Rep. Baker introduces GO Zone extension bill to benefit South Louisiana, Greater Baton Rouge area parishes
WASHINGTON - U.S. Rep. Richard Baker, R-Baton Rouge, introduced legislation last night to extend tax benefits created through the Gulf Opportunity (GO) Zone Act of 2005.
The Baker GO Zone bill will extend key tax benefits included within the original GO Zone Act of 2005. Specifically, Rep. Baker's legislation will expand the renewal community designation in Orleans Parish and extend the following tax benefits in GO Zone Parishes in Louisiana:
· Special Depreciation Allowance; · Rehabilitation Credit; · Work Opportunity Tax Credit; · New Markets Tax Credit; and · Tax Exempt Bond Financing.
"The GO Zone Act has been vital in spurring the economy of South Louisiana. Most importantly, GO Zone tax benefits have provided breathing room to our small businesses and the opportunity for growth. This opportunity has been the lynchpin of our economic rebuilding effort and has led to the employment of Louisiana citizens," stated Rep. Baker.
"Giving businesses the tools to create and expand private investment in Louisiana is one of the best ways to guarantee that Louisiana continues on the path to recovery. The bonus depreciation and special bond financing have proven to be extremely valuable tools," Rep. Baker continued. "The extensions in my bill will assist businesses as they rebuild and invest in Louisiana and will ensure that the economy and job market in South Louisiana continue to grow."
The special depreciation provision of the GO Zone Act provides 50 percent depreciation to help businesses rebuild in the Zone. Businesses can claim an additional first-year depreciation deduction equal to 50 percent of new capital investments. The low interest bond financing provision is particularly useful for companies needing financing of buildings, machinery and equipment. By creating additional tax exempt bond authority to help construct new and rebuild devastated infrastructure in the GO Zone, the legislation will keep these incentives in place. Without the extensions, many of the GO Zone provisions will expire in 2008 and 2009.
"Hurricane Katrina not only devastated coastal regions of our state but it also dramatically increased construction costs throughout South Louisiana, which has led to postponements and/or cancellations of many significant projects," stated Stephen Moret, President and CEO of the Baton Rouge Area Chamber. "Extending these GO Zone provisions would go a long way toward promoting economic recovery across our state. We strongly support Congressman Baker's efforts in this regard and appreciate his leadership on this critical issue."
The Gulf Opportunity Zone Act of 2005 was passed by Congress and signed into law by President Bush in December of 2005. The Act directs federal tax incentives to areas affected by hurricanes Katrina, Rita and Wilma that were designated as warranting public and individual assistance. Thirty-one parishes in Louisiana were included in the Katrina and/or Rita Zones for individual and public assistance. The New Markets Tax Credits provided through the GO Zone Act and extended through Baker's bill give authority for investment in Community Development Entities to further recovery and redevelopment in the Zone. Baker's bill allocates additional New Markets Tax Credits funding of $200 million for 2008 and $200 million for 2009.
"Greater New Orleans, Inc. applauds the legislative efforts of Congressman Richard Baker to extend the time provisions of the GO Zone tax incentives and his efforts to continue funding for the New Market Tax Credits and Tax Exempt Bonds in the recovery areas. Baker's proposal will provide the tools necessary to continue business recovery and investment in the hurricane impacted communities still struggling to build back our economies two years after the hurricanes hit," said Dino Paternostro, Sr. Vice President of GNO, Inc.
The Baker bill extends the GO Zone provisions for all of the following original GO Zone parishes: Acadia, Ascension, Assumption, Calcasieu, Cameron, East Baton Rouge, East Feliciana, Iberia, Iberville, Jefferson, Jefferson Davis, Lafayette, Lafourche, Livingston, Orleans, Plaquemines, Pointe Coupee, St. Bernard, St. Charles, St. Helena, St. James, St John the Baptist, St. Martin, St. Mary, St. Tammany, Tangipahoa, Terrebonne, Vermilion, Washington, West Baton Rouge and West Feliciana.