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Tax Advantages and Issues in Renewal Communities
HEADLINES & LINKS
RC Tax Incentives Chart from the City of Memphis  
IRS RC Publications: 954, 8844, 4562 & Related Tax Incentives (City of Minneapolis)  
HUD's Renewal Community Web Page.  
JOINT COMMITTEE ON TAXATION SEARCH ENGINE  
CONFERENCE REPORT ON H.R. 4577, COMMUNITY RENEWAL TAX RELIEF ACT OF 2000  
Proposed bill to allow a credit against income tax for information technology training expenses in RC's  
1998CRH8806D TAXPAYER RELIEF ACT OF 1998, wrt RC's  
CRS1463 AMENDMENTS SUBMITTED-HUD to transfer ownership of any qualified HUD property to the unit of general local government having jurisdiction for the area   
SUMMARY OF PROVISIONS CONTAINED IN H.R. 5662, THE "COMMUNITY RENEWAL TAX RELIEF ACT OF 2000"   
BIPARTISAN AGREEMENT ON NEW MARKETS AND RENEWAL COMMUNITIES  
Tax Credit Information, General Information about Renewal Communities  
PRESIDENT CLINTON & SPEAKER HASTERT ANNOUNCE BIPARTISAN AGREEMENTON NEW MARKETS AND RENEWAL COMMUNITIES  

 
 


HUD received more than 100 applications for the program from both urban and rural areas around the country. The RC and Round III Empowerment Zone initiatives represent a new approach to advancing economic prosperity in the Nation's poorest communities. Communities that receive RC or EZ designation will be able to use a revitalizing business tax incentive package valued at $22 billion nationwide. HUD will designate a total of 40 rural and urban RCs. The designation period will be from January 1, 2002 to December 31, 2009.

On December 21, 2000, the Community Renewal Tax Relief Act of 2000 was signed into law. The law provides for $15 billion in tax incentives under the New Markets Tax Credit Program to help spur economic growth in new markets in urban and rural communities across the country. By making an equity investment in an eligible 'community development entity' (CDE), individual and corporate investors can receive a New Markets Tax Credit worth more than 30 percent of the amount invested over the life of the credit, in present value terms.

The CDE Application is available on the Fund's website . The Tax Credit Allocation. Application will be available in early 2002.


General Information about Renewal Communities


SUMMARY OF PROVISIONS CONTAINED IN H.R. 5662 THE "COMMUNITY RENEWAL TAX RELIEF ACT OF 2000"

Prepared by the Staff of the Joint Committee on Taxation

TITLE I. COMMUNITY RENEWAL PROVISIONS

A. Renewal Communities Provisions

The bill authorizes the Secretary of HUD to designate up to 40 "renewal communities" from areas nominated by States and local governments. At least 12 of the designated renewal communities must be in rural areas. In general, nominated areas are ranked based on a formula that takes into account the area's poverty rate, median income, and unemployment rate. A nominated area that is designated as a renewal community is eligible for the following tax incentives: (1) a zero-percent rate for capital gain from the sale of qualifying assets; (2) a 15-percent wage credit to employers for the first $10,000 of qualified wages; (3) a "commercial revitalization deduction" that allows taxpayers (to the extent allocated by the appropriate State agency for the period after December 31, 2001) to deduct either (a) 50 percent of qualifying expenditures for the taxable year in which a qualified building is placed in service, or (b) all of the qualifying expenditures ratably over a 10-year period beginning with the month in which such building is placed in service; (4) an additional $35,000 of section 179 expensing for qualified property; and (5) an expansion of the WOTC with respect to individuals who live in a renewal community. The 40 renewal communities must be designated by January 1, 2002, and the resulting tax benefits will be available for the period beginning on January 1, 2002, and ending December 31, 2009.


C. Cooperation Among the Nominating Governments and Community Organizations

Every application for RC designation must contain a course of action describing the commitment to cooperation in the nominated area by the nominating governments and community organizations that meets the requirements of this section II.C. listed immediately below.

C. Cooperation Among the Nominating Governments and Community Organizations

Every application for RC designation must contain a course of action describing the commitment to cooperation in the nominated area by the nominating governments and community organizations that meets the requirements of this section II.C. listed immediately below.

1. Commitment to a course of action. A course of action is a written document, signed by the nominated area's State and local governments, or in the case of a nominated area located within an Indian reservation, the reservation governing body, and community-based organizations which commits each signatory to undertake and achieve measurable goals and actions within the nominated area upon its designation as a Renewal Community.

2. Community-based organizations. For purposes of the course of action, ``community-based organizations'' includes for-profit and non- profit private entities, businesses and business organizations, neighborhood organizations, and community groups. Community-based organizations are not required to be located in the nominated area as long as they commit to achieving the goals of the course of action in the Renewal Community.

3. Timetable. The course of action must include a timetable that identifies the significant steps and target dates for implementing the goals and actions.

4. Performance measures. The course of action must include a description of how the performance of the course of action will be measured and evaluated.

5. Required goals and actions. The course of action must include at least four of the following:

a. A reduction of tax rates or fees applying within the Renewal Community;

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b. An increase in the level of efficiency of local services within the Renewal Community, such as services for residents funded through the Federal Temporary Assistance for Needy Families program and related Federal programs including, for example, job support services, child care and after school care for children of working residents, employment training, transportation services and other services that help residents become economically self-sufficient;

c. Crime reduction strategies, such as crime prevention, including the provision of crime prevention services by nongovernmental entities;

d. Actions to reduce, remove, simplify, or streamline governmental requirements applying within the Renewal Community, such as:

i. Density bonus. Permission to develop or redevelop real property at a higher density level than otherwise permitted under the zoning ordinance, e.g., increased height or increased number of residential or business units;

ii. Incentive zoning. Providing a density bonus or other real property-related incentive for the development, redevelopment, or preservation of a parcel in the designated area;

iii. Comprehensive or one-stop permit. Streamlining construction or other development permitting processes, rather than requiring multiple applications for multiple permits, e.g., for demolition, site preparation, and construction, the developer or redeveloper submits asingle application that is circulated for the necessary reviews by the various planning, engineering, and other departments in the county or municipality;

iv. Variance and exception policies. Counties or municipalities may pass ordinances that permit variances to or exceptions from certain zoning or other land use limitations. Examples include a reduced building set-back requirement or a reduced requirement for the provision of parking. The policy may be limited to a particular geographic area.

v. Voluntary environmental compliance program. A shared or limited environmental liability program, with limited liability from certain legal or administrative action in exchange for undertaking an approved program of environmental investigation, hazard control, and on-going risk reduction activities. Typically, the liability limitation is for future environmental cleanup (and not against lawsuit for damages). Risk of cleanup may be shared by the developer or property owner and the government;

e. Involvement in economic development activities by private entities, organizations, neighborhood organizations, and community groups, particularly those in the Renewal Community, including a commitment from such private entities to provide jobs and job training for, and technical, financial, or other assistance to, employers, employees, and residents from the Renewal Community;

f. The gift or sale at below fair market value of surplus real property held by State or local governments, such as land, homes, and commercial or industrial structures in the Renewal Community to neighborhood organizations, community development corporations, or private companies.

6. Recognition of past efforts. The course of action is not limited to future goals and actions. Past efforts within the previous eight years, either completed or on-going, of the nominating State or local governments in reducing the various burdens borne by employers and employees in the nominated area by undertaking any of the goals or actions listed in section II.C.5., above, of this notice may be used to meet the course of action requirement. If past efforts are used, the course of action must identify which of the required goals and actions listed in section II.C.5. they address; the timetable for their continued implementation, if on-going; the community-based organizations involved, if any; and an evaluation of their performance and the performance measures used. http://www.epa.gov/brownfields/html-doc/fr080701.htm


 

 
 
 

Taxation and the Renewal Communities Designation


RC Tax Incentives Chart from the City of Memphis     Posted: May 12, 2002
Renewal Community Tax Incentives: Chart of IRS Incentives and Forms.


IRS RC Publications: 954, 8844, 4562 & Related Tax Incentives (City of Minneapolis)     Posted: May 10, 2002

Tax Incentive Guide : Tax Incentive Guide for Businesses in the Renewal Communities, Empowerment Zones and Enterprise Communities

IRS Publication 954Tax Incentives for Empowerment Zones and Other Distressed Communities.

IRS Form 8844: Empowerment Zone Employment Credit

IRS Form 4562 for Addtional Expensing

Empowerment Zone Related Tax Incentives:City of Minneapolis, MN


HUD's Renewal Community Web Page.     Posted: May 5, 2002
Renewal community (rc) competition information and resources" This is the big HUD web page with most of the information you'll need on it.
JOINT COMMITTEE ON TAXATION SEARCH ENGINE     Posted: April 30, 2002
To search for a document on the Joint Committee on Taxation's website, enter a single word, several words, or a phrase.
CONFERENCE REPORT ON H.R. 4577, COMMUNITY RENEWAL TAX RELIEF ACT OF 2000     Posted: April 13, 2002
In recent years, provisions have been added to the Internal Revenue Code that target specific geographic areas for special Federal income tax treatment. For example, empowerment zones and enterprise communities generally provide tax incentives for businesses that locate within certain geographic areas designated by the Secretaries of Housing and Urban Development (`HUD'') and Agriculture.House BillNo provision. However, H.R. 5542 1 authorizes the designation of 40 ``renewal communities'' within which special tax incentives would be available. The following is a description of the designation process and the tax incentives that would be available within the renewal communities.
Proposed bill to allow a credit against income tax for information technology training expenses in RC's     Posted: April 13, 2002
I have urged that we focus our efforts on IT training and partnerships between the business and education communities. Many excellent partnerships between the IT community, state and local government, high schools, and colleges and universities that provide individuals of all ages with education and training opportunities in information technology are already underway. ...
1998CRH8806D TAXPAYER RELIEF ACT OF 1998, wrt RC's     Posted: April 13, 2002
``(a) General Rule.--In the case of a renewal community business (as defined in section 1400G), for purposes of section 179-- ``(1) the limitation under section 179(b)(1) shall be increased by the lesser of-- ``(A) $35,000, or ``(B) the cost of section 179 property which is qualified renewal property placed in service during the taxable year, and ``(2) the amount taken into account under section 179(b)(2) with respect to any section 179 property which is qualified renewal property shall be 50 percent of the cost thereof. ``(b) Recapture.--Rules similar to the rules under section 179(d)(10) shall apply with respect to any qualified renewal property which ceases to be used in a renewal community by a renewal community business. ``(c) Qualified Renewal Property.--For purposes of this section-- ``(1) In general.--The term `qualified renewal property' means any property to which section 168 applies (or would apply but for section 179) if-- ``(A) such property was acquired by the taxpayer by purchase (as defined in section 179(d)(2)) after December 31, 1999, and before January 1, 2007, and ``(B) such property would be qualified zone property (as defined in section 1397C) if references to renewal communities were substituted for references to empowerment zones in section 1397C. ``(2) Certain rules to apply.--The rules of subsections (a)(2) and (b) of section 1397C shall apply for purposes of this section.''
CRS1463 AMENDMENTS SUBMITTED-HUD to transfer ownership of any qualified HUD property to the unit of general local government having jurisdiction for the area     Posted: April 13, 2002
Pursuant to the authority under section 204 of the Departments of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Act, 1997, the Secretary shall transfer ownership of any qualified HUD property to the unit of general local government having jurisdiction for the area in which the property is located in accordance with this section, but only if the unit of general local government enters into an agreement with the Secretary meeting the requirements of subsection (d). (b) Qualified HUD Properties.
SUMMARY OF PROVISIONS CONTAINED IN H.R. 5662, THE "COMMUNITY RENEWAL TAX RELIEF ACT OF 2000"     Posted: April 11, 2002
INTRODUCTION This document,1 prepared by the staff of the Joint Committee on Taxation, contains asummary of the provisions in H.R. 5662, the "Community Renewal Tax Relief Act of 2000". The provisions of H.R. 5662 are to be incorporated by reference in the conference agreement for H.R.4577, the Departments of Labor, Health and Human Services, and Education and Related Agencies Appropriations Act, 2001.
BIPARTISAN AGREEMENT ON NEW MARKETS AND RENEWAL COMMUNITIES     Posted: April 10, 2002
Today, President Clinton will be joined by Speaker Dennis Hastert in announcing a bipartisan agreement on a New Markets and Community Renewal legislative initiative. This announcement is the outcome of the commitment President Clinton and Speaker Hastert made in Chicago last Nov. to develop a bipartisan legislative initiative on New Markets and revitalizing impoverished communities this year. This initiative will help encourage private sector equity investment in underserved communities throughout the country to ensure that all Americans share in our nation's economic prosperity.
Tax Credit Information, General Information about Renewal Communities     Posted: March 28, 2002
This posting holds Renewal Community (rc) competition information and resources, a lot about Renewal Community Tax Incentives, PowerPoint slides, and links to other Renewal Communtities.
PRESIDENT CLINTON & SPEAKER HASTERT ANNOUNCE BIPARTISAN AGREEMENTON NEW MARKETS AND RENEWAL COMMUNITIES     Posted: May 23, 2000
Today, President Clinton will be joined by Speaker Dennis Hastert in announcing a bipartisan agreement on a New Markets and Community Renewal legislative initiative. This announcement is the outcome of the commitment President Clinton and Speaker Hastert made in Chicago last Nov. to develop a bipartisan legislative initiative on New Markets and revitalizing impoverished communities this year. This initiative will help encourage private sector equity investment in underserved communities throughout the country to ensure that all Americans share in our nation's economic prosperity.
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