[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3768 Engrossed Amendment Senate (EAS)]
In the Senate of the United States,
September 15, 2005.
Resolved, That the bill from the House of Representatives (H.R.
3768) entitled ``An Act to provide emergency tax relief for persons
affected by Hurricane Katrina.'', do pass with the following
AMENDMENT:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Hurricane Katrina
Tax Relief Act of 2005''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is expressed in
terms of an amendment to, or repeal of, a section or other provision,
the reference shall be considered to be made to a section or other
provision of the Internal Revenue Code of 1986.
(c) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; amendment of 1986 Code; table of contents.
Sec. 2. Hurricane Katrina disaster area.
TITLE I--PENALTY FREE USE OF RETIREMENT FUNDS IN THE CASE OF NATURAL
DISASTERS
Sec. 101. Penalty free withdrawals from retirement plans for victims of
federally declared natural disasters.
Sec. 102. Income averaging for disaster-relief distributions related to
Hurricane Katrina.
Sec. 103. Recontributions of withdrawals for home purchases cancelled
due to Hurricane Katrina.
Sec. 104. Loans from qualified plans to victims of Hurricane Katrina.
Sec. 105. Provisions relating to plan amendments.
TITLE II--EMPLOYMENT RELIEF
Sec. 201. Work opportunity tax credit for Hurricane Katrina employee
survivors.
Sec. 202. Employee retention credit for employers affected by Hurricane
Katrina.
TITLE III--CHARITABLE GIVING INCENTIVES
Sec. 301. Temporary suspension of limitations on charitable
contributions.
Sec. 302. Charitable deduction for contributions of food inventories.
Sec. 303. Charitable deduction for contributions of book inventories.
Sec. 304. Additional exemption for housing Hurricane Katrina displaced
individuals.
Sec. 305. Increase in standard mileage rate for charitable use of
passenger automobile.
Sec. 306. Mileage reimbursements to charitable volunteers excluded from
gross income.
TITLE IV--ADDITIONAL TAX RELIEF PROVISIONS
Sec. 401. Exclusions of certain cancellations of indebtedness for
victims of Hurricane Katrina.
Sec. 402. Suspension of certain limitations on personal casualty
losses.
Sec. 403. Required exercise of authority under section 7508A for tax
relief for victims of Hurricane Katrina.
Sec. 404. Special mortgage financing rules for residences located in
Hurricane Katrina disaster area.
Sec. 405. Extension of replacement period for nonrecognition of gain
for property located in Hurricane Katrina
disaster area.
Sec. 406. Special rule for determining earned income.
Sec. 407. Secretarial authority to make adjustments regarding taxpayer
and dependency status.
TITLE V--EMERGENCY REQUIREMENT
Sec. 501. Emergency requirement.
SEC. 2. HURRICANE KATRINA DISASTER AREA.
For purposes of this Act, the term ``Hurricane Katrina disaster
area'' means an area--
(1) with respect to which a major disaster has been
declared by the President before September 14, 2005, under
section 401 of the Robert T. Stafford Disaster Relief and
Emergency Assistance Act in connection with Hurricane Katrina,
and
(2) which--
(A) except as provided in subparagraph (B), is
determined by the President before such date to warrant
assistance from the Federal Government under such Act,
and
(B) in the case of sections 201 and 202, is
determined by the President before such date to warrant
individual assistance, or individual and public
assistance, from the Federal Government under such Act.
TITLE I--PENALTY FREE USE OF RETIREMENT FUNDS IN THE CASE OF NATURAL
DISASTERS
SEC. 101. PENALTY FREE WITHDRAWALS FROM RETIREMENT PLANS FOR VICTIMS OF
FEDERALLY DECLARED NATURAL DISASTERS.
(a) In General.--Paragraph (2) of section 72(t) (relating to 10-
percent additional tax on early distributions from qualified retirement
plans) is amended by adding at the end the following new subparagraph:
``(G) Distributions from retirement plans to
victims of federally declared natural disasters.--
``(i) Distribution allowed.--Any qualified
disaster-relief distribution.
``(ii) Amount distributed may be repaid.--
``(I) In general.--Any individual
who receives a qualified disaster-
relief distribution may, at any time
during the 3-year period beginning on
the day after the date on which such
distribution was made, make one or more
contributions in an aggregate amount
not to exceed the amount of such
distribution to an eligible retirement
plan (as defined in section
402(c)(8)(B)) of which such individual
is a beneficiary and to which a
rollover contribution of such
distribution could be made under
section 402(c), 403(a)(4), 403(b)(8),
408(d)(3), or 457(e)(16), as the case
may be.
``(II) Treatment of repayments for
distributions from eligible retirement
plans other than iras.--For purposes of
this title, if a contribution is made
pursuant to subclause (I) with respect
to a qualified disaster-relief
distribution from an eligible
retirement plan (as so defined) other
than an individual retirement plan,
then the taxpayer shall, to the extent
of the amount of the contribution, be
treated as having received the
qualified disaster-relief distribution
in an eligible rollover distribution
(as defined in section 402(c)(4)) and
as having transferred the amount to the
eligible retirement plan in a direct
trustee to trustee transfer within 60
days of the distribution.
``(III) Treatment of repayments for
distributions from iras.--For purposes
of this title, if a contribution is
made pursuant to subclause (I) with
respect to a qualified disaster-relief
distribution from an individual
retirement plan, then, to the extent of
the amount of the contribution, the
qualified disaster-relief distribution
shall be treated as a distribution
described in section 408(d)(3) and as
having been transferred to the eligible
retirement plan in a direct trustee to
trustee transfer within 60 days of the
distribution.
``(IV) Application to governmental
section 457 plans.--In determining
whether any distribution is a qualified
disaster-relief distribution for
purposes of this clause, an eligible
deferred compensation plan (as defined
in section 457(b)) maintained by an
employer described in section
457(e)(1)(A) shall be treated as a
qualified retirement plan.
``(iii) Qualified disaster-relief
distribution.--Except as provided in clause
(iv), for purposes of this subparagraph, the
term `qualified disaster-relief distribution'
means any distribution--
``(I) to an individual who has
sustained a loss as a result of a major
disaster declared under section 401 of
the Robert T. Stafford Disaster Relief
and Emergency Assistance Act and who
has a principal place of abode
immediately before the declaration in a
qualified disaster area, and
``(II) which is made during the 1-
year period beginning on the date such
declaration is made.
``(iv) Dollar limitation.--
``(I) In general.--The term
`qualified disaster-relief
distribution' shall not include any
distributions for any taxable year to
the extent the aggregate amount of such
distributions exceeds $100,000, reduced
by the aggregate amounts treated as
qualified disaster-relief distributions
with respect to such individual for all
prior taxable years.
``(II) Treatment of plan
distributions.--If a distribution to an
individual with respect to any such
major disaster would (without regard to
subclause (I)) be a qualified disaster-
relief distribution, a plan shall not
be treated as violating any requirement
of this title merely because it treats
such distribution as a qualified
disaster-relief distribution, unless
the aggregate amount of such
distributions from all plans maintained
by the employer (and any member of any
controlled group which includes the
employer) to such individual exceeds
$100,000.
``(v) Qualified disaster area.--For
purposes of this subparagraph, the term
`qualified disaster area' means an area--
``(I) with respect to which a major
disaster has been declared by the
President before September 14, 2005,
under section 401 of the Robert T.
Stafford Disaster Relief and Emergency
Assistance Act in connection with
Hurricane Katrina, and
``(II) which is determined by the
President before such date to warrant
assistance from the Federal Government
under such Act.''.
(b) Exemption of Distributions From Trustee to Trustee Transfer and
Withholding Rules.--Paragraph (4) of section 402(c) (relating to
eligible rollover distribution) is amended by striking ``and'' at the
end of subparagraph (B), by striking the period at the end of
subparagraph (C) and inserting ``, and'', and by inserting at the end
the following new subparagraph:
``(D) any qualified disaster-relief distribution
(within the meaning of section 72(t)(2)(G)).''.
(c) Conforming Amendments.--
(1) Section 401(k)(2)(B)(i) is amended by striking ``or''
at the end of subclause (III), by striking ``and'' at the end
of subclause (IV) and inserting ``or'', and by inserting after
subclause (IV) the following new subclause:
``(V) the date on which a period
referred to in section
72(t)(2)(G)(iii)(II) begins (but only
to the extent provided in section
72(t)(2)(G)), and''.
(2) Section 403(b)(7)(A)(ii) is amended by inserting
``sustains a loss as a result of a major disaster declared
under section 401 of the Robert T. Stafford Disaster Relief and
Emergency Assistance Act by reason of Hurricane Katrina (but
only to the extent provided in section 72(t)(2)(G)),'' before
``or''.
(3) Section 403(b)(11) is amended by striking ``or'' at the
end of subparagraph (A), by striking the period at the end of
subparagraph (B) and inserting ``, or'', and by inserting after
subparagraph (B) the following new subparagraph:
``(C) for distributions to which section
72(t)(2)(G) applies.''.
(4) Section 457(d)(1)(A) is amended by striking ``or'' at
the end of clause (ii), by adding ``or'' at the end of clause
(iii), and by adding at the end the following new clause:
``(iv) in the case of an eligible deferred
compensation plan established and maintained by
an employer described in subsection (e)(1)(A),
when the participant sustains a loss as a
result of a major disaster declared under
section 401 of the Robert T. Stafford Disaster
Relief and Emergency Assistance Act by reason
of Hurricane Katrina (but only to the extent
provided in section 72(t)(2)(G)),''.
(d) Effective Date.--The amendments made by this section shall
apply to distributions received after August 28, 2005.
SEC. 102. INCOME AVERAGING FOR DISASTER-RELIEF DISTRIBUTIONS RELATED TO
HURRICANE KATRINA.
(a) In General.--In the case of any qualified disaster-relief
distribution (within the meaning of section 72(t)(2)(G) of the Internal
Revenue Code of 1986) from a qualified retirement plan (as defined in
section 4974(c) of such Code) to a qualified individual, unless the
taxpayer elects not to have this section apply for any taxable year,
any amount required to be included in gross income for such taxable
year shall be so included ratably over the 3-taxable year period
beginning with such taxable year.
(b) Special Rules.--
(1) Application to governmental section 457 plans.--In
determining whether any distribution is a qualified disaster-
relief distribution (as so defined) for purposes of this
section, an eligible deferred compensation plan (as defined in
section 457(b) of such Code) maintained by an employer
described in section 457(e)(1)(A) of such Code shall be treated
as a qualified retirement plan (as so defined)
(2) Certain rules to apply.--Rules similar to the rules of
subparagraph (E) of section 408A(d)(3) of such Code shall apply
for purposes of this section.
(c) Qualified Individual.--For purposes of this section, the term
``qualified individual'' means an individual who has sustained a loss
as a result of the major disaster declared under section 401 of the
Robert T. Stafford Disaster Relief and Emergency Assistance Act (42
U.S.C. 5170) in connection with Hurricane Katrina and who has a
principal place of abode immediately before the declaration in a
Hurricane Katrina disaster area.
SEC. 103. RECONTRIBUTIONS OF WITHDRAWALS FOR HOME PURCHASES CANCELLED
DUE TO HURRICANE KATRINA.
(a) Recontributions.--
(1) In general.--Any individual who received a qualified
distribution may, at any time during the 6-month period
beginning on the day after the disaster declaration date, make
one or more contributions in an aggregate amount not to exceed
the amount of such qualified distribution to an eligible
retirement plan (as defined in section 402(c)(8)(B) of the
Internal Revenue Code of 1986) of which such individual is a
beneficiary and to which a rollover contribution of such
distribution could be made under section 402(c), 403(a)(4),
403(b)(8), or 408(d)(3) of such Code, as the case may be.
(2) Treatment of repayments.--
(A) Treatment of repayments for distributions from
eligible retirement plans other than iras.--For
purposes of the Internal Revenue Code of 1986, if a
contribution is made pursuant to paragraph (1) with
respect to a qualified distribution from an eligible
retirement plan (as so defined) other than an
individual retirement plan (as defined in section
7701(a)(37) of such Code), then the taxpayer shall, to
the extent of the amount of the contribution, be
treated as having received the qualified distribution
in an eligible rollover distribution (as defined in
section 402(c)(4) of such Code) and as having
transferred the amount to the eligible retirement plan
in a direct trustee to trustee transfer within 60 days
of the distribution.
(B) Treatment of repayments for distributions from
iras.--For purposes of the Internal Revenue Code of
1986, if a contribution is made pursuant to paragraph
(1) with respect to a qualified distribution from an
individual retirement plan (as so defined), then, to
the extent of the amount of the contribution, the
qualified distribution shall be treated as a
distribution described in section 408(d)(3) of such
Code and as having been transferred to the eligible
retirement plan (as so defined) in a direct trustee to
trustee transfer within 60 days of the distribution.
(b) Definitions.--For purposes of this section--
(1) Qualified distribution.--The term ``qualified
distribution'' means any distribution--
(A) described in section 401(k)(2)(B)(i)(IV),
403(b)(7)(A)(ii) (but only to the extent such
distribution relates to financial hardship),
403(b)(11)(B), or 72(t)(2)(F) of the Internal Revenue
Code of 1986,
(B) received after February 28, 2005, and before
August 29, 2005, and
(C) which was to be used to purchase or construct a
principal residence in a Hurricane Katrina disaster
area, but which was not so purchased or constructed.
(2) Disaster declaration date.--The term ``disaster
declaration date'' means the date on which the President
designated the area as a Hurricane Katrina disaster area.
SEC. 104. LOANS FROM QUALIFIED PLANS TO VICTIMS OF HURRICANE KATRINA.
(a) Increase in Limit on Loans Not Treated as Distributions.--In
the case of any loan from a qualified employer plan (as defined under
section 72(p)(4) of the Internal Revenue Code of 1986) to a qualified
individual (as defined in section 102(c)) made after the date of
enactment of this Act and before the date which is 1 year after the
disaster declaration date (as defined in section 103(b)(2))--
(1) clause (i) of section 72(p)(2)(A) of such Code shall be
applied by substituting ``$100,000'' for ``$50,000'', and
(2) clause (ii) of such section shall be applied by
substituting ``the present value of the nonforfeitable accrued
benefit of the employee under the plan'' for ``one-half of the
present value of the nonforfeitable accrued benefit of the
employee under the plan''.
(b) Delay of Repayment.--In the case of a qualified individual (as
defined in section 102(c)) with an outstanding loan on or after August
26, 2005, from a qualified employer plan (as defined in section
72(p)(4) of the Internal Revenue Code of 1986)--
(1) if the due date pursuant to subparagraph (B) or (C) of
section 72(p)(2) of such Code for any repayment with respect to
such loan occurs during the period beginning after August 29,
2005, and ending before August 30, 2006, such due date shall be
delayed for 1 year,
(2) any subsequent repayments with respect to any such loan
shall be appropriately adjusted to reflect the delay in the due
date under paragraph (1) and any interest accruing during such
delay, and
(3) in determining the 5-year period and the term of a loan
under subparagraph (B) or (C) of section 72(p)(2) of such Code,
such period shall be disregarded.
SEC. 105. PROVISIONS RELATING TO PLAN AMENDMENTS.
(a) In General.--If this section applies to any plan or contract
amendment such plan or contract shall be treated as being operated in
accordance with the terms of the plan during the period described in
subsection (b)(2)(A).
(b) Amendments to Which Section Applies.--
(1) In general.--This section shall apply to any amendment
to any plan or annuity contract which is made--
(A) pursuant to any amendment made by this title,
or pursuant to any regulation issued by the Secretary
of the Treasury or the Secretary of Labor under this
title, and
(B) on or before the last day of the first plan
year beginning on or after January 1, 2007, or such
later date as the Secretary of the Treasury may
prescribe.
In the case of a governmental plan (as defined in section
414(d) of the Internal Revenue Code of 1986), subparagraph (B)
shall be applied by substituting the date which is 2 years
after the date otherwise applied under subparagraph (B).
(2) Conditions.--This section shall not apply to any
amendment unless--
(A) during the period--
(i) beginning on the date the legislative
or regulatory amendment described in paragraph
(1)(A) takes effect (or in the case of a plan
or contract amendment not required by such
legislative or regulatory amendment, the
effective date specified by the plan), and
(ii) ending on the date described in
paragraph (1)(B) (or, if earlier, the date the
plan or contract amendment is adopted),
the plan or contract is operated as if such plan or
contract amendment were in effect; and
(B) such plan or contract amendment applies
retroactively for such period.
TITLE II--EMPLOYMENT RELIEF
SEC. 201. WORK OPPORTUNITY TAX CREDIT FOR HURRICANE KATRINA EMPLOYEE
SURVIVORS.
(a) In General.--For purposes of section 51 of the Internal Revenue
Code of 1986, a Hurricane Katrina employee survivor shall be treated as
a member of a targeted group.
(b) Hurricane Katrina Employee Survivor.--For purposes of this
section, the term ``Hurricane Katrina employee survivor'' means any
individual who is certified as an individual who--
(1) on August 28, 2005, had a principal place of abode in a
Hurricane Katrina disaster area, and
(2) became unemployed as a result of Hurricane Katrina.
(c) Special Rules for Determining Credit.--For purposes of applying
subpart F of part IV of subchapter A of chapter 1 of such Code to wages
paid or incurred to any Hurricane Katrina employee survivor--
(1) section 51(c)(4) of such Code shall not apply,
(2) notwithstanding section 51(d)(12) of such Code, the
certification under subsection (b) shall be made in such manner
and at such time as determined by the Secretary of the
Treasury, except that the certification shall be made by a
person other than the such employee survivor or the employer
(within the meaning of section 51 of such Code), and
(3) section 51(i)(2) of such Code shall not apply with
respect to the first hire of such employee survivor, unless
such employee survivor was an employee of the employer on
August 28, 2005.
(d) Application of Section.--This section shall apply to wages
(within the meaning on section 51(c) of such Code) paid or incurred to
any individual who begins work--
(1) for an employer during the 6-month period beginning on
August 29, 2005, or
(2) in the case of an individual who is being hired for a
position the principal place of employment of which is located
in a Hurricane Katrina disaster area, for any employer during
the 2-year period beginning on such date.
SEC. 202. EMPLOYEE RETENTION CREDIT FOR EMPLOYERS AFFECTED BY HURRICANE
KATRINA.
(a) In General.--In the case of an eligible employer, there shall
be allowed as a credit against the tax imposed by chapter 1 of the
Internal Revenue Code of 1986 for the taxable year an amount equal to
40 percent of the qualified wages with respect to each eligible
employee of such employer for such taxable year. For purposes of the
preceding sentence, the amount of qualified wages which may be taken
into account with respect to any individual shall not exceed $6,000.
(b) Definitions.--For purposes of this section--
(1) Eligible employer.--The term ``eligible employer''
means any employer--
(A) which conducted an active trade or business on
August 28, 2005, in a Hurricane Katrina disaster area,
and
(B) with respect to whom the trade or business
described in subparagraph (A) is inoperable on any day
after August 28, 2005, and before January 1, 2006, as a
result of damage sustained in connection with Hurricane
Katrina.
(2) Eligible employee.--The term ``eligible employee''
means with respect to an eligible employer--
(A) an employee whose principal place of employment
on August 28, 2005, with such eligible employer was in
a Hurricane Katrina disaster area, or
(B) a Ready Reserve-National Guard employee of such
eligible employer who is performing qualified active
duty and whose principal place of employment
immediately before the date on which such employee
began performing such qualified active duty was in a
Hurricane Katrina disaster area.
(3) Qualified wages.--The term ``qualified wages'' means
wages (as defined in section 51(c)(1) of the Internal Revenue
Code of 1986, but without regard to section 3306(b)(2)(B) of
such Code) paid or incurred by an eligible employer with
respect to an eligible employee on any day after August 28,
2005, and before January 1, 2006, which occurs during the
period--
(A) beginning on the date on which the trade or
business described in paragraph (1) first became
inoperable at the principal place of employment of the
employee immediately before Hurricane Katrina, and
(B) ending on the date on which such trade or
business has resumed significant operations at such
principal place of employment.
Such term shall include wages paid without regard to whether
the employee performs no services, performs services at a
different place of employment than such principal place of
employment, or performs services at such principal place of
employment before significant operations have resumed.
(4) Ready reserve-national guard employee.--The term
``Ready Reserve-National Guard employee'' means an employee who
is a member of the Ready Reserve of a reserve component of an
Armed Force of the United States as described in section 10142
and 10101 of title 10, United States Code and who is performing
qualified active duty.
(5) Qualified active duty.--The term ``qualified active
duty'' means--
(A) active duty, other than the training duty
specified in section 10147 of title 10, United States
Code (relating to training requirements for Ready
Reserve), or section 502(a) of title 32, United States
Code (relating to required drills and field exercises
for the National Guard), in connection with which an
employee is entitled to reemployment rights and other
benefits or to a leave of absence from employment under
chapter 43 of title 38, United States Code, and
(B) hospitalization incident to such duty.
(c) Certain Rules To Apply.--For purposes of this section, rules
similar to the rules of sections 51(i)(1), 52, and 280C(a) of the
Internal Revenue Code of 1986 of the shall apply.
(d) Credit To Be Part of General Business Credit.--The credit
allowed under this section shall be added to the current year business
credit under section 38(b) of the Internal Revenue Code of 1986 and
shall be treated as a credit allowed under subpart D of part IV of
subchapter A of chapter 1 of such Code.
TITLE III--CHARITABLE GIVING INCENTIVES
SEC. 301. TEMPORARY SUSPENSION OF LIMITATIONS ON CHARITABLE
CONTRIBUTIONS.
(a) In General.--Except as otherwise provided in subsection (b),
section 170(b) of the Internal Revenue Code of 1986 shall not apply to
qualified contributions and such contributions shall not be taken into
account for purposes of subsections (b) and (d) of section 170 of the
Internal Revenue Code of 1986.
(b) Treatment of Excess Contributions.--For purposes of section 170
of such Code--
(1) Individuals.--In the case of an individual--
(A) Limitation.--Any qualified contribution shall
be allowed only to the extent that the aggregate of
such contributions does not exceed the excess of the
taxpayer's contribution base (as defined in paragraph
(1) of section 170(b) of such Code) over the amount of
all other charitable contributions allowed under such
paragraph.
(B) Carryover.--If the aggregate amount of
qualified contributions made in the contribution year
(within the meaning of section 170(d)(1) of such Code)
exceeds the limitation of subparagraph (A), such excess
shall be added to the excess described in the portion
of subparagraph (A) of such section which precedes
clause (i) thereof for purposes of applying such
section.
(2) Corporations.--In the case of a corporation--
(A) Limitation.--Any qualified contribution shall
be allowed only to the extent that the aggregate of
such contributions does not exceed the excess of the
taxpayer's taxable income (as determined under
paragraph (2) of section 170(b) of such Code) over the
amount of all other charitable contributions allowed
under such paragraph.
(B) Carryover.--Rules similar to the rules of
paragraph (1)(B) shall apply for purposes of this
paragraph.
(c) Exception to Overall Limitation on Itemized Deductions.--So
much of any deduction allowed under section 170 of such Code as does
not exceed the qualified contributions made during the taxable year
shall not be treated as an itemized deduction for purposes of section
68 of such Code.
(d) Qualified Contributions.--For purposes of this section, the
term ``qualified contribution'' means any charitable contribution (as
defined in section 170(c) of such Code)--
(1) made during the period beginning on August 28, 2005,
and ending on December 31, 2005, in cash to an organization
described in section 170(b)(1)(A) of such Code (other than an
organization described in section 509(a)(3) of such Code), and
(2) with respect to which the taxpayer has elected the
application of this section.
In the case of a partnership or S corporation, the election under
paragraph (2) shall be made separately by each partner or shareholder.
For purposes of subsection (b)(2), a contribution shall be treated as a
qualified contribution only if the contribution is for relief efforts
related to Hurricane Katrina.
SEC. 302. CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF FOOD INVENTORIES.
(a) In General.--Subsection (e) of section 170 (relating to certain
contributions of ordinary income and capital gain property) is amended
by adding at the end the following new paragraph:
``(7) Application of paragraph (3) to certain contributions
of food inventory.--For purposes of this section--
``(A) Extension to individuals.--In the case of a
charitable contribution of apparently wholesome food--
``(i) paragraph (3)(A) shall be applied
without regard to whether the contribution is
made by a C corporation, and
``(ii) in the case of a taxpayer other than
a C corporation, the aggregate amount of such
contributions for any taxable year which may be
taken into account under this section shall not
exceed 10 percent of the taxpayer's net income
for such taxable year from all trades or
businesses from which such contributions were
made for such taxable year, computed without
regard to this section.
``(B) Limitation on reduction.--In the case of a
charitable contribution of apparently wholesome food,
notwithstanding paragraph (3)(B), the amount of the
reduction determined under paragraph (1)(A) shall not
exceed the amount by which the fair market value of
such property exceeds twice the basis of such property.
``(C) Determination of basis.--If a taxpayer--
``(i) does not account for inventories
under section 471, and
``(ii) is not required to capitalize
indirect costs under section 263A,
the taxpayer may elect, solely for purposes of
paragraph (3)(B), to treat the basis of any apparently
wholesome food as being equal to 25 percent of the fair
market value of such food.
``(D) Determination of fair market value.--In the
case of a charitable contribution of apparently
wholesome food which is a qualified contribution
(within the meaning of paragraph (3), as modified by
subparagraph (A) of this paragraph) and which, solely
by reason of internal standards of the taxpayer or lack
of market, cannot or will not be sold, the fair market
value of such contribution shall be determined--
``(i) without regard to such internal
standards or such lack of market and
``(ii) by taking into account the price at
which the same or substantially the same food
items (as to both type and quality) are sold by
the taxpayer at the time of the contribution
(or, if not so sold at such time, in the recent
past).
``(E) Apparently wholesome food.--For purposes of
this paragraph, the term `apparently wholesome food'
has the meaning given such term by section 22(b)(2) of
the Bill Emerson Good Samaritan Food Donation Act (42
U.S.C. 1791(b)(2)), as in effect on the date of the
enactment of this paragraph.
``(F) Application.--This paragraph shall apply to
contributions made after August 28, 2005, and before
January 1, 2006.''.
(b) Effective Date.--The amendment made by this section shall apply
to contributions made after August 28, 2005.
SEC. 303. CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF BOOK INVENTORIES.
(a) In General.--Section 170(e)(3) (relating to certain
contributions of ordinary income and capital gain property) is amended
by redesignating subparagraph (C) as subparagraph (D) and by inserting
after subparagraph (B) the following new subparagraph:
``(C) Special rule for contributions of book
inventory for educational purposes.--
``(i) Contributions of book inventory.--In
determining whether a qualified book
contribution is a qualified contribution,
subparagraph (A) shall be applied without
regard to whether--
``(I) the donee is an organization
described in the matter preceding
clause (i) of subparagraph (A), and
``(II) the property is to be used
by the donee solely for the care of the
ill, the needy, or infants.
``(ii) Amount of reduction.--
Notwithstanding subparagraph (B), the amount of
the reduction determined under paragraph (1)(A)
shall not exceed the amount by which the fair
market value of the contributed property (as
determined by the taxpayer using a bona fide
published market price for such book) exceeds
twice the basis of such property.
``(iii) Qualified book contribution.--For
purposes of this paragraph, the term `qualified
book contribution' means a charitable
contribution of books, but only if the
requirements of clauses (iv) and (v) are met.
``(iv) Identity of donee.--The requirement
of this clause is met if the contribution is to
an organization--
``(I) described in subclause (I) or
(III) of paragraph (6)(B)(i), or
``(II) described in section
501(c)(3) and exempt from tax under
section 501(a) (other than a private
foundation, as defined in section
509(a), which is not an operating
foundation, as defined in section
4942(j)(3)), which is organized
primarily to make books available to
the general public at no cost or to
operate a literacy program.
``(v) Certification by donee.--The
requirement of this clause is met if, in
addition to the certifications required by
subparagraph (A) (as modified by this
subparagraph), the donee certifies in writing
that--
``(I) the books are suitable, in
terms of currency, content, and
quantity, for use in the donee's
educational programs, and
``(II) the donee will use the books
in its educational programs.
``(vi) Bona fide published market price.--
For purposes of this subparagraph, the term
`bona fide published market price' means, with
respect to any book, a price--
``(I) determined using the same
printing and edition,
``(II) determined in the usual
market in which such a book has been
customarily sold by the taxpayer, and
``(III) for which the taxpayer can
demonstrate to the satisfaction of the
Secretary that the taxpayer customarily
sold such books in arm's length
transactions within 7 years preceding
the contribution of such a book.
``(vii) Application.--This subparagraph
shall apply to contributions made after August
28, 2005, and before January 1, 2006.''.
(b) Effective Date.--The amendments made by this section shall
apply to contributions made after August 28, 2005.
SEC. 304. ADDITIONAL EXEMPTION FOR HOUSING HURRICANE KATRINA DISPLACED
INDIVIDUALS.
(a) In General.--In the case of taxable years of a natural person
beginning in 2005 and 2006, for purposes of the Internal Revenue Code
of 1986, taxable income shall be reduced by $500 for each Hurricane
Katrina displaced individual of the taxpayer for the taxable year.
(b) Limitations.--
(1) Dollar limitation.--The reduction under subsection (a)
shall not exceed $2,000, reduced by the amount of the reduction
under this section for all previous taxable years.
(2) Individuals taken into account only once.--An
individual shall not be taken into account under subsection (a)
if such individual was taken into account under such subsection
by the taxpayer in any prior taxable year.
(c) Hurricane Katrina Displaced Individual.--For purposes of this
subsection, the term ``Hurricane Katrina displaced individual'' means,
with respect to any taxpayer for any taxable year, a natural person
who--
(1) was (as of August 28, 2005) a resident of any Hurricane
Katrina disaster area,
(2) is displaced from the person's residence located in the
area described in paragraph (1), and
(3) is provided housing free of charge by the taxpayer in
the principal residence of the taxpayer for a period of 60
consecutive days which ends in such taxable year.
Such term shall not include the spouse or any dependent of the
taxpayer.
SEC. 305. INCREASE IN STANDARD MILEAGE RATE FOR CHARITABLE USE OF
PASSENGER AUTOMOBILE.
Notwithstanding section 170(i) of the Internal Revenue Code of
1986, for purposes of computing the deduction under section 170 of such
Code for use of a vehicle described in subsection (f)(12)(E)(i) for
provision of relief related to Hurricane Katrina during the period
beginning on August 29, 2005, and ending before January 1, 2007, the
standard mileage rate shall be 70 percent of the standard mileage rate
in effect under section 162(a) of such Code at the time of such use.
Any increase under this section shall be rounded to the next highest
cent.
SEC. 306. MILEAGE REIMBURSEMENTS TO CHARITABLE VOLUNTEERS EXCLUDED FROM
GROSS INCOME.
(a) In General.--Part III of subchapter B of chapter 1 is amended
by inserting after section 139A the following new section:
``SEC. 139B. MILEAGE REIMBURSEMENTS TO CHARITABLE VOLUNTEERS.
``(a) In General.--Gross income of an individual does not include
amounts received, from an organization described in section 170(c), as
reimbursement of operating expenses with respect to use of a passenger
automobile for the benefit of such organization. The preceding sentence
shall apply only to the extent that the expenses which are reimbursed
would be deductible under this chapter if section 274(d) were applied--
``(1) by using the standard business mileage rate
established under such section, and
``(2) as if the individual were an employee of an
organization not described in section 170(c).
``(b) Application to Volunteer Services Only.--Subsection (a) shall
not apply with respect to any expenses relating to the performance of
services for compensation.
``(c) No Double Benefit.--A taxpayer may not claim a deduction or
credit under any other provision of this title with respect to the
expenses under subsection (a).
``(d) Exemption From Reporting Requirements.--Section 6041 shall
not apply with respect to reimbursements excluded from income under
subsection (a).
``(e) Termination.--This section shall not apply to use of a
passenger automobile after December 31, 2006.''.
(b) Clerical Amendment.--The table of sections for part III of
subchapter B of chapter 1 is amended by inserting after the item
relating to section 139A the following new item:
``Sec. 139B Mileage reimbursements to charitable volunteers''.
(c) Effective Date.--The amendments made by this section shall
apply to the use of a passenger automobile after the date of the
enactment of this Act, in taxable years ending after such date.
TITLE IV--ADDITIONAL TAX RELIEF PROVISIONS
SEC. 401. EXCLUSIONS OF CERTAIN CANCELLATIONS OF INDEBTEDNESS FOR
VICTIMS OF HURRICANE KATRINA.
(a) In General.--For purposes of the Internal Revenue Code of 1986,
gross income shall not include any amount which (but for this section)
would be includible in gross income by reason of the discharge (in
whole or in part) of indebtedness of a natural person by an applicable
entity (as defined in section 6050P(c)(1)) if the discharge is by
reason of the damage sustained by the taxpayer in connection with
Hurricane Katrina.
(b) Exception.--Subsection (a) shall not apply to any indebtedness
incurred in connection with a trade or business.
(c) Denial of Double Benefit.--The amount excluded from gross
income under subsection (a) shall be applied to reduce the tax
attributes of the taxpayer as provided in section 108(b) of such Code.
(d) Effective Date.--This section shall apply to discharges made on
or after August 29, 2005, and before January 1, 2007.
SEC. 402. SUSPENSION OF CERTAIN LIMITATIONS ON PERSONAL CASUALTY
LOSSES.
Paragraphs (1) and (2)(A) of section 165(h) of the Internal Revenue
Code of 1986 shall not apply to losses described in section 165(c)(3)
of such Code which are attributable to Hurricane Katrina. In the case
of any other losses, section 165(h)(2)(A) of such Code shall be applied
without regard to the losses referred to in the preceding sentence.
SEC. 403. REQUIRED EXERCISE OF AUTHORITY UNDER SECTION 7508A FOR TAX
RELIEF FOR VICTIMS OF HURRICANE KATRINA.
(a) Authority Includes Suspension of Payment of Employment and
Excise Taxes.--Subparagraphs (A) and (B) of section 7508(a)(1) are
amended to read as follows:
``(A) Filing any return of income, estate, gift,
employment, or excise tax;
``(B) Payment of any income, estate, gift,
employment, or excise tax or any installment thereof or
of any other liability to the United States in respect
thereof;''.
(b) Application to Victims of Hurricane Katrina.--In the case of
any taxpayer determined by the Secretary of the Treasury to be affected
by the Presidentially declared disaster relating to Hurricane Katrina,
any relief provided by the Secretary of the Treasury under section
7508A of the Internal Revenue Code of 1986 shall be for a period ending
not earlier than February 28, 2006, and shall be treated as applying to
the filing of returns relating to, and the payment of, employment and
excise taxes.
(c) Effective Date.--The amendment made by subsection (a) shall
apply for any period for performing an act which has not expired before
August 29, 2005.
SEC. 404. SPECIAL MORTGAGE FINANCING RULES FOR RESIDENCES LOCATED IN
HURRICANE KATRINA DISASTER AREA.
In the case of a residence located in a Hurricane Katrina disaster
area which replaces a residence destroyed by Hurricane Katrina or which
is being repaired for damage caused by Hurricane Katrina, section 143
of the Internal Revenue Code of 1986 shall be applied with the
following modifications to financing provided with respect to such
residence within 3 years after the date of the disaster declaration:
(1) Subsections (d) of such section 143 shall be applied as
if such residence were a targeted area residence.
(2) The limitation under subsection (k)(4) of such section
143 shall be increased (but not above $150,000) to the extent
the qualified home-improvement loan is for the repair of damage
caused by Hurricane Katrina.
This section shall apply only with respect to bonds issued after August
28, 2005, and before August 29, 2008.
SEC. 405. EXTENSION OF REPLACEMENT PERIOD FOR NONRECOGNITION OF GAIN
FOR PROPERTY LOCATED IN HURRICANE KATRINA DISASTER AREA.
Notwithstanding subsections (g) and (h) of section 1033 of the
Internal Revenue Code of 1986, clause (i) of section 1033(a)(2)(B) of
such Code shall be applied by substituting ``5 years'' for ``2 years''
with respect to property which is compulsorily or involuntarily
converted as a result of Hurricane Katrina in a Hurricane Katrina
disaster area, but only if substantially all of the use of the
replacement property is in such area.
SEC. 406. SPECIAL RULE FOR DETERMINING EARNED INCOME.
(a) In General.--In the case of a qualified individual, if the
earned income of the taxpayer for the taxable year of such taxpayer
which includes August 28, 2005, is less than the earned income which is
attributable to the taxpayer for the preceding taxable year, the
credits allowed under sections 24(d) and 32 of the Internal Revenue
Code of 1986 may, at the election of the taxpayer, be determined by
substituting--
(1) such earned income for the preceding taxable year, for
(2) such earned income for the taxable year which includes
August 28, 2005.
(b) Qualified Individual.--For purposes of this section, the term
``qualified individual'' means any individual whose principal place of
abode was (as of August 28, 2005) in any Hurricane Katrina disaster
area.
(c) Earned Income.--For purposes of this section, the term ``earned
income'' has the meaning given such term under section 32(c) of such
Code.
(d) Special Rules.--
(1) Application to joint returns.--For purpose of
subsection (a), in the case of a joint return for a taxable
year which includes August 28, 2005,
(A) such subsection shall apply if either spouse is
a qualified individual,
(B) the earned income which is attributable to the
taxpayer for the preceding taxable year shall be the
sum of the earned income which is attributable to each
spouse for such preceding taxable year, and
(C) the substitution described in such subsection
shall apply only with respect to earned income which is
attributable to a spouse who is a qualified individual.
(2) Uniform application of election.--Any election made
under subsection (a) shall apply with respect to both section
24(d) and section 32 of such Code.
(3) Errors treated as mathematical error.--For purposes of
section 6213 of such Code, an incorrect use on a return of
earned income pursuant to subsection (a) shall be treated as a
mathematical or clerical error.
(4) No effect on determination of gross income.--For
purposes of the Internal Revenue Code of 1986, gross income
shall be determined without regard to any substitution under
subsection (a).
SEC. 407. SECRETARIAL AUTHORITY TO MAKE ADJUSTMENTS REGARDING TAXPAYER
AND DEPENDENCY STATUS.
With respect to taxable years beginning in 2005 or 2006, the
Secretary of the Treasury or the Secretary's delegate may make such
adjustments in the application of the internal revenue laws as may be
necessary to ensure that taxpayers do not lose any deduction or credit
or experience a change of filing status by reason of temporary
relocations after Hurricane Katrina or by reason of the receipt of
hurricane relief. Any adjustments made under the preceding sentence
shall ensure that an individual is not taken into account by more than
one taxpayer with respect to the same tax benefit.
TITLE V--EMERGENCY REQUIREMENT
SEC. 501. EMERGENCY REQUIREMENT.
Any provision of this Act causing an effect on receipts, budget
authority, or outlays is designated as an emergency requirement
pursuant to section 402 of H. Con. Res. 95 (109th Congress).
Attest:
Secretary.
109th CONGRESS
1st Session
H. R. 3768
_______________________________________________________________________
AMENDMENT