telephone and Our House Small Business Committee disadvantaged position, compared with urban electric systems, housing, roads, schools, has recommended this concept in a cur­ areas, by such indexes as educational and watershed development, flood prevention, rent report on problems and progress in health facilities, housing and income levels. recreational facilities, etc. There are also smalltown America, Secretary of Agri­ It has been estimated that for rural Amer­ numerous loan programs to strengthen fam­ ica as a whole, about 5.3 million rural young ily farms, improve rural communities and culture Orville Freeman has advocated men are becoming adults in this decade as alleviate rural poverty. The rural non-farm this approach, and the President's Com­ against only about 3 million men who are programs include rural renewal loans to mission on Rural Poverty has given its dropping out of the labor force. In addition, renew the economy of rural areas where fam­ support to this concept. farm jobs are declining at a rate of perhaps ily incomes are abnormally low, community At my request, Mr. Speaker, the Li­ 300,000 a year. To compensate, there is need facility loans for water and waste disposal brary of Congress recently prepared a to create each year about 550,000 rural non­ systems and community recreation areas in comprehensive report on the concept of farm jobs or jobs accessible to rural residents communities up to 5,500 population, rural tax incentives as related to rural by commuting. The alternative is continued housing loans, resource development loans, heavy migration from the countryside to the and economic opportunity loans to help development. already overcrowded cities. low income rural families develop enterprises I am placing excerpts of this report in A continuation of past trends, according to raise their level of living. It has been the RECORD at the conclusion of my to the Acm report, will have these results: reported that rural electric cooperative asso­ remarks. (1) a widening gap between the economies ciations have created employment for about Mr. Speaker, this is an important bill­ of the central cities and their surrounding 30,000 rural residents. Additional employ­ a significant bill. This bill is responsive surburban neighbors, intensifying the prob­ ment opportunities were created by the over to the needs of our time and it is my be­ lems of the central cities, and 300,000 commercial and industrial custom­ (2) an eventual by-passing of the nation's ers, mostly small businesses, served by REA lief that the new tax revenues generated small urban places to the point where they systems. Electric and telephone systems by the increased business activity and will be less and less able to offer enough jobs financed by the Rural Electrification Admin­ employment will more than offset the to their residents and those of the surround­ istration work with local groups, generally in revenue loss through tax credits to busi­ ing rural areas. This will cause an even locating technical advice or lending sources, ness and industry participating in this greater out-migration from rural areas than to help launch new or expanded industries program. we have witnessed in the past. Then these in their areas. Surveys indicate that from 102 EXTENSIONS OE REMARKS 'January 3,,, 1969 1961 to 1967 more than 2, 700 such enterprises where the jobs exist; the political d.iftlculty backside of the moon, the Apollo 8 have been launched creating an estimated of pinpointing ac.tion to limited areas;.
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