BY NANCY cotten HIRST
DBJ Contributing Editor

The House of Representatives passed the bill that has become known as the Clinton-Hastert Agreement by a large margin late in July. A similar Senate bill is expected to pass as well, so it is logical to assume that some new incentives will be available for economic developers in the Delta in the near future.
The question is whether there's any real meat in this measure or whether it amounts to a lot of window dressing to help garner votes from poorer districts in November's elections. The answer seems to be a mix of "yes" to both questions.
It is difficult, in pre-reading any legislation, to foresee actual impact. As Bill Bynum, Executive Director of the Enterprise Corporation of the Delta, says, "The devil's in the details." Bynum is hopeful that the tax incentives for private investment will help his organization, which raises private capital to use as seed money or investment capital in certain qualified business start-ups and expansions.
The catch is that the incentives for private investment capital are limited to organizations like Bynum's. Known as the "New Markets Tax Credit," this provision would allow a credit for private investors of up to 30%. The credit, however, is only applicable to "eligible funds" - not to direct capital investment. Another catch is that the highly touted credit really isn't 30% at all, but 5% for three years followed by 6% spread over an additional four years - representing a "value" of 30% of total investment.
Very few private investors are going to pony up substantial funds for a seven year period with no foreseeable return on investment. They wouldn't even know to whom the money would be lent, much less the type of business into which it would be invested. These decisions would be made by the "eligible funds" personnel, whose intentions, while good, are not necessarily the same as those of private investors. Bynum says that he believes the primary parties who will take advantage of these tax breaks will be banks and foundations, both of whom have the kinds of money available for this type of social investment.
Other tax advantages of the bill may prove to be of genuine merit, but the regulations accompanying them are not set, so it's early to tell. Small businesses could deduct an increased amount of equipment costs, up to $35,000. Businesses would be eligible for 15% tax credits on wages up to $10,000. There is a rehab deduction of up to 20% for existing buildings, and some environmental clean-up costs are deductible for businesses locating in "brown fields" areas such as abandoned industrial parks.
Most of these breaks, however, are just transfers to this program of breaks already in effect through other programs. Some are a little more liberal, and it may help to have them packaged together for the sake of efficient utilization, but there is very little new substance here.
There is also an extension of the Empowerment Zone designation until 2009 and nine new zones will be created, although whether any of these would benefit the Delta is in question. There are also a couple of new wrinkles that will help the low income housing situation and a clause allowing religious sponsorship of alcohol and substance-abuse programs. The catch here, of course, is that the groups have to follow federal guidelines on separation of church and state, so they probably won't apply for fear of litigation.
Local economic development leaders are hesitant to comment one way or the other on the possible impact of the bill, but they are hopeful that some of it, at least, will help. Ron Hudson, of the Clarksdale Chamber of Commerce, says, "The information is hard to evaluate at this point as to what the real benefits would be."
Griffin Norquist of Yazoo City, a primary volunteer leader, says, "The Delta Council and other economic development organizations in the Delta are reviewing details and will do our best to analyze this bill. Our first observation was surprise, in that major newspapers reported major tax breaks for the Delta. There's nothing that specifically mentions the Delta in our reading of the proposed legislation, but we hope to be able to provide meaningful feedback as our delegation approaches this issue."
Bill Bynum says, "The money and the program may be marginal in benefits, but the message is good. It's definitely no silver bullet, but it is an important shift in approach. It's saying that we care about helping our poorer communities develop their assets and create jobs."
Hopeful caution seems to be the mood among people accustomed to seeing highly touted government programs come to little or nothing in the end. Even so, it is an election year, so they'll take anything they can get that may help even slightly.