II 

115TH CONGRESS 

1ST SESSION S. 144 

To amend the Internal Revenue Code of 1986 to provide for the establishment 

of Promise Zones. 

IN THE SENATE OF THE UNITED STATES 

JANUARY 12, 2017 

Mr. CASEY (for himself and Mrs. MURRAY) 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 provide 

for the establishment of Promise Zones. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Promise Zone Job Cre5 ation Act of 2017’’. 

6 SEC. 2. PROMISE ZONES. 

7 (a) IN GENERAL.—Subchapter Y of chapter 1 of the 

8 Internal Revenue Code of 1986 is amended by adding at 

9 the end the following new part: 


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1 ‘‘PART IV—PROMISE ZONES 

‘‘Sec. 1400V–1. Designation of Promise Zones. 

‘‘Sec. 1400V–2. Promise Zone employment credit. 

‘‘Sec. 1400V–3. Expensing of Promise Zone property. 

2 ‘‘SEC. 1400V–1. DESIGNATION OF PROMISE ZONES. 

3 ‘‘(a) IN GENERAL.—For purposes of this part, the 

4 term ‘Promise Zone’ means any area— 

5 ‘‘(1) which is nominated by one or more local 

6 governments or Indian Tribes (as defined in section 

7 4(13) of the Native American Housing Assistance 

8 and Self-Determination Act of 1996 (25 U.S.C. 

9 4103(13)) for designation as a Promise Zone (here10 after in this section referred to as a ‘nominated 

11 area’), 

12 ‘‘(2) which has a continuous boundary, 

13 ‘‘(3) the population of which does not exceed 

14 200,000, and 

15 ‘‘(4) which the Secretary of Housing and Urban 

16 Development and the Secretary of Agriculture, act17 ing jointly, designate as a Promise Zone, after con18 sultation with the Secretary of Commerce, the Sec19 retary of Education, the Attorney General, the Sec20 retary of Health and Human Services, the Secretary 

21 of Labor, the Secretary of the Treasury, the Sec22 retary of Transportation, and other agencies as ap23 propriate. 

24 ‘‘(b) NUMBER OF DESIGNATIONS.— 


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1 ‘‘(1) IN GENERAL.—Not more than 40 nomi2 nated areas may be designated as Promise Zones. 

3 ‘‘(2) NUMBER OF DESIGNATIONS IN RURAL

4 AREAS.—Of the areas designated under paragraph 

5 (1), 12 of such areas shall be areas— 

6 ‘‘(A) which are outside of a metropolitan 

7 statistical area (within the meaning of section 

8 143(k)(2)(B)), or 

9 ‘‘(B) which are determined by the Sec10 retary of Agriculture to be rural areas. 

11 ‘‘(c) PERIOD OF DESIGNATIONS.— 

12 ‘‘(1) IN GENERAL.—The Secretary of Housing 

13 and Urban Development and the Secretary of the 

14 Agriculture shall, acting jointly, designate 40 areas 

15 as Promise Zones before January 1, 2019. 

16 ‘‘(2) EFFECTIVE DATES OF DESIGNATIONS.— 

17 The designation of any Promise Zone shall take ef18 fect— 

19 ‘‘(A) for purposes of priority consideration 

20 in Federal grant programs and initiatives 

21 (other than this part), upon execution of the 

22 Promise Zone agreement, and 

23 ‘‘(B) for purposes of this part, on January 

24 1 of the first calendar year beginning after the 


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1 date of the execution of the Promise Zone 

2 agreement. 

3 ‘‘(3) TERMINATION OF DESIGNATIONS.—The 

4 designation of any Promise Zone shall end on the 

5 earlier of— 

6 ‘‘(A) the end of the 10-year period begin7 ning on the date that such designation takes ef8 fect, or 

9 ‘‘(B) the date of the revocation of such 

10 designation. 

11 ‘‘(4) APPLICATION TO CERTAIN ZONES AL12 READY DESIGNATED.—In the case of any area des13 ignated as a Promise Zone by the Secretary of 

14 Housing and Urban Development and the Secretary 

15 of Agriculture before the date of the enactment of 

16 this Act, such area shall be taken into account as a 

17 Promise Zone designated under this section (not18 withstanding whether any such designation has been 

19 revoked before the date of the enactment of this 

20 Act) and shall reduce the number of Promise Zones 

21 remaining to be designated under paragraph (1). 

22 ‘‘(d) LIMITATIONS ON DESIGNATIONS.—No area may 

23 be designated under this section unless— 


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1 ‘‘(1) the entities nominating the area have the 

2 authority to nominate the area of designation under 

3 this section, 

4 ‘‘(2) such entities provide written assurances 

5 satisfactory to the Secretary of Housing and Urban 

6 Development and the Secretary of Agriculture that 

7 the competitiveness plan described in the application 

8 under subsection (e) for such area will be imple9 mented and that such entities will provide the Sec10 retary of Housing and Urban Development and the 

11 Secretary of Agriculture with such data regarding 

12 the economic conditions of the area (before, during, 

13 and after the area’s period of designation as a 

14 Promise Zone) as such Secretary may require, and 

15 ‘‘(3) the Secretary of Housing and Urban De16 velopment and the Secretary of Agriculture deter17 mine that any information furnished is reasonably 

18 accurate. 

19 ‘‘(e) APPLICATION.—No area may be designated 

20 under this section unless the application for such designa21 tion— 

22 ‘‘(1) demonstrates that the nominated area sat23 isfies the eligibility criteria described in subsection 

24 (a), 

25 ‘‘(2) includes a competitiveness plan which— 


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1 ‘‘(A) addresses the need of the nominated 

2 area to attract investment and jobs and im3 prove educational opportunities, 

4 ‘‘(B) leverages the nominated area’s eco5 nomic strengths and outlines targeted invest6 ments to develop competitive advantages, 

7 ‘‘(C) demonstrates collaboration across a 

8 wide range of stakeholders, 

9 ‘‘(D) outlines a strategy which connects 

10 the nominated area to drivers of regional eco11 nomic growth, and 

12 ‘‘(E) proposes a strategy for focusing on 

13 increased access to high quality affordable 

14 housing and improved public safety. 

15 ‘‘(f) SELECTION CRITERIA.—From among the nomi16 nated areas eligible for designation under this section, the 

17 Secretary of Housing and Urban Development and the 

18 Secretary of Agriculture shall designate Promise Zones on 

19 the basis of— 

20 ‘‘(1) the effectiveness of the competitiveness 

21 plan submitted under subsection (e) and the assur22 ances made under subsection (d), and 

23 ‘‘(2) unemployment rates, poverty rates, va24 cancy rates, crime rates, and such other factors as 

25 the Secretary of Housing and Urban Development 


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1 and the Secretary of Agriculture may identify, in2 cluding household income, home-ownership, labor 

3 force participation, and educational attainment, and 

4 ‘‘(3) other criteria as determined by the Sec5 retary of Housing and Urban Development and the 

6 Secretary of Agriculture. 

7 The Secretary of Housing and Urban Development and 

8 the Secretary of Agriculture may set minimal standards 

9 for the levels of unemployment and poverty that must be 

10 satisfied for designation as a Promise Zone. 

11 ‘‘SEC. 1400V–2. PROMISE ZONE EMPLOYMENT CREDIT. 

12 ‘‘(a) AMOUNT OF CREDIT.—For purposes of section 

13 38, the amount of the Promise Zone employment credit 

14 determined under this section with respect to any em15 ployer for any taxable year is the applicable percentage 

16 of the qualified wages paid or incurred during the calendar 

17 year which ends with or within such taxable year. 

18 ‘‘(b) APPLICABLE PERCENTAGE.—For purposes of 

19 this section, the term ‘applicable percentage’ means— 

20 ‘‘(1) in the case of qualified wages described in 

21 subsection (c)(1)(A), 20 percent, and 

22 ‘‘(2) in the case of qualified wages described in 

23 subsection (c)(1)(B), 10 percent. 

24 ‘‘(c) QUALIFIED WAGES.—For purposes of this sec25 tion— 


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1 ‘‘(1) IN GENERAL.—The term ‘qualified wages’ 

2 means any wages paid or incurred by an employer 

3 for services performed by an employee while such 

4 employee is— 

5 ‘‘(A) a qualified zone employee, or 

6 ‘‘(B) a qualified resident employee. 

7 ‘‘(2) ONLY FIRST $15,000 OF WAGES PER YEAR

8 TAKEN INTO ACCOUNT.—With respect to each quali9 fied employee, the amount of qualified wages taken 

10 into account for a calendar year shall not exceed 

11 $15,000. 

12 ‘‘(3) COORDINATION WITH WORK OPPORTUNITY

13 CREDIT.— 

14 ‘‘(A) IN GENERAL.—The term ‘qualified 

15 wages’ shall not include wages taken into ac16 count in determining the credit under section 

17 51. 

18 ‘‘(B) COORDINATION WITH DOLLAR LIMI19 TATION.—The $15,000 amount in paragraph 

20 (2) shall be reduced for any calendar year by 

21 the amount of wages paid or incurred during 

22 such year which are taken into account in de23 termining the credit under section 51. 

24 ‘‘(4) WAGES.—The term ‘wages’ has the mean25 ing given such term by section 1397(a). 


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1 ‘‘(d) QUALIFIED EMPLOYEE.—For purposes of this 

2 section— 

3 ‘‘(1) QUALIFIED EMPLOYEE.—The term ‘quali4 fied employee’ means any employee who is a quali5 fied zone employee or a qualified resident employee. 

6 ‘‘(2) QUALIFIED ZONE EMPLOYEE.—Except as 

7 otherwise provided in this subsection, the term 

8 ‘qualified zone employee’ means, with respect to any 

9 period, any employee of an employer if— 

10 ‘‘(A) substantially all of the services per11 formed during such period by such employee for 

12 such employer are performed within a Promise 

13 Zone in a trade or business of the employer, 

14 and 

15 ‘‘(B) the principal place of abode of such 

16 employee while performing such services is 

17 within a Promise Zone. 

18 ‘‘(3) QUALIFIED RESIDENT EMPLOYEE.—Ex19 cept as otherwise provided in this subsection, the 

20 term ‘qualified resident employee’ means, with re21 spect to any period, an employee of an employer if 

22 the principal place of abode of such employee during 

23 such period is within a Promise Zone, but substan24 tially all of the services performed during such pe25 riod by such employee for such employer are not 


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1 performed within a Promise Zone in a trade or busi2 ness of the employer. 

3 ‘‘(4) CERTAIN INDIVIDUALS NOT ELIGIBLE.— 

4 The terms ‘qualified zone employee’ and ‘qualified 

5 resident employee’ shall not include any individual 

6 described in paragraph (2) of section 1396(d)(2) 

7 (determined after application of paragraph (3) 

8 thereof). 

9 ‘‘(e) SPECIAL RULES.—Rules similar to the rules of 

10 section 1397 shall apply for purposes of this section. 

11 ‘‘(f) TAXPAYER REPORTING.—No credit shall be de12 termined under this section with respect to any taxpayer 

13 for any taxable year unless such taxpayer provides the 

14 Secretary with such information as the Secretary may re15 quire to allow the Secretary to evaluate the effectiveness 

16 of the program established under this part. 

17 ‘‘SEC. 1400V–3. EXPENSING OF PROMISE ZONE PROPERTY. 

18 ‘‘(a) IN GENERAL.—A taxpayer may elect to treat the 

19 cost of any Promise Zone property as an expense which 

20 is not chargeable to capital account. Any cost so treated 

21 shall be allowed as a deduction for the taxable year in 

22 which the Promise Zone property is placed in service. 

23 ‘‘(b) PROMISE ZONE PROPERTY.—For purposes of 

24 this section— 


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1 ‘‘(1) IN GENERAL.—Except as otherwise pro2 vided in this subsection, the term ‘Promise Zone 

3 property’ means property— 

4 ‘‘(A) which is— 

5 ‘‘(i) tangible property (to which sec6 tion 168 applies) with an applicable recov7 ery period (within the meaning of section 

8 168) of 20 years or less, 

9 ‘‘(ii) water utility property described 

10 in section 168(e)(5), 

11 ‘‘(iii) computer software described in 

12 section 179(d)(1)(A)(ii), or 

13 ‘‘(iv) qualified leasehold improvement 

14 property (as defined in section 168(e)), 

15 ‘‘(B) which is acquired by purchase (as de16 fined in section 179(d)(2)) for use in the active 

17 conduct of a trade or business, and 

18 ‘‘(C) which is originally placed in service 

19 by the taxpayer in a Promise Zone. 

20 ‘‘(2) EXCEPTION FOR CERTAIN PROPERTY.— 

21 Such term shall not include any property to which 

22 section 168(g) applies. 

23 ‘‘(c) ELECTION.—An election under this section shall 

24 be made under rules similar to the rules of section 179(c). 


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1 ‘‘(d) COORDINATION WITH SECTION 179.—For pur2 poses of section 179, Promise Zone property shall not be 

3 treated as section 179 property. 

4 ‘‘(e) APPLICATION OF OTHER RULES.—Rules similar 

5 to the rules of paragraphs (3), (4), (5), (7), (9) and (10) 

6 of section 179(d) shall apply for purposes of this section. 

7 ‘‘(f) TAXPAYER REPORTING.—This section shall not 

8 apply with respect to any taxpayer for any taxable year 

9 unless such taxpayer provides the Secretary with such in10 formation as the Secretary may require to allow the Sec11 retary to evaluate the effectiveness of the program estab12 lished under this part.’’. 

13 (b) CONFORMING AMENDMENTS.— 

14 (1) Section 38(b) of such Code is amended by 

15 striking ‘‘plus’’ at the end of paragraph (35), by 

16 striking the period at the end of paragraph (36) and 

17 inserting ‘‘, plus’’, and by adding at the end the fol18 lowing new paragraph: 

19 ‘‘(37) the Promise Zone employment credit de20 termined under section 1400V–2.’’. 

21 (2) The table of parts for subchapter Y of chap22 ter 1 of such Code is amended by adding at the end 

23 the following new item: 

‘‘PART IV—PROMISE ZONES’’. 


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1 (c) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to taxable years ending after De3 cember 31, 2016. 

Æ 


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