[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 538 Introduced in Senate (IS)]







110th CONGRESS
  1st Session
                                 S. 538

To reduce income tax withholding deposits to reflect a FICA payroll tax 
 credit for certain employers located in specified portions of the GO 
                     Zone, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            February 8, 2007

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

_______________________________________________________________________

                                 A BILL


 
To reduce income tax withholding deposits to reflect a FICA payroll tax 
 credit for certain employers located in specified portions of the GO 
                     Zone, and for other purposes.

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

SECTION 1. SHORT TITLE; ETC.

    (a) Short Title.--This Act may be cited as the ``Work, Hope, and 
Opportunity for the Disaster Area Today Act''.
    (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.

SEC. 2. REDUCTION IN INCOME TAX WITHHOLDING DEPOSITS TO REFLECT FICA 
              PAYROLL TAX CREDIT FOR CERTAIN EMPLOYERS LOCATED IN 
              SPECIFIED PORTIONS OF THE GO ZONE DURING 2007.

    (a) General Rule.--In the case of any applicable calendar quarter--
            (1) the aggregate amount of required income tax deposits of 
        an eligible employer for the calendar quarter following the 
        applicable calendar quarter shall be reduced by the payroll tax 
        credit equivalent amount for the applicable calendar quarter, 
        and
            (2) the amount of any deduction allowable to the eligible 
        employer under chapter 1 of the Internal Revenue Code of 1986 
        for taxes paid under section 3111 of such Code with respect to 
        employment during the applicable calendar quarter shall be 
        reduced by such payroll tax credit equivalent amount.
For purposes of the Internal Revenue Code of 1986, an eligible employer 
shall be treated as having paid, and an eligible employee shall be 
treated as having received, any wages or compensation deducted and 
withheld but not deposited by reason of paragraph (1).
    (b) Carryovers of Unused Amounts.--If the payroll tax credit 
equivalent amount for any applicable calendar quarter exceeds the 
required income tax deposits for the following calendar quarter--
            (1) such excess shall be added to the payroll tax credit 
        equivalent amount for the next applicable calendar quarter, and
            (2) in the case of the last applicable calendar quarter, 
        such excess shall be used to reduce required income tax 
        deposits for any succeeding calendar quarter until such excess 
        is used.
    (c) Payroll Tax Credit Equivalent Amount.--For purposes of this 
section--
            (1) In general.--The term ``payroll tax credit equivalent 
        amount'' means, with respect to any applicable calendar 
        quarter, an amount equal to 7.65 percent of the aggregate 
        amount of wages or compensation--
                    (A) paid or incurred by the eligible employer with 
                respect to employment of eligible employees during the 
                applicable calendar quarter, and
                    (B) subject to the tax imposed by section 3111 of 
                the Internal Revenue Code of 1986.
            (2) Trade or business requirement.--A rule similar to the 
        rule of section 51(f) of such Code shall apply for purposes of 
        this section.
            (3) Limitation on wages subject to credit.--For purposes of 
        this subsection, only wages and compensation of an eligible 
        employee in an applicable calendar quarter, when added to such 
        wages and compensation for any preceding applicable calendar 
        quarter, not exceeding $15,000 shall be taken into account with 
        respect to such employee.
    (d) Eligible Employer; Eligible Employee.--For purposes of this 
section--
            (1) Eligible employer.--
                    (A) In general.--The term ``eligible employer'' 
                means any employer which conducts an active trade or 
                business in one or more specified portions of the GO 
                Zone and employs not more than 100 full-time employees 
                on the date of the enactment of this Act.
                    (B) Specified portions of the go zone.--The term 
                ``specified portions of the GO Zone'' has the meaning 
                given such term by section 1400N(d)(6)(C) of the 
                Internal Revenue Code of 1986.
            (2) Eligible employee.--The term ``eligible employee'' 
        means with respect to an eligible employer an employee whose 
        principal place of employment with such eligible employer is in 
        one or more specified portions of the GO Zone. Such term shall 
        not include an employee described in section 401(c)(1)(A).
    (e) Applicable Calendar Quarter.--For purposes of this section, the 
term ``applicable calendar quarter'' means any of the 4 calendar 
quarters beginning in 2007.
    (f) Special Rules.--For purposes of this section--
            (1) Required income tax deposits.--The term ``required 
        income tax deposits'' means deposits an eligible employer is 
        required to make under section 6302 of the Internal Revenue 
        Code of 1986 of taxes such employer is required to deduct and 
        withhold under section 3402 of such Code.
            (2) Aggregation rules.--Rules similar to the rules of 
        subsections (a) and (b) of section 52 of the Internal Revenue 
        Code of 1986 shall apply.
            (3) Employers not on quarterly system.--The Secretary of 
        the Treasury shall prescribe rules for the application of this 
        section in the case of an eligible employer whose required 
        income tax deposits are not made on a quarterly basis.
            (4) Adjustments for certain acquisitions, etc.--Under 
        regulations prescribed by the Secretary--
                    (A) Acquisitions.--If, after December 31, 2006, an 
                employer acquires the major portion of a trade or 
                business of another person (hereafter in this paragraph 
                referred to as the ``predecessor'') or the major 
                portion of a separate unit of a trade or business of a 
                predecessor, then, for purposes of applying this 
                section for any calendar quarter ending after such 
                acquisition, the amount of wages or compensation deemed 
                paid by the employer during periods before such 
                acquisition shall be increased by so much of such wages 
                or compensation paid by the predecessor with respect to 
                the acquired trade or business as is attributable to 
                the portion of such trade or business acquired by the 
                employer.
                    (B) Dispositions.--If, after December 31, 2006--
                            (i) an employer disposes of the major 
                        portion of any trade or business of the 
                        employer or the major portion of a separate 
                        unit of a trade or business of the employer in 
                        a transaction to which paragraph (1) applies, 
                        and
                            (ii) the employer furnishes the acquiring 
                        person such information as is necessary for the 
                        application of subparagraph (A),
                then, for purposes of applying this section for any 
                calendar quarter ending after such disposition, the 
                amount of wages or compensation deemed paid by the 
                employer during periods before such disposition shall 
                be decreased by so much of such wages as is 
                attributable to such trade or business or separate 
                unit.
            (5) Other rules.--
                    (A) Government employers.--This section shall not 
                apply if the employer is the Government of the United 
                States, the government of any State or political 
                subdivision of the State, or any agency or 
                instrumentality of any such government.
                    (B) Treatment of other entities.--Rules similar to 
                the rules of subsections (d) and (e) of section 52 of 
                such Code shall apply for purposes of this section.

SEC. 3. BONUS BUSINESS TRAVEL DEDUCTION IN SPECIFIED PORTIONS OF THE GO 
              ZONE.

    (a) In General.--Section 274(n)(2) (relating to exceptions) is 
amended by striking ``or'' at the end of subparagraph (D), by striking 
the period at the end of subparagraph (E)(iv) and inserting ``, or'', 
and by inserting after subparagraph (E)(iv) the following new 
subparagraph:
                    ``(F) such expense is for goods, services, or 
                facilities made available before January 1, 2010, in 
                one or more specified portions of the GO Zone (as 
                defined in section 1400N(d)(6)(C).''.
    (b) Effective Date.--The amendments made by this section shall 
apply to expenses paid or incurred after the date of the enactment of 
this Act, in taxable years ending after such date.

SEC. 4. EXTENSION OF INCREASED EXPENSING FOR QUALIFIED SECTION 179 GULF 
              OPPORTUNITY ZONE PROPERTY LOCATED IN SPECIFIED PORTIONS 
              OF THE GO ZONE.

    Paragraph (2) of section 1400N(e) (relating to qualified section 
179 Gulf Opportunity Zone property) is amended--
            (1) by striking ``this subsection, the term'' and inserting 
        ``this subsection--
                    ``(A) In general.--The term'', and
            (2) by adding at the end the following new subparagraph:
                    ``(B) Extension for certain property.--In the case 
                of property substantially all of the use of which is in 
                one or more specified portions of the GO Zone (as 
                defined in subsection (d)(6)(C)), such term shall 
                include section 179 property (as so defined) which is 
                described in subsection (d)(2), determined--
                            ``(i) without regard to subsection (d)(6), 
                        and
                            ``(ii) by substituting, in subparagraph 
                        (A)(v) thereof--
                                    ``(I) `2009' for `2007', and
                                    ``(II) `2009' for `2008'.''.

SEC. 5. EXTENSION OF WORK OPPORTUNITY TAX CREDIT FOR HURRICANE KATRINA 
              EMPLOYEES HIRED BY SMALL BUSINESSES LOCATED IN SPECIFIED 
              PORTIONS OF THE GO ZONE.

    (a) In General.--Section 201(b)(1) of the Katrina Emergency Tax 
Relief Act of 2005 (Public Law 109-73) is amended by striking ``who is 
hired during the 2-year period'' and all that follows and inserting 
``who--
                    ``(A) is hired during the 2-year period beginning 
                on such date for a position the principal place of 
                employment which is located in the core disaster area, 
                or
                    ``(B) is hired--
                            ``(i) during the period beginning on the 
                        date of the enactment of the Work, Hope, 
                        Opportunity, and Disaster Area Tax Act of 2007 
                        and ending before January 1, 2010, for a 
                        position the principal place of employment 
                        which is located in one or more specified 
                        portions of the GO Zone (as defined in 
                        subsection 1400N(d)(6)(C) of the Internal 
                        Revenue Code of 1986), and
                            ``(ii) by an employer who has no more than 
                        100 employees on the date such individual is 
                        hired, and''.
    (b) Effective Date.--The amendment made by this section take effect 
as if included in section 201 of the Katrina Emergency Tax Relief Act 
of 2005.

SEC. 6. EXTENSION AND MODIFICATION OF 15-YEAR STRAIGHT-LINE COST 
              RECOVERY FOR QUALIFIED LEASEHOLD IMPROVEMENTS AND 
              QUALIFIED RESTAURANT IMPROVEMENTS LOCATED IN SPECIFIED 
              PORTIONS OF THE GO ZONE; 15-YEAR STRAIGHT-LINE COST 
              RECOVERY FOR CERTAIN IMPROVEMENTS TO RETAIL SPACE LOCATED 
              IN SPECIFIED PORTIONS OF THE GO ZONE.

    (a) Extension of Leasehold and Restaurant Improvements.--
            (1) In general.--Clauses (iv) and (v) of section 
        168(e)(3)(E) (relating to 15-year property) are each amended by 
        striking ``January 1, 2008'' and inserting ``January 1, 2008 
        (January 1, 2009, in the case of property placed in service in 
        one or more specified portions of the GO Zone (as defined in 
        subsection 1400Nd)(6)(C))''.
            (2) Effective date.--The amendment made by this subsection 
        shall apply to property placed in service after December 31, 
        2007.
    (b) Modification of Treatment of Qualified Restaurant Property as 
15-Year Property for Purposes of Depreciation Deduction.--
            (1) Treatment to include new construction.--Paragraph (7) 
        of section 168(e) (relating to classification of property) is 
        amended to read as follows:
            ``(7) Qualified restaurant property.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `qualified restaurant 
                property' means any section 1250 property which is an 
                improvement to a building if--
                            ``(i) such improvement is placed in service 
                        more than 3 years after the date such building 
                        was first placed in service, and
                            ``(ii) more than 50 percent of the 
                        building's square footage is devoted to 
                        preparation of, and seating for on-premises 
                        consumption of, prepared meals.
                    ``(B) Property located in certain areas of go 
                zone.--In the case of property placed in service in one 
                or more specified portions of the GO Zone (as defined 
                in subsection 1400Nd)(6)(C)), such term means any 
                section 1250 property which is a building (or its 
                structural components) or an improvement to such 
                building if more than 50 percent of such building's 
                square footage is devoted to preparation of, and 
                seating for on-premises consumption of, prepared 
                meals.''.
            (2) Effective date.--The amendment made by this subsection 
        shall apply to any property placed in service after the date of 
        the enactment of this Act.
    (c) Recovery Period for Depreciation of Certain Improvements to 
Retail Space.--
            (1) 15-year recovery period.--Section 168(e)(3)(E) 
        (relating to 15-year property) is amended by striking ``and'' 
        at the end of clause (vii), by striking the period at the end 
        of clause (viii) and inserting ``, and'', and by adding at the 
        end the following new clause:
                            ``(ix) any qualified retail improvement 
                        property placed in service before January 1, 
                        2009, in one or more specified portions of the 
                        GO Zone (as defined in subsection 
                        1400Nd)(6)(C).''.
            (2) Qualified retail improvement property.--Section 168(e) 
        is amended by adding at the end the following new paragraph:
            ``(8) Qualified retail improvement property.--
                    ``(A) In general.--The term `qualified retail 
                improvement property' means any improvement to an 
                interior portion of a building which is nonresidential 
                real property if--
                            ``(i) such portion is open to the general 
                        public and is used in the retail trade or 
                        business of selling tangible personal property 
                        to the general public, and
                            ``(ii) such improvement is placed in 
                        service more than 3 years after the date the 
                        building was first placed in service.
                    ``(B) Improvements made by owner.--In the case of 
                an improvement made by the owner of such improvement, 
                such improvement shall be qualified retail improvement 
                property (if at all) only so long as such improvement 
                is held by such owner. Rules similar to the rules under 
                paragraph (6)(B) shall apply for purposes of the 
                preceding sentence.
                    ``(C) Certain improvements not included.--Such term 
                shall not include any improvement for which the 
                expenditure is attributable to--
                            ``(i) the enlargement of the building,
                            ``(ii) any elevator or escalator,
                            ``(iii) any structural component 
                        benefitting a common area, or
                            ``(iv) the internal structural framework of 
                        the building.''.
            (3) Requirement to use straight line method.--Section 
        168(b)(3) is amended by adding at the end the following new 
        subparagraph:
                    ``(I) Qualified retail improvement property 
                described in subsection (e)(8).''.
            (4) Alternative system.--The table contained in section 
        168(g)(3)(B) is amended by inserting after the item relating to 
        subparagraph (E)(viii) the following new item:


``(E)(ix)..................................................        39''.
 

            (5) Effective date.--The amendments made by this section 
        shall apply to property placed in service after the date of the 
        enactment of this Act.
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