In May of 2000, Councilmember Catania announced the formation of the New E-Conomy Advisory Group, composed of District-based high tech CEOs, in order to advise the District Council on how to retain and attract high tech business to the District. The identification of barriers for tech companies in the District resulted in “The New E-Conomy Transformation Act of 2000”, legislation aimed at removing barriers and paving the way for the growth of the District’s high tech community. The legislation includes eleven innovative incentives that encourage high technology companies to locate and stay in the District. The act targeted three main areas that have prevented high tech companies from operating in the District: Workforce Development, Affordable Facilities, and Targeted Financial Incentives.
Below is a summary of the incentives included in the bill:
WORKFORCE DEVELOPMENT
Employment Opportunity Relocation Cost Credits: Encourages high technology companies to locate in the District by providing to each company a $7,500 per-employee tax credit for each employee they relocate who lives in the District, and a $5,000 per-employee tax credit if they relocate outside the District. To qualify the company must move at least 2 full-time jobs into the District for a total of up to $1,000,000 per company for District residents and up to $250,000 per company for non-District residents. An amendment was accepted by the Council clarifying that any financial assistance associated with lease payments for this employment relocation credit would be limited to the first 12 months of a lease.
Employment Wage Credits: Offers a tax credit equal to 10 percent of employees' salaries at a high technology company for the first 24 months of employment. The credit would be capped at $5,000 per employee per year.

Employment and Training Wage Credits for Disadvantaged Employees: In order to encourage companies to train and employ current Temporary Assistance to Needy Families [TANF] recipients, those recently receiving TANF benefits, those recently released from incarceration and others, the bill provides a retraining tax credit to cover the costs of retraining at qualified District-based educational institutions. The tax credit is limited to $20,000 per each qualified employee. In addition, the bill includes an expanded wage credit for each disadvantaged employee, capped at $15,000 per employee per year.
AFFORDABLE FACILITIES
Security Deposit Assistance: Requires the Mayor to provide funding assistance to cover the cost of security deposits for leases for Qualified High Technology Companies.
Master Lease Program: Authorizes the Mayor to enter into one or more master leases in facilities with the District for the purpose of subleasing the premises to qualified companies.
Access to DC Public School and other District Government Facilities: Directs the Mayor and the Superintendent of Schools to carry out a study to be completed in one year on underutilized District-owned space within their inventory. Authorizes the Mayor to lease available spaces at reasonable, below-market rates to qualified companies.
In exchange, for those companies that participate in the master lease program or utilize D.C. facilities, as part of its lease condition, they are required to assist schools through internships and training programs for students and teachers, or other services.
Real Property Tax Abatement on Improved Properties: In order to encourage the upgrade of buildings and real property, the bill offers a five-year property tax abatement for improvements.
TARGETED FINANCIAL INCENTIVES
Personal Property Tax Exemptions: Exempts from Personal Property tax personal property held by a high technology company for the first ten years.
Sales/Use Tax Exemptions: Intangible properties sold by Qualified High Technology Companies would be exempt from sales and use taxes. Also, companies would be exempt from paying sales tax on the purchase of certain essential equipment and technology.
Corporate Income Tax Reductions: Reduces the corporate franchise tax for high technology companies to 6 percent, placing it in parity with Virginia. Additionally, allows the Mayor and the Council to designate High Technology Development Regions in which qualified high technology companies would be subject to a zero percent corporate franchise tax for a period of five years. The bill identifies certain
areas, such as parts of downtown, the Georgia Avenue corridor, the New York Avenue corridor, the area around the Anacostia Metro Station, and parts of the St. Elizabeth's campus, among others, that are automatically designated as a High Technology Development Region. Deductibility of Tangible Personal Property: Increases the value of tangible personal property companies can "expense" in the first year.
Unincorporated Franchise Tax: Eliminates the Unincorporated Franchise Tax on qualified high technology companies.
Unincorporated Business Franchise Tax Exemption: Creates an exemption from tax on capital gains from the sale or exchange of qualified assets for Qualified High Technology Companies. Qualified assets are defined as stock, partnership interest, and business property. Stock Rollovers: Provides for the rollover of a gain from one Qualified High Technology Company stock to another.
The District Council passed “The New E-Conomy Transformation Act of 2000” on December 5, 2000. The regulations resulting from the act were made available for public comment in November of 2001, and were published in the D.C. Register on March 8, 2002.