[Congressional Record Volume 151, Number 116 (Thursday, September 15, 2005)]
[House]
[Pages H8014-H8022]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                KATRINA EMERGENCY TAX RELIEF ACT OF 2005

  Mr. McCRERY. Madam Speaker, I move to suspend the rules and pass the 
bill (H.R. 3768) to provide emergency tax relief for persons affected 
by Hurricane Katrina, as amended.
  The Clerk read as follows:

                               H.R. 3768

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Katrina Emergency Tax Relief 
     Act of 2005''.

     SEC. 2. DESIGNATION AS EMERGENCY REQUIREMENT.

       Any provision of this Act causing an effect on receipts, 
     budget authority, or outlays is designated as an emergency 
     requirement pursuant to section 402 of H. Con. Res. 95 (109th 
     Congress).

                 TITLE I--GENERAL TAX RELIEF PROVISIONS

     SEC. 101. EXTENSION OF REPLACEMENT PERIOD FOR NONRECOGNITION 
                   OF GAIN.

       Clause (i) of section 1033(a)(2)(B) of the Internal Revenue 
     Code of 1986 shall be applied by substituting ``5 years'' for 
     ``2 years'' with respect to property which--
       (1) is located in an area determined by the President to 
     warrant individual or individual and public assistance from 
     the Federal Government under the Robert T. Stafford Disaster 
     Relief and Emergency Assistance Act by reason of Hurricane 
     Katrina, and
       (2) is compulsorily or involuntarily converted as a result 
     of such hurricane,

     but only if substantially all of the use of the replacement 
     property is located in any such area.

     SEC. 102. SUSPENSION OF LIMITATIONS ON CHARITABLE 
                   CONTRIBUTIONS FOR RELIEF EFFORTS RELATED TO 
                   HURRICANE KATRINA.

       (a) In General.--Except as otherwise provided in subsection 
     (b), qualified disaster contributions shall not be taken into 
     account for purposes of subsections (b) and (d) of section 
     170 of the Internal Revenue Code of 1986.
       (b) Treatment of Excess Contributions.--For purposes of 
     section 170 of such Code--
       (1) Individuals.--In the case of an individual--
       (A) Limitation.--Any qualified disaster contribution shall 
     be allowed only to the extent that the aggregate of such 
     contributions does not exceed the excess of the taxpayer's 
     contribution base (as defined in paragraph (1) of section 
     170(b) of such Code) over

[[Page H8015]]

     the amount of all other charitable contributions allowed 
     under such paragraph.
       (B) Carryover.--If the aggregate amount of qualified 
     disaster contributions made in the contribution year (within 
     the meaning of section 170(d)(1) of such Code) exceeds the 
     limitation of subparagraph (A), such excess shall be added to 
     the excess described in the portion of subparagraph (A) of 
     such section which precedes clause (i) thereof for purposes 
     of applying such section.
       (2) Corporations.--In the case of a corporation--
       (A) Limitation.--Any qualified disaster contribution shall 
     be allowed only to the extent that the aggregate of such 
     contributions does not exceed the excess of the taxpayer's 
     taxable income (as determined under paragraph (2) of section 
     170(b) of such Code) over the amount of all other charitable 
     contributions allowed under such paragraph.
       (B) Carryover.--Rules similar to the rules of paragraph 
     (1)(B) shall apply for purposes of this paragraph.
       (c) Exception to Overall Limitation on Itemized 
     Deductions.--So much of any deduction allowed under section 
     170 of such Code as does not exceed the qualified disaster 
     contributions made during the taxable year shall not be 
     treated as an itemized deduction for purposes of section 68 
     of such Code.
       (d) Qualified Disaster Contributions.--For purposes of this 
     section, the term ``qualified disaster contribution'' means 
     any charitable contribution (as defined in section 170(c) of 
     such Code)--
       (1) made during the period beginning on August 28, 2005, 
     and ending on December 31, 2005, in cash to an organization 
     described in section 170(b)(1)(A) of such Code (other than an 
     organization described in section 509(a)(3) of such Code) for 
     relief efforts related to Hurricane Katrina, and
       (2) with respect to which the taxpayer has elected the 
     application of this section.

     In the case of a partnership or S corporation, the election 
     under paragraph (2) shall be made separately by each partner 
     or shareholder.

     SEC. 103. MILEAGE RATE FOR CHARITABLE PURPOSES RELATED TO 
                   HURRICANE KATRINA.

       (a) Mileage Rate for Charitable Purposes Related to 
     Hurricane Katrina.--Notwithstanding subsection (i) of section 
     170 of the Internal Revenue Code of 1986, in the case of the 
     use of a vehicle described in subsection (f)(12)(E)(i) of 
     such section for provision of relief related to Hurricane 
     Katrina, the standard mileage rate for purposes of such 
     section shall be 70 percent of the standard mileage rate for 
     business purposes prescribed by the Secretary for purposes of 
     chapter 1 of such Code which is in effect on the date of the 
     contribution.
       (b) Application.--Subsection (a) shall apply only with 
     respect to contributions made before January 1, 2007.

     SEC. 104. EXCLUSION OF CERTAIN CANCELLATIONS OF INDEBTEDNESS.

       (a) In General.--For purposes of the Internal Revenue Code 
     of 1986, gross income shall not include any amount which (but 
     for this section) would be includible in gross income by 
     reason of the discharge (in whole or in part) of qualified 
     nonbusiness debt of a qualified individual by an applicable 
     entity (as defined in section 6050P(c)).
       (b) Qualified Nonbusiness Debt.--For purposes of this 
     section, the term ``qualified nonbusiness debt'' means any 
     indebtedness other than indebtedness incurred in connection 
     with a trade or business.
       (c) Qualified Individual.--For purposes of this section, 
     the term ``qualified individual'' means any natural person 
     who was a resident (as of August 28, 2005) of, or who owned 
     real property (as of the date of such discharge) in, any area 
     which is determined by the President to warrant individual or 
     individual and public assistance from the Federal Government 
     under the Robert T. Stafford Disaster Relief and Emergency 
     Assistance Act by reason of Hurricane Katrina.
       (d) Exception for Real Property Outside Disaster Area.--
     Subsection (a) shall not apply to any discharge of 
     indebtedness to the extent that real property constituting 
     security for such indebtedness is located outside of the area 
     described in subsection (c).
       (e) Denial of Double Benefit.--The amount excluded from 
     gross income under subsection (a) shall be applied to reduce 
     the tax attributes of the taxpayer as provided in section 
     108(b) of the Internal Revenue Code of 1986.
       (f) Application.--This section shall not apply to 
     discharges after December 31, 2006.

     SEC. 105. SPECIAL RULES FOR MORTGAGE REVENUE BONDS.

       (a) In General.--In the case of financing provided with 
     respect to a qualified Hurricane Katrina recovery residence, 
     subsection (d) of section 143 of the Internal Revenue Code of 
     1986 shall be applied as if such residence were a targeted 
     area residence.
       (b) Qualified Hurricane Katrina Recovery Residence.--For 
     purposes of this section, the term ``qualified Hurricane 
     Katrina recovery residence'' means any residence if such 
     residence is located in an area which is determined by the 
     President to warrant individual or individual and public 
     assistance from the Federal Government under the Robert T. 
     Stafford Disaster Relief and Emergency Assistance Act by 
     reason of Hurricane Katrina.
       (c) Application.--Subsection (a) shall not apply to 
     financing provided after December 31, 2007.

     SEC. 106. SUSPENSION OF CERTAIN LIMITATIONS ON PERSONAL 
                   CASUALTY LOSSES.

       Paragraphs (1) and (2)(A) of section 165(h) of the Internal 
     Revenue Code of 1986 shall not apply to losses described in 
     section 165(c)(3) of such Code which are attributable to 
     Hurricane Katrina. In the case of any other losses, section 
     165(h)(2)(A) of such Code shall be applied without regard to 
     the losses referred to in the preceding sentence.

     SEC. 107. ADDITIONAL EXEMPTION FOR HOUSING HURRICANE KATRINA 
                   DISPLACED INDIVIDUALS.

       (a) In General.--In the case of taxable years of a natural 
     person beginning in 2005 and 2006, for purposes of the 
     Internal Revenue Code of 1986, taxable income shall be 
     reduced by $500 for each Hurricane Katrina displaced 
     individual of the taxpayer for the taxable year.
       (b) Limitations.--
       (1) Dollar limitation.--The reduction under subsection (a) 
     shall not exceed $2,000, reduced by the amount of the 
     reduction under this section for all previous taxable years.
       (2) Individuals taken into account only once.--An 
     individual shall not be taken into account under subsection 
     (a) if such individual was taken into account under such 
     subsection by the taxpayer in any prior taxable year.
       (c) Hurricane Katrina Displaced Individual.--For purposes 
     of this subsection, the term ``Hurricane Katrina displaced 
     individual'' means, with respect to any taxpayer for any 
     taxable year, a natural person who--
       (1) was (as of August 28, 2005) a resident of any area 
     which is determined by the President to warrant individual or 
     individual and public assistance from the Federal Government 
     under the Robert T. Stafford Disaster Relief and Emergency 
     Assistance Act by reason of Hurricane Katrina,
       (2) is displaced from the person's residence located in the 
     area described in paragraph (1), and
       (3) is provided housing free of charge by the taxpayer in 
     the principal residence of the taxpayer for a period of 60 
     consecutive days which ends in such taxable year.

     Such term shall not include the spouse or any dependent of 
     the taxpayer.

     SEC. 108. SPECIAL RULE FOR DETERMINING EARNED INCOME.

       (a) In General.--In the case of a qualified individual, if 
     the earned income of the taxpayer for the taxable year of 
     such taxpayer which includes August 28, 2005, is less than 
     the earned income which is attributable to the taxpayer for 
     the preceding taxable year, the credits allowed under 
     sections 24(d) and 32 of the Internal Revenue Code of 1986 
     may, at the election of the taxpayer, be determined by 
     substituting--
       (1) such earned income for the preceding taxable year, for
       (2) such earned income for the taxable year which includes 
     August 28, 2005.
       (b) Qualified Individual.--For purposes of this section, 
     the term ``qualified individual'' means any individual who 
     was (as of August 28, 2005) a resident of any area which is 
     determined by the President to warrant individual or 
     individual and public assistance from the Federal Government 
     under the Robert T. Stafford Disaster Relief and Emergency 
     Assistance Act by reason of Hurricane Katrina.
       (c) Earned Income.--For purposes of this section, the term 
     ``earned income'' has the meaning given such term under 
     section 32(c) of such Code.
       (d) Special Rules.--
       (1) Application to joint returns.--For purpose of 
     subsection (a), in the case of a joint return for a taxable 
     year which includes August 28, 2005,
       (A) such subsection shall apply if either spouse is a 
     qualified individual,
       (B) the earned income which is attributable to the taxpayer 
     for the preceding taxable year shall be the sum of the earned 
     income which is attributable to each spouse for such 
     preceding taxable year, and
       (C) the substitution described in such subsection shall 
     apply only with respect to earned income which is 
     attributable to a spouse who is a qualified individual.
       (2) Uniform application of election.--Any election made 
     under subsection (a) shall apply with respect to both section 
     24(d) and section 32 of such Code.
       (3) Errors treated as mathematical error.--For purposes of 
     section 6213 of such Code, an incorrect use on a return of 
     earned income pursuant to subsection (a) shall be treated as 
     a mathematical or clerical error.
       (4) No effect on determination of gross income.--For 
     purposes of the Internal Revenue Code of 1986, gross income 
     shall be determined without regard to any substitution under 
     subsection (a).

     SEC. 109. SECRETARIAL AUTHORITY TO MAKE ADJUSTMENTS REGARDING 
                   TAXPAYER AND DEPENDENCY STATUS.

       With respect to taxable years beginning in 2005 or 2006, 
     the Secretary of the Treasury, or his delegate, may make such 
     adjustments in the application of the internal revenue laws 
     as may be necessary to ensure that taxpayers do not lose 
     dependency exemptions or child credits or experience a change 
     of filing status by reason of temporary relocations after 
     Hurricane Katrina or by reason of the receipt of hurricane 
     relief. Any adjustments made under the preceding sentence 
     shall ensure that an individual is not taken into account by 
     more than one taxpayer with respect to the same tax benefit.

[[Page H8016]]

     SEC. 110. WORK OPPORTUNITY TAX CREDIT FOR HURRICANE KATRINA 
                   EMPLOYEES.

       (a) In General.--For purposes of section 51 of the Internal 
     Revenue Code of 1986, a Hurricane Katrina employee shall be 
     treated as a member of a targeted group.
       (b) Hurricane Katrina Employee.--For purposes of this 
     section, the term ``Hurricane Katrina employee'' means any 
     individual who, on August 28, 2005, had a principal place of 
     abode in a Hurricane Katrina disaster area.
       (c) Special Rules for Determining Credit.--For purposes of 
     applying subpart F of part IV of subchapter A of chapter 1 of 
     such Code to wages paid or incurred to any Hurricane Katrina 
     employee--
       (1) section 51(c)(4) of such Code shall not apply, and
       (2) except in the case of an employee of the employer 
     (within the meaning of section 51 of such Code) on August 28, 
     2005, or an employee initially hired after such date, section 
     51(i)(2) of such Code shall not apply.
       (d) Application of Section.--This section shall apply only 
     to wages (within the meaning on section 51(c) of such Code) 
     paid or incurred to any individual who--
       (1) is being hired for a position the principal place of 
     employment of which is located in a Hurricane Katrina 
     disaster area, and
       (2) who begins work for the employer during the 2-year 
     period beginning on August 29, 2005.
       (e) Hurricane Katrina Disaster Area.--For purposes of this 
     section, the term ``Hurricane Katrina disaster area'' means 
     any area which is determined by the President to warrant 
     individual or individual and public assistance from the 
     Federal Government under the Robert T. Stafford Disaster 
     Relief and Emergency Assistance Act by reason of Hurricane 
     Katrina.

 TITLE II--PENALTY FREE USE OF RETIREMENT FUNDS IN THE CASE OF NATURAL 
                               DISASTERS

     SEC. 201. PENALTY FREE WITHDRAWALS FROM RETIREMENT PLANS UPON 
                   FEDERAL DECLARATION OF NATURAL DISASTER.

       (a) In General.--Paragraph (2) of section 72(t) of the 
     Internal Revenue Code of 1986 (relating to 10-percent 
     additional tax on early distributions from qualified 
     retirement plans) is amended by adding at the end the 
     following new subparagraph:
       ``(G) Distributions from retirement plans upon federal 
     declaration of natural disaster.--
       ``(i) In general.--Any qualified disaster-relief 
     distribution.
       ``(ii) Aggregate limitation.--The aggregate amount of 
     payments or distributions received by an individual which may 
     be treated as qualified disaster-relief distributions for any 
     taxable year shall not exceed the excess (if any) of --

       ``(I) $100,000, over
       ``(II) the aggregate amounts treated as qualified disaster-
     relief distributions with respect to such individual for all 
     prior taxable years.

       ``(iii) Amount distributed may be repaid.--

       ``(I) In general.--Any individual who receives a qualified 
     disaster-relief distribution may, at any time during the 3-
     year period beginning on the day after the date on which such 
     distribution was made, make one or more contributions in an 
     aggregate amount not to exceed the amount of such 
     distribution to an eligible retirement plan (as defined in 
     section 402(c)(8)(B)) of which such individual is a 
     beneficiary and to which a rollover contribution of such 
     distribution could be made under section 402(c), 403(a)(4), 
     403(b)(8), or 408(d)(3), as the case may be.
       ``(II) Treatment of repayments for distributions from 
     eligible retirement plans other than iras.--For purposes of 
     this title, if a contribution is made pursuant to subclause 
     (I) with respect to a qualified disaster-relief distribution 
     from an eligible retirement plan (as so defined) other than 
     an individual retirement plan, then the taxpayer shall, to 
     the extent of the amount of the contribution, be treated as 
     having received the qualified disaster-relief distribution in 
     an eligible rollover distribution (as defined in section 
     402(c)(4)) and as having transferred the amount to the 
     eligible retirement plan in a direct trustee to trustee 
     transfer within 60 days of the distribution.
       ``(III) Treatment of repayments for distributions from 
     iras.--For purposes of this title, if a contribution is made 
     pursuant to subclause (I) with respect to a qualified 
     disaster-relief distribution from an individual retirement 
     plan, then, to the extent of the amount of the contribution, 
     the qualified disaster-relief distribution shall be treated 
     as a distribution described in section 408(d)(3) and as 
     having been transferred to the eligible retirement plan in a 
     direct trustee to trustee transfer within 60 days of the 
     distribution.
       ``(IV) Application to governmental section 457 plans.--In 
     determining whether any distribution is a qualified disaster-
     relief distribution for purposes of this clause, an eligible 
     deferred compensation plan (as defined in section 457(b)) 
     maintained by an employer described in section 457(e)(1)(A) 
     shall be treated as a qualified retirement plan.

       ``(iv) Qualified disaster-relief distribution.--For 
     purposes of this subparagraph, the term `qualified disaster-
     relief distribution' means any distribution--

       ``(I) to an individual who has sustained a loss as a result 
     of a major disaster declared under section 401 of the Robert 
     T. Stafford Disaster Relief and Emergency Assistance Act by 
     reason of Hurricane Katrina and who has a principal place of 
     abode immediately before the declaration in a qualified 
     disaster area, and
       ``(II) which is made during the 1-year period beginning on 
     the date such declaration is made.

       ``(v) Qualified disaster area.--For purposes of this 
     subparagraph, the term `qualified disaster area' means any 
     area which is determined by the President to warrant 
     individual or individual and public assistance from the 
     Federal Government under the Robert T. Stafford Disaster 
     Relief and Emergency Assistance Act by reason of Hurricane 
     Katrina.''.
       (b) Exemption of Distributions From Trustee to Trustee 
     Transfer and Withholding Rules.--Paragraph (4) of section 
     402(c) of such Code (relating to eligible rollover 
     distribution) is amended by striking ``and'' at the end of 
     subparagraph (B), by striking the period at the end of 
     subparagraph (C) and inserting ``, and'', and by inserting at 
     the end the following new subparagraph:
       ``(D) any qualified disaster-relief distribution (within 
     the meaning of section 72(t)(2)(G)).''.
       (c) Conforming Amendments.--
       (1) Section 401(k)(2)(B)(i) of such Code is amended by 
     striking ``or'' at the end of subclause (III), by striking 
     ``and'' at the end of subclause (IV) and inserting ``or'', 
     and by inserting after subclause (IV) the following new 
     subclause:

       ``(V) the date on which a period referred to in section 
     72(t)(2)(G)(iii)(II) begins (but only to the extent provided 
     in section 72(t)(2)(G)), and''.

       (2) Section 403(b)(7)(A)(ii) of such Code is amended by 
     inserting ``sustains a loss as a result of a major disaster 
     declared under section 401 of the Robert T. Stafford Disaster 
     Relief and Emergency Assistance Act by reason of Hurricane 
     Katrina (but only to the extent provided in section 
     72(t)(2)(G)),'' before ``or''.
       (3) Section 403(b)(11) of such Code is amended by striking 
     ``or'' at the end of subparagraph (A), by striking the period 
     at the end of subparagraph (B) and inserting ``, or'', and by 
     inserting after subparagraph (B) the following new 
     subparagraph:
       ``(C) for distributions to which section 72(t)(2)(G) 
     applies.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to distributions received after August 28, 2005.

     SEC. 202. INCOME AVERAGING FOR DISASTER-RELIEF DISTRIBUTIONS 
                   RELATED TO HURRICANE KATRINA.

       (a) In General.--In the case of any qualified disaster-
     relief distribution (within the meaning of section 
     72(t)(2)(G) of the Internal Revenue Code of 1986) from a 
     qualified retirement plan (as defined in section 4974(c) of 
     such Code) to a qualified individual, unless the taxpayer 
     elects not to have this section apply for any taxable year, 
     any amount required to be included in gross income for such 
     taxable year shall be so included ratably over the 3-taxable 
     year period beginning with such taxable year.
       (b) Special Rules.--
       (1) Application to governmental section 457 plans.--In 
     determining whether any distribution is a qualified disaster-
     relief distribution (as so defined) for purposes of this 
     section, an eligible deferred compensation plan (as defined 
     in section 457(b) of such Code) maintained by an employer 
     described in section 457(e)(1)(A) of such Code shall be 
     treated as a qualified retirement plan (as so defined)
       (2) Certain rules to apply.--Rules similar to the rules of 
     subparagraph (E) of section 408A(d)(3) of such Code shall 
     apply for purposes of this section.
       (c) Qualified Individual.--For purposes of this section, 
     the term ``qualified individual'' means an individual who has 
     sustained a loss as a result of the major disaster declared 
     under section 401 of the Robert T. Stafford Disaster Relief 
     and Emergency Assistance Act (42 U.S.C. 5170) by reason of 
     Hurricane Katrina and who has a principal place of abode 
     immediately before the declaration in a Hurricane Katrina 
     disaster area.
       (d) Hurricane Katrina Disaster Area.--For purposes of this 
     section, the term ``Hurricane Katrina disaster area'' means 
     any area which is determined by the President to warrant 
     individual or individual and public assistance from the 
     Federal Government under the Robert T. Stafford Disaster 
     Relief and Emergency Assistance Act by reason of Hurricane 
     Katrina.

     SEC. 203. RECONTRIBUTIONS OF WITHDRAWALS FOR HOME PURCHASES 
                   CANCELLED DUE TO HURRICANE KATRINA.

       (a) Recontributions.--
       (1) In general.--Any individual who received a qualified 
     distribution may, at any time during the 6-month period 
     beginning on the day after the disaster declaration date, 
     make one or more contributions in an aggregate amount not to 
     exceed the amount of such qualified distribution to an 
     eligible retirement plan (as defined in section 402(c)(8)(B) 
     of the Internal Revenue Code of 1986) of which such 
     individual is a beneficiary and to which a rollover 
     contribution of such distribution could be made under section 
     402(c), 403(a)(4), 403(b)(8), 408(d)(3), or 457(e)(16) of 
     such Code, as the case may be.
       (2) Treatment of repayments.--
       (A) Treatment of repayments for distributions from eligible 
     retirement plans other than iras.--For purposes of the 
     Internal Revenue Code of 1986, if a contribution is

[[Page H8017]]

     made pursuant to paragraph (1) with respect to a qualified 
     distribution from an eligible retirement plan (as so defined) 
     other than an individual retirement plan (as defined in 
     section 7701(a)(37) of such Code), then the taxpayer shall, 
     to the extent of the amount of the contribution, be treated 
     as having received the qualified distribution in an eligible 
     rollover distribution (as defined in section 402(c)(4) of 
     such Code) and as having transferred the amount to the 
     eligible retirement plan in a direct trustee to trustee 
     transfer within 60 days of the distribution.
       (B) Treatment of repayments for distributions from iras.--
     For purposes of the Internal Revenue Code of 1986, if a 
     contribution is made pursuant to paragraph (1) with respect 
     to a qualified distribution from an individual retirement 
     plan (as so defined), then, to the extent of the amount of 
     the contribution, the qualified distribution shall be treated 
     as a distribution described in section 408(d)(3) of such Code 
     and as having been transferred to the eligible retirement 
     plan (as so defined) in a direct trustee to trustee transfer 
     within 60 days of the distribution.
       (b) Definitions.--For purposes of this section--
       (1) Qualified distribution.--The term ``qualified 
     distribution'' means any distribution--
       (A) described in section 401(k)(2)(B)(i)(IV), 
     403(b)(7)(A)(ii), 403(b)(11)(B), 457(d)(1)(A)(iii), or 
     72(t)(2)(F) of the Internal Revenue Code of 1986,
       (B) received after February 28, 2005, and before August 29, 
     2005, and
       (C) which was to be used to purchase or construct a 
     principal residence in a Hurricane Katrina disaster area, but 
     which was not so purchased or constructed.
       (2) Disaster declaration date.--The term ``disaster 
     declaration date'' means the date on which the President 
     designated the area as a Hurricane Katrina disaster area.
       (3) Hurricane katrina disaster area.--The term ``Hurricane 
     Katrina disaster area'' means any area which is determined by 
     the President to warrant individual or individual and public 
     assistance from the Federal Government under the Robert T. 
     Stafford Disaster Relief and Emergency Assistance Act by 
     reason of Hurricane Katrina.

     SEC. 204. LOANS FROM QUALIFIED PLANS IN CONNECTION WITH 
                   HURRICANE KATRINA.

       (a) Increase in Limit on Loans not Treated as 
     Distributions.--In the case of any loan from a qualified 
     employer plan (as defined under section 72(p)(4) of the 
     Internal Revenue Code of 1986) to a qualified individual (as 
     defined in section 202(c)) made after the date of enactment 
     of this Act and before the date which is 1 year after the 
     disaster declaration date (as defined in section 203(b)(2))--
       (1) clause (i) of section 72(p)(2)(A) of such Code shall be 
     applied by substituting ``$100,000'' for ``$50,000'', and
       (2) clause (ii) of such section shall be applied by 
     substituting ``the present value of the nonforfeitable 
     accrued benefit of the employee under the plan'' for ``one-
     half of the present value of the nonforfeitable accrued 
     benefit of the employee under the plan''.
       (b) Delay of Repayment.--In the case of a qualified 
     individual (as defined in section 202(c)) with an outstanding 
     loan on or after August 26, 2005, from a qualified employer 
     plan (as defined in section 72(p)(4) of the Internal Revenue 
     Code of 1986)--
       (1) if the due date pursuant to subparagraph (B) or (C) of 
     section 72(p)(2) of such Code for any repayment with respect 
     to such loan occurs during the period beginning after August 
     29, 2005, and ending before August 30, 2006, such due date 
     shall be delayed for 1 year,
       (2) any subsequent repayments with respect to any such loan 
     shall be appropriately adjusted to reflect the delay in the 
     due date under paragraph (1) and any interest accruing during 
     such delay, and
       (3) in determining the 5-year period and the term of a loan 
     under subparagraph (B) or (C) of section 72(p)(2) of such 
     Code, such period shall be disregarded.

     SEC. 205. PROVISIONS RELATING TO PLAN AMENDMENTS.

       (a) In General.--If this section applies to any plan or 
     contract amendment--
       (1) such plan or contract shall be treated as being 
     operated in accordance with the terms of the plan during the 
     period described in subsection (b)(2)(A), and
       (2) except as provided by the Secretary of the Treasury, 
     such plan shall not fail to meet the requirements of section 
     411(d)(6) of the Internal Revenue Code of 1986 and section 
     204(g) of the Employee Retirement Income Security Act of 1974 
     by reason of such amendment.
       (b) Amendments to Which Section Applies.--
       (1) In general.--This section shall apply to any amendment 
     to any plan or annuity contract which is made--
       (A) pursuant to any amendment made by this title, or 
     pursuant to any regulation issued by the Secretary of the 
     Treasury or the Secretary of Labor under this title, and
       (B) on or before the last day of the first plan year 
     beginning on or after January 1, 2007, or such later date as 
     the Secretary of the Treasury may prescribe.

     In the case of a governmental plan (as defined in section 
     414(d) of the Internal Revenue Code of 1986), subparagraph 
     (B) shall be applied by substituting the date which is 2 
     years after the date otherwise applied under subparagraph 
     (B).
       (2) Conditions.--This section shall not apply to any 
     amendment unless--
       (A) during the period--
       (i) beginning on the date the legislative or regulatory 
     amendment described in paragraph (1)(A) takes effect (or in 
     the case of a plan or contract amendment not required by such 
     legislative or regulatory amendment, the effective date 
     specified by the plan), and
       (ii) ending on the date described in paragraph (1)(B) (or, 
     if earlier, the date the plan or contract amendment is 
     adopted),
     the plan or contract is operated as if such plan or contract 
     amendment were in effect; and
       (B) such plan or contract amendment applies retroactively 
     for such period.

    TITLE III--EXTENSION OF CERTAIN PROVISIONS TO FLORIDA AND OTHER 
                             AFFECTED AREAS

     SEC. 301. EXTENSION OF CERTAIN PROVISIONS TO FLORIDA AND 
                   OTHER AFFECTED AREAS.

       (a) In General.--The following provisions shall be applied 
     as if they did not include the phrase ``individual or 
     individual and public'':
       (1) Section 101 of this Act (relating to extension of 
     replacement period for nonrecognition of gain).
       (2) Section 104 of this Act (relating to exclusion of 
     certain cancellations of indebtedness), but only if the 
     discharge is on account of Hurricane Katrina.
       (3) Section 105 of this Act (relating to special rules for 
     mortgage revenue bonds), but only with respect to residences 
     damaged as a result of Hurricane Katrina.
       (4) Section 106 of this Act (relating to suspension of 
     certain limitations on personal casualty losses).
       (5) Section 107 of this Act (relating to additional 
     exemption for housing Hurricane Katrina displaced 
     individuals).
       (6) Sections 108 and 109 of this Act (relating to special 
     rule for certain family related benefits), but only with 
     respect to individuals dislocated from their residence by 
     reason of Hurricane Katrina.
       (7) Title II of this Act (relating to penalty free use of 
     retirement funds in the case of natural disasters) and 
     section 72(t)(2)(G) of the Internal Revenue Code of 1986 (as 
     added by section 201 of this Act).
       (b) Clarification of Scope of Provisions Relating to 
     Charitable Contributions.--The provisions of sections 102 and 
     103 shall apply to relief efforts related to Hurricane 
     Katrina whether or not such efforts are carried out in an 
     area directly impacted by Hurricane Katrina.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Louisiana (Mr. McCrery) and the gentleman from Louisiana (Mr. 
Jefferson) each will control 20 minutes.
  The Chair recognizes the gentleman from Louisiana (Mr. McCrery).
  Mr. McCRERY. Madam Speaker, I yield myself such time as I may 
consume.
  Madam Speaker, I rise today in strong support of the Katrina 
Emergency Tax Relief Act of 2005. I want to thank my colleagues on both 
sides of the aisle for their work and support in moving this critical 
legislation quickly to the House floor. In particular, I want to thank 
the members of the Committee on Ways and Means, the gentleman from 
Louisiana (Mr. Jefferson), the gentleman from New York (Mr. Rangel), 
and all the members of the Louisiana delegation for their continued 
assistance in crafting hurricane-related legislation.
  This bill is the Committee on Ways and Means' second installment of 
providing targeted relief for individuals and families hurt by 
Hurricane Katrina. These tax provisions are aimed at easing the 
financial burdens of people of the region as they begin to rebuild 
their lives.
  The bill also address the generosity of many Good Samaritans across 
the country who have opened up their homes to individuals and families 
displaced by the hurricane. H.R. 3768 would provide a special $500 
income tax deduction for those who are providing temporary housing. In 
addition, the Katrina Emergency Tax Relief Act encourages cash 
donations to help victims by relaxing some restrictions regarding how 
much charitable contribution can be deducted on an individual's tax 
return.
  H.R. 3768 continues the efforts of this Congress to bring immediate 
relief to these individuals and families devastated by Hurricane 
Katrina.

                              {time}  1230

  Madam Speaker, last week, the members of the Committee on Ways and 
Means on both sides of the aisle acted quickly, and the House passed 
the TANF Emergency Response and Recovery Act. That bill will provide 
aid by cutting down red tape and bringing more Federal dollars to the 
affected areas through the Temporary Assistance for Needy Families 
program, with the welfare program.
  The Committee on Ways and Means continues to look at programs within

[[Page H8018]]

our jurisdiction and how they might be used to assist those affected by 
Hurricane Katrina. I expect that we will bring to the House floor 
additional legislation in the coming weeks. We know that the people and 
businesses of New Orleans and the gulf coast areas hit by Katrina will 
rebuild, and we are committed to helping them do that.
  Today, Congress will vote on much-needed tax relief for the affected 
areas. I urge my colleagues to support this legislation so we can 
quickly work with our colleagues in the Senate and further demonstrate 
that this Congress stands ready to help those most affected by 
Hurricane Katrina.
  Madam Speaker, I reserve the balance of my time.
  Mr. JEFFERSON. Madam Speaker, I yield myself such time as I may 
consume.
  First, I want to thank the gentleman from Louisiana (Mr. McCrery), my 
friend and colleague, for joining me in introducing this important 
piece of legislation. I also want to thank the gentleman from 
California (Mr. Thomas), the chairman of the committee, and the 
gentleman from New York (Mr. Rangel), our ranking member, for their 
swift action in bringing this bill to the floor, as well as the members 
of the Committee on Ways and Means.
  I also would be remiss if I failed to thank both the Republican and 
Democratic staff of the committee for their extraordinary bipartisan 
effort to put this tax package together in such a timely way.
  Madam Speaker, the Katrina Emergency Tax Relief Act of 2005 provides 
much-needed aid and comfort to the victims of Hurricane Katrina and the 
many thousands of good Samaritans who have opened their arms, wallets 
and homes to provide food, clothing, shelter and medical care and other 
necessities to the thousands of Americans who have been uprooted in the 
wake of this horrible storm.
  As we have all seen, while Hurricane Katrina was indiscriminate in 
the destruction it wrought, the unprecedented property damage, human 
toll and economic loss fell disproportionately on the backs of our 
poorest and most vulnerable citizens.
  A disproportionate share of the damage in my hometown of New Orleans 
was meted out on parts of our great city that were already 
extraordinarily economically disadvantaged. The poverty, disability and 
economic disenfranchisement in these areas in no small way were factors 
in the extraordinary loss of life and property experienced by my 
constituents.
  For this reason, I am grateful that the bill we consider today 
provides important relief to these vulnerable families.
  First, families who have been displaced in the wake of Hurricane 
Katrina are held harmless against the loss of critical economic 
security and benefits. Damage caused by the hurricane has displaced 
hundreds of thousands of individuals, who are temporarily living with 
family, friends or good Samaritans.
  Under current law, a prolonged change in their living situation could 
affect their eligibility for various tax benefits. The proposal allows 
individuals the option of using their 2004 income tax returns to 
calculate their child credit and the Earned Income Tax Credit on their 
2005 tax returns. This special rule applies to individuals who lived in 
areas eligible for individual assistance from the Federal Government as 
a result of the disaster as of August 28, 2005.
  The proposal also grants the U.S. Treasury Department authority to 
ensure that taxpayers do not lose dependency exemptions or child 
credits for 2005 due to temporary relocations.
  In many areas of the gulf coast devastated by Hurricane Katrina, 
including my hometown of New Orleans, the EITC is a vitally important 
part of many families' economic security. This bill ensures the 
continuing eligibility of the thousands of families displaced by 
Katrina.
  Second, the legislation ensures that the victims of Hurricane Katrina 
are able to account fully for the losses they have suffered in the 
aftermath of the hurricane. Moreover, it exempts the value of forgiven 
mortgages and other debt from taxable income. These two very important 
provisions demonstrate compassion by prohibiting the IRS from kicking 
these families when, for many of them, they are at the lowest points in 
their lives.
  Madam Speaker, this Act also provides an added measure of financial 
security to the many victims of this storm by providing them with added 
flexibility to access the savings they have set aside in 401(k) plans 
and individual retirement accounts without the usual penalties. In a 
time when so many have lost jobs and, consequently, their paychecks, 
denying or penalizing access to their savings is inappropriate, and 
this bill recognizes that.
  As I have said repeatedly over the past 2 weeks, the recovery, 
reconstruction and revival of the gulf coast region, and particularly 
New Orleans, will require an unprecedented Federal commitment.
  The bill we will pass today takes two important steps toward that 
recovery.
  First, the bill expands the availability of low-interest mortgages 
for the building and purchasing of homes in the affected areas. We all 
understand that the most solid foundation for the economic security of 
our Nation's families is homeownership. By lifting some of the 
restrictions on the use of mortgage revenue bonds, this bill will help 
to build a solid economic foundation for the families whose lives have 
been turned upside down by Hurricane Katrina.
  In addition, the Katrina Emergency Tax Relief Act also provides 
targeted incentives for returning businesses and new businesses to 
employ the thousands of hardworking Americans who have been displaced 
or lost jobs to Hurricane Katrina. By encouraging businesses to hire 
workers from the affected areas, this bill takes another very important 
step toward our uniform goal of rebuilding and resettling New Orleans 
and other areas tragically struck by the hurricane.
  Finally, Madam Speaker, the legislation we consider today recognizes 
the important contributions that good-hearted and generous Americans 
have made to the recovery effort. By increasing the value of the 
charitable deductions and providing relief to the thousands of 
Americans who have opened their homes to my constituents who have lost 
theirs, this bill is an important expression of gratitude from this 
Congress to the American people for rising to the challenge of 
Hurricane Katrina in truly extraordinary ways.
  Madam Speaker, the efforts of my colleagues in providing the relief 
we need in the gulf coast has been unparalleled to any I have witnessed 
during my tenure in Congress. For that, I am extraordinarily grateful. 
However, we still have a long row to hoe before we have achieved the 
full recovery that I know we all want. I look forward to working with 
each of you in the coming weeks and months as we rise to the challenge 
of ensuring that, like the Phoenix of myth and fable, New Orleans rises 
from the devastation of Hurricane Katrina as a bright, shining model of 
American ingenuity and opportunity.
  Madam Speaker, I reserve the balance of my time.
  Mr. McCRERY. Madam Speaker, I yield 2 minutes to the gentleman from 
Florida (Mr. Foley), a distinguished member of the Committee on Ways 
and Means.
  Mr. FOLEY. Madam Speaker, I want to particularly thank the gentleman 
from Louisiana (Chairman McCrery) and the gentleman from California 
(Chairman Thomas) and others for their collaborative efforts in helping 
the victims of Katrina. It has been a horrific time for America to 
witness on TV what those fine folk in Mississippi, Alabama, Florida and 
Louisiana have endured.
  It really brings out the best in America, the character, the courage, 
the ability to help their neighbor, and here on the floor, we are 
providing relief by virtue of the Tax Code.
  I want to specifically thank the gentleman from Florida (Mr. Shaw) 
and the gentleman from Florida (Mr. Mario Diaz-Balart), our colleagues 
who brought to the committee a very urgent need of helping Floridians 
as well.
  The three States that were dramatically impacted have been visualized 
on TV, but Katrina did start off the coast of Florida, off the Bahamas 
and made its way through southern Florida, Dayton, Broward Counties. 
They suffered significant damage. The gentlewoman from Florida (Ms. 
Wasserman Schultz), our colleague, as well lent a

[[Page H8019]]

hand in trying to see that our constituents were brought whole in this 
effort as well.
  The chairman was specific in providing targeted relief for those that 
were directly impacted by the storm, and we applaud that. No tax relief 
measure should be a grab bag for others to dip into simply because they 
thought they were close to a proximity of damage.
  In this bill, we establish criteria that there is significant and 
real damage, not perceived, not illusory, but real damage. Forgiveness 
of debt if, in fact, your home has been decimated and you have to 
discharge the mortgage obligation, relieving that would be a gain under 
the Tax Code for a person that has not only lost their home, had their 
mortgage foreclosed but is being considered by the IRS for gain on that 
asset simply because they got a forgiveness of debt.
  Ability to reach into your IRA for the specific use in this 
emergency. The IRA is an important asset for future financial 
strengthening of all persons' assets. So we do not let people just go 
into the account, but it is strictly provided for on the case of 
emergency.
  So I applaud this bill. The gentleman from Louisiana (Mr. Jefferson), 
my colleague, I know has suffered himself personally. We are delighted 
that we worked in a bipartisan spirit to bring about relief for the 
very people that have suffered so much.
  Mr. JEFFERSON. Madam Speaker, I am pleased to yield 3 minutes to the 
gentleman from Maryland (Mr. Cardin), a distinguished member of the 
Committee on Ways and Means.
  (Mr. CARDIN asked and was given permission to revise and extend his 
remarks.)
  Mr. CARDIN. Madam Speaker, let me thank the gentleman from Louisiana 
(Mr. Jefferson) for his leadership in focusing what we can do to help 
the victims of Katrina. I want to thank the gentleman from Louisiana 
(Mr. McCrery) for his leadership on the committee.
  This is exactly what we need to do. Obviously, all of us were 
devastated by what happened with Katrina and the failure of our 
government to respond in a timely and effective way, and people who 
were vulnerable paid a very heavy price.
  What this bill does is try to deal with the problems of the victims 
of Katrina by looking at our Tax Code. Our first priority today must be 
to help those who were devastated by Katrina, and this bill looks at 
the Tax Code to find ways in which we can be helpful. I applaud the 
specific provisions that are in it because I think it will help.
  To deal with the practical problems such as residency, people who now 
live in different parts of the country would not comply with the 
technical requirements in our Tax Code on residency, which is required 
to take advantage of some of the tax provisions. This bill provides the 
needed relief.
  Our colleague, the gentleman from Louisiana (Mr. Jefferson), talked 
about the Earned Income Tax Credit, a very important tool to help low-
wage families in this Nation. This bill will make sure that those who 
are entitled to that relief, who were affected by Katrina, will 
continue to be able to receive that help.
  Along with the forgiveness of loans which is taking place, if we do 
not pass this bill, there could be tax consequences to that.
  We provide incentives in this bill for individuals who have opened up 
their homes to take in those who are now without a home, and we provide 
full deductibility for personal casualty losses, as we should.
  For job opportunity, we expand the Work Opportunity Tax Credit, as we 
should do, and we now make it easier for individuals to be able to give 
cash donations to the victims of Katrina.
  Bottom line, Madam Speaker, is this bill takes care of some of the 
practical problems that our Tax Code could not anticipate as a result 
of Katrina, and I want to thank the leadership on both sides of the 
aisle for expediting the process to bring this bill forward so that we 
can try, in a constructive way, to make it easier for those who were 
victimized by this horrible hurricane.
  Mr. McCRERY. Madam Speaker, I yield 2 minutes to the gentlewoman from 
Pennsylvania (Ms. Hart), another distinguished member of the Committee 
on Ways and Means.
  Ms. HART. Madam Speaker, I thank the chairman and also the gentleman 
from California (Chairman Thomas) and the gentleman from New York 
(Ranking Member Rangel) and my colleagues of the Committee on Ways and 
Means for finding some creative and very practical ways to help the 
victims of Hurricane Katrina.
  Since it was one of the deadliest disasters, or the deadliest 
disaster, in U.S. history, it has left countless individuals without 
the most basic needs, and the American people's response has been 
historic, with millions being donated in time and money, nearly $800 
million already donated privately to the relief effort on top of 
government assistance.
  Unfortunately, despite this outpouring, the people in the communities 
in Louisiana, Mississippi and Alabama still need help. H.R. 3768 will 
help these families rebuild their lives in a number of different ways.
  One, it will encourage even more private help from individuals. It 
encourages more cash donations by individuals by allowing them to 
deduct more of the contributions that they give.
  It will also encourage more deductions by corporations. Under current 
law, they can only deduct 10 percent of those donations. That is waived 
under this bill.
  It increases the opportunity for people to provide more physical help 
by increasing the reimbursement rate for mileage for those who actually 
will spend their gasoline getting to places to help, ways that people 
can get involved personally.
  Also, those who have had savings, who are going to need to tap it, 
who have been victims, are assisted in accessing their own money. It 
was mentioned earlier that people can access their IRAs without the 
penalty that they currently would have for accessing that money before 
their retirement. It is important for us to allow these victims access 
to whatever they can get, whatever assets they can get to help them get 
their lives back on track sooner.
  I think it is the least that we can do to address some very simple 
but very practical issues via this bill.
  Mr. JEFFERSON. Madam Speaker, I reserve the balance of my time.
  Mr. McCRERY. Madam Speaker, I yield such time as he may consume to 
the gentleman from California (Mr. Thomas), the distinguished chairman 
of the Committee on Ways and Means.
  Mr. THOMAS. Madam Speaker, I thank the gentleman for the time.
  I just want to remind Members, as we move forward with yet another 
piece of legislation which has taken a little longer to craft because 
it becomes more structural in dealing with the Tax Code, as we had 
indicated when we came back from our summer district work period, we 
will probably have another piece of legislation which will deal with 
more additional structural assistance that takes a little longer to 
craft dealing with the reconstruction portion of assistance.
  I took the time at the microphone this morning to indicate to my 
colleagues how frustrating this process has been.

                              {time}  1245

  More than a week ago, this House moved swiftly, in a bipartisan way, 
to simply open up the pipeline that had money already in it as direct 
assistance to individuals under the targeted assistance for families, 
or the TANF program. That bill moved off the floor of the House without 
even a recorded vote, and it has not yet been taken up by the Senate.
  The procedure of putting a hold on legislation, which is an 
individual or a group of Senators' way of stopping the process, has 
been exercised by Members of the Senate. And I want to indicate to 
people how outrageous that procedure is on a bill which should have 
been moved last week to assist people. I take the time on this floor to 
say this particular legislation, a bit more structured, we had an extra 
week to think it out, being moved again on a bipartisan basis should 
not be subject to a hold in the Senate.
  If the Senate cannot get its act together to move legislation, then 
simply allow the House's bipartisan effort to go forward. These people 
need help. That area needs help. The House has moved in a bipartisan 
way and the Senate has obstructed the movement of

[[Page H8020]]

needed legislation by allowing even in normal times the somewhat 
unseemly procedure of holds by individuals or groups of Senators, but 
on this legislation it is unconscionable.
  Mr. JEFFERSON. Madam Speaker, I am pleased to yield 3 minutes to my 
colleague and friend, the gentleman from Mississippi (Mr. Taylor).
  Mr. TAYLOR of Mississippi. Madam Speaker, I want to thank the members 
of the Committee on Ways and Means for bringing this to the floor. As 
you know, south Mississippi, south Louisiana suffered a catastrophe of 
biblical proportions; and there is really no other way to describe it. 
A 30-foot wall of water hit south Mississippi, resulting in the 
breaking of the floodgates in New Orleans.
  Whole communities, the city of Waveland, it is pretty fair to say no 
longer exists. The city of Bay Saint Louis, probably 80 percent of the 
people in that town lost their homes. In portions of Harrison County, 
in Pass Christian and Biloxi, there are entire blocks leveled, with one 
person not able to distinguish the parts of furniture from his house 
with the parts of furniture from another.
  I consider myself a deficit hawk. I have voted against almost every 
tax bill that came to this floor because I did not want to see the 
deficit go up by the $2 trillion it has. This is different. I felt that 
those bills took care of the wealthiest Americans. I think this bill 
takes care of the neediest Americans. It is truly a step in the right 
direction when we have so much to do.
  One of the fights that the gentleman from Louisiana (Mr. McCrery) and 
all of us from the affected area will have is to help those people who 
could never have conceived they would flood with their insurance needs. 
They had wind insurance. They are now being told it did not cover a 
flood, and places that had never flooded in recorded history of the 
Europeans coming to America flooded. They are being left out in the 
cold. We have to find a way to help them.
  There is going to be, based on the Florida experience, a number, 
probably in the tens of thousands of people, who will be told by FEMA 
that their house has been 51 percent destroyed and, by regulation, it 
has to be bulldozed. And then it is complicated by, I am told, based on 
the Florida experience, the insurance companies who will go to them and 
say FEMA says there is only 51 percent destruction, so we are only 
going to give you 51 percent of what you thought your premium was. So 
if you had a $100,000 house, it is bulldozed; but you only get $51,000 
in payment. We have to fix that. We cannot let that happen again. There 
are too many hard-working people who are looking to Congress for 
leadership.
  I do not say this often, because I did vote for the war in Iraq and I 
share in the responsibility for every one of those Americans who were 
wounded there and everyone who died there, but on a daily basis we hire 
Iraqis to clean the streets, just to give them something to do and give 
them a chance at life. On a daily basis we are fixing sewer lines in 
Iraq. On a daily basis we are building schools in Iraq. We need to do 
for our fellow Americans what we so willingly do for the Iraqi people.
  So I thank the committee for this great step in the right direction. 
It is such a, quite frankly, small step on such a monumental journey 
that we have to take; but it is at least a step in the right direction, 
and thank you for doing it.
  Mr. McCRERY. Madam Speaker, I can assure the gentleman from 
Mississippi that I agree with his remarks, and there will be more 
coming from this Congress.
  Madam Speaker, I yield 2\1/2\ minutes to the gentleman from Arizona 
(Mr. Hayworth), another member of the Committee on Ways and Means.
  (Mr. HAYWORTH asked and was given permission to revise and extend his 
remarks.)
  Mr. HAYWORTH. Madam Speaker, I thank my colleague from the Committee 
on Ways and Means for yielding me this time.
  Members of this House from States directly affected by this natural 
disaster have come to this floor and spoken eloquently and movingly of 
the needs their constituents have. Just as a natural disaster does not 
distinguish partisanship, so too has this House moved forward to deal 
effectively and, yes, as a consequence of the Tax Code and the nature 
of what we do, methodically and sequentially to deal in a thoughtful 
and compassionate manner with what we confront as a people and as a 
Nation.
  By the same token, Madam Speaker, Americans from coast to coast and 
beyond have opened their hearts, opened their homes, and opened their 
pocketbooks to help their fellow Americans in need. And as these are 
the worst of times for so many affected by this natural disaster, in 
many ways the best of America comes through with this compassionate 
impulse to help others. Fittingly and properly, many of the actions we 
take in this legislation are targeted directly at the people whose 
lives have been changed and affected by this storm, but also we take 
into account the generosity of fellow Americans and, in dealing with 
the Tax Code, a couple of provisions that we need to emphasize that 
affect people not only who call the gulf coast home but help those 
around the Nation.
  Briefly, the fact that we are providing tax relief for housing 
assistance to dislocated persons; the fact that we are encouraging cash 
donations by individuals and by corporations, and moving in a way to 
encourage yet more giving by the incredibly compassionate people known 
as Americans is something that should be lauded and something that I 
believe will go a long way in Americans helping Americans and this 
House, as a collective body, reaching out to help those Americans most 
in need.
  Mr. JEFFERSON. Madam Speaker, I am pleased to yield 2\1/2\ minutes to 
the gentleman from Oregon (Mr. Blumenauer).
  Mr. BLUMENAUER. Madam Speaker, I thank the gentleman for yielding me 
this time and for his courtesy in permitting me to speak on this 
proposal. I applaud what the committee has done, moving forward with 
specific tax relief that is going to make a difference for people in 
this devastated area.
  I am hopeful that this will signify the start of a creative effort on 
the part of a number of committees, people on both sides of the aisle, 
to figure out ways that we can have assistance that is commensurate 
with the challenge and, in fact, employs some of the techniques that we 
have used in other parts of the world.
  Some of us visited the tsunami-ravaged area days after that 
devastation, and we saw on the ground people in Indonesia, in Sri 
Lanka, and in Thailand that were being put to work virtually overnight 
with a cash-for-work program that had people doing essential labor-
intensive work that made the community better so that the recovery 
could proceed.
  I would hope the creativity, ingenuity, and bipartisan spirit 
demonstrated by the Committee on Ways and Means on these important 
provisions could be extended to other committees, other parts of our 
organizational efforts here to have a program so that every able-bodied 
person in the three States who wants to be able to work restoring their 
community is given that opportunity. It will be far cheaper in the long 
run than employing expensive contracts from people out of State, and it 
will give people a sense of ownership and involvement, and it will get 
money circulating in those devastated local economies.
  Madam Speaker, I am hopeful that we will be able to use the 
creativity to bring other people together for a planning effort that 
involves the people in Mississippi, in Alabama, and in New Orleans, 
because we are going to be putting at least another $100 billion on the 
ground. We ought to make sure that this is not just a monument for 
rapid Federal reaction. It should be a model, for the very first time 
on this scale, taking this blank slate and working with the people who 
had their lives turned upside down, and making them full partners in 
putting the pieces back together.
  Mr. McCRERY. Madam Speaker, I yield 2 minutes to the gentleman from 
Mississippi (Mr. Wicker), a distinguished member of the Committee on 
Appropriations.
  Mr. WICKER. Madam Speaker, I thank my friend for yielding me this 
time.
  Madam Speaker, forces have been marshaled from across the Nation and, 
indeed, from around the globe to assist in the relief and recovery from 
Hurricane Katrina. But the biggest asset in

[[Page H8021]]

this effort is not the Federal Government; it is the generosity of our 
fellow citizens. From the corner lemonade stands to the corporate board 
rooms, people are opening their hearts, homes, churches, and their 
pocketbooks to assist in the relief efforts. Donations continue to pour 
in to countless nongovernmental organizations and to the faith 
community as we begin to take stock in the breadth of Katrina's 
destruction.
  According to the 2004 generosity index, based on IRS statistics, 
Mississippi is the most charitable State in the country. Now we find 
ourselves in need of charity. It is something we take great pride in 
back home, that we are the leader in generosity; and with that in mind, 
I am thankful to see that the provisions of H.R. 3724, the charitable 
donation legislation I introduced last week, have been included in the 
relief package.
  Under current law, the amount of individual or corporate deductions 
is now capped. This bill includes provisions to lift those caps for 
Katrina-related donations. In doing so, we are unleashing the awesome 
power of the American public and our capacity to care for our own.
  This past weekend, I was part of a caravan of trucks and vans loaded 
with supplies from north Mississippi to several churches in the ravaged 
portions of my State. While I saw the pain on the faces of those who 
had lost so much, I also saw a determination that is strong among our 
people. We are already working hard on recovery and rebuilding, spurred 
on by the compassion and generosity of so many Americans. This bill 
will help provide individuals affected by this tragedy with the 
charitable assistance they need.
  Mr. JEFFERSON. Madam Speaker, I am pleased to yield 2\1/2\ minutes to 
the gentleman from Illinois (Mr. Emanuel), a distinguished member of 
the Committee on Ways and Means and whose family has donated generously 
to our food relief efforts in the affected area.

                              {time}  1300

  Mr. EMANUEL. Madam Speaker, I would like to thank both my colleagues 
who serve on the Ways and Means Committee who are from Louisiana and 
the affected area.
  As you look at the overall part of this bill, both from the 
charitable piece to also helping the families, whether that is on debt 
forgiveness, dislocation as relates to building a home, and also their 
own family income or casualty loss, finally the Tax Code is beginning 
to reflect America's values: When something happens to an American, all 
Americans pull together to help those individuals affected restore 
their lives, rebuild their communities, and get back on with their own 
lives.
  I want to isolate a particular part of this bill which deals with the 
Earned Income Tax Credit. I have introduced a bill with Senator Obama 
in the Senate that would fast-track the Earned Income Tax Credit and 
child credit and other educational credits to affected individuals. 
There is a precedent for this. During 9/11, the United States Congress 
fast-tracked the authority and allowed the Secretary of Treasury to get 
to affected families during 9/11 the child credit. In the same way, we 
should get to the Earned Income Tax Credit, the child credit, as well 
as educational credits like the Hope Scholarship to affected 
individuals on a fast-track basis so they, as a family, can get their 
lives restored, families who have children, families who work.
  These are all for individuals who have worked and who have paid their 
taxes, ensuring that they get the benefits and credits that are due to 
them. It would lock in and ensure that the Secretary of Treasury would 
fast-track and get those resources to these families and allow them to 
establish themselves again and get their income moving again.
  One of the most important things we are going to talk about in 
another tax bill is helping businesses get their feet on the ground. 
The Earned Income Tax Credit, the child credit, other educational 
credits help families get their feet on the ground, going again, and 
operating as a family.
  Today's provisions, whether it is Earned Income Tax Credit, whether 
it deals with the forgiven debt, whether it deals with the charity, 
whether it deals with deductibility for personal casualty, it reflects 
all of our values that we as Americans act as one in a time of need.
  I compliment both of my colleagues from Louisiana, my colleagues from 
Mississippi, and others in Alabama from affected areas working on this 
legislation, the bipartisanship here, and hope that would spread to 
other parts of this Congress as we work on other pieces of legislation. 
I hope to work with them in the future on the legislation that Senator 
Obama and I introduced so we can not only help families use the 2004 
tax that they submitted, their tax forms, but also that we now direct 
the Secretary of Treasury to fast-track those checks so those families 
can actually get moving.
  Mr. McCRERY. Madam Speaker, I would compliment the gentleman from 
Illinois for his thoughts on speeding relief to the people most in 
need; and, of course, the bill before us today does take some steps 
toward protecting those who are on the EITC already, to make sure that 
changed circumstances that they might encounter as a result of the 
disaster do not affect their eligibility for those checks. We are doing 
that in this legislation, but the gentleman makes an excellent point 
about the need for those checks to arrive in a speedy manner. I look 
forward to discussing that with the gentleman.
  Madam Speaker, I yield 2 minutes to the gentleman from Indiana (Mr. 
Souder).
  Mr. SOUDER. Madam Speaker, I thank the gentleman from Louisiana (Mr. 
McCrery), the gentleman from Louisiana (Mr. Jefferson), and I rise in 
support of this bill, but I would like to make a cautionary point. I 
have been a long advocate of the charitable points in this bill, and I 
think they are very important. After 9/11, however, what we saw was 
charitable giving diverted from people all over America into New York 
City.
  If the giving is not sacrificial above and beyond what you already 
give, there are going to be children who are hungry, people without 
homes, people who cannot get the drug addiction assistance, juveniles 
who cannot find a place to go, people who cannot get immunized all over 
America as the money just pours into one region. Sometimes the 
unintended consequences of giving a preferential advantage in 
charitable giving over others can drive this trend even more.
  As I have talked to different groups in my district who have poured 
down into this region, this is not a 3-month project or a 2-day 
project, this is going to be 7 to 9 years as they reorient their 
mission programs as they try to do this. We need to make sure that the 
broader Charitable Giving Act is passed as well so that we do not dry 
up charities around the country and other people who are hurting in 
other areas are abandoned.
  I strongly favor all the incentives in this bill, I believe we 
absolutely need to do it in this region, but we also need to make sure 
that the same charitable options are there for the rest of the country, 
where they are not getting $60 billion of assistance and probably $200 
billion more that is desperately needed. Because if you are hungry, if 
you are hurting, it is the same no matter what city you are in, and we 
need to make sure this charitable giving applies to the whole Nation, 
not just here. I am strongly in support of this, but I hope we can move 
an additional bill so we do not have an unintended consequence coming 
out of this bill.
  Mr. JEFFERSON. Madam Speaker, I yield myself the balance of my time. 
I again want to thank my colleague from Louisiana (Mr. McCrery) and 
others who have worked so carefully on this bill. This has been an 
important debate, an important discussion about where this Congress is 
going and how it is helping out and the generosity of this Congress as 
we tackle these important issues and the difficult issues back home.
  To those who say this is not a huge step forward, I should say to 
them that it is huge for the people who are involved. We take to heart 
the remarks made by Mr. Emanuel, the bill that he and Mr. Obama are 
pushing to get this relief out fast. I think it is very important.
  This is a huge step, but it simply is not the last step. It is far 
from the last step in providing relief to our region. We want this 
Congress to walk along

[[Page H8022]]

with us as we make one step after another toward realizing the vision 
of restoring our area and rebuilding it to a new, better, higher place.
  I look forward to this walk with this Congress over the next months 
and years. I hope that we will stay engaged as fully as we are in these 
early days throughout this lengthy process.
  Madam Speaker, I yield back the balance of my time.
  Mr. McCRERY. Madam Speaker, I yield myself the balance of my time.
  I would be remiss if I did not thank the Bush administration, the 
Department of Treasury and the IRS for administratively doing a great 
many things that they could do without legislation to make sure that 
the needs of the victims of Hurricane Katrina are met vis-a-vis the Tax 
Code. I want to thank the administration for their important work on 
this subject as well.
  I also want to reiterate my thanks to the gentleman from Louisiana 
(Mr. Jefferson) for working so closely with me and my staff to craft 
these very important individual tax provisions that, thanks to the 
leadership on both sides of the aisle, we have been able to bring to 
the floor in such a speedy manner.
  Lastly, I would thank the chairman of the Committee on Ways and Means 
for lending the full support of his staff to this effort over the past 
couple of weeks. That will continue for some time to come.
  I urge all Members to support this important legislation and get this 
needed relief to individuals who were affected by Hurricane Katrina.
  Madam Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore (Mrs. Emerson). The question is on the motion 
offered by the gentleman from Louisiana (Mr. McCrery) that the House 
suspend the rules and pass the bill, H.R. 3768, as amended.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

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