I 
109TH CONGRESS 
2D SESSION 
H. R. 6276 
To amend the Internal Revenue Code of 1986 to alleviate poverty by encour-
aging the employment of residents by empowerment zone businesses 
through the employment of residents in designated areas of pervasive 
poverty, unemployment, and general distress. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 29, 2006 
Mr. CLAY (for himself, Mr. AKIN, Mr. BLUNT, Mr. CARNAHAN, Mrs. EMER-
SON, and Mr. HULSHOF) 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 alleviate 
poverty by encouraging the employment of residents by 
empowerment zone businesses through the employment 
of residents in designated areas of pervasive poverty, 
unemployment, and general distress. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SPECIAL RULE FOR EMPLOYMENT OF RESI-
DENTS IN AN EMPOWERMENT ZONE. 
(a) IN GENERAL.—Section 1397C of the Internal 
Revenue Code of 1986 (defining enterprise zone business) 
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is amended by adding at the end the following new sub-
section: 
‘‘(g) SPECIAL RULES RELATING TO RESIDENT EM-
PLOYMENT REQUIREMENTS.— 
‘‘(1) IN GENERAL.—If a business entity or pro-
prietorship uses all reasonable efforts during the 
first 6-month period of any taxable year to meet the 
35 percent employee requirement under subsection 
(b)(6) or (c)(5) or under any other provision of this 
subchapter, but is unable to do so because insuffi-
cient applications of qualified candidates willing to 
accept and continue employment were received by 
such business entity or proprietorship during such 
period, then the business entity or proprietorship 
may file with the Secretary of Housing and Urban 
Development necessary information, including avail-
able statistics concerning the labor pool and applica-
tions received, documenting such reasonable efforts 
during such period and request that the Secretary of 
Housing and Urban Development determine whether 
such business entity or proprietorship used all rea-
sonable efforts during such period to meet such re-
quirement. If the Secretary of Housing and Urban 
Development determines that the business entity or 
proprietorship used such reasonable efforts, the Sec-
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retary of Housing and Urban Development shall 
issue a finding stating such determination and such 
requirement shall be deemed to be met for all pur-
poses of this subchapter for such taxable year if dur-
ing the final 3 months of such taxable year at least 
35 percent of the employees of such business entity 
or proprietorship are residents of— 
‘‘(A) the empowerment zone, or 
‘‘(B) any area within a 15 mile radius of 
the qualified business of such business entity or 
proprietorship which has been designated by 
any Federal, State, city, or municipal govern-
mental unit as an area of pervasive poverty, un-
employment, and general distress. 
Any employee taken into account for purposes of 
such requirement by reason of this paragraph for 
any taxable year may continue to be taken into ac-
count for such requirement for any subsequent tax-
able year during which such employee remains a 
resident of the area described in subparagraph (A) 
or (B). 
‘‘(2) DETERMINATION BY HUD.—The Secretary 
of Housing and Urban Development shall make any 
and all necessary inquiries (including requesting ad-
ditional information of the business entity or propri-
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etorship) in order to respond to the request made 
under paragraph (1) (by making such finding or 
providing notice of a failure to make such finding) 
within 30 days of the date of such request. Any find-
ing under paragraph (1) shall also contain a state-
ment by the Secretary of Housing and Urban Devel-
opment verifying that the areas described in para-
graph (1)(B) are areas of pervasive poverty, unem-
ployment and general distress. 
‘‘(3) EMPLOYMENT
BY
MANAGEMENT
COM-
PANY.—For purposes of this subchapter, a business 
entity or proprietorship owner of a enterprise zone 
business shall be deemed the employer of any em-
ployees that a management company hires to oper-
ate such enterprise zone business.’’. 
(b) REPORTS TO CONGRESS.— 
(1) IN GENERAL.—The Secretary of Housing 
and Urban Development shall submit to Congress, 
every 3 years, a report summarizing the information 
submitted to the Secretary by a business entity or 
proprietorship under section 1397C(g) of the Inter-
nal Revenue Code of 1986 (as added by subsection 
(a)) and the actions taken by the Secretary in re-
sponse. 
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(2) FINAL REPORT.—The Comptroller General 
of the United States shall use the reports submitted 
by the Secretary of Housing and Urban Develop-
ment under paragraph (1), and such other informa-
tion the Comptroller General deems relevant, to 
make an assessment of the impact of such section 
1397C(g), in the form of an update to the reports 
required by section 101(c) of the Community Re-
newal Tax Relief Act of 2000. 
(c) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning on and 
after January 1, 2006, and shall apply to any bonds out-
standing on that date. 
Æ 
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