I 
110TH CONGRESS 
2D SESSION 
H. R. 7096 
To amend the Internal Revenue Code of 1986 to allow a deduction for 
income attributable to business activities conducted in high job-loss areas. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 25, 2008 
Mr. HIGGINS introduced the following bill; which was referred to the 
Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to allow a 
deduction for income attributable to business activities 
conducted in high job-loss areas. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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 ACTIVI-
TIES CONDUCTED IN HIGH JOB-LOSS AREAS. 
(a) IN GENERAL.—Part VI of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 (relating to 
VerDate Aug 31 2005 
03:12 Sep 27, 2008
Jkt 069200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H7096.IH
H7096
bajohnson on PROD1PC77 with BILLS
itemized deductions for individuals and corporations) is 
amended by adding at the end the following new section: 
‘‘SEC. 200. INCOME ATTRIBUTABLE TO BUSINESS ACTIVI-
TIES CONDUCTED IN HIGH-JOB LOSS AREAS. 
‘‘(a) IN GENERAL.—In the case of an eligible tax-
payer, 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 met-
ropolitan 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). 
VerDate Aug 31 2005 
03:12 Sep 27, 2008
Jkt 069200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H7096.IH
H7096
bajohnson on PROD1PC77 with BILLS
‘‘(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 busi-
ness gross receipts for such taxable year, over 
‘‘(B) the sum of— 
‘‘(i) the cost of goods sold that are al-
locable to such receipts, and 
‘‘(ii) other expenses, losses, or deduc-
tions (other than the deduction allowed 
under this section), which are properly al-
locable to such receipts. 
‘‘(2) ALLOCATION
METHOD.—The Secretary 
shall prescribe rules for the proper allocation of 
items described in paragraph (1) for purposes of de-
termining qualified high job-loss zone business in-
come. Such rules shall provide for the proper alloca-
tion of items whether or not such items are directly 
allocable to high job-loss zone business gross re-
ceipts. 
‘‘(3) COSTS.—Rules similar to the rules of sec-
tion 199(c)(3) shall apply for purposes of paragraph 
(1). 
VerDate Aug 31 2005 
03:12 Sep 27, 2008
Jkt 069200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H7096.IH
H7096
bajohnson on PROD1PC77 with BILLS
‘‘(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 tax-
payer derived from property leased, li-
censed, or rented by the taxpayer for use 
by any related person. 
‘‘(ii) RELATED
PERSON.—For pur-
poses of clause (i), a person shall be treat-
ed as related to another person if such per-
sons are treated as a single employer 
under subsection (a) or (b) of section 52 or 
subsection (m) or (o) of section 414, ex-
cept 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— 
VerDate Aug 31 2005 
03:12 Sep 27, 2008
Jkt 069200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H7096.IH
H7096
bajohnson on PROD1PC77 with BILLS
between the 1990 and 2000 censuses. 
‘‘(3) ELIGIBLE CITIES.—For purposes of para-
graph (1), the term ‘eligible city’ means, with re-
spect 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 popu-
lation 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 cen-
sus. 
‘‘(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 fac-
tors referred to in the paragraph are— 
‘‘(A) per capita income, 
VerDate Aug 31 2005 
03:12 Sep 27, 2008
Jkt 069200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6201
E:\BILLS\H7096.IH
H7096
bajohnson on PROD1PC77 with BILLS
‘‘(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 sta-
tistical area high job-loss zone’ means any standard 
micropolitan statistical area designated by the Sec-
retary 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 para-
graph (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 
VerDate Aug 31 2005 
23:47 Sep 27, 2008
Jkt 069200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H7096.IH
H7096
bajohnson on PROD1PC77 with BILLS
‘‘(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 para-
graph (1), the term ‘eligible city’ means, with re-
spect 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 fac-
tors referred to in the paragraph are— 
‘‘(A) per capita income, 
VerDate Aug 31 2005 
23:47 Sep 27, 2008
Jkt 069200
PO 00000
Frm 00008
Fmt 6652
Sfmt 6201
E:\BILLS\H7096.IH
H7096
bajohnson on PROD1PC77 with BILLS
‘‘(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 sec-
tion. 
‘‘(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 deduc-
tion 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), 
VerDate Aug 31 2005 
03:12 Sep 27, 2008
Jkt 069200
PO 00000
Frm 00009
Fmt 6652
Sfmt 6201
E:\BILLS\H7096.IH
H7096
bajohnson on PROD1PC77 with BILLS
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 para-
graph (16), by striking the period at the end of 
paragraph (17) and inserting ‘‘, and’’, and by insert-
ing after paragraph (17) the following new para-
graph: 
‘‘(18) the deduction provided by section 200 
shall not be allowed.’’. 
(4) The table of sections for part VI of sub-
chapter 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 
VerDate Aug 31 2005 
03:12 Sep 27, 2008
Jkt 069200
PO 00000
Frm 00010
Fmt 6652
Sfmt 6201
E:\BILLS\H7096.IH
H7096
bajohnson on PROD1PC77 with BILLS
section) on retaining and attracting new businesses to 
high job-loss zones. Such reports shall be submitted annu-
ally for each calendar year included in the period specified 
in section 200(g) of such Code. 
Æ 
VerDate Aug 31 2005 
03:12 Sep 27, 2008
Jkt 069200
PO 00000
Frm 00011
Fmt 6652
Sfmt 6301
E:\BILLS\H7096.IH
H7096
bajohnson on PROD1PC77 with BILLS