July 25, 2000
H.R. 4923 - Community Renewal and New Markets Act of 2000
(Rep. Watts (R) OK and four cosponsors)
The Administration strongly supports House passage of H.R. 4923, the Community Renewal and New Markets Act of 2000. H.R. 4923 embodies all of the elements of the bipartisan agreement between the President and the Speaker of the House announced on May 23, 2000. 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.
H.R. 4923 includes the President's New Markets Tax Credit, authorization
for America's Private Investment Companies (APICs) and the New Market
Venture Capital (NMVC) program, and the extension and expansion of
Empowerment Zone (EZ) incentives. The EZ incentives include extending the
life of all existing EZs through 2009, equalizing tax incentives in all EZs
by making the Round 1 wage credit and Round 2 bonding authority available
in all EZs, creating new capital gains incentives in EZs, and creating 9
new Round 3 EZs. This package also includes the creation of 40 new Renewal
Communities with certain tax incentives. The Administration looks forward
to securing the commitment for $200 million in appropriations for
Empowerment Zones, as the bill moves forward.
The bill also makes clear that religious organizations may apply for
drug abuse prevention and treatment funds on the same basis as other
non-profit organizations. The Administration supports the principle that
community and faith-based organizations can play a valuable role in
addressing substance abuse. At the same time, the Administration has made
clear that charitable choice provisions must be implemented consistent with
full respect for the constitutional separation of church and state. The
current version of this bill satisfies this constitutional prerequisite.
The bill provides important protections for program beneficiaries and,
similar to the Personal Responsibility and Work Opportunity Act of 1996
(P.L. 104-193), states that a religious organization's eligibility for the
Civil Rights Act Title VII exemption allowing religious organizations to
hire on the basis of religion will not be affected by an organization's
participation in the program. The language also makes clear that nothing
in the bill "shall be construed to modify or affect" the application of
other Federal or State law prohibiting employment discrimination. It also
preserves state certification authority, while prohibiting States from
discriminating against substance abuse training provided by specifically
qualified religious organizations.
While the Administration supports H.R. 4923, there are concerns with the
legislation and the Administration looks forward to working to address
these concerns as the bill moves through Congress. Specifically, while the
bill includes an increase in the Low Income Housing Tax Credit and Private
Activity Bonds, that increase is phased in more slowly than is sought by an
overwhelming majority of Democrats and Republicans in the House. The
Administration is deeply committed to ensuring that the increase is phased
in more quickly. The Administration is also disappointed that the bill
does not extend more of the existing tax incentives in the District of
Columbia. The Administration looks forward to addressing these concerns as
the bill moves forward.
The Administration applauds the bipartisan action on H.R. 4923 and urges
its swift passage.
H.R. 4923 would affect receipts; therefore, it is subject to the
pay-as-you-go requirement of the Omnibus Budget Reconciliation Act of 1990.
The Administration has not yet completed its estimates of the costs of the
bill. However, the absence of an offset to H.R. 4923 could cause a
sequester of Federal resources. The Administration supports House passage
of this bill, and will work with Congress to avoid an unintended