To amend the Internal Revenue Code of 1986 to allow a deduction for income attributable to business activities conducted in high job-loss areas.

Summary: Tax Incentives for Growth, Expansion and Revitalization Act of 2008 - Amends the Internal Revenue Code to allow employers in a high-job loss area a tax deduction for 50% of the income attributable to trade or business activities conducted in such area. Designates an area as a high-job loss area based upon standards relating to employment, annual payroll, and business establishments. Makes such tax deduction applicable to taxable years beginning after December 31, 2008, and before January 1, 2014.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Tax Incentives for Growth, Expansion 
and Revitalization Act of 2008''.

SEC. 2. DEDUCTION FOR INCOME FROM BUSINESS ACTIVITIES CONDUCTED IN HIGH 
              JOB-LOSS AREAS.

    (a) In General.--Part VI of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 (relating to itemized deductions for 
individuals and corporations) is amended by adding at the end the 
following new section:

``SEC. 200. INCOME ATTRIBUTABLE TO BUSINESS ACTIVITIES CONDUCTED IN 
              HIGH-JOB LOSS AREAS.

    ``(a) In General.--In the case of an eligible taxpayer, there shall 
be allowed as a deduction an amount equal to 50 percent of the lesser 
of--
            ``(1) the qualified high job-loss zone business income of 
        the taxpayer for the taxable year, or
            ``(2) taxable income (determined without regard to this 
        section) for the taxable year.
    ``(b) Eligible Taxpayer.--For purposes of this section--
            ``(1) In general.--The term `eligible taxpayer' means any 
        taxpayer if not less than 5 percent of the gross receipts of 
        the taxpayer are high job-loss zone business gross receipts 
        attributable to a single metropolitan statistical area high 
        job-loss zone.
            ``(2) Related persons.--All persons treated as a single 
        employer under subsection (a) or (b) of section 52 or 
        subsection (m) or (o) of section 414 (except that 
        determinations under subsections (a) and (b) of section 52 
        shall be made without regard to section 1563(b)) shall be 
        treated as 1 person for purposes of paragraph (1).
    ``(c) Qualified High Job-Loss Zone Business Income.--
            ``(1) In general.--The term `qualified high job-loss zone 
        business income' for any taxable year means an amount equal to 
        the excess (if any) of--
                    ``(A) the taxpayer's high job-loss zone business 
                gross receipts for such taxable year, over
                    ``(B) the sum of--
                            ``(i) the cost of goods sold that are 
                        allocable to such receipts, and
                            ``(ii) other expenses, losses, or 
                        deductions (other than the deduction allowed 
                        under this section), which are properly 
                        allocable to such receipts.
            ``(2) Allocation method.--The Secretary shall prescribe 
        rules for the proper allocation of items described in paragraph 
        (1) for purposes of determining qualified high job-loss zone 
        business income. Such rules shall provide for the proper 
        allocation of items whether or not such items are directly 
        allocable to high job-loss zone business gross receipts.
            ``(3) Costs.--Rules similar to the rules of section 
        199(c)(3) shall apply for purposes of paragraph (1).
            ``(4) High job-loss zone business gross receipts.--
                    ``(A) In general.--The term `high job-loss zone 
                business gross receipts' means gross receipts of the 
                taxpayer which are derived from the active conduct of a 
                trade or business in a metropolitan statistical area 
                high job-loss zone.
                    ``(B) Related person.--
                            ``(i) In general.--The term `high job-loss 
                        zone business gross receipts' shall not include 
                        any gross receipts of the taxpayer derived from 
                        property leased, licensed, or rented by the 
                        taxpayer for use by any related person.
                            ``(ii) Related person.--For purposes of 
                        clause (i), a person shall be treated as 
                        related to another person if such persons are 
                        treated as a single employer under subsection 
                        (a) or (b) of section 52 or subsection (m) or 
                        (o) of section 414, except that determinations 
                        under subsections (a) and (b) of section 52 
                        shall be made without regard to section 
                        1563(b).
    ``(d) Metropolitan Statistical Area High Job-Loss Zone.--For 
purposes of this section--
            ``(1) In general.--The term `metropolitan statistical area 
        high job-loss zone' means any standard metropolitan statistical 
        area designated by the Secretary for purposes of this section. 
        Designations under the preceding sentence shall be made not 
        later than January 1, 2009.
            ``(2) Standards for designations.--An area may be 
        designated by the Secretary under paragraph (1) if the 
        Secretary determines that--
                    ``(A) any eligible city in such area is among of 
                the lowest \1/3\ of all eligible cities ranked on the 
                basis of--
                            ``(i) the economic conditions referred to 
                        in paragraph (4), and
                            ``(ii) the residential economic well-being 
                        factors referred to in paragraph (5), and
                    ``(B) the area is among the lowest \1/3\ of all 
                standard metropolitan statistical areas ranked on the 
                basis of comparing changes in--
                            ``(i) employment,
                            ``(ii) wages,
                            ``(iii) gross metropolitan product, and
                            ``(iv) gross metropolitan product per job,
                between the 1990 and 2000 censuses.
            ``(3) Eligible cities.--For purposes of paragraph (1), the 
        term `eligible city' means, with respect to a standard 
        metropolitan statistical area, any city in such area if--
                    ``(A) has a population of at least 50,000 and is 
                the most populous city in such area,
                    ``(B) has a population of--
                            ``(i) at least 50,000, and
                            ``(ii) at least 50 percent of the 
                        population of the most populous city in such 
                        area, or
                    ``(C) has a population of at least 150,000.
        Population shall be determined using the 2000 census.
            ``(4) Economic conditions.--The economic conditions 
        referred to in this paragraph are growth in--
                    ``(A) employment,
                    ``(B) annual payroll, and
                    ``(C) business establishments.
            ``(5) Residential economic well-being factors.--The 
        residential economic well-being factors referred to in the 
        paragraph are--
                    ``(A) per capita income,
                    ``(B) median household income,
                    ``(C) poverty rate,
                    ``(D) unemployment rate, and
                    ``(E) labor force participation rate.
    ``(e) Micropolitan Statistical Area High Job-Loss Zone.--For 
purposes of this section--
            ``(1) In general.--The term `micropolitan statistical area 
        high job-loss zone' means any standard micropolitan statistical 
        area designated by the Secretary for purposes of this section. 
        Designations under the preceding sentence shall be made not 
        later than January 1, 2009.
            ``(2) Standards for designations.--An area may be 
        designated by the Secretary under paragraph (1) if the 
        Secretary determines that--
                    ``(A) any eligible city in such area is among of 
                the lowest \1/3\ of all eligible cities ranked on the 
                basis of--
                            ``(i) the economic conditions referred to 
                        in paragraph (4), and
                            ``(ii) the residential economic well-being 
                        factors referred to in paragraph (5), and
                    ``(B) the area is among the lowest \1/3\ of all 
                standard metropolitan statistical areas ranked on the 
                basis of comparing changes in--
                            ``(i) employment,
                            ``(ii) wages,
                            ``(iii) gross metropolitan product, and
                            ``(iv) gross metropolitan product per job,
                between the 1990 and 2000 censuses.
            ``(3) Eligible cities.--For purposes of paragraph (1), the 
        term `eligible city' means, with respect to a standard 
        metropolitan statistical area, any city in such area which has 
        a population of at least 10,000 but less than 50,000 
        (determined using the 2000 census).
            ``(4) Economic conditions.--The economic conditions 
        referred to in this paragraph are growth in--
                    ``(A) employment,
                    ``(B) annual payroll, and
                    ``(C) business establishments.
            ``(5) Residential economic well-being factors.--The 
        residential economic well-being factors referred to in the 
        paragraph are--
                    ``(A) per capita income,
                    ``(B) median household income,
                    ``(C) poverty rate,
                    ``(D) unemployment rate,
                    ``(E) average age of housing stock, and
                    ``(F) labor force participation rate.
    ``(f) Special Rules.--Rules similar to the rules of paragraphs (1) 
through (7) of section 199(d) shall apply for purposes of this section.
    ``(g) Regulations.--The Secretary shall prescribe such regulations 
as are appropriate to carry out this section.
    ``(h) Application of Section.--The section shall apply to taxable 
years beginning after December 31, 2008, and before January 1, 2014.''.
    (b) Minimum Tax.--Section 56(g)(4)(C) of such Code (relating to 
disallowance of items not deductible in computing earnings and profits) 
is amended by adding at the end the following new clause:
                            ``(vii) Deduction for high job-loss zone 
                        income.--Clause (i) shall not apply to any 
                        amount allowable as a deduction under section 
                        199.''.
    (c) Technical Amendments.--
            (1) Sections 86(b)(2)(A), 135(c)(4)(A), 137(b)(3)(A), 
        219(g)(3)(A)(ii), 221(b)(2)(C)(i), 222(b)(2)(C)(i), 246(b)(1), 
        and 469(i)(3)(F)(iii) of such Code are each amended by 
        inserting ``200,'' after ``199,''.
            (2) Subsection (a) of section 613 of such Code is amended 
        by inserting ``or 200'' after ``199''.
            (3) Subsection (a) of section 1402 of such Code is amended 
        by striking ``and'' at the end of paragraph (16), by striking 
        the period at the end of paragraph (17) and inserting ``, 
        and'', and by inserting after paragraph (17) the following new 
        paragraph:
            ``(18) the deduction provided by section 200 shall not be 
        allowed.''.
            (4) The table of sections for part VI of subchapter B of 
        chapter 1 of such Code is amended by adding at the end the 
        following new item:

``Sec. 200. Income attributable to business activities conducted in 
                            high-job loss areas.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2008.
    (e) Reporting.--The Secretary of the Treasury shall submit reports 
to the Committee on Ways and Means of the House of Representatives and 
the Committee on Finance of the Senate detailing the impact of section 
200 of the Internal Revenue Code of 1986 (as added by this section) on 
retaining and attracting new businesses to high job-loss zones. Such 
reports shall be submitted annually for each calendar year included in 
the period specified in section 200(g) of such Code.