[Congressional Record (Bound Edition), Volume 151 (2005), Part 21]
[House]
[Pages 29094-29112]
[From the U.S. Government Publishing Office, www.gpo.gov]




                   GULF OPPORTUNITY ZONE ACT OF 2005

  Mr. McCRERY. Madam Speaker, I ask unanimous consent to take from the 
Speaker's table the 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, with a Senate amendment thereto, and concur in the Senate 
amendment.
  The Clerk read the title of the bill.
  The Clerk read the Senate amendment, as follows:

       Senate amendment:
       Strike out all after the enacting clause and insert:

     SECTION 1. SHORT TITLE; ETC.

       (a) Short Title.--This Act may be cited as the ``Gulf 
     Opportunity Zone Act of 2005''.
       (b) Amendment of 1986 Code.--Except as otherwise expressly 
     provided, whenever in this Act an amendment or repeal is 
     expressed in terms of an amendment to, or repeal of, a 
     section or other provision, the reference shall be considered 
     to be made to a section or other provision of the Internal 
     Revenue Code of 1986.
       (c) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; etc.

            TITLE I--ESTABLISHMENT OF GULF OPPORTUNITY ZONE

Sec. 101. Tax benefits for Gulf Opportunity Zone.
Sec. 102. Expansion of Hope Scholarship and Lifetime Learning Credit 
              for students in the Gulf Opportunity Zone.

[[Page 29095]]

Sec. 103. Housing relief for individuals affected by Hurricane Katrina.
Sec. 104. Extension of special rules for mortgage revenue bonds.
Sec. 105. Special extension of bonus depreciation placed in service 
              date for taxpayers affected by Hurricanes Katrina, Rita, 
              and Wilma.

      TITLE II--TAX BENEFITS RELATED TO HURRICANES RITA AND WILMA

Sec. 201. Extension of certain emergency tax relief for Hurricane 
              Katrina to Hurricanes Rita and Wilma.

                      TITLE III--OTHER PROVISIONS

Sec. 301. Gulf Coast Recovery Bonds.
Sec. 302. Election to include combat pay as earned income for purposes 
              of earned income credit.
Sec. 303. Modification of effective date of exception from suspension 
              rules for certain listed and reportable transactions.
Sec. 304. Authority for undercover operations.
Sec. 305. Disclosures of certain tax return information.

                          TITLE IV--TECHNICALS

                       Subtitle A--Tax Technicals

Sec. 401. Short title.
Sec. 402. Amendments related to Energy Policy Act of 2005.
Sec. 403. Amendments related to the American Jobs Creation Act of 2004.
Sec. 404. Amendments related to the Working Families Tax Relief Act of 
              2004.
Sec. 405. Amendments related to the Jobs and Growth Tax Relief 
              Reconciliation Act of 2003.
Sec. 406. Amendment related to the Victims of Terrorism Tax Relief Act 
              of 2001.
Sec. 407. Amendments related to the Economic Growth and Tax Relief 
              Reconciliation Act of 2001.
Sec. 408. Amendments related to the Internal Revenue Service 
              Restructuring and Reform Act of 1998.
Sec. 409. Amendments related to the Taxpayer Relief Act of 1997.
Sec. 410. Amendment related to the Omnibus Budget Reconciliation Act of 
              1990.
Sec. 411. Amendment related to the Omnibus Budget Reconciliation Act of 
              1987.
Sec. 412. Clerical corrections.
Sec. 413. Other corrections related to the American Jobs Creation Act 
              of 2004.

                      Subtitle B--Trade Technicals

Sec. 421. Technical corrections to regional value content methods for 
              rules of origin under Public Law 109-53.

                     TITLE V--EMERGENCY REQUIREMENT

Sec. 501. Emergency requirement.

            TITLE I--ESTABLISHMENT OF GULF OPPORTUNITY ZONE

     SEC. 101. TAX BENEFITS FOR GULF OPPORTUNITY ZONE.

       (a) In General.--Subchapter Y of chapter 1 is amended by 
     adding at the end the following new part:

                  ``PART II--TAX BENEFITS FOR GO ZONES

``Sec. 1400M. Definitions. 
``Sec. 1400N. Tax benefits for Gulf Opportunity Zone.

     ``SEC. 1400M. DEFINITIONS.

       ``For purposes of this part--
       ``(1) Gulf opportunity zone.--The terms `Gulf Opportunity 
     Zone' and `GO Zone' mean that portion of the Hurricane 
     Katrina disaster area determined by the President to warrant 
     individual or individual and public assistance from the 
     Federal Government under the Robert T. Stafford Disaster 
     Relief and Emergency Assistance Act by reason of Hurricane 
     Katrina.
       ``(2) Hurricane katrina disaster area.--The term `Hurricane 
     Katrina disaster area' means an area with respect to which a 
     major disaster has been declared by the President before 
     September 14, 2005, under section 401 of such Act by reason 
     of Hurricane Katrina.
       ``(3) Rita go zone.--The term `Rita GO Zone' means that 
     portion of the Hurricane Rita disaster area determined by the 
     President to warrant individual or individual and public 
     assistance from the Federal Government under such Act by 
     reason of Hurricane Rita.
       ``(4) Hurricane rita disaster area.--The term `Hurricane 
     Rita disaster area' means an area with respect to which a 
     major disaster has been declared by the President before 
     October 6, 2005, under section 401 of such Act by reason of 
     Hurricane Rita.
       ``(5) Wilma go zone.--The term `Wilma GO Zone' means that 
     portion of the Hurricane Wilma disaster area determined by 
     the President to warrant individual or individual and public 
     assistance from the Federal Government under such Act by 
     reason of Hurricane Wilma.
       ``(6) Hurricane wilma disaster area.--The term `Hurricane 
     Wilma disaster area' means an area with respect to which a 
     major disaster has been declared by the President before 
     November 14, 2005, under section 401 of such Act by reason of 
     Hurricane Wilma.

     ``SEC. 1400N. TAX BENEFITS FOR GULF OPPORTUNITY ZONE.

       ``(a) Tax-Exempt Bond Financing.--
       ``(1) In general.--For purposes of this title--
       ``(A) any qualified Gulf Opportunity Zone Bond described in 
     paragraph (2)(A)(i) shall be treated as an exempt facility 
     bond, and
       ``(B) any qualified Gulf Opportunity Zone Bond described in 
     paragraph (2)(A)(ii) shall be treated as a qualified mortgage 
     bond.
       ``(2) Qualified gulf opportunity zone bond.--For purposes 
     of this subsection, the term `qualified Gulf Opportunity Zone 
     Bond' means any bond issued as part of an issue if--
       ``(A)(i) 95 percent or more of the net proceeds (as defined 
     in section 150(a)(3)) of such issue are to be used for 
     qualified project costs, or
       ``(ii) such issue meets the requirements of a qualified 
     mortgage issue, except as otherwise provided in this 
     subsection,
       ``(B) such bond is issued by the State of Alabama, 
     Louisiana, or Mississippi, or any political subdivision 
     thereof,
       ``(C) such bond is designated for purposes of this section 
     by--
       ``(i) in the case of a bond which is required under State 
     law to be approved by the bond commission of such State, such 
     bond commission, and
       ``(ii) in the case of any other bond, the Governor of such 
     State,
       ``(D) such bond is issued after the date of the enactment 
     of this section and before January 1, 2011, and
       ``(E) no portion of the proceeds of such issue is to be 
     used to provide any property described in section 
     144(c)(6)(B).
       ``(3) Limitations on bonds.--
       ``(A) Aggregate amount designated.--The maximum aggregate 
     face amount of bonds which may be designated under this 
     subsection with respect to any State shall not exceed the 
     product of $2,500 multiplied by the portion of the State 
     population which is in the Gulf Opportunity Zone (as 
     determined on the basis of the most recent census estimate of 
     resident population released by the Bureau of Census before 
     August 28, 2005).
       ``(B) Movable property.--No bonds shall be issued which are 
     to be used for movable fixtures and equipment.
       ``(4) Qualified project costs.--For purposes of this 
     subsection, the term `qualified project costs' means--
       ``(A) the cost of any qualified residential rental project 
     (as defined in section 142(d)) located in the Gulf 
     Opportunity Zone, and
       ``(B) the cost of acquisition, construction, 
     reconstruction, and renovation of--
       ``(i) nonresidential real property (including fixed 
     improvements associated with such property) located in the 
     Gulf Opportunity Zone, and
       ``(ii) public utility property (as defined in section 
     168(i)(10)) located in the Gulf Opportunity Zone.
       ``(5) Special rules.--In applying this title to any 
     qualified Gulf Opportunity Zone Bond, the following 
     modifications shall apply:
       ``(A) Section 142(d)(1) (defining qualified residential 
     rental project) shall be applied--
       ``(i) by substituting `60 percent' for `50 percent' in 
     subparagraph (A) thereof, and
       ``(ii) by substituting `70 percent' for `60 percent' in 
     subparagraph (B) thereof.
       ``(B) Section 143 (relating to mortgage revenue bonds: 
     qualified mortgage bond and qualified veterans' mortgage 
     bond) shall be applied--
       ``(i) only with respect to owner-occupied residences in the 
     Gulf Opportunity Zone,
       ``(ii) by treating any such residence in the Gulf 
     Opportunity Zone as a targeted area residence,
       ``(iii) by applying subsection (f)(3) thereof without 
     regard to subparagraph (A) thereof, and
       ``(iv) by substituting `$150,000' for `$15,000' in 
     subsection (k)(4) thereof.
       ``(C) Except as provided in section 143, repayments of 
     principal on financing provided by the issue of which such 
     bond is a part may not be used to provide financing.
       ``(D) Section 146 (relating to volume cap) shall not apply.
       ``(E) Section 147(d)(2) (relating to acquisition of 
     existing property not permitted) shall be applied by 
     substituting `50 percent' for `15 percent' each place it 
     appears.
       ``(F) Section 148(f)(4)(C) (relating to exception from 
     rebate for certain proceeds to be used to finance 
     construction expenditures) shall apply to the available 
     construction proceeds of bonds which are part of an issue 
     described in paragraph (2)(A)(i).
       ``(G) Section 57(a)(5) (relating to tax-exempt interest) 
     shall not apply.
       ``(6) Separate issue treatment of portions of an issue.--
     This subsection shall not apply to the portion of an issue 
     which (if issued as a separate issue) would be treated as a 
     qualified bond or as a bond that is not a private activity 
     bond (determined without regard to paragraph (1)), if the 
     issuer elects to so treat such portion.
       ``(b) Advance Refundings of Certain Tax-Exempt Bonds.--
       ``(1) In general.--With respect to a bond described in 
     paragraph (3), one additional advance refunding after the 
     date of the enactment of this section and before January 1, 
     2011, shall be allowed under the applicable rules of section 
     149(d) if--
       ``(A) the Governor of the State designates the advance 
     refunding bond for purposes of this subsection, and
       ``(B) the requirements of paragraph (5) are met.
       ``(2) Certain private activity bonds.--With respect to a 
     bond described in paragraph (3) which is an exempt facility 
     bond described in paragraph (1) or (2) of section 142(a), one 
     advance refunding after the date of the enactment of this 
     section and before January 1, 2011, shall be allowed under 
     the applicable rules of section 149(d) (notwithstanding 
     paragraph (2) thereof) if the requirements of subparagraphs 
     (A) and (B) of paragraph (1) are met.
       ``(3) Bonds described.--A bond is described in this 
     paragraph if such bond was outstanding on August 28, 2005, 
     and is issued by the State of

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     Alabama, Louisiana, or Mississippi, or a political 
     subdivision thereof.
       ``(4) Aggregate limit.--The maximum aggregate face amount 
     of bonds which may be designated under this subsection by the 
     Governor of a State shall not exceed--
       ``(A) $4,500,000,000 in the case of the State of Louisiana,
       ``(B) $2,250,000,000 in the case of the State of 
     Mississippi, and
       ``(C) $1,125,000,000 in the case of the State of Alabama.
       ``(5) Additional requirements.--The requirements of this 
     paragraph are met with respect to any advance refunding of a 
     bond described in paragraph (3) if--
       ``(A) no advance refundings of such bond would be allowed 
     under this title on or after August 28, 2005,
       ``(B) the advance refunding bond is the only other 
     outstanding bond with respect to the refunded bond, and
       ``(C) the requirements of section 148 are met with respect 
     to all bonds issued under this subsection.
       ``(6) Use of proceeds requirement.--This subsection shall 
     not apply to any advance refunding of a bond which is issued 
     as part of an issue if any portion of the proceeds of such 
     issue (or any prior issue) was (or is to be) used to provide 
     any property described in section 144(c)(6)(B).
       ``(c) Low-Income Housing Credit.--
       ``(1) Additional housing credit dollar amount for gulf 
     opportunity zone.--
       ``(A) In general.--For purposes of section 42, in the case 
     of calendar years 2006, 2007, and 2008, the State housing 
     credit ceiling of each State, any portion of which is located 
     in the Gulf Opportunity Zone, shall be increased by the 
     lesser of--
       ``(i) the aggregate housing credit dollar amount allocated 
     by the State housing credit agency of such State to buildings 
     located in the Gulf Opportunity Zone for such calendar year, 
     or
       ``(ii) the Gulf Opportunity housing amount for such State 
     for such calendar year.
       ``(B) Gulf opportunity housing amount.--For purposes of 
     subparagraph (A), the term `Gulf Opportunity housing amount' 
     means, for any calendar year, the amount equal to the product 
     of $18.00 multiplied by the portion of the State population 
     which is in the Gulf Opportunity Zone (as determined on the 
     basis of the most recent census estimate of resident 
     population released by the Bureau of Census before August 28, 
     2005).
       ``(C) Allocations treated as made first from additional 
     allocation amount for purposes of determining carryover.--For 
     purposes of determining the unused State housing credit 
     ceiling under section 42(h)(3)(C) for any calendar year, any 
     increase in the State housing credit ceiling under 
     subparagraph (A) shall be treated as an amount described in 
     clause (ii) of such section.
       ``(2) Additional housing credit dollar amount for texas and 
     florida.--For purposes of section 42, in the case of calendar 
     year 2006, the State housing credit ceiling of Texas and 
     Florida shall each be increased by $3,500,000.
       ``(3) Difficult development area.--
       ``(A) In general.--For purposes of section 42, in the case 
     of property placed in service during 2006, 2007, or 2008, the 
     Gulf Opportunity Zone, the Rita GO Zone, and the Wilma GO 
     Zone--
       ``(i) shall be treated as difficult development areas 
     designated under subclause (I) of section 42(d)(5)(C)(iii), 
     and
       ``(ii) shall not be taken into account for purposes of 
     applying the limitation under subclause (II) of such section.
       ``(B) Application.--Subparagraph (A) shall apply only to--
       ``(i) housing credit dollar amounts allocated during the 
     period beginning on January 1, 2006, and ending on December 
     31, 2008, and
       ``(ii) buildings placed in service during such period to 
     the extent that paragraph (1) of section 42(h) does not apply 
     to any building by reason of paragraph (4) thereof, but only 
     with respect to bonds issued after December 31, 2005.
       ``(4) Special rule for applying income tests.--In the case 
     of property placed in service--
       ``(A) during 2006, 2007, or 2008,
       ``(B) in the Gulf Opportunity Zone, and
       ``(C) in a nonmetropolitan area (as defined in section 
     42(d)(5)(C)(iv)(IV)),
     section 42 shall be applied by substituting `national 
     nonmetropolitan median gross income (determined under rules 
     similar to the rules of section 142(d)(2)(B))' for `area 
     median gross income' in subparagraphs (A) and (B) of section 
     42(g)(1).
       ``(5) Definitions.--Any term used in this subsection which 
     is also used in section 42 shall have the same meaning as 
     when used in such section.
       ``(d) Special Allowance for Certain Property Acquired on or 
     After August 28, 2005.--
       ``(1) Additional allowance.--In the case of any qualified 
     Gulf Opportunity Zone property--
       ``(A) the depreciation deduction provided by section 167(a) 
     for the taxable year in which such property is placed in 
     service shall include an allowance equal to 50 percent of the 
     adjusted basis of such property, and
       ``(B) the adjusted basis of the qualified Gulf Opportunity 
     Zone property shall be reduced by the amount of such 
     deduction before computing the amount otherwise allowable as 
     a depreciation deduction under this chapter for such taxable 
     year and any subsequent taxable year.
       ``(2) Qualified gulf opportunity zone property.--For 
     purposes of this subsection--
       ``(A) In general.--The term `qualified Gulf Opportunity 
     Zone property' means property--
       ``(i)(I) which is described in section 168(k)(2)(A)(i), or
       ``(II) which is nonresidential real property or residential 
     rental property,
       ``(ii) substantially all of the use of which is in the Gulf 
     Opportunity Zone and is in the active conduct of a trade or 
     business by the taxpayer in such Zone,
       ``(iii) the original use of which in the Gulf Opportunity 
     Zone commences with the taxpayer on or after August 28, 2005,
       ``(iv) which is acquired by the taxpayer by purchase (as 
     defined in section 179(d)) on or after August 28, 2005, but 
     only if no written binding contract for the acquisition was 
     in effect before August 28, 2005, and
       ``(v) which is placed in service by the taxpayer on or 
     before December 31, 2007 (December 31, 2008, in the case of 
     nonresidential real property and residential rental 
     property).
       ``(B) Exceptions.--
       ``(i) Alternative depreciation property.--Such term shall 
     not include any property described in section 
     168(k)(2)(D)(i).
       ``(ii) Tax-exempt bond-financed property.--Such term shall 
     not include any property any portion of which is financed 
     with the proceeds of any obligation the interest on which is 
     exempt from tax under section 103.
       ``(iii) Qualified revitalization buildings.--Such term 
     shall not include any qualified revitalization building with 
     respect to which the taxpayer has elected the application of 
     paragraph (1) or (2) of section 1400I(a).
       ``(iv) Election out.--If a taxpayer makes an election under 
     this clause with respect to any class of property for any 
     taxable year, this subsection shall not apply to all property 
     in such class placed in service during such taxable year.
       ``(3) Special rules.--For purposes of this subsection, 
     rules similar to the rules of subparagraph (E) of section 
     168(k)(2) shall apply, except that such subparagraph shall be 
     applied--
       ``(A) by substituting `August 27, 2005' for `September 10, 
     2001' each place it appears therein,
       ``(B) by substituting `January 1, 2008' for `January 1, 
     2005' in clause (i) thereof, and
       ``(C) by substituting `qualified Gulf Opportunity Zone 
     property' for `qualified property' in clause (iv) thereof.
       ``(4) Allowance against alternative minimum tax.--For 
     purposes of this subsection, rules similar to the rules of 
     section 168(k)(2)(G) shall apply.
       ``(5) Recapture.--For purposes of this subsection, rules 
     similar to the rules under section 179(d)(10) shall apply 
     with respect to any qualified Gulf Opportunity Zone property 
     which ceases to be qualified Gulf Opportunity Zone property.
       ``(e) Increase in Expensing Under Section 179.--
       ``(1) In general.--For purposes of section 179--
       ``(A) the dollar amount in effect under section 179(b)(1) 
     for the taxable year shall be increased by the lesser of--
       ``(i) $100,000, or
       ``(ii) the cost of qualified section 179 Gulf Opportunity 
     Zone property placed in service during the taxable year, and
       ``(B) the dollar amount in effect under section 179(b)(2) 
     for the taxable year shall be increased by the lesser of--
       ``(i) $600,000, or
       ``(ii) the cost of qualified section 179 Gulf Opportunity 
     Zone property placed in service during the taxable year.
       ``(2) Qualified section 179 gulf opportunity zone 
     property.--For purposes of this subsection, the term 
     `qualified section 179 Gulf Opportunity Zone property' means 
     section 179 property (as defined in section 179(d)) which is 
     qualified Gulf Opportunity Zone property (as defined in 
     subsection (d)(2)).
       ``(3) Coordination with empowerment zones and renewal 
     communities.--For purposes of sections 1397A and 1400J, 
     qualified section 179 Gulf Opportunity Zone property shall 
     not be treated as qualified zone property or qualified 
     renewal property, unless the taxpayer elects not to take such 
     qualified section 179 Gulf Opportunity Zone property into 
     account for purposes of this subsection.
       ``(4) Recapture.--For purposes of this subsection, rules 
     similar to the rules under section 179(d)(10) shall apply 
     with respect to any qualified section 179 Gulf Opportunity 
     Zone property which ceases to be qualified section 179 Gulf 
     Opportunity Zone property.
       ``(f) Expensing for Certain Demolition and Clean-up 
     Costs.--
       ``(1) In general.--A taxpayer may elect to treat 50 percent 
     of any qualified Gulf Opportunity Zone clean-up cost as an 
     expense which is not chargeable to capital account. Any cost 
     so treated shall be allowed as a deduction for the taxable 
     year in which such cost is paid or incurred.
       ``(2) Qualified gulf opportunity zone clean-up cost.--For 
     purposes of this subsection, the term `qualified Gulf 
     Opportunity Zone clean-up cost' means any amount paid or 
     incurred during the period beginning on August 28, 2005, and 
     ending on December 31, 2007, for the removal of debris from, 
     or the demolition of structures on, real property which is 
     located in the Gulf Opportunity Zone and which is--
       ``(A) held by the taxpayer for use in a trade or business 
     or for the production of income, or
       ``(B) property described in section 1221(a)(1) in the hands 
     of the taxpayer.

     For purposes of the preceding sentence, amounts paid or 
     incurred shall be taken into account only to the extent that 
     such amount would (but

[[Page 29097]]

     for paragraph (1)) be chargeable to capital account.
       ``(g) Extension of Expensing for Environmental Remediation 
     Costs.--With respect to any qualified environmental 
     remediation expenditure (as defined in section 198(b)) paid 
     or incurred on or after August 28, 2005, in connection with a 
     qualified contaminated site located in the Gulf Opportunity 
     Zone, section 198 (relating to expensing of environmental 
     remediation costs) shall be applied--
       ``(1) in the case of expenditures paid or incurred on or 
     after August 28, 2005, and before January 1, 2008, by 
     substituting `December 31, 2007' for the date contained in 
     section 198(h), and
       ``(2) except as provided in section 198(d)(2), by treating 
     petroleum products (as defined in section 4612(a)(3)) as a 
     hazardous substance.
       ``(h) Increase in Rehabilitation Credit.--In the case of 
     qualified rehabilitation expenditures (as defined in section 
     47(c)) paid or incurred during the period beginning on August 
     28, 2005, and ending on December 31, 2008, with respect to 
     any qualified rehabilitated building or certified historic 
     structure (as defined in section 47(c)) located in the Gulf 
     Opportunity Zone, subsection (a) of section 47 (relating to 
     rehabilitation credit) shall be applied--
       ``(1) by substituting `13 percent' for `10 percent' in 
     paragraph (1) thereof, and
       ``(2) by substituting `26 percent' for `20 percent' in 
     paragraph (2) thereof.
       ``(i) Special Rules for Small Timber Producers.--
       ``(1) Increased expensing for qualified timber property.--
     In the case of qualified timber property any portion of which 
     is located in the Gulf Opportunity Zone, in that portion of 
     the Rita GO Zone which is not part of the Gulf Opportunity 
     Zone, or in the Wilma GO Zone, the limitation under 
     subparagraph (B) of section 194(b)(1) shall be increased by 
     the lesser of--
       ``(A) the limitation which would (but for this subsection) 
     apply under such subparagraph, or
       ``(B) the amount of reforestation expenditures (as defined 
     in section 194(c)(3)) paid or incurred by the taxpayer with 
     respect to such qualified timber property during the 
     specified portion of the taxable year.
       ``(2) 5 year nol carryback of certain timber losses.--For 
     purposes of determining any farming loss under section 
     172(i), income and deductions which are allocable to the 
     specified portion of the taxable year and which are 
     attributable to qualified timber property any portion of 
     which is located in the Gulf Opportunity Zone, in that 
     portion of the Rita GO Zone which is not part of the Gulf 
     Opportunity Zone, or in the Wilma GO Zone shall be treated as 
     attributable to farming businesses.
       ``(3) Rules not applicable to certain entities.--Paragraphs 
     (1) and (2) shall not apply to any taxpayer which--
       ``(A) is a corporation the stock of which is publicly 
     traded on an established securities market, or
       ``(B) is a real estate investment trust.
       ``(4) Rules not applicable to large timber producers.--
       ``(A) Expensing.--Paragraph (1) shall not apply to any 
     taxpayer if such taxpayer holds more than 500 acres of 
     qualified timber property at any time during the taxable 
     year.
       ``(B) NOL carryback.--Paragraph (2) shall not apply with 
     respect to any qualified timber property unless--
       ``(i) such property was held by the taxpayer--

       ``(I) on August 28, 2005, in the case of qualified timber 
     property any portion of which is located in the Gulf 
     Opportunity Zone,
       ``(II) on September 23, 2005, in the case of qualified 
     timber property (other than property described in subclause 
     (I)) any portion of which is located in that portion of the 
     Rita GO Zone which is not part of the Gulf Opportunity Zone, 
     or
       ``(III) on October 23, 2005, in the case of qualified 
     timber property (other than property described in subclause 
     (I) or (II)) any portion of which is located in the Wilma GO 
     Zone, and

       ``(ii) such taxpayer held not more than 500 acres of 
     qualified timber property on such date.
       ``(5) Definitions.--For purposes of this subsection--
       ``(A) Specified portion.--
       ``(i) In general.--The term `specified portion' means--

       ``(I) in the case of qualified timber property any portion 
     of which is located in the Gulf Opportunity Zone, that 
     portion of the taxable year which is on or after August 28, 
     2005, and before the termination date,
       ``(II) in the case of qualified timber property (other than 
     property described in clause (i)) any portion of which is 
     located in the Rita GO Zone, that portion of the taxable year 
     which is on or after September 23, 2005, and before the 
     termination date, or
       ``(III) in the case of qualified timber property (other 
     than property described in clause (i) or (ii)) any portion of 
     which is located in the Wilma GO Zone, that portion of the 
     taxable year which is on or after October 23, 2005, and 
     before the termination date.

       ``(ii) Termination date.--The term `termination date' 
     means--

       ``(I) for purposes of paragraph (1), January 1, 2008, and
       ``(II) for purposes of paragraph (2), January 1, 2007.

       ``(B) Qualified timber property.--The term `qualified 
     timber property' has the meaning given such term in section 
     194(c)(1).
       ``(j) Special Rule for Gulf Opportunity Zone Public Utility 
     Casualty Losses.--
       ``(1) In general.--The amount described in section 
     172(f)(1)(A) for any taxable year shall be increased by the 
     Gulf Opportunity Zone public utility casualty loss for such 
     taxable year.
       ``(2) Gulf opportunity zone public utility casualty loss.--
     For purposes of this subsection, the term `Gulf Opportunity 
     Zone public utility casualty loss' means any casualty loss of 
     public utility property (as defined in section 168(i)(10)) 
     located in the Gulf Opportunity Zone if--
       ``(A) such loss is allowed as a deduction under section 165 
     for the taxable year,
       ``(B) such loss is by reason of Hurricane Katrina, and
       ``(C) the taxpayer elects the application of this 
     subsection with respect to such loss.
       ``(3) Reduction for gains from involuntary conversion.--The 
     amount of any Gulf Opportunity Zone public utility casualty 
     loss which would (but for this paragraph) be taken into 
     account under paragraph (1) for any taxable year shall be 
     reduced by the amount of any gain recognized by the taxpayer 
     for such year from the involuntary conversion by reason of 
     Hurricane Katrina of public utility property (as so defined) 
     located in the Gulf Opportunity Zone.
       ``(4) Coordination with general disaster loss rules.--
     Subsection (k) and section 165(i) shall not apply to any Gulf 
     Opportunity Zone public utility casualty loss to the extent 
     such loss is taken into account under paragraph (1).
       ``(5) Election.--Any election under paragraph (2)(C) shall 
     be made in such manner as may be prescribed by the Secretary 
     and shall be made by the due date (including extensions of 
     time) for filing the taxpayer's return for the taxable year 
     of the loss. Such election, once made for any taxable year, 
     shall be irrevocable for such taxable year.
       ``(k) Treatment of Net Operating Losses Attributable to 
     Gulf Opportunity Zone Losses.--
       ``(1) In general.--If a portion of any net operating loss 
     of the taxpayer for any taxable year is a qualified Gulf 
     Opportunity Zone loss, the following rules shall apply:
       ``(A) Extension of carryback period.--Section 172(b)(1) 
     shall be applied with respect to such portion--
       ``(i) by substituting `5 taxable years' for `2 taxable 
     years' in subparagraph (A)(i), and
       ``(ii) by not taking such portion into account in 
     determining any eligible loss of the taxpayer under 
     subparagraph (F) thereof for the taxable year.
       ``(B) Suspension of 90 percent amt limitation.--Section 
     56(d)(1) shall be applied by increasing the amount determined 
     under subparagraph (A)(ii)(I) thereof by the sum of the 
     carrybacks and carryovers of any net operating loss 
     attributable to such portion.
       ``(2) Qualified gulf opportunity zone loss.--For purposes 
     of paragraph (1), the term `qualified Gulf Opportunity Zone 
     loss' means the lesser of--
       ``(A) the excess of--
       ``(i) the net operating loss for such taxable year, over
       ``(ii) the specified liability loss for such taxable year 
     to which a 10-year carryback applies under section 
     172(b)(1)(C), or
       ``(B) the aggregate amount of the following deductions to 
     the extent taken into account in computing the net operating 
     loss for such taxable year:
       ``(i) Any deduction for any qualified Gulf Opportunity Zone 
     casualty loss.
       ``(ii) Any deduction for moving expenses paid or incurred 
     after August 27, 2005, and before January 1, 2008, and 
     allowable under this chapter to any taxpayer in connection 
     with the employment of any individual--

       ``(I) whose principal place of abode was located in the 
     Gulf Opportunity Zone before August 28, 2005,
       ``(II) who was unable to remain in such abode as the result 
     of Hurricane Katrina, and
       ``(III) whose principal place of employment with the 
     taxpayer after such expense is located in the Gulf 
     Opportunity Zone.

     For purposes of this clause, the term `moving expenses' has 
     the meaning given such term by section 217(b), except that 
     the taxpayer's former residence and new residence may be the 
     same residence if the initial vacating of the residence was 
     as the result of Hurricane Katrina.
       ``(iii) Any deduction allowable under this chapter for 
     expenses paid or incurred after August 27, 2005, and before 
     January 1, 2008, to temporarily house any employee of the 
     taxpayer whose principal place of employment is in the Gulf 
     Opportunity Zone.
       ``(iv) Any deduction for depreciation (or amortization in 
     lieu of depreciation) allowable under this chapter with 
     respect to any qualified Gulf Opportunity Zone property (as 
     defined in subsection (d)(2), but without regard to 
     subparagraph (B)(iv) thereof)) for the taxable year such 
     property is placed in service.
       ``(v) Any deduction allowable under this chapter for repair 
     expenses (including expenses for removal of debris) paid or 
     incurred after August 27, 2005, and before January 1, 2008, 
     with respect to any damage attributable to Hurricane Katrina 
     and in connection with property which is located in the Gulf 
     Opportunity Zone.
       ``(3) Qualified gulf opportunity zone casualty loss.--
       ``(A) In general.--For purposes of paragraph (2)(B)(i), the 
     term `qualified Gulf Opportunity Zone casualty loss' means 
     any uncompensated section 1231 loss (as defined in section 
     1231(a)(3)(B)) of property located in the Gulf Opportunity 
     Zone if--
       ``(i) such loss is allowed as a deduction under section 165 
     for the taxable year, and

[[Page 29098]]

       ``(ii) such loss is by reason of Hurricane Katrina.
       ``(B) Reduction for gains from involuntary conversion.--The 
     amount of qualified Gulf Opportunity Zone casualty loss which 
     would (but for this subparagraph) be taken into account under 
     subparagraph (A) for any taxable year shall be reduced by the 
     amount of any gain recognized by the taxpayer for such year 
     from the involuntary conversion by reason of Hurricane 
     Katrina of property located in the Gulf Opportunity Zone.
       ``(C) Coordination with general disaster loss rules.--
     Section 165(i) shall not apply to any qualified Gulf 
     Opportunity Zone casualty loss to the extent such loss is 
     taken into account under this subsection.
       ``(4) Special rules.--For purposes of paragraph (1), rules 
     similar to the rules of paragraphs (2) and (3) of section 
     172(i) shall apply with respect to such portion.
       ``(l) Credit to Holders of Gulf Tax Credit Bonds.--
       ``(1) Allowance of credit.--If a taxpayer holds a Gulf tax 
     credit bond on one or more credit allowance dates of the bond 
     occurring during any taxable year, there shall be allowed as 
     a credit against the tax imposed by this chapter for the 
     taxable year an amount equal to the sum of the credits 
     determined under paragraph (2) with respect to such dates.
       ``(2) Amount of credit.--
       ``(A) In general.--The amount of the credit determined 
     under this paragraph with respect to any credit allowance 
     date for a Gulf tax credit bond is 25 percent of the annual 
     credit determined with respect to such bond.
       ``(B) Annual credit.--The annual credit determined with 
     respect to any Gulf tax credit bond is the product of--
       ``(i) the credit rate determined by the Secretary under 
     subparagraph (C) for the day on which such bond was sold, 
     multiplied by
       ``(ii) the outstanding face amount of the bond.
       ``(C) Determination.--For purposes of subparagraph (B), 
     with respect to any Gulf tax credit bond, the Secretary shall 
     determine daily or cause to be determined daily a credit rate 
     which shall apply to the first day on which there is a 
     binding, written contract for the sale or exchange of the 
     bond. The credit rate for any day is the credit rate which 
     the Secretary or the Secretary's designee estimates will 
     permit the issuance of Gulf tax credit bonds with a specified 
     maturity or redemption date without discount and without 
     interest cost to the issuer.
       ``(D) Credit allowance date.--For purposes of this 
     subsection, the term `credit allowance date' means March 15, 
     June 15, September 15, and December 15. Such term also 
     includes the last day on which the bond is outstanding.
       ``(E) Special rule for issuance and redemption.--In the 
     case of a bond which is issued during the 3-month period 
     ending on a credit allowance date, the amount of the credit 
     determined under this paragraph with respect to such credit 
     allowance date shall be a ratable portion of the credit 
     otherwise determined based on the portion of the 3-month 
     period during which the bond is outstanding. A similar rule 
     shall apply when the bond is redeemed or matures.
       ``(3) Limitation based on amount of tax.--The credit 
     allowed under paragraph (1) for any taxable year shall not 
     exceed the excess of--
       ``(A) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(B) the sum of the credits allowable under part IV of 
     subchapter A (other than subpart C and this subsection).
       ``(4) Gulf tax credit bondor purposes of this subsection--
       ``(A) In general.--The term `Gulf tax credit bond' means 
     any bond issued as part of an issue if--
       ``(i) the bond is issued by the State of Alabama, 
     Louisiana, or Mississippi,
       ``(ii) 95 percent or more of the proceeds of such issue are 
     to be used to--

       ``(I) pay principal, interest, or premiums on qualified 
     bonds issued by such State or any political subdivision of 
     such State, or
       ``(II) make a loan to any political subdivision of such 
     State to pay principal, interest, or premiums on qualified 
     bonds issued by such political subdivision,

       ``(iii) the Governor of such State designates such bond for 
     purposes of this subsection,
       ``(iv) the bond is a general obligation of such State and 
     is in registered form (within the meaning of section 149(a)),
       ``(v) the maturity of such bond does not exceed 2 years, 
     and
       ``(vi) the bond is issued after December 31, 2005, and 
     before January 1, 2007.
       ``(B) State matching requirement.--A bond shall not be 
     treated as a Gulf tax credit bond unless--
       ``(i) the issuer of such bond pledges as of the date of the 
     issuance of the issue an amount equal to the face amount of 
     such bond to be used for payments described in subclause (I) 
     of subparagraph (A)(ii), or loans described in subclause (II) 
     of such subparagraph, as the case may be, with respect to the 
     issue of which such bond is a part, and
       ``(ii) any such payment or loan is made in equal amounts 
     from the proceeds of such issue and from the amount pledged 
     under clause (i).

     The requirement of clause (ii) shall be treated as met with 
     respect to any such payment or loan made during the 1-year 
     period beginning on the date of the issuance (or any 
     successor 1-year period) if such requirement is met when 
     applied with respect to the aggregate amount of such payments 
     and loans made during such period.
       ``(C) Aggregate limit on bond designations.--The maximum 
     aggregate face amount of bonds which may be designated under 
     this subsection by the Governor of a State shall not exceed--
       ``(i) $200,000,000 in the case of the State of Louisiana,
       ``(ii) $100,000,000 in the case of the State of 
     Mississippi, and
       ``(iii) $50,000,000 in the case of the State of Alabama.
       ``(D) Special rules relating to arbitrage.--A bond which is 
     part of an issue shall not be treated as a Gulf tax credit 
     bond unless, with respect to the issue of which the bond is a 
     part, the issuer satisfies the arbitrage requirements of 
     section 148 with respect to proceeds of the issue and any 
     loans made with such proceeds.
       ``(5) Qualified bond.--For purposes of this subsection--
       ``(A) In general.--The term `qualified bond' means any 
     obligation of a State or political subdivision thereof which 
     was outstanding on August 28, 2005.
       ``(B) Exception for private activity bonds.--Such term 
     shall not include any private activity bond.
       ``(C) Exception for advance refundings.--Such term shall 
     not include any bond with respect to which there is any 
     outstanding refunded or refunding bond during the period in 
     which a Gulf tax credit bond is outstanding with respect to 
     such bond.
       ``(D) Use of proceeds requirement.--Such term shall not 
     include any bond issued as part of an issue if any portion of 
     the proceeds of such issue was (or is to be) used to provide 
     any property described in section 144(c)(6)(B).
       ``(6) Credit included in gross income.--Gross income 
     includes the amount of the credit allowed to the taxpayer 
     under this subsection (determined without regard to paragraph 
     (3)) and the amount so included shall be treated as interest 
     income.
       ``(7) Other definitions and special rules.--For purposes of 
     this subsection--
       ``(A) Bond.--The term `bond' includes any obligation.
       ``(B)  Partnership; s corporation; and other pass-thru 
     entities.--
       ``(i) In general.--Under regulations prescribed by the 
     Secretary, in the case of a partnership, trust, S 
     corporation, or other pass-thru entity, rules similar to the 
     rules of section 41(g) shall apply with respect to the credit 
     allowable under paragraph (1).
       ``(ii) No basis adjustment.--In the case of a bond held by 
     a partnership or an S corporation, rules similar to the rules 
     under section 1397E(i) shall apply.
       ``(C) Bonds held by regulated investment companies.--If any 
     Gulf tax credit bond is held by a regulated investment 
     company, the credit determined under paragraph (1) shall be 
     allowed to shareholders of such company under procedures 
     prescribed by the Secretary.
       ``(D) Reporting.--Issuers of Gulf tax credit bonds shall 
     submit reports similar to the reports required under section 
     149(e).
       ``(E) Credit treated as nonrefundable bondholder credit.--
     For purposes of this title, the credit allowed by this 
     subsection shall be treated as a credit allowable under 
     subpart H of part IV of subchapter A of this chapter.
       ``(m) Application of New Markets Tax Credit to Investments 
     in Community Development Entities Serving Gulf Opportunity 
     Zone.--For purposes of section 45D--
       ``(1) a qualified community development entity shall be 
     eligible for an allocation under subsection (f)(2) thereof of 
     the increase in the new markets tax credit limitation 
     described in paragraph (2) only if a significant mission of 
     such entity is the recovery and redevelopment of the Gulf 
     Opportunity Zone,
       ``(2) the new markets tax credit limitation otherwise 
     determined under subsection (f)(1) thereof shall be increased 
     by an amount equal to--
       ``(A) $300,000,000 for 2005 and 2006, to be allocated among 
     qualified community development entities to make qualified 
     low-income community investments within the Gulf Opportunity 
     Zone, and
       ``(B) $400,000,000 for 2007, to be so allocated, and
       ``(3) subsection (f)(3) thereof shall be applied separately 
     with respect to the amount of the increase under paragraph 
     (2).
       ``(n) Treatment of Representations Regarding Income 
     Eligibility for Purposes of Qualified Residential Rental 
     Project Requirements.--For purposes of determining if any 
     residential rental project meets the requirements of section 
     142(d)(1) and if any certification with respect to such 
     project meets the requirements under section 142(d)(7), the 
     operator of the project may rely on the representations of 
     any individual applying for tenancy in such project that such 
     individual's income will not exceed the applicable income 
     limits of section 142(d)(1) upon commencement of the 
     individual's tenancy if such tenancy begins during the 6-
     month period beginning on and after the date such individual 
     was displaced by reason of Hurricane Katrina.
       ``(o) Treatment of Public Utility Property Disaster 
     Losses.--
       ``(1) In general.--Upon the election of the taxpayer, in 
     the case of any eligible public utility property loss--
       ``(A) section 165(i) shall be applied by substituting `the 
     fifth taxable year immediately preceding' for `the taxable 
     year immediately preceding',
       ``(B) an application for a tentative carryback adjustment 
     of the tax for any prior taxable year

[[Page 29099]]

     affected by the application of subparagraph (A) may be made 
     under section 6411, and
       ``(C) section 6611 shall not apply to any overpayment 
     attributable to such loss.
       ``(2) Eligible public utility property loss.--For purposes 
     of this subsection--
       ``(A) In general.--The term `eligible public utility 
     property loss' means any loss with respect to public utility 
     property located in the Gulf Opportunity Zone and 
     attributable to Hurricane Katrina.
       ``(B) Public utility property.--The term `public utility 
     property' has the meaning given such term by section 
     168(i)(10) without regard to the matter following 
     subparagraph (D) thereof.
       ``(3) Waiver of limitations.--If refund or credit of any 
     overpayment of tax resulting from the application of 
     paragraph (1) is prevented at any time before the close of 
     the 1-year period beginning on the date of the enactment of 
     this section by the operation of any law or rule of law 
     (including res judicata), such refund or credit may 
     nevertheless be made or allowed if claim therefor is filed 
     before the close of such period.
       ``(p) Tax Benefits Not Available With Respect to Certain 
     Property.--
       ``(1) Qualified Gulf Opportunity Zone property.--For 
     purposes of subsections (d), (e), and (k)(2)(B)(iv), the term 
     `qualified Gulf Opportunity Zone property' shall not include 
     any property described in paragraph (3).
       ``(2) Qualified Gulf Opportunity Zone casualty losses.--For 
     purposes of subsection (k)(2)(B)(i), the term `qualified Gulf 
     Opportunity Zone casualty loss' shall not include any loss 
     with respect to any property described in paragraph (3).
       ``(3) Property described.--
       ``(A) In general.--For purposes of this subsection, 
     property is described in this paragraph if such property is--
       ``(i) any property used in connection with any private or 
     commercial golf course, country club, massage parlor, hot tub 
     facility, suntan facility, or any store the principal 
     business of which is the sale of alcoholic beverages for 
     consumption off premises, or
       ``(ii) any gambling or animal racing property.
       ``(B) Gambling or animal racing property.--For purposes of 
     subparagraph (A)(ii)--
       ``(i) In general.--The term `gambling or animal racing 
     property' means--

       ``(I) any equipment, furniture, software, or other property 
     used directly in connection with gambling, the racing of 
     animals, or the on-site viewing of such racing, and
       ``(II) the portion of any real property (determined by 
     square footage) which is dedicated to gambling, the racing of 
     animals, or the on-site viewing of such racing.

       ``(ii) De minimis portion.--Clause (i)(II) shall not apply 
     to any real property if the portion so dedicated is less than 
     100 square feet.''.
       (b) Conforming Amendments.--
       (1) Paragraph (2) of section 54(c) is amended by inserting 
     ``, section 1400N(l),'' after ``subpart C''.
       (2) Subparagraph (A) of section 6049(d)(8) is amended--
       (A) by inserting ``or 1400N(l)(6)'' after ``section 
     54(g)'', and
       (B) by inserting ``or 1400N(l)(2)(D), as the case may be'' 
     after ``section 54(b)(4)''.
       (3) So much of subchapter Y of chapter 1 as precedes 
     section 1400L is amended to read as follows:

              ``Subchapter Y--Short-Term Regional Benefits

            ``Part I--Tax Benefits for New York Liberty Zone

                  ``Part II--Tax Benefits for GO Zones

            ``PART I--TAX BENEFITS FOR NEW YORK LIBERTY ZONE

``Sec. 1400L. Tax benefits for New York Liberty Zone.''.
       (4) The item relating to subchapter Y in the table of 
     subchapters for chapter 1 is amended to read as follows:


             ``Subchapter Y--Short-Term Regional Benefits''.

       (c) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to taxable years 
     ending on or after August 28, 2005.
       (2) Carrybacks.--Subsections (i)(2), (j), and (k) of 
     section 1400N of the Internal Revenue Code of 1986 (as added 
     by this section) shall apply to losses arising in such 
     taxable years.

     SEC. 102. EXPANSION OF HOPE SCHOLARSHIP AND LIFETIME LEARNING 
                   CREDIT FOR STUDENTS IN THE GULF OPPORTUNITY 
                   ZONE.

       (a) In General.--Part II of subchapter Y of chapter 1 (as 
     added by this Act) is amended by adding at the end the 
     following new section:

     ``SEC. 1400O. EDUCATION TAX BENEFITS.

       ``In the case of an individual who attends an eligible 
     educational institution (as defined in section 25A(f)(2)) 
     located in the Gulf Opportunity Zone for any taxable year 
     beginning during 2005 or 2006--
       ``(1) in applying section 25A, the term `qualified tuition 
     and related expenses' shall include any costs which are 
     qualified higher education expenses (as defined in section 
     529(e)(3)),
       ``(2) each of the dollar amounts in effect under of 
     subparagraphs (A) and (B) of section 25A(b)(1) shall be twice 
     the amount otherwise in effect before the application of this 
     subsection, and
       ``(3) section 25A(c)(1) shall be applied by substituting 
     `40 percent' for `20 percent'.''.
       (b) Conforming Amendment.--The table of sections for part 
     II of subchapter Y of chapter 1 is amended by adding at the 
     end the following new item:

``Sec. 1400O. Education tax benefits.''.

     SEC. 103. HOUSING RELIEF FOR INDIVIDUALS AFFECTED BY 
                   HURRICANE KATRINA.

       (a) In General.--Part II of subchapter Y of chapter 1 (as 
     added by this Act) is amended by adding at the end the 
     following new section:

     ``SEC. 1400P. HOUSING TAX BENEFITS .

       ``(a) Exclusion of Employer Provided Housing for Individual 
     Affected by Hurricane Katrina.--
       ``(1) In general.--Gross income of a qualified employee 
     shall not include the value of any lodging furnished in-kind 
     to such employee (and such employee's spouse or any of such 
     employee's dependents) by or on behalf of a qualified 
     employer for any month during the taxable year.
       ``(2) Limitation.--The amount which may be excluded under 
     paragraph (1) for any month for which lodging is furnished 
     during the taxable year shall not exceed $600.
       ``(3) Treatment of exclusion.--The exclusion under 
     paragraph (1) shall be treated as an exclusion under section 
     119 (other than for purposes of sections 3121(a)(19) and 
     3306(b)(14)).
       ``(b) Employer Credit for Housing Employees Affected by 
     Hurricane Katrina.--For purposes of section 38, in the case 
     of a qualified employer, the Hurricane Katrina housing credit 
     for any month during the taxable year is an amount equal to 
     30 percent of any amount which is excludable from the gross 
     income of a qualified employee of such employer under 
     subsection (a) and not otherwise excludable under section 
     119.
       ``(c) Qualified Employee.--For purposes of this section, 
     the term `qualified employee' means, with respect to any 
     month, an individual--
       ``(1) who had a principal residence (as defined in section 
     121) in the Gulf Opportunity Zone on August 28, 2005, and
       ``(2) who performs substantially all employment services--
       ``(A) in the Gulf Opportunity Zone, and
       ``(B) for the qualified employer which furnishes lodging to 
     such individual.
       ``(d) Qualified Employer.--For purposes of this section, 
     the term `qualified employer' means any employer with a trade 
     or business located in the Gulf Opportunity Zone.
       ``(e) Certain Rules to Apply.--For purposes of this 
     subsection, rules similar to the rules of sections 51(i)(1) 
     and 52 shall apply.
       ``(f) Application of Section.--This section shall apply to 
     lodging furnished during the period--
       ``(1) beginning on the first day of the first month 
     beginning after the date of the enactment of this section, 
     and
       ``(2) ending on the date which is 6 months after the first 
     day described in paragraph (1).''.
       (b) Conforming Amendments.--
       (1) Subsection (b) of section 38 is amended by striking 
     ``and'' at the end of paragraph (25), by striking the period 
     at the end of paragraph (26) and inserting ``, and'', and by 
     adding at the end the following new paragraphs:
       ``(27) the Hurricane Katrina housing credit determined 
     under section 1400P(b).''.
       (2) Section 280C(a) is amended by striking ``and 1396(a)'' 
     and inserting ``1396(a), and 1400P(b)''.
       (3) The table of sections for part II of subchapter Y of 
     chapter 1 is amended by adding at the end the following new 
     item:

``Sec. 1400P. Housing tax benefits.''.

     SEC. 104. EXTENSION OF SPECIAL RULES FOR MORTGAGE REVENUE 
                   BONDS.

       Section 404(d) of the Katrina Emergency Tax Relief Act of 
     2005 is amended by striking ``December 31, 2007'' and 
     inserting ``December 31, 2010''.

     SEC. 105. SPECIAL EXTENSION OF BONUS DEPRECIATION PLACED IN 
                   SERVICE DATE FOR TAXPAYERS AFFECTED BY 
                   HURRICANES KATRINA, RITA, AND WILMA.

       In applying the rule under section 168(k)(2)(A)(iv) of the 
     Internal Revenue Code of 1986 to any property described in 
     subparagraph (B) or (C) of section 168(k)(2) of such Code--
       (1) the placement in service of which--
       (A) is to be located in the GO Zone (as defined in section 
     1400M(1) of such Code), the Rita GO Zone (as defined in 
     section 1400M(3) of such Code), or the Wilma GO Zone (as 
     defined in section 1400M(5) of such Code), and
       (B) is to be made by any taxpayer affected by Hurricane 
     Katrina, Rita, or Wilma, or
       (2) which is manufactured in such Zone by any person 
     affected by Hurricane Katrina, Rita, or Wilma,
     the Secretary of the Treasury may, on a taxpayer by taxpayer 
     basis, extend the required date of the placement in service 
     of such property under such section by such period of time as 
     is determined necessary by the Secretary but not to exceed 1 
     year. For purposes of the preceding sentence, the 
     determination shall be made by only taking into account the 
     effect of one or more hurricanes on the date of such 
     placement by the taxpayer.

      TITLE II--TAX BENEFITS RELATED TO HURRICANES RITA AND WILMA

     SEC. 201. EXTENSION OF CERTAIN EMERGENCY TAX RELIEF FOR 
                   HURRICANE KATRINA TO HURRICANES RITA AND WILMA.

       (a) In General.--Part II of subchapter Y of chapter 1 (as 
     added by this Act) is amended by adding at the end the 
     following new sections:

     ``SEC. 1400Q. SPECIAL RULES FOR USE OF RETIREMENT FUNDS.

       ``(a) Tax-Favored Withdrawals From Retirement Plans.--

[[Page 29100]]

       ``(1) In general.--Section 72(t) shall not apply to any 
     qualified hurricane distribution.
       ``(2) Aggregate dollar limitation.--
       ``(A) In general.--For purposes of this subsection, the 
     aggregate amount of distributions received by an individual 
     which may be treated as qualified hurricane distributions for 
     any taxable year shall not exceed the excess (if any) of--
       ``(i) $100,000, over
       ``(ii) the aggregate amounts treated as qualified hurricane 
     distributions received by such individual for all prior 
     taxable years.
       ``(B) Treatment of plan distributions.--If a distribution 
     to an individual would (without regard to subparagraph (A)) 
     be a qualified hurricane distribution, a plan shall not be 
     treated as violating any requirement of this title merely 
     because the plan treats such distribution as a qualified 
     hurricane distribution, unless the aggregate amount of such 
     distributions from all plans maintained by the employer (and 
     any member of any controlled group which includes the 
     employer) to such individual exceeds $100,000.
       ``(C) Controlled group.--For purposes of subparagraph (B), 
     the term `controlled group' means any group treated as a 
     single employer under subsection (b), (c), (m), or (o) of 
     section 414.
       ``(3) Amount distributed may be repaid.--
       ``(A) In general.--Any individual who receives a qualified 
     hurricane distribution may, at any time during the 3-year 
     period beginning on the day after the date on which such 
     distribution was received, make one or more contributions in 
     an aggregate amount not to exceed the amount of such 
     distribution to an eligible retirement plan of which such 
     individual is a beneficiary and to which a rollover 
     contribution of such distribution could be made under section 
     402(c), 403(a)(4), 403(b)(8), 408(d)(3), or 457(e)(16), as 
     the case may be.
       ``(B) Treatment of repayments of distributions from 
     eligible retirement plans other than iras.--For purposes of 
     this title, if a contribution is made pursuant to 
     subparagraph (A) with respect to a qualified hurricane 
     distribution from an eligible retirement plan other than an 
     individual retirement plan, then the taxpayer shall, to the 
     extent of the amount of the contribution, be treated as 
     having received the qualified hurricane distribution in an 
     eligible rollover distribution (as defined in section 
     402(c)(4)) and as having transferred the amount to the 
     eligible retirement plan in a direct trustee to trustee 
     transfer within 60 days of the distribution.
       ``(C) Treatment of repayments for distributions from 
     iras.--For purposes of this title, if a contribution is made 
     pursuant to subparagraph (A) with respect to a qualified 
     hurricane distribution from an individual retirement plan (as 
     defined by section 7701(a)(37)), then, to the extent of the 
     amount of the contribution, the qualified hurricane 
     distribution shall be treated as a distribution described in 
     section 408(d)(3) and as having been transferred to the 
     eligible retirement plan in a direct trustee to trustee 
     transfer within 60 days of the distribution.
       ``(4) Definitions.--For purposes of this subsection--
       ``(A) Qualified hurricane distribution.--Except as provided 
     in paragraph (2), the term `qualified hurricane distribution' 
     means--
       ``(i) any distribution from an eligible retirement plan 
     made on or after August 25, 2005, and before January 1, 2007, 
     to an individual whose principal place of abode on August 28, 
     2005, is located in the Hurricane Katrina disaster area and 
     who has sustained an economic loss by reason of Hurricane 
     Katrina,
       ``(ii) any distribution (which is not described in clause 
     (i)) from an eligible retirement plan made on or after 
     September 23, 2005, and before January 1, 2007, to an 
     individual whose principal place of abode on September 23, 
     2005, is located in the Hurricane Rita disaster area and who 
     has sustained an economic loss by reason of Hurricane Rita, 
     and
       ``(iii) any distribution (which is not described in clause 
     (i) or (ii)) from an eligible retirement plan made on or 
     after October 23, 2005, and before January 1, 2007, to an 
     individual whose principal place of abode on October 23, 
     2005, is located in the Hurricane Wilma disaster area and who 
     has sustained an economic loss by reason of Hurricane Wilma.
       ``(B) Eligible retirement plan.--The term `eligible 
     retirement plan' shall have the meaning given such term by 
     section 402(c)(8)(B).
       ``(5) Income inclusion spread over 3-year period.--
       ``(A) In general.--In the case of any qualified hurricane 
     distribution, unless the taxpayer elects not to have this 
     paragraph apply for any taxable year, any amount required to 
     be included in gross income for such taxable year shall be so 
     included ratably over the 3-taxable year period beginning 
     with such taxable year.
       ``(B) Special rule.--For purposes of subparagraph (A), 
     rules similar to the rules of subparagraph (E) of section 
     408A(d)(3) shall apply.
       ``(6) Special rules.--
       ``(A) Exemption of distributions from trustee to trustee 
     transfer and withholding rules.--For purposes of sections 
     401(a)(31), 402(f), and 3405, qualified hurricane 
     distributions shall not be treated as eligible rollover 
     distributions.
       ``(B) Qualified hurricane distributions treated as meeting 
     plan distribution requirements.--For purposes this title, a 
     qualified hurricane distribution shall be treated as meeting 
     the requirements of sections 401(k)(2)(B)(i), 
     403(b)(7)(A)(ii), 403(b)(11), and 457(d)(1)(A).
       ``(b) Recontributions of Withdrawals for Home Purchases.--
       ``(1) Recontributions.--
       ``(A) In general.--Any individual who received a qualified 
     distribution may, during the applicable period, make one or 
     more contributions in an aggregate amount not to exceed the 
     amount of such qualified distribution to an eligible 
     retirement plan (as defined in section 402(c)(8)(B)) of which 
     such individual is a beneficiary and to which a rollover 
     contribution of such distribution could be made under section 
     402(c), 403(a)(4), 403(b)(8), or 408(d)(3), as the case may 
     be.
       ``(B) Treatment of repayments.--Rules similar to the rules 
     of subparagraphs (B) and (C) of subsection (a)(3) shall apply 
     for purposes of this subsection.
       ``(2) Qualified distribution.--For purposes of this 
     subsection--
       ``(A) In general.--The term `qualified distribution' means 
     any qualified Katrina distribution, any qualified Rita 
     distribution, and any qualified Wilma distribution.
       ``(B) Qualified katrina distribution.--The term `qualified 
     Katrina distribution' means any distribution--
       ``(i) described in section 401(k)(2)(B)(i)(IV), 
     403(b)(7)(A)(ii) (but only to the extent such distribution 
     relates to financial hardship), 403(b)(11)(B), or 
     72(t)(2)(F),
       ``(ii) received after February 28, 2005, and before August 
     29, 2005, and
       ``(iii) which was to be used to purchase or construct a 
     principal residence in the Hurricane Katrina disaster area, 
     but which was not so purchased or constructed on account of 
     Hurricane Katrina.
       ``(C) Qualified rita distribution.--The term `qualified 
     Rita distribution' means any distribution (other than a 
     qualified Katrina distribution)--
       ``(i) described in section 401(k)(2)(B)(i)(IV), 
     403(b)(7)(A)(ii) (but only to the extent such distribution 
     relates to financial hardship), 403(b)(11)(B), or 
     72(t)(2)(F),
       ``(ii) received after February 28, 2005, and before 
     September 24, 2005, and
       ``(iii) which was to be used to purchase or construct a 
     principal residence in the Hurricane Rita disaster area, but 
     which was not so purchased or constructed on account of 
     Hurricane Rita.
       ``(D) Qualified wilma distribution.--The term `qualified 
     Wilma distribution' means any distribution (other than a 
     qualified Katrina distribution or a qualified Rita 
     distribution)--
       ``(i) described in section 401(k)(2)(B)(i)(IV), 
     403(b)(7)(A)(ii) (but only to the extent such distribution 
     relates to financial hardship), 403(b)(11)(B), or 
     72(t)(2)(F),
       ``(ii) received after February 28, 2005, and before October 
     24, 2005, and
       ``(iii) which was to be used to purchase or construct a 
     principal residence in the Hurricane Wilma disaster area, but 
     which was not so purchased or constructed on account of 
     Hurricane Wilma.
       ``(3) Applicable period.--For purposes of this subsection, 
     the term `applicable period' means--
       ``(A) with respect to any qualified Katrina distribution, 
     the period beginning on August 25, 2005, and ending on 
     February 28, 2006,
       ``(B) with respect to any qualified Rita distribution, the 
     period beginning on September 23, 2005, and ending on 
     February 28, 2006, and
       ``(C) with respect to any qualified Wilma distribution, the 
     period beginning on October 23, 2005, and ending on February 
     28, 2006.
       ``(c) Loans From Qualified Plans.--
       ``(1) Increase in limit on loans not treated as 
     distributions.--In the case of any loan from a qualified 
     employer plan (as defined under section 72(p)(4)) to a 
     qualified individual made during the applicable period--
       ``(A) clause (i) of section 72(p)(2)(A) shall be applied by 
     substituting `$100,000' for `$50,000', and
       ``(B) clause (ii) of such section shall be applied by 
     substituting `the present value of the nonforfeitable accrued 
     benefit of the employee under the plan' for `one-half of the 
     present value of the nonforfeitable accrued benefit of the 
     employee under the plan'.
       ``(2) Delay of repayment.--In the case of a qualified 
     individual with an outstanding loan on or after the qualified 
     beginning date from a qualified employer plan (as defined in 
     section 72(p)(4))--
       ``(A) if the due date pursuant to subparagraph (B) or (C) 
     of section 72(p)(2) for any repayment with respect to such 
     loan occurs during the period beginning on the qualified 
     beginning date and ending on December 31, 2006, such due date 
     shall be delayed for 1 year,
       ``(B) any subsequent repayments with respect to any such 
     loan shall be appropriately adjusted to reflect the delay in 
     the due date under paragraph (1) and any interest accruing 
     during such delay, and
       ``(C) in determining the 5-year period and the term of a 
     loan under subparagraph (B) or (C) of section 72(p)(2), the 
     period described in subparagraph (A) shall be disregarded.
       ``(3) Qualified individual.--For purposes of this 
     subsection--
       ``(A) In general.--The term `qualified individual' means 
     any qualified Hurricane Katrina individual, any qualified 
     Hurricane Rita individual, and any qualified Hurricane Wilma 
     individual.
       ``(B) Qualified hurricane katrina individual.--The term 
     `qualified Hurricane Katrina individual' means an individual 
     whose principal place of abode on August 28, 2005, is located 
     in

[[Page 29101]]

     the Hurricane Katrina disaster area and who has sustained an 
     economic loss by reason of Hurricane Katrina.
       ``(C) Qualified hurricane rita individual.--The term 
     `qualified Hurricane Rita individual' means an individual 
     (other than a qualified Hurricane Katrina individual) whose 
     principal place of abode on September 23, 2005, is located in 
     the Hurricane Rita disaster area and who has sustained an 
     economic loss by reason of Hurricane Rita.
       ``(D) Qualified hurricane wilma individual.--The term 
     `qualified Hurricane Wilma individual' means an individual 
     (other than a qualified Hurricane Katrina individual or a 
     qualified Hurricane Rita individual) whose principal place of 
     abode on October 23, 2005, is located in the Hurricane Wilma 
     disaster area and who has sustained an economic loss by 
     reason of Hurricane Wilma.
       ``(4) Applicable period; qualified beginning date.--For 
     purposes of this subsection--
       ``(A) Hurricane katrina.--In the case of any qualified 
     Hurricane Katrina individual--
       ``(i) the applicable period is the period beginning on 
     September 24, 2005, and ending on December 31, 2006, and
       ``(ii) the qualified beginning date is August 25, 2005.
       ``(B) Hurricane rita.--In the case of any qualified 
     Hurricane Rita individual--
       ``(i) the applicable period is the period beginning on the 
     date of the enactment of this subsection and ending on 
     December 31, 2006, and
       ``(ii) the qualified beginning date is September 23, 2005.
       ``(C) Hurricane wilma.--In the case of any qualified 
     Hurricane Wilma individual--
       ``(i) the applicable period is the period beginning on the 
     date of the enactment of this subparagraph and ending on 
     December 31, 2006, and
       ``(ii) the qualified beginning date is October 23, 2005.
       ``(d) Provisions Relating to Plan Amendments.--
       ``(1) In general.--If this subsection applies to any 
     amendment to any plan or annuity contract, such plan or 
     contract shall be treated as being operated in accordance 
     with the terms of the plan during the period described in 
     paragraph (2)(B)(i).
       ``(2) Amendments to which subsection applies.--
       ``(A) In general.--This subsection shall apply to any 
     amendment to any plan or annuity contract which is made--
       ``(i) pursuant to any provision of this section, or 
     pursuant to any regulation issued by the Secretary or the 
     Secretary of Labor under any provision of this section, and
       ``(ii) on or before the last day of the first plan year 
     beginning on or after January 1, 2007, or such later date as 
     the Secretary may prescribe.
     In the case of a governmental plan (as defined in section 
     414(d)), clause (ii) shall be applied by substituting the 
     date which is 2 years after the date otherwise applied under 
     clause (ii).
       ``(B) Conditions.--This subsection shall not apply to any 
     amendment unless--
       ``(i) during the period--

       ``(I) beginning on the date that this section or the 
     regulation described in subparagraph (A)(i) takes effect (or 
     in the case of a plan or contract amendment not required by 
     this section or such regulation, the effective date specified 
     by the plan), and
       ``(II) ending on the date described in subparagraph (A)(ii) 
     (or, if earlier, the date the plan or contract amendment is 
     adopted),

     the plan or contract is operated as if such plan or contract 
     amendment were in effect; and
       ``(ii) such plan or contract amendment applies 
     retroactively for such period.

     ``SEC. 1400R. EMPLOYMENT RELIEF.

       ``(a) Employee Retention Credit for Employers Affected by 
     Hurricane Katrina.--
       ``(1) In general.--For purposes of section 38, in the case 
     of an eligible employer, the Hurricane Katrina employee 
     retention credit for any taxable year is an amount equal to 
     40 percent of the qualified wages with respect to each 
     eligible employee of such employer for such taxable year. For 
     purposes of the preceding sentence, the amount of qualified 
     wages which may be taken into account with respect to any 
     individual shall not exceed $6,000.
       ``(2) Definitions.--For purposes of this subsection--
       ``(A) Eligible employer.--The term `eligible employer' 
     means any employer--
       ``(i) which conducted an active trade or business on August 
     28, 2005, in the GO Zone, and
       ``(ii) with respect to whom the trade or business described 
     in clause (i) is inoperable on any day after August 28, 2005, 
     and before January 1, 2006, as a result of damage sustained 
     by reason of Hurricane Katrina.
       ``(B) Eligible employee.--The term `eligible employee' 
     means with respect to an eligible employer an employee whose 
     principal place of employment on August 28, 2005, with such 
     eligible employer was in the GO Zone.
       ``(C) Qualified wages.--The term `qualified wages' means 
     wages (as defined in section 51(c)(1), but without regard to 
     section 3306(b)(2)(B)) paid or incurred by an eligible 
     employer with respect to an eligible employee on any day 
     after August 28, 2005, and before January 1, 2006, which 
     occurs during the period--
       ``(i) beginning on the date on which the trade or business 
     described in subparagraph (A) first became inoperable at the 
     principal place of employment of the employee immediately 
     before Hurricane Katrina, and
       ``(ii) ending on the date on which such trade or business 
     has resumed significant operations at such principal place of 
     employment.

     Such term shall include wages paid without regard to whether 
     the employee performs no services, performs services at a 
     different place of employment than such principal place of 
     employment, or performs services at such principal place of 
     employment before significant operations have resumed.
       ``(3) Certain rules to apply.--For purposes of this 
     subsection, rules similar to the rules of sections 51(i)(1) 
     and 52 shall apply.
       ``(4) Employee not taken into account more than once.--An 
     employee shall not be treated as an eligible employee for 
     purposes of this subsection for any period with respect to 
     any employer if such employer is allowed a credit under 
     section 51 with respect to such employee for such period.
       ``(b) Employee Retention Credit for Employers Affected by 
     Hurricane Rita.--
       ``(1) In general.--For purposes of section 38, in the case 
     of an eligible employer, the Hurricane Rita employee 
     retention credit for any taxable year is an amount equal to 
     40 percent of the qualified wages with respect to each 
     eligible employee of such employer for such taxable year. For 
     purposes of the preceding sentence, the amount of qualified 
     wages which may be taken into account with respect to any 
     individual shall not exceed $6,000.
       ``(2) Definitions.--For purposes of this subsection--
       ``(A) Eligible employer.--The term `eligible employer' 
     means any employer--
       ``(i) which conducted an active trade or business on 
     September 23, 2005, in the Rita GO Zone, and
       ``(ii) with respect to whom the trade or business described 
     in clause (i) is inoperable on any day after September 23, 
     2005, and before January 1, 2006, as a result of damage 
     sustained by reason of Hurricane Rita.
       ``(B) Eligible employee.--The term `eligible employee' 
     means with respect to an eligible employer an employee whose 
     principal place of employment on September 23, 2005, with 
     such eligible employer was in the Rita GO Zone.
       ``(C) Qualified wages.--The term `qualified wages' means 
     wages (as defined in section 51(c)(1), but without regard to 
     section 3306(b)(2)(B)) paid or incurred by an eligible 
     employer with respect to an eligible employee on any day 
     after September 23, 2005, and before January 1, 2006, which 
     occurs during the period--
       ``(i) beginning on the date on which the trade or business 
     described in subparagraph (A) first became inoperable at the 
     principal place of employment of the employee immediately 
     before Hurricane Rita, and
       ``(ii) ending on the date on which such trade or business 
     has resumed significant operations at such principal place of 
     employment.
     Such term shall include wages paid without regard to whether 
     the employee performs no services, performs services at a 
     different place of employment than such principal place of 
     employment, or performs services at such principal place of 
     employment before significant operations have resumed.
       ``(3) Certain rules to apply.--For purposes of this 
     subsection, rules similar to the rules of sections 51(i)(1) 
     and 52 shall apply.
       ``(4) Employee not taken into account more than once.--An 
     employee shall not be treated as an eligible employee for 
     purposes of this subsection for any period with respect to 
     any employer if such employer is allowed a credit under 
     subsection (a) or section 51 with respect to such employee 
     for such period.
       ``(c) Employee Retention Credit for Employers Affected by 
     Hurricane Wilma.--
       ``(1) In general.--For purposes of section 38, in the case 
     of an eligible employer, the Hurricane Wilma employee 
     retention credit for any taxable year is an amount equal to 
     40 percent of the qualified wages with respect to each 
     eligible employee of such employer for such taxable year. For 
     purposes of the preceding sentence, the amount of qualified 
     wages which may be taken into account with respect to any 
     individual shall not exceed $6,000.
       ``(2) Definitions.--For purposes of this subsection--
       ``(A) Eligible employer.--The term `eligible employer' 
     means any employer--
       ``(i) which conducted an active trade or business on 
     October 23, 2005, in the Wilma GO Zone, and
       ``(ii) with respect to whom the trade or business described 
     in clause (i) is inoperable on any day after October 23, 
     2005, and before January 1, 2006, as a result of damage 
     sustained by reason of Hurricane Wilma.
       ``(B) Eligible employee.--The term `eligible employee' 
     means with respect to an eligible employer an employee whose 
     principal place of employment on October 23, 2005, with such 
     eligible employer was in the Wilma GO Zone.
       ``(C) Qualified wages.--The term `qualified wages' means 
     wages (as defined in section 51(c)(1), but without regard to 
     section 3306(b)(2)(B)) paid or incurred by an eligible 
     employer with respect to an eligible employee on any day 
     after October 23, 2005, and before January 1, 2006, which 
     occurs during the period--
       ``(i) beginning on the date on which the trade or business 
     described in subparagraph (A) first became inoperable at the 
     principal place of employment of the employee immediately 
     before Hurricane Wilma, and
       ``(ii) ending on the date on which such trade or business 
     has resumed significant operations at such principal place of 
     employment.


[[Page 29102]]


     Such term shall include wages paid without regard to whether 
     the employee performs no services, performs services at a 
     different place of employment than such principal place of 
     employment, or performs services at such principal place of 
     employment before significant operations have resumed.
       ``(3) Certain rules to apply.--For purposes of this 
     subsection, rules similar to the rules of sections 51(i)(1) 
     and 52 shall apply.
       ``(4) Employee not taken into account more than once.--An 
     employee shall not be treated as an eligible employee for 
     purposes of this subsection for any period with respect to 
     any employer if such employer is allowed a credit under 
     subsection (a) or (b) or section 51 with respect to such 
     employee for such period.

     ``SEC. 1400S. ADDITIONAL TAX RELIEF PROVISIONS.

       ``(a) Temporary Suspension of Limitations on Charitable 
     Contributions.--
       ``(1) In general.--Except as otherwise provided in 
     paragraph (2), section 170(b) shall not apply to qualified 
     contributions and such contributions shall not be taken into 
     account for purposes of applying subsections (b) and (d) of 
     section 170 to other contributions.
       ``(2) Treatment of excess contributions.--For purposes of 
     section 170--
       ``(A) Individuals.--In the case of an individual--
       ``(i) Limitation.--Any qualified contribution shall be 
     allowed only to the extent that the aggregate of such 
     contributions does not exceed the excess of the taxpayer's 
     contribution base (as defined in subparagraph (F) of section 
     170(b)(1)) over the amount of all other charitable 
     contributions allowed under section 170(b)(1).
       ``(ii) Carryover.--If the aggregate amount of qualified 
     contributions made in the contribution year (within the 
     meaning of section 170(d)(1)) exceeds the limitation of 
     clause (i), such excess shall be added to the excess 
     described in the portion of subparagraph (A) of such section 
     which precedes clause (i) thereof for purposes of applying 
     such section.
       ``(B) Corporations.--In the case of a corporation--
       ``(i) Limitation.--Any qualified contribution shall be 
     allowed only to the extent that the aggregate of such 
     contributions does not exceed the excess of the taxpayer's 
     taxable income (as determined under paragraph (2) of section 
     170(b)) over the amount of all other charitable contributions 
     allowed under such paragraph.
       ``(ii) Carryover.--Rules similar to the rules of 
     subparagraph (A)(ii) shall apply for purposes of this 
     subparagraph.
       ``(3) Exception to overall limitation on itemized 
     deductions.--So much of any deduction allowed under section 
     170 as does not exceed the qualified contributions paid 
     during the taxable year shall not be treated as an itemized 
     deduction for purposes of section 68.
       ``(4) Qualified contributions.--
       ``(A) In general.--For purposes of this subsection, the 
     term `qualified contribution' means any charitable 
     contribution (as defined in section 170(c)) if--
       ``(i) such contribution is paid during the period beginning 
     on August 28, 2005, and ending on December 31, 2005, in cash 
     to an organization described in section 170(b)(1)(A) (other 
     than an organization described in section 509(a)(3)),
       ``(ii) in the case of a contribution paid by a corporation, 
     such contribution is for relief efforts related to Hurricane 
     Katrina, Hurricane Rita, or Hurricane Wilma, and
       ``(iii) the taxpayer has elected the application of this 
     subsection with respect to such contribution.
       ``(B) Exception.--Such term shall not include a 
     contribution if the contribution is for establishment of a 
     new, or maintenance in an existing, segregated fund or 
     account with respect to which the donor (or any person 
     appointed or designated by such donor) has, or reasonably 
     expects to have, advisory privileges with respect to 
     distributions or investments by reason of the donor's status 
     as a donor.
       ``(C) Application of election to partnerships and s 
     corporations.--In the case of a partnership or S corporation, 
     the election under subparagraph (A)(iii) shall be made 
     separately by each partner or shareholder.
       ``(b) Suspension of Certain Limitations on Personal 
     Casualty Losses.--Paragraphs (1) and (2)(A) of section 165(h) 
     shall not apply to losses described in section 165(c)(3)--
       ``(1) which arise in the Hurricane Katrina disaster area on 
     or after August 25, 2005, and which are attributable to 
     Hurricane Katrina,
       ``(2) which arise in the Hurricane Rita disaster area on or 
     after September 23, 2005, and which are attributable to 
     Hurricane Rita, or
       ``(3) which arise in the Hurricane Wilma disaster area on 
     or after October 23, 2005, and which are attributable to 
     Hurricane Wilma.
     In the case of any other losses, section 165(h)(2)(A) shall 
     be applied without regard to the losses referred to in the 
     preceding sentence.
       ``(c) Required Exercise of Authority Under Section 7508A.--
     In the case of any taxpayer determined by the Secretary to be 
     affected by the Presidentially declared disaster relating to 
     Hurricane Katrina, Hurricane Rita, or Hurricane Wilma, any 
     relief provided by the Secretary under section 7508A shall be 
     for a period ending not earlier than February 28, 2006.
       ``(d) Special Rule for Determining Earned Income.--
       ``(1) In general.--In the case of a qualified individual, 
     if the earned income of the taxpayer for the taxable year 
     which includes the applicable date is less than the earned 
     income of the taxpayer for the preceding taxable year, the 
     credits allowed under sections 24(d) and 32 may, at the 
     election of the taxpayer, be determined by substituting--
       ``(A) such earned income for the preceding taxable year, 
     for
       ``(B) such earned income for the taxable year which 
     includes the applicable date.
       ``(2) Qualified individual.--For purposes of this 
     subsection--
       ``(A) In general.--The term `qualified individual' means 
     any qualified Hurricane Katrina individual, any qualified 
     Hurricane Rita individual, and any qualified Hurricane Wilma 
     individual.
       ``(B) Qualified hurricane katrina individual.--The term 
     `qualified Hurricane Katrina individual' means any individual 
     whose principal place of abode on August 25, 2005, was 
     located--
       ``(i) in the GO Zone, or
       ``(ii) in the Hurricane Katrina disaster area (but outside 
     the GO Zone) and such individual was displaced from such 
     principal place of abode by reason of Hurricane Katrina.
       ``(C) Qualified hurricane rita individual.--The term 
     `qualified Hurricane Rita individual' means any individual 
     (other than a qualified Hurricane Katrina individual) whose 
     principal place of abode on September 23, 2005, was located--
       ``(i) in the Rita GO Zone, or
       ``(ii) in the Hurricane Rita disaster area (but outside the 
     Rita GO Zone) and such individual was displaced from such 
     principal place of abode by reason of Hurricane Rita.
       ``(D) Qualified hurricane wilma individual.--The term 
     `qualified Hurricane Wilma individual' means any individual 
     whose principal place of abode on October 23, 2005, was 
     located--
       ``(i) in the Wilma GO Zone, or
       ``(ii) in the Hurricane Wilma disaster area (but outside 
     the Wilma GO Zone) and such individual was displaced from 
     such principal place of abode by reason of Hurricane Wilma.
       ``(3) Applicable date.--For purposes of this subsection, 
     the term `applicable date' means--
       ``(A) in the case of a qualified Hurricane Katrina 
     individual, August 25, 2005,
       ``(B) in the case of a qualified Hurricane Rita individual, 
     September 23, 2005, and
       ``(C) in the case of a qualified Hurricane Wilma 
     individual, October 23, 2005.
       ``(4) Earned income.--For purposes of this subsection, the 
     term `earned income' has the meaning given such term under 
     section 32(c).
       ``(5) Special rules.--
       ``(A) Application to joint returns.--For purposes of 
     paragraph (1), in the case of a joint return for a taxable 
     year which includes the applicable date--
       ``(i) such paragraph shall apply if either spouse is a 
     qualified individual, and
       ``(ii) the earned income of the taxpayer for the preceding 
     taxable year shall be the sum of the earned income of each 
     spouse for such preceding taxable year.
       ``(B) Uniform application of election.--Any election made 
     under paragraph (1) shall apply with respect to both section 
     24(d) and section 32.
       ``(C) Errors treated as mathematical error.--For purposes 
     of section 6213, an incorrect use on a return of earned 
     income pursuant to paragraph (1) shall be treated as a 
     mathematical or clerical error.
       ``(D) No effect on determination of gross income, etc.--
     Except as otherwise provided in this subsection, this title 
     shall be applied without regard to any substitution under 
     paragraph (1).
       ``(e) Secretarial Authority To Make Adjustments Regarding 
     Taxpayer and Dependency Status.--With respect to taxable 
     years beginning in 2005 or 2006, the Secretary 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, Hurricane Rita, or Hurricane Wilma. Any adjustments 
     made under the preceding sentence shall ensure that an 
     individual is not taken into account by more than one 
     taxpayer with respect to the same tax benefit.

     ``SEC. 1400T. SPECIAL RULES FOR MORTGAGE REVENUE BONDS.

       ``(a) In General.--In the case of financing provided with 
     respect to owner-occupied residences in the GO Zone, the Rita 
     GO Zone, or the Wilma GO Zone, section 143 shall be applied--
       ``(1) by treating any such residence in the Rita GO Zone or 
     the Wilma GO Zone as a targeted area residence,
       ``(2) by applying subsection (f)(3) thereof without regard 
     to subparagraph (A) thereof, and
       ``(3) by substituting `$150,000' for `$15,000' in 
     subsection (k)(4) thereof.
       ``(b) Application.--Subsection (a) shall not apply to 
     financing provided after December 31, 2010.''.
       (b) Conforming Amendments.--
       (1) Subsection (b) of section 38, as amended by this Act, 
     is amended by striking ``and'' at the end of paragraph (26), 
     by striking the period at the end of paragraph (27) and 
     inserting a comma, and by adding at the end the following new 
     paragraphs:
       ``(28) the Hurricane Katrina employee retention credit 
     determined under section 1400R(a),
       ``(29) the Hurricane Rita employee retention credit 
     determined under section 1400R(b), and
       ``(30) the Hurricane Wilma employee retention credit 
     determined under section 1400R(c).''.

[[Page 29103]]

       (2) Section 280C(a), as amended by this Act, is amended by 
     striking ``and 1400P(b)'' and inserting ``1400P(b), and 
     1400R''.
       (3) The table of sections for part II of subchapter Y of 
     chapter 1 is amended by adding at the end the following new 
     items:

``Sec. 1400Q. Special rules for use of retirement funds.
``Sec. 1400R. Employment relief.
``Sec. 1400S. Additional tax relief provisions.''.
       (4) The following provisions of the Katrina Emergency Tax 
     Relief Act of 2005 are hereby repealed:
       (A) Title I.
       (B) Sections 202, 301, 402, 403(b), 406, and 407.

                      TITLE III--OTHER PROVISIONS

     SEC. 301. GULF COAST RECOVERY BONDS.

       It is the sense of the Congress that the Secretary of the 
     Treasury, or the Secretary's delegate, should designate one 
     or more series of bonds or certificates (or any portion 
     thereof) issued under section 3105 of title 31, United States 
     Code, as ``Gulf Coast Recovery Bonds'' in response to 
     Hurricanes Katrina, Rita, and Wilma.

     SEC. 302. ELECTION TO INCLUDE COMBAT PAY AS EARNED INCOME FOR 
                   PURPOSES OF EARNED INCOME CREDIT.

       (a) In General.--Subclause (II) of section 32(c)(2)(B)(vi) 
     is amended by striking ``January 1, 2006'' and inserting 
     ``January 1, 2007''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to taxable years beginning after December 31, 
     2005.

     SEC. 303. MODIFICATION OF EFFECTIVE DATE OF EXCEPTION FROM 
                   SUSPENSION RULES FOR CERTAIN LISTED AND 
                   REPORTABLE TRANSACTIONS.

       (a) Effective Date Modification.--
       (1) In general.--Paragraph (2) of section 903(d) of the 
     American Jobs Creation Act of 2004 is amended to read as 
     follows:
       ``(2) Exception for reportable or listed transactions.--
       ``(A) In general.--The amendments made by subsection (c) 
     shall apply with respect to interest accruing after October 
     3, 2004.
       ``(B) Special rule for certain listed and reportable 
     transactions.--
       ``(i) In general.--Except as provided in clauses (ii), 
     (iii), and (iv), the amendments made by subsection (c) shall 
     also apply with respect to interest accruing on or before 
     October 3, 2004.
       ``(ii) Participants in settlement initiatives.--Clause (i) 
     shall not apply to any transaction if, as of January 23, 
     2006--

       ``(I) the taxpayer is participating in a settlement 
     initiative described in Internal Revenue Service Announcement 
     2005-80 with respect to such transaction, or
       ``(II) the taxpayer has entered into a settlement agreement 
     pursuant to such an initiative.

     Subclause (I) shall not apply to any taxpayer if, after 
     January 23, 2006, the taxpayer withdraws from, or terminates, 
     participation in the initiative or the Secretary of the 
     Treasury or the Secretary's delegate determines that a 
     settlement agreement will not be reached pursuant to the 
     initiative within a reasonable period of time.
       ``(iii) Taxpayers acting in good faith.--The Secretary of 
     the Treasury may except from the application of clause (i) 
     any transaction in which the taxpayer has acted reasonably 
     and in good faith.
       ``(iv) Closed transactions.--Clause (i) shall not apply to 
     a transaction if, as of December 14, 2005--

       ``(I) the assessment of all Federal income taxes for the 
     taxable year in which the tax liability to which the interest 
     relates arose is prevented by the operation of any law or 
     rule of law, or
       ``(II) a closing agreement under section 7121 has been 
     entered into with respect to the tax liability arising in 
     connection with the transaction.''.

       (2) Effective date.--The amendment made by this subsection 
     shall take effect as if included in the provisions of the 
     American Jobs Creation Act of 2004 to which it relates.
       (b) Treatment of Amended Returns and Other Similar Notices 
     of Additional Tax Owed.--
       (1) In general.--Section 6404(g)(1) (relating to 
     suspension) is amended by adding at the end the following new 
     sentence: ``If, after the return for a taxable year is filed, 
     the taxpayer provides to the Secretary 1 or more signed 
     written documents showing that the taxpayer owes an 
     additional amount of tax for the taxable year, clause (i) 
     shall be applied by substituting the date the last of the 
     documents was provided for the date on which the return is 
     filed.''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to documents provided on or after the date of the 
     enactment of this Act.

     SEC. 304. AUTHORITY FOR UNDERCOVER OPERATIONS.

       Paragraph (6) of section 7608(c) (relating to application 
     of section) is amended by striking ``January 1, 2006'' both 
     places is appears and inserting ``January 1, 2007''.

     SEC. 305. DISCLOSURES OF CERTAIN TAX RETURN INFORMATION.

       (a) Disclosures To Facilitate Combined Employment Tax 
     Reporting.--
       (1) In general.--Subparagraph (B) of section 6103(d)(5) 
     (relating to termination) is amended by striking ``December 
     31, 2005'' and inserting ``December 31, 2006''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall apply to disclosures after December 31, 2005.
       (b) Disclosures Relating to Terrorist Activities.--
       (1) In general.--Clause (iv) of section 6103(i)(3)(C) and 
     subparagraph (E) of section 6103(i)(7) are each amended by 
     striking ``December 31, 2005'' and inserting ``December 31, 
     2006''.
       (2) Effective date.--The amendments made by paragraph (1) 
     shall apply to disclosures after December 31, 2005.
       (c) Disclosures Relating to Student Loans.--
       (1) In general.--Subparagraph (D) of section 6103(l)(13) 
     (relating to termination) is amended by striking ``December 
     31, 2005'' and inserting ``December 31, 2006''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall apply to requests made after December 31, 2005.

                          TITLE IV--TECHNICALS

                       Subtitle A--Tax Technicals

     SEC. 401. SHORT TITLE.

       This subtitle may be cited as the ``Tax Technical 
     Corrections Act of 2005''.

     SEC. 402. AMENDMENTS RELATED TO ENERGY POLICY ACT OF 2005.

       (a) Amendments Related to Section 1263.--
       (1) Part VI of subchapter O of chapter 1 is repealed.
       (2) Section 1223 is amended by striking paragraph (3) and 
     by redesignating paragraphs (4) through (16) as paragraphs 
     (3) through (15), respectively.
       (3) Section 121(g) is amended by striking ``1223(7)'' and 
     inserting ``1223(6)''.
       (4) Section 246(c)(3)(B) is amended by striking ``paragraph 
     (4) of section 1223'' and inserting ``paragraph (3) of 
     section 1223''.
       (5) Section 247(b)(2)(D) is amended by inserting ``as in 
     effect before its repeal'' after ``part VI of subchapter O''.
       (6)(A) Section 1245(b) is amended by striking paragraph (5) 
     and redesignating paragraphs (6) through (9) as paragraphs 
     (5) through (8), respectively.
       (B) Section 1245(b)(3) is amended by striking ``paragraph 
     (7)'' and inserting ``paragraph (6)''.
       (7)(A) Section 1250(d) is amended by striking paragraph (5) 
     and redesignating paragraphs (6) through (8) as paragraphs 
     (5) through (7), respectively.
       (B) Section 1250(e)(2) is amended by striking ``(3), or 
     (5)'' and inserting ``or (3)''.
       (b) Amendment Related to Section 1301.--Clause (ii) of 
     section 45(c)(3)(A) is amended by striking ``nonhazardous 
     lignin waste material'' and inserting ``lignin material''.
       (c) Amendments Related to Section 1303.--
       (1) Subsection (l) of section 54 is amended by striking 
     paragraph (5), and by redesignating paragraphs (6) and (7) as 
     paragraphs (5) and (6), respectively.
       (2) Subsection (e) of section 1303 of the Energy Policy Act 
     of 2005 is amended to read as follows:
       ``(e) Effective Dates.--
       ``(1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to bonds issued 
     after December 31, 2005.
       ``(2) Subsection (c).--The amendments made by subsection 
     (c) shall apply to taxable years beginning after December 31, 
     2005.''.
       (d) Amendments Related to Section 1306.--
       (1) Paragraph (2) of section 45J(c) is amended to read as 
     follows:
       ``(2) Phaseout of credit.--
       ``(A) In general.--The amount of the credit determined 
     under subsection (a) shall be reduced by an amount which 
     bears the same ratio to the amount of the credit (determined 
     without regard to this paragraph) as--
       ``(i) the amount by which the reference price (as defined 
     in section 45(e)(2)(C)) for the calendar year in which the 
     sale occurs exceeds 8 cents, bears to
       ``(ii) 3 cents.
       ``(B) Phaseout adjustment based on inflation.--The 8 cent 
     amount in subparagraph (A) shall be adjusted by multiplying 
     such amount by the inflation adjustment factor (as defined in 
     section 45(e)(2)(B)) for the calendar year in which the sale 
     occurs. If any amount as increased under the preceding 
     sentence is not a multiple of 0.1 cent, such amount shall be 
     rounded to the nearest multiple of 0.1 cent.''.
       (2) Subsection (e) of section 45J is amended by striking 
     ``(2),''.
       (e) Amendment Related to Section 1309.--Subparagraph (B) of 
     section 169(d)(5) is amended by adding at beginning thereof 
     ``in the case of facility placed in service in connection 
     with a plant or other property placed in operation after 
     December 31, 1975,''.
       (f) Amendments Related to Section 1311.--
       (1) Clause (i) of section 172(b)(1)(I) is amended to read 
     as follows:
       ``(i) In general.--At the election of the taxpayer for any 
     taxable year ending after December 31, 2005, and before 
     January 1, 2009, in the case of a net operating loss for a 
     taxable year ending after December 31, 2002, and before 
     January 1, 2006, there shall be a net operating loss 
     carryback to each of the 5 taxable years preceding the 
     taxable year of such loss to the extent that such loss does 
     not exceed 20 percent of the sum of the electric transmission 
     property capital expenditures and the pollution control 
     facility capital expenditures of the taxpayer for the taxable 
     year preceding the taxable year for which such election is 
     made.''.
       (2) Clause (ii) of section 172(b)(1)(I) is amended by 
     striking ``in a taxable year'' and inserting ``for a taxable 
     year''.
       (3) Subparagraph (I) of section 172(b)(1) is amended by 
     striking clause (iv) and (v), by redesignating clause (vi) as 
     clause (v), and by inserting after clause (iii) the 
     following:
       ``(iv) Special rules relating to credit or refund.--In the 
     case of the portion of the loss

[[Page 29104]]

     which is carried back 5 years by reason of clause (i)--

       ``(I) an application under section 6411(a) with respect to 
     such portion shall not fail to be treated as timely filed if 
     filed within 24 months after the due date specified under 
     such section, and
       ``(II) references in sections 6501(h), 6511(d)(2)(A), and 
     6611(f)(1) to the taxable year in which such net operating 
     loss arises or results in a net operating loss carryback 
     shall be treated as references to the taxable year for which 
     such election is made.''.

       (g) Amendment Related to Section 1322.--Subsection (a) of 
     section 45K is amended by striking ``if the taxpayer elects 
     to have this section apply,''.
       (h) Amendment Related to Section 1331.--Paragraph (3) of 
     section 1250(b) is amended by striking ``or by section 
     179D''.
       (i) Amendments Related to Section 1335.--
       (1) Paragraph (1) of section 25D(b) is amended by inserting 
     ``(determined without regard to subsection (c))'' after 
     ``subsection (a)''.
       (2) Subparagraphs (A) and (B) of section 25D(e)(4) are 
     amended to read as follows:
       ``(A) Maximum expenditures.--The maximum amount of 
     expenditures which may be taken into account under subsection 
     (a) by all such individuals with respect to such dwelling 
     unit during such calendar year shall be--
       ``(i) $6,667 in the case of any qualified photovoltaic 
     property expenditures,
       ``(ii) $6,667 in the case of any qualified solar water 
     heating property expenditures, and
       ``(iii) $1,667 in the case of each half kilowatt of 
     capacity of qualified fuel cell property (as defined in 
     section 48(c)(1)) for which qualified fuel cell property 
     expenditures are made.
       ``(B) Allocation of expenditures.--The expenditures 
     allocated to any individual for the taxable year in which 
     such calendar year ends shall be an amount equal to the 
     lesser of--
       ``(i) the amount of expenditures made by such individual 
     with respect to such dwelling during such calendar year, or
       ``(ii) the maximum amount of such expenditures set forth in 
     subparagraph (A) multiplied by a fraction--

       ``(I) the numerator of which is the amount of such 
     expenditures with respect to such dwelling made by such 
     individual during such calendar year, and
       ``(II) the denominator of which is the total expenditures 
     made by all such individuals with respect to such dwelling 
     during such calendar year.''.

       (3)(A)(i) The matter preceding subparagraph (A) of section 
     23(b)(4) is amended by striking ``The credit'' and inserting 
     ``In the case of a taxable year to which section 26(a)(2) 
     does not apply, the credit''.
       (ii) Subsection (c) of section 23 is amended to read as 
     follows:
       ``(c) Carryforwards of Unused Credit.--
       ``(1) Rule for years in which all personal credits allowed 
     against regular and alternative minimum tax.--In the case of 
     a taxable year to which section 26(a)(2) applies, if the 
     credit allowable under subsection (a) for any taxable year 
     exceeds the limitation imposed by section 26(a)(2) for such 
     taxable year reduced by the sum of the credits allowable 
     under this subpart (other than this section and sections 25D 
     and 1400C), such excess shall be carried to the succeeding 
     taxable year and added to the credit allowable under 
     subsection (a) for such taxable year.
       ``(2) Rule for other years.--In the case of a taxable year 
     to which section 26(a)(2) does not apply, if the credit 
     allowable under subsection (a) for any taxable year exceeds 
     the limitation imposed by subsection (b)(4) for such taxable 
     year, such excess shall be carried to the succeeding taxable 
     year and added to the credit allowable under subsection (a) 
     for such taxable year.
       ``(3) Limitation.--No credit may be carried forward under 
     this subsection to any taxable year following the fifth 
     taxable year after the taxable year in which the credit 
     arose. For purposes of the preceding sentence, credits shall 
     be treated as used on a first-in first-out basis.''.
       (B)(i) The matter preceding subparagraph (A) of section 
     24(b)(3) is amended by striking ``The credit'' and inserting 
     ``In the case of a taxable year to which section 26(a)(2) 
     does not apply, the credit''.
       (ii) Paragraph (1) of section 24(d) is amended to read as 
     follows:
       ``(1) In general.--The aggregate credits allowed to a 
     taxpayer under subpart C shall be increased by the lesser 
     of--
       ``(A) the credit which would be allowed under this section 
     without regard to this subsection and the limitation under 
     section 26(a)(2) or subsection (b)(3), as the case may be, or
       ``(B) the amount by which the aggregate amount of credits 
     allowed by this subpart (determined without regard to this 
     subsection) would increase if the limitation imposed by 
     section 26(a)(2) or subsection (b)(3), as the case may be, 
     were increased by the excess (if any) of--
       ``(i) 15 percent of so much of the taxpayer's earned income 
     (within the meaning of section 32) which is taken into 
     account in computing taxable income for the taxable year as 
     exceeds $10,000, or
       ``(ii) in the case of a taxpayer with 3 or more qualifying 
     children, the excess (if any) of--

       ``(I) the taxpayer's social security taxes for the taxable 
     year, over
       ``(II) the credit allowed under section for the taxable 
     year.

     The amount of the credit allowed under this subsection shall 
     not be treated as a credit allowed under this subpart and 
     shall reduce the amount of credit otherwise allowable under 
     subsection (a) without regard to section 26(a)(2) or 
     subsection (b)(3), as the case may be. For purposes of 
     subparagraph (B), any amount excluded from gross income by 
     reason of section 112 shall be treated as earned income which 
     is taken into account in computing taxable income for the 
     taxable year.''.
       (C) Subparagraph (C) of section 25(e)(1) is amended to read 
     as follows:
       ``(C) Applicable tax limit.--For purposes of this 
     paragraph, the term `applicable tax limit' means--
       ``(i) in the case of a taxable year to which section 
     26(a)(2) applies, the limitation imposed by section 26(a)(2) 
     for the taxable year reduced by the sum of the credits 
     allowable under this subpart (other than this section and 
     sections 23, 25D, and 1400C), and
       ``(ii) in the case of a taxable year to which section 
     26(a)(2) does not apply, the limitation imposed by section 
     26(a)(1) for the taxable year reduced by the sum of the 
     credits allowable under this subpart (other than this section 
     and sections 23, 24, 25B, 25D, and 1400C).''.
       (D) The matter preceding paragraph (1) of section 25B(g) is 
     amended by striking ``The credit'' and inserting ``In the 
     case of a taxable year to which section 26(a)(2) does not 
     apply, the credit''.
       (E) Subsection (c) of section 25D is amended to read as 
     follows:
       ``(c) Carryforward of Unused Credit.--
       ``(1) Rule for years in which all personal credits allowed 
     against regular and alternative minimum tax.--In the case of 
     a taxable year to which section 26(a)(2) applies, if the 
     credit allowable under subsection (a) exceeds the limitation 
     imposed by section 26(a)(2) for such taxable year reduced by 
     the sum of the credits allowable under this subpart (other 
     than this section), such excess shall be carried to the 
     succeeding taxable year and added to the credit allowable 
     under subsection (a) for such succeeding taxable year.
       ``(2) Rule for other years.--In the case of a taxable year 
     to which section 26(a)(2) does not apply, if the credit 
     allowable under subsection (a) exceeds the limitation imposed 
     by section 26(a)(1) for such taxable year reduced by the sum 
     of the credits allowable under this subpart (other than this 
     section and sections 23, 24, and 25B), such excess shall be 
     carried to the succeeding taxable year and added to the 
     credit allowable under subsection (a) for such succeeding 
     taxable year.''.
       (F) Subsection (d) of section 1400C is amended to read as 
     follows:
       ``(d) Carryforward of Unused Credit.--
       ``(1) Rule for years in which all personal credits allowed 
     against regular and alternative minimum tax.--In the case of 
     a taxable year to which section 26(a)(2) applies, if the 
     credit allowable under subsection (a) exceeds the limitation 
     imposed by section 26(a)(2) for such taxable year reduced by 
     the sum of the credits allowable under subpart A of part IV 
     of subchapter A (other than this section and section 25D), 
     such excess shall be carried to the succeeding taxable year 
     and added to the credit allowable under subsection (a) for 
     such taxable year.
       ``(2) Rule for other years.--In the case of a taxable year 
     to which section 26(a)(2) does not apply, if the credit 
     allowable under subsection (a) exceeds the limitation imposed 
     by section 26(a)(1) for such taxable year reduced by the sum 
     of the credits allowable under subpart A of part IV of 
     subchapter A (other than this section and sections 23, 24, 
     25B, and 25D), such excess shall be carried to the succeeding 
     taxable year and added to the credit allowable under 
     subsection (a) for such taxable year.''.
       (G) Subsection (i) of section 904 is amended to read as 
     follows:
       ``(i) Coordination With Nonrefundable Personal Credits.--In 
     the case of any taxable year of an individual to which 
     section 26(a)(2) does not apply, for purposes of subsection 
     (a), the tax against which the credit is taken is such tax 
     reduced by the sum of the credits allowable under subpart A 
     of part IV of subchapter A of this chapter (other than 
     sections 23, 24, and 25B).''.
       (H) Application of egtrra sunset.--The amendments made by 
     this paragraph (and each part thereof) shall be subject to 
     title IX of the Economic Growth and Tax Relief Reconciliation 
     Act of 2001 in the same manner as the provisions of such Act 
     to which such amendment (or part thereof) relates.
       (4) Subsection (b) of section 1335 of the Energy Policy Act 
     of 2005 is amended by striking paragraphs (1), (2), and (3). 
     The Internal Revenue Code of 1986 shall be applied and 
     administered as if the amendments made such paragraphs had 
     never been enacted.
       (j) Amendment Related to Section 1341.--Paragraph (6) of 
     section 30B(h) is amended by adding at the end the following 
     sentence: ``For purposes of subsection (g), property to which 
     this paragraph applies shall be treated as of a character 
     subject to an allowance for depreciation.''.
       (k) Amendment Related to Section 1342.--Paragraph (2) of 
     section 30C(e) is amended by adding at the end the following 
     sentence: ``For purposes of subsection (d), property to which 
     this paragraph applies shall be treated as of a character 
     subject to an allowance for depreciation.''.
       (l) Amendments Related to Section 1351.--
       (1) Paragraph (6) of section 41(f) (relating to special 
     rules) is amended by adding at the end the following:

[[Page 29105]]

       ``(C) Foreign research.--For purposes of subsection (a)(3), 
     amounts paid or incurred for any energy research conducted 
     outside the United States, the Commonwealth of Puerto Rico, 
     or any possession of the United States shall not be taken 
     into account.
       ``(D) Denial of double benefit.--Any amount taken into 
     account under subsection (a)(3) shall not be taken into 
     account under paragraph (1) or (2) of subsection (a).''.
       (2) Clause (ii) of section 41(b)(3)(C) is amended by 
     striking ``(other than an energy research consortium)''.
       (m) Effective Date.--
       (1) In general.--Except as provided in paragraphs (2) and 
     (3), the amendments made by this section shall take effect as 
     if included in the provisions of the Energy Policy Act of 
     2005 to which they relate.
       (2) Repeal of public utility holding company act of 1935.--
     The amendments made by subsection (a) shall not apply with 
     respect to any transaction ordered in compliance with the 
     Public Utility Holding Company Act of 1935 before its repeal.
       (3) Coordination of personal credits.--The amendments made 
     by subsection (i)(3) shall apply to taxable years beginning 
     after December 31, 2005.

     SEC. 403. AMENDMENTS RELATED TO THE AMERICAN JOBS CREATION 
                   ACT OF 2004.

       (a) Amendments Related to Section 102 of the Act.--
       (1) Paragraph (1) of section 199(b) is amended by striking 
     ``the employer'' and inserting ``the taxpayer''.
       (2) Paragraph (2) of section 199(b) is amended to read as 
     follows:
       ``(2) W-2 wages.--For purposes of this section, the term 
     `W-2 wages' means, with respect to any person for any taxable 
     year of such person, the sum of the amounts described in 
     paragraphs (3) and (8) of section 6051(a) paid by such person 
     with respect to employment of employees by such person during 
     the calendar year ending during such taxable year. Such term 
     shall not include any amount which is not properly included 
     in a return filed with the Social Security Administration on 
     or before the 60th day after the due date (including 
     extensions) for such return.''.
       (3) Subparagraph (B) of section 199(c)(1) is amended by 
     inserting ``and'' at the end of clause (i), by striking 
     clauses (ii) and (iii), and by inserting after clause (i) the 
     following:
       ``(ii) other expenses, losses, or deductions (other than 
     the deduction allowed under this section), which are properly 
     allocable to such receipts.''.
       (4) Paragraph (2) of section 199(c) is amended to read as 
     follows:
       ``(2) Allocation method.--The Secretary shall prescribe 
     rules for the proper allocation of items described in 
     paragraph (1) for purposes of determining qualified 
     production activities income. Such rules shall provide for 
     the proper allocation of items whether or not such items are 
     directly allocable to domestic production gross receipts.''.
       (5) Subparagraph (A) of section 199(c)(4) is amended by 
     striking clauses (ii) and (iii) and inserting the following 
     new clauses:
       ``(ii) in the case of a taxpayer engaged in the active 
     conduct of a construction trade or business, construction of 
     real property performed in the United States by the taxpayer 
     in the ordinary course of such trade or business, or
       ``(iii) in the case of a taxpayer engaged in the active 
     conduct of an engineering or architectural services trade or 
     business, engineering or architectural services performed in 
     the United States by the taxpayer in the ordinary course of 
     such trade or business with respect to the construction of 
     real property in the United States.''.
       (6) Subparagraph (B) of section 199(c)(4) is amended by 
     striking ``and'' at the end of clause (i), by striking the 
     period at the end of clause (ii) and inserting ``, or'', and 
     by adding at the end the following:
       ``(iii) the lease, rental, license, sale, exchange, or 
     other disposition of land.''.
       (7) Paragraph (4) of section 199(c) is amended by adding at 
     the end the following new subparagraphs:
       ``(C) Special rule for certain government contracts.--Gross 
     receipts derived from the manufacture or production of any 
     property described in subparagraph (A)(i)(I) shall be treated 
     as meeting the requirements of subparagraph (A)(i) if--
       ``(i) such property is manufactured or produced by the 
     taxpayer pursuant to a contract with the Federal Government, 
     and
       ``(ii) the Federal Acquisition Regulation requires that 
     title or risk of loss with respect to such property be 
     transferred to the Federal Government before the manufacture 
     or production of such property is complete.
       ``(D) Partnerships owned by expanded affiliated groups.--
     For purposes of this paragraph, if all of the interests in 
     the capital and profits of a partnership are owned by members 
     of a single expanded affiliated group at all times during the 
     taxable year of such partnership, the partnership and all 
     members of such group shall be treated as a single taxpayer 
     during such period.''.
       (8) Paragraph (1) of section 199(d) is amended to read as 
     follows:
       ``(1) Application of section to pass-thru entities.--
       ``(A) Partnerships and s corporations.--In the case of a 
     partnership or S corporation--
       ``(i) this section shall be applied at the partner or 
     shareholder level,
       ``(ii) each partner or shareholder shall take into account 
     such person's allocable share of each item described in 
     subparagraph (A) or (B) of subsection (c)(1) (determined 
     without regard to whether the items described in such 
     subparagraph (A) exceed the items described in such 
     subparagraph (B)), and
       ``(iii) each partner or shareholder shall be treated for 
     purposes of subsection (b) as having W-2 wages for the 
     taxable year in an amount equal to the lesser of--

       ``(I) such person's allocable share of the W-2 wages of the 
     partnership or S corporation for the taxable year (as 
     determined under regulations prescribed by the Secretary), or
       ``(II) 2 times 9 percent of so much of such person's 
     qualified production activities income as is attributable to 
     items allocated under clause (ii) for the taxable year.

       ``(B) Trusts and estates.--In the case of a trust or 
     estate--
       ``(i) the items referred to in subparagraph (A)(ii) (as 
     determined therein) and the W-2 wages of the trust or estate 
     for the taxable year, shall be apportioned between the 
     beneficiaries and the fiduciary (and among the beneficiaries) 
     under regulations prescribed by the Secretary, and
       ``(ii) for purposes of paragraph (2), adjusted gross income 
     of the trust or estate shall be determined as provided in 
     section 67(e) with the adjustments described in such 
     paragraph.
       ``(C) Regulations.--The Secretary may prescribe rules 
     requiring or restricting the allocation of items and wages 
     under this paragraph and may prescribe such reporting 
     requirements as the Secretary determines appropriate.''.
       (9) Paragraph (3) of section 199(d) is amended to read as 
     follows:
       ``(3) Agricultural and horticultural cooperatives.--
       ``(A) Deduction allowed to patrons.--Any person who 
     receives a qualified payment from a specified agricultural or 
     horticultural cooperative shall be allowed for the taxable 
     year in which such payment is received a deduction under 
     subsection (a) equal to the portion of the deduction allowed 
     under subsection (a) to such cooperative which is--
       ``(i) allowed with respect to the portion of the qualified 
     production activities income to which such payment is 
     attributable, and
       ``(ii) identified by such cooperative in a written notice 
     mailed to such person during the payment period described in 
     section 1382(d).
       ``(B) Cooperative denied deduction for portion of qualified 
     payments.--The taxable income of a specified agricultural or 
     horticultural cooperative shall not be reduced under section 
     1382 by reason of that portion of any qualified payment as 
     does not exceed the deduction allowable under subparagraph 
     (A) with respect to such payment.
       ``(C) Taxable income of cooperatives determined without 
     regard to certain deductions.--For purposes of this section, 
     the taxable income of a specified agricultural or 
     horticultural cooperative shall be computed without regard to 
     any deduction allowable under subsection (b) or (c) of 
     section 1382 (relating to patronage dividends, per-unit 
     retain allocations, and nonpatronage distributions).
       ``(D) Special rule for marketing cooperatives.--For 
     purposes of this section, a specified agricultural or 
     horticultural cooperative described in subparagraph (F)(ii) 
     shall be treated as having manufactured, produced, grown, or 
     extracted in whole or significant part any qualifying 
     production property marketed by the organization which its 
     patrons have so manufactured, produced, grown, or extracted.
       ``(E) Qualified payment.--For purposes of this paragraph, 
     the term `qualified payment' means, with respect to any 
     person, any amount which--
       ``(i) is described in paragraph (1) or (3) of section 
     1385(a),
       ``(ii) is received by such person from a specified 
     agricultural or horticultural cooperative, and
       ``(iii) is attributable to qualified production activities 
     income with respect to which a deduction is allowed to such 
     cooperative under subsection (a).
       ``(F) Specified agricultural or horticultural 
     cooperative.--For purposes of this paragraph, the term 
     `specified agricultural or horticultural cooperative' means 
     an organization to which part I of subchapter T applies which 
     is engaged--
       ``(i) in the manufacturing, production, growth, or 
     extraction in whole or significant part of any agricultural 
     or horticultural product, or
       ``(ii) in the marketing of agricultural or horticultural 
     products.''.
       (10) Clause (i) of section 199(d)(4)(B) is amended--
       (A) by striking ``50 percent'' and inserting ``more than 50 
     percent'', and
       (B) by striking ``80 percent'' and inserting ``at least 80 
     percent''.
       (11)(A) Paragraph (6) of section 199(d) is amended to read 
     as follows:
       ``(6) Coordination with minimum tax.--For purposes of 
     determining alternative minimum taxable income under section 
     55--
       ``(A) qualified production activities income shall be 
     determined without regard to any adjustments under sections 
     56 through 59, and
       ``(B) in the case of a corporation, subsection (a)(1)(B) 
     shall be applied by substituting `alternative minimum taxable 
     income' for `taxable income'.''.
       (B) Paragraph (2) of section 199(a) is amended by striking 
     ``subsections (d)(1) and (d)(6)'' and inserting ``subsection 
     (d)(1)''.

[[Page 29106]]

       (12) Subsection (d) of section 199 is amended by 
     redesignating paragraph (7) as paragraph (8) and by inserting 
     after paragraph (6) the following new paragraph:
       ``(7) Unrelated business taxable income.--For purposes of 
     determining the tax imposed by section 511, subsection 
     (a)(1)(B) shall be applied by substituting `unrelated 
     business taxable income' for `taxable income'.''.
       (13) Paragraph (8) of section 199(d), as redesignated by 
     paragraph (12), is amended by inserting ``, including 
     regulations which prevent more than 1 taxpayer from being 
     allowed a deduction under this section with respect to any 
     activity described in subsection (c)(4)(A)(i)'' before the 
     period at the end.
       (14) Clauses (i)(II) and (ii)(II) of section 56(d)(1)(A) 
     are each amended by striking ``such deduction'' and inserting 
     ``such deduction and the deduction under section 199''.
       (15) Clause (i) of section 163(j)(6)(A) is amended by 
     striking ``and'' at the end of subclause (II), by 
     redesignating subclause (III) as subclause (IV), and by 
     inserting after subclause (II) the following new subclause:

       ``(III) any deduction allowable under section 199, and''.

       (16) Paragraph (2) of section 170(b) is amended by 
     redesignating subparagraphs (C) and (D) as subparagraphs (D) 
     and (E), respectively, and by inserting after subparagraph 
     (B) the following new subparagraph:
       ``(C) section 199,''.
       (17) Subsection (d) of section 172 is amended by adding at 
     the end the following new paragraph:
       ``(7) Manufacturing deduction.--The deduction under section 
     199 shall not be allowed.''.
       (18) Paragraph (1) of section 613A(d) is amended by 
     redesignating subparagraphs (B), (C), and (D) as 
     subparagraphs (C), (D), and (E), respectively, and by 
     inserting after subparagraph (A) the following new 
     subparagraph:
       ``(B) any deduction allowable under section 199,''.
       (19) Subsection (e) of section 102 of the American Jobs 
     Creation Act of 2004 is amended to read as follows:
       ``(e) Effective Date.--
       ``(1) In general.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2004.
       ``(2) Application to pass-thru entities, etc.--In 
     determining the deduction under section 199 of the Internal 
     Revenue Code of 1986 (as added by this section), items 
     arising from a taxable year of a partnership, S corporation, 
     estate, or trust beginning before January 1, 2005, shall not 
     be taken into account for purposes of subsection (d)(1) of 
     such section.''.
       (b) Amendment Related to Section 231 of the Act.--Paragraph 
     (1) of section 1361(c) is amended to read as follows:
       ``(1) Members of a family treated as 1 shareholder.--
       ``(A) In general.--For purposes of subsection (b)(1)(A), 
     there shall be treated as one shareholder--
       ``(i) a husband and wife (and their estates), and
       ``(ii) all members of a family (and their estates).
       ``(B) Members of a family.--For purposes of this 
     paragraph--
       ``(i) In general.--The term `members of a family' means a 
     common ancestor, any lineal descendant of such common 
     ancestor, and any spouse or former spouse of such common 
     ancestor or any such lineal descendant.
       ``(ii) Common ancestor.--An individual shall not be 
     considered to be a common ancestor if, on the applicable 
     date, the individual is more than 6 generations removed from 
     the youngest generation of shareholders who would (but for 
     this subparagraph) be members of the family. For purposes of 
     the preceding sentence, a spouse (or former spouse) shall be 
     treated as being of the same generation as the individual to 
     whom such spouse is (or was) married.
       ``(iii) Applicable date.--The term `applicable date' means 
     the latest of--

       ``(I) the date the election under section 1362(a) is made,
       ``(II) the earliest date that an individual described in 
     clause (i) holds stock in the S corporation, or
       ``(III) October 22, 2004.

       ``(C) Effect of adoption, etc.--Any legally adopted child 
     of an individual, any child who is lawfully placed with an 
     individual for legal adoption by the individual, and any 
     eligible foster child of an individual (within the meaning of 
     section 152(f)(1)(C)), shall be treated as a child of such 
     individual by blood.''.
       (c) Amendment Related to Section 235 of the Act.--
     Subsection (b) of section 235 of the American Jobs Creation 
     Act of 2004 is amended by striking ``taxable years 
     beginning'' and inserting ``transfers''.
       (d) Amendments Related to Section 243 of the Act.--
       (1) Paragraph (7) of section 856(c) is amended to read as 
     follows:
       ``(7) Rules of application for failure to satisfy paragraph 
     (4).--
       ``(A) In general.--A corporation, trust, or association 
     that fails to meet the requirements of paragraph (4) (other 
     than a failure to meet the requirements of paragraph 
     (4)(B)(iii) which is described in subparagraph (B)(i) of this 
     paragraph) for a particular quarter shall nevertheless be 
     considered to have satisfied the requirements of such 
     paragraph for such quarter if--
       ``(i) following the corporation, trust, or association's 
     identification of the failure to satisfy the requirements of 
     such paragraph for a particular quarter, a description of 
     each asset that causes the corporation, trust, or association 
     to fail to satisfy the requirements of such paragraph at the 
     close of such quarter of any taxable year is set forth in a 
     schedule for such quarter filed in accordance with 
     regulations prescribed by the Secretary,
       ``(ii) the failure to meet the requirements of such 
     paragraph for a particular quarter is due to reasonable cause 
     and not due to willful neglect, and
       ``(iii)(I) the corporation, trust, or association disposes 
     of the assets set forth on the schedule specified in clause 
     (i) within 6 months after the last day of the quarter in 
     which the corporation, trust or association's identification 
     of the failure to satisfy the requirements of such paragraph 
     occurred or such other time period prescribed by the 
     Secretary and in the manner prescribed by the Secretary, or
       ``(II) the requirements of such paragraph are otherwise met 
     within the time period specified in subclause (I).
       ``(B) Rule for certain de minimis failures.--A corporation, 
     trust, or association that fails to meet the requirements of 
     paragraph (4)(B)(iii) for a particular quarter shall 
     nevertheless be considered to have satisfied the requirements 
     of such paragraph for such quarter if--
       ``(i) such failure is due to the ownership of assets the 
     total value of which does not exceed the lesser of--

       ``(I) 1 percent of the total value of the trust's assets at 
     the end of the quarter for which such measurement is done, 
     and
       ``(II) $10,000,000, and

       ``(ii)(I) the corporation, trust, or association, following 
     the identification of such failure, disposes of assets in 
     order to meet the requirements of such paragraph within 6 
     months after the last day of the quarter in which the 
     corporation, trust or association's identification of the 
     failure to satisfy the requirements of such paragraph 
     occurred or such other time period prescribed by the 
     Secretary and in the manner prescribed by the Secretary, or
       ``(II) the requirements of such paragraph are otherwise met 
     within the time period specified in subclause (I).
       ``(C) Tax.--
       ``(i) Tax imposed.--If subparagraph (A) applies to a 
     corporation, trust, or association for any taxable year, 
     there is hereby imposed on such corporation, trust, or 
     association a tax in an amount equal to the greater of--

       ``(I) $50,000, or
       ``(II) the amount determined (pursuant to regulations 
     promulgated by the Secretary) by multiplying the net income 
     generated by the assets described in the schedule specified 
     in subparagraph (A)(i) for the period specified in clause 
     (ii) by the highest rate of tax specified in section 11.

       ``(ii) Period.--For purposes of clause (i)(II), the period 
     described in this clause is the period beginning on the first 
     date that the failure to satisfy the requirements of such 
     paragraph (4) occurs as a result of the ownership of such 
     assets and ending on the earlier of the date on which the 
     trust disposes of such assets or the end of the first quarter 
     when there is no longer a failure to satisfy such paragraph 
     (4).
       ``(iii) Administrative provisions.--For purposes of 
     subtitle F, the taxes imposed by this subparagraph shall be 
     treated as excise taxes with respect to which the deficiency 
     procedures of such subtitle apply.''.
       (2) Subsection (m) of section 856 is amended by adding at 
     the end the following new paragraph:
       ``(6) Transition rule.--
       ``(A) In general.--Notwithstanding paragraph (2)(C), 
     securities held by a trust shall not be considered securities 
     held by the trust for purposes of subsection 
     (c)(4)(B)(iii)(III) during any period beginning on or before 
     October 22, 2004, if such securities--
       ``(i) are held by such trust continuously during such 
     period, and
       ``(ii) would not be taken into account for purposes of such 
     subsection by reason of paragraph (7)(C) of subsection (c) 
     (as in effect on October 22, 2004) if the amendments made by 
     section 243 of the American Jobs Creation Act of 2004 had 
     never been enacted.
       ``(B) Rule not to apply to securities held after maturity 
     date.--Subparagraph (A) shall not apply with respect to any 
     security after the later of October 22, 2004, or the latest 
     maturity date under the contract (as in effect on October 22, 
     2004) taking into account any renewal or extension permitted 
     under the contract if such renewal or extension does not 
     significantly modify any other terms of the contract.
       ``(C) Successors.--If the successor of a trust to which 
     this paragraph applies acquires securities in a transaction 
     to which section 381 applies, such trusts shall be treated as 
     a single entity for purposes of determining the holding 
     period of such securities under subparagraph (A).''.
       (3) Subparagraph (E) of section 857(b)(2) is amended by 
     striking ``section 856(c)(7)(B)(iii), and section 
     856(g)(1).'' and inserting ``section 856(c)(7)(C), and 
     section 856(g)(5)''.
       (4) Subsection (g) of section 243 of the American Jobs 
     Creation Act of 2004 is amended to read as follows:
       ``(g) Effective Dates.--
       ``(1) Subsections (a) and (b).--The amendments made by 
     subsections (a) and (b) shall apply to taxable years 
     beginning after December 31, 2000.
       ``(2) Subsections (c) and (e).--The amendments made by 
     subsections (c) and (e) shall

[[Page 29107]]

     apply to taxable years beginning after the date of the 
     enactment of this Act.
       ``(3) Subsection (d).--The amendment made by subsection (d) 
     shall apply to transactions entered into after December 31, 
     2004.
       ``(4) Subsection (f).--
       ``(A) The amendment made by paragraph (1) of subsection (f) 
     shall apply to failures with respect to which the 
     requirements of subparagraph (A) or (B) of section 856(c)(7) 
     of the Internal Revenue Code of 1986 (as added by such 
     paragraph) are satisfied after the date of the enactment of 
     this Act.
       ``(B) The amendment made by paragraph (2) of subsection (f) 
     shall apply to failures with respect to which the 
     requirements of paragraph (6) of section 856(c) of the 
     Internal Revenue Code of 1986 (as amended by such paragraph) 
     are satisfied after the date of the enactment of this Act.
       ``(C) The amendments made by paragraph (3) of subsection 
     (f) shall apply to failures with respect to which the 
     requirements of paragraph (5) of section 856(g) of the 
     Internal Revenue Code of 1986 (as added by such paragraph) 
     are satisfied after the date of the enactment of this Act.
       ``(D) The amendment made by paragraph (4) of subsection (f) 
     shall apply to taxable years ending after the date of the 
     enactment of this Act.
       ``(E) The amendments made by paragraph (5) of subsection 
     (f) shall apply to statements filed after the date of the 
     enactment of this Act.''.
       (e) Amendments Related to Section 244 of the Act.--
       (1) Paragraph (2) of section 181(d) is amended by striking 
     the last sentence in subparagraph (A), by redesignating 
     subparagraph (B) as subparagraph (C), and by inserting after 
     subparagraph (A) the following new subparagraph:
       ``(B) Special rules for television series.--In the case of 
     a television series--
       ``(i) each episode of such series shall be treated as a 
     separate production, and
       ``(ii) only the first 44 episodes of such series shall be 
     taken into account.''.
       (2) Subparagraph (C) of section 1245(a)(2) is amended by 
     inserting ``181,'' after ``179B,''.
       (f) Amendments Related to Section 245 of the Act.--
       (1) Subsection (b) of section 45G is amended to read as 
     follows:
       ``(b) Limitation.--
       ``(1) In general.--The credit allowed under subsection (a) 
     for any taxable year shall not exceed the product of--
       ``(A) $3,500, multiplied by
       ``(B) the sum of--
       ``(i) the number of miles of railroad track owned or leased 
     by the eligible taxpayer as of the close of the taxable year, 
     and
       ``(ii) the number of miles of railroad track assigned for 
     purposes of this subsection to the eligible taxpayer by a 
     Class II or Class III railroad which owns or leases such 
     railroad track as of the close of the taxable year.
       ``(2) Assignments.--With respect to any assignment of a 
     mile of railroad track under paragraph (1)(B)(ii)--
       ``(A) such assignment may be made only once per taxable 
     year of the Class II or Class III railroad and shall be 
     treated as made as of the close of such taxable year,
       ``(B) such mile may not be taken into account under this 
     section by such railroad for such taxable year, and
       ``(C) such assignment shall be taken into account for the 
     taxable year of the assignee which includes the date that 
     such assignment is treated as effective.''.
       (2) Paragraph (2) of section 45G(c) is amended to read as 
     follows:
       ``(2) any person who transports property using the rail 
     facilities of a Class II or Class III railroad or who 
     furnishes railroad-related property or services to a Class II 
     or Class III railroad, but only with respect to miles of 
     railroad track assigned to such person by such Class II or 
     Class III railroad for purposes of subsection (b).''.
       (g) Amendments Related to Section 248 of the Act.--
       (1)(A) Subsection (d) of section 1353 is amended by 
     striking ``ownership and charter interests'' and inserting 
     ``ownership, charter, and operating agreement interests''.
       (B) Subsection (a) of section 1355 is amended by striking 
     paragraph (8).
       (C) Paragraph (1) of section 1355(b) is amended to read as 
     follows:
       ``(1) In general.--Except as provided in paragraph (2), a 
     person is treated as operating any vessel during any period 
     if--
       ``(A)(i) such vessel is owned by, or chartered (including a 
     time charter) to, the person, or
       ``(ii) the person provides services for such vessel 
     pursuant to an operating agreement, and
       ``(B) such vessel is in use as a qualifying vessel during 
     such period.''.
       (D) Paragraph (3) of section 1355(d) is amended to read as 
     follows:
       ``(3) the extent of a partner's ownership, charter, or 
     operating agreement interest in any vessel operated by the 
     partnership shall be determined on the basis of the partner's 
     interest in the partnership.''.
       (2) Paragraph (3) of section 1355(c) is amended by striking 
     ``determined--'' and all that follows and inserting 
     ``determined by treating all members of such group as 1 
     person.''
       (3) Subsection (c) of section 1356 is amended--
       (A) by striking paragraph (3), and
       (B) by adding at the end of paragraph (2) the following new 
     flush sentence:
       ``Such term shall not include any core qualifying 
     activities.''.
       (4) The last sentence of section 1354(b) is amended by 
     inserting ``on or'' after ``only if made''.
       (h) Amendment Related to Section 314 of the Act.--Paragraph 
     (2) of section 55(c) is amended by striking ``regular tax'' 
     and inserting ``regular tax liability''.
       (i) Amendments Related to Section 322 of the Act.--
       (1)(A) Subparagraph (B) of section 194(b)(1) is amended to 
     read as follows:
       ``(B) Dollar limitation.--The aggregate amount of 
     reforestation expenditures which may be taken into account 
     under subparagraph (A) with respect to each qualified timber 
     property for any taxable year shall not exceed--
       ``(i) except as provided in clause (ii) or (iii), $10,000,
       ``(ii) in the case of a separate return by a married 
     individual (as defined in section 7703), $5,000, and
       ``(iii) in the case of a trust, zero.''.
       (B) Paragraph (4) of section 194(c) is amended to read as 
     follows:
       ``(4) Treatment of trusts and estates.--The aggregate 
     amount of reforestation expenditures incurred by any trust or 
     estate shall be apportioned between the income beneficiaries 
     and the fiduciary under regulations prescribed by the 
     Secretary. Any amount so apportioned to a beneficiary shall 
     be taken into account as expenditures incurred by such 
     beneficiary in applying this section to such beneficiary.''.
       (2) Subparagraph (C) of section 1245(a)(2) is amended by 
     striking ``or 193'' and inserting ``193, or 194''.
       (j) Amendments Related to Section 336 of the Act.--
       (1) Clause (iv) of section 168(k)(2)(A) is amended by 
     striking ``subparagraphs (B) and (C)'' and inserting 
     ``subparagraph (B) or (C)''.
       (2) Clause (iii) of section 168(k)(4)(B) is amended by 
     striking ``and paragraph (2)(C)'' and inserting ``or 
     paragraph (2)(C) (as so modified)''.
       (k) Amendment Related to Section 402 of the Act.--Paragraph 
     (2) of section 904(g) is amended to read as follows:
       ``(2) Overall domestic loss.--For purposes of this 
     subsection--
       ``(A) In general.--The term `overall domestic loss' means--
       ``(i) with respect to any qualified taxable year, the 
     domestic loss for such taxable year to the extent such loss 
     offsets taxable income from sources without the United States 
     for the taxable year or for any preceding qualified taxable 
     year by reason of a carryback, and
       ``(ii) with respect to any other taxable year, the domestic 
     loss for such taxable year to the extent such loss offsets 
     taxable income from sources without the United States for any 
     preceding qualified taxable year by reason of a carryback.
       ``(B) Domestic loss.--For purposes of subparagraph (A), the 
     term `domestic loss' means the amount by which the gross 
     income for the taxable year from sources within the United 
     States is exceeded by the sum of the deductions properly 
     apportioned or allocated thereto (determined without regard 
     to any carryback from a subsequent taxable year).
       ``(C) Qualified taxable year.--For purposes of subparagraph 
     (A), the term `qualified taxable year' means any taxable year 
     for which the taxpayer chose the benefits of this subpart.''.
       (l) Amendment Related to Section 403 of the Act.--Section 
     403 of the American Jobs Creation Act of 2004 is amended by 
     adding at the end the following new subsection:
       ``(d) Transition Rule.--If the taxpayer elects (at such 
     time and in such form and manner as the Secretary of the 
     Treasury may prescribe) to have the rules of this subsection 
     apply--
       ``(1) the amendments made by this section shall not apply 
     to taxable years beginning after December 31, 2002, and 
     before January 1, 2005, and
       ``(2) in the case of taxable years beginning after December 
     31, 2004, clause (iv) of section 904(d)(4)(C) of the Internal 
     Revenue Code of 1986 (as amended by this section) shall be 
     applied by substituting `January 1, 2005' for `January 1, 
     2003' both places it appears.''.
       (m) Amendment Related to Section 412 of the Act.--
     Subparagraph (B) of section 954(c)(4) is amended by adding at 
     the end the following: ``If a controlled foreign corporation 
     is treated as owning a capital or profits interest in a 
     partnership under constructive ownership rules similar to the 
     rules of section 958(b), the controlled foreign corporation 
     shall be treated as owning such interest directly for 
     purposes of this subparagraph.''.
       (n) Amendments Related to Section 413 of the Act.-- or 
     purposes of this subparagraph.''.
       (n) Amendments Related to Section 413 of the Act.--
       (1) Subsection (b) of section 532 is amended by striking 
     paragraph (2) and redesignating paragraphs (3) and (4) as 
     paragraphs (2) and (3), respectively.
       (2) Subsection (b) of section 535 is amended by adding at 
     the end the following new paragraph:
       ``(10) Controlled foreign corporations.--There shall be 
     allowed as a deduction the amount of the corporation's income 
     for the taxable year which is included in the gross income of 
     a United States shareholder under section 951(a). In the case 
     of any corporation the accumulated taxable income of which 
     would (but for this sentence) be determined without allowance 
     of any deductions, the deduction under this paragraph shall 
     be allowed and shall be appropriately adjusted to take into 
     account any deductions which reduced such inclusion.''.
       (3)(A) Section 6683 is repealed.

[[Page 29108]]

       (B) The table of sections for part I of subchapter B of 
     chapter 68 is amended by striking the item relating to 
     section 6683.
       (o) Amendment Related to Section 415 of the Act.--
     Subparagraph (D) of section 904(d)(2) is amended by inserting 
     ``as in effect before its repeal'' after ``section 954(f)''.
       (p) Amendments Related to Section 418 of the Act.--
       (1) The second sentence of section 897(h)(1) is amended--
       (A) by striking ``any distribution'' and all that follows 
     through ``any class of stock'' and inserting ``any 
     distribution by a real estate investment trust with respect 
     to any class of stock'', and
       (B) by striking ``the taxable year'' and inserting ``the 1-
     year period ending on the date of the distribution''.
       (2) Subsection (c) of section 418 of the American Jobs 
     Creation Act of 2004 is amended to read as follows:
       ``(c) Effective Date.--The amendments made by this section 
     shall apply to--
       ``(1) any distribution by a real estate investment trust 
     which is treated as a deduction for a taxable year of such 
     trust beginning after the date of the enactment of this Act, 
     and
       ``(2) any distribution by a real estate investment trust 
     made after such date which is treated as a deduction under 
     section 860 for a taxable year of such trust beginning on or 
     before such date.''.
       (q) Amendments Related to Section 422 of the Act.--
       (1) Subparagraph (B) of section 965(a)(2) is amended by 
     inserting ``from another controlled foreign corporation in 
     such chain of ownership'' before ``, but only to the 
     extent''.
       (2) Subparagraph (A) of section 965(b)(2) is amended by 
     inserting ``cash'' before ``dividends''.
       (3) Paragraph (3) of section 965(b) is amended by adding at 
     the end the following: ``The Secretary may prescribe such 
     regulations as may be necessary or appropriate to prevent the 
     avoidance of the purposes of this paragraph, including 
     regulations which provide that cash dividends shall not be 
     taken into account under subsection (a) to the extent such 
     dividends are attributable to the direct or indirect transfer 
     (including through the use of intervening entities or capital 
     contributions) of cash or other property from a related 
     person (as so defined) to a controlled foreign 
     corporation.''.
       (4) Paragraph (1) of section 965(c) is amended to read as 
     follows:
       ``(1) Applicable financial statement.--The term `applicable 
     financial statement' means--
       ``(A) with respect to a United States shareholder which is 
     required to file a financial statement with the Securities 
     and Exchange Commission (or which is included in such a 
     statement so filed by another person), the most recent 
     audited annual financial statement (including the notes which 
     form an integral part of such statement) of such shareholder 
     (or which includes such shareholder)--
       ``(i) which was so filed on or before June 30, 2003, and
       ``(ii) which was certified on or before June 30, 2003, as 
     being prepared in accordance with generally accepted 
     accounting principles, and
       ``(B) with respect to any other United States shareholder, 
     the most recent audited financial statement (including the 
     notes which form an integral part of such statement) of such 
     shareholder (or which includes such shareholder)--
       ``(i) which was certified on or before June 30, 2003, as 
     being prepared in accordance with generally accepted 
     accounting principles, and
       ``(ii) which is used for the purposes of a statement or 
     report--

       ``(I) to creditors,
       ``(II) to shareholders, or
       ``(III) for any other substantial nontax purpose.''.

       (5) Paragraph (2) of section 965(d) is amended by striking 
     ``properly allocated and apportioned'' and inserting 
     ``directly allocable''.
       (6) Subsection (d) of section 965 is amended by adding at 
     the end the following new paragraph:
       ``(4) Coordination with section 78.--Section 78 shall not 
     apply to any tax which is not allowable as a credit under 
     section 901 by reason of this subsection.''.
       (7) The last sentence of section 965(e)(1) is amended by 
     inserting ``which are imposed by foreign countries and 
     possessions of the United States and are'' after ``taxes''.
       (8) Subsection (f) of section 965 is amended by inserting 
     ``on or'' before ``before the due date''.
       (r) Amendments Related to Section 501 of the Act.--
       (1) Subparagraph (A) of section 164(b)(5) is amended to 
     read as follows:
       ``(A) Election to deduct state and local sales taxes in 
     lieu of state and local income taxes.--At the election of the 
     taxpayer for the taxable year, subsection (a) shall be 
     applied--
       ``(i) without regard to the reference to State and local 
     income taxes, and
       ``(ii) as if State and local general sales taxes were 
     referred to in a paragraph thereof.''.
       (2) Clause (ii) of section 56(b)(1)(A) is amended by 
     inserting ``or clause (ii) of section 164(b)(5)(A)'' before 
     the period at the end.
       (s) Amendments Related to Section 708 of the Act.--Section 
     708 of the American Jobs Creation Act of 2004 is amended--
       (1) in subsection (a), by striking ``contract commencement 
     date'' and inserting ``construction commencement date'', and
       (2) by redesignating subsection (d) as subsection (e) and 
     inserting after subsection (c) the following new subsection:
       ``(d) Certain Adjustments Not to Apply.--Section 481 of the 
     Internal Revenue Code of 1986 shall not apply with respect to 
     any change in the method of accounting which is required by 
     this section.''.
       (t) Amendment Related to Section 710 of the Act.--Clause 
     (i) of section 45(c)(7)(A) is amended by striking 
     ``synthetic''.
       (u) Amendment Related to Section 801 of the Act.--Paragraph 
     (3) of section 7874(a) is amended to read as follows:
       ``(3) Coordination with subsection (b).--A corporation 
     which is treated as a domestic corporation under subsection 
     (b) shall not be treated as a surrogate foreign corporation 
     for purposes of paragraph (2)(A).''.
       (v) Amendments Related to Section 804 of the Act.--
       (1) Subparagraph (C) of section 877(g)(2) is amended by 
     striking ``section 7701(b)(3)(D)(ii)'' and inserting 
     ``section 7701(b)(3)(D)''.
       (2) Subsection (n) of section 7701 is amended to read as 
     follows:
       ``(n) Special Rules for Determining When an Individual Is 
     No Longer a United States Citizen or Long-Term Resident.--For 
     purposes of this chapter--
       ``(1) United states citizens.--An individual who would (but 
     for this paragraph) cease to be treated as a citizen of the 
     United States shall continue to be treated as a citizen of 
     the United States until such individual--
       ``(A) gives notice of an expatriating act (with the 
     requisite intent to relinquish citizenship) to the Secretary 
     of State, and
       ``(B) provides a statement in accordance with section 6039G 
     (if such a statement is otherwise required).
       ``(2) Long-term residents.--A long-term resident (as 
     defined in section 877(e)(2)) who would (but for this 
     paragraph) be described in section 877(e)(1) shall be treated 
     as a lawful permanent resident of the United States and as 
     not described in section 877(e)(1) until such individual--
       ``(A) gives notice of termination of residency (with the 
     requisite intent to terminate residency) to the Secretary of 
     Homeland Security, and
       ``(B) provides a statement in accordance with section 6039G 
     (if such a statement is otherwise required).''.
       (w) Amendment Related to Section 811 of the Act.--
     Subsection (c) of section 811 of the American Jobs Creation 
     Act of 2004 is amended by inserting ``and which were not 
     filed before such date'' before the period at the end.
       (x) Amendments Related to Section 812 of the Act.--
       (1) Subsection (b) of section 6662 is amended by adding at 
     the end the following new sentence: ``Except as provided in 
     paragraph (1) or (2)(B) of section 6662A(e), this section 
     shall not apply to the portion of any underpayment which is 
     attributable to a reportable transaction understatement on 
     which a penalty is imposed under section 6662A.''
       (2) Paragraph (2) of section 6662A(e) is amended to read as 
     follows:
       ``(2) Coordination with other penalties.--
       ``(A) Coordination with fraud penalty.--This section shall 
     not apply to any portion of an understatement on which a 
     penalty is imposed under section 6663.
       ``(B) Coordination with gross valuation misstatement 
     penalty.--This section shall not apply to any portion of an 
     understatement on which a penalty is imposed under section 
     6662 if the rate of the penalty is determined under section 
     6662(h).''.
       (3) Subsection (f) of section 812 of the American Jobs 
     Creation Act of 2004 is amended to read as follows:
       ``(f) Effective Dates.--
       ``(1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to taxable years 
     ending after the date of the enactment of this Act.
       ``(2) Disqualified opinions.--Section 6664(d)(3)(B) of the 
     Internal Revenue Code of 1986 (as added by subsection (c)) 
     shall not apply to the opinion of a tax advisor if--
       ``(A) the opinion was provided to the taxpayer before the 
     date of the enactment of this Act,
       ``(B) the opinion relates to one or more transactions all 
     of which were entered into before such date, and
       ``(C) the tax treatment of items relating to each such 
     transaction was included on a return or statement filed by 
     the taxpayer before such date.''.
       (y) Amendment Related to Section 814 of the Act.--
     Subparagraph (B) of section 6501(c)(10) is amended by 
     striking ``(as defined in section 6111)''.
       (z) Amendment Related to Section 815 of the Act.--Paragraph 
     (1) of section 6112(b) is amended by inserting ``(or was 
     required to maintain a list under subsection (a) as in effect 
     before the enactment of the American Jobs Creation Act of 
     2004)'' after ``a list under subsection (a)''.
       (aa) Amendments Related to Section 832 of the Act.--
       (1) Subsection (e) of section 853 is amended to read as 
     follows:
       ``(e) Treatment of Certain Taxes Not Allowed as a Credit 
     Under Section 901.--This section shall not apply to any tax 
     with respect to which the regulated investment company is not 
     allowed a credit under section 901 by reason of subsection 
     (k) or (l) of such section.''.
       (2) Clause (i) of section 901(l)(2)(C) is amended by 
     striking ``if such security were stock''.
       (bb) Amendments Related to Section 833 of the Act.--

[[Page 29109]]

       (1) Subsection (a) of section 734 is amended by inserting 
     ``with respect to such distribution'' before the period at 
     the end.
       (2) So much of subsection (b) of section 734 as precedes 
     paragraph (1) is amended to read as follows:
       ``(b) Method of Adjustment.--In the case of a distribution 
     of property to a partner by a partnership with respect to 
     which the election provided in section 754 is in effect or 
     with respect to which there is a substantial basis reduction, 
     the partnership shall--''.
       (cc) Amendment Related to Section 835 of the Act.--
     Paragraph (3) of section 860G(a) is amended--
       (1) in subparagraph (A)(iii)(I), by striking ``the 
     obligation'' and inserting ``a reverse mortgage loan or other 
     obligation'', and
       (2) by striking all that follows subparagraph (C) and 
     inserting the following:
     ``For purposes of subparagraph (A), any obligation secured by 
     stock held by a person as a tenant-stockholder (as defined in 
     section 216) in a cooperative housing corporation (as so 
     defined) shall be treated as secured by an interest in real 
     property. For purposes of subparagraph (A), any obligation 
     originated by the United States or any State (or any 
     political subdivision, agency, or instrumentality of the 
     United States or any State) shall be treated as principally 
     secured by an interest in real property if more than 50 
     percent of such obligations which are transferred to, or 
     purchased by, the REMIC are principally secured by an 
     interest in real property (determined without regard to this 
     sentence).''.
       (dd) Amendments Related to Section 836 of the Act.--
       (1) Paragraph (1) of section 334(b) is amended by striking 
     ``except that'' and all that follows and inserting ``except 
     that, in the hands of such distributee--
       ``(A) the basis of such property shall be the fair market 
     value of the property at the time of the distribution in any 
     case in which gain or loss is recognized by the liquidating 
     corporation with respect to such property, and
       ``(B) the basis of any property described in section 
     362(e)(1)(B) shall be the fair market value of the property 
     at the time of the distribution in any case in which such 
     distributee's aggregate adjusted basis of such property would 
     (but for this subparagraph) exceed the fair market value of 
     such property immediately after such liquidation.''.
       (2) Clause (ii) of section 362(e)(2)(C) is amended to read 
     as follows:
       ``(ii) Election.--Any election under clause (i) shall be 
     made at such time and in such form and manner as the 
     Secretary may prescribe, and, once made, shall be 
     irrevocable.''.
       (ee) Amendment Related to Section 840 of the Act.--
     Subsection (d) of section 121 is amended--
       (1) by redesignating the paragraph (10) relating to 
     property acquired from a decedent as paragraph (11) and by 
     moving such paragraph to the end of such subsection, and
       (2) by amending the paragraph (10) relating to property 
     acquired in like-kind exchange to read as follows:
       ``(10) Property acquired in like-kind exchange.--If a 
     taxpayer acquires property in an exchange with respect to 
     which gain is not recognized (in whole or in part) to the 
     taxpayer under subsection (a) or (b) of section 1031, 
     subsection (a) shall not apply to the sale or exchange of 
     such property by such taxpayer (or by any person whose basis 
     in such property is determined, in whole or in part, by 
     reference to the basis in the hands of such taxpayer) during 
     the 5-year period beginning with the date of such 
     acquisition.''.
       (ff) Amendment Related to Section 849 of the Act.--
     Subsection (a) of section 849 of the American Jobs Creation 
     Act of 2004 is amended by inserting ``, and in the case of 
     property treated as tax-exempt use property other than by 
     reason of a lease, to property acquired after March 12, 
     2004'' before the period at the end.
       (gg) Amendment Related to Section 884 of the Act.--
     Subparagraph (B) of section 170(f)(12) is amended by adding 
     at the end the following new clauses:
       ``(v) Whether the donee organization provided any goods or 
     services in consideration, in whole or in part, for the 
     qualified vehicle.
       ``(vi) A description and good faith estimate of the value 
     of any goods or services referred to in clause (v) or, if 
     such goods or services consist solely of intangible religious 
     benefits (as defined in paragraph (8)(B)), a statement to 
     that effect.''.
       (hh) Amendments Related to Section 885 of the Act.--
       (1) Paragraph (2) of section 26(b) is amended by striking 
     ``and'' at the end of subparagraph (R), by striking the 
     period at the end of subparagraph (S) and inserting ``, 
     and'', and by adding at the end the following new 
     subparagraph:
       ``(T) subsections (a)(1)(B)(i) and (b)(4)(A) of section 
     409A (relating to interest and additional tax with respect to 
     certain deferred compensation).''.
       (2) Clause (ii) of section 409A(a)(4)(C) is amended by 
     striking ``first''.
       (3)(A) Notwithstanding section 885(d)(1) of the American 
     Jobs Creation Act of 2004, subsection (b) of section 409A of 
     the Internal Revenue Code of 1986 shall take effect on 
     January 1, 2005.
       (B) Not later than 90 days after the date of the enactment 
     of this Act, the Secretary of the Treasury shall issue 
     guidance under which a nonqualified deferred compensation 
     plan which is in violation of the requirements of section 
     409A(b) of such Code shall be treated as not having violated 
     such requirements if such plan comes into conformance with 
     such requirements during such limited period as the Secretary 
     may specify in such guidance.
       (4) Subsection (f) of section 885 of the American Jobs 
     Creation Act of 2004 is amended by striking ``December 31, 
     2004'' the first place it appears and inserting ``January 1, 
     2005''.
       (ii) Amendment Related to Section 888 of the Act.--
     Paragraph (2) of section 1092(a) is amended by striking the 
     last sentence and adding at the end the following new 
     subparagraph:
       ``(C) Regulations.--The Secretary shall prescribe such 
     regulations or other guidance as may be necessary or 
     appropriate to carry out the purposes of this paragraph. Such 
     regulations or other guidance may specify the proper methods 
     for clearly identifying a straddle as an identified straddle 
     (and for identifying the positions comprising such straddle), 
     the rules for the application of this section to a taxpayer 
     which fails to comply with those identification requirements, 
     and the ordering rules in cases where a taxpayer disposes (or 
     otherwise ceases to be the holder) of any part of any 
     position which is part of an identified straddle.''.
       (jj) Amendments Related to Section 898 of the Act.--
       (1) Paragraph (3) of section 361(b) is amended by inserting 
     ``(reduced by the amount of the liabilities assumed (within 
     the meaning of section 357(c)))'' before the period at the 
     end.
       (2) Paragraph (1) of section 357(d) is amended by inserting 
     ``section 361(b)(3),'' after ``section 358(h),''.
       (kk) Amendment Related to Section 899 of the Act.--
     Subparagraph (A) of section 351(g)(3) is amended by adding at 
     the end the following: ``If there is not a real and 
     meaningful likelihood that dividends beyond any limitation or 
     preference will actually be paid, the possibility of such 
     payments will be disregarded in determining whether stock is 
     limited and preferred as to dividends.''.
       (ll) Amendment Related to Section 902 of the Act.--
     Paragraph (1) of section 709(b) is amended by striking 
     ``taxpayer'' both places it appears and inserting 
     ``partnership''.
       (mm) Amendments Related to Section 907 of the Act.--Clause 
     (ii) of section 274(e)(2)(B) is amended--
       (1) in subclause (I), by inserting ``or a related party to 
     the taxpayer'' after ``the taxpayer'',
       (2) in subclause (II), by inserting ``(or such related 
     party)'' after ``the taxpayer'', and
       (3) by adding at the end the following new flush sentence:
     ``For purposes of this clause, a person is a related party 
     with respect to another person if such person bears a 
     relationship to such other person described in section 267(b) 
     or 707(b).''.
       (nn) Effective Date.--The amendments made by this section 
     shall take effect as if included in the provisions of the 
     American Jobs Creation Act of 2004 to which they relate.

     SEC. 404. AMENDMENTS RELATED TO THE WORKING FAMILIES TAX 
                   RELIEF ACT OF 2004.

       (a) Amendment Related to Section 201 of the Act.--
     Subsection (e) of section 152 is amended to read as follows:
       ``(e) Special Rule for Divorced Parents, Etc.--
       ``(1) In general.--Notwithstanding subsection (c)(1)(B), 
     (c)(4), or (d)(1)(C), if--
       ``(A) a child receives over one-half of the child's support 
     during the calendar year from the child's parents--
       ``(i) who are divorced or legally separated under a decree 
     of divorce or separate maintenance,
       ``(ii) who are separated under a written separation 
     agreement, or
       ``(iii) who live apart at all times during the last 6 
     months of the calendar year, and--
       ``(B) such child is in the custody of 1 or both of the 
     child's parents for more than one-half of the calendar year, 
     such child shall be treated as being the qualifying child or 
     qualifying relative of the noncustodial parent for a calendar 
     year if the requirements described in paragraph (2) or (3) 
     are met.
       ``(2) Exception where custodial parent releases claim to 
     exemption for the year.--For purposes of paragraph (1), the 
     requirements described in this paragraph are met with respect 
     to any calendar year if--
       ``(A) the custodial parent signs a written declaration (in 
     such manner and form as the Secretary may by regulations 
     prescribe) that such custodial parent will not claim such 
     child as a dependent for any taxable year beginning in such 
     calendar year, and
       ``(B) the noncustodial parent attaches such written 
     declaration to the noncustodial parent's return for the 
     taxable year beginning during such calendar year.
       ``(3) Exception for certain pre-1985 instruments.--
       ``(A) In general .--For purposes of paragraph (1), the 
     requirements described in this paragraph are met with respect 
     to any calendar year if--
       ``(i) a qualified pre-1985 instrument between the parents 
     applicable to the taxable year beginning in such calendar 
     year provides that the noncustodial parent shall be entitled 
     to any deduction allowable under section 151 for such child, 
     and
       ``(ii) the noncustodial parent provides at least $600 for 
     the support of such child during such calendar year.

     For purposes of this subparagraph, amounts expended for the 
     support of a child or children shall be treated as received 
     from the noncustodial parent to the extent that such parent 
     provided amounts for such support.

[[Page 29110]]

       ``(B) Qualified pre-1985 instrument.--For purposes of this 
     paragraph, the term `qualified pre-1985 instrument' means any 
     decree of divorce or separate maintenance or written 
     agreement--
       ``(i) which is executed before January 1, 1985,
       ``(ii) which on such date contains the provision described 
     in subparagraph (A)(i), and
       ``(iii) which is not modified on or after such date in a 
     modification which expressly provides that this paragraph 
     shall not apply to such decree or agreement.
       ``(4) Custodial parent and noncustodial parent.--For 
     purposes of this subsection--
       ``(A) Custodial parent.--The term `custodial parent' means 
     the parent having custody for the greater portion of the 
     calendar year.
       ``(B) Noncustodial parent.--The term `noncustodial parent' 
     means the parent who is not the custodial parent.
       ``(5) Exception for multiple-support agreement.--This 
     subsection shall not apply in any case where over one-half of 
     the support of the child is treated as having been received 
     from a taxpayer under the provision of subsection (d)(3).
       ``(6) Special rule for support received from new spouse of 
     parent.--For purposes of this subsection, in the case of the 
     remarriage of a parent, support of a child received from the 
     parent's spouse shall be treated as received from the 
     parent.''.
       (b) Amendment Related to Section 203 of the Act.--
     Subparagraph (B) of section 21(b)(1) is amended by inserting 
     ``(as defined in section 152, determined without regard to 
     subsections (b)(1), (b)(2), and (d)(1)(B))'' after 
     ``dependent of the taxpayer''.
       (c) Amendment Related to Section 207 of the Act.--
     Subparagraph (A) of section 223(d)(2) is amended by inserting 
     ``, determined without regard to subsections (b)(1), (b)(2), 
     and (d)(1)(B) thereof'' after ``section 152''.
       (d) Effective Date.--The amendments made by this section 
     shall take effect as if included in the provisions of the 
     Working Families Tax Relief Act of 2004 to which they relate.

     SEC. 405. AMENDMENTS RELATED TO THE JOBS AND GROWTH TAX 
                   RELIEF RECONCILIATION ACT OF 2003.

       (a) Amendments Related to Section 201 of the Act.--
       (1) Clause (ii) of section 168(k)(4)(B) is amended to read 
     as follows:
       ``(ii) which is--

       ``(I) acquired by the taxpayer after May 5, 2003, and 
     before January 1, 2005, but only if no written binding 
     contract for the acquisition was in effect before May 6, 
     2003, or
       ``(II) acquired by the taxpayer pursuant to a written 
     binding contract which was entered into after May 5, 2003, 
     and before January 1, 2005, and''.

       (2) Subparagraph (D) of section 1400L(b)(2) is amended by 
     striking ``September 11, 2004'' and inserting ``January 1, 
     2005''.
       (b) Effective Date.--The amendments made by this section 
     shall take effect as if included in section 201 of the Jobs 
     and Growth Tax Relief and Reconciliation Act of 2003.

     SEC. 406. AMENDMENT RELATED TO THE VICTIMS OF TERRORISM TAX 
                   RELIEF ACT OF 2001.

       (a) Amendment Related to Section 201 of the Act.--Paragraph 
     (17) of section 6103(l) is amended by striking ``subsection 
     (f), (i)(7), or (p)'' and inserting ``subsection (f), (i)(8), 
     or (p)''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect as if included in section 201 of the 
     Victims of Terrorism Tax Relief Act of 2001.

     SEC. 407. AMENDMENTS RELATED TO THE ECONOMIC GROWTH AND TAX 
                   RELIEF RECONCILIATION ACT OF 2001.

       (a) Amendments Related to Section 617 of the Act.--
       (1) Clause (ii) of section 402(g)(7)(A) is amended to read 
     as follows:
       ``(ii) $15,000 reduced by the sum of--

       ``(I) the amounts not included in gross income for prior 
     taxable years by reason of this paragraph, plus
       ``(II) the aggregate amount of designated Roth 
     contributions (as defined in section 402A(c)) for prior 
     taxable years, or''.

       (2) Subparagraph (A) of section 402(g)(1) is amended by 
     inserting ``to'' after ``shall not apply''.
       (b) Amendment Related to Section 632 of the Act.--
     Subparagraph (C) of section 415(c)(7) is amended by striking 
     ``the greater of $3,000'' and all that follows and inserting 
     ``$3,000. This subparagraph shall not apply with respect to 
     any taxable year to any individual whose adjusted gross 
     income for such taxable year (determined separately and 
     without regard to community property laws) exceeds 
     $17,000.''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect as if included in the provisions of the 
     Economic Growth and Tax Relief Reconciliation Act of 2001 to 
     which they relate.

     SEC. 408. AMENDMENTS RELATED TO THE INTERNAL REVENUE SERVICE 
                   RESTRUCTURING AND REFORM ACT OF 1998.

       (a) Amendments Related to Section 3415 of the Act.--
       (1) Paragraph (2) of section 7609(c) is amended by 
     inserting ``or'' at the end of subparagraph (D), by striking 
     ``; or'' at the end of subparagraph (E) and inserting a 
     period, and by striking subparagraph (F).
       (2) Subsection (c) of section 7609 is amended by 
     redesignating paragraph (3) as paragraph (4) and by inserting 
     after paragraph (2) the following new paragraph:
       ``(3) John doe and certain other summonses.--Subsection (a) 
     shall not apply to any summons described in subsection (f) or 
     (g).''.
       (b) Effective Date.--The amendments made by this section 
     shall take effect as if included in section 3415 of the 
     Internal Revenue Service Restructuring and Reform Act of 
     1998.

     SEC. 409. AMENDMENTS RELATED TO THE TAXPAYER RELIEF ACT OF 
                   1997.

       (a) Amendments Related to Section 1055 of the Act.--
       (1) The last sentence of section 6411(a) is amended by 
     striking ``6611(f)(3)(B)'' and inserting ``6611(f)(4)(B)''.
       (2) Paragraph (4) of section 6601(d) is amended by striking 
     ``6611(f)(3)(A)'' and inserting ``6611(f)(4)(A)''.
       (b) Amendment Related to Section 1112 of the Act.--
     Subsection (c) of section 961 is amended to read as follows:
       ``(c) Basis Adjustments in Stock Held by Foreign 
     Corporations.--Under regulations prescribed by the Secretary, 
     if a United States shareholder is treated under section 
     958(a)(2) as owning stock in a controlled foreign corporation 
     which is owned by another controlled foreign corporation, 
     then adjustments similar to the adjustments provided by 
     subsections (a) and (b) shall be made to--
       ``(1) the basis of such stock, and
       ``(2) the basis of stock in any other controlled foreign 
     corporation by reason of which the United States shareholder 
     is considered under section 958(a)(2) as owning the stock 
     described in paragraph (1),

     but only for the purposes of determining the amount included 
     under section 951 in the gross income of such United States 
     shareholder (or any other United States shareholder who 
     acquires from any person any portion of the interest of such 
     United States shareholder by reason of which such shareholder 
     was treated as owning such stock, but only to the extent of 
     such portion, and subject to such proof of identity of such 
     interest as the Secretary may prescribe by regulations). The 
     preceding sentence shall not apply with respect to any stock 
     to which a basis adjustment applies under subsection (a) or 
     (b).''.
       (c) Amendment Related to Section 1144 of the Act.--
     Subparagraph (B) of section 6038B(a)(1) is amended by 
     inserting ``or'' at the end.
       (d) Effective Date.--The amendments made by this section 
     shall take effect as if included in the provisions of the 
     Taxpayer Relief Act of 1997 to which they relate.

     SEC. 410. AMENDMENT RELATED TO THE OMNIBUS BUDGET 
                   RECONCILIATION ACT OF 1990.

       (a) Amendment Related to Section 11813 of the Act.--
     Subclause (I) of section 168(e)(3)(B)(vi) is amended by 
     striking ``if `solar and wind' were substituted for `solar' 
     in clause (i) thereof'' and inserting ``if `solar or wind 
     energy' were substituted for `solar energy' in clause (i) 
     thereof''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect as if included in section 11813 of the 
     Omnibus Budget Reconciliation Act of 1990.

     SEC. 411. AMENDMENT RELATED TO THE OMNIBUS BUDGET 
                   RECONCILIATION ACT OF 1987.

       (a) Amendment Related to Section 10227 of the Act.--Section 
     1363(d) is amended by adding at the end the following new 
     paragraph:
       ``(5) Special rule.--Sections 1367(a)(2)(D) and 1371(c)(1) 
     shall not apply with respect to any increase in the tax 
     imposed by reason of this subsection.''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect as if included in section 10227 of the 
     Omnibus Budget Reconciliation Act of 1987.

     SEC. 412. CLERICAL CORRECTIONS.

       (a) Subparagraph (C) of section 2(b)(2) is amended by 
     striking ``subparagraph (C)'' and inserting ``subparagraph 
     (B)''.
       (b) Paragraph (2) of section 25C(b) is amended by striking 
     ``subsection (c)(3)(B)'' and inserting ``subsection 
     (c)(2)(B)''.
       (c) Subparagraph (E) of section 26(b)(2) is amended by 
     striking ``section 530(d)(3)'' and inserting ``section 
     530(d)(4)''.
       (d) Subparagraph (A) of section 30B(g)(2) and subparagraph 
     (A) of section 30C(d)(2) are each amended by striking 
     ``regular tax'' and inserting ``regular tax liability (as 
     defined in section 26(b))''.
       (e) The table of sections for subpart B of part IV of 
     subchapter A of chapter 1 is amended by striking the item 
     relating to section 30C and inserting the following new item:

``Sec. 30C. Alternative fuel vehicle refueling property credit.''.

       (f)(1) Subclause (II) of section 38(c)(2)(A)(ii) is amended 
     by striking ``or the New York Liberty Zone business employee 
     credit or the specified credits'' and inserting ``, the New 
     York Liberty Zone business employee credit, and the specified 
     credits''.
       (2) Subclause (II) of section 38(c)(3)(A)(ii) is amended by 
     striking ``or the specified credits'' and inserting ``and the 
     specified credits''.
       (3) Subparagraph (B) of section 38(c)(4) is amended--
       (A) by striking ``includes'' and inserting ``means'', and
       (B) by inserting ``and'' at the end of clause (i).
       (g)(1) Subparagraph (A) of section 39(a)(1) is amended by 
     striking ``each of the 1 taxable years'' and inserting ``the 
     taxable year''.
       (2) Subparagraph (B) of section 39(a)(3) is amended to read 
     as follows:
       ``(B) paragraph (1) shall be applied by substituting `each 
     of the 5 taxable years' for `the taxable year' in 
     subparagraph (A) thereof, and''.

[[Page 29111]]

       (h) Subparagraph (B) of section 40A(b)(5) is amended by 
     striking ``(determined without regard to the last sentence of 
     subsection (d)(2))''.
       (i) Paragraph (5) of section 43(c) is amended to read as 
     follows:
       ``(5) Alaska natural gas.--For purposes of paragraph 
     (1)(D)--
       ``(A) In general.--The term `Alaska natural gas' means 
     natural gas entering the Alaska natural gas pipeline (as 
     defined in section 168(i)(16) (determined without regard to 
     subparagraph (B) thereof)) which is produced from a well--
       ``(i) located in the area of the State of Alaska lying 
     north of 64 degrees North latitude, determined by excluding 
     the area of the Alaska National Wildlife Refuge (including 
     the continental shelf thereof within the meaning of section 
     638(1)), and
       ``(ii) pursuant to the applicable State and Federal 
     pollution prevention, control, and permit requirements from 
     such area (including the continental shelf thereof within the 
     meaning of section 638(1)).
       ``(B) Natural gas.--The term `natural gas' has the meaning 
     given such term by section 613A(e)(2).''.
       (j) Subsection (d) of section 45 is amended--
       (1) in paragraph (8) by striking ``The term'' and inserting 
     ``In the case of a facility that produces refined coal, the 
     term'', and
       (2) in paragraph (10) by striking ``The term'' and 
     inserting ``In the case of a facility that produces Indian 
     coal, the term''.
       (k) Paragraph (2) of section 45I(a) is amended by striking 
     ``qualified credit oil production'' and inserting ``qualified 
     crude oil production''.
       (l) Subsection (g) of section 45K, as redesignated by 
     section 1322 of the Energy Policy Act of 2005, is amended--
       (1) in the matter preceding paragraph (1), by striking 
     ``subsection (f)'' and inserting ``subsection (e)'', and
       (2) in paragraph (2)(C), by striking ``subsection (g)'' and 
     inserting ``subsection (f)''.
       (m) Paragraph (1) of section 48(a), as amended by section 
     1336 of the Energy Policy Act of 2005, is amended by striking 
     ``paragraph (1)(B) or (2)(B) of subsection (d)'' and 
     inserting ``paragraphs (1)(B) and (2)(B) of subsection (c)''.
       (n) Subparagraph (A) of section 48(a)(3) is amended--
       (1) by redesignating clause (iii) (relating to qualified 
     fuel cell property or qualified microturbine property), as 
     added by section 1336 of the Energy Policy Act of 2005, as 
     clause (iv) and by moving such clause to the end of such 
     subparagraph, and
       (2) by striking ``or'' at the end of clause (ii).
       (o) Subparagraph (E) of section 50(a)(2) is amended by 
     striking ``section 48(a)(5)'' and inserting ``section 
     48(b)''.
       (p)(1) Paragraph (3) of section 55(c) is amended by 
     inserting ``30B(g)(2), 30C(d)(2),'' after ``30(b)(3),''.
       (2) Section 1341(b)(3) of the Energy Policy Act of 2005 is 
     repealed.
       (3) Section 1342(b)(3) of the Energy Policy Act of 2005 is 
     repealed.
       (q)(1) Subsection (a) of section 62 is amended--
       (A) by redesignating paragraph (19) (relating to costs 
     involving discrimination suits, etc.), as added by section 
     703 of the American Jobs Creation Act of 2004, as paragraph 
     (20), and
       (B) by moving such paragraph after paragraph (19) (relating 
     to health savings accounts).
       (2) Subsection (e) of section 62 is amended by striking 
     ``subsection (a)(19)'' and inserting ``subsection (a)(20)''.
       (r) Paragraph (3) of section 167(f) is amended by striking 
     ``section 197(e)(7)'' and inserting ``section 197(e)(6)''.
       (s) Subparagraph (D) of section 168(i)(15) is amended by 
     striking ``This paragraph shall not apply to'' and inserting 
     ``Such term shall not include''.
       (t) Paragraph (2) of section 221(d) is amended by striking 
     ``this Act'' and inserting ``the Taxpayer Relief Act of 
     1997''.
       (u) Paragraph (8) of section 318(b) is amended by striking 
     ``section 6038(d)(2)'' and inserting ``section 6038(e)(2)''.
       (v) Subparagraph (B) of section 332(d)(1) is amended by 
     striking ``distribution to which section 301 applies'' and 
     inserting ``distribution of property to which section 301 
     applies''.
       (w) Subparagraph (B) of section 403(b)(9) is amended by 
     inserting ``or'' before ``a convention''.
       (x)(1) Clause (i) of section 412(m)(4)(B) is amended by 
     striking ``subsection (c)'' and inserting ``subsection (d)''.
       (2) Clause (i) of section 302(e)(4)(B) of the Employee 
     Retirement Income Security Act of 1974 is amended by striking 
     ``subsection (c)'' and inserting ``subsection (d)''.
       (y) Paragraph (1) of section 415(l) is amended by striking 
     ``individual medical account'' and inserting ``individual 
     medical benefit account''.
       (z) The matter following clause (iv) of section 
     415(n)(3)(C) is amended by striking ``clauses'' and inserting 
     ``clause''.
       (aa) Subparagraph (C) of section 461(i)(3) is amended by 
     striking ``section 6662(d)(2)(C)(iii)'' and inserting 
     ``section 6662(d)(2)(C)(ii)''.
       (bb) Paragraph (12) of section 501(c) is amended--
       (1) by striking ``subparagraph (C)(iii)'' in subparagraph 
     (F) and inserting ``subparagraph (C)(iv)'', and
       (2) by striking ``subparagraph (C)(iv)'' in subparagraph 
     (G) and inserting ``subparagraph (C)(v)''.
       (cc) Clause (ii) of section 501(c)(22)(B) is amended by 
     striking ``clause (ii) of paragraph (21)(B)'' and inserting 
     ``clause (ii) of paragraph (21)(D)''.
       (dd) Paragraph (1) of section 512(b) is amended by striking 
     ``section 512(a)(5)'' and inserting ``subsection (a)(5)''.
       (ee)(1) Subsection (b) of section 512 is amended--
       (A) by redesignating paragraph (18) (relating to the 
     treatment of gain or loss on sale or exchange of certain 
     brownfield sites), as added by section 702 of the American 
     Jobs Creation Act of 2004, as paragraph (19), and
       (B) by moving such paragraph to the end of such subsection.
       (2) Subparagraph (E) of section 514(b)(1) is amended by 
     striking ``section 512(b)(18)'' and inserting ``section 
     512(b)(19)''.
       (3) Paragraph (6) of section 529(c) is amended by striking 
     ``education individual retirement account'' and inserting 
     ``Coverdell education savings account''.
       (ff)(1) Subsection (b) of section 530 is amended by 
     striking paragraph (3) and by redesignating paragraphs (4) 
     and (5) as paragraphs (3) and (4), respectively.
       (2) Clause (ii) of section 530(b)(2)(A) is amended by 
     striking ``paragraph (4)'' and inserting ``paragraph (3)''.
       (gg) Subparagraph (H) of section 613(c)(4) is amended by 
     inserting ``(including in situ retorting)'' after ``and 
     retorting''.
       (hh) Subparagraph (A) of section 856(g)(5) is amended by 
     striking ``subsection (c)(6) or (c)(7) of section 856'' and 
     inserting ``paragraph (2), (3), or (4) of subsection (c)''.
       (ii) Paragraph (6) of section 857(b) is amended--
       (1) in subparagraph (E), by striking ``subparagraph (C)'' 
     and inserting ``subparagraphs (C) and (D)'', and
       (2) in subparagraph (F)--
       (A) by striking ``subparagraph (C) of this paragraph'' and 
     inserting ``subparagraph (C) or (D)'', and
       (B) by striking ``subparagraphs (C) and (D)'' and inserting 
     ``subparagraphs (C), (D), and (E)''.
       (jj) Subparagraph (C) of section 881(e)(1) is amended by 
     inserting ``interest-related dividend received by a 
     controlled foreign corporation'' after ``shall apply to 
     any''.
       (kk) Clause (ii) of section 952(c)(1)(B) is amended--
       (1) by striking ``clause (iii)(III) or (IV)'' and inserting 
     ``subclause (II) or (III) of clause (iii)'', and
       (2) by striking ``clause (iii)(II)'' and inserting ``clause 
     (iii)(I)''.
       (ll) Clause (i) of section 954(c)(1)(C) is amended by 
     striking ``paragraph (4)(A)'' and inserting ``paragraph 
     (5)(A)''.
       (mm) Subparagraph (F) of section 954(c)(1) is amended by 
     striking ``Net income from notional principal contracts.'' 
     after ``Income from notional principal contracts.--''.
       (nn) Paragraph (23) of section 1016(a) is amended by 
     striking ``1045(b)(4)'' and inserting ``1045(b)(3)''.
       (oo) Paragraph (1) of section 1256(f) is amended by 
     striking ``subsection (e)(2)(C)'' and inserting ``subsection 
     (e)(2)''.
       (pp) The matter preceding clause (i) of section 
     1031(h)(2)(B) is amended by striking ``subparagraph'' and 
     inserting ``subparagraphs''.
       (qq) Paragraphs (1) and (2) of section 1375(d) are each 
     amended by striking ``subchapter C'' and inserting 
     ``accumulated''.
       (rr) Each of the following provisions are amended by 
     striking ``General Accounting Office'' each place it appears 
     therein and inserting ``Government Accountability Office'':
       (1) Clause (ii) of section 1400E(c)(4)(A).
       (2) Paragraph (1) of section 6050M(b).
       (3) Subparagraphs (A), (B)(i), and (B)(ii) of section 
     6103(i)(8).
       (4) Paragraphs (3)(C)(i), (4), (5), and (6)(B) of section 
     6103(p).
       (5) Subsection (e) of section 8021.
       (ss)(1) Clause (ii) of section 1400L(b)(2)(C) is amended by 
     striking ``section 168(k)(2)(C)(i)'' and inserting ``section 
     168(k)(2)(D)(i)''.
       (2) Clause (iv) of section 1400L(b)(2)(C) is amended by 
     striking ``section 168(k)(2)(C)(iii)'' and inserting 
     ``section 168(k)(2)(D)(iii)''.
       (3) Subparagraph (D) of section 1400L(b)(2) is amended by 
     striking ``section 168(k)(2)(D)'' and inserting ``section 
     168(k)(2)(E)''.
       (4) Subparagraph (E) of section 1400L(b)(2) is amended by 
     striking ``section 168(k)(2)(F)'' and inserting ``section 
     168(k)(2)(G)''.
       (5) Paragraph (5) of section 1400L(c) is amended by 
     striking ``section 168(k)(2)(C)(iii)'' and inserting 
     ``section 168(k)(2)(D)(iii)''.
       (tt) Section 3401 is amended by redesignating subsection 
     (h) as subsection (g).
       (uu) Paragraph (2) of section 4161(a) is amended to read as 
     follows:
       ``(2) 3 percent rate of tax for electric outboard motors.--
     In the case of an electric outboard motor, paragraph (1) 
     shall be applied by substituting `3 percent' for `10 
     percent'.''.
       (vv) Subparagraph (C) of section 4261(e)(4) is amended by 
     striking ``imposed subsection (b)'' and inserting ``imposed 
     by subsection (b)''.
       (ww) Subsection (a) of section 4980D is amended by striking 
     ``plans'' and inserting ``plan''.
       (xx) The matter following clause (iii) of section 
     6045(e)(5)(A) is amended by striking ``for `$250,000'.'' and 
     all that follows through ``to the Treasury.'' and inserting 
     ``for `$250,000'. The Secretary may by regulation increase 
     the dollar amounts under this subparagraph if the Secretary 
     determines that such an increase will not materially reduce 
     revenues to the Treasury.''.
       (yy) Subsection (p) of section 6103 is amended--
       (1) by striking so much of paragraph (4) as precedes 
     subparagraph (A) and inserting the following:

[[Page 29112]]

       ``(4) Safeguards.--Any Federal agency described in 
     subsection (h)(2), (h)(5), (i)(1), (2), (3), (5), or (7), 
     (j)(1), (2), or (5), (k)(8), (l)(1), (2), (3), (5), (10), 
     (11), (13), (14), or (17) or (o)(1), the Government 
     Accountability Office, the Congressional Budget Office, or 
     any agency, body, or commission described in subsection (d), 
     (i)(3)(B)(i) or 7(A)(ii), or (l)(6), (7), (8), (9), (12), 
     (15), or (16) or any other person described in subsection 
     (l)(16), (18), (19), or (20) shall, as a condition for 
     receiving returns or return information--'',
       (2) by amending paragraph (4)(F)(i) to read as follows:
       ``(i) in the case of an agency, body, or commission 
     described in subsection (d), (i)(3)(B)(i), or (l)(6), (7), 
     (8), (9), or (16), or any other person described in 
     subsection (l)(16), (18), (19), or (20) return to the 
     Secretary such returns or return information (along with any 
     copies made therefrom) or make such returns or return 
     information undisclosable in any manner and furnish a written 
     report to the Secretary describing such manner,'', and
       (3) by striking the first full sentence in the matter 
     following subparagraph (F) of paragraph (4) and inserting the 
     following: ``If the Secretary determines that any such 
     agency, body, or commission, including an agency or any other 
     person described in subsection (l)(16), (18), (19), or (20), 
     or the Government Accountability Office or the Congressional 
     Budget Office, has failed to, or does not, meet the 
     requirements of this paragraph, he may, after any proceedings 
     for review established under paragraph (7), take such actions 
     as are necessary to ensure such requirements are met, 
     including refusing to disclose returns or return information 
     to such agency, body, or commission, including an agency or 
     any other person described in subsection (l)(16), (18), (19), 
     or (20), or the Government Accountability Office or the 
     Congressional Budget Office, until he determines that such 
     requirements have been or will be met.''.
       (zz) Clause (ii) of section 6111(b)(1)(A) is amended by 
     striking ``advice or assistance'' and inserting ``aid, 
     assistance, or advice''.
       (aaa) Paragraph (3) of section 6662(d) is amended by 
     striking ``the'' before ``1 or more''.

     SEC. 413. OTHER CORRECTIONS RELATED TO THE AMERICAN JOBS 
                   CREATION ACT OF 2004.

       (a) Amendments Related to Section 233 of the Act.--
       (1) Clause (vi) of section 1361(c)(2)(A) is amended--
       (A) by inserting ``or a depository institution holding 
     company (as defined in section 3(w)(1) of the Federal Deposit 
     Insurance Act (12 U.S.C. 1813(w)(1))'' after ``a bank (as 
     defined in section 581)'', and
       (B) by inserting ``or company'' after ``such bank''.
       (2) Paragraph (16) of section 4975(d) is amended--
       (A) in subparagraph (A), by inserting ``or a depository 
     institution holding company (as defined in section 3(w)(1) of 
     the Federal Deposit Insurance Act (12 U.S.C. 1813(w)(1))'' 
     after ``a bank (as defined in section 581)'', and
       (B) in subparagraph (C), by inserting ``or company'' after 
     ``such bank''.
       (b) Amendment Related to Section 237 of the Act.--
     Subparagraph (F) of section 1362(d)(3) is amended by striking 
     ``a bank holding company'' and all that follows through 
     ``section 2(p) of such Act)'' and inserting ``a depository 
     institution holding company (as defined in section 3(w)(1) of 
     the Federal Deposit Insurance Act (12 U.S.C. 1813(w)(1))''.
       (c) Amendments Related to Section 239 of the Act.--
     Paragraph (3) of section 1361(b) is amended--
       (1) in subparagraph (A), by striking ``and in the case of 
     information returns required under part III of subchapter A 
     of chapter 61'', and
       (2) by adding at the end the following new subparagraph:
       ``(E) Information returns.--Except to the extent provided 
     by the Secretary, this paragraph shall not apply to part III 
     of subchapter A of chapter 61 (relating to information 
     returns).''.
       (d) Effective Date.--The amendments made by this section 
     shall take effect as if included in the provisions of the 
     American Jobs Creation Act of 2004 to which they relate.

                      Subtitle B--Trade Technicals

     SEC. 421. TECHNICAL CORRECTIONS TO REGIONAL VALUE-CONTENT 
                   METHODS FOR RULES OF ORIGIN UNDER PUBLIC LAW 
                   109-53.

       Section 203(c) of the Dominican Republic-Central America-
     United States Free Trade Agreement Implementation Act (Public 
     Law 109-53; 19 U.S.C. 4033(c)) is amended as follows:
       (1) In paragraph (2)(A), by striking all that follows ``the 
     following build-down method:'' and inserting the following:

                                    av-vnm

                         ``rvc = --------  x  100''.

                                      av

       (2) In paragraph (3)(A), by striking all that follows ``the 
     following build-up method:'' and inserting the following:

                                     vom

                          ``rvc = --------  x  100''.

                                      av

       (3) In paragraph (4)(A), by striking all that follows ``the 
     following net cost method:'' and inserting the following:

                                    nc-vnm

                         ``rvc = --------  x  100''.

                                      nc

                     TITLE V--EMERGENCY REQUIREMENT

     SEC. 501. EMERGENCY REQUIREMENT.

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

  Mr. McCRERY (during the reading). Madam Speaker, I ask unanimous 
consent that the Senate amendment be considered as read and printed in 
the Record.
  The SPEAKER pro tempore (Mrs. Emerson). Is there objection to the 
request of the gentleman from Louisiana?
  There was no objection.
  The SPEAKER pro tempore. Is there objection to the original request 
of the gentleman from Louisiana?
  Mr. JEFFERSON. Madam Speaker, I do not object, but I reserve the 
right to object.
  Madam Speaker, I want to say to the Speaker and this entire House, to 
my colleague from Louisiana, Mr. McCrery, to the ranking member, 
Charles Rangel, to our chairman, Bill Thomas, of the Ways and Means 
Committee, to all our Members who worked so hard to arrive at this 
piece of legislation at this time, we are, in our part of the world, 
extraordinarily grateful to the House and Senate for what it has done 
here. It will help to get our local government back on our feet and get 
our businesses incentivized to come back into our area. We believe that 
it will make a huge contribution to restoring and rebuilding our city.
  Madam Speaker, I appreciate the good work that my colleague has done, 
and I thank the House.
  Mr. McCRERY. Madam Speaker, will the gentleman yield?
  Mr. JEFFERSON. I yield to the gentleman from Louisiana.
  Mr. McCRERY. Madam Speaker, I thank the gentleman for yielding.
  Madam Speaker, I, too, want to thank the gentleman from Louisiana, my 
colleague on the Ways and Means Committee, the chairman of the Ways and 
Means Committee, the ranking member and the staff who have worked so 
hard to help us provide incentives for businesses to come back and 
reinvest in the devastated areas along our gulf coast.
  The gentleman from Louisiana and Members of the House should know 
that members of the other body have placed a document prepared by the 
Joint Committee on Taxation in the Congressional Record that explains 
the legislative intent with respect to H.R. 4440, as amended. The Joint 
Committee will also make this explanation public. This document 
expresses our understanding of the bill now before us, and it will be a 
useful reference in understanding the legislation.
  Mr. JEFFERSON. Madam Speaker, I withdraw my reservation of objection.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Louisiana?
  There was no objection.
  A motion to reconsider was laid on the table.

                          ____________________