[Congressional Record Volume 151, Number 162 (Friday, December 16, 2005)]
[Senate]
[Pages S13702-S13708]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
GULF OPPORTUNITY ZONE ACT OF 2005
Mr. LOTT. Mr. President, I ask unanimous consent the Senate proceed
to immediate consideration of Calendar No. 328, H.R. 4440.
The PRESIDING OFFICER. The clerk will report the bill by title.
The assistant legislative clerk read as follows:
A bill (H.R. 4440) to amend the Internal Revenue Code of
1986 to provide tax benefits for the Gulf Opportunity Zone
and certain areas affected by Hurricanes Rita and Wilma, and
for other purposes.
There being no objection, the Senate proceeded to consider the bill.
Mr. GRASSLEY. Mr. President, this amendment 2680 acts on our
commitment to provide rebuilding assistance to areas of the country
devastated by this year's relentless hurricane season. It will benefit
residents of the gulf region, as well as more recently impacted areas
of Texas and Florida, and provides much needed relief and resources for
economic rebuilding to those areas.
As promised, we have made our best effort to marry up our compassion
for displaced persons and damaged communities with attention to fiscal
discipline and the best use of taxpayer dollars. This bill represents
an effort to most efficiently and effectively use the tax code to
assist in the rebuilding and revitalization of those regions. I will
reiterate the guiding principles of our hurricane relief legislation.
First, because market forces will be the driver in getting these
regions back on their feet, our bill includes only provisions that
encourage and incentivize redevelopment. Second, our package provides
resources only to those who incurred uninsured losses and does not
provide for a bailout of those who assumed risk as an insurer in our
capitalist, free-market system. Third, we have focused our limited
Federal resources on those most in need--like the many devastated small
business employers who were the backbones of these economies and who
will be the engines of their future growth and prosperity. The
amendment provides front-loaded incentives on a timely basis to
encourage people and businesses to return to the region as quickly as
possible.
I want to show my appreciation to my colleagues in the Senate and in
the House for working to get this legislation to the President as
quickly as possible. Before we go home to spend time with our families,
it is important for us to help the many families who have had their
lives overturned by the recent hurricanes. Hopefully they will think of
this holiday season as a time of rebuilding and opportunity.
[[Page S13703]]
The amendment also includes tax technical correction provisions
related to the American Jobs Creation Act of 2004 and other tax
legislation. Technical corrections measures are routine for major tax
acts and are necessary to ensure that the provisions of the acts are
working consistently with their original intent, or to provide clerical
corrections. Because these measures carry out congressional intent, no
revenue gain or loss is scored from them.
The process and test for technical corrections ensures that only
provisions narrowly drawn to carry out Congressional intent are
included. Technical corrections are derived from a deliberative and
consultative process among the congressional and administration tax
staffs. That means the Republican and Democratic staffs of the House
Ways and Means and Senate Finance Committees are involved as is the
Treasury department staff. All of this work is performed with the
participation and guidance of the nonpartisan Joint Committee on
Taxation staff. A technical enters the list only if all staffs agree it
is appropriate.
The Senate Finance Committee and the Committee on Ways and Means, in
consultation with the Joint Committee on Taxation and the Department of
the Treasury, are continuing to assess proposals for other technical
corrections which may be needed to achieve congressional intent. On
that point, no double benefit is intended under the railroad track
maintenance credit of code section 45G. If the current basis adjustment
rule is not serving to carry out that intent, the provision may need to
be clarified. Such a clarification might provide that basis or tax
attribute reduction applies to the taxpayer taking the credit. I would
like to ask the staff to work on this.
In conclusion, this package will show those affected by Hurricanes
Rita, Wilma, and Katrina that their needs have not been forgotten, and
that we will continue to help them rebuild their homes, communities,
and lives.
Mr. BAUCUS. Mr. President, shortly, we will complete legislative
business and adjourn for the year. Senators will leave to spend the
holidays with our families. Senators will travel to the comfort of our
homes.
But there are still those in the gulf region who do not have homes.
Hurricane Katrina struck almost 4 months ago. We cannot, in good
conscience, conclude our action for the year without passing tax relief
for the gulf region.
The legislation before us today is a good bill. We must pass it
today.
In September, I was pleased that Congress could come together and
quickly pass emergency tax relief for victims of Hurricane Katrina.
Prior to passing that legislation, I promised that I would work with
my colleagues to draft a long-term tax relief package. And that is what
we did.
We worked to create legislation that would help rebuild homes and
businesses. We worked to create legislation that would pump money into
local economies. And we worked to create legislation that would help
distressed working families.
We must come together again. We must pass this legislation today.
On November 18th, the Senate passed the tax reconciliation bill. We
included Hurricane tax relief. We included Alternative Minimum Tax
relief. And we included more than a dozen important tax provisions that
expire on December 31st, including the Work Opportunity Tax Credit and
the Research and Development Tax Credit.
With the help of many, Chairman Grassley and I fit all of that
legislation within the constraints of the budget resolution's
instructions.
But the House did not take up our bill. Instead, the House passed
hurricane relief and Alternative Minimum Tax relief outside of the
budget reconciliation process. Then the next day, the House passed a
tax reconciliation bill.
Why did the House need three bills to achieve what the Senate
succeeded in passing in one bill?
The reason is simple. The reason is the capital gains and dividends
tax cut.
I am disappointed in the House. I am disappointed that Congress could
not pass all the important tax relief that the Senate did in one bill.
And that is why we have the legislation before us today, the House
hurricane tax relief bill.
The amendment that Chairman Grassley and I have crafted to this bill
recognizes that to revitalize the gulf region, the region must have a
strong economy. We must encourage individuals to return. And that means
that there must be jobs for them to return to. This legislation gives
businesses help to create those jobs.
We would provide bonus depreciation. We would increase small business
expensing limits. We would also provide new authority for tax-favored
private activity and mortgage bonds.
We would also extend to victims of Hurricanes Rita and Wilma some of
the tax relief that we provided to victims of Hurricane Katrina in
September. This includes penalty-free early tax-free withdrawals from
pensions and IRAs. We would allow victims to fully deduct casualty
losses. And we would remove the cap on allowable corporate charitable
contributions made in response to the hurricanes.
And thanks to the hard work and persistence of the good Senators from
Florida and Texas, we have been able to forge an agreement to provide
extra low-income housing benefits for the Rita and Wilma hurricane
zones. My good friend from Florida, Senator Nelson, has made
the convincing case that these devastated areas need more assistance
with low-income housing, and I am pleased to say this bill will be
providing that very help.
The substitute that Senator Grassley and I offer today provides $8
billion in tax relief for the gulf region. We take the House bill, but
we provide additional tax relief for employers and students to
encourage people to return to the gulf region.
One item of particular importance to me is tax relief to employers
who continued to pay their workers after the hurricanes struck.
Employers located in the Katrina, Rita, and Wilma disaster zones will
be able to take up to a $2,400 tax credit on wages paid to employees
during the period the business was shut down. These business owners
have tapped into their savings to help out their workers. They deserve
tax relief. We provided this relief in our first bill, but it was
limited to small employers. I have always felt and argued strongly that
any employer that helps out their workers while the business is shut
down deserves this assistance. I am very pleased that we were able to
eliminate this cap, and extend this relief for the Rita and Wilma zones
as well.
Another priority item for me is a provision to encourage students to
return to the gulf region. Many colleges and universities were forced
to shut down after Hurricane Katrina and students have been scattered
across the country. To encourage these students, and new students as
well, to come back to the gulf region, we double the Hope Scholarship
and Lifetime Learning tax credits. Students from around the country
would be able to take a credit up to $4,000 for tuition, room and
board, books, and fees for attending college in the areas affected by
Hurricane Katrina. I was very pleased that we could include this
benefit in our Senate version and that we have retained it in this
substitute. I think it will be extremely valuable to the colleges and
universities who have really suffered from this hurricane.
One further priority item for me is the additional $1 billion in new
markets tax credit authority for the Katrina zone. I fought to get this
credit in our Senate version because I am convinced this program works.
The program provides access to capital for small businesses through
established community development entities. Entities with a significant
mission of rebuilding in the hurricane zone may access these additional
tax credits in order to help these struggling businesses rebuild. These
businesses may not be able to utilize some of the other tax benefits in
the bill, but access to capital will help many of them stay in business
and stay in the zone.
One last item that I would like to highlight is an employer credit
for providing housing for workers and their families. My good friend
from Louisiana, Senator Landrieu, offered this provision during our
floor debate last month. And if I could just take a moment to point out
to our colleagues the tremendous work she has done on this bill. She
has truly been our compass during these negotiations and has been
essential in conveying the true plight of her constituents.
[[Page S13704]]
She has told me about the many hurricane victims who still do not
have housing in the gulf region. Under her provision, workers and their
families receiving housing from their employers could exclude up to
$600 a month from their income for tax purposes, plus the business can
receive a partial credit for this expense. Business leaders have told
us that they simply cannot get back to work unless their workers have
housing. The Landrieu housing provision helps them immensely.
Finally, this bill provides that soldiers in Iraq and Afghanistan may
include combat pay when calculating their earned income tax credit.
This has been a priority item for our friend from Arkansas, Senator
Pryor, who championed this fix for our military families serving in
combat last year. We extend the benefit for another year in this
substitute and I commend Senator Pryor for his tireless work on behalf
of military families.
We have a good bill before us. It has been nearly 4 months. We are
set to adjourn the Senate for the year. We need to come together and
help those most in need. I urge my colleagues to pass this legislation
today.
animal racing
Mr. BUNNING. Mr. President, I thank the chairman for working with me
on an issue of importance regarding the applicability of the animal
racing facility limitation contained in the Senate amendment to H.R.
4440. I understand that the legislative language creates new section
1400N(p) of the Internal Revenue Code which indicates that property
directly related to animal racing is not eligible for certain benefits
contained in certain subsections of new section 1400N. My understanding
is that items not directly related to the racing of animals or the
viewing of such races, such as barns, stables, practice facilities,
restaurants, some administrative offices, gift shops, and parking areas
are eligible for these benefits.
Mr. GRASSLEY. I thank the Senator for that clarification. His
description is correct.
employee retention credit--tax-exempt financing
Mr. LOTT. Mr. President, because there is no committee report
accompanying this legislation, I would like to engage Chairman Grassley
in a colloquy to clarify the intent of two provisions contained in this
important legislation.
First, among the tax benefits contained in this package is the
employee retention credit. This incentive will play a pivotal role in
helping businesses retain their employees even it they are temporarily
out of business while the gulf coast rebuilds. As I understand the
committee's intent, the credit will apply both where a company is
completely out of business, and where it did not suffer total
devastation to its trade or business operations. For example, the
credit would apply in cases where one part of the operation in the
designated zone was rendered ``inoperable'' while another location of
that same business continued to operate. Is that correct?
Mr. GRASSLEY. I agree with Senator Lott's interpretation of this
provision of the bill.
Mr. LOTT. Another provision of H.R. 4440 would make eligible for tax-
exempt financing the costs of nonresidential real property located in
the Gulf Opportunity Zone. It is my understanding that the intent of
this provision is that nonresidential real property includes any
tangible property other than fixtures and equipment that are movable,
without regard to the class life of such property or its use as part of
manufacturing, production, or extraction, or of furnishing services or
property.
Mr. GRASSLEY. I agree with Senator Lott's interpretation of this
provision of the bill.
Mr. SANTORUM. Mr. President, I rise today to raise an issue of
concern with the Katrina tax relief bill, known as the Gulf Opportunity
Zone. This bill quite rightly provides incentives to bring back
businesses and capital to the devastated regions of the gulf coast.
This package is needed legislation that will continue to drive
redevelopment and provide encouragement for businesses and others to
come back and rebuild, creating jobs in the rebuilding and jobs in the
businesses themselves and providing much needed revenues for the local
communities.
However, I have raised a concern to my colleague from Mississippi
regarding providing incentives to certain industries such as casinos. I
read with interest an article in the New York Times on December 14,
2005, regarding the return of casinos to the gulf coast. The article
noted that while the storm damaged 9 out of 10 casinos in Biloxi, MS 3
of the 9 damaged would be open again before the new year. In fact
``[a]ll 10 Biloxi casinos have told the city they will rebuild, and
most plan larger, more elaborate facilities.'' Clearly, the casinos and
gaming industry do not need Congress to give them tax breaks to entice
them to reopen.
More importantly, there are significant concerns about the impact of
gambling on communities and families. In 2000, the Government
Accountability Office found that ``individuals suffering from
pathological gambling engaged in destructive family behavior, committed
more crime than other citizens, and had higher suicide rates.'' It also
found the ``destructive family behavior'' included domestic violence,
divorce, and homelessness. Additionally, GAO ``also reported that
children of individuals suffering from pathological gambling are often
prone to suffer abuse and neglect.'' As we look at soaring costs for
social programs and ever-increasing needs, it is most troubling that
this report noted that ``lifetime pathological, problem, and at-risk
gamblers are more likely than low-risk or nongamblers to have been
alcohol or drug dependent'' and estimates that ``15 million adults are
at risk of becoming problem gamblers.''
With the heartbreaking impact this industry has on some of our most
vulnerable citizens, I am pleased that my colleague from Mississippi
has recognized my concern and offered a package that ensures the
necessary economic assistance for his State and communities without
exacerbating the social toll on these already devastated communities
and families.
I urge my colleagues to support the expeditious passage of this bill.
I am hopeful our House colleagues will then adopt this bill and send it
on to the President's desk so we can get this help out to these States,
communities, businesses and families before the new year. Then
hopefully the Congress can turn its attention back to the Tax Relief
Act and enact its charitable incentives to help the countless
nonprofits working day and night to heal the wounds in Katrina's wake.
That element of the tax bill is critical, and we should move forward on
this bill in short order.
EITC and CTC for Katrina Victims
Mr. BAUCUS. As we consider this legislation to provide tax relief to
respond to Katrina, it is particularly important that we recognize the
impact of the hurricane on those struggling working families who are
eligible for the earned income tax credit and the child tax credit. I
am particularly concerned that the disruptions and displacement
affecting these families in both their jobs and their homes may make it
more difficult for them to receive these critical tax credits to which
they are legally entitled--credits which they need more than ever. Some
families will become eligible for these credits for the first time, yet
may not be aware of these programs let alone how to apply for them. In
addition, we have seen a tremendous outpouring of support for those hit
by Katrina from families and friends of the victims, often at great
cost. These relatives and friends may also qualify for assistance but
find it more difficult to meet all the normal requirements.
For example, there are many families who have taken in nonrelative
children displaced by the hurricane. They are essentially foster
parents but may not be considered as such under current law. Due to the
need to act quickly in response to Katrina, these foster children will
not have been formally placed by an authorized agency but under current
rules, such individuals could not claim these children for the EITC or
the child tax credit. This would be true even if they continued to care
for the children for more than 6 months in 2006 and thus meet the
qualifying child residency requirement.
The only potential relief such individuals have is the $500
additional exemption in 2005 for housing a Katrina survivor more than
60 days provided in the Hurricane Katrina Emergency Tax Relief Act,
HKTRA. However, this is a
[[Page S13705]]
minimal support for a family taking in a child as a member of the
family. In addition, the exemption is unavailable to low-income
families with no income tax liability.
Taxpayers caring for such children may ultimately seek to formalize
the arrangement with an authorized agency during 2006, but a placement
decision may not be reached until later in the year. If only the time
in residence with a child after the placement decision is considered
for the purposes of meeting the residency test, the taxpayer may be
unable to meet that test for the EITC and CTC. Some low-income
taxpayers, unaware of the EITC or CTC rules, may simply continue to
care for the child in their family and not pursue a formal arrangement
until a later point and yet may be counting on the income from these
credits.
Clearly the IRS needs to address this problem.
Mr. GRASSLEY. I share concern with the impact that Katrina will have
on the ability of low wage working families who qualify for the child
tax credit and the earned income tax credit to receive them for the
2005 tax year. In addition, I certainly agree that something must be
done to address this problem for families who generously gave of
themselves and took in a child displaced by Katrina but may lack the
proper formal authorization that would prevent them from receiving the
EITC they qualify for and would otherwise get.
To help address this problem, I would urge the IRS to accept a child
placement decision by an authorized agency as being retroactive to the
earliest point in 2006 when the taxpayer first took in the child. This
would apply only to children who had resided in a hurricane disaster
zone in 2005 as defined under HKTRA and under any subsequent
legislation extending HKTRA provisions to Rita and Wilma survivors.
I have been advised that the IRS has the ability to adopt this
approach under section 407 of HKTRA and any equivalent extension to
Rita and Wilma survivors--that enables the Secretary to make
adjustments in application of rules to ensure that hurricane survivors
do not lose tax benefits. I know my colleague from Montana joins me in
urging the IRS to use this authority to help these foster care families
who so generously took in children displaced by Katrina.
Mr. BAUCUS. I wholeheartedly agree with my friend from Iowa.
I would like to raise another concern regarding these tax credits and
the Katrina families.
As we approach the next filing season, there are so many families
affected by the hurricane who previously received the EITC and the CTC
but now face significant confusion about whether they will get the
credit and how much they will receive. And, of course, some of the
normal sources of taxpayer assistance in the gulf are not available
now. Accordingly, it is exceedingly important the IRS do everything it
can to maximize information and assistance provided to the public to
help those eligible secure these credits.
While we wrote section 406 and section 407 of the Hurricane Tax
relief bill to help eligible hurricane survivors receive the benefits
of the EITC and CTC, it is really up to the IRS to effectively inform
taxpayers and the tax preparation community of how the provisions are
being implemented. In particular, section 407 provides that the IRS ``.
. . may make such adjustments in the application of the internal
revenue laws as may be necessary to ensure that taxpayers do not lose
any deduction or credit or experience a change of filing status by
reason of temporary relocations by reason of Hurricane Katrina.''
I understand that the IRS is working to decide how this ``adjustment
authority'' will be implemented and is preparing a new Publication
4492. However, low-income taxpayers and those who assist them in the
preparation of their 2005 tax returns will need to understand the
nature and limits of the adjustments IRS is willing to make so that
returns are prepared properly. It will take a very thorough and
comprehensive public education program to make sure that nontechnical
information is made available through various means to help educate the
public and those who help prepare tax returns. I am very concerned that
the IRS take every possible step it can to make sure eligible low-
income working families affected by Katrina know about special
temporary adjustments to these credits and what they need to do to
ensure they receive these credits.
Mr. GRASSLEY. I agree that many eligible hard-working families who
qualify for the EITC and the child tax credit but whose lives have been
sharply affected by the hurricane may face particular challenges and
hurdles in applying for and receiving these credits. I also concur that
is incumbent upon the IRS to take all steps it can to ensure that the
public and the tax preparation community have clear, detailed, and
understandable information about any adjustments and modifications it
makes to help Katrina victims who qualify for the credits get them.
I believe that the IRS should report to Congress within the next
couple of weeks the action it has taken to implement the provisions of
section 406 and section 407 HKTRA, pertaining to the EITC and CTC,
including outreach and communication efforts undertaken by IRS to
inform taxpayers, tax practitioners, and volunteer tax preparation
programs of these provisions, including the guidance provided to them
by IRS on how the flexible authority to IRS in section 407 is being
interpreted and implemented. IRS should publish such guidance,
including typical questions and answers, in formats that are accessible
to taxpayers, commercial tax practitioners, volunteer tax preparer
organizations and low-income taxpayer clinics, including but not
limited to the IRS Web site.
Mr. BAUCUS. I thank the Chairman and join in his recommendations to
the IRS.
Mr. KERRY. Mr. President, I commend Senate Finance Chairman Grassley
and Ranking Member Baucus for putting together a bipartisan bill that
will provide tax relief to individuals and businesses who are
struggling due to the aftermath of Hurricane Katrina. This legislation
creates a gulf opportunity zone in those areas in Alabama, Louisiana,
and Mississippi that were hardest hit by the hurricane. Businesses
operating in this zone will be eligible for specified tax breaks. In
addition, the legislation provides relief to help with housing and the
cost of higher education.
I support providing businesses with the appropriate tax relief that
will help them rebuild. However, I am concerned that this tax relief
will not be helpful if we do not provide assistance to small
businesses. If the assistance to small businesses continues at its
present pace, tax relief will be somewhat meaningless. Currently, 74
percent of hurricane-related Small Business Administration, SBA,
disaster business loan applications have not even been processed, and
less than 10 percent of the approved business loans have been fully
disbursed. I have introduced legislation that would allow the affected
States to distribute $450 million in bridge loans to help businesses
that are waiting for an SBA loan to begin rebuilding immediately. If we
do not provide businesses with loans, they will not be able to rebuild
and benefit from these tax incentives.
I am pleased that this legislation includes a provision that would
extend the current law provision that allows military personnel the
option of treating certain combat pay as earned income for the purpose
of computing the earned income tax credit, EITC, for 1 year. I have
introduced legislation that strengthens the EITC. It includes a
provision to allow permanently military personnel to elect to treat
certain combat pay as income for purposes of calculating the EITC.
During the debate on S. 2020, the Tax Relief Act of 2005, I along with
Senator Obama offered an amendment on the EITC that would have extended
this provision through 2007, but it was subject to a point of order
because it included outlays.
This provision should be made permanent, but it is important that we
are not allowing it to expire. It is a commonsense provision that would
prevent members of the armed services from losing their EITC when they
are mobilized and serving their country. Military families are often
faced with increased expenses when a loved one is deployed. Thousands
of reservists, for example, take a cut in pay when they are called to
active duty.
Without this extension, several military families that are benefiting
from
[[Page S13706]]
the EITC would not longer be eligible for the credit. Eligibility for
the EITC is based on income, and certain combat pay does not count as
income for tax purposes. The election included in this provision would
allow military personnel to choose whether they want their combat zone
pay to count as income for purposes of calculating the EITC.
This provision will help military families with some of their
financial burdens. It does not repay the sacrifices that they are
making for us, but it shows that we are supporting our troops at home
as well as abroad.
Mr. LOTT. Mr. President, I would like to thank Chairman Grassley and
Senator Baucus for their commitment to enacting a long-overdue tax bill
that will help get cash back into the pockets of businesses and
individuals who are rebuilding their lives and their communities in the
wake of hurricane's Katrina, Rita, and Wilma.
By significantly lowering the cost of capital for small, medium, and
large businesses alike, the provisions in this legislation will spur
business investment on the gulf coast, increase the supply of
affordable housing, and put dislocated employees back to work.
Specifically, this legislation includes roughly $8 billion in tax
incentives to help the gulf coast. These provisions: 50 percent bonus
depreciation for property acquired in the GO Zone; double small
business expensing for small businesses in the Zone; increase the
amount of tax-exempt bonds Mississippi is allowed to allocate by $4.8
billion; allow for an additional advanced refunding for bonds
previously issued by Mississippi and by all local issuers within the GO
Zone; increase the amount low-income housing tax credits available to
Mississippi; increase the allocation of new markets tax credits
available for companies investing in Mississippi businesses and
construction; allows for a 5-year net operation loss carryback for
businesses in the zone; allows for a 10-year NOL for public utility
disaster losses; allows public utility disaster losses to be carried
back 5 years; increases reforestation expensing from $10,000 to $20,000
for expenses incurred in the Go Zone for 2006; allows small timber
growers a 5 year NOL carryback for losses incurred in the zone; allows
increased expensing for demolition and clean up costs through 2007; and
makes the employees retention credit available to all employers in the
zone.
We have been at this for several months now. My constituents have
been patient, and deserve action now. This is a vitally important bill.
It is critical that we pass it today and that it is sent to the
President for his signature before we adjourn.
This amendment modifies recent legislation introduced by Chairman
Grassley by making clear that the business tax incentives in this
legislation do not apply to the construction of private or commercial
golf courses, country clubs, massage parlors, hot tub facilities or
suntan facilities, racetracks or other facilities used for gambling, or
any store the principal business of which is the sale of alcoholic
beverages for consumption off premises.
However, it also makes clear that tax incentives do apply to the
construction of hotels, restaurants, parking lots, and other
attachments to gaming facilities.
I would have much preferred a clean bill, but in the interest of my
constituents, I am offering this amended legislation today. I ask
unanimous consent that the amendment be adopted.
Ms. LANDRIEU. Mr. President, the Senate has taken a big step forward
in helping Louisiana and the other States affected by Hurricanes
Katrina, Rita, and Wilma by passing H.R. 4440, the Gulf Opportunity
Zone Act of 2005, also known as the GO Zone Act. I realize that there
are a number of very important pieces of legislation pending before the
Senate and the House of Representatives as we wind down this session.
But I want my colleagues to know that I am grateful, and the people of
Louisiana are grateful, for the Senate's passing this bill by unanimous
consent. I must thank Chairman Grassley and Ranking Member Baucus of
the Finance Committee for their work on this legislation and for the
tremendous support of their staffs.
The GO Zone Act contains a number of tax incentives to rebuild our
economic infrastructure. Our State will be able to issue bonds to build
housing, roads, bridges, and industrial plants. The bill increases the
allocation of low-income housing tax credits in the GO Zone to $18 per
person--more than nine times the amount we are currently allocated--to
build housing to allow all of our citizens to return home. Businesses
will be able to get favorable depreciation and enhanced deductions for
investing in plant and equipment in the devastated areas. These tax
incentives are aimed at helping our businesses stay in business. We
also included an expansion of the Hope scholarship and lifetime
learning credit for students who return to the GO Zone to continue
their educations.
The bill also contains a housing provision that I offered as a floor
amendment when the Senate considered this legislation. The amendment,
cosponsored by Senator Vitter, will create reward employers who have
provided housing for workers and their families in the hurricane
disaster area. These dedicated employers have made it possible for
their workers to live on company property so that their business
operations could get going again. They have rented or purchased
trailers and put them on their property, all hooked up to utilities.
Our business leaders recognized that they could not get back on their
feet if their employees had no place to live near where they worked.
FEMA has been incapable and incompetent in getting people into housing,
so our businesses have stepped in to fill the void.
Under this provision, employees working at firms in the GO Zone may
exclude up to $600 per month from income for employer-provided housing
assistance. Employers get a tax credit of up to 30 percent of
assistance provided to employees. The provision is temporary, lasting
only 6 months, but it was the right thing to do for companies that
believe in Louisiana and the gulf as a great place to do business.
I must also note that the housing amendment had strong support from
local and national business organizations, including the U.S. Chamber
of Commerce, Greater New Orleans, Inc., and Michael Olivier, the
Louisiana State Secretary for Economic Development. I ask unanimous
consent that their letters of support be printed in the Record.
These tax incentives, however, are still only a beginning. Tax cuts
will not build a levee, and without our levees, we will not rebuild New
Orleans. I was pleased that the President recently announced his
support for $3 billion in additional funding to restore our levees to
true Category 3 protection, along with a down payment to get us to
Category 5 protection.
Now our focus must be on passing Chairman Thad Cochran's hurricane
relief package, which adds to the President's $17 billion request for
Federal assistance another $17.5 billion in aid to Louisiana and
Mississippi, including funding for levee repairs. The chairman's
leadership has built up support for the measure in the Senate, but we
need to urge the White House and leadership in House of Representatives
to follow suit and commit to giving a hand up to the people of the gulf
coast. We should not go home for the holidays without taking this step
for the thousands still left without homes to go home to.
Mr. President, with the passage of the GO Zone Act, the Senate has
taken a key step toward helping the people of the gulf rebuild our
communities. We must finish the job for this year in the gulf before we
adjourn for the year.
I ask that my complete statement and the additional letters in
support of the Landrieu amendment be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Chamber of Commerce of the United States of America,
Washington, DC, December 14, 2005.
Hon. Charles Grassley,
Chairman, Committee on Finance,
U.S. Senate, Washington, DC.
Dear Chairman Grassley: On behalf of the U.S. Chamber of
Commerce, the world's largest business federation
representing more than three million businesses and
organizations of every size, sector, and region, I write to
express our support for the Landrieu housing tax credit
amendment included as part of the GO Zone tax incentive
package in the Senate tax reconciliation bill (S. 2020). The
proposal would give tax relief to employers in the Katrina
disaster area who provide employees with housing so that they
can return to work.
[[Page S13707]]
Many employers in Louisiana have made housing available to
their employees in order to get their business operations up
and running again. The tax reconciliation bill establishes a
Gulf Opportunity Zone (GO Zone) with a number of additional
tax incentive provisions to bring investment and to rebuild
Louisiana and the Gulf Coast. The Landrieu amendment will
encourage more employers to do the same.
The Landrieu amendment will allow employees to exclude up
to $600 per month in employer-provided housing from their
income. An employee will be able to take advantage of this
exclusion for housing provided to the employee, the
employee's spouse, as well as any dependents. Employers who
make housing available to employees in the Katrina GO Zone
will be allowed a tax credit of up to 30 percent of the value
of such housing. The maximum monthly credit will be $180 per
employee.
We urge you to include the Landrieu housing amendment in
the final version of any hurricane tax relief bill that is
voted on before Congress adjourns for the year.
Sincerely,
R. Bruce Josten,
Executive Vice President,
Government Affairs.
____
Chamber of Commerce of the United States of America,
Washington, DC, December 14, 2005.
Hon. Max Baucus,
Ranking Member, Committee on Finance,
U.S. Senate, Washington, DC.
Dear Ranking Member Baucus: On behalf of the U.S. Chamber
of Commerce, the world's largest business federation
representing more than three million businesses and
organizations of every size, sector, and region, I write to
express our support for the Landrieu housing tax credit
amendment included as part of the GO Zone tax incentive
package in the Senate tax reconciliation bill (S. 2020). The
proposal would give tax relief to employers in the Katrina
disaster area who provide employees with housing so that they
can return to work.
Many employers in Louisiana have made housing available to
their employees in order to get their business operations up
and running again. The tax reconciliation bill establishes a
Gulf Opportunity Zone (GO Zone) with a number of additional
tax incentive provisions to bring investment and to rebuild
Louisiana and the Gulf Coast. The Landrieu amendment will
encourage more employers to do the same.
The Landrieu amendment will allow employees to exclude up
to $600 per month in employer-provided housing from their
income. An employee will be able to take advantage of this
exclusion for housing provided to the employee, the
employee's spouse, as well as any dependents. Employers who
make housing available to employees in the Katrina GO Zone
will be allowed a tax credit of up to 30 percent of the value
of such housing. The maximum monthly credit will be $180 per
employee.
We urge you to include the Landrieu housing amendment in
the final version of any hurricane tax relief bill that is
voted on before Congress adjourns for the year.
Sincerely,
R. Bruce Josten,
Executive Vice President,
Government Affairs.
____
State of Louisiana,
Louisiana Economic Development,
Baton Rouge, LA, December 9, 2005.
Hon. Charles Grassley,
Chairman, U.S. Senate Committee on Finance, Hart Senate
Office Building, Washington, DC.
Dear Senator Grassley: Louisiana Economic Development
strongly endorses Senator Mary Landrieu's Housing Tax Relief
Amendment to the Senate Tax Reconciliation Bill. This
amendment will give tax relief to employers who provide their
employees with housing so that they can return to work. It is
a necessary and important financial benefit to those
Louisiana employers who have tirelessly worked to bring their
work forces back to our state and to the communities damaged
by the Katrina disaster.
In doing so, the proposed Landrieu Amendment provides
relief to employers and their employees who return to work in
rebuilding Louisiana from the catastrophic disaster that
occurred. This is essential so that our businesses can resume
operations, our workers can return to their communities, and
both businesses and their employees can have a stake in the
recovery of their communities. Your endorsement of and the
ultimate passage of the Act fulfills these important goals.
Sincerely,
Michael J. Olivier,
Secretary.
____
State of Louisiana,
Louisiana Economic Development,
Baton Rouge, LA, December 9, 2005.
Hon. Max Baucus,
Ranking Member, U.S. Senate Committee on Finance, Hart Senate
Office Building, Washington, DC
Dear Senator Baucus: Louisiana Economic Development
strongly endorses Senator Mary Landrieu's Housing Tax Relief
Amendment to the Senate Tax Reconciliation Bill. This
amendment will give tax relief to employers who provide their
employees with housing so that they can return to work. It is
a necessary and important financial benefit to those
Louisiana employers who have tirelessly worked to bring their
work forces back to our state and to the communities damaged
by the Katrina disaster.
In doing so, the proposed Landrieu Amendment provides
relief to employers and their employees who return to work in
rebuilding Louisiana from the catastrophic disaster that
occurred. This is essential so that our businesses can resume
operations, our workers can return to their communities, and
both businesses and their employees can have a stake in the
recovery of their communities. Your endorsement of and the
ultimate passage of the Act fulfills these important goals.
Sincerely,
Michael J. Olivier,
Secretary.
____
Greater New Orleans, Inc.,
New Orleans, LA, December 9, 2005.
Dear Chairman Grassley and Ranking Member Baucus: On behalf
of Greater New Orleans, Inc., the regional economic
development organization for Southeast Louisiana, I want to
thank you for all of your efforts to assist the people of
Louisiana and the City of New Orleans in our efforts to
rebuild our communities and our economy after Hurricanes
Katrina and Rita. Under your leadership, the Senate recently
passed a tax reconciliation plan, S. 2020 that included $7
billion in additional incentives for investment to rebuild
the Gulf Coast. The House of Representatives has also passed
a hurricane relief package, similar to the provisions in the
S. 2020. Both the House and Senate Katrina packages will
greatly help the people in the Gulf rebuild homes, businesses
and communities.
During the Senate's consideration of S. 2020, it adopted an
amendment, sponsored by Senator Landrieu and cosponsored by
Senator Vitter, to provide tax relief to employers in the
Katrina affected areas who are providing housing for their
employees. Under the amendment, employees will be able to
exclude up to $600 per month in the value of any housing
assistance they receive from their employer. Employers will
be eligible for a tax credit of 30 percent of the housing
assistance they provide to their employees.
The lack of housing to bring back employees is one of the
largest detriments in bringing back the local economy and
serves as the base for establishing local commerce. The
Landrieu-Vitter amendment addresses one of the most pressing
needs in Louisiana, the need for housing while we rebuild our
economy. Our employers would like to open up for business
again, but their employees cannot return to work if they do
not have a place to live. We have worked with hundreds of
employers who have already taken steps to make housing
available to their employees through trailers and temporary
housing, but this amendment will encourage more employers to
do the same. With their employees close by, our businesses
can begin their operations helping to drive our economic
rebuilding. The Landrieu-Vitter amendment will help give this
growth a jumpstart.
We urge you to include the Landrieu-Vitter housing
amendment in the final version of any hurricane tax relief
bill before Congress adjourns for the year.
Sincerely,
Mark C. Drennen,
President and CEO.
Mr. LOTT. I ask unanimous consent the substitute amendment at the
desk be agreed to, the bill, as amended, be read the third time and
passed, the motion to reconsider be laid upon the table, and any
statements related to the bill be printed in the Record.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment (No. 2680), in the nature of a substitute, was agreed
to.
(The amendment is printed in today's Record under ``Text of
Amendments.'')
The bill (H.R. 4440), as amended, was read a third time and passed.
Mr. LOTT. Briefly, I express appreciation to Senator Grassley,
Senator Baucus, especially Senator Reid for his efforts, my colleague
from Mississippi, Senator Cochran, the input and the help and the
determination of Senator Landrieu from Louisiana, and Senator Vitter,
Senator Hutchison and Senator Cornyn. I will have my additional
remarks. I thank all those involved. This is important legislation.
This is almost $8 billion in tax incentives and relief for the people
in the hurricane areas. It means so much. Now we will be able to pass
this back to the House, and hopefully they will take it up and send it
directly to the President.
Mr. REID. This is not the time for a long statement. I especially
extend my appreciation to the chairman and the ranking member of the
Committee on Finance--it has been tough sledding--and, of course, the
delegation from
[[Page S13708]]
Mississippi, that of the Senator from Louisiana.
I ask unanimous consent the Senator from Louisiana be recognized for
90 seconds.
The PRESIDING OFFICER. Without objection, it is so ordered.
Ms. LANDRIEU. Mr. President, it will only take 90 seconds to thank
Senator Lott for his leadership and the two managers, Senator Grassley
and Senator Baucus, who have literally worked tirelessly on this piece
of legislation to help the people along the gulf coast. This is part of
a relief package that will help us to help ourselves, get our people
back home, our businesses back to work, and the gulf coast on its feet,
so we can continue to support the needs of this Nation through energy
and commerce and trade.
I thank Senator Lott particularly for the extra effort he has put
into this bill. I thank the leadership for passing it this morning.
____________________