,,ii #aacth ,,congress #ast ,session ,s4 #aheb ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,december #ah1 #bjac,mr4 ,paul 7for himself and ,mr4 ,mc,connell7 introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to provide for the establishment of free market enterprise zones in order to help facilitate the creation of new jobs1 entrepreneurial opportunities1 enhanced and renewed educational opportunities1 and increased community involvement in bankrupt or economically distressed areas4 #a4 ,short title2 table of contents 7a7 ,short title ,this ,act may be cited as the ,economic ,freedom ,zones ,act of #bjac4 7b7 ,table of contents ,the table of contents for this ,act is as follows3 ,sec4 #a4 ,short title2 table of contents4,sec4 #b4 ,definitions4,,title ,i--,prohibition against a ,federal ,government bailout of a ,state1 city1 or municipality,sec4 #aja4 ,prohibition of ,federal ,government ,bailouts4,,title ,,ii--,designation of ,economic ,freedom ,zones 7,,efz7,sec4 #bja4 ,eligibility requirements for ,economic ,freedom ,zone ,status4,sec4 #bjb4 ,area and regional requirements4,sec4 #bjc4 ,application and duration of designation4,,title ,,iii--,federal tax incentives,sec4 #cja4 ,tax incentives related to ,economic ,freedom ,zones4,,title ,,iv--,federal regulatory reductions,sec4 #dja4 ,suspension of certain laws and regulations4,,title ,v--,educational enhancements,sec4 #eja4 ,educational opportunity tax credit4,sec4 #ejb4 ,school choice through portability4,sec4 #ejc4 ,special ,economic ,freedom ,zone visas4,sec4 #ejd4 ,economic ,freedom ,zone educational savings accounts4,,title ,,vi--,community assistance and rebuilding,sec4 #fja4 ,nonapplication of ,davis-,bacon4,sec4 #fjb4 ,economic ,freedom ,zone charitable tax credit4,,title ,,vii--,state and community policy recommendations,sec4 #gja4 ,sense of the ,senate concerning policy recommendations4 #b4 ,definitions ,in this ,act3 7#a7 ,city ,the term city means any unit of general local government that is classified as a municipality by the ,united ,states ,census ,bureau1 or is a town or township as determined jointly by the ,director of the ,office of ,management and ,budget and the ,secretary of the ,treasury4 7#b7 ,county ,the term ,county means any unit of local general government that is classified as a county by the ,united ,states ,census ,bureau4 7#c7 ,eligible entity ,the term eligible entity means a ,state1 municipality1 zip code1 or rural area4 7#d7 ,municipality ,the term municipality has the meaning given that term in section #aja7dj7 of title #aa1 ,united ,states ,code4 7#e7 ,rural area ,the term rural area means any area not in an urbanized area1 as that term is defined by the ,census ,bureau4 7#f7 ,secretary ,the term ,secretary means the ,secretary of the ,treasury4 7#g7 ,zip code ,the term zip code means any area or region associated with or covered by a ,united ,states ,postal zip code of not less than #e digits4 ,i ,prohibition against a ,federal ,government bailout of a ,state1 city1 or municipality #aja4 ,prohibition of ,federal ,government ,bailouts 7a7 ,definitions ,in this section-- 7#a7 the term credit rating has the meaning given that term in section #c7;a77#fj7 of the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gh;c7a77#fj772 7#b7 the term credit rating agency has the meaning given that term in section #c7;a77#fa7 of the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gh;c7a77#fa772 7#c7 the term ,federal assistance means the use of any advances from the ,federal ,reserve credit facility or discount window that is not part of a program or facility with broad-based eligibility under section #ac7c77;,a7 of the ,federal ,reserve ,act 7#ab ,u4,s4,c4 #cdc7c77;,a771 ,federal ,deposit ,insurance ,corporation insurance1 or guarantees for the purpose of-- 7,a7 making a loan to1 or purchasing any interest or debt obligation of1 a municipality2 7,b7 purchasing the assets of a municipality2 7,c7 guaranteeing a loan or debt issuance of a municipality2 or 7,d7 entering into an assistance arrangement1 including a grant program1 with an eligible entity2 7#d7 the term insolvent means1 with respect to an eligible entity1 a financial condition such that the eligible entity-- 7,a7 has any debt that has been given a credit rating lower than a ,b by a nationally recognized statistical rating organization or a credit rating agency2 7,b7 is not paying its debts as they become due1 unless such debts are the subject of a bona fide dispute2 or 7,c7 is unable to pay its debts as they become due2 and 7#e7 the term nationally recognized statistical rating organization has the meaning given that term in section #c7;a77#fb7 of the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gh;c7a77#fb774 7b7 ,prohibition of ,federal ,government ,bailouts 7#a7 ,prohibition of ,federal assistance ,notwithstanding any other provision of law1 no ,federal assistance may be provided to an eligible entity 7other than the assistance provided for in this ,act for an area that is designated as an ,economic ,free ,zone74 7#b7 ,prohibition of financial assistance to bankrupt or insolvent eligible entities ,except as provided in paragraph 7#a71 the ,federal ,government may not provide financial assistance-- 7,a7 to a municipality that is a debtor under chapter #i of title #aa1 ,united ,states ,code2 or 7,b7 to ,state or municipality that is insolvent4 ,,ii ,designation of ,economic ,freedom ,zones 7,,efz7 #bja4 ,eligibility requirements for ,economic ,freedom ,zone ,status 7a7 ,in general ,in order to be eligible for designation as an ,economic ,freedom ,zone by the ,secretary1 an eligible entity shall meet one or more of the following requirements 7in order of priority7 and the requirements of section #bjb3 7#a7 ,eligible chapter #i debtor ,an eligible entity that satisfies the requirements under section #aji7;c7 of title #aa1 ,united ,states ,code4 7#b7 ,eligible entity at risk of insolvency 7,a7 ,in general ,an eligible entity that is at risk of insolvency1 as described in subparagraph 7,b74 7,b7 ,requirements ,an eligible entity is at risk of insolvency if-- 7i7 an independent actuarial firm that has been engaged by the eligible entity and that does not have a conflict of interest with the eligible entity1 including any previous relationship with the eligible entity1 as determined by the ,secretary-- 7,i7 determines that the eligible entity is insolvent 7as defined in section #aja7;a77#d772 and 7,,ii7 submits its analysis regarding the insolvency of the eligible entity to the ,secretary2 and 7ii7 the ,secretary has reviewed and approved the determination of insolvency by the actuarial firm4 7#c7 ,low economic and high poverty zones 7,a7 ,in general ,an eligible entity that is designated as a low economic or high poverty zone under subparagraph 7,b74 7,b7 ,designation ,the ,secretary1 after reviewing supporting data as deemed appropriate1 shall designate an eligible entity as a low economic or high poverty area if-- 7i7 the ,state or local government with jurisdiction over the entity certifies that-- 7,i7 the entity is one of pervasive poverty1 unemployment1 and general distress2 7,,ii7 the average rate of unemployment within such entity during the most recent #c-month period for which data is available is at least #a4e times the national unemployment rate for the period involved2 7,,iii7 during the most recent #c-month period1 at least #cj percent of the area residents have incomes below the national poverty level2 or 7,,iv7 at least #gj percent of the are residents have incomes below #hj percent of the median income of households within the jurisdiction of the local government 7as determined in the same manner as under section #aai7;b77#b7 of the ,housing and ,community ,development ,act of #aigd72 and 7ii7 the ,secretary determines that such a designation is appropriate4 7#d7 ,special high poverty requirement for designation ,an eligible entity shall be designated as a low economic or high poverty zone if the ,secretary determines that-- 7,a7 the ,state in which the entity is located within one of the #aj most impoverished ,states1 as determined using ,united ,states ,census ,bureau data2 7,b7 the entity is one of pervasive poverty1 unemployment1 and general distress2 7,c7 the average rate of unemployment within such entity during the most recent #c-month period for which data is available is at least #a4be times the national unemployment rate for the period involved2 7,d7 during the most recent #c-month period1 at least #be percent of the area residents have income below the national poverty level2 or 7,e7 at least #fe percent of the residents have incomes below #hj percent of the median income of households within the jurisdiction of the local government 7as determined in the same manner as under section #aai7;b77#b7 of the ,housing and ,community ,development ,act of #aigd74 7b7 ,refusal ,to grant status ,the ,secretary may refuse to designate an eligible entity as an ,economic ,freedom ,zone if the ,secretary determines that any requirement under this ,act1 including any requirement under subsection 7a77#b77;,b71 has not been satisfied4 #bjb4 ,area and regional requirements 7a7 ,in general ,to be designated as an ,economic ,freedom ,zone by the ,secretary1 an eligible entity shall-- 7#a7 meet one or more of the requirements under section #bja2 and 7#b7 be an entity described in subsection 7b74 7b7 ,entity described ,an entity is described in this subsection if such entity-- 7#a7 is a metropolitan statistical area 7as defined by the ,director of the ,office of ,management and ,budget7 that-- 7,a7 is located within the jurisdiction of a local government2 and 7,b7 has a continuous boundary2 7#b7 is a non-metropolitan statistical area 7as defined by the ,director of the ,office of ,management and ,budget7 if 7based on the following order of priority7 such area-- 7,a7 is an official county geographical area in any ,state that meets any of the eligibility requirements of section #bja2 7,b7 is an official city geographical area in any ,state that meets any of the eligibility requirements of section #bja2 or 7,c7 is an official zip code geographical area in any ,state that meets any of the eligibility requirements of section #bja2 or 7#c7 is a zip code area that-- 7,a7 is within a metropolitan statistical area2 and 7,b7 meets other eligibility criteria as determined by the ,secretary after consultation with the ,united ,states ,census ,bureau1 the ,bureau of ,labor ,statistics1 and the ,office of ,management and ,budget4 #bjc4 ,application and duration of designation 7a7 ,application ,the ,secretary shall develop procedures to enable an eligible entity to submit to the ,secretary an application for designation as an ,economic ,freedom ,zone under this title4 7b7 ,duration ,the designation by the ,secretary of an eligible entity as a ,economic ,freedom ,zone shall be for a period of #aj years4 ,,iii ,federal tax incentives #cja4 ,tax incentives related to ,economic ,freedom ,zones 7a7 ,in general ,chapter #a of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new subchapter3 ,z ,economic ,freedom ,zones ,part ,i--,tax incentives,part ,,ii--,definitions ,i ,tax incentives ,sec4 #adjj,v-#a4 ,economic ,freedom ,zone individual flat tax4,sec4 #adjj,v-#b4 ,economic ,freedom ,zone corporate flat tax4,sec4 #adjj,v-#c4 ,zero percent capital gains rate4,sec4 #adjj,v-#d4 ,reduced payroll taxes4,sec4 #adjj,v-#e4 ,increase in expensing under section #agi4 #adjj,v-#a4 ,economic ,freedom ,zone individual flat tax 7a7 ,in general ,in the case of any individual whose principal residence 7within the meaning of section #aba7 is located in an ,economic ,freedom ,zone for the taxable year1 in lieu of the tax imposed by section #a1 there shall be imposed a tax equal to #e percent of the taxable income of such taxpayer4 ,for purposes of this title1 the tax imposed by the preceding sentence shall be treated as a tax imposed by section #a4 7b7 ,joint returns ,in the case of a joint return under section #fjac1 subsection 7a7 shall apply so long as either spouse has a principal residence 7within the meaning of section #aba7 in an ,economic ,freedom ,zone for the taxable year4 7c7 ,alternative minimum tax not ,to apply ,the tax imposed by section #ee shall not apply to any taxpayer to whom subsection 7a7 applies4 #adjj,v-#b4 ,economic ,freedom ,zone corporate flat tax 7a7 ,in general ,in the case of any corporation located in an ,economic ,freedom ,zone for the taxable year1 in lieu of the tax imposed by section #aa1 there shall be imposed a tax equal to #e percent of the taxable income of such corporation4 ,for purposes of this title1 the tax imposed by the preceding sentence shall be treated as a tax imposed by section #aa4 7b7 ,limitation ,subsection 7a7 shall not apply to any corporation for any taxable year if the adjusted gross income of such corporation for such taxable year exceeds #ejj1jjj1jjj4 7c7 ,located ,for purposes of this section1 a corporation shall be considered to be located in an ,economic ,freedom ,zone if-- 7#a7 not less than #aj percent of the total gross income of such corporation is derived from the active conduct of a trade or business within an ,economic ,freedom ,zone1 or 7#b7 at least #be percent of the employees of such corporation are residents of an ,economic ,freedom ,zone4 7d7 ,alternative minimum tax not ,to apply ,the tax imposed by section #ee shall not apply to any taxpayer to whom subsection 7a7 applies4 #adjj,v-#c4 ,zero percent capital gains rate 7a7 ,exclusion ,gross income shall not include qualified capital gain from the sale or exchange of-- 7#a7 any ,economic ,freedom ,zone asset held for more than #e years1 7#b7 any real property located in an ,economic ,freedom ,zone4 7b7 ,economic ,freedom ,zone asset ,for purposes of this section-- 7#a7 ,in general ,the term ,economic ,freedom ,zone asset means-- 7,a7 any ,economic ,freedom ,zone business stock1 7,b7 any ,economic ,freedom ,zone partnership interest1 and 7,c7 any ,economic ,freedom ,zone business property4 7#b7 ,economic ,freedom ,zone business stock 7,a7 ,in general ,the term ,economic ,freedom ,zone business stock means any stock in a domestic corporation if-- 7i7 such stock is acquired by the taxpayer1 before the date on which such corporation no longer qualifies as an ,economic ,freedom ,zone business due to the lapse of #a or more ,economic ,freedom ,zones1 at its original issue 7directly or through an underwriter7 solely in exchange for cash1 7ii7 as of the time such stock was issued1 such corporation was an ,economic ,freedom ,zone business 7or1 in the case of a new corporation1 such corporation was being organized for purposes of being an ,economic ,freedom ,zone business71 and 7iii7 during substantially all of the taxpayer's holding period for such stock1 such corporation qualified as an ,economic ,freedom ,zone business4 7,b7 ,redemptions ,a rule similar to the rule of section #abjb7;c77#c7 shall apply for purposes of this paragraph4 7#c7 ,economic ,freedom ,zone partnership interest ,the term ,economic ,freedom ,zone partnership interest means any capital or profits interest in a domestic partnership if-- 7,a7 such interest is acquired by the taxpayer1 before the date on which such partnership no longer qualifies as an ,economic ,freedom ,zone business due to the lapse of #a or more ,economic ,freedom ,zones1 from the partnership solely in exchange for cash1 7,b7 as of the time such interest was acquired1 such partnership was an ,economic ,freedom ,zone business 7or1 in the case of a new partnership1 such partnership was being organized for purposes of being an ,economic ,freedom ,zone business71 and 7,c7 during substantially all of the taxpayer's holding period for such interest1 such partnership qualified as an ,economic ,freedom ,zone business4 ,a rule similar to the rule of paragraph 7#b77;,b7 shall apply for purposes of this paragraph4 7#d7 ,economic ,freedom ,zone business property 7,a7 ,in general ,the term ,economic ,freedom ,zone business property means tangible property if-- 7i7 such property was acquired by the taxpayer by purchase 7as defined in section #agi7;d77#b77 after the date on such taxpayer qualifies as an ,economic ,freedom ,zone business and before the date on which such taxpayer no longer qualifies as an ,economic ,freedom ,zone business due to the lapse of #a or more ,economic ,freedom ,zones1 7ii7 the original use of such property in the ,economic ,freedom ,zone commences with the taxpayer1 and 7iii7 during substantially all of the taxpayer's holding period for such property1 substantially all of the use of such property was in an ,economic ,freedom ,zone business of the taxpayer4 7,b7 ,special rule for buildings which are substantially improved 7i7 ,in general ,the requirements of clauses 7i7 and 7ii7 of subparagraph 7,a7 shall be treated as met with respect to-- 7,i7 property which is substantially improved by the taxpayer before the date on which such taxpayer no longer qualifies as an ,economic ,freedom ,zone business due to the lapse of #a or more ,economic ,freedom ,zones1 and 7,,ii7 any land on which such property is located4 7ii7 ,substantial improvement ,for purposes of clause 7i71 property shall be treated as substantially improved by the taxpayer only if1 during any #bd-month period beginning after the date on which the taxpayer qualifies as an ,economic ,freedom ,zone business additions to basis with respect to such property in the hands of the taxpayer exceed the greater of-- 7,i7 an amount equal to the adjusted basis of such property at the beginning of such #bd-month period in the hands of the taxpayer1 or 7,,ii7 #e1jjj4 7#e7 ,treatment of ,economic ,freedom ,zone termination ,except as otherwise provided in this subsection1 the termination of the designation of the ,economic ,freedom ,zone shall be disregarded for purposes of determining whether any property is an ,economic ,freedom ,zone asset4 7#f7 ,treatment of subsequent purchasers1 etc ,the term ,economic ,freedom ,zone asset includes any property which would be an ,economic ,freedom ,zone asset but for paragraph 7#b77;,a77i71 7#c77;,a71 or 7#d77;,a77i7 or 7ii7 in the hands of the taxpayer if such property was an ,economic ,freedom ,zone asset in the hands of a prior holder4 7#g7 #e-,year safe harbor ,if any property ceases to be an ,economic ,freedom ,zone asset by reason of paragraph 7#b77;,a77iii71 7#c77;,c71 or 7#d77;,a77iii7 after the #e-year period beginning on the date the taxpayer acquired such property1 such property shall continue to be treated as meeting the requirements of such paragraph2 except that the amount of gain to which subsection 7a7 applies on any sale or exchange of such property shall not exceed the amount which would be qualified capital gain had such property been sold on the date of such cessation4 7c7 ,economic ,freedom ,zone business ,for purposes of this section1 the term ,economic ,freedom ,zone business means any enterprise zone business 7as defined in section #acig;,c71 determined-- 7#a7 after the application of section #adjj7;e71 7#b7 by substituting #hj percent for #ej percent in subsections 7b77#b7 and 7c77#a7 of section #acig;,c1 and 7#c7 by treating only areas that are ,economic ,freedom ,zones as an empowerment zone or enterprise community4 7d7 ,other definitions and special rules ,for purposes of this section-- 7#a7 ,qualified capital gain ,except as otherwise provided in this subsection1 the term qualified capital gain means any gain recognized on the sale or exchange of-- 7,a7 a capital asset1 or 7,b7 property used in the trade or business 7as defined in section #abca7;b774 7#b7 ,certain gain not qualified ,the term qualified capital gain shall not include any gain attributable to periods before the date on which the a business qualifies as an ,economic ,freedom ,zone business or after the date that is #d years after the date on which such business no longer qualifies as an ,economic ,freedom ,zone business due to the lapse of #a or more ,economic ,freedom ,zones4 7#c7 ,certain gain not qualified ,the term qualified capital gain shall not include any gain which would be treated as ordinary income under section #abde or under section #abej if section #abej applied to all depreciation rather than the additional depreciation4 7#d7 ,intangibles not integral part of ,economic ,freedom ,zone business ,in the case of gain described in subsection 7a77#a71 the term qualified capital gain shall not include any gain which is attributable to an intangible asset which is not an integral part of an ,economic ,freedom ,zone business4 7#e7 ,related party transactions ,the term qualified capital gain shall not include any gain attributable1 directly or indirectly1 in whole or in part1 to a transaction with a related person4 ,for purposes of this paragraph1 persons are related to each other if such persons are described in section #bfg7;b7 or #gjg7;b77#a74 7e7 ,sales and exchanges of interests in partnerships and s corporations which are ,economic ,freedom ,zone businesses ,in the case of the sale or exchange of an interest in a partnership1 or of stock in an ,s corporation1 which was an ,economic ,freedom ,zone business during substantially all of the period the taxpayer held such interest or stock1 the amount of qualified capital gain shall be determined without regard to-- 7#a7 any gain which is attributable to an intangible asset which is not an integral part of an ,economic ,freedom ,zone business1 and 7#b7 any gain attributable to periods before the date on which the a business qualifies as an ,economic ,freedom ,zone business or after the date that is #d years after the date on which such business no longer qualifies as an ,economic ,freedom ,zone business due to the lapse of #a or more ,economic ,freedom ,zones4 #adjj,v-#d4 ,reduced payroll taxes 7a7 ,in general 7#a7 ,employees ,the rate of tax under #caja7;a7 7including for purposes of determining the applicable percentage under sections #cbja7;a7 and #cbaa7;a77#a77 shall be #d4b percent for any remuneration received during any period in which the individual's principal residence 7within the meaning of section #aba7 is located in an ,economic ,freedom ,zone4 7#b7 ,employers 7,a7 ,in general ,the rate of tax under section #caaa7;a7 7including for purposes of determining the applicable percentage under sections #cbba7;a77 shall be #d4b percent with respect to remuneration paid for qualified services during any period in which the employer is located in an ,economic ,freedom ,zone4 7,b7 ,qualified services ,for purposes of this section1 the term qualified services means services performed-- 7i7 in a trade or business of a qualified employer1 or 7ii7 in the case of a qualified employer exempt from tax under section #eja7;a7 of the ,internal ,revenue ,code of #aihf1 in furtherance of the activities related to the purpose or function constituting the basis of the employer's exemption under section #eja of such ,code4 7,c7 ,location of employer ,for purposes of this paragraph1 the location of an employer shall be determined in the same manner as under section #adjj,v-#b7;c74 7#c7 ,self-employed individuals ,the rate of tax under section #adja7;a7 shall be #h4dj percent any taxable year in which such individual was located 7determined under section #adjj,v-#b7;c7 as if such individual were a corporation7 in an ,economic ,freedom ,zone4 7b7 ,transfers of ,funds - 7#a7 ,transfers to federal old-age and survivors insurance trust fund ,there are hereby appropriated to the ,federal ,old-,age and ,survivors ,trust ,fund and the ,federal ,disability ,insurance ,trust ,fund established under section #bja of the ,social ,security ,act 7#db ,u4,s4,c4 #dja7 amounts equal to the reduction in revenues to the ,treasury by reason of the application of subsection 7a74 ,amounts appropriated by the preceding sentence shall be transferred from the general fund at such times and in such manner as to replicate to the extent possible the transfers which would have occurred to such ,trust ,fund had such amendments not been enacted4 7#b7 ,transfers to social security equivalent benefit account ,there are hereby appropriated to the ,social ,security ,equivalent ,benefit ,account established under section #ae;,a7a7 of the ,railroad ,retirement ,act of #aigd 7#de ,u4,s4,c4 #bcan-#a7;a77 amounts equal to the reduction in revenues to the ,treasury by reason of the application of paragraphs 7#a7 and 7#b7 of subsection 7a74 ,amounts appropriated by the preceding sentence shall be transferred from the general fund at such times and in such manner as to replicate to the extent possible the transfers which would have occurred to such ,account had such amendments not been enacted4 7#c7 ,coordination with other federal laws ,for purposes of applying any provision of ,federal law other than the provisions of the ,internal ,revenue ,code of #aihf1 the rate of tax in effect under section #caja7;a7 shall be determined without regard to the reduction in such rate under this section4 #adjj,v-#e4 ,increase in expensing under section #agi 7a7 ,in general ,in the case of an ,economic ,freedom ,zone business1 for purposes of section #agi-- 7#a7 the limitation under section #agi7;b77#a7 shall be increased by the lesser of-- 7,a7 #bjj percent of the amount in effect under such section 7determined without regard to this section71 or 7,b7 the cost of section #agi property which is ,economic ,freedom ,zone business property placed in service during the taxable year1 and 7#b7 the amount taken into account under section #agi7;b77#b7 with respect to any section #agi property which is ,economic ,freedom ,zone business property shall be #ej percent of the cost thereof4 7b7 ,economic ,freedom zone business property ,for purposes of this section1 the term ,economic ,freedom ,zone business property has the meaning given such term under section #adjj,v-#c7;b77#d71 except that for purposes of subparagraph 7,a77ii7 thereof1 if property is sold and leased back by the taxpayer within #c months after the date such property was originally placed in service1 such property shall be treated as originally placed in service not earlier than the date on which such property is used under the leaseback 7c7 ,recapture ,rules similar to the rules under section #agi7;d77#aj7 shall apply with respect to any qualified zone property which ceases to be used in an empowerment zone by an enterprise zone business4 ,,ii ,definitions ,sec4 #adjj,v-#f4 ,economic ,freedom ,zone4 #adjj,v-#f4 ,economic ,freedom ,zone ,for purposes of this subchapter1 the term ,economic ,freedom ,zone means any area which is an ,economic ,freedom ,zone under title ,,ii of the ,economic ,freedom ,zone ,act4 4 7b7 ,clerical amendment ,the table of subchapters for chapter #a of such ,code is amended by inserting after the item relating to subchapter ,y the following new item3 ,subchapter ,z--,economic ,freedom ,zones 4 7c7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after the date of the enactment of this ,act4 ,,iv ,federal regulatory reductions #dja4 ,suspension of certain laws and regulations 7a7 ,environmental ,protection ,agency ,for each area designated as an ,economic ,freedom ,zone under this ,act1 the ,administrator of the ,environmental ,protection ,agency shall not enforce1 with respect to that ,economic ,freedom ,zone1 and the ,economic ,freedom ,zone shall be exempt from compliance with-- 7#a7 part ,d of the ,clean ,air ,act 7#db ,u4,s4,c4 #geja et seq47 7including any regulations promulgated under that part72 7#b7 section #djb of the ,federal ,water ,pollution ,control ,act 7#cc ,u4,s4,c4 #acdb72 7#c7 sections #aci1 #afh1 #afi1 #cbf1 and #cbg of title #bc1 ,united ,states ,code2 7#d7 section #cjd of title #di1 ,united ,states ,code2 and 7#e7 sections #acae through #acbj of ,public ,law #aab-ada 7#abf ,stat4 #edi74 7b7 ,department of the ,interior 7#a7 ,wild and scenic rivers ,for each area designated as an ,economic ,freedom ,zone under this ,act1 the ,secretary of the ,interior shall not enforce1 with respect to that ,economic ,freedom ,zone1 and the ,economic ,freedom ,zone shall be exempt from compliance with the ,wild and ,scenic ,rivers ,act 7#af ,u4,s4,c4 #abga et seq474 7#b7 ,national heritage areas ,for the period beginning on the date of enactment of this ,act and ending on the date on which an area is removed from designation as an ,economic ,freedom ,zone1 any ,national ,heritage ,area located within that ,economic ,freedom ,zone shall not be considered to be a ,national ,heritage ,area and any applicable ,federal law 7including regulations7 relating to that ,national ,heritage ,area shall not apply4 ,v ,educational enhancements #eja4 ,educational opportunity tax credit 7a7 ,in general ,subpart ,a of part ,,iv of subchapter ,a of chapter #a of the ,internal ,revenue ,code of #aihf is amended by inserting after section #be;,d the following new section3 #be;,e4 ,credit for qualified elementary and secondary education expenses 7a7 ,in general ,in the case of an individual1 there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the qualified elementary and secondary education expenses of an eligible student4 7b7 ,limitation ,the amount taken into account under subsection 7a7 with respect to any student for any taxable year shall not exceed #e1jjj4 7c7 ,definitions ,for purposes of this section-- 7#a7 ,qualified elementary and secondary education expenses ,the term qualified elementary and secondary education expenses has the meaning given such term under section #ecj7;b77#c74 7#b7 ,eligible student ,the term eligible student means any student who-- 7,a7 is enrolled in1 or attends1 any public1 private1 or religious school 7as defined in section #ecj7;b77#c77;,b771 and 7,b7 whose principal residence 7within the meaning of section #abc7 is located in an ,economic ,freedom ,zone4 7#c7 ,economic ,freedom ,zone ,the term ,economic ,freedom ,zone means any area which is an ,economic ,freedom ,zone under title ,,ii of the ,economic ,freedom ,zone ,act4 4 7b7 ,clerical amendment ,the table of sections for subpart ,a of part ,,iv of subchapter ,a of chapter #a of such ,code is amended by inserting after the item relating to section #be;,d the following new item3 ,sec4 #be;,e4 ,credit for qualified elementary and secondary education expenses4 4 7c7 ,effective date ,the amendments made by this section shall apply to expenditures made in taxable years beginning after the date of the enactment of this ,act4 #ejb4 ,school choice through portability 7a7 ,in general ,subpart #b of part ,a of title ,i of the ,elementary and ,secondary ,education ,act of #aife 7#bj ,u4,s4,c4 #fcca et seq47 is amended by adding at the end the following3 #aabh4 ,school choice through portability 7a7 ,authorization 7#a7 ,in general ,notwithstanding sections #aabd1 #aabd;,a1 and #aabe and any other provision of law1 and to the extent permitted under ,state law1 a ,state educational agency may allocate grant funds under this subpart among the local educational agencies in the ,state based on the formula described in paragraph 7#b74 7#b7 ,formula ,a ,state educational agency may allocate grant funds under this subpart for a fiscal year among the local educational agencies in the ,state in proportion to the number of eligible children enrolled in public schools served by the local educational agency and enrolled in ,state-accredited private schools within the local educational agency's geographic jurisdiction1 for the most recent fiscal year for which satisfactory data are available1 compared to the number of such children in all such local educational agencies for that fiscal year4 7b7 ,eligible child 7#a7 ,in general ,in this section1 the term eligible child means a child-- 7,a7 from a family with an income below the poverty level1 on the basis of the most recent satisfactory data published by the ,department of ,commerce2 and 7,b7 who resides in an ,economic ,freedom ,zone as designated under title ,,ii of the ,economic ,freedom ,zones ,act of #bjac4 7#b7 ,criteria of poverty ,in determining the families with incomes below the poverty level for the purposes of paragraph 7#b71 a ,state educational agency shall use the criteria of poverty used by the ,census ,bureau in compiling the most recent decennial census4 7#c7 ,identification of eligible children ,on an annual basis1 on a date to be determined by the ,state educational agency1 each local educational agency that receives grant funding in accordance with subsection 7a7 shall inform the ,state educational agency of the number of eligible children enrolled in public schools served by the local educational agency and enrolled in ,state-accredited private schools within the local educational agency's geographic jurisdiction4 7c7 ,distribution to schools ,each local educational agency that receives grant funding under subsection 7a7 shall distribute such funds to the public schools served by the local educational agency and ,state-accredited private schools with the local educational agency's geographic jurisdiction-- 7#a7 based on the number of eligible children enrolled in such schools2 and 7#b7 in the manner that would1 in the absence of such ,federal funds1 supplement the funds made available from the non-,federal resources for the education of pupils participating in programs under this part1 and not to supplant such funds4 4 7b7 ,table of contents ,the table of contents in section #b of the ,elementary and ,secondary ,education ,act of #aife is amended by inserting after the item relating to section #aabg the following3 ,sec4 #aabh4 ,school choice through portability4 4 #ejc4 ,special ,economic ,freedom ,zone visas 7a7 ,definitions ,in this section3 7#a7 ,abandoned2 dilapidated ,the terms abandoned and dilapidated shall be defined by the ,states in accordance with the provisions of this ,act4 7#b7 ,full-time employment ,the term full-time employment means employment in a position that requires at least #ce hours of service per week at any time1 regardless of who fills the position4 7b7 ,purpose ,the purpose of this section is to facilitate increased investment and enhanced human capital in ,economic ,freedom ,zones through the issuance of special regional visas4 7c7 ,authorization ,the ,secretary of ,homeland ,security1 in collaboration with the ,secretary of ,labor1 may issue ,special ,economic ,freedom ,zone ,visas1 in a number determined by the ,governor of each ,state1 in consultation with local officials in regions designated by the ,secretary of the ,treasury as ,economic ,freedom ,zones1 to authorize qualified aliens to enter the ,united ,states for the purpose of-- 7#a7 engaging in a new commercial enterprise 7including a limited partnership7-- 7,a7 in which such alien has invested1 or is actively in the process of investing1 capital in an amount not less than the amount specified in subsection 7d72 and 7,b7 which will benefit the region designated as an ,economic ,freedom ,zone by creating full-time employment of not fewer than #e ,united ,states citizens1 aliens lawfully admitted for permanent residence1 or other immigrants lawfully authorized to be employed in the ,united ,states 7excluding the alien and the alien's immediate family72 7#b7 engaging in the purchase and renovation of dilapidated or abandoned properties or residences 7as determined by ,state and local officials7 in which such alien has invested1 or is actively in the process of investing1 in the ownership of such properties or residences2 or 7#c7 residing and working in an ,economic ,freedom ,zone4 7d7 ,effective period ,a visa issued to an alien under this section shall expire on the later of-- 7#a7 the date on which the relevant ,economic ,freedom ,zone loses such designation2 or 7#b7 the date that is #e years after the date on which such visa was issued to such alien4 7e7 ,capital and educational requirements 7#a7 ,new commercial enterprises ,except as otherwise provided under this section1 the minimum amount of capital required to comply with subsection 7c77#a77;,a7 shall be #ej1jjj4 7#b7 ,renovation of dilapidated or abandoned properties ,an alien is not in compliance with subsection 7c77#b7 unless the alien-- 7,a7 purchases a dilapidated or abandoned property in an ,economic ,freedom ,zone2 and 7,b7 not later than #ah months after such purchase1 invests not less than #be1jjj to rebuild1 rehabilitate1 or repurpose the property4 7#c7 ,verification ,a visa issued under subsection 7c7 shall not remain in effect for more than #b years unless the ,secretary of ,homeland ,security has verified that the alien has complied with the requirements described in subsection 7c74 7#d7 ,education and skill requirements ,an alien is not in compliance with subsection 7c77#c7 unless the alien possesses-- 7,a7 a bachelor's degree 7or its equivalent7 or an advanced degree2 7,b7 a degree or specialty certification that-- 7i7 is required for the job the alien will be performing2 and 7ii7 is specific to an industry or job that is so complex or unique that it can be performed only by an individual with the specialty certification2 7,c7 7i7 the knowledge required to perform the duties of the job the alien will be performing2 and 7ii7 the nature of the specific duties is so specialized and complex that such knowledge is usually associated with attainment of a bachelor's or higher degree2 or 7,d7 a skill or talent that would benefit the ,economic ,freedom ,zone4 7f7 ,additional provisions 7#a7 ,geographic limitation ,an alien who has been issued a visa under this section is not permitted to live or work outside of an ,economic ,freedom ,zone4 7#b7 ,rescission ,a visa issued under this section shall be rescinded if the visa holder resides or works outside of an ,economic ,freedom ,zone or otherwise fails to comply with the provisions of this section4 7#c7 ,other visas ,an alien who has been issued a visa under this section may apply for any other visa for which the alien is eligible in order to pursue employment outside of an ,economic ,freedom ,zone4 7g7 ,adjustment of status ,the ,secretary of ,homeland ,security may adjust the status of an alien who has been issued a visa under this section to that of an alien lawfully admitted for permanent residence1 without numerical limitation1 if the alien-- 7#a7 has fully complied with the requirements set forth in this section for at least #e years2 7#b7 submits a completed application to the ,secretary2 and 7#c7 is not inadmissible to the ,united ,states based on any of the factors set forth in section #bab7;a7 of the ,immigration and ,nationality ,act 7#h ,u4,s4,c4 #aahb7;a774 #ejd4 ,economic ,freedom ,zone educational savings accounts 7a7 ,in general ,part ,,viii of subchapter ,f of chapter #a of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new section3 #ecj;,a4 ,economic ,freedom ,zone educational savings accounts 7a7 ,in general ,except as provided in this section1 an ,economic ,freedom ,zone educational savings account shall be treated for purposes of this title in the same manner as a ,coverdell education savings account4 7b7 ,definitions ,for purposes of this section-- 7#a7 ,economic ,freedom ,zone educational savings account ,the term ,economic ,freedom ,zone educational savings account means a trust created or organized in the ,united ,states exclusively for the purpose of paying the qualified education expenses 7as defined in section #ecj7;b77#b77 of an individual who is the designated beneficiary of the trust 7and designated as an ,economic ,freedom ,zone educational saving account at the time created or organized7 and who is a qualified individual at the time such trust is established1 but only if the written governing instrument creating the trust meets the following requirements3 7,a7 ,no contribution will be accepted-- 7i7 unless it is in cash1 7ii7 after the date on which such beneficiary attains age #be1 or 7iii7 except in the case of rollover contributions1 if such contribution would result in aggregate contributions for the taxable year exceeding #aj1jjj4 7,b7 ,no contribution shall be accepted at any time in which the designated beneficiary is not a qualified individual4 7,c7 ,the trust meets the requirements of subparagraphs 7,b71 7,c71 7,d71 and 7,e7 of section #ecj7;b77#a74 ,the age limitations in subparagraphs 7,a77ii71 subparagraph 7,e7 of section #ecj7;b77#a71 and paragraphs 7#e7 and 7#f7 of section #ecj7;d71 shall not apply to any designated beneficiary with special needs 7as determined under regulations prescribed by the ,secretary74 7#b7 ,qualified individual ,the term qualified individual means any individual whose principal residence 7within the meaning of section #aba7 is located in an ,economic ,freedom ,zone 7as defined in section #adjj,v-#f74 7c7 ,deduction for contributions 7#a7 ,in general ,there shall be allowed as a deduction under part ,,vii of subchapter ,b of this chapter an amount equal to the aggregate amount of contributions made by the taxpayer to any ,economic ,freedom ,zone educational savings account during the taxable year4 7#b7 ,limitation ,the amount of the deduction allowed under paragraph 7#a7 for any taxpayer for any taxable year shall not exceed #dj1jjj4 7#c7 ,no deduction for rollover contributions ,no deduction shall be allowed under paragraph 7#a7 for any rollover contribution described in section #ecj7;d77#e74 7d7 ,other rules 7#a7 ,no income limit ,in the case of an ,economic ,freedom ,zone educational savings account1 subsection 7c7 of section #ecj shall not apply4 7#b7 ,change in beneficiaries ,notwithstanding paragraph 7#f7 of section #ecj7;b71 a change in the beneficiary of an ,economic ,freedom ,zone education savings account shall be treated as a distribution unless the new beneficiary is a qualified individual4 4 7b7 ,clerical amendment ,the table of sections for part ,,viii of subchapter ,f of chapter #a of such ,code is amended by adding at the end the following new item3 ,sec4 #ecj;,a4 ,economic ,freedom ,zone educational savings accounts4 4 ,,vi ,community assistance and rebuilding #fja4 ,nonapplication of ,davis-,bacon ,the wage rate requirements of subchapter ,,iv of chapter #ca of title #dj1 ,united ,states ,code 7commonly referred to as the ,davis-,bacon ,act71 shall not apply with respect to any area designated as an ,economic ,freedom ,zone under this ,act4 #fjb4 ,economic ,freedom ,zone charitable tax credit 7a7 ,in general ,section #agj is amended by redesignating subsection 7p7 as subsection 7q7 and by inserting after subsection 7o7 the following new subsection3 7o7 ,election ,to treat contributions for ,economic ,freedom ,zone charities as a credit 7#a7 ,in general ,in the case of an individual1 at the election of the taxpayer1 so much of the deduction allowed under subsection 7a7 7determined without regard to this subsection7 which is attributable to ,economic ,freedom ,zone charitable contributions-- 7,a7 shall be allowed as a credit against the tax imposed by this chapter for the taxable year1 and 7,b7 shall not be allowed as a deduction for such taxable year under subsection 7a74 ,any amount allowable as a credit under this subsection shall be treated as a credit allowed under subpart ,a of part ,,iv of subchapter ,a for purposes of this title4 7#b7 ,amount attributable to ,economic ,freedom ,zone charitable contributions ,for purposes of paragraph 7#a7-- 7,a7 ,in general ,in any case in which the total charitable contributions of a taxpayer for a taxable year exceed the contribution base1 the amount of ,economic ,freedom ,zone charitable contributions taken into account under paragraph 7#a7 shall be the amount which bears the same ratio to the total charitable contributions made by the taxpayer during such taxable year as the amount of the deduction allowed under subsection 7a7 7determined without regard to this subsection and after application of subsection 7b77 bears to the total charitable contributions made by the taxpayer for such taxable year4 7,b7 ,carryovers ,in the case of any contribution carried from a preceding taxable year under subsection 7d71 such amount shall be treated as attributable to an ,economic ,freedom ,zone charitable contribution in the amount that bears the same ratio to the total amount carried from preceding taxable years under subsection 7d7 as the amount of ,economic ,freedom ,zone charitable contributions not allowed as a deduction under subsection 7a7 7other than by reason of this subsection7 for the preceding #e taxable year bears to total amount carried from preceding taxable years under subsection 7d74 7#c7 ,economic ,freedom ,zone charitable contribution ,the term ,economic ,freedom ,zone charitable contribution means any contribution to a corporation1 trust1 or community chest fund1 or foundation described in subsection 7c77#b71 but only if-- 7,a7 such entity is created or organized exclusively for-- 7i7 religious purposes1 7ii7 educational purposes1 or 7iii7 any of the following charitable purposes3 providing educational scholarships1 providing shelters for homeless individuals1 or setting up or maintaining food banks1 7,b7 the primary mission of such entity is serving individuals in an ,economic ,freedom ,zone1 7,c7 the entity maintains accountability to residents of such ,economic ,freedom ,zone through their representation on any governing board of the entity or any advisory board to the entity1 and 7,d7 the entity is certified by the ,secretary for purposes of this subsection4 ,such term shall not include any contribution made to an entity described in the preceding sentence after the date in which the designation of the ,economic ,freedom ,zone serviced by such entity lapses4 7#d7 ,economic ,freedom ,zone ,the term ,economic ,freedom ,zone means any area which is an ,economic ,freedom ,zone under title ,,ii of the ,economic ,freedom ,zone ,act4 4 7b7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after the date of the enactment of this ,act4 ,,vii ,state and community policy recommendations #gja4 ,sense of the ,senate concerning policy recommendations ,it is the sense of the ,senate that ,state and local governments should review and adopt the following policy recommendations3 7#a7 ,pension reform ,state and local governments should-- 7,a7 implement reforms to address any fiscal shortfall in public pension funding1 including utilizing accrual accounting methods1 such as those reforms undertaken by the private sector pension funds2 and 7,b7 restructure and renegotiate any public pension fund that is deemed to be insolvent or underfunded1 including adopting defined contribution retirement systems4 7#b7 ,taxes ,state and local governments should reduce jurisdictional tax rates below the national average in order to help facilitate capital investment and economic growth1 particularly in combination with the provisions of this ,act4 7#c7 ,education ,state and local governments should adopt school choice options to provide children and parents more educational choices1 particularly in impoverished areas4 7#d7 ,communities ,state and local governments should adopt right-to-work laws to allow more competitiveness and more flexibility for businesses to expand4 7#e7 ,regulations ,state and local governments should streamline the regulatory burden on families and businesses1 including streamlining the opportunities for occupational licensing4 7#f7 ,abandoned structures ,state and local governments should consider the following options to reduce or fix areas with abandoned properties or residences3 7,a7 ,in the case of foreclosures1 tax notifications should be sent to both the lien holder 7if different than the homeowner7 and the homeowner4 7,b7 ,where ,state constitutions permit1 property tax abatement or credits should be provided for individuals who purchase or invest in abandoned or dilapidated properties4 7,c7 ,non-profit or charity demolition entities should be permitted or encouraged to help remove abandoned properties4 7,d7 ,government or municipality fees and penalties should be limited1 and be proportional to the outstanding tax amount and the ability to pay4 7,e7 ,the sale of tax liens to third parties should be reviewed1 and where available1 should prohibit the selling of tax liens below a certain threshold 7for example the prohibition of the sale of tax liens to third parties under #a1jjj74