[Congressional Record Volume 151, Number 152 (Wednesday, November 16, 2005)]
[House]
[Pages H10363-H10365]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        GULF OPPORTUNITY ZONE PUBLIC FINANCE RELIEF ACT OF 2005

  Mr. McCRERY. Mr. Speaker, I ask unanimous consent that the Committee 
on Ways and Means be discharged from further consideration of the bill 
(H.R. 4337) to amend the Internal Revenue Code of 1986 to provide for 
Gulf tax credit bonds and advance refundings of certain tax-exempt 
bonds, and to provide a Federal guarantee of certain State bonds, and 
ask for its immediate consideration in the House.
  The Clerk read the title of the bill.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Louisiana?
  Mr. JEFFERSON. Mr. Speaker, reserving the right to object, and I do 
not intend to object, I want to thank the gentleman from Louisiana (Mr. 
McCrery) for his efforts in this regard to this bill. I want to thank 
the gentleman from California (Chairman Thomas) and the ranking member, 
the gentleman from New York (Mr. Rangel), and all of the members of the 
Committee on Ways and Means and others who have taken up the cause of 
helping our dear friends and my constituents back in Louisiana, our 
constituents back in Louisiana.
  The gravamen of the problem that this bill addresses is that our 
local governments, are State governments, are severely handicapped to 
serve their citizens because of a lack of finance to service our 
people. Our city has lost its tax base completely, and so has the 
school board and other cities in our region. Our State is facing a big 
budget hole because of the decimation of our cities on a fiscal basis.
  This bill gives us a chance to address those issues through self-help 
approaches, through the refinancing of bonds, through the extending of 
taxable bonds, and through the extension of bonds to service debt. I 
think it is an important part of the recovery of our State of 
Louisiana. I am very grateful to this House and to my colleagues on the 
Committee on Ways and Means, Mr. McCrery, for his leadership on this 
issue and for our partnership in this endeavor.
  Mr. McCRERY. Mr. Speaker, will the gentleman yield?
  Mr. JEFFERSON. I yield to the gentleman from Louisiana.
  Mr. McCRERY. Mr. Speaker, I would like to thank the gentleman from 
Louisiana (Mr. Jefferson) for the hard work that he has put into this 
effort to allow the State and our municipalities the ability to help 
themselves. That is what this bill will do.
  Mr. Jefferson has worked tirelessly with me to try to clear the way 
for passage of this bill this evening. His efforts are to be commended. 
I thank him very much.
  Mr. JEFFERSON. Mr. Speaker, I withdraw my reservation of objection.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Louisiana?
  There was no objection.
  The Clerk read the bill, as follows:

                               H.R. 4337

       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 ``Gulf Opportunity Zone Public 
     Finance Relief Act of 2005''.

     SEC. 2. GULF TAX CREDIT BONDS.

       (a) In General.--Subpart H of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 is amended by 
     adding at the end the following new section:

     ``SEC. 54A. CREDIT TO HOLDERS OF GULF TAX CREDIT BONDS.

       ``(a) Allowance of Credit.--If a taxpayer holds a Gulf tax 
     credit bond on one or more

[[Page H10364]]

     credit allowance dates of the bond occurring during any 
     taxable year, there shall be allowed as a credit against the 
     tax imposed by this chapter for the taxable year an amount 
     equal to the sum of the credits determined under subsection 
     (b) with respect to such dates.
       ``(b) Amount of Credit.--
       ``(1) In general.--The amount of the credit determined 
     under this subsection with respect to any credit allowance 
     date for a Gulf tax credit bond is 25 percent of the annual 
     credit determined with respect to such bond.
       ``(2) Annual credit.--The annual credit determined with 
     respect to any Gulf tax credit bond is the product of--
       ``(A) the credit rate determined by the Secretary under 
     paragraph (3) for the day on which such bond was sold, 
     multiplied by
       ``(B) the outstanding face amount of the bond.
       ``(3) Determination.--For purposes of paragraph (2), with 
     respect to any Gulf tax credit bond, the Secretary shall 
     determine daily or cause to be determined daily a credit rate 
     which shall apply to the first day on which there is a 
     binding, written contract for the sale or exchange of the 
     bond. The credit rate for any day is the credit rate which 
     the Secretary or the Secretary's designee estimates will 
     permit the issuance of Gulf tax credit bonds with a specified 
     maturity or redemption date without discount and without 
     interest cost to the issuer.
       ``(4) Credit allowance date.--For purposes of this section, 
     the term `credit allowance date' means March 15, June 15, 
     September 15, and December 15. Such term also includes the 
     last day on which the bond is outstanding.
       ``(5) Special rule for issuance and redemption.--In the 
     case of a bond which is issued during the 3-month period 
     ending on a credit allowance date, the amount of the credit 
     determined under this subsection with respect to such credit 
     allowance date shall be a ratable portion of the credit 
     otherwise determined based on the portion of the 3-month 
     period during which the bond is outstanding. A similar rule 
     shall apply when the bond is redeemed or matures.
       ``(c) Limitation BAsed on Amount of Tax.--The credit 
     allowed under subsection (a) for any taxable year shall not 
     exceed the excess of--
       ``(1) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(2) the sum of the credits allowable under this part 
     (other than subpart C and this section).
       ``(d) Gulf Tax Credit Bond.--For purposes of this section--
       ``(1) In general.--The term `Gulf tax credit bond' means 
     any bond issued as part of an issue if--
       ``(A) the bond is issued by the State of Alabama, 
     Louisiana, or Mississippi,
       ``(B) 95 percent or more of the proceeds of such issue are 
     to be used to--
       ``(i) pay principal, interest, or premiums on qualified 
     bonds issued by such State or any political subdivision of 
     such State, or
       ``(ii) make a loan to any political subdivision of such 
     State to pay principal, interest, or premiums on qualified 
     bonds issued by such political subdivision,
       ``(C) the Governor of such State designates such bond for 
     purposes of this section,
       ``(D) the bond is a general obligation of such State and is 
     in registered form (within the meaning of section 149(a)),
       ``(E) the maturity of such bond does not exceed 2 years, 
     and
       ``(F) the bond is issued after December 31, 2005, and 
     before January 1, 2007.
       ``(2) State matching requirement.--A bond shall not be 
     treated as a Gulf tax credit bond unless--
       ``(A) the issuer of such bond pledges as of the date of the 
     issuance of the issue an amount equal to the face amount of 
     such bond to be used for payments described in clause (i) of 
     paragraph (l)(B), or loans described in clause (ii) of such 
     paragraph, as the case may be, with respect to the issue of 
     which such bond is a part, and
       ``(B) any such payment or loan is made in equal amounts 
     from the proceeds of such issue and from the amount pledged 
     under subparagraph (A).
       The requirement of subparagraph (B) shall be treated as met 
     with respect to any such payment or loan made during the 1-
     year period beginning on the date of the issuance (or any 
     successor 1-year period) if such requirement is met when 
     applied with respect to the aggregate amount of such payments 
     and loans made during such period.
       ``(3) Aggregate limit on bond designations.--The maximum 
     aggregate face amount of bonds which may be designated under 
     this section by the Governor of a State shall not exceed--
       ``(A) $200,000,000 in the case of the State of Louisiana,
       ``(B) $100,000,000 in the case of the State of Mississippi, 
     and
       ``(C) $50,000,000 in the case of the State of Alabama.
       ``(4) Special rules relating to arbitrage.--A bond which is 
     part of an issue shall not be treated as a Gulf tax credit 
     bond unless, with respect to the issue of which the bond is a 
     part, the issuer satisfies the arbitrage requirements of 
     section 148 with respect to proceeds of the issue and any 
     loans made with such proceeds.
       ``(e) Qualified Bond.--For purposes of this section--
       ``(1) In general.--The term `qualified bond' means any 
     obligation of a State or political subdivision thereof which 
     was outstanding on August 28, 2005.
       ``(2) Exception for private activity bonds.--Such term 
     shall not include any private activity bond.
       ``(3) Exception for advance refundings.--Such term shall 
     not include any bond--
       ``(A) which is designated as an advance refunding bond 
     under section 149(d)(7), or
       ``(B) with respect to which there is any outstanding bond 
     to refund such bond.
       ``(f) Credit Included in Gross Income.--Gross income 
     includes the amount of the credit allowed to the taxpayer 
     under this section (determined without regard to subsection 
     (c)) and the amount so included shall be treated as interest 
     income.
       ``(g) Other Definitions and Special Rules.--For purposes of 
     this section--
       ``(1) Bond.--The term `bond' includes any obligation.
       ``(2) partnership; s corporation; and other pass-thru 
     entities.--
       `` (A) In general.--Under regulations prescribed by the 
     Secretary, in the case of a partnership, trust, S 
     corporation, or other pass-thru entity, rules similar to the 
     rules of section 41 (g) shall apply with respect to the 
     credit allowable under subsection (a).
       ``(B) No basis adjustment.--In the case of a bond held by a 
     partnership or an S corporation, rules similar to the rules 
     under section 1397E(i) shall apply.
       ``(3) Bonds held by regulated investment companies.--If any 
     Gulf tax credit bond is held by a regulated investment 
     company, the credit determined under subsection (a) shall be 
     allowed to shareholders of such company under procedures 
     prescribed by the Secretary.
       ``(4) Reporting.--Issuers of Gulf tax credit bonds shall 
     submit reports similar to the reports required under section 
     149(e).''.
       (b) Conforming Amendments.--
       (1) Paragraph (2) of section 54(c) of such Code is amended 
     by inserting ``, section 54A,'' after ``subpart C''.
       (2) Subparagraph (A) of section 6049(d)(8) of such Code is 
     amended--
       (A) by inserting ``or 54A(f)'' after ``section 54(g)'', and
       (B) by inserting ``or 54A(b)(4), as the case may be'' after 
     ``section 54(b)(4)''.
       (3) The table of sections for subpart H of part IV of 
     subchapter A of chapter 1 of such Code is amended by adding 
     at the end the following new item:
``Sec. 54A. Credit to holders of Gulf tax credit bonds.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years ending after December 31, 2005.

     SEC. 3. ADVANCE REFUNDINGS OF CERTAIN TAX-EXEMPT BONDS.

       (a) In General.--Subsection (d) of section 149 of the 
     Internal Revenue Code of 1986 (relating to advance 
     refundings) is amended by redesignating paragraph (7) as 
     paragraph (8) and by inserting after paragraph (6) the 
     following new paragraph:
       ``(7) Advance refundings of certain gulf coast bonds.--
       ``(A) In general.--With respect to a bond described in 
     subparagraph (C) which is not a qualified 501(c)(3) bond, one 
     additional advance refunding after the date of the enactment 
     of this paragraph and before January 1, 2011, shall be 
     allowed under the applicable rules of this subsection if--
       ``(i) the Governor of the State designates the advance 
     refunding bond for purposes of this paragraph, and
       ``(ii) the requirements of subparagraph (E) are met.
       ``(B) Certain private activity bonds.--With respect to a 
     bond described in subparagraph (C) which is an exempt 
     facility bond described in paragraph (1) or (2) of section 
     142(a), one advance refunding after the date of the enactment 
     of this paragraph and before January 1, 2011, shall be 
     allowed under the applicable rules of this subsection 
     (notwithstanding paragraph (2)) if the requirements of 
     clauses (i) and (ii) of subparagraph (A) are met.
       ``(C) Bonds described.--A bond is described in this 
     subparagraph if such bond was outstanding on August 28, 2005, 
     and is issued by the State of Alabama, Louisiana, or 
     Mississippi, or a political subdivision thereof.
       ``(D) Aggregate limit.--The maximum aggregate face amount 
     of bonds which may be designated under this paragraph by the 
     Governor of a State shall not exceed--
       ``(i) $4,500,000,000 in the case of the State of Louisiana,
       ``(ii) $2,250,000,000 in the case of the State of 
     Mississippi, and
       ``(iii) $1,125,000,000 in the case of the State of Alabama.
       ``(E) Additional requirements.--The requirements of this 
     subparagraph are met with respect to any advance refunding of 
     a bond described in subparagraph (C) if--
       ``(i) no advance refundings of such bond would be allowed 
     under this title on or after August 28, 2005,
       ``(ii) the advance refunding bond is the only other 
     outstanding bond with respect to the refunded bond, and
       ``(iii) the requirements of section 148 are met with 
     respect to all bonds issued under this paragraph.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to advance refundings after the date of the 
     enactment of this Act.

     SEC. 4. FEDERAL GUARANTEE OF CERTAIN STATE BONDS.

       (a) State Bonds Described.--This section shall apply to a 
     bond issued as part of an issue if--

[[Page H10365]]

       (1) the issue of which such bond is part is an issue of the 
     State of Alabama, Louisiana, or Mississippi,
       (2) the bond is a general obligation of the issuing State 
     and is in registered form,
       (3) the proceeds of the bond are distributed to one or more 
     political subdivisions of the issuing State,
       (4) the maturity of such bond does not exceed 5 years,
       (5) the bond is issued after the date of the enactment of 
     this Act and before January 1, 2008, and
       (6) the bond is designated by the Secretary of the Treasury 
     for purposes of this section.
       (b) Application.--
       (1) In general.--The Secretary of the Treasury may only 
     designate a bond for purposes of this section pursuant to an 
     application submitted to the Secretary by the State which 
     demonstrates the need for such designation on the basis of 
     the criteria specified in paragraph (2).
       (2) Criteria.--For purposes of paragraph (1), the criteria 
     specified in this paragraph are--
       (A) the loss of revenue base of one or more political 
     subdivisions of the State by reason of Hurricane Katrina,
       (B) the need for resources to fund infrastructure within, 
     or operating expenses of, any such political subdivision,
       (C) the lack of access of such political subdivision to 
     capital, and
       (D) any other criteria as may be determined by the 
     Secretary.
       (3) Guidance for submission and consideration of 
     applications.--The Secretary of the Treasury shall prescribe 
     regulations or other guidance which provide for the time and 
     manner for the submission and consideration of applications 
     under this subsection.
       (c) Federal Guarantee.--A bond described in subsection (a) 
     is guaranteed by the United States in an amount equal to 50 
     percent of the outstanding principal with respect to such 
     bond.
       (d) Aggregate Limit on Bond Designations.--The maximum 
     aggregate face amount of bonds which may be exceed issued 
     under this section shall not exceed $3,000,000,000.

  The bill was ordered to be engrossed and read a third time, was read 
the third time, and passed, and a motion to reconsider was laid on the 
table.

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