Tax benefits for Gulf Oil Spill Recovery Zone

(a)

In General

Subchapter Y of chapter 1 is amended by adding at the end the following new part:

TAX BENEFITS FOR GULF OIL SPILL RECOVERY ZONE

Sec. 1400V–1. Gulf Oil Spill Recovery Zone.

Sec. 1400V–2. Tax benefits for Gulf Oil Spill Recovery Zone.

Sec. 1400V–3. Housing tax benefits.

Sec. 1400V–4. Special rules for use of retirement funds.

Sec. 1400V–5. Employee Retention Credit for Employers Affected by Gulf Oil Spill.

Sec. 1400V–6. Additional tax relief provisions.

Sec. 1400V–7. Special rules for mortgage revenue bonds.

1400V–1.

Gulf Oil Spill Recovery Zone

For purposes of this part— (1)

Gulf Oil Spill Recovery Zone

The term Gulf Oil Spill Recovery Zone means the following counties and parishes affected by the Gulf Oil Spill: (A)Terrebone, LaFourche, Jefferson, Plaquemines, St. Bernard, Orleans, and St. Tammany parishes in the State of Louisiana, (B)Mobile and Baldwin counties in the State of Alabama, (C)Hancock, Harrison, and Jackson counties in the State of Mississippi, and (D)Escambia, Santa Rosa, Okaloosa, Walton, Bay, Holmes, Washington, Gulf, and Franklin counties in the State of Florida. (2)

Gulf Oil Spill

The term Gulf Oil Spill means the discharge of oil by reason of the explosion on, and sinking of, the mobile offshore drilling unit Deepwater Horizon.

1400V–2.

Tax benefits for Gulf Oil Spill Recovery Zone

(a)

Tax-Exempt Bond Financing

(1)

In general

For purposes of this title— (A)any qualified Gulf Oil Spill Recovery Zone Bond described in paragraph (2)(A)(i) shall be treated as an exempt facility bond, and (B)any qualified Gulf Oil Spill Recovery Zone Bond described in paragraph (2)(A)(ii) shall be treated as a qualified mortgage bond. (2)

Qualified Gulf Oil Spill Recovery Zone bond

For purposes of this subsection, the term qualified Gulf Oil Spill Recovery Zone Bond means any bond issued as part of an issue if— (A)(i)95 percent or more of the net proceeds (as defined in section 150(a)(3)) of such issue are to be used for qualified project costs, or (ii)such issue meets the requirements of a qualified mortgage issue, except as otherwise provided in this subsection, (B)such bond is issued by the State of Florida, Alabama, Louisiana, or Mississippi, or any political subdivision thereof, (C)such bond is designated for purposes of this section by— (i)in the case of a bond which is required under State law to be approved by the bond commission of such State, such bond commission, and (ii)in the case of any other bond, the Governor of such State, (D)such bond is issued after the date of the enactment of this section and before January 1, 2016, and (E)no portion of the proceeds of such issue is to be used to provide any property described in section 144(c)(6)(B). (3)

Limitations on bonds

(A)

Aggregate amount designated

The maximum aggregate face amount of bonds which may be designated under this subsection with respect to any State shall not exceed the product of $2,500 multiplied by the portion of the State population which is in the Gulf Oil Spill Recovery Zone (as determined on the basis of the most recent census estimate of resident population released by the Bureau of Census before April 20, 2010). (B)

Movable property

No bonds shall be issued which are to be used for movable fixtures and equipment. (4)

Qualified project costs

For purposes of this subsection, the term qualified project costs means— (A)the cost of any qualified residential rental project (as defined in section 142(d)) located in the Gulf Oil Spill Recovery Zone, and (B)the cost of acquisition, construction, reconstruction, and renovation of— (i)nonresidential real property (including fixed improvements associated with such property) located in the Gulf Oil Spill Recovery Zone, and (ii)public utility property (as defined in section 168(i)(10)) located in the Gulf Oil Spill Recovery Zone. (5)

Special rules

In applying this title to any qualified Gulf Oil Spill Recovery Zone Bond, the following modifications shall apply: (A)Section 142(d)(1) (defining qualified residential rental project) shall be applied— (i)by substituting 60 percent for 50 percent in subparagraph (A) thereof, and (ii)by substituting 70 percent for 60 percent in subparagraph (B) thereof. (B)Section 143 (relating to mortgage revenue bonds: qualified mortgage bond and qualified veterans’ mortgage bond) shall be applied— (i)only with respect to owner-occupied residences in the Gulf Oil Spill Recovery Zone, (ii)by treating any such residence in the Gulf Oil Spill Recovery Zone as a targeted area residence, (iii)by applying subsection (f)(3) thereof without regard to subparagraph (A) thereof, and (iv)by substituting $150,000 for $15,000 in subsection (k)(4) thereof. (C)Except as provided in section 143, repayments of principal on financing provided by the issue of which such bond is a part may not be used to provide financing. (D)Section 146 (relating to volume cap) shall not apply. (E)Section 147(d)(2) (relating to acquisition of existing property not permitted) shall be applied by substituting 50 percent for 15 percent each place it appears. (F)Section 148(f)(4)(C) (relating to exception from rebate for certain proceeds to be used to finance construction expenditures) shall apply to the available construction proceeds of bonds which are part of an issue described in paragraph (2)(A)(i). (G)Section 57(a)(5) (relating to tax-exempt interest) shall not apply. (6)

Separate issue treatment of portions of an issue

This subsection shall not apply to the portion of an issue which (if issued as a separate issue) would be treated as a qualified bond or as a bond that is not a private activity bond (determined without regard to paragraph (1)), if the issuer elects to so treat such portion. (b)

Advance Refundings of Certain Tax-Exempt Bonds

(1)

In general

With respect to a bond described in paragraph (3), one additional advance refunding after the date of the enactment of this section and before January 1, 2016, shall be allowed under the applicable rules of section 149(d) if— (A)the Governor of the State designates the advance refunding bond for purposes of this subsection, and (B)the requirements of paragraph (5) are met. (2)

Certain private activity bonds

With respect to a bond described in paragraph (3) which is an exempt facility bond described in paragraph (1) or (2) of section 142(a), one advance refunding after the date of the enactment of this section and before January 1, 2016, shall be allowed under the applicable rules of section 149(d) (notwithstanding paragraph (2) thereof) if the requirements of subparagraphs (A) and (B) of paragraph (1) are met. (3)

Bonds described

A bond is described in this paragraph if such bond was outstanding on April 20, 2010, and is issued by the State of Florida, Alabama, Louisiana, or Mississippi, or a political subdivision thereof. (4)

Aggregate limit

The maximum aggregate face amount of bonds which may be designated under this subsection by the Governor of a State shall not exceed— (A)$4,500,000,000 in the case of the State of Florida, (B)$4,500,000,000 in the case of the State of Louisiana, (C)$4,500,000,000 in the case of the State of Mississippi, and (D)$4,500,000,000 in the case of the State of Alabama. (5)

Additional requirements

The requirements of this paragraph are met with respect to any advance refunding of a bond described in paragraph (3) if— (A)no advance refundings of such bond would be allowed under this title on or after April 20, 2010, (B)the advance refunding bond is the only other outstanding bond with respect to the refunded bond, and (C)the requirements of section 148 are met with respect to all bonds issued under this subsection. (6)

Use of proceeds requirement

This subsection shall not apply to any advance refunding of a bond which is issued as part of an issue if any portion of the proceeds of such issue (or any prior issue) was (or is to be) used to provide any property described in section 144(c)(6)(B). (c)

Low-Income Housing Credit

(1)

Additional housing credit dollar amount for Gulf Oil Spill Recovery Zone

(A)

In general

For purposes of section 42, in the case of calendar years 2010, 2011, and 2012, the State housing credit ceiling of each State, any portion of which is located in the Gulf Oil Spill Recovery Zone, shall be increased by the lesser of— (i)the aggregate housing credit dollar amount allocated by the State housing credit agency of such State to buildings located in the Gulf Oil Spill Recovery Zone for such calendar year, or (ii)the Gulf Oil Spill Recovery housing amount for such State for such calendar year. (B)

Gulf opportunity housing amount

For purposes of subparagraph (A), the term Gulf Oil Spill Recovery housing amount means, for any calendar year, the amount equal to the product of $18.00 multiplied by the portion of the State population which is in the Gulf Oil Spill Recovery Zone (as determined on the basis of the most recent census estimate of resident population released by the Bureau of Census before April 20, 2010). (C)

Allocations treated as made first from additional allocation amount for purposes of determining carryover

For purposes of determining the unused State housing credit ceiling under section 42(h)(3)(C) for any calendar year, any increase in the State housing credit ceiling under subparagraph (A) shall be treated as an amount described in clause (ii) of such section. (2)

Difficult development area

(A)

In general

For purposes of section 42, in the case of property placed in service during 2011, 2012, or 2013, the Gulf Oil Spill Recovery Zone— (i)shall be treated as difficult development areas designated under subclause (I) of section 42(d)(5)(C)(iii), and (ii)shall not be taken into account for purposes of applying the limitation under subclause (II) of such section. (B)

Application

Subparagraph (A) shall apply only to— (i)housing credit dollar amounts allocated during the period beginning on January 1, 2011, and ending on December 31, 2013, and (ii)buildings placed in service during such period to the extent that paragraph (1) of section 42(h) does not apply to any building by reason of paragraph (4) thereof, but only with respect to bonds issued after December 31, 2010. (3)

Special rule for applying income tests

In the case of property placed in service— (A)during 2011, 2012, or 2013, (B)in the Gulf Oil Spill Recovery Zone, and (C)in a nonmetropolitan area (as defined in section 42(d)(5)(C)(iv)(IV)),

section 42 shall be applied by substituting national nonmetropolitan median gross income (determined under rules similar to the rules of section 142(d)(2)(B)) for area median gross income in subparagraphs (A) and (B) of section 42(g)(1).

(4)

Definitions

Any term used in this subsection which is also used in section 42 shall have the same meaning as when used in such section. (d)

Special Allowance for Certain Property Acquired on or After April 20, 2010

(1)

Additional allowance

In the case of any qualified Gulf Oil Spill Recovery Zone property— (A)the depreciation deduction provided by section 167(a) for the taxable year in which such property is placed in service shall include an allowance equal to 50 percent of the adjusted basis of such property, and (B)the adjusted basis of the qualified Gulf Oil Spill Recovery Zone property shall be reduced by the amount of such deduction before computing the amount otherwise allowable as a depreciation deduction under this chapter for such taxable year and any subsequent taxable year. (2)

Qualified Gulf Oil Spill Recovery Zone property

For purposes of this subsection— (A)

In general

The term qualified Gulf Oil Spill Recovery Zone property means property— (i)(I)which is described in section 168(k)(2)(A)(i), or (II)which is nonresidential real property or residential rental property, (ii)substantially all of the use of which is in the Gulf Oil Spill Recovery Zone and is in the active conduct of a trade or business by the taxpayer in such Zone, (iii)the original use of which in the Gulf Oil Spill Recovery Zone commences with the taxpayer on or after April 20, 2010, (iv)which is acquired by the taxpayer by purchase (as defined in section 179(d)) on or after April 20, 2010, but only if no written binding contract for the acquisition was in effect before April 20, 2010, and (v)which is placed in service by the taxpayer on or before December 31, 2012 (December 31, 2013, in the case of nonresidential real property and residential rental property). (B)

Exceptions

(i)

Alternative depreciation property

Such term shall not include any property described in section 168(k)(2)(D)(i). (ii)

Tax-exempt bond-financed property

Such term shall not include any property any portion of which is financed with the proceeds of any obligation the interest on which is exempt from tax under section 103. (iii)

Qualified revitalization buildings

Such term shall not include any qualified revitalization building with respect to which the taxpayer has elected the application of paragraph (1) or (2) of section 1400I(a). (iv)

Election out

If a taxpayer makes an election under this clause with respect to any class of property for any taxable year, this subsection shall not apply to all property in such class placed in service during such taxable year. (3)

Special rules

For purposes of this subsection, rules similar to the rules of subparagraph (E) of section 168(k)(2) shall apply, except that such subparagraph shall be applied— (A)by substituting April 20, 2010 for December 31, 2007 each place it appears therein, (B)by substituting January 1, 2013 for January 1, 2010 in clause (i) thereof, and (C)by substituting qualified Gulf Oil Spill Recovery Zone property for qualified property in clause (iv) thereof. (4)

Allowance against alternative minimum tax

For purposes of this subsection, rules similar to the rules of section 168(k)(2)(G) shall apply. (5)

Recapture

For purposes of this subsection, rules similar to the rules under section 179(d)(10) shall apply with respect to any qualified Gulf Oil Spill Recovery Zone property which ceases to be qualified Gulf Oil Spill Recovery Zone property. (e)

Increase in Expensing Under Section 179

(1)

In general

For purposes of section 179— (A)the dollar amount in effect under section 179(b)(1) for the taxable year shall be increased by the lesser of— (i)$100,000, or (ii)the cost of qualified section 179 Gulf Oil Spill Recovery Zone property placed in service during the taxable year, and (B)the dollar amount in effect under section 179(b)(2) for the taxable year shall be increased by the lesser of— (i)$600,000, or (ii)the cost of qualified section 179 Gulf Oil Spill Recovery Zone property placed in service during the taxable year. (2)

Qualified section 179 Gulf Oil Spill Recovery Zone property

For purposes of this subsection, the term qualified section 179 Gulf Oil Spill Recovery Zone property means section 179 property (as defined in section 179(d)) which is qualified Gulf Oil Spill Recovery Zone property (as defined in subsection (d)(2)). (3)

Coordination with empowerment zones and renewal communities

For purposes of sections 1397A and 1400J, qualified section 179 Gulf Oil Spill Recovery Zone property shall not be treated as qualified zone property or qualified renewal property, unless the taxpayer elects not to take such qualified section 179 Gulf Oil Spill Recovery Zone property into account for purposes of this subsection. (4)

Recapture

For purposes of this subsection, rules similar to the rules under section 179(d)(10) shall apply with respect to any qualified section 179 Gulf Oil Spill Recovery Zone property which ceases to be qualified section 179 Gulf Oil Spill Recovery Zone property. (f)

Expensing for Certain Demolition and Clean-Up Costs

(1)

In general

A taxpayer may elect to treat 50 percent of any qualified Gulf Oil Spill Recovery Zone clean-up cost as an expense which is not chargeable to capital account. Any cost so treated shall be allowed as a deduction for the taxable year in which such cost is paid or incurred. (2)

Qualified Gulf Oil Spill Recovery Zone clean-up cost

For purposes of this subsection, the term qualified Gulf Oil Spill Recovery Zone clean-up cost means any amount paid or incurred during the period beginning on April 20, 2010, and ending on December 31, 2012, for the removal of debris from, or the demolition of structures on, real property which is located in the Gulf Oil Spill Recovery Zone and which is— (A)held by the taxpayer for use in a trade or business or for the production of income, or (B)property described in section 1221(a)(1) in the hands of the taxpayer.

For purposes of the preceding sentence, amounts paid or incurred shall be taken into account only to the extent that such amount would (but for paragraph (1)) be chargeable to capital account.

(g)

Extension of Expensing for Environmental Remediation Costs

With respect to any qualified environmental remediation expenditure (as defined in section 198(b)) paid or incurred on or after April 20, 2010, in connection with a qualified contaminated site located in the Gulf Oil Spill Recovery Zone, section 198 (relating to expensing of environmental remediation costs) shall be applied— (1)in the case of expenditures paid or incurred on or after April 20, 2010, and before January 1, 2013, by substituting December 31, 2012 for the date contained in section 198(h), and (2)except as provided in section 198(d)(2), by treating petroleum products (as defined in section 4612(a)(3)) as a hazardous substance. (h)

Increase in Rehabilitation Credit

In the case of qualified rehabilitation expenditures (as defined in section 47(c)) paid or incurred during the period beginning on April 20, 2010, and ending on December 31, 2013, with respect to any qualified rehabilitated building or certified historic structure (as defined in section 47(c)) located in the Gulf Oil Spill Recovery Zone, subsection (a) of section 47 (relating to rehabilitation credit) shall be applied— (1)by substituting 13 percent for 10 percent in paragraph (1) thereof, and (2)by substituting 26 percent for 20 percent in paragraph (2) thereof. (i)

Treatment of Net Operating Losses Attributable to Gulf Oil Spill Recovery Zone Losses

(1)

In general

If a portion of any net operating loss of the taxpayer for any taxable year is a qualified Gulf Oil Spill Recovery Zone loss, the following rules shall apply: (A)

Extension of carryback period

Section 172(b)(1) shall be applied with respect to such portion— (i)by substituting 5 taxable years for 2 taxable years in subparagraph (A)(i), and (ii)by not taking such portion into account in determining any eligible loss of the taxpayer under subparagraph (F) thereof for the taxable year. (B)

Suspension of 90 percent amt limitation

Section 56(d)(1) shall be applied by increasing the amount determined under subparagraph (A)(ii)(I) thereof by the sum of the carrybacks and carryovers of any net operating loss attributable to such portion. (2)

Qualified Gulf Oil Spill Recovery Zone loss

For purposes of paragraph (1), the term qualified Gulf Oil Spill Recovery Zone loss means the lesser of— (A)the excess of— (i)the net operating loss for such taxable year, over (ii)the specified liability loss for such taxable year to which a 10-year carryback applies under section 172(b)(1)(C), or (B)the aggregate amount of the following deductions to the extent taken into account in computing the net operating loss for such taxable year: (i)Any deduction for any qualified Gulf Oil Spill Recovery Zone casualty loss. (ii)Any deduction for moving expenses paid or incurred after April 19, 2010, and before January 1, 2014, and allowable under this chapter to any taxpayer in connection with the employment of any individual— (I)whose principal place of abode was located in the Gulf Oil Spill Recovery Zone before April 20, 2010, (II)who was unable to remain in such abode as the result of the Gulf Oil Spill, and (III)whose principal place of employment with the taxpayer after such expense is located in the Gulf Oil Spill Recovery Zone.

For purposes of this clause, the term moving expenses has the meaning given such term by section 217(b), except that the taxpayer’s former residence and new residence may be the same residence if the initial vacating of the residence was by reason of the Gulf Oil Spill.

(iii)Any deduction allowable under this chapter for expenses paid or incurred after April 19, 2010, and before January 1, 2013, to temporarily house any employee of the taxpayer whose principal place of employment is in the Gulf Oil Spill Recovery Zone. (iv)Any deduction for depreciation (or amortization in lieu of depreciation) allowable under this chapter with respect to any qualified Gulf Oil Spill Recovery Zone property (as defined in subsection (d)(2), but without regard to subparagraph (B)(iv) thereof)) for the taxable year such property is placed in service. (v)Any deduction allowable under this chapter for repair expenses (including expenses for removal of debris) paid or incurred after April 19, 2010, and before January 1, 2013, with respect to any damage attributable to the Gulf Oil Spill and in connection with property which is located in the Gulf Oil Spill Recovery Zone. (3)

Qualified Gulf Oil Spill Recovery Zone casualty loss

(A)

In general

For purposes of paragraph (2)(B)(i), the term qualified Gulf Oil Spill Recovery Zone casualty loss means any uncompensated section 1231 loss (as defined in section 1231(a)(3)(B)) of property located in the Gulf Oil Spill Recovery Zone if— (i)such loss is allowed as a deduction under section 165 for the taxable year, and (ii)such loss is by reason of the Gulf Oil Spill. (B)

Reduction for gains from involuntary conversion

The amount of qualified Gulf Oil Spill Recovery Zone casualty loss which would (but for this subparagraph) be taken into account under subparagraph (A) for any taxable year shall be reduced by the amount of any gain recognized by the taxpayer for such year from the involuntary conversion by reason of the Gulf Oil Spill of property located in the Gulf Oil Spill Recovery Zone. (C)

Coordination with general disaster loss rules

Subsections (h) and (i) of section 165 shall not apply to any qualified Gulf Oil Spill Recovery Zone casualty loss to the extent such loss is taken into account under this subsection. (4)

Special rules

For purposes of paragraph (1), rules similar to the rules of paragraphs (2) and (3) of section 172(i) shall apply with respect to such portion. (j)

Credit to Holders of Gulf Oil Spill Recovery tax credit Bonds

(1)

Allowance of credit

If a taxpayer holds a Gulf Oil Spill Recovery tax credit bond on one or more credit allowance dates of the bond occurring during any taxable year, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of the credits determined under paragraph (2) with respect to such dates. (2)

Amount of credit

(A)

In general

The amount of the credit determined under this paragraph with respect to any credit allowance date for a Gulf Oil Spill Recovery tax credit bond is 25 percent of the annual credit determined with respect to such bond. (B)

Annual credit

The annual credit determined with respect to any Gulf Oil Spill Recovery tax credit bond is the product of— (i)the credit rate determined by the Secretary under subparagraph (C) for the day on which such bond was sold, multiplied by (ii)the outstanding face amount of the bond. (C)

Determination

For purposes of subparagraph (B), with respect to any Gulf Oil Spill Recovery tax credit bond, the Secretary shall determine daily or cause to be determined daily a credit rate which shall apply to the first day on which there is a binding, written contract for the sale or exchange of the bond. The credit rate for any day is the credit rate which the Secretary or the Secretary’s designee estimates will permit the issuance of Gulf Oil Spill Recovery tax credit bonds with a specified maturity or redemption date without discount and without interest cost to the issuer. (D)

Credit allowance date

For purposes of this subsection, the term credit allowance date means March 15, June 15, September 15, and December 15. Such term also includes the last day on which the bond is outstanding. (E)

Special rule for issuance and redemption

In the case of a bond which is issued during the 3-month period ending on a credit allowance date, the amount of the credit determined under this paragraph with respect to such credit allowance date shall be a ratable portion of the credit otherwise determined based on the portion of the 3-month period during which the bond is outstanding. A similar rule shall apply when the bond is redeemed or matures. (3)

Limitation based on amount of tax

The credit allowed under paragraph (1) for any taxable year shall not exceed the excess of— (A)the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, over (B)the sum of the credits allowable under part IV of subchapter A (other than subpart C and this subsection). (4)

Gulf Oil Spill Recovery tax credit bond

For purposes of this subsection— (A)

In general

The term Gulf Oil Spill Recovery tax credit bond means any bond issued as part of an issue if— (i)the bond is issued by the State of Florida, Alabama, Louisiana, or Mississippi, (ii)95 percent or more of the proceeds of such issue are to be used to— (I)pay principal, interest, or premiums on qualified bonds issued by such State or any political subdivision of such State, or (II)make a loan to any political subdivision of such State to pay principal, interest, or premiums on qualified bonds issued by such political subdivision, (iii)the Governor of such State designates such bond for purposes of this subsection, (iv)the bond is a general obligation of such State and is in registered form (within the meaning of section 149(a)), (v)the maturity of such bond does not exceed 2 years, and (vi)the bond is issued after December 31, 2010, and before January 1, 2013. (B)

State matching requirement

A bond shall not be treated as a Gulf Oil Spill Recovery tax credit bond unless— (i)the issuer of such bond pledges as of the date of the issuance of the issue an amount equal to the face amount of such bond to be used for payments described in subclause (I) of subparagraph (A)(ii), or loans described in subclause (II) of such subparagraph, as the case may be, with respect to the issue of which such bond is a part, and (ii)any such payment or loan is made in equal amounts from the proceeds of such issue and from the amount pledged under clause (i).

The requirement of clause (ii) shall be treated as met with respect to any such payment or loan made during the 1-year period beginning on the date of the issuance (or any successor 1-year period) if such requirement is met when applied with respect to the aggregate amount of such payments and loans made during such period.

(C)

Aggregate limit on bond designations

The maximum aggregate face amount of bonds which may be designated under this subsection by the Governor of a State shall not exceed— (i)$200,000,000 in the case of the State of Florida, (ii)$200,000,000 in the case of the State of Louisiana, (iii)$100,000,000 in the case of the State of Mississippi, and (iv)$50,000,000 in the case of the State of Alabama. (D)

Special rules relating to arbitrage

A bond which is part of an issue shall not be treated as a Gulf Oil Spill Recovery tax credit bond unless, with respect to the issue of which the bond is a part, the issuer satisfies the arbitrage requirements of section 148 with respect to proceeds of the issue and any loans made with such proceeds. (5)

Qualified bond

For purposes of this subsection— (A)

In general

The term qualified bond means any obligation of a State or political subdivision thereof which was outstanding on April 20, 2010. (B)

Exception for private activity bonds

Such term shall not include any private activity bond. (C)

Exception for advance refundings

Such term shall not include any bond with respect to which there is any outstanding refunded or refunding bond during the period in which a Gulf Oil Spill Recovery tax credit bond is outstanding with respect to such bond. (D)

Use of proceeds requirement

Such term shall not include any bond issued as part of an issue if any portion of the proceeds of such issue was (or is to be) used to provide any property described in section 144(c)(6)(B). (6)

Credit included in gross income

Gross income includes the amount of the credit allowed to the taxpayer under this subsection (determined without regard to paragraph (3)) and the amount so included shall be treated as interest income. (7)

Other definitions and special rules

For purposes of this subsection— (A)

Bond

The term bond includes any obligation. (B)

Partnership; s corporation; and other pass-thru entities

(i)

In general

Under regulations prescribed by the Secretary, in the case of a partnership, trust, S corporation, or other pass-thru entity, rules similar to the rules of section 41(g) shall apply with respect to the credit allowable under paragraph (1). (ii)

No basis adjustment

In the case of a bond held by a partnership or an S corporation, rules similar to the rules under section 1397E(i) shall apply. (C)

Bonds held by regulated investment companies

If any Gulf Oil Spill Recovery tax credit bond is held by a regulated investment company, the credit determined under paragraph (1) shall be allowed to shareholders of such company under procedures prescribed by the Secretary. (D)

Reporting

Issuers of Gulf Oil Spill Recovery tax credit bonds shall submit reports similar to the reports required under section 149(e). (E)

Credit treated as nonrefundable bondholder credit

For purposes of this title, the credit allowed by this subsection shall be treated as a credit allowable under subpart H of part IV of subchapter A of this chapter. (k)

Application of New Markets Tax Credit to Investments in Community Development Entities Serving Gulf Oil Spill Recovery Zone

For purposes of section 45D— (1)a qualified community development entity shall be eligible for an allocation under subsection (f)(2) thereof of the increase in the new markets tax credit limitation described in paragraph (2) only if a significant mission of such entity is the recovery and redevelopment of the Gulf Oil Spill Recovery Zone, (2)the new markets tax credit limitation otherwise determined under subsection (f)(1) thereof shall be increased by an amount equal to— (A)$300,000,000 for 2010 and 2011, to be allocated among qualified community development entities to make qualified low-income community investments within the Gulf Oil Spill Recovery Zone, and (B)$400,000,000 for 2012, to be so allocated, and (3)subsection (f)(3) thereof shall be applied separately with respect to the amount of the increase under paragraph (2). (l)

Treatment of Representations Regarding Income Eligibility for Purposes of Qualified Residential Rental Project Requirements

For purposes of determining if any residential rental project meets the requirements of section 142(d)(1) and if any certification with respect to such project meets the requirements under section 142(d)(7), the operator of the project may rely on the representations of any individual applying for tenancy in such project that such individual’s income will not exceed the applicable income limits of section 142(d)(1) upon commencement of the individual’s tenancy if such tenancy begins during the 6-month period beginning on and after the date such individual was displaced by reason of the Gulf Oil Spill. (m)

Treatment of Public Utility Property Gulf Oil Spill Losses

(1)

In general

Upon the election of the taxpayer, in the case of any eligible public utility property loss— (A)section 165(i) shall be applied by substituting the fifth taxable year immediately preceding for the taxable year immediately preceding, (B)an application for a tentative carryback adjustment of the tax for any prior taxable year affected by the application of subparagraph (A) may be made under section 6411, and (C)section 6611 shall not apply to any overpayment attributable to such loss. (2)

Eligible public utility property loss

For purposes of this subsection— (A)

In general

The term eligible public utility property loss means any loss with respect to public utility property located in the Gulf Oil Spill Recovery Zone and attributable to the Gulf Oil Spill. (B)

Public utility property

The term public utility property has the meaning given such term by section 168(i)(10) without regard to the matter following subparagraph (D) thereof. (3)

Waiver of limitations

If refund or credit of any overpayment of tax resulting from the application of paragraph (1) is prevented at any time before the close of the 1-year period beginning on the date of the enactment of this section by the operation of any law or rule of law (including res judicata), such refund or credit may nevertheless be made or allowed if claim therefor is filed before the close of such period. (n)

Tax Benefits Not Available With Respect to Certain Property

(1)

Qualified Gulf Oil Spill Recovery Zone property

For purposes of subsections (d), (e), and (j)(2)(B)(iv), the term qualified Gulf Oil Spill Recovery Zone property shall not include any property described in paragraph (3). (2)

Qualified Gulf Oil Spill Recovery Zone casualty losses

For purposes of subsection (j)(2)(B)(i), the term qualified Gulf Oil Spill Recovery Zone casualty loss shall not include any loss with respect to any property described in paragraph (3). (3)

Property described

(A)

In general

For purposes of this subsection, property is described in this paragraph if such property is— (i)any property used in connection with any private or commercial golf course, country club, massage parlor, hot tub facility, suntan facility, or any store the principal business of which is the sale of alcoholic beverages for consumption off premises, or (ii)any gambling or animal racing property. (B)

Gambling or animal racing property

For purposes of subparagraph (A)(ii)— (i)

In general

The term gambling or animal racing property means— (I)any equipment, furniture, software, or other property used directly in connection with gambling, the racing of animals, or the on-site viewing of such racing, and (II)the portion of any real property (determined by square footage) which is dedicated to gambling, the racing of animals, or the on-site viewing of such racing. (ii)

De minimis portion

Clause (i)(II) shall not apply to any real property if the portion so dedicated is less than 100 square feet.

1400V–3.

Housing tax benefits

(a)

Exclusion of Employer Provided Housing for Individual Affected by Gulf Oil Spill

(1)

In general

Gross income of a qualified employee shall not include the value of any lodging furnished in-kind to such employee (and such employee’s spouse or any of such employee’s dependents) by or on behalf of a qualified employer for any month during the taxable year. (2)

Limitation

The amount which may be excluded under paragraph (1) for any month for which lodging is furnished during the taxable year shall not exceed $600. (3)

Treatment of exclusion

The exclusion under paragraph (1) shall be treated as an exclusion under section 119 (other than for purposes of sections 3121(a)(19) and 3306(b)(14)). (b)

Employer Credit for Housing Employees Affected by Gulf Oil Spill

For purposes of section 38, in the case of a qualified employer, the Gulf Oil Spill housing credit for any month during the taxable year is an amount equal to 30 percent of any amount which is excludable from the gross income of a qualified employee of such employer under subsection (a) and not otherwise excludable under section 119. (c)

Qualified Employee

For purposes of this section, the term qualified employee means, with respect to any month, an individual— (1)who had a principal residence (as defined in section 121) in the Gulf Oil Spill Recovery Zone on April 20, 2010, and (2)who performs substantially all employment services— (A)in the Gulf Oil Spill Recovery Zone, and (B)for the qualified employer which furnishes lodging to such individual. (d)

Qualified Employer

For purposes of this section, the term qualified employer means any employer with a trade or business located in the Gulf Oil Spill Recovery Zone. (e)

Certain Rules to Apply

For purposes of this subsection, rules similar to the rules of sections 51(i)(1) and 52 shall apply. (f)

Application of Section

This section shall apply to lodging furnished during the period— (1)beginning on the first day of the first month beginning after the date of the enactment of this section, and (2)ending on the date which is 6 months after the first day described in paragraph (1).

1400V–4.

Special rules for use of retirement funds

(a)

Tax-Favored Withdrawals From Retirement Plans

(1)

In general

Section 72(t) shall not apply to any qualified Gulf Oil Spill distribution. (2)

Aggregate dollar limitation

(A)

In general

For purposes of this subsection, the aggregate amount of distributions received by an individual which may be treated as qualified Gulf Oil Spill distributions for any taxable year shall not exceed the excess (if any) of— (i)$100,000, over (ii)the aggregate amounts treated as qualified Gulf Oil Spill distributions received by such individual for all prior taxable years. (B)

Treatment of plan distributions

If a distribution to an individual would (without regard to subparagraph (A)) be a qualified Gulf Oil Spill distribution, a plan shall not be treated as violating any requirement of this title merely because the plan treats such distribution as a qualified Gulf Oil Spill 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. (C)

Controlled group

For purposes of subparagraph (B), the term controlled group means any group treated as a single employer under subsection (b), (c), (m), or (o) of section 414. (3)

Amount distributed may be repaid

(A)

In general

Any individual who receives a qualified Gulf Oil Spill distribution may, at any time during the 3-year period beginning on the day after the date on which such distribution was received, make one or more contributions in an aggregate amount not to exceed the amount of such distribution to an eligible retirement plan 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. (B)

Treatment of repayments of distributions from eligible retirement plans other than iras

For purposes of this title, if a contribution is made pursuant to subparagraph (A) with respect to a qualified Gulf Oil Spill distribution from an eligible retirement plan 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 Gulf Oil Spill 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. (C)

Treatment of repayments for distributions from iras

For purposes of this title, if a contribution is made pursuant to subparagraph (A) with respect to a qualified Gulf Oil Spill distribution from an individual retirement plan (as defined by section 7701(a)(37)), then, to the extent of the amount of the contribution, the qualified Gulf Oil Spill 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. (4)

Definitions

For purposes of this subsection— (A)

Qualified Gulf Oil Spill distribution

Except as provided in paragraph (2), the term qualified Gulf Oil Spill distribution means any distribution from an eligible retirement plan made on or after April 20, 2010, and before January 1, 2012, to an individual whose principal place of abode on April 20, 2010, is located in the Gulf Oil Spill Recovery Zone and who has sustained an economic loss by reason of the Gulf Oil Spill. (B)

Eligible retirement plan

The term eligible retirement plan shall have the meaning given such term by section 402(c)(8)(B). (5)

Income inclusion spread over 3-year period

(A)

In general

In the case of any qualified Gulf Oil Spill distribution, unless the taxpayer elects not to have this paragraph 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 rule

For purposes of subparagraph (A), rules similar to the rules of subparagraph (E) of section 408A(d)(3) shall apply. (6)

Special rules

(A)

Exemption of distributions from trustee to trustee transfer and withholding rules

For purposes of sections 401(a)(31), 402(f), and 3405, qualified Gulf Oil Spill distributions shall not be treated as eligible rollover distributions. (B)

Qualified Gulf Oil Spill distributions treated as meeting plan distribution requirements

For purposes this title, a qualified Gulf Oil Spill distribution shall be treated as meeting the requirements of sections 401(k)(2)(B)(i), 403(b)(7)(A)(ii), 403(b)(11), and 457(d)(1)(A). (b)

Recontributions of Withdrawals for Home Purchases

(1)

Recontributions

(A)

In general

Any individual who received a qualified distribution may, during the applicable period, 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 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), as the case may be. (B)

Treatment of repayments

Rules similar to the rules of subparagraphs (B) and (C) of subsection (a)(3) shall apply for purposes of this subsection. (2)

Qualified distribution

For purposes of this subsection, 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), (B)received after October 31, 2005, and before April 30, 2010, and (C)which was to be used to purchase or construct a principal residence in the Gulf Oil Spill Recovery Zone, but which was not so purchased or constructed on account of the Gulf Oil Spill. (3)

Applicable period

For purposes of this subsection, the term applicable period means the period beginning on April 20, 2010, and ending on October 20, 2010. (c)

Loans From Qualified Plans

(1)

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)) to a qualified individual made during the applicable period— (A)clause (i) of section 72(p)(2)(A) shall be applied by substituting $100,000 for $50,000, and (B)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. (2)

Delay of repayment

In the case of a qualified individual with an outstanding loan on or after the qualified beginning date from a qualified employer plan (as defined in section 72(p)(4))— (A)if the due date pursuant to subparagraph (B) or (C) of section 72(p)(2) for any repayment with respect to such loan occurs during the period beginning on the qualified beginning date and ending on December 31, 2011, such due date shall be delayed for 1 year, (B)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 (C)in determining the 5-year period and the term of a loan under subparagraph (B) or (C) of section 72(p)(2), the period described in subparagraph (A) shall be disregarded. (3)

Qualified individual

For purposes of this subsection, the term qualified individual means an individual whose principal place of abode on April 20, 2010, is located in the Gulf Oil Spill Recovery Zone and who has sustained an economic loss by reason of the Gulf Oil Spill. (4)

Applicable period; qualified beginning date

For purposes of this subsection— (A)the applicable period is the period beginning on April 20, 2010, and ending on December 31, 2011, and— (B)the qualified beginning date is April 20, 2010. (d)

Provisions Relating to Plan Amendments

(1)

In general

If this subsection applies to any amendment to any plan or annuity contract, such plan or contract shall be treated as being operated in accordance with the terms of the plan during the period described in paragraph (2)(B)(i). (2)

Amendments to which subsection applies

(A)

In general

This subsection shall apply to any amendment to any plan or annuity contract which is made— (i)pursuant to any provision of this section, or pursuant to any regulation issued by the Secretary or the Secretary of Labor under any provision of this section, and (ii)on or before the last day of the first plan year beginning on or after January 1, 2012, or such later date as the Secretary may prescribe.

In the case of a governmental plan (as defined in section 414(d)), clause (ii) shall be applied by substituting the date which is 2 years after the date otherwise applied under clause (ii).

(B)

Conditions

This subsection shall not apply to any amendment unless— (i)during the period— (I)beginning on the date that this section or the regulation described in subparagraph (A)(i) takes effect (or in the case of a plan or contract amendment not required by this section or such regulation, the effective date specified by the plan), and (II)ending on the date described in subparagraph (A)(ii) (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

(ii)such plan or contract amendment applies retroactively for such period.

1400V–5.

Employee Retention Credit for Employers Affected by Gulf Oil Spill

(a)

In general

For purposes of section 38, in the case of an eligible employer, the Gulf Oil Spill employee retention credit for any taxable year is 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 subsection— (1)

Eligible employer

The term eligible employer means any employer— (A)which conducted an active trade or business on April 20, 2010, in the Gulf Oil Spill Recovery Zone, and (B)with respect to whom the trade or business described in subparagraph (A) is inoperable on any day after April 20, 2010, and before January 1, 2011, as a result of damage sustained by reason of the Gulf Oil Spill. (2)

Eligible employee

The term eligible employee means with respect to an eligible employer an employee whose principal place of employment on April 20, 2010, with such eligible employer was in the Gulf Oil Spill Recovery Zone. (3)

Qualified wages

The term qualified wages means wages (as defined in section 51(c)(1)), but without regard to section 3306(b)(2)(B)) paid or incurred by an eligible employer with respect to an eligible employee on any day after April 20, 2010, and before January 1, 2011, 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 the Gulf Oil Spill, 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 place of employment different than such principal place of employment, or performs services at such principal place of employment before significant operations have resumed.

(c)

Certain rules To apply

For purposes of this section, rules similar to the rules of sections 51(i)(1) and 52 shall apply. (d)

Employee not taken into account more than once

An employee shall not be treated as an eligible employee for purposes of this subsection for any period with respect to any employer if such employer is allowed a credit under section 51 with respect to such employee for such period.

1400V–6.

Additional tax relief provisions

(a)

Temporary Suspension of Limitations on Charitable Contributions

(1)

In general

Except as otherwise provided in paragraph (2), section 170(b) shall not apply to qualified contributions and such contributions shall not be taken into account for purposes of applying subsections (b) and (d) of section 170 to other contributions. (2)

Treatment of excess contributions

For purposes of section 170— (A)

Individuals

In the case of an individual— (i)

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 subparagraph (F) of section 170(b)(1)) over the amount of all other charitable contributions allowed under section 170(b)(1). (ii)

Carryover

If the aggregate amount of qualified contributions made in the contribution year (within the meaning of section 170(d)(1)) exceeds the limitation of clause (i), 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. (B)

Corporations

In the case of a corporation— (i)

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)) over the amount of all other charitable contributions allowed under such paragraph. (ii)

Carryover

Rules similar to the rules of subparagraph (A)(ii) shall apply for purposes of this subparagraph. (3)

Exception to overall limitation on itemized deductions

So much of any deduction allowed under section 170 as does not exceed the qualified contributions paid during the taxable year shall not be treated as an itemized deduction for purposes of section 68. (4)

Qualified contributions

(A)

In general

For purposes of this subsection, the term qualified contribution means any charitable contribution (as defined in section 170(c)) if— (i)such contribution is paid during the period beginning on April 20, 2010, and ending on December 31, 2012, in cash to an organization described in section 170(b)(1)(A) (other than an organization described in section 509(a)(3)), (ii)in the case of a contribution paid by a corporation, such contribution is for relief efforts related to the Gulf Oil Spill, and (iii)the taxpayer has elected the application of this subsection with respect to such contribution. (B)

Exception

Such term shall not include a contribution if the contribution is for establishment of a new, or maintenance in an existing, segregated fund or account with respect to which the donor (or any person appointed or designated by such donor) has, or reasonably expects to have, advisory privileges with respect to distributions or investments by reason of the donor’s status as a donor. (C)

Application of election to partnerships and s corporations

In the case of a partnership or S corporation, the election under subparagraph (A)(iii) shall be made separately by each partner or shareholder. (b)

Suspension of Certain Limitations on Personal Casualty Losses

Paragraphs (1) and (2)(A) of section 165(h) shall not apply to losses described in section 165(c)(3) which arise in the Gulf Oil Spill Recovery Zone on or after April 20, 2010, and which are attributable to the Gulf Oil Spill. In the case of any other losses, section 165(h)(2)(A) shall be applied without regard to the losses referred to in the preceding sentence. (c)

Required Exercise of Authority Under Section 7508A

In the case of any taxpayer determined by the Secretary to be affected by the Gulf Oil Spill, any relief provided by the Secretary under section 7508A shall be for a period ending not earlier than October 20, 2011. (d)

Special Rule for Determining Earned Income

(1)

In general

In the case of a qualified individual, if the earned income of the taxpayer for the taxable year which includes the applicable date is less than the earned income of the taxpayer for the preceding taxable year, the credits allowed under sections 24(d) and 32 may, at the election of the taxpayer, be determined by substituting— (A)such earned income for the preceding taxable year, for (B)such earned income for the taxable year which includes the applicable date. (2)

Qualified individual

For purposes of this subsection, the term qualified individual means any individual— (A)whose principal place of abode on April 20, 2010, was located in the Gulf Oil Spill Recovery Zone, and (B)who was displaced from such principal place of abode by reason of the Gulf Oil Spill. (3)

Applicable date

For purposes of this subsection, the term applicable date means April 20, 2010. (4)

Earned income

For purposes of this subsection, the term earned income has the meaning given such term under section 32(c). (5)

Special rules

(A)

Application to joint returns

For purposes of paragraph (1), in the case of a joint return for a taxable year which includes the applicable date— (i)such paragraph shall apply if either spouse is a qualified individual, and (ii)the earned income of the taxpayer for the preceding taxable year shall be the sum of the earned income of each spouse for such preceding taxable year. (B)

Uniform application of election

Any election made under paragraph (1) shall apply with respect to both sections 24(d) and section 32. (C)

Errors treated as mathematical error

For purposes of section 6213, an incorrect use on a return of earned income pursuant to paragraph (1) shall be treated as a mathematical or clerical error. (D)

No effect on determination of gross income, etc

Except as otherwise provided in this subsection, this title shall be applied without regard to any substitution under paragraph (1). (e)

Secretarial Authority To Make Adjustments Regarding Taxpayer and Dependency Status

With respect to taxable years beginning in 2010 or 2011, the Secretary 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 by reason of the Gulf Oil Spill. 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.

1400V–7.

Special rules for mortgage revenue bonds

(a)

In General

In the case of financing provided with respect to owner-occupied residences in the Gulf Oil Spill Recovery Zone, section 143 shall be applied— (1)by treating any such residence as a targeted area residence, (2)by applying subsection (f)(3) thereof without regard to subparagraph (A) thereof, and (3)by substituting $150,000 for $15,000 in subsection (k)(4) thereof. (b)

Application

Subsection (a) shall not apply to financing provided after December 31, 2010.

(b)

Conforming Amendments

(1)Paragraph (2) of section 54(c) is amended by inserting section 1400V–2(j), after 1400N(l). (2)Subparagraph (A) of section 6049(d)(8) is amended— (A)by striking or 1400N(l)(6) and inserting , 1400N(l)(6), or 1400V–2(k)(6), and (B)by striking or 1400N(l)(2)(D) and inserting 1400N(l)(2)(D), or 1400V–2(j)(2)(D). (3)Subsection (b) of section 38 is amended by striking plus at the end of paragraph (35), by striking the period at the end of paragraph (36) and inserting a comma, and by adding at the end the following new paragraphs:

(37)the Gulf Oil Spill housing credit determined under section 1400V–3(b), plus (38)the Gulf Oil Spill employee retention credit determined under section 1400V–5(a).

(4)Section 280C(a) is amended by striking and 1400R and inserting 1400R, 1400V–3(b), and 1400V–5. (5)The table of parts for subchapter Y of chapter 1 is amended by adding at the end the following new item:

Part IV. Tax Benefits for Gulf Oil Spill Recovery Zone.

(c)

Effective Date

(1)

In general

Except as provided in paragraph (2), the amendments made by this section shall apply to taxable years ending on or after April 20, 2010. (2)

Carrybacks

Subsections (j) and (n) of section 1400V–2 of the Internal Revenue Code of 1986 (as added by this section) shall apply to losses arising in such taxable years.