[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6683 Introduced in House (IH)]

112th CONGRESS
  2d Session
                                H. R. 6683

 To amend the Internal Revenue Code of 1986 to provide tax relief for 
      damages relating to Hurricane Sandy, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           December 19, 2012

  Mr. Pascrell (for himself, Mr. Rangel, Mr. Smith of New Jersey, Mr. 
Pallone, Ms. DeLauro, Mr. LoBiondo, Mr. Frelinghuysen, Mr. Crowley, Mr. 
 Larson of Connecticut, Mr. Garrett, Mr. Lance, Mr. Grimm, Mr. Runyan, 
 Mr. Turner of New York, Mrs. Lowey, Mr. Israel, Mr. Reed, Mr. Engel, 
   Mr. Towns, Mr. Sires, Mr. Higgins, Mr. Andrews, Mr. Courtney, Mr. 
    Langevin, Mr. Ackerman, Mr. Payne, and Mr. Holt) introduced the 
 following bill; which was referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to provide tax relief for 
      damages relating to Hurricane Sandy, 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 ``Hurricane Sandy 
Tax Relief Act of 2012''.
    (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this Act an amendment or repeal is expressed in 
terms of an amendment to, or repeal of, a section or other provision, 
the reference shall be considered to be made to a section or other 
provision of the Internal Revenue Code of 1986.
    (c) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title, etc.
Sec. 2. Waiver of adjusted gross income limitation for losses and 
                            increase in standard deduction by disaster 
                            casualty losses attributable to Hurricane 
                            Sandy.
Sec. 3. Expensing of qualified disaster expenses.
Sec. 4. Net operating losses attributable to federally declared 
                            disasters.
Sec. 5. Waiver of certain mortgage revenue bond requirements following 
                            federally declared disasters.
Sec. 6. Increased expensing for Hurricane Sandy qualified disaster 
                            assistance property.
Sec. 7. Increased limitation on charitable contributions for disaster 
                            relief; certain contributions paid before 
                            April 15, 2013, treated as paid in 2012.
Sec. 8. Increase in new markets tax credit for investments in community 
                            development entities serving Hurricane 
                            Sandy disaster areas.
Sec. 9. Extension of expensing for environmental remediation costs.
Sec. 10. Special rule for public utility casualty losses.
Sec. 11. Determination of earned income for purposes of earned income 
                            credit and child tax credit.
Sec. 12. Work Opportunity Credit.
Sec. 13. Hurricane Sandy Bonds.
Sec. 14. Additional low-income housing credit may be allocated in 
                            States damaged by Hurricane Sandy.
Sec. 15. Special rules for use of retirement funds.

SEC. 2. WAIVER OF ADJUSTED GROSS INCOME LIMITATION FOR LOSSES AND 
              INCREASE IN STANDARD DEDUCTION BY DISASTER CASUALTY 
              LOSSES ATTRIBUTABLE TO HURRICANE SANDY.

    (a) In General.--Subclause (I) of section 165(h)(3)(B)(i) is 
amended by striking ``January 1, 2010'' and inserting ``January 1, 
2010, or the Hurricane Sandy federally declared disaster''.
    (b) Hurricane Sandy Federally Declared Disaster.--Paragraph (3) of 
section 165(h) is amended by adding at the end the following new 
subparagraph:
                    ``(D) Application to hurricane sandy.--
                            ``(i) In general.--Personal casualty losses 
                        shall be treated as described in subparagraph 
                        (B)(i) if such losses--
                                    ``(I) are attributable to the 
                                Hurricane Sandy federally declared 
                                disaster, and
                                    ``(II) occur in the Hurricane Sandy 
                                disaster area.
                            ``(ii) Hurricane sandy federally declared 
                        disaster.--For purposes of clause (i), the term 
                        `Hurricane Sandy federally declared disaster' 
                        means the disaster occurring by reason of 
                        Hurricane Sandy and determined by the President 
                        before November 4, 2012, to warrant individual 
                        or individual and public assistance from the 
                        Federal Government under the Robert T. Stafford 
                        Disaster Relief and Emergency Assistance Act.
                            ``(iii) Hurricane sandy disaster area.--The 
                        term `Hurricane Sandy disaster area' means the 
                        area so determined to warrant such 
                        assistance.''.
    (c) Effective Date.--The amendments made by this subsection shall 
apply to taxable years ending after October 28, 2012.

SEC. 3. EXPENSING OF QUALIFIED DISASTER EXPENSES.

    (a) In General.--Paragraph (2) of 198A(b) is amended--
            (1) in subparagraph (A) by striking ``January 1, 2010'' and 
        inserting ``January 1, 2010, or released in the Hurricane Sandy 
        disaster area on account of the Hurricane Sandy federally 
        declared disaster, as defined by section 165(h)(3)(D)'',
            (2) in subparagraph (B) by striking ``such date'' and 
        inserting ``such date or which is business-related property in 
        the Hurricane Sandy disaster area that is damaged or destroyed 
        as a result of the Hurricane Sandy federally declared disaster 
        (as so defined)'', and
            (3) in subparagraph (C) by striking ``such date'' and 
        inserting ``such date or which is business-related property in 
        the Hurricane Sandy disaster area that is damaged as a result 
        of the Hurricane Sandy federally declared disaster (as so 
        defined)''.
    (b) Effective Date.--The amendments made by this section shall 
apply to amounts paid or incurred after October 28, 2012.

SEC. 4. NET OPERATING LOSSES ATTRIBUTABLE TO FEDERALLY DECLARED 
              DISASTERS.

    (a) In General.--Subsection (j) of section 172 is amended by adding 
at the end the following new paragraph:
            ``(5) Application to hurricane sandy.--
                    ``(A) In general.--Losses shall be treated as 
                described in paragraph (1)(A)(i) if such losses are 
                attributable to the Hurricane Sandy federally declared 
                disaster (as defined in section 165(h)(3)(D)) and occur 
                in the Hurricane Sandy disaster area (as so defined).
                    ``(B) Special rule.--For purposes of subparagraph 
                (A), paragraph (4) shall not apply.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years ending after October 28, 2012.

SEC. 5. WAIVER OF CERTAIN MORTGAGE REVENUE BOND REQUIREMENTS FOLLOWING 
              FEDERALLY DECLARED DISASTERS.

    (a) In General.--Subparagraphs (A)(i) and (B)(i) of section 
143(k)(12), as added by the Tax Extenders and Alternative Minimum Tax 
Relief Act of 2008, are each amended by striking ``January 1, 2010'' 
and inserting ``January 1, 2010, or in the case of a residence located 
in the Hurricane Sandy disaster area on October 29, 2012, by reason of 
the Hurricane Sandy federally declared disaster, as defined by section 
165(h)(3)(D)''.
    (b) Conforming Amendments.--Subparagraph (A)(ii) of such section is 
amended by striking ``such date'' and inserting ``such date or by 
reason of the Hurricane Sandy federally declared disaster (as so 
defined)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to disasters occurring after October 28, 2012.

SEC. 6. INCREASED EXPENSING FOR HURRICANE SANDY QUALIFIED DISASTER 
              ASSISTANCE PROPERTY.

    (a) In General.--Subsection (e) of section 179 is amended to read 
as follows:
    ``(e) Special Rules for Hurricane Sandy.--
            ``(1) In general.--If a taxpayer elects the application of 
        this subsection for a taxable year and places in service during 
        the taxable year any Hurricane Sandy qualified disaster 
        assistance property--
                    ``(A) the dollar amount in effect under subsection 
                (b)(1) for the taxable year shall be increased by the 
                qualified disaster limitation amount, and
                    ``(B) the dollar amount in effect under subsection 
                (b)(2) for the taxable year shall be increased by the 
                qualified disaster limitation reduction amount.
            ``(2) Qualified disaster limitation amount.--For purposes 
        of paragraph (1), the term `qualified disaster limitation 
        amount' means the lesser of--
                    ``(A) $500,000, or
                    ``(B) the cost of Hurricane Sandy qualified 
                disaster assistance property placed in service during 
                the taxable year.
            ``(3) Qualified disaster limitation reduction amount.--For 
        purposes of paragraph (1), the term `qualified disaster 
        limitation amount' means the lesser of--
                    ``(A) $2,000,000, or
                    ``(B) the cost of Hurricane Sandy qualified 
                disaster assistance property placed in service during 
                the taxable year.
            ``(4) Hurricane sandy qualified disaster assistance 
        property.--For purposes of this subsection--
                    ``(A) In general.--The term `Hurricane Sandy 
                qualified disaster assistance property' means section 
                179 property (as defined in subsection (d)) and 
                qualified property--
                            ``(i) the original use of which in the 
                        Hurricane Sandy disaster area commences with 
                        the taxpayer on or after October 29, 2012,
                            ``(ii) substantially all of the use of 
                        which is--
                                    ``(I) in the Hurricane Sandy 
                                disaster area, and
                                    ``(II) in the active conduct of a 
                                trade or business by the taxpayer in 
                                the Hurricane Sandy disaster area,
                            ``(iii) which--
                                    ``(I) rehabilitates property 
                                damaged, or replaces property destroyed 
                                or condemned, as a result of the 
                                Hurricane Sandy federally declared 
                                disaster, except that, for purposes of 
                                this clause, property shall be treated 
                                as replacing property destroyed or 
                                condemned if, as part of an integrated 
                                plan, such property replaces property 
                                which is included in a continuous area 
                                which includes real property destroyed 
                                or condemned, and
                                    ``(II) is located in the same 
                                county as the property being 
                                rehabilitated or replaced,
                            ``(iv) which is placed in service or 
                        acquired by the taxpayer by purchase (as 
                        defined in subsection (d)) on or after October 
                        29, 2012, but only if no written binding 
                        contract for the acquisition was in effect 
                        before such date, and
                            ``(v) which is placed in service by the 
                        taxpayer on or after October 29, 2012, and 
                        before December 31, 2015 (December 31, 2016, in 
                        the case of nonresidential real property and 
                        residential rental property).
                    ``(B) Qualified property.--The term `qualified 
                property' means property which is--
                            ``(i) tangible property to which section 
                        168 applies and which has a recovery period of 
                        39 years or less, or
                            ``(ii) computer software (as defined in 
                        section 167(f)(1)(B)) for which a deduction is 
                        allowable under section 167(a).
                    ``(C) Exceptions.--
                            ``(i) Alternative depreciation property.--
                        Such term shall not include any property to 
                        which the alternative depreciation system under 
                        section 168(g) applies, determined without 
                        regard to paragraph (7) thereof (relating to 
                        election to have system apply).
                            ``(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.
                    ``(D) Election.--An election under this subsection 
                for any taxable year shall--
                            ``(i) specify the items of Hurricane Sandy 
                        qualified disaster assistance property to which 
                        the election applies and the portion of the 
                        cost of each of such items which is to be taken 
                        into account under paragraph (1), and
                            ``(ii) be made on the taxpayer's return of 
                        the tax imposed by this chapter for the taxable 
                        year.
                    ``(E) 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--
                            ``(i) by substituting `the date of the 
                        Hurricane Sandy federally declared disaster' 
                        for `December 31, 2007' each place it appears 
                        therein,
                            ``(ii) by substituting `January 1, 2014' 
                        for `January 1, 2013' in clause (i) thereof, 
                        and
                            ``(iii) by substituting `Hurricane Sandy 
                        qualified section 179 disaster assistance 
                        property' for `qualified property' in clause 
                        (iv) thereof.
            ``(5) Terms relating to hurricane sandy.--For purposes of 
        this subsection, the terms `Hurricane Sandy federally declared 
        disaster' and `Hurricane Sandy disaster area' have the meanings 
        given such terms by section 165(h)(3)(D).
            ``(6) Recapture.--For purposes of this subsection, rules 
        similar to the rules under subsection (d)(10) shall apply with 
        respect to any qualified section 179 disaster assistance 
        property which ceases to be qualified section 179 disaster 
        assistance property.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after October 28, 2012.

SEC. 7. INCREASED LIMITATION ON CHARITABLE CONTRIBUTIONS FOR DISASTER 
              RELIEF; CERTAIN CONTRIBUTIONS PAID BEFORE APRIL 15, 2013, 
              TREATED AS PAID IN 2012.

    (a) Individuals.--Paragraph (1) of section 170(b) is amended by 
redesignating subparagraphs (F) and (G) as subparagraphs (G) and (H), 
respectively, and by inserting after subparagraph (E) the following new 
subparagraph:
                    ``(F) Qualified hurricane sandy disaster 
                contributions.--
                            ``(i) In general.--Any qualified Hurricane 
                        Sandy disaster contribution shall be allowed to 
                        the extent that the aggregate of such 
                        contributions does not exceed the excess of 80 
                        percent of the taxpayer's contribution base 
                        over the amount of all other charitable 
                        contributions allowable under this paragraph.
                            ``(ii) Qualified hurricane sandy disaster 
                        contribution.--For purposes of this 
                        subparagraph, the term `qualified Hurricane 
                        Sandy disaster contribution' means any 
                        charitable contribution if--
                                    ``(I) such contribution--
                                            ``(aa) is paid during the 
                                        period beginning on October 29, 
                                        2012, and ending on December 
                                        31, 2013, in cash to an 
                                        organization described in 
                                        subparagraph (A), and
                                            ``(bb) is made for relief 
                                        efforts in the Hurricane Sandy 
                                        disaster area related to the 
                                        Hurricane Sandy federally 
                                        declared disaster,
                                    ``(II) the taxpayer obtains from 
                                such organization contemporaneous 
                                written acknowledgment (within the 
                                meaning of subsection (f)(8)) that such 
                                contribution was used (or is to be 
                                used) for relief efforts in the 
                                Hurricane Sandy disaster area related 
                                to the Hurricane Sandy federally 
                                declared disaster, and
                                    ``(III) the taxpayer has elected 
                                the application of this subparagraph 
                                with respect to such contribution.
                            ``(iii) Exception.--A qualified Hurricane 
                        Sandy disaster contribution shall not include a 
                        contribution by a donor if the contribution 
                        is--
                                    ``(I) to an organization described 
                                in section 509(a)(3), or
                                    ``(II) for establishment of a new, 
                                or maintenance of an existing, donor 
                                advised fund (as defined in section 
                                4966(d)(2)).
                            ``(iv) Carryover.--
                                    ``(I) In general.--If the aggregate 
                                amount of contributions described in 
                                clause (i) exceeds the limitation under 
                                clause (i), such excess shall be 
                                treated (in a manner consistent with 
                                the rules of subsection (d)(1)) as a 
                                charitable contribution to which clause 
                                (i) applies in each of the 5 succeeding 
                                years in order of time.
                                    ``(II) Coordination with other 
                                subparagraphs.--For purposes of 
                                applying this subparagraph and 
                                subsection (d)(1), contributions 
                                described in clause (i) shall not be 
                                treated as described in subparagraph 
                                (A) and such subparagraph shall be 
                                applied without regard to such 
                                contributions.
                            ``(v) 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.
                            ``(vi) Hurricane sandy federally declared 
                        disaster and disaster area.--For purposes of 
                        this subparagraph, the terms `Hurricane Sandy 
                        federally declared disaster' and `Hurricane 
                        Sandy disaster area' have the meanings given 
                        such terms by section 165(h)(3)(D).''.
    (b) Corporations.--
            (1) In general.--Paragraph (2) of section 170(b) is amended 
        by redesignating subparagraph (C) as subparagraph (D) and by 
        inserting after subparagraph (B) the following new 
        subparagraph:
                    ``(C) Qualified disaster contributions.--
                            ``(i) In general.--Any qualified Hurricane 
                        Sandy disaster contribution shall be allowed to 
                        the extent that the aggregate of such 
                        contributions does not exceed the excess of 20 
                        percent of the taxpayer's taxable income over 
                        the amount of charitable contributions allowed 
                        under subparagraph (A).
                            ``(ii) Carryover.--If the aggregate amount 
                        of contributions described in clause (i) 
                        exceeds the limitation under clause (i), such 
                        excess shall be treated (in a manner consistent 
                        with the rules of subsection (d)(1)) as a 
                        charitable contribution to which clause (i) 
                        applies in each of the 5 succeeding years in 
                        order of time.
                            ``(iii) Qualified disaster contribution.--
                        The term `qualified Hurricane Sandy disaster 
                        contribution' has the meaning given such term 
                        under paragraph (1)(F).''.
            (2) Conforming amendments.--
                    (A) Subparagraph (A) of section 170(b)(2) is 
                amended by striking ``subparagraph (B) applies'' and 
                inserting ``subparagraphs (B) and (C) apply''.
                    (B) Subparagraph (B) of section 170(b)(2) is 
                amended by striking ``subparagraph (A)'' and inserting 
                ``subparagraphs (A) and (C)''.
    (c) Contributions Treated as Made in Prior Year.--Subsection (b) of 
section 170 of such Code is amended by adding at the end the following 
new paragraph:
            ``(4) Contributions treated as made in prior year.--For 
        purposes of this section, a taxpayer may treat any qualified 
        Hurricane Sandy disaster contribution (as defined in paragraph 
        (1)(F)) which is paid after December 31, 2012, and on or before 
        April 15, 2013, as if such contribution was made on December 
        31, 2012, and not in 2013.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after the date of the enactment of this 
Act.

SEC. 8. INCREASE IN NEW MARKETS TAX CREDIT FOR INVESTMENTS IN COMMUNITY 
              DEVELOPMENT ENTITIES SERVING HURRICANE SANDY DISASTER 
              AREAS.

    (a) In General.--Paragraph (1) of section 45D(f) is amended by 
striking the period at the end of subparagraph (G) and inserting ``, 
and'' and by adding at the end the following:
                    ``(H) in the case of the Hurricane Sandy Federal 
                disaster area, $250,000,000.''.
    (b) Rules Relating to Hurricane Sandy.--Subsection (f) of section 
45D is amended by adding at the end the following new paragraph:
            ``(4) Increased special allocation for community 
        development entities serving hurricane sandy federal disaster 
        areas.--
                    ``(A) In general.--The limitation under paragraph 
                (1)(H) shall be allocated among qualified community 
                development entities to make qualified low-income 
                community investments within the Hurricane Sandy 
                disaster area (as defined in section 165(h)(3)(D)).
                    ``(B) Allocation of increase.--The limitation under 
                subparagraph (A) shall be allocated by the Secretary 
                under paragraph (2) to qualified community development 
                entities and shall give priority to such entities with 
                a record of having successfully provided capital or 
                technical assistance to businesses or communities 
                within the Hurricane Sandy disaster area.
                    ``(C) Separate carryover of unused limitation.--
                Paragraph (3) shall be applied separately with respect 
                to the limitation under paragraph (1)(H).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to calendar years beginning after 2011.

SEC. 9. EXTENSION OF EXPENSING FOR ENVIRONMENTAL REMEDIATION COSTS.

    (a) In General.--Section 198 is amended by adding at the end the 
following:
    ``(i) Extension Relating to Hurricane Sandy.--Subsection (h) shall 
not apply in the case of any qualified environmental remediation 
expenditure paid or incurred after the date of the Hurricane Sandy 
federally declared disaster (as defined in section 165(h)(3)(D)) and 
before January 1, 2015, by reason of such disaster at a qualified 
contaminated site located in the Hurricane Sandy disaster area (as so 
defined).''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to expenditures paid or incurred after October 28, 2012.

SEC. 10. SPECIAL RULE FOR PUBLIC UTILITY CASUALTY LOSSES.

    (a) In General.--Subsection (f) of section 172 is amended by adding 
at the end the following:
            ``(7) Hurricane sandy public utility casualty losses.--
                    ``(A) In general.--The amount described in 
                paragraph (1)(A) for any taxable year shall be 
                increased by the Hurricane Sandy public utility 
                casualty loss for such taxable year.
                    ``(B) Hurricane sandy public utility casualty 
                loss.--For purposes of this paragraph, the term 
                `Hurricane Sandy public utility casualty loss' means 
                any casualty loss of public utility property (as 
                defined in section 168(i)(10)) located in the Hurricane 
                Sandy disaster area if--
                            ``(i) such loss is allowed as a deduction 
                        under section 165 for the taxable year,
                            ``(ii) such loss is by reason of Hurricane 
                        Sandy, and
                            ``(iii) the taxpayer elects the application 
                        of this paragraph with respect to such loss.
                    ``(C) Reduction for gains from involuntary 
                conversion.--The amount of any Hurricane Sandy public 
                utility 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 Hurricane 
                Sandy of public utility property (as so defined) 
                located in the Hurricane Sandy disaster area.
                    ``(D) Hurricane sandy disaster area.--For purposes 
                of this paragraph, the term `Hurricane Sandy disaster 
                area' has the meaning given such term by section 
                165(h)(3)(D).
                    ``(E) Coordination with general disaster loss 
                rules.--Section 168(k) and section 165(i) shall not 
                apply to any Hurricane Sandy public utility casualty 
                loss to the extent such loss is taken into account 
                under subparagraph (A).
                    ``(F) Election.--Any election under subparagraph 
                (B)(iii) shall be made in such manner as may be 
                prescribed by the Secretary and shall be made by the 
                due date (including extensions of time) for filing the 
                taxpayer's return for the taxable year of the loss. 
                Such election, once made for any taxable year, shall be 
                irrevocable for such taxable year.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to losses arising in taxable years ending after October 28, 2012.

SEC. 11. DETERMINATION OF EARNED INCOME FOR PURPOSES OF EARNED INCOME 
              CREDIT AND CHILD TAX CREDIT.

    (a) Earned Income Credit.--Section 32 is amended by adding at the 
end the following new subsection:
    ``(n) Special Rule Relating to Hurricane Sandy.--For purposes of 
this section and section 24(d)--
            ``(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 credit allowed 
        under subsection (a) 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 the 
                applicable date was located in the Hurricane Sandy 
                disaster area and such individual was displaced from 
                such principal place of abode by reason of the 
                Hurricane Sandy federally declared disaster, or
                    ``(B) who performed substantially all employment 
                services in the disaster area and was so employed on 
                the applicable date.
            ``(3) Other definitions.--For purposes of this subsection--
                    ``(A) Applicable date.--The term `applicable date' 
                means any day on or after October 29, 2012, and on or 
                before November 3, 2012.
                    ``(B) Hurricane sandy federally declared disaster 
                and disaster area.--The terms `Hurricane Sandy 
                federally declared disaster' and `Hurricane Sandy 
                disaster area' have the meanings given such terms by 
                section 165(h)(3)(D).
            ``(4) 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 this section and section 24(d).
                    ``(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).''.
    (b) Child Tax Credit.--Subsection (d) of section 24 is amended by 
adding at the end the following new paragraph:
            ``(5) Special rule relating to hurricane sandy.--See 
        section 32(n) for determination of earned income with respect 
        to the Hurricane Sandy federally declared disaster.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after October 28, 2012.

SEC. 12. WORK OPPORTUNITY CREDIT.

    (a) In General.--Paragraph (1) of section 51(d) is amended by 
striking ``or'' at the end of subparagraph (H), by striking the period 
at the end of subparagraph (I) and inserting ``, or'', and by inserting 
after subparagraph (I) the following new subparagraph:
                    ``(J) a Hurricane Sandy employee.''.
    (b) Hurricane Sandy Employee.--Subsection (d) of section 51 is 
amended by adding at the end the following:
            ``(15) Hurricane sandy employee.--
                    ``(A) In general.--The term `Hurricane Sandy 
                employee' means any individual--
                            ``(i) who, on or after October 29, 2012, 
                        and on or before November 3, 2012, had a 
                        principal place of abode in the Hurricane Sandy 
                        disaster area,
                            ``(ii) who did not apply for or receive 
                        unemployment compensation under State or 
                        Federal law in 2012 before October 29, 2012, 
                        but first applied for or received such 
                        compensation after such date and before 
                        February 15, 2013,
                            ``(iii) who receives such compensation 
                        without a break until the earlier of exhausting 
                        such compensation under Federal or State law or 
                        the hiring date, and
                            ``(iv) whose hiring date for a position the 
                        principal place of employment of which is 
                        located in the Hurricane Sandy disaster area 
                        (as defined in section 165(h)(3)(D)) is before 
                        January 1, 2014.
                    ``(B) Reasonable identification acceptable.--In 
                lieu of the certification requirement under 
                subparagraph (A) of paragraph (13), an individual may 
                provide to the employer reasonable evidence that the 
                individual is a Hurricane Sandy employee, and 
                subparagraph (B) of such paragraph shall be applied as 
                if such evidence were a certification described in such 
                subparagraph.
                    ``(C) Special rules.--For purposes of this 
                paragraph--
                            ``(i) subsection (c)(4) shall not apply, 
                        and
                            ``(ii) subsection (i)(2) shall not apply 
                        with respect to the first hire of such employee 
                        as a Hurricane Sandy employee, unless such 
                        employee was an employee of the employer on 
                        October 28, 2012.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after October 28, 2012.

SEC. 13. HURRICANE SANDY BONDS.

    (a) In General.--Subpart A of part IV of subchapter B of chapter 1 
is amended by inserting after section 146 the following new section:

``SEC. 146A. HURRICANE SANDY BONDS.

    ``(a) In General.--For purposes of this title, any qualified 
Hurricane Sandy Bond shall--
            ``(1) be treated as an exempt facility bond, and
            ``(2) not be subject to section 146.
    ``(b) Qualified Hurricane Sandy Bond.--For purposes of this 
section, the term `qualified Hurricane Sandy bond' means any bond 
issued as part of an issue if--
            ``(1) 95 percent or more of the net proceeds of such issue 
        are to be used for qualified project costs,
            ``(2) such bond is issued by a State or any political 
        subdivision thereof any part of which is in the Hurricane Sandy 
        disaster area,
            ``(3) the Governor of the issuing State designates such 
        bond for purposes of this section, and
            ``(4) such bond is issued after the date of the enactment 
        of this section and before January 1, 2016.
    ``(c) Limitation on Amount of Bonds.--
            ``(1) In general.--The maximum aggregate face amount of 
        bonds which may be designated under this section shall not 
        exceed--
                    ``(A) $3,200,000,000 in the case of Connecticut,
                    ``(B) $9,200,000,000 in the case of New Jersey, and
                    ``(C) $9,200,000,000 in the case of New York.
            ``(2) Reduction for failure to issue bonds.--
                    ``(A) 2013.--If after the date of enactment of this 
                section and before January 1, 2014, less than 10 
                percent of the face amount of the bond limitation for a 
                State has been issued, the authorized limitation for 
                such State under paragraph (1) shall be reduced by the 
                amount by which 10 percent of the face amount of the 
                bond limitation for such State exceeds the face amount 
                of issued bonds.
                    ``(B) 2014.--If after the date of enactment of this 
                section and before January 1, 2015, less than 30 
                percent of the face amount of the bond limitation for a 
                State has been issued, the authorized limitation for 
                such State shall be reduced by the amount by which 10 
                percent of the face amount of the bond limitation for 
                such State exceeds the face amount of issued bonds.
            ``(3) Movable property.--No bonds shall be issued which are 
        to be used for movable fixtures and equipment.
            ``(4) Treatment of current refunding bonds.--Paragraph (1) 
        shall not apply to any bond (or series of bonds) issued to 
        refund a qualified Hurricane Sandy bond, if--
                    ``(A) the average maturity date of the issue of 
                which the refunding bond is a part is not later than 
                the average maturity date of the bonds to be refunded 
                by such issue,
                    ``(B) the amount of the refunding bond does not 
                exceed the outstanding amount of the refunded bond, and
                    ``(C) the net proceeds of the refunding bond are 
                used to redeem the refunded bond not later than 90 days 
                after the date of the issuance of the refunding bond.
        For purposes of subparagraph (A), average maturity shall be 
        determined in accordance with section 147(b)(2)(A).
    ``(d) Qualified Project Costs.--For purposes of this section, the 
term `qualified project costs' means the cost of acquisition, 
construction, reconstruction, and renovation of--
            ``(1) residential rental property (as defined in section 
        142(d)),
            ``(2) nonresidential real property (including fixed 
        improvements associated with such property),
            ``(3) a facility described in paragraph (2) or (3) of 
        section 142(a), or
            ``(4) public utility property (as defined in section 
        168(i)(10)),
which is located in the Hurricane Sandy Disaster area and was damaged 
or destroyed by reason of the Hurricane Sandy federally declared 
disaster.
    ``(e) Special Rules.--In applying this title to any qualified 
Hurricane Sandy Bond, the following modifications shall apply:
            ``(1) Section 147(d) (relating to acquisition of existing 
        property not permitted) shall be applied by substituting `50 
        percent' for `15 percent' each place it appears.
            ``(2) 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 issued under this section. For purposes of 
        the preceding sentence, the following spending requirements 
        shall apply in lieu of the requirements in clause (ii) of such 
        section:
                    ``(A) 40 percent of such available construction 
                proceeds are spent for the governmental purposes of the 
                issue within the 2-year period beginning on the date 
                the bonds are issued,
                    ``(B) 60 percent of such proceeds are spent for 
                such purposes within the 3-year period beginning on 
                such date,
                    ``(C) 80 percent of such proceeds are spent for 
                such purposes within the 4-year period beginning on 
                such date, and
                    ``(D) 100 percent of such proceeds are spent for 
                such purposes within the 5-year period beginning on 
                such date.
            ``(3) Repayments of principal on financing provided by the 
        issue--
                    ``(A) may not be used to provide financing, and
                    ``(B) must be used not later than the close of the 
                1st semiannual period beginning after the date of the 
                repayment to redeem bonds which are part of such issue.
        The requirement of subparagraph (B) shall be treated as met 
        with respect to amounts received within 5 years after the date 
        of issuance of the issue (or, in the case of a refunding bond, 
        the date of issuance of the original bond) if such amounts are 
        used by the close of such 5 years to redeem bonds which are 
        part of such issue.
            ``(4) Section 57(a)(5) shall not apply.
    ``(f) Separate Issue Treatment of Portions of an Issue.--This 
section 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.
    ``(g) Hurricane Sandy Federally Declared Disaster and Disaster 
Area.--The terms `Hurricane Sandy federally declared disaster' and 
`Hurricane Sandy disaster area' have the meanings given such terms by 
section 165(h)(3)(D).''.
    (b) Clerical Amendment.--The table of sections for subpart A of 
part IV of subchapter B of chapter 1 is amended by inserting after the 
item relating to section 146 the following new item:

``Sec. 146A. Hurricane Sandy Bonds.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to obligations issued after the date of the enactment of this 
Act.

SEC. 14. ADDITIONAL LOW-INCOME HOUSING CREDIT MAY BE ALLOCATED IN 
              STATES DAMAGED BY HURRICANE SANDY.

    (a) In General.--Paragraph (3) of section 42(h) of the Internal 
Revenue Code of 1986 (relating to limitation on aggregate credit 
allowable with respect to projects located in a State) is amended by 
adding at the end the following new subparagraph:
                    ``(J) Increase in state housing credit for states 
                damaged by hurricane sandy.--
                            ``(i) In general.--In the case of calendar 
                        year 2013, the State housing credit ceiling of 
                        each State any portion of which includes any 
                        portion of the Hurricane Sandy disaster area 
                        shall be increased by so much of the aggregate 
                        housing credit dollar amount as does not exceed 
                        the applicable limitation allocated by the 
                        State housing credit agency of such State for 
                        such calendar year to buildings located in such 
                        disaster area.
                            ``(ii) Applicable limitation.--For purposes 
                        of clause (i), the applicable limitation is the 
                        greater of--
                                    ``(I) $8 multiplied by the 
                                population of the area described in 
                                clause (vii)(I), or
                                    ``(II) 50 percent of the State 
                                housing credit ceiling (determined 
                                without regard to this subparagraph) 
                                for 2013.
                            ``(iii) Applicable percentage.--For 
                        purposes of this section, the applicable 
                        percentage with respect to any building to 
                        which amounts allocated under clause (i) shall 
                        be determined under subsection (b)(2), except 
                        that subparagraph (A) thereof shall be applied 
                        by substituting `December 31, 2015' for 
                        `December 31, 2013'.
                            ``(iv) 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 subparagraph (C) for any calendar 
                        year, any increase in the State housing credit 
                        ceiling under clause (i) shall be treated as an 
                        amount described in clause (ii) of such 
                        subparagraph.
                            ``(v) Difficult development area.--
                                    ``(I) In general.--In the case of 
                                property placed in service during 2013, 
                                2014, or 2015, the Hurricane Sandy 
                                disaster area shall be treated as a 
                                difficult development area designated 
                                under subclause (I) of subsection 
                                (d)(5)(B)(iii), and shall not be taken 
                                into account for purposes of applying 
                                the limitation under subclause (II) of 
                                such subsection.
                                    ``(II) Application of clause.--
                                Subclause (I) shall apply only to--
                                            ``(aa) housing credit 
                                        dollar amounts allocated during 
                                        2013, and
                                            ``(bb) to the extent that 
                                        paragraph (1) does not apply to 
                                        any building by reason of 
                                        paragraph (4), only with 
                                        respect to bonds issued after 
                                        December 31, 2012.
                            ``(vi) Hurricane sandy disaster area and 
                        hurricane sandy federally declared disaster.--
                        For purposes of this subparagraph--
                                    ``(I) Disaster area.--The term 
                                `Hurricane Sandy disaster area' means 
                                each county included in the 
                                geographical area covered by the 
                                Hurricane Sandy federally declared 
                                disaster.
                                    ``(II) Hurricane sandy federally 
                                declared disaster and disaster area.--
                                The term `Hurricane Sandy federally 
                                declared disaster' has the meaning 
                                given such term by section 
                                165(h)(3)(D).''.
    (b) Effective Date.--The amendment made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 15. SPECIAL RULES FOR USE OF RETIREMENT FUNDS.

    (a) Early Withdrawal From Retirement Plans.--Paragraph (2) of 
section 72(t) is amended by adding at the end the following new 
subparagraph:
                    ``(H) Hurricane sandy distributions.--Distributions 
                to an individual which are Hurricane Sandy 
                distributions (as defined in paragraph (11)).''.
    (b) Special Rules.--Subsection (t) of section 72 is amended by 
adding at the end the following:
            ``(11) Special rules relating to use of retirement funds 
        relating to hurricane sandy.--
                    ``(A) Distributions.--For purposes of this 
                paragraph--
                            ``(i) In general.--The term `Hurricane 
                        Sandy distribution' means any distribution from 
                        an eligible retirement plan (as defined by 
                        section 402(c)(8)(B)) made on or after October 
                        29, 2012, and before January 1, 2014, to an 
                        individual whose principal place of abode on 
                        October 29, 2012, is located in the Hurricane 
                        Sandy disaster area (as defined in section 
                        165(h)(3)(D)) and who has sustained an economic 
                        loss by reason of Hurricane Sandy.
                            ``(ii) Aggregate dollar limitation.--
                                    ``(I) In general.--For purposes of 
                                this paragraph, the aggregate amount of 
                                distributions received by an individual 
                                which may be treated as Hurricane Sandy 
                                distributions for any taxable year 
                                shall not exceed the excess (if any) 
                                of--
                                            ``(aa) $100,000, over
                                            ``(bb) the aggregate 
                                        amounts treated as Hurricane 
                                        Sandy distributions received by 
                                        such individual for all prior 
                                        taxable years.
                                    ``(II) Treatment of plan 
                                distributions.--If a distribution to an 
                                individual would (without regard to 
                                subclause (I)) be a Hurricane Sandy 
                                distribution, a plan shall not be 
                                treated as violating any requirement of 
                                this title merely because the plan 
                                treats such distribution as a Hurricane 
                                Sandy 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.
                                    ``(III) Controlled group.--For 
                                purposes of subclause (II), the term 
                                `controlled group' means any group 
                                treated as a single employer under 
                                subsection (b), (c), (m), or (o) of 
                                section 414.
                            ``(iii) Amount distributed may be repaid.--
                                    ``(I) In general.--Any individual 
                                who receives a Hurricane Sandy 
                                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.
                                    ``(II) Treatment of repayments of 
                                distributions from eligible retirement 
                                plans other than iras.--For purposes of 
                                this title, if a contribution is made 
                                pursuant to subclause (I) with respect 
                                to a Hurricane Sandy 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 Hurricane Sandy 
                                distribution in an eligible rollover 
                                distribution (as defined in section 
                                402(c)(4)) and as having transferred 
                                the amount to the eligible retirement 
                                plan in a direct trustee to trustee 
                                transfer within 60 days of the 
                                distribution.
                                    ``(III) Treatment of repayments for 
                                distributions from iras.--For purposes 
                                of this title, if a contribution is 
                                made pursuant to subclause (I) with 
                                respect to a Hurricane Sandy 
                                distribution from an individual 
                                retirement plan (as defined by section 
                                7701(a)(37)), then, to the extent of 
                                the amount of the contribution, the 
                                Hurricane Sandy distribution shall be 
                                treated as a distribution described in 
                                section 408(d)(3) and as having been 
                                transferred to the eligible retirement 
                                plan in a direct trustee to trustee 
                                transfer within 60 days of the 
                                distribution.
                            ``(iv) Income inclusion spread over 3-year 
                        period.--
                                    ``(I) In general.--In the case of 
                                any Hurricane Sandy distribution, 
                                unless the taxpayer elects not to have 
                                this clause 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.
                                    ``(II) Special rule.--For purposes 
                                of subclause (I), rules similar to the 
                                rules of subparagraph (E) of section 
                                408A(d)(3) shall apply.
                            ``(v) Special rules.--
                                    ``(I) Exemption of distributions 
                                from trustee to trustee transfer and 
                                withholding rules.--For purposes of 
                                sections 401(a)(31), 402(f), and 3405, 
                                Hurricane Sandy distributions shall not 
                                be treated as eligible rollover 
                                distributions.
                                    ``(II) Hurricane sandy 
                                distributions treated as meeting plan 
                                distribution requirements.--For 
                                purposes this title, a Hurricane Sandy 
                                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.--
                            ``(i) In general.--Any individual who 
                        received a distribution described in clause 
                        (ii) may, during the applicable period, make 
                        one or more contributions in an aggregate 
                        amount not to exceed the amount of such 
                        distribution to an eligible retirement plan (as 
                        defined in section 402(c)(8)(B)) of which such 
                        individual is a beneficiary and to which a 
                        rollover contribution of such distribution 
                        could be made under section 402(c), 403(a)(4), 
                        403(b)(8), or 408(d)(3), as the case may be.
                            ``(ii) Distribution described.--For 
                        purposes of clause (i), a distribution is 
                        described in this clause if the distribution--
                                    ``(I) is described in paragraph 
                                (2)(F) or section 401(k)(2)(B)(i)(IV), 
                                403(b)(7)(A)(ii) (but only to the 
                                extent such distribution relates to 
                                financial hardship), or 403(b)(11)(B),
                                    ``(II) is received after April 29, 
                                2012, and before October 30, 2012, and
                                    ``(III) was to be used to purchase 
                                or construct a principal residence in 
                                the Hurricane Sandy disaster area (as 
                                defined in section 165(h)(3)(D)), but 
                                which was not so purchased or 
                                constructed on account of Hurricane 
                                Sandy.
                            ``(iii) Applicable period.--For purposes of 
                        this subparagraph, the term `applicable period' 
                        means the period beginning on October 29, 2012, 
                        and ending five months after the date of 
                        enactment of the Hurricane Sandy Tax Relief Act 
                        of 2012.
                            ``(iv) Treatment of repayments.--Rules 
                        similar to the rules of subclauses (II) and 
                        (III) of subparagraph (A)(iii) shall apply for 
                        purposes of this subparagraph.''.
    (c) Loans From Qualified Plans.--Subsection (p) of section 72 is 
amended by adding at the end the following:
            ``(6) Special rules relating to hurricane sandy.--
                    ``(A) Increase in limit on loans not treated as 
                distributions.--In the case of any loan from a 
                qualified employer plan to a qualified individual made 
                during the applicable period--
                            ``(i) paragraph (2)(A)(i) shall be applied 
                        by substituting `$100,000' for `$50,000', and
                            ``(ii) paragraph (2)(A)(ii) shall be 
                        applied by substituting `the present value of 
                        the nonforfeitable accrued benefit of the 
                        employee under the plan' for `one-half of the 
                        present value of the nonforfeitable accrued 
                        benefit of the employee under the plan'.
                    ``(B) Delay of repayment.--In the case of a 
                qualified individual with an outstanding loan on or 
                after the qualified beginning date from a qualified 
                employer plan--
                            ``(i) if the due date pursuant to 
                        subparagraph (B) or (C) of paragraph (2) for 
                        any repayment with respect to such loan occurs 
                        during the period beginning on the qualified 
                        beginning date and ending on December 31, 2013, 
                        such due date shall be delayed for 1 year,
                            ``(ii) any subsequent repayments with 
                        respect to any such loan shall be appropriately 
                        adjusted to reflect the delay in the due date 
                        under clause (i) and any interest accruing 
                        during such delay, and
                            ``(iii) in determining the 5-year period 
                        and the term of a loan under subparagraph (B) 
                        or (C) of paragraph (2), the period described 
                        in clause (i) shall be disregarded.
                    ``(C) Qualified individual.--For purposes of this 
                paragraph--
                            ``(i) In general.--The term `qualified 
                        individual' means any qualified Hurricane Sandy 
                        individual.
                            ``(ii) Qualified hurricane sandy 
                        individual.--The term `qualified Hurricane 
                        Sandy individual' means an individual whose 
                        principal place of abode on October 29, 2012, 
                        is located in the Hurricane Sandy disaster area 
                        (as defined in section 165(h)(3)(D)) and who 
                        has sustained an economic loss by reason of 
                        Hurricane Sandy.
                    ``(D) Other definitions.--For purposes of this 
                paragraph--
                            ``(i) Applicable period.--The applicable 
                        period is the period beginning on the date of 
                        enactment of the Hurricane Sandy Tax Relief Act 
                        of 2012 and ending on December 31, 2013.
                            ``(ii) Qualified beginning date.--The 
                        qualified beginning date is October 29, 
                        2012.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to years ending after October 28, 2012.
    (e) 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 or 
                        amendment made by this section, or pursuant to 
                        any regulation issued by the Secretary of the 
                        Treasury or the Secretary of Labor under any 
                        provision of or amendment made by this section, 
                        and
                            (ii) on or before the last day of the first 
                        plan year beginning on or after January 1, 
                        2014, or such later date as the Secretary of 
                        the Treasury may prescribe.
                In the case of a governmental plan (as defined in 
                section 414(d)), 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.
                                 <all>