A bill to amend the Internal Revenue Code of 1986 to alleviate poverty by encouraging the employment of residents by empowerment zone businesses through the employment of residents in designated areas of pervasive poverty, unemployment, and general distress.

Amends the Internal Revenue Code to allow enterprise zone businesses operating in empowerment zones (economically depressed areas) who file necessary information with the Secretary of Housing and Urban Development documenting reasonable efforts to meet the residency requirement applicable to zone employees to receive an exemption from such requirement if at least 35% of their employees during the final three months of a taxable year are residents of the empowerment zone or any area within a 15-mile radius of the qualified business which has been designated by any governmental unit as an area of pervasive poverty, unemployment, and general distress.

[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 3894 Introduced in Senate (IS)]








109th CONGRESS
  2d Session
                                S. 3894

  To amend the Internal Revenue Code of 1986 to alleviate poverty by 
encouraging the employment of residents by empowerment zone businesses 
 through the employment of residents in designated areas of pervasive 
              poverty, unemployment, and general distress.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 14, 2006

     Mr. Bond (for himself, Mr. Talent, Mr. Durbin, and Mr. Obama) 
introduced the following bill; which was read twice and referred to the 
                          Committee on Finance

_______________________________________________________________________

                                 A BILL


 
  To amend the Internal Revenue Code of 1986 to alleviate poverty by 
encouraging the employment of residents by empowerment zone businesses 
 through the employment of residents in designated areas of pervasive 
              poverty, unemployment, and general distress.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SPECIAL RULE FOR EMPLOYMENT OF RESIDENTS IN AN EMPOWERMENT 
              ZONE.

    (a) In General.--Section 1397C of the Internal Revenue Code of 1986 
(defining enterprise zone business) is amended by adding at the end the 
following new subsection:
    ``(g) Special Rules Relating to Resident Employment Requirements.--
            ``(1) In general.--If a business entity or proprietorship 
        uses all reasonable efforts during the first 6-month period of 
        any taxable year to meet the 35 percent employee requirement 
        under subsection (b)(6) or (c)(5) or under any other provision 
        of this subchapter, but is unable to do so because insufficient 
        applications of qualified candidates willing to accept and 
        continue employment were received by such business entity or 
        proprietorship during such period, then the business entity or 
        proprietorship may file with the Secretary of Housing and Urban 
        Development necessary information, including available 
        statistics concerning the labor pool and applications received, 
        documenting such reasonable efforts during such period and 
        request that the Secretary of Housing and Urban Development 
        determine whether such business entity or proprietorship used 
        all reasonable efforts during such period to meet such 
        requirement. If the Secretary of Housing and Urban Development 
        determines that the business entity or proprietorship used such 
        reasonable efforts, the Secretary of Housing and Urban 
        Development shall issue a finding stating such determination 
        and such requirement shall be deemed to be met for all purposes 
        of this subchapter for such taxable year if during the final 3 
        months of such taxable year at least 35 percent of the 
        employees of such business entity or proprietorship are 
        residents of--
                    ``(A) the empowerment zone, or
                    ``(B) any area within a 15 mile radius of the 
                qualified business of such business entity or 
                proprietorship which has been designated by any 
                Federal, State, city, or municipal governmental unit as 
                an area of pervasive poverty, unemployment, and general 
                distress.
        Any employee taken into account for purposes of such 
        requirement by reason of this paragraph for any taxable year 
        may continue to be taken into account for such requirement for 
        any subsequent taxable year during which such employee remains 
        a resident of the area described in subparagraph (A) or (B).
            ``(2) Determination by hud.--The Secretary of Housing and 
        Urban Development shall make any and all necessary inquiries 
        (including requesting additional information of the business 
        entity or proprietorship) in order to respond to the request 
        made under paragraph (1) (by making such finding or providing 
        notice of a failure to make such finding) within 30 days of the 
        date of such request. Any finding under paragraph (1) shall 
        also contain a statement by the Secretary of Housing and Urban 
        Development verifying that the areas described in paragraph 
        (1)(B) are areas of pervasive poverty, unemployment and general 
        distress.
            ``(3) Employment by management company.--For purposes of 
        this subchapter, a business entity or proprietorship owner of a 
        enterprise zone business shall be deemed the employer of any 
        employees that a management company hires to operate such 
        enterprise zone business.''.
    (b) Reports to Congress.--
            (1) In general.--The Secretary of Housing and Urban 
        Development shall submit to Congress, every 3 years, a report 
        summarizing the information submitted to the Secretary by a 
        business entity or proprietorship under section 1397C(g) of the 
        Internal Revenue Code of 1986 (as added by subsection (a)) and 
        the actions taken by the Secretary in response.
            (2) Final report.--The Comptroller General of the United 
        States shall use the reports submitted by the Secretary of 
        Housing and Urban Development under paragraph (1), and such 
        other information the Comptroller General deems relevant, to 
        make an assessment of the impact of such section 1397C(g), in 
        the form of an update to the reports required by section 101(c) 
        of the Community Renewal Tax Relief Act of 2000.
    (c) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning on and after January 1, 2006, and shall 
apply to any bonds outstanding on that date.
                                 <all>