Introduction of a Bill to Amend the Internal Revenue Code of 1986 to Designate the District of Columbia as an Empowerment Zone

Floor Speech

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Mr. Speaker, I rise today to introduce a bill to instruct the Secretary of the United States Department of Housing and Urban Development to deem areas within the District of Columbia as empowerment zones. This bill would effectively reauthorize the tax incentives for business investment in the District, which expired in 2011, yet are timelier than ever today. These were the only tax incentives for a big city that were not extended, even though they were initially created by Republicans, with a few Democrats. The wisdom of these bipartisan, modest, targeted tax incentives has been amply and visibly demonstrated in the economic resurgence in many parts of the nation's capital. However, the D.C. tax incentives were cut off before the poorest neighborhoods were ready to make use of them.

Congress has recognized that the benefits of incentives for investment in economically distressed communities outweigh their costs as it has continually extended the national empowerment zone program. The positive effects of the D.C. tax incentives are apparent throughout the city. Among the most visible are the vibrant area around the Verizon Center, which is now surrounded by offices, restaurants and nightlife, and the Penn Quarter neighborhood, which had limited residential, commercial, and retail spaces and is now a popular mixed-use neighborhood. Before the business tax incentives, the city found it difficult to retain, much less attract, businesses. However, one of the business tax incentives enabled the city government to issue more than $155 million in tax- exempt bonds on behalf of for-profit and non-profit entities for capital projects.

The federal government's decision to build facilities in the District's poorest ward, Ward 8, lays the groundwork for revitalization there. The new headquarters for the U.S. Coast Guard is now open in Southeast D.C. in the city's lowest income ward, the first in a complex of buildings Congress has authorized for the federally-owned West Campus of the St. Elizabeths Hospital. The tax incentives, particularly in areas where the federal government is expanding, as it did in NoMa, have demonstrated that they can revitalize such neighborhoods.

Withdrawing the D.C. incentives, particularly after they had proven to be effective in other areas of the city, left the nation's capital with essentially half of a revival, and was tragically timed just as the lower-income parts of the District, which need the incentives most, are ready for redevelopment.

Except for having no representation in the Senate, there is no good reason why the D.C. tax incentives were not extended like those of similar cities. Like the fiscal health of many other cities, the District's overall fiscal health has improved since the tax incentives were established in 1997, but not in the poorest wards and in neighborhood pockets elsewhere. The incentives are particularly indispensable for ensuring that lower-income areas of the city are part of the city's economic progress. It would be tragic to continue to single out the nation's capital as the only empowerment zone not to be renewed just as the eastern, low-income sections of the city are about to develop. As essential as the federal incentives have been, their costs have been de minimis compared to the measurable benefits they have demonstrated they can generate.

I urge my colleagues to support this bill.

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