[Congressional Record (Bound Edition), Volume 151 (2005), Part 21]
[Senate]
[Pages 28800-28806]
[From the U.S. 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.
  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

[[Page 28801]]

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.
  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

[[Page 28802]]

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 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

[[Page 28803]]

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 28804]]

 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

[[Page 28805]]

     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.
                                  ____

         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.

[[Page 28806]]

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 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.

                          ____________________