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House Enterprise-Zone Bill Includes Aid to Schools

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and Julie A. Miller

WASHINGTON--The House has approved a tax bill that would create urban and rural "enterprise zones'' eligible for extra education, job-training, and child-nutrition aid, and the Senate is poised to follow suit.

The bill also would help states fund education and training programs under the Family Support Act, the 1988 welfare-reform law aimed at making welfare recipients self-sufficient.

HR 11, which was approved July 2 by a vote of 365 to 55, represents a compromise between the Bush Administration and House Democrats.

The Administration and lawmakers also reached agreement on an emergency urban-aid bill last month after the Congress dropped $750 million in funding for summer-education programs and trimmed spending for summer jobs for youths from $675 million to $500 million.

HR 11 would create a permanent program under which businesses would get tax breaks for investing in distressed urban and rural areas.

State and local officials would apply to an interagency council for the enterprise-zone designation.

Each community would divide its allotment of extra social-service funding evenly among five categories: criminal justice, job training, education, health, and housing.

Education funds could be used for Head Start, the child-care block grant, Chapter 1, vocational or adult education, or the Trio programs that aim to encourage disadvantaged youths to attend college.

Senate Action

The Senate Finance Committee approved a companion bill late last week with identical aid provisions. However, it contains a different package of unrelated tax provisions and would replace the House bill's capital-gains-tax cut with other incentives for businesses operating in enterprise zones. It would also authorize only 25 zones, compared with 50 in the House bill.

Also included in the Senate version is a child-welfare measure aimed at investing in services to prevent child abuse and neglect and family separation. (See Capital Digest, page 40.)

Changes to Welfare Law

The Family Support Act revisions in HR 11 aim to solve a problem caused by the recession.

Because they are short of cash, many states have been unable to qualify for all the federal matching funds available under the Job Opportunities and Basic Skills program. The House bill would enable some states to make use of some of the unobligated funds and set a temporary, more favorable matching rate.

The Senate Finance Committee version would increase JOBS funding and set a more favorable federal matching rate in fiscal years 1993, 1994, and 1995.

The House measure would allow welfare recipients to keep up to $10,000 in savings without losing their benefits if the money is used for the education, training, or employability of a family member, for the purchase of a new home, or for expenses related to a change in residence; the Senate panel's version would allow $8,000.

The House measure also includes a provision making it easier for welfare recipients to pursue educational programs under the JOBS program, which may be added to the Senate version when it reaches the floor.

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