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[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 790 Introduced in Senate (IS)]

114th CONGRESS
  1st Session
                                 S. 790

  To provide for the establishment of free market enterprise zones in 
  order to help facilitate the creation of new jobs, entrepreneurial 
  opportunities, enhanced and renewed educational opportunities, and 
increased community involvement in bankrupt or economically distressed 
                                 areas.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             March 18, 2015

Mr. Paul (for himself and Mr. McConnell) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL

 
  To provide for the establishment of free market enterprise zones in 
  order to help facilitate the creation of new jobs, entrepreneurial 
  opportunities, enhanced and renewed educational opportunities, and 
increased community involvement in bankrupt or economically distressed 
                                 areas.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Economic Freedom 
Zones Act of 2015''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
          TITLE I--PROHIBITION OF FEDERAL GOVERNMENT BAILOUTS

Sec. 101. Prohibition of Federal Government bailouts.
         TITLE II--DESIGNATION OF ECONOMIC FREEDOM ZONES (EFZ)

Sec. 201. Eligibility requirements for Economic Freedom Zone Status.
Sec. 202. Application and duration of designation.
                   TITLE III--FEDERAL TAX INCENTIVES

Sec. 301. Tax incentives related to Economic Freedom Zones.
                TITLE IV--FEDERAL REGULATORY REDUCTIONS

Sec. 401. Suspension of certain laws and regulations.
                   TITLE V--EDUCATIONAL ENHANCEMENTS

Sec. 501. Educational opportunity tax credit.
Sec. 502. School choice through portability.
Sec. 503. Special Economic Freedom Zone visas.
Sec. 504. Economic Freedom Zone educational savings accounts.
             TITLE VI--COMMUNITY ASSISTANCE AND REBUILDING

Sec. 601. Nonapplication of Davis-Bacon.
Sec. 602. Economic Freedom Zone charitable tax credit.
         TITLE VII--STATE AND COMMUNITY POLICY RECOMMENDATIONS

Sec. 701. Sense of the Senate concerning policy recommendations.

SEC. 2. DEFINITIONS.

    In this Act:
            (1) City.--The term ``city'' means any unit of general 
        local government that is classified as a municipality by the 
        United States Census Bureau, or is a town or township as 
        determined jointly by the Director of the Office of Management 
        and Budget and the Secretary.
            (2) County.--The term ``county'' means any unit of local 
        general government that is classified as a county by the United 
        States Census Bureau.
            (3) Eligible entity.--The term ``eligible entity'' means a 
        municipality or a zip code.
            (4) Municipality.--The term ``municipality'' has the 
        meaning given that term in section 101(40) of title 11, United 
        States Code.
            (5) Secretary.--The term ``Secretary'' means the Secretary 
        of the Treasury.
            (6) Zip code.--The term ``zip code'' means any area or 
        region associated with or covered by a United States Postal zip 
        code of not less than 5 digits.

          TITLE I--PROHIBITION OF FEDERAL GOVERNMENT BAILOUTS

SEC. 101. PROHIBITION OF FEDERAL GOVERNMENT BAILOUTS.

    (a) Definitions.--In this section--
            (1) the term ``credit rating'' has the meaning given that 
        term in section 3(a)(60) of the Securities Exchange Act of 1934 
        (15 U.S.C. 78c(a)(60));
            (2) the term ``credit rating agency'' has the meaning given 
        that term in section 3(a)(61) of the Securities Exchange Act of 
        1934 (15 U.S.C. 78c(a)(61));
            (3) the term ``Federal assistance'' means the use of any 
        advances from the Federal Reserve credit facility or discount 
        window that is not part of a program or facility with broad-
        based eligibility under section 13(3)(A) of the Federal Reserve 
        Act (12 U.S.C. 343(3)(A)), Federal Deposit Insurance 
        Corporation insurance, or guarantees for the purpose of--
                    (A) making a loan to, or purchasing any interest or 
                debt obligation of, a municipality;
                    (B) purchasing the assets of a municipality;
                    (C) guaranteeing a loan or debt issuance of a 
                municipality; or
                    (D) entering into an assistance arrangement, 
                including a grant program, with an eligible entity;
            (4) the term ``insolvent'' means, with respect to an 
        eligible entity, a financial condition such that the eligible 
        entity--
                    (A) has any debt that has been given a credit 
                rating lower than a ``B'' by a nationally recognized 
                statistical rating organization or a credit rating 
                agency;
                    (B) is not paying its debts as they become due, 
                unless such debts are the subject of a bona fide 
                dispute; or
                    (C) is unable to pay its debts as they become due; 
                and
            (5) the term ``nationally recognized statistical rating 
        organization'' has the meaning given that term in section 
        3(a)(62) of the Securities Exchange Act of 1934 (15 U.S.C. 
        78c(a)(62)).
    (b) Prohibition of Federal Government Bailouts.--
            (1) Prohibition of federal assistance.--Notwithstanding any 
        other provision of law, no Federal assistance may be provided 
        to an eligible entity (other than the assistance provided for 
        in this Act for an area that is designated as an Economic Free 
        Zone).
            (2) Prohibition of financial assistance to bankrupt or 
        insolvent eligible entities.--Except as provided in paragraph 
        (1), the Federal Government may not provide financial 
        assistance--
                    (A) to a municipality that is a debtor under 
                chapter 9 of title 11, United States Code; or
                    (B) to a municipality that is insolvent.

         TITLE II--DESIGNATION OF ECONOMIC FREEDOM ZONES (EFZ)

SEC. 201. ELIGIBILITY REQUIREMENTS FOR ECONOMIC FREEDOM ZONE STATUS.

    (a) Designation of Municipalities as Economic Freedom Zones.--
            (1) In general.--An eligible entity that is a municipality 
        may be designated by the Secretary as an Economic Freedom Zone 
        if the municipality--
                    (A) meets the requirements under section 109(c) of 
                title 11, United States Code; or
                    (B) is at risk of insolvency, as determined under 
                paragraph (2).
            (2) At risk of insolvency.--A municipality is at risk of 
        insolvency if--
                    (A) an independent actuarial firm that has been 
                engaged by the municipality and that does not have a 
                conflict of interest with the municipality, including 
                any previous relationship with the municipality, as 
                determined by the Secretary--
                            (i) determines that the municipality is 
                        insolvent (as defined in section 101(a)(4) of 
                        title 11, United States Code); and
                            (ii) submits its analysis regarding the 
                        insolvency of the municipality to the 
                        Secretary; and
                    (B) the Secretary has reviewed and approved the 
                determination of insolvency by the actuarial firm.
    (b) Designation of Counties, Cities, and Zip Codes as Economic 
Freedom Zones.--
            (1) In general.--An eligible entity may be designated by 
        the Secretary as an Economic Freedom Zone if the eligible 
        entity--
                    (A) is a county or city that--
                            (i) is located in a non-metropolitan 
                        statistical area (as defined by the Director of 
                        the Office of Management and Budget); and
                            (ii) meets the requirements under paragraph 
                        (2); or
                    (B) is a zip code that meets the requirements under 
                paragraph (2).
            (2) Low economic and high poverty area.--
                    (A) In general.--An eligible entity shall be 
                eligible for designation as an Economic Freedom Zone 
                under paragraph (1) if the eligible entity is 
                designated by the Secretary as a low economic or high 
                poverty area under subparagraph (B).
                    (B) Designation as low economic and high poverty 
                area.--The Secretary, after reviewing supporting data 
                as determined appropriate, shall designate an eligible 
                entity as a low economic or high poverty area if--
                            (i) the State or local government with 
                        jurisdiction over the eligible entity certifies 
                        that--
                                    (I) the eligible entity is one of 
                                pervasive poverty, unemployment, and 
                                general distress;
                                    (II) the average rate of 
                                unemployment within such eligible 
                                entity during the most recent 3-month 
                                period for which data is available is 
                                at least 1.5 times the national 
                                unemployment rate for the period 
                                involved;
                                    (III) during the most recent 3-
                                month period, at least 30 percent of 
                                the residents of the eligible entity 
                                have incomes below the national poverty 
                                level; or
                                    (IV) at least 70 percent of the 
                                residents of the eligible have incomes 
                                below 80 percent of the median income 
                                of households within the jurisdiction 
                                of the local government (as determined 
                                in the same manner as under section 
                                119(b)(2) of the Housing and Community 
                                Development Act of 1974); and
                            (ii) the Secretary determines that such a 
                        designation is appropriate.
    (c) Refusal To Grant Status.--The Secretary may refuse to designate 
an eligible entity as an Economic Freedom Zone if the Secretary 
determines that any requirement under this Act, including any 
requirement under subsection (a)(2), has not been satisfied.

SEC. 202. APPLICATION AND DURATION OF DESIGNATION.

    (a) Application.--The Secretary shall develop procedures to enable 
an eligible entity to submit to the Secretary an application for 
designation as an Economic Freedom Zone under this title.
    (b) Duration.--The designation by the Secretary of an eligible 
entity as a Economic Freedom Zone shall be for a period of 10 years.

                   TITLE III--FEDERAL TAX INCENTIVES

SEC. 301. TAX INCENTIVES RELATED TO ECONOMIC FREEDOM ZONES.

    (a) In General.--Chapter 1 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new subchapter:

                 ``Subchapter Z--Economic Freedom Zones

                        ``PART I--Tax Incentives

                         ``PART II--Definitions

                        ``PART I--TAX INCENTIVES

``Sec. 1400V-1. Economic Freedom Zone individual flat tax.
``Sec. 1400V-2. Economic Freedom Zone corporate flat tax.
``Sec. 1400V-3. Zero percent capital gains rate.
``Sec. 1400V-4. Reduced payroll taxes.
``Sec. 1400V-5. Increase in expensing under section 179.

``SEC. 1400V-1. ECONOMIC FREEDOM ZONE INDIVIDUAL FLAT TAX.

    ``(a) In General.--In the case of any individual whose principal 
residence (within the meaning of section 121) is located in an Economic 
Freedom Zone for the taxable year, in lieu of the tax imposed by 
section 1, there shall be imposed a tax equal to 5 percent of the 
taxable income of such taxpayer. For purposes of this title, the tax 
imposed by the preceding sentence shall be treated as a tax imposed by 
section 1.
    ``(b) Joint Returns.--In the case of a joint return under section 
6013, subsection (a) shall apply so long as either spouse has a 
principal residence (within the meaning of section 121) in an Economic 
Freedom Zone for the taxable year.
    ``(c) Alternative Minimum Tax Not To Apply.--The tax imposed by 
section 55 shall not apply to any taxpayer to whom subsection (a) 
applies.

``SEC. 1400V-2. ECONOMIC FREEDOM ZONE CORPORATE FLAT TAX.

    ``(a) In General.--In the case of any corporation located in an 
Economic Freedom Zone for the taxable year, in lieu of the tax imposed 
by section 11, there shall be imposed a tax equal to 5 percent of the 
taxable income of such corporation. For purposes of this title, the tax 
imposed by the preceding sentence shall be treated as a tax imposed by 
section 11.
    ``(b) Limitation.--Subsection (a) shall not apply to any 
corporation for any taxable year if the adjusted gross income of such 
corporation for such taxable year exceeds $500,000,000.
    ``(c) Located.--For purposes of this section, a corporation shall 
be considered to be located in an Economic Freedom Zone if--
            ``(1) not less than 10 percent of the total gross income of 
        such corporation is derived from the active conduct of a trade 
        or business within an Economic Freedom Zone, or
            ``(2) at least 25 percent of the employees of such 
        corporation are residents of an Economic Freedom Zone.
    ``(d) Alternative Minimum Tax Not To Apply.--The tax imposed by 
section 55 shall not apply to any taxpayer to whom subsection (a) 
applies.

``SEC. 1400V-3. ZERO PERCENT CAPITAL GAINS RATE.

    ``(a) Exclusion.--Gross income shall not include qualified capital 
gain from the sale or exchange of--
            ``(1) any Economic Freedom Zone asset held for more than 5 
        years, or
            ``(2) any real property located in an Economic Freedom 
        Zone.
    ``(b) Economic Freedom Zone Asset.--For purposes of this section--
            ``(1) In general.--The term `Economic Freedom Zone asset' 
        means--
                    ``(A) any Economic Freedom Zone business stock,
                    ``(B) any Economic Freedom Zone partnership 
                interest, and
                    ``(C) any Economic Freedom Zone business property.
            ``(2) Economic freedom zone business stock.--
                    ``(A) In general.--The term `Economic Freedom Zone 
                business stock' means any stock in a domestic 
                corporation if--
                            ``(i) such stock is acquired by the 
                        taxpayer, before the date on which such 
                        corporation no longer qualifies as an Economic 
                        Freedom Zone business due to the lapse of 1 or 
                        more Economic Freedom Zones, at its original 
                        issue (directly or through an underwriter) 
                        solely in exchange for cash,
                            ``(ii) as of the time such stock was 
                        issued, such corporation was an Economic 
                        Freedom Zone business (or, in the case of a new 
                        corporation, such corporation was being 
                        organized for purposes of being an Economic 
                        Freedom Zone business), and
                            ``(iii) during substantially all of the 
                        taxpayer's holding period for such stock, such 
                        corporation qualified as an Economic Freedom 
                        Zone business.
                    ``(B) Redemptions.--A rule similar to the rule of 
                section 1202(c)(3) shall apply for purposes of this 
                paragraph.
            ``(3) Economic freedom zone partnership interest.--The term 
        `Economic Freedom Zone partnership interest' means any capital 
        or profits interest in a domestic partnership if--
                    ``(A) such interest is acquired by the taxpayer, 
                before the date on which such partnership no longer 
                qualifies as an Economic Freedom Zone business due to 
                the lapse of 1 or more Economic Freedom Zones, from the 
                partnership solely in exchange for cash,
                    ``(B) as of the time such interest was acquired, 
                such partnership was an Economic Freedom Zone business 
                (or, in the case of a new partnership, such partnership 
                was being organized for purposes of being an Economic 
                Freedom Zone business), and
                    ``(C) during substantially all of the taxpayer's 
                holding period for such interest, such partnership 
                qualified as an Economic Freedom Zone business.
        A rule similar to the rule of paragraph (2)(B) shall apply for 
        purposes of this paragraph.
            ``(4) Economic freedom zone business property.--
                    ``(A) In general.--The term `Economic Freedom Zone 
                business property' means tangible property if--
                            ``(i) such property was acquired by the 
                        taxpayer by purchase (as defined in section 
                        179(d)(2)) after the date on such taxpayer 
                        qualifies as an Economic Freedom Zone business 
                        and before the date on which such taxpayer no 
                        longer qualifies as an Economic Freedom Zone 
                        business due to the lapse of 1 or more Economic 
                        Freedom Zones,
                            ``(ii) the original use of such property in 
                        the Economic Freedom Zone commences with the 
                        taxpayer, and
                            ``(iii) during substantially all of the 
                        taxpayer's holding period for such property, 
                        substantially all of the use of such property 
                        was in an Economic Freedom Zone business of the 
                        taxpayer.
                    ``(B) Special rule for buildings which are 
                substantially improved.--
                            ``(i) In general.--The requirements of 
                        clauses (i) and (ii) of subparagraph (A) shall 
                        be treated as met with respect to--
                                    ``(I) property which is 
                                substantially improved by the taxpayer 
                                before the date on which such taxpayer 
                                no longer qualifies as an Economic 
                                Freedom Zone business due to the lapse 
                                of 1 or more Economic Freedom Zones, 
                                and
                                    ``(II) any land on which such 
                                property is located.
                            ``(ii) Substantial improvement.--For 
                        purposes of clause (i), property shall be 
                        treated as substantially improved by the 
                        taxpayer only if, during any 24-month period 
                        beginning after the date on which the taxpayer 
                        qualifies as an Economic Freedom Zone business 
                        additions to basis with respect to such 
                        property in the hands of the taxpayer exceed 
                        the greater of--
                                    ``(I) an amount equal to the 
                                adjusted basis of such property at the 
                                beginning of such 24-month period in 
                                the hands of the taxpayer, or
                                    ``(II) $5,000.
            ``(5) Treatment of economic freedom zone termination.--
        Except as otherwise provided in this subsection, the 
        termination of the designation of the Economic Freedom Zone 
        shall be disregarded for purposes of determining whether any 
        property is an Economic Freedom Zone asset.
            ``(6) Treatment of subsequent purchasers, etc.--The term 
        `Economic Freedom Zone asset' includes any property which would 
        be an Economic Freedom Zone asset but for paragraph (2)(A)(i), 
        (3)(A), or (4)(A)(i) or (ii) in the hands of the taxpayer if 
        such property was an Economic Freedom Zone asset in the hands 
        of a prior holder.
            ``(7) 5-year safe harbor.--If any property ceases to be an 
        Economic Freedom Zone asset by reason of paragraph (2)(A)(iii), 
        (3)(C), or (4)(A)(iii) after the 5-year period beginning on the 
        date the taxpayer acquired such property, such property shall 
        continue to be treated as meeting the requirements of such 
        paragraph; except that the amount of gain to which subsection 
        (a) applies on any sale or exchange of such property shall not 
        exceed the amount which would be qualified capital gain had 
        such property been sold on the date of such cessation.
    ``(c) Economic Freedom Zone Business.--For purposes of this 
section, the term `Economic Freedom Zone business' means any enterprise 
zone business (as defined in section 1397C), determined--
            ``(1) after the application of section 1400(e),
            ``(2) by substituting `80 percent' for `50 percent' in 
        subsections (b)(2) and (c)(1) of section 1397C, and
            ``(3) by treating only areas that are Economic Freedom 
        Zones as an empowerment zone or enterprise community.
    ``(d) Other Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Qualified capital gain.--Except as otherwise provided 
        in this subsection, the term `qualified capital gain' means any 
        gain recognized on the sale or exchange of--
                    ``(A) a capital asset, or
                    ``(B) property used in the trade or business (as 
                defined in section 1231(b)).
            ``(2) Certain gain not qualified.--The term `qualified 
        capital gain' shall not include any gain attributable to 
        periods before the date on which the a business qualifies as an 
        Economic Freedom Zone business or after the date that is 4 
        years after the date on which such business no longer qualifies 
        as an Economic Freedom Zone business due to the lapse of 1 or 
        more Economic Freedom Zones.
            ``(3) Certain gain not qualified.--The term `qualified 
        capital gain' shall not include any gain which would be treated 
        as ordinary income under section 1245 or under section 1250 if 
        section 1250 applied to all depreciation rather than the 
        additional depreciation.
            ``(4) Intangibles not integral part of economic freedom 
        zone business.--In the case of gain described in subsection 
        (a)(1), the term `qualified capital gain' shall not include any 
        gain which is attributable to an intangible asset which is not 
        an integral part of an Economic Freedom Zone business.
            ``(5) Related party transactions.--The term `qualified 
        capital gain' shall not include any gain attributable, directly 
        or indirectly, in whole or in part, to a transaction with a 
        related person. For purposes of this paragraph, persons are 
        related to each other if such persons are described in section 
        267(b) or 707(b)(1).
    ``(e) Sales and Exchanges of Interests in Partnerships and S 
Corporations Which Are Economic Freedom Zone Businesses.--In the case 
of the sale or exchange of an interest in a partnership, or of stock in 
an S corporation, which was an Economic Freedom Zone business during 
substantially all of the period the taxpayer held such interest or 
stock, the amount of qualified capital gain shall be determined without 
regard to--
            ``(1) any gain which is attributable to an intangible asset 
        which is not an integral part of an Economic Freedom Zone 
        business, and
            ``(2) any gain attributable to periods before the date on 
        which the a business qualifies as an Economic Freedom Zone 
        business or after the date that is 4 years after the date on 
        which such business no longer qualifies as an Economic Freedom 
        Zone business due to the lapse of 1 or more Economic Freedom 
        Zones.

``SEC. 1400V-4. REDUCED PAYROLL TAXES.

    ``(a) In General.--
            ``(1) Employees.--The rate of tax under 3101(a) (including 
        for purposes of determining the applicable percentage under 
        sections 3201(a) and 3211(a)(1)) shall be 4.2 percent for any 
        remuneration received during any period in which the 
        individual's principal residence (within the meaning of section 
        121) is located in an Economic Freedom Zone.
            ``(2) Employers.--
                    ``(A) In general.--The rate of tax under section 
                3111(a) (including for purposes of determining the 
                applicable percentage under sections 3221(a)) shall be 
                4.2 percent with respect to remuneration paid for 
                qualified services during any period in which the 
                employer is located in an Economic Freedom Zone.
                    ``(B) Qualified services.--For purposes of this 
                section, the term `qualified services' means services 
                performed--
                            ``(i) in a trade or business of a qualified 
                        employer, or
                            ``(ii) in the case of a qualified employer 
                        exempt from tax under section 501(a) of the 
                        Internal Revenue Code of 1986, in furtherance 
                        of the activities related to the purpose or 
                        function constituting the basis of the 
                        employer's exemption under section 501 of such 
                        Code.
                    ``(C) Location of employer.--For purposes of this 
                paragraph, the location of an employer shall be 
                determined in the same manner as under section 1400V-
                2(c).
            ``(3) Self-employed individuals.--The rate of tax under 
        section 1401(a) shall be 8.40 percent any taxable year in which 
        such individual was located (determined under section 1400V-
        2(c) as if such individual were a corporation) in an Economic 
        Freedom Zone.
    ``(b) Transfers of Funds.---
            ``(1) Transfers to federal old-age and survivors insurance 
        trust fund.--There are hereby appropriated to the Federal Old-
        Age and Survivors Trust Fund and the Federal Disability 
        Insurance Trust Fund established under section 201 of the 
        Social Security Act (42 U.S.C. 401) amounts equal to the 
        reduction in revenues to the Treasury by reason of the 
        application of subsection (a). Amounts appropriated by the 
        preceding sentence shall be transferred from the general fund 
        at such times and in such manner as to replicate to the extent 
        possible the transfers which would have occurred to such Trust 
        Fund had such amendments not been enacted.
            ``(2) Transfers to social security equivalent benefit 
        account.--There are hereby appropriated to the Social Security 
        Equivalent Benefit Account established under section 15A(a) of 
        the Railroad Retirement Act of 1974 (45 U.S.C. 231n-1(a)) 
        amounts equal to the reduction in revenues to the Treasury by 
        reason of the application of paragraphs (1) and (2) of 
        subsection (a). Amounts appropriated by the preceding sentence 
        shall be transferred from the general fund at such times and in 
        such manner as to replicate to the extent possible the 
        transfers which would have occurred to such Account had such 
        amendments not been enacted.
            ``(3) Coordination with other federal laws.--For purposes 
        of applying any provision of Federal law other than the 
        provisions of the Internal Revenue Code of 1986, the rate of 
        tax in effect under section 3101(a) shall be determined without 
        regard to the reduction in such rate under this section.

``SEC. 1400V-5. INCREASE IN EXPENSING UNDER SECTION 179.

    ``(a) In General.--In the case of an Economic Freedom Zone 
business, for purposes of section 179--
            ``(1) the limitation under section 179(b)(1) shall be 
        increased by the lesser of--
                    ``(A) 200 percent of the amount in effect under 
                such section (determined without regard to this 
                section), or
                    ``(B) the cost of section 179 property which is 
                Economic Freedom Zone business property placed in 
                service during the taxable year, and
            ``(2) the amount taken into account under section 179(b)(2) 
        with respect to any section 179 property which is Economic 
        Freedom Zone business property shall be 50 percent of the cost 
        thereof.
    ``(b) Economic Freedom Zone Business Property.--For purposes of 
this section, the term `Economic Freedom Zone business property' has 
the meaning given such term under section 1400V-3(b)(4), except that 
for purposes of subparagraph (A)(ii) thereof, if property is sold and 
leased back by the taxpayer within 3 months after the date such 
property was originally placed in service, such property shall be 
treated as originally placed in service not earlier than the date on 
which such property is used under the leaseback.
    ``(c) Recapture.--Rules similar to the rules under section 
179(d)(10) shall apply with respect to any qualified zone property 
which ceases to be used in an empowerment zone by an enterprise zone 
business.

                         ``PART II--DEFINITIONS

``Sec. 1400V-6. Economic Freedom Zone.

``SEC. 1400V-6. ECONOMIC FREEDOM ZONE.

    ``For purposes of this subchapter, the term `Economic Freedom Zone' 
means any area which is an Economic Freedom Zone under title II of the 
Economic Freedom Zone Act.''.
    (b) Clerical Amendment.--The table of subchapters for chapter 1 of 
such Code is amended by inserting after the item relating to subchapter 
Y the following new item:

               ``subchapter z--economic freedom zones''.

    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

                TITLE IV--FEDERAL REGULATORY REDUCTIONS

SEC. 401. SUSPENSION OF CERTAIN LAWS AND REGULATIONS.

    (a) Environmental Protection Agency.--For each area designated as 
an Economic Freedom Zone under this Act, the Administrator of the 
Environmental Protection Agency shall not enforce, with respect to that 
Economic Freedom Zone, and the Economic Freedom Zone shall be exempt 
from compliance with--
            (1) part D of the Clean Air Act (42 U.S.C. 7501 et seq.) 
        (including any regulations promulgated under that part);
            (2) section 402 of the Federal Water Pollution Control Act 
        (33 U.S.C. 1342);
            (3) sections 139, 168, 169, 326, and 327 of title 23, 
        United States Code;
            (4) section 304 of title 49, United States Code; and
            (5) sections 1315 through 1320 of Public Law 112-141 (126 
        Stat. 549).
    (b) Department of the Interior.--
            (1) Wild and scenic rivers.--For each area designated as an 
        Economic Freedom Zone under this Act, the Secretary of the 
        Interior shall not enforce, with respect to that Economic 
        Freedom Zone, and the Economic Freedom Zone shall be exempt 
        from compliance with the Wild and Scenic Rivers Act (16 U.S.C. 
        1271 et seq.).
            (2) National heritage areas.--For the period beginning on 
        the date of enactment of this Act and ending on the date on 
        which an area is removed from designation as an Economic 
        Freedom Zone, any National Heritage Area located within that 
        Economic Freedom Zone shall not be considered to be a National 
        Heritage Area and any applicable Federal law (including 
        regulations) relating to that National Heritage Area shall not 
        apply.

                   TITLE V--EDUCATIONAL ENHANCEMENTS

SEC. 501. EDUCATIONAL OPPORTUNITY TAX CREDIT.

    (a) In General.--Subpart A of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by inserting after 
section 25D the following new section:

``SEC. 25E. CREDIT FOR QUALIFIED ELEMENTARY AND SECONDARY EDUCATION 
              EXPENSES.

    ``(a) In General.--In the case of an individual, there shall be 
allowed as a credit against the tax imposed by this chapter for the 
taxable year an amount equal to the qualified elementary and secondary 
education expenses of an eligible student.
    ``(b) Limitation.--The amount taken into account under subsection 
(a) with respect to any student for any taxable year shall not exceed 
$5,000.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Qualified elementary and secondary education 
        expenses.--The term `qualified elementary and secondary 
        education expenses' has the meaning given such term under 
        section 530(b)(3).
            ``(2) Eligible student.--The term `eligible student' means 
        any student who--
                    ``(A) is enrolled in, or attends, any public, 
                private, or religious school (as defined in section 
                530(b)(3)(B)), and
                    ``(B) whose principal residence (within the meaning 
                of section 123) is located in an Economic Freedom Zone.
            ``(3) Economic freedom zone.--The term `Economic Freedom 
        Zone' means any area which is an Economic Freedom Zone under 
        title II of the Economic Freedom Zone Act.''.
    (b) Clerical Amendment.--The table of sections for subpart A of 
part IV of subchapter A of chapter 1 of such Code is amended by 
inserting after the item relating to section 25D the following new 
item:

``Sec. 25E. Credit for qualified elementary and secondary education 
                            expenses.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to expenditures made in taxable years beginning after the date of 
the enactment of this Act.

SEC. 502. SCHOOL CHOICE THROUGH PORTABILITY.

    (a) In General.--Subpart 2 of part A of title I of the Elementary 
and Secondary Education Act of 1965 (20 U.S.C. 6331 et seq.) is amended 
by adding at the end the following:

``SEC. 1128. SCHOOL CHOICE THROUGH PORTABILITY.

    ``(a) Authorization.--
            ``(1) In general.--Notwithstanding sections 1124, 1124A, 
        and 1125 and any other provision of law, and to the extent 
        permitted under State law, a State educational agency may 
        allocate grant funds under this subpart among the local 
        educational agencies in the State based on the formula 
        described in paragraph (2).
            ``(2) Formula.--A State educational agency may allocate 
        grant funds under this subpart for a fiscal year among the 
        local educational agencies in the State in proportion to the 
        number of eligible children enrolled in public schools served 
        by the local educational agency and enrolled in State-
        accredited private schools within the local educational 
        agency's geographic jurisdiction, for the most recent fiscal 
        year for which satisfactory data are available, compared to the 
        number of such children in all such local educational agencies 
        for that fiscal year.
    ``(b) Eligible Child.--
            ``(1) In general.--In this section, the term `eligible 
        child' means a child--
                    ``(A) from a family with an income below the 
                poverty level, on the basis of the most recent 
                satisfactory data published by the Department of 
                Commerce; and
                    ``(B) who resides in an Economic Freedom Zone as 
                designated under title II of the Economic Freedom Zones 
                Act of 2015.
            ``(2) Criteria of poverty.--In determining the families 
        with incomes below the poverty level for the purposes of 
        paragraph (2), a State educational agency shall use the 
        criteria of poverty used by the Census Bureau in compiling the 
        most recent decennial census.
            ``(3) Identification of eligible children.--On an annual 
        basis, on a date to be determined by the State educational 
        agency, each local educational agency that receives grant 
        funding in accordance with subsection (a) shall inform the 
        State educational agency of the number of eligible children 
        enrolled in public schools served by the local educational 
        agency and enrolled in State-accredited private schools within 
        the local educational agency's geographic jurisdiction.
    ``(c) Distribution to Schools.--Each local educational agency that 
receives grant funding under subsection (a) shall distribute such funds 
to the public schools served by the local educational agency and State-
accredited private schools with the local educational agency's 
geographic jurisdiction--
            ``(1) based on the number of eligible children enrolled in 
        such schools; and
            ``(2) in the manner that would, in the absence of such 
        Federal funds, supplement the funds made available from the 
        non-Federal resources for the education of pupils participating 
        in programs under this part, and not to supplant such funds.''.
    (b) Table of Contents.--The table of contents in section 2 of the 
Elementary and Secondary Education Act of 1965 is amended by inserting 
after the item relating to section 1127 the following:

``Sec. 1128. School choice through portability.''.

SEC. 503. SPECIAL ECONOMIC FREEDOM ZONE VISAS.

    (a) Definitions.--In this section:
            (1) Abandoned; dilapidated.--The terms ``abandoned'' and 
        ``dilapidated'' shall be defined by the States in accordance 
        with the provisions of this Act.
            (2) Full-time employment.--The term ``full-time 
        employment'' means employment in a position that requires at 
        least 35 hours of service per week at any time, regardless of 
        who fills the position.
    (b) Purpose.--The purpose of this section is to facilitate 
increased investment and enhanced human capital in Economic Freedom 
Zones through the issuance of special regional visas.
    (c) Authorization.--The Secretary of Homeland Security, in 
collaboration with the Secretary of Labor, may issue Special Economic 
Freedom Zone Visas, in a number determined by the Governor of each 
State, in consultation with local officials in regions designated by 
the Secretary of Treasury as Economic Freedom Zones, to authorize 
qualified aliens to enter the United States for the purpose of--
            (1) engaging in a new commercial enterprise (including a 
        limited partnership)--
                    (A) in which such alien has invested, or is 
                actively in the process of investing, capital in an 
                amount not less than the amount specified in subsection 
                (d); and
                    (B) which will benefit the region designated as an 
                Economic Freedom Zone by creating full-time employment 
                of not fewer than 5 United States citizens, aliens 
                lawfully admitted for permanent residence, or other 
                immigrants lawfully authorized to be employed in the 
                United States (excluding the alien and the alien's 
                immediate family);
            (2) engaging in the purchase and renovation of dilapidated 
        or abandoned properties or residences (as determined by State 
        and local officials) in which such alien has invested, or is 
        actively in the process of investing, in the ownership of such 
        properties or residences; or
            (3) residing and working in an Economic Freedom Zone.
    (d) Effective Period.--A visa issued to an alien under this section 
shall expire on the later of--
            (1) the date on which the relevant Economic Freedom Zone 
        loses such designation; or
            (2) the date that is 5 years after the date on which such 
        visa was issued to such alien.
    (e) Capital and Educational Requirements.--
            (1) New commercial enterprises.--Except as otherwise 
        provided under this section, the minimum amount of capital 
        required to comply with subsection (c)(1)(A) shall be $50,000.
            (2) Renovation of dilapidated or abandoned properties.--An 
        alien is not in compliance with subsection (c)(2) unless the 
        alien--
                    (A) purchases a dilapidated or abandoned property 
                in an Economic Freedom Zone; and
                    (B) not later than 18 months after such purchase, 
                invests not less than $25,000 to rebuild, rehabilitate, 
                or repurpose the property.
            (3) Verification.--A visa issued under subsection (c) shall 
        not remain in effect for more than 2 years unless the Secretary 
        of Homeland Security has verified that the alien has complied 
        with the requirements described in subsection (c).
            (4) Education and skill requirements.--An alien is not in 
        compliance with subsection (c)(3) unless the alien possesses--
                    (A) a bachelor's degree (or its equivalent) or an 
                advanced degree;
                    (B) a degree or specialty certification that--
                            (i) is required for the job the alien will 
                        be performing; and
                            (ii) is specific to an industry or job that 
                        is so complex or unique that it can be 
                        performed only by an individual with the 
                        specialty certification;
                    (C)(i) the knowledge required to perform the duties 
                of the job the alien will be performing; and
                    (ii) the nature of the specific duties is so 
                specialized and complex that such knowledge is usually 
                associated with attainment of a bachelor's or higher 
                degree; or
                    (D) a skill or talent that would benefit the 
                Economic Freedom Zone.
    (f) Additional Provisions.--
            (1) Geographic limitation.--An alien who has been issued a 
        visa under this section is not permitted to live or work 
        outside of an Economic Freedom Zone.
            (2) Rescission.--A visa issued under this section shall be 
        rescinded if the visa holder resides or works outside of an 
        Economic Freedom Zone or otherwise fails to comply with the 
        provisions of this section.
            (3) Other visas.--An alien who has been issued a visa under 
        this section may apply for any other visa for which the alien 
        is eligible in order to pursue employment outside of an 
        Economic Freedom Zone.
    (g) Adjustment of Status.--The Secretary of Homeland Security may 
adjust the status of an alien who has been issued a visa under this 
section to that of an alien lawfully admitted for permanent residence, 
without numerical limitation, if the alien--
            (1) has fully complied with the requirements set forth in 
        this section for at least 5 years;
            (2) submits a completed application to the Secretary; and
            (3) is not inadmissible to the United States based on any 
        of the factors set forth in section 212(a) of the Immigration 
        and Nationality Act (8 U.S.C. 1182(a)).

SEC. 504. ECONOMIC FREEDOM ZONE EDUCATIONAL SAVINGS ACCOUNTS.

    (a) In General.--Part VIII of subchapter F of chapter 1 of the 
Internal Revenue Code of 1986 is amended by adding at the end the 
following new section:

``SEC. 530A. ECONOMIC FREEDOM ZONE EDUCATIONAL SAVINGS ACCOUNTS.

    ``(a) In General.--Except as provided in this section, an Economic 
Freedom Zone educational savings account shall be treated for purposes 
of this title in the same manner as a Coverdell education savings 
account.
    ``(b) Definitions.--For purposes of this section--
            ``(1) Economic freedom zone educational savings account.--
        The term `Economic Freedom Zone educational savings account' 
        means a trust created or organized in the United States 
        exclusively for the purpose of paying the qualified education 
        expenses (as defined in section 530(b)(2)) of an individual who 
        is the designated beneficiary of the trust (and designated as 
        an Economic Freedom Zone educational saving account at the time 
        created or organized) and who is a qualified individual at the 
        time such trust is established, but only if the written 
        governing instrument creating the trust meets the following 
        requirements:
                    ``(A) No contribution will be accepted--
                            ``(i) unless it is in cash,
                            ``(ii) after the date on which such 
                        beneficiary attains age 25, or
                            ``(iii) except in the case of rollover 
                        contributions, if such contribution would 
                        result in aggregate contributions for the 
                        taxable year exceeding $10,000.
                    ``(B) No contribution shall be accepted at any time 
                in which the designated beneficiary is not a qualified 
                individual.
                    ``(C) The trust meets the requirements of 
                subparagraphs (B), (C), (D), and (E) of section 
                530(b)(1).
        The age limitations in subparagraphs (A)(ii), subparagraph (E) 
        of section 530(b)(1), and paragraphs (5) and (6) of section 
        530(d), shall not apply to any designated beneficiary with 
        special needs (as determined under regulations prescribed by 
        the Secretary).
            ``(2) Qualified individual.--The term `qualified 
        individual' means any individual whose principal residence 
        (within the meaning of section 121) is located in an Economic 
        Freedom Zone (as defined in section 1400V-6).
    ``(c) Deduction for Contributions.--
            ``(1) In general.--There shall be allowed as a deduction 
        under part VII of subchapter B of this chapter an amount equal 
        to the aggregate amount of contributions made by the taxpayer 
        to any Economic Freedom Zone educational savings account during 
        the taxable year.
            ``(2) Limitation.--The amount of the deduction allowed 
        under paragraph (1) for any taxpayer for any taxable year shall 
        not exceed $40,000.
            ``(3) No deduction for rollover contributions.--No 
        deduction shall be allowed under paragraph (1) for any rollover 
        contribution described in section 530(d)(5).
    ``(d) Other Rules.--
            ``(1) No income limit.--In the case of an Economic Freedom 
        Zone educational savings account, subsection (c) of section 530 
        shall not apply.
            ``(2) Change in beneficiaries.--Notwithstanding paragraph 
        (6) of section 530(b), a change in the beneficiary of an 
        Economic Freedom Zone education savings account shall be 
        treated as a distribution unless the new beneficiary is a 
        qualified individual.''.
    (b) Clerical Amendment.--The table of sections for part VIII of 
subchapter F of chapter 1 of such Code is amended by adding at the end 
the following new item:

``Sec. 530A. Economic Freedom Zone educational savings accounts.''.

             TITLE VI--COMMUNITY ASSISTANCE AND REBUILDING

SEC. 601. NONAPPLICATION OF DAVIS-BACON.

    The wage rate requirements of subchapter IV of chapter 31 of title 
40, United States Code (commonly referred to as the ``Davis-Bacon 
Act''), shall not apply with respect to any area designated as an 
Economic Freedom Zone under this Act.

SEC. 602. ECONOMIC FREEDOM ZONE CHARITABLE TAX CREDIT.

    (a) In General.--Section 170 is amended by redesignating subsection 
(p) as subsection (q) and by inserting after subsection (o) the 
following new subsection:
    ``(o) Election To Treat Contributions for Economic Freedom Zone 
Charities as a Credit.--
            ``(1) In general.--In the case of an individual, at the 
        election of the taxpayer, so much of the deduction allowed 
        under subsection (a) (determined without regard to this 
        subsection) which is attributable to Economic Freedom Zone 
        charitable contributions--
                    ``(A) shall be allowed as a credit against the tax 
                imposed by this chapter for the taxable year, and
                    ``(B) shall not be allowed as a deduction for such 
                taxable year under subsection (a).
        Any amount allowable as a credit under this subsection shall be 
        treated as a credit allowed under subpart A of part IV of 
        subchapter A for purposes of this title.
            ``(2) Amount attributable to economic freedom zone 
        charitable contributions.--For purposes of paragraph (1)--
                    ``(A) In general.--In any case in which the total 
                charitable contributions of a taxpayer for a taxable 
                year exceed the contribution base, the amount of 
                Economic Freedom Zone charitable contributions taken 
                into account under paragraph (1) shall be the amount 
                which bears the same ratio to the total charitable 
                contributions made by the taxpayer during such taxable 
                year as the amount of the deduction allowed under 
                subsection (a) (determined without regard to this 
                subsection and after application of subsection (b)) 
                bears to the total charitable contributions made by the 
                taxpayer for such taxable year.
                    ``(B) Carryovers.--In the case of any contribution 
                carried from a preceding taxable year under subsection 
                (d), such amount shall be treated as attributable to an 
                Economic Freedom Zone charitable contribution in the 
                amount that bears the same ratio to the total amount 
                carried from preceding taxable years under subsection 
                (d) as the amount of Economic Freedom Zone charitable 
                contributions not allowed as a deduction under 
                subsection (a) (other than by reason of this 
                subsection) for the preceding 5 taxable year bears to 
                total amount carried from preceding taxable years under 
                subsection (d).
            ``(3) Economic freedom zone charitable contribution.--The 
        term `Economic Freedom Zone charitable contribution' means any 
        contribution to a corporation, trust, or community chest fund, 
        or foundation described in subsection (c)(2), but only if--
                    ``(A) such entity is created or organized 
                exclusively for--
                            ``(i) religious purposes,
                            ``(ii) educational purposes, or
                            ``(iii) any of the following charitable 
                        purposes: providing educational scholarships, 
                        providing shelters for homeless individuals, or 
                        setting up or maintaining food banks,
                    ``(B) the primary mission of such entity is serving 
                individuals in an Economic Freedom Zone,
                    ``(C) the entity maintains accountability to 
                residents of such Economic Freedom Zone through their 
                representation on any governing board of the entity or 
                any advisory board to the entity, and
                    ``(D) the entity is certified by the Secretary for 
                purposes of this subsection.
        Such term shall not include any contribution made to an entity 
        described in the preceding sentence after the date in which the 
        designation of the Economic Freedom Zone serviced by such 
        entity lapses.
            ``(4) Economic freedom zone.--The term `Economic Freedom 
        Zone' means any area which is an Economic Freedom Zone under 
        title II of the Economic Freedom Zone Act.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

         TITLE VII--STATE AND COMMUNITY POLICY RECOMMENDATIONS

SEC. 701. SENSE OF THE SENATE CONCERNING POLICY RECOMMENDATIONS.

    It is the sense of the Senate that State and local governments 
should review and adopt the following policy recommendations:
            (1) Pension reform.--State and local governments should--
                    (A) implement reforms to address any fiscal 
                shortfall in public pension funding, including 
                utilizing accrual accounting methods, such as those 
                reforms undertaken by the private sector pension funds; 
                and
                    (B) restructure and renegotiate any public pension 
                fund that is deemed to be insolvent or underfunded, 
                including adopting defined contribution retirement 
                systems.
            (2) Taxes.--State and local governments should reduce 
        jurisdictional tax rates below the national average in order to 
        help facilitate capital investment and economic growth, 
        particularly in combination with the provisions of this Act.
            (3) Education.--State and local governments should adopt 
        school choice options to provide children and parents more 
        educational choices, particularly in impoverished areas.
            (4) Communities.--State and local governments should adopt 
        right-to-work laws to allow more competitiveness and more 
        flexibility for businesses to expand.
            (5) Regulations.--State and local governments should 
        streamline the regulatory burden on families and businesses, 
        including streamlining the opportunities for occupational 
        licensing.
            (6) Abandoned structures.--State and local governments 
        should consider the following options to reduce or fix areas 
        with abandoned properties or residences:
                    (A) In the case of foreclosures, tax notifications 
                should be sent to both the lien holder (if different 
                than the homeowner) and the homeowner.
                    (B) Where State constitutions permit, property tax 
                abatement or credits should be provided for individuals 
                who purchase or invest in abandoned or dilapidated 
                properties.
                    (C) Non-profit or charity demolition entities 
                should be permitted or encouraged to help remove 
                abandoned properties.
                    (D) Government or municipality fees and penalties 
                should be limited, and be proportional to the 
                outstanding tax amount and the ability to pay.
                    (E) The sale of tax liens to third parties should 
                be reviewed, and where available, should prohibit the 
                selling of tax liens below a certain threshold (for 
                example the prohibition of the sale of tax liens to 
                third parties under $1,000).
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