I
105TH CONGRESS
1ST SESSION
H. R. 1031
To amend the Internal Revenue Code of 1986 to allow the designation
of renewal communities, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MARCH 12, 1997
Mr. WATTS of Oklahoma (for himself, Mr. FLAKE, and Mr. TALENT) intro-
duced the following bill; which was referred to the Committee on Ways
and Means, and in addition to the Committees on Education and the
Workforce, Banking and Financial Services, and Commerce, for a period
to be subsequently determined by the Speaker, in each case for consider-
ation of such provisions as fall within the jurisdiction of the committee
concerned
A BILL
To amend the Internal Revenue Code of 1986 to allow the
designation of renewal communities, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘American Community Renewal Act of 1997’’.
(b) TABLE OF CONTENTS.—The table of contents for
this Act is as follows:
Sec. 1. Short title and table of contents.
Sec. 2. Findings and purpose.
TITLE I—DESIGNATION AND EVALUATION OF RENEWAL
COMMUNITIES
Sec. 101. Short title.
Sec. 102. Statement of purpose.
Sec. 103. Designation of renewal communities.
Sec. 104. Evaluation and reporting requirements.
Sec. 105. Interaction with other Federal programs.
TITLE II—TAX PROVISIONS
Subtitle A—Tax Incentives for Renewal Communities
Sec. 201. Tax treatment of renewal communities.
Sec. 202. Extension of work opportunity tax credit for renewal communities
Sec. 203. Allowance of commercial revitalization credit.
Sec. 204. Conforming and clerical amendments.
Subtitle B—Charitable Contribution Credit
Sec. 211. Credit for certain charitable contributions.
TITLE III—LOW-INCOME EDUCATIONAL OPPORTUNITY
SCHOLARSHIP PROGRAM
Sec. 301. Short title.
Sec. 302. Findings; precedents.
Sec. 303. Purposes.
Sec. 304. Plan submission; requirements.
Sec. 305. Uses of funds.
Sec. 306. Scholarship program.
Sec. 307. Allocation of funds among renewal communities.
Sec. 308. Parental right of choice in education.
Sec. 309. Eligible schools.
Sec. 310. Administration of program and treatment of funds.
Sec. 311. Contributions to scholarship program from other sources.
Sec. 312. Use of excess funds for additional educational purposes.
Sec. 313. Evaluation.
Sec. 314. Effect on other programs.
Sec. 315. Judicial review.
Sec. 316. Definitions.
Sec. 317. Authorization of appropriations.
TITLE IV—ADDITIONAL PROVISIONS
Sec. 401. Transfer of unoccupied and substandard HUD-held housing in re-
newal communities to local governments.
Sec. 402. Prevention and treatment of substance abuse; services provided
through religious organizations.
Sec. 403. CRA credit for investments in community development organizations
located in renewal communities.
SEC. 2. FINDINGS AND PURPOSE.
(a) FINDINGS.—The Congress makes the following
findings:
(1) Many of the Nation’s urban centers are
places with high levels of poverty, high rates of wel-
fare dependency, high crime rates, poor schools, and
joblessness.
(2) Federal tax incentives and regulatory re-
forms can encourage economic growth, job creation,
and small business formation in many urban centers.
(3) Encouraging private sector investment in
America’s economically distressed urban and rural
areas is essential to breaking the cycle of poverty
and the related ills of crime, drug abuse, illiteracy,
welfare dependency, and unemployment.
(b) PURPOSE.—The purpose of this Act is to increase
job creation, small business expansion and formation, edu-
cational opportunities, and homeownership, and to foster
moral renewal, in economically depressed areas by provid-
ing Federal tax incentives, regulatory reforms, school re-
form pilot projects, and homeownership incentives.
TITLE 
I—DESIGNATION 
AND
EVALUATION 
OF 
RENEWAL
COMMUNITIES
SEC. 101. SHORT TITLE.
This title may be cited as the ‘‘Renewing American
Communities Act of 1997’’.
SEC. 102. STATEMENT OF PURPOSE.
It is the purpose of this title to provide for the estab-
lishment of renewal communities in order to stimulate the
creation of new jobs, particularly for disadvantaged work-
ers and long-term unemployed individuals, and to promote
revitalization of economically distressed areas primarily by
providing or encouraging—
(1) tax relief at the Federal, State, and local
levels;
(2) regulatory relief at the Federal, State, and
local levels; and
(3) improved local services and an increase in
the economic stake of renewal community residents
in their own community and its development, par-
ticularly through the increased involvement of pri-
vate, local, and neighborhood organizations.
SEC. 103. DESIGNATION OF RENEWAL COMMUNITIES.
(a) IN GENERAL.—Chapter 1 of the Internal Reve-
nue Code of 1986 is amended by adding at the end the
following new subchapter:
‘‘Subchapter W—Renewal Communities
‘‘Part I.
Designation.’’
‘‘PART I—DESIGNATION
‘‘Sec. 1400. Designation of Renewal Communities.
‘‘SEC. 1400. DESIGNATION OF RENEWAL COMMUNITIES.
‘‘(a) DESIGNATION.—
‘‘(1) DEFINITIONS.—For purposes of this title,
the term ‘renewal community’ means any area—
‘‘(A) which is nominated by one or more
local governments and the State or States in
which it is located for designation as a renewal
community (hereinafter in this section referred
to as a ‘nominated area’), and
‘‘(B) which the Secretary of Housing and
Urban Development, after consultation with—
‘‘(i) the Secretaries of Agriculture,
Commerce, Labor, and the Treasury; the
Director of the Office of Management and
Budget; and the Administrator of the
Small Business Administration, and
‘‘(ii) in the case of an area on an In-
dian reservation, the Secretary of the Inte-
rior,
designates as a renewal community.
‘‘(2) NUMBER OF DESIGNATIONS.—
‘‘(A) IN
GENERAL.—The Secretary of
Housing and Urban Development may des-
ignate not more than 100 nominated areas as
renewal communities.
‘‘(B) MINIMUM
DESIGNATION
IN
RURAL
AREAS.—Of the areas designated under para-
graph (1), at least 25 percent must be areas—
‘‘(i) which are within a local govern-
ment jurisdiction or jurisdictions with a
population of less than 50,000 (as deter-
mined under the most recent census data
available),
‘‘(ii) which are outside of a metropoli-
tan statistical area (within the meaning of
section 143(k)(2)(B)), or
‘‘(iii) which are determined by the
Secretary of Housing and Urban Develop-
ment, after consultation with the Secretary
of Commerce, to be rural areas.
‘‘(C) ADDITIONAL DESIGNATIONS TO RE-
PLACE REVOKED DESIGNATIONS.—
‘‘(i) IN GENERAL.—The Secretary of
Housing and Urban Development may des-
ignate one additional area under subpara-
graph (A) to replace each area for which
the designation is revoked under subsection
(b)(2), but in no event may more than 100
areas designated under this subsection
bear designations as renewal communities
at any time.
‘‘(ii) EXTENSION OF TIME LIMIT ON
DESIGNATIONS.—In the case of any des-
ignation made under this subparagraph,
paragraph (4)(B) shall be applied by sub-
stituting ‘36-month’ for ‘24-month’.
‘‘(3) AREAS DESIGNATED BASED ON DEGREE
OF POVERTY, ETC.—
‘‘(A) IN GENERAL.—Except as otherwise
provided in this section, the nominated areas
designated as renewal communities under this
subsection shall be those nominated areas with
the highest average ranking with respect to the
criteria described in subparagraphs (C), (D),
and (E) of subsection (c)(3). For purposes of
the preceding sentence, an area shall be ranked
within each such criterion on the basis of the
amount by which the area exceeds such cri-
terion, with the area which exceeds such cri-
terion by the greatest amount given the highest
ranking.
‘‘(B) EXCEPTION
WHERE
INADEQUATE
COURSE OF ACTION, ETC.—An area shall not be
designated under subparagraph (A) if the Sec-
retary of Housing and Urban Development de-
termines that the course of action described in
subsection (d)(2) with respect to such area is
inadequate.
‘‘(C) PRIORITY FOR EMPOWERMENT ZONES
AND ENTERPRISE COMMUNITIES WITH RESPECT
TO FIRST HALF OF DESIGNATIONS.—With re-
spect to the first 50 designations made under
this section, the nominated areas designated as
renewal communities shall be chosen first from
nominated areas which are enterprise zones or
empowerment communities (and are otherwise
eligible for designation under this section), and
then from other nominated areas which are so
eligible.
‘‘(D) SEPARATE APPLICATION TO RURAL
AND OTHER AREAS.—Subparagraph (A) shall
be applied separately with respect to areas de-
scribed in paragraph (2)(B) and to other areas.
‘‘(4) LIMITATION ON DESIGNATIONS.—
‘‘(A) PUBLICATION
OF
REGULATIONS.—
The Secretary of Housing and Urban Develop-
ment shall prescribe by regulation no later than
4 months after the date of the enactment of
this section, after consultation with the officials
described in paragraph (1)(B)—
‘‘(i) the procedures for nominating an
area under paragraph (1)(A),
‘‘(ii) the parameters relating to the
size and population characteristics of a re-
newal community, and
‘‘(iii) the manner in which nominated
areas will be evaluated based on the cri-
teria specified in subsection (d).
‘‘(B) TIME LIMITATIONS.—The Secretary
of Housing and Urban Development may des-
ignate nominated areas as renewal communities
only during the 24-month period beginning on
the first day of the first month following the
month in which the regulations described in
subparagraph (A) are prescribed.
‘‘(C) PROCEDURAL RULES.—The Secretary
of Housing and Urban Development shall not
make any designation of a nominated area as a
renewal community under paragraph (2) un-
less—
‘‘(i) the local governments and the
State in which the nominated area is lo-
cated have the authority—
being both the State and local governments with re-
spect to such area.
‘‘(b) PERIOD FOR WHICH DESIGNATION IS IN EF-
FECT.—
‘‘(1) IN GENERAL.—Any designation of an area
as a renewal community shall remain in effect dur-
ing the period beginning on the date of the designa-
tion and ending on the earliest of—
‘‘(A) December 31 of the 7th calendar year
following the calendar year in which such date
occurs,
‘‘(B) the termination date designated by
the State and local governments in their nomi-
nation pursuant to subsection (a)(4)(C)(ii), or
‘‘(C) the date the Secretary of Housing
and Urban Development revokes such designa-
tion under paragraph (2).
‘‘(2) REVOCATION OF DESIGNATION.—The Sec-
retary of Housing and Urban Development may,
after—
‘‘(A) consultation with the officials de-
scribed in subsection (a)(1)(B) (and the Sec-
retary of Education if notification required
under section 304 of the Low-Income Edu-