Short title

This Act may be cited as the

Katrina Aftermath Relief Effort Tax Credit Act

Findings and purposes

(a)

Findings

The Congress finds the following: (1)Hurricane Katrina devastated the Gulf Coast States of Louisiana, Mississippi, and Alabama on August 29, 2005. (2)An estimated 1,000,000 Americans from the Gulf Coast were forced to flee their homes as a result of Hurricane Katrina. (3)Many of the displaced victims of Hurricane Katrina are currently residing in shelters across the country, including in Texas, Louisiana, Mississippi, Alabama, Wisconsin, Arkansas, Florida, Tennessee, Georgia, and other States. (4)Many of these shelters, including Kelly USA in San Antonio and the Astrodome in Houston, are only intended to serve as temporary homes for the victims of Hurricane Katrina. (5)In addition to the temporary shelters, Americans have opened their homes to welcome the victims of Hurricane Katrina. Many Americans who have opened their homes also pay expenses such as food, clothing, school supplies, transportation, or personal items for the benefit of those victims of Hurricane Katrina residing with them. (6)Due to the devastation of Hurricane Katrina, many Americans from the Gulf Coast cannot return to their homes for many months. As a result, it is necessary to find intermediate-term and long-term housing for the victims of Hurricane Katrina. (7)Long-term housing can be difficult to locate in certain areas. In addition, locating long-term housing can be a lengthy process. (8)Intermediate-term housing is appropriate for the victims of Hurricane Katrina until long-term housing can be located. (9)Opening private homes to victims of Hurricane Katrina is vital to the overall effort to find intermediate-term housing for the victims of Hurricane Katrina. (b)

Purposes

The purposes of this Act are as follows: (1)To provide incentives for Americans to open their homes to fellow Americans from the Gulf Coast who were devastated by Hurricane Katrina. (2)To partially offset expenses paid by Americans who open their homes to victims of Hurricane Katrina. (3)To amend the Internal Revenue Code of 1986 to provide a tax credit to partially offset the costs of food, clothing, school supplies, transportation, or personal items paid by Americans who house victims of Hurricane Katrina for the benefit of such victims of Hurricane Katrina.

Katrina aftermath relief effort credit

(a)

In general

Subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to refundable credits) is amended by redesignating section 36 as section 37 and by inserting after section 35 the following new section:

36.

Katrina aftermath relief effort credit

(a)

Allowance of credit

In the case of an individual, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the qualified housing support expenses paid or incurred by the taxpayer during the taxable year for the benefit of a qualified individual who resides in housing provided by the taxpayer. (b)

Limitation

The credit allowable under subsection (a) for any taxable year shall not exceed $1,000. (c)

Definitions

For purposes of this section— (1)

Qualified individual

The term qualified individual means any individual who is displaced by reason of Hurricane Katrina. (2)

Qualified housing support expenses

The term qualified housing support expenses means any expenses paid or incurred for food, clothing, school supplies, transportation, or personal items of a qualified individual during the period that such qualified individual resides in housing provided by the taxpayer. (d)

Substantiation required

No credit shall be allowed under this section unless the taxpayer substantiates by adequate records or by sufficient evidence corroborating the taxpayer’s own statement— (1)the amount of the expense, (2)the time and place of the expense, (3)the purpose of the expense, and (4)the name of the qualified individual to which the expense relates. (e)

Application

Subsection (a) shall apply only to amounts paid or incurred during the period beginning on August 29, 2005, and ending on December 31, 2006.

(b)

Conforming amendments

(1)The table of sections for subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by redesignating the item relating to section 36 as an item relating to section 37 and by inserting before such item the following new item:

Sec. 36. Katrina aftermath relief effort credit

(2)Section 1324(b)(2) of title 31, United States Code, is amended by inserting or 36 after section 35. (c)

Effective date

The amendments made by this section shall apply to amounts paid or incurred on or after August 29, 2005.