[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 2451 Introduced in Senate (IS)]








109th CONGRESS
  2d Session
                                S. 2451

   To amend the Internal Revenue Code of 1986 to expand certain tax 
      benefits related to Hurricane Katrina and to Hurricane Rita.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

               March 16 (legislative day, March 15), 2006

 Ms. Landrieu introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
   To amend the Internal Revenue Code of 1986 to expand certain tax 
      benefits related to Hurricane Katrina and to Hurricane Rita.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Hurricane Rita Relief Act of 2006''.

SEC. 2. EXPANSION OF CERTAIN TAX BENEFITS FOR INDIVIDUALS AFFECTED BY 
              HURRICANE KATRINA TO INDIVIDUALS AFFECTED BY HURRICANE 
              RITA.

    (a) Work Opportunity Tax Credit for Hurricane Rita Employees.--
            (1) In general.--For purposes of section 51 of the Internal 
        Revenue Code of 1986, a Hurricane Rita employee shall be 
        treated as a member of a targeted group.
            (2) Hurricane rita employee.--For purposes of this 
        subsection, the term ``Hurricane Rita employee'' means any 
        individual who is certified as an individual who on September 
        23, 2005, had a principal place of abode in that portion of the 
        Rita GO Zone which is not part of the Gulf Opportunity Zone and 
        who is hired during the 2-year period beginning on such date 
        for a position the principal place of employment of which is 
        located in the Rita GO Zone or the Gulf Opportunity Zone.
            (3) Reasonable identification acceptable.--In lieu of the 
        certification requirement under subparagraph (A) of section 
        51(d)(12) of such Code, an individual may provide to the 
        employer reasonable evidence that the individual is a Hurricane 
        Rita employee, and subparagraph (B) of such section shall be 
        applied as if such evidence were a certification described in 
        such subparagraph.
            (4) 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 Rita 
        employee--
                    (A) section 51(c)(4) of such Code shall not apply, 
                and
                    (B) section 51(i)(2) of such Code shall not apply 
                with respect to the first hire of such employee as a 
                Hurricane Rita employee, unless such employee was an 
                employee of the employer on September 23, 2005.
    (b) Additional Exemption for Housing Hurricane Rita Displaced 
Individuals.--
            (1) 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 Rita displaced individual of the taxpayer 
        for the taxable year.
            (2) Limitations.--
                    (A) Dollar limitation.--The reduction under 
                paragraph (1) shall not exceed $2,000, reduced by the 
                amount of the reduction under this subsection and 
                section 302(a) of the Katrina Emergency Tax Relief Act 
                of 2005 for all previous taxable years.
                    (B) Individuals taken into account only once.--An 
                individual shall not be taken into account under 
                paragraph (1) if such individual was taken into account 
                under such paragraph or under section 302(a) of the 
                Katrina Emergency Tax Relief Act of 2005 by the 
                taxpayer in any prior taxable year.
                    (C) Identifying information required.--An 
                individual shall not be taken into account under 
                paragraph (1) for a taxable year unless the taxpayer 
                identification number of such individual is included on 
                the return of the taxpayer for such taxable year.
            (3) Hurricane rita displaced individual.--For purposes of 
        this subsection, the term ``Hurricane Rita displaced 
        individual'' means, with respect to any taxpayer for any 
        taxable year, a natural person if--
                    (A) such person is not a Hurricane Katrina 
                displaced individual (within the meaning of section 
                302(c) of the Katrina Emergency Tax Relief Act of 
                2005),
                    (B) such person's principal place of abode on 
                September 23, 2005, was in the Hurricane Rita disaster 
                area,
                    (C)(i) in the case of such an abode located in the 
                Rita GO Zone, such person is displaced from such abode, 
                or
                    (ii) in the case of such an abode located outside 
                the Rita GO Zone, such person is displaced from such 
                abode, and
                            (I) such abode was damaged by Hurricane 
                        Rita, or
                            (II) such person was evacuated from such 
                        abode by reason of Hurricane Rita, and
                    (D) such person 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.
            (4) Compensation for housing.--No deduction shall be 
        allowed under this subsection if the taxpayer receives any rent 
        or other amount (from any source) in connection with the 
        providing of such housing.
    (c) Mileage Reimbursement to Charitable Volunteers Excluded From 
Gross Income.--
            (1) In general.--For purposes of the Internal Revenue Code 
        of 1986, gross income of an individual for taxable years ending 
        on or after September 23, 2005, does not include amounts 
        received, from an organization described in section 170(c) of 
        such Code, as reimbursement of operating expenses with respect 
        to use of a passenger automobile for the benefit of such 
        organization in connection with providing relief relating to 
        Hurricane Rita during the period beginning on September 23, 
        2005, and ending on December 31, 2006. The preceding sentence 
        shall apply only to the extent that the expenses which are 
        reimbursed would be deductible under chapter 1 of such Code if 
        section 274(d) of such Code were applied--
                    (A) by using the standard business mileage rate in 
                effect under section 162(a) of such Code at the time of 
                such use, and
                    (B) as if the individual were an employee of an 
                organization not described in section 170(c) of such 
                Code.
            (2) Application to volunteer services only.--Paragraph (1) 
        shall not apply with respect to any expenses relating to the 
        performance of services for compensation.
            (3) No double benefit.--No deduction or credit shall be 
        allowed under any other provision of such Code with respect to 
        the expenses excludable from gross income under paragraph (1).
    (d) Exclusions of Certain Cancellations of Indebtedness for Victims 
of Hurricane Rita.--
            (1) In general.--For purposes of the Internal Revenue Code 
        of 1986, gross income shall not include any amount which (but 
        for this subsection) would be includible in gross income by 
        reason of the discharge (in whole or in part) of indebtedness 
        of a natural person described in paragraph (2) by an applicable 
        entity (as defined in section 6050P(c)(1) of such Code).
            (2) Person described.--A natural person is described in 
        this paragraph if the principal place of abode of such person 
        on September 23, 2005, was located--
                    (A) in the Rita GO Zone, or
                    (B) in the Hurricane Rita disaster area (but 
                outside the Rita GO Zone) and such person suffered 
                economic loss by reason of Hurricane Rita.
            (3) Exceptions.--
                    (A) Business indebtedness.--Paragraph (1) shall not 
                apply to any indebtedness incurred in connection with a 
                trade or business.
                    (B) Real property outside rita go zone.--Paragraph 
                (1) shall not apply to any discharge of indebtedness to 
                the extent that real property constituting security for 
                such indebtedness is located outside the Hurricane Rita 
                disaster area.
            (4) Denial of double benefit.--For purposes of the Internal 
        Revenue Code of 1986, the amount excluded from gross income 
        under paragraph (1) shall treated in the same manner as an 
        amount excluded under section 108(a) of such Code.
            (5) Effective date.--This subsection shall apply to 
        discharges made on or after September 23, 2005, and before 
        January 1, 2007.
    (e) Definitions.--For purposes of this section, the terms ``Rita GO 
Zone'', ``Hurricane Rita disaster area'', and ``Gulf Opportunity Zone'' 
have the meanings given such terms under section 1400M of the Internal 
Revenue Code of 1986.

SEC. 3. EXPANSION OF EDUCATION TAX BENEFITS AND HOUSING TAX BENEFITS TO 
              PERSONS AFFECTED BY HURRICANE RITA.

    (a) Education Tax Benefits.--Section 1400O of the Internal Revenue 
Code of 1986 is amended by inserting ``or the Rita GO Zone'' after 
``Gulf Opportunity Zone''.
    (b) Housing Tax Benefits.--
            (1) Qualified employee.--Subsection (c) of section 1400P of 
        the Internal Revenue Code of 1986 is amended to read as 
        follows:
    ``(c) Qualified Employee.--For purposes of this section, the term 
`qualified employee' means, with respect to any month--
            ``(1) any individual--
                    ``(A) who had a principal residence (as defined in 
                section 121) in the Gulf Opportunity Zone on August 28, 
                2005, and
                    ``(B) who performs substantially all employment 
                services--
                            ``(i) in the Gulf Opportunity Zone, and
                            ``(ii) for the qualified employer which 
                        furnishes lodging to such individual, and
            ``(2) any individual--
                    ``(A) who had a principal residence (as defined in 
                section 121) in the Rita GO Zone on September 23, 2005, 
                and
                    ``(B) who performs substantially all employment 
                services--
                            ``(i) in the Rita GO Zone, and
                            ``(ii) for the qualified employer which 
                        furnishes lodging to such individual.''.
            (2) Qualified employer.--Subsection (d) of section 1400P of 
        the Internal Revenue Code of 1986 is amended to read as 
        follows:
    ``(d) Qualified Employer.--The term `qualified employer' means--
            ``(1) with respect to a qualified employee described in 
        subsection (c)(1), any employer with a trade or business 
        located in the Gulf Opportunity Zone, and
            ``(2) with respect to a qualified employee described in 
        subsection (c)(2), any employer with a trade or business 
        located in the Rita GO Zone.''.
            (3) Conforming amendments.--
                    (A) The heading for subsection (a) of section 1400P 
                of the Internal Revenue Code of 1986 is amended by 
                striking ``Individual Affected by Hurricane Katrina'' 
                and inserting ``Individuals Affected by Hurricanes 
                Katrina and Rita''.
                    (B) Section 1400P(b) of such Code is amended--
                            (i) by inserting ``of a qualified 
                        employee'' after ``in the case of a qualified 
                        employer'',
                            (ii) by striking ``the Hurricane Katrina 
                        housing credit'' and inserting ``the Hurricane 
                        Katrina and Rita housing credit'',
                            (iii) by striking ``of a qualified employee 
                        of such employer'' and inserting ``of all 
                        qualified employees of such employer'', and
                            (iv) by striking ``Hurricane Katrina'' in 
                        the heading and inserting ``Hurricanes Katrina 
                        and Rita''.
                    (C) Section 38(b)(27) of such Code is amended by 
                striking ``Hurricane Katrina housing credit'' and 
                inserting ``Hurricane Katrina and Rita housing 
                credit''.
    (c) Effective Date.--The amendments made by this section shall take 
effect as if included in the Gulf Opportunity Zone Act of 2005.

SEC. 4. EXPANSION OF CERTAIN GULF OPPORTUNITY ZONE BENEFITS TO THE RITA 
              GO ZONE.

    (a) In General.--Section 1400N is amended by adding at the end the 
following new subsection:
    ``(q) Application of Section to Rita GO Zone.--
            ``(1) In general.--For purposes of subsections (d), (e), 
        (f), (g), (h), and (k)--
                    ``(A) the term `Gulf Opportunity Zone' shall 
                include the Rita GO Zone,
                    ``(B) any reference to August 28, 2005, shall be 
                treated as a reference to September 23, 2005, with 
                respect to that portion of the Rita GO Zone which is 
                not a part of the Gulf Opportunity Zone,
                    ``(C) any reference to August 27, 2005, shall be 
                treated as a reference to September 22, 2005, with 
                respect to that portion of the Rita GO Zone which is 
                not a part of the Gulf Opportunity Zone, and
                    ``(D) any reference to Hurricane Katrina shall be 
                treated as a reference to Hurricane Rita with respect 
                to any portion of the Gulf Opportunity Zone (after the 
                application of subparagraph (A)) which is also a part 
                of the Rita GO Zone.
            ``(2) Special rule.--For purposes of subsection (k)(2), in 
        the case of any individual whose principal place of abode was 
        located in that portion of the Rita GO Zone which is not a part 
        of the Gulf Opportunity Zone (as defined in section 1400M(1) 
        without regard to paragraph (1)(A)), no deduction for moving 
        expenses under subparagraph (B)(ii) thereof shall be taken into 
        account unless the principal place of employment of such 
        individual is located in the Rita GO Zone.''.
    (b) Effective Date.--The amendment made by this section shall take 
effect as if included in the Gulf Opportunity Zone Act of 2005.
                                 <all>