The Community Renewal Tax Relief Act of 2000 is a bill that was introduced into the United States House of Representatives during the 106th United States Congress. The Act was eventually passed as part of the Consolidated Appropriations Act, 2001. The Community Renewal Tax Relief Act of 2000 is intended to improve development in economically distressed areas of the United States. The law offers "tax incentives for businesses to locate and hire residents in urban and rural areas that have not experienced recent economic expansion." Both rural and urban areas are eligible. Three primary means were used: renewal communities, empowerment zones, and community development entities. The bill also created the New Markets Tax Credit Program, which has been renewed several times and is still in effect.
Provisions of the bill
One provision of the Community Renewal Tax Relief Act of 2000 was the creation of 40 "renewal communities". Renewal communities would receive special tax breaks designed to encourage economic growth by generating business investment and job opportunities. Requirements to being designated a renewal community included having a high rate of poverty and high unemployment rate. The communities must have under 200,000 people in them, but can be any physical size. Local and state governments must be involved with a community gaining this designation. They are required to participate by making their own commitments to taking action to reduce economic burdens on employers and businesses in the area, as well as taking steps to encourage economic growth. If a community is successful in becoming a designated renewal community, local business "may be entitled to employer wage credits for full-time employees and summer workers, an expanded expense deduction for tangible assets, an accelerated commercial revitalization deduction and a 100% exclusion for capital gains on the sale of certain renewal community business interests or tangible assets." Another provision of the Community Renewal Tax Relief Act of 2000 was the improvement and expansion of an existing program of "empowerment zones." The law authorized the creation of additional empowerment zones, which were originally created in 1993, and the expansion of some of the tax incentives available. These incentives include that businesses located in these zones "will enjoy a wage credit for certain employees, increased expensing of some property, a 60% exclusion of gain from the sale of their stock, deferral of gain on qualifying assets if the proceeds are reinvested in appropriate replacement assets and easier access to tax-exempt financing." A third provision of the Community Renewal Tax Relief Act of 2000 was the establishment of tax incentives for investment or loans provided to small businesses in low-income communities. This tax credit, known as the New Markets Tax Credit Program, is established for investments in community development entities. CDEs have three official characteristics: their primary mission is to serve low-income communities and people, they are accountable to residents and include them on their governing boards, and they receive certification as a CDE from the U.S. Department of the Treasury.
This summary is based largely on the summary provided by the Congressional Research Service, a public domain source. Title I: Community Renewal and New Markets Title II: Two-Year Extension of Availability of Medical Savings Accounts Title III: Administrative and Technical Provisions Title IV: Tax Treatment of Securities Futures Contracts
The Community Renewal Tax Relief Act of 2000 was passed in December 2000. At that time, the New Markets Tax Credit was scheduled to be a seven-year program. It was then reauthorized in subsequent years. Empowerment zone designations were set to expire at the end of 2011, but were extended until December 31, 2013 after President Barack Obamasigned into law the American Taxpayer Relief Act of 2012. Under rules from the Internal Revenue Service, all Empowerment Zone designations were extended unless they actively requested not to be extended. On June 11, 2013, Senator Jay Rockefeller introduced the New Markets Tax Credit Extension Act of 2013, which would make one component of the Community Renewal Tax Relief Act of 2000 permanent.
