Bill Assisting Poverty Areas Clears House

Forty impoverished communities to be chosen nationwide would get tax breaks, regulatory relief and new government programs under a bill passed overwhelmingly by the House on Tuesday as a partial solution for places not sharing in America’s prosperity.

With a solid 394-27 bipartisan vote, the House sent the bill to the Senate, where a similar measure is pending. President Clinton is an enthusiastic supporter, and it is backed by Republican leaders in Congress, making the legislation one of the few major tax-related bills with a chance of becoming law this year.

In a written statement, Clinton said the bill would “spur more private sector investment” in cities and rural areas that “still do not have access to investment capital and economic opportunity.”

The legislation represents five years of effort by lawmakers from both parties “to find out what works from the people on the ground who are working every day to revive these neighborhoods,” said Rep. J. C. Watts Jr. of Oklahoma, the fourth-ranking House Republican.

Under the bill, which would reduce government revenue by about $6 billion over five years, the Department of Housing and Urban Development would designate the 40 communities where the assistance would apply from nominations submitted by states. In general, they would be urban and rural places with “pervasive poverty, high unemployment and general economic distress.”

These communities, in turn, would be eligible for tax breaks and other provisions with the underlying theme of persuading private companies to invest in inner cities and poor rural areas, thereby creating jobs and economic activity while minimizing the role of government.

A hallmark of the bill is the “new markets” initiative that establishes 10 venture capital companies to invest in small businesses located in poor neighborhoods. The government would guarantee up to $150 million in loans and $30 million in grants for companies licensed by the Small Business Administration.