[Congressional Record (Bound Edition), Volume 153 (2007), Part 6]
[House]
[Pages 7988-7993]
[From the U.S. Government Publishing Office, www.gpo.gov]




                 KATRINA HOUSING TAX RELIEF ACT OF 2007

  Mr. RANGEL. Madam Speaker, I move to suspend the rules and pass the 
bill (H.R. 1562) to amend the Internal Revenue Code of 1986 to extend 
and expand certain rules with respect to housing in the GO Zones, as 
amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 1562

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Katrina Housing Tax Relief 
     Act of 2007''.

     SEC. 2. EXTENSION AND EXPANSION OF LOW-INCOME HOUSING CREDIT 
                   RULES FOR BUILDINGS IN THE GO ZONES.

       (a) Time for Making Low-Income Housing Credit 
     Allocations.--Subsection (c) of section 1400N of the Internal 
     Revenue Code of 1986 (relating to low-income housing credit) 
     is amended by redesignating paragraph (5) as paragraph (6) 
     and by inserting after paragraph (4) the following new 
     paragraph:
       ``(5) Time for making low-income housing credit 
     allocations.--Section 42(h)(1)(B) shall not apply to an 
     allocation of housing credit dollar amount to a building 
     located in the Gulf Opportunity Zone, the Rita GO Zone, or 
     the Wilma GO Zone, if such allocation is made in 2006, 2007, 
     or 2008, and such building is placed in service before 
     January 1, 2011.''.
       (b) Extension of Period for Treating GO Zones as Difficult 
     Development Areas.--
       (1) In general.--Subparagraph (A) of section 1400N(c)(3) of 
     such Code is amended by striking ``2006, 2007, or 2008'' and 
     inserting ``the period beginning on January 1, 2006, and 
     ending on December 31, 2010''.
       (2) Conforming amendment.--Clause (ii) of section 
     1400N(c)(3)(B) of such Code is amended by striking ``such 
     period'' and inserting ``the period described in subparagraph 
     (A)''.
       (c) Community Development Block Grants Not Taken Into 
     Account in Determining if Buildings Are Federally 
     Subsidized.--Subsection (c) of section 1400N of such Code 
     (relating to low-income housing credit), as amended by this 
     Act, is amended by redesignating paragraph (6) as paragraph 
     (7) and by inserting after paragraph (5) the following new 
     paragraph:

[[Page 7989]]

       ``(6) Community development block grants not taken into 
     account in determining if buildings are federally 
     subsidized.--For purpose of applying section 42(i)(2)(D) to 
     any building which is placed in service in the Gulf 
     Opportunity Zone, the Rita GO Zone, or the Wilma GO Zone 
     during the period beginning on January 1, 2006, and ending on 
     December 31, 2010, a loan shall not be treated as a below 
     market Federal loan solely by reason of any assistance 
     provided under section 106, 107, or 108 of the Housing and 
     Community Development Act of 1974 by reason of section 122 of 
     such Act or any provision of the Department of Defense 
     Appropriations Act, 2006, or the Emergency Supplemental 
     Appropriations Act for Defense, the Global War on Terror, and 
     Hurricane Recovery, 2006.''.

     SEC. 3. SPECIAL TAX-EXEMPT BOND FINANCING RULE FOR REPAIRS 
                   AND RECONSTRUCTIONS OF RESIDENCES IN THE GO 
                   ZONES.

       Subsection (a) of section 1400N of the Internal Revenue 
     Code of 1986 (relating to tax-exempt bond financing) is 
     amended by adding at the end the following new paragraph:
       ``(7) Special rule for repairs and reconstructions.--
       ``(A) In general.--For purposes of section 143 and this 
     subsection, any qualified GO Zone repair or reconstruction 
     shall be treated as a qualified rehabilitation.
       ``(B) Qualified go zone repair or reconstruction.--For 
     purposes of subparagraph (A), the term `qualified GO Zone 
     repair or reconstruction' means any repair of damage caused 
     by Hurricane Katrina, Hurricane Rita, or Hurricane Wilma to a 
     building located in the Gulf Opportunity Zone, the Rita GO 
     Zone, or the Wilma GO Zone (or reconstruction of such 
     building in the case of damage constituting destruction) if 
     the expenditures for such repair or reconstruction are 25 
     percent or more of the mortgagor's adjusted basis in the 
     residence. For purposes of the preceding sentence, the 
     mortgagor's adjusted basis shall be determined as of the 
     completion of the repair or reconstruction or, if later, the 
     date on which the mortgagor acquires the residence.
       ``(C) Termination.--This paragraph shall apply only to 
     owner-financing provided after the date of the enactment of 
     this paragraph and before January 1, 2011.''.

     SEC. 4. GAO STUDY OF PRACTICES EMPLOYED BY STATE AND LOCAL 
                   GOVERNMENTS IN ALLOCATING AND UTILIZING TAX 
                   INCENTIVES PROVIDED PURSUANT TO THE GULF 
                   OPPORTUNITY ZONE ACT OF 2005.

       (a) In General.--The Comptroller General of the United 
     States shall conduct a study of the practices employed by 
     State and local governments, and subdivisions thereof, in 
     allocating and utilizing tax incentives provided pursuant to 
     the Gulf Opportunity Zone Act of 2005 and this Act.
       (b) Submission of Report.--Not later than one year after 
     the date of the enactment of this Act, the Comptroller 
     General shall submit a report on the findings of the study 
     conducted under subsection (a) and shall include therein 
     recommendations (if any) relating to such findings. The 
     report shall be submitted to the Committee on Ways and Means 
     of the House of Representatives and the Committee on Finance 
     of the Senate.
       (c) Congressional Hearings.--In the case that the report 
     submitted under this section includes findings of significant 
     fraud, waste or abuse, each Committee specified in subsection 
     (b) shall, within 60 days after the date the report is 
     submitted under subsection (b), hold a public hearing to 
     review such findings.

     SEC. 5. MODIFICATION OF COLLECTION DUE PROCESS PROCEDURES FOR 
                   EMPLOYMENT TAX LIABILITIES.

       (a) In General.--Section 6330(f) of the Internal Revenue 
     Code of 1986 (relating to jeopardy and State refund 
     collection) is amended--
       (1) by striking ``; or'' at the end of paragraph (1) and 
     inserting a comma,
       (2) by adding ``or'' at the end of paragraph (2), and
       (3) by inserting after paragraph (2) the following new 
     paragraph:
       ``(3) the Secretary has served a disqualified employment 
     tax levy,''.
       (b) Disqualified Employment Tax Levy.--Section 6330 of such 
     Code (relating to notice and opportunity for hearing before 
     levy) is amended by adding at the end the following new 
     subsection:
       ``(h) Disqualified Employment Tax Levy.--For purposes of 
     subsection (f), a disqualified employment tax levy is any 
     levy in connection with the collection of employment taxes 
     for any taxable period if--
       ``(1) the person subject to the levy (or any predecessor 
     thereof) requested a hearing under this section with respect 
     to unpaid employment taxes arising in the most recent 2-year 
     period before the beginning of the taxable period with 
     respect to which the levy is served, and
       ``(2) such levy is served before February 29, 2016.

     For purposes of the preceding sentence, the term `employment 
     taxes' means any taxes under chapter 21, 22, 23, or 24.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to levies served on or after the date that is 120 
     days after the date of the enactment of this Act.

     SEC. 6. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES.

       Subparagraph (B) of section 401(1) of the Tax Increase 
     Prevention and Reconciliation Act of 2005 is amended by 
     striking ``106.25 percent'' and inserting ``106.45 percent''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from New 
York (Mr. Rangel) and the gentleman from Michigan (Mr. Camp) each will 
control 20 minutes.
  The Chair recognizes the gentleman from New York.
  Mr. RANGEL. Mr. Speaker, once again I find myself thanking Mr. 
McCrery, the ranking member, and members of the minority on the Ways 
and Means Committee for moving forward to a piece of legislation, 
agreeing that it go to the suspension calendar and, more importantly, 
working with us in bringing about changes in order to make certain that 
we have a pay-for that is appreciated by the House.
  This is important legislation. The Nation suffered a tremendous 
natural setback with Katrina. Thousands of people in Mississippi and 
Louisiana felt the pain. And somehow we are sluggishly moving towards 
some type of solution of this real problem.
  One of the major problems, of course, is housing, people not being 
able to come back. We on the Ways and Means Committee can play some 
small part in putting together tax incentives to move forward, to make 
certain that these people have a place to stay and go back to their 
home.
  More important, I am so pleased that John Lewis will be managing this 
bill, a man of compassion, a man of understanding, a man that 
understands the real pain that people have felt and continue to feel. I 
don't think there is any Member in the House that I would rather see 
associated with a bill that brings some type of relief to people who 
have felt so much pain.
  So, Mr. Speaker, with your permission, I would like to ask Mr. Lewis 
from the sovereign State of Georgia, an outstanding Member of Congress, 
to manage the remainder of this time and to distribute it as he sees 
fit.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from New York?
  There was no objection.
  Mr. CAMP of Michigan. Mr. Speaker, I am pleased to rise in support of 
H.R. 1562, the Katrina Housing Tax Relief Act of 2007, which was 
introduced by my friends, the chairman and ranking member of the 
Committee on Ways and Means.
  It is unfortunate that we continue to deal with the aftermath of the 
devastating hurricanes of 2005. The imprint left by Hurricanes Katrina 
and Rita on the Gulf Coast has been well documented. Unfortunately, the 
slow pace of recovery has also been well documented, despite 
substantial efforts by the Ways and Means Committee and the Congress as 
a whole to provide direct and indirect support to the rebuilding 
efforts.
  As part of that effort, the Congress enacted the Gulf Opportunity 
Zone Act of 2005. Among its provisions, the measure authorized a 
tenfold increase in Section 42 low-income housing tax credits for 
States in the Gulf Opportunity Zone. At the time, our hope was that 
putting a fast expiration on those credits would lead to the rapid 
rebuilding of this much-needed housing. Our experience, however, has 
shown otherwise. Delays in getting necessary permitting and insurance, 
combined with the high cost of materials and a shortage of skilled 
labor, have created a situation in which many of the allocated credits 
are likely to go unused by the current December 31, 2008, deadline.
  The good news for the GO Zone is that credits not used by the end of 
2008 will not be lost. Instead, they will revert back to the State for 
future allocation. But the difficulties on the ground create 
uncertainty as to whether these projects will be placed in service by 
the end of 2008.
  Witnesses at an Oversight Subcommittee hearing earlier this month 
warned that many deserving projects that had been allocated credits in 
Louisiana and Mississippi by the State housing agencies are going 
unfunded and therefore will not be built by the end of next year.
  The measure before us makes several changes to the rules governing 
low-income housing tax credits in the GO

[[Page 7990]]

Zone. These changes expire at the end of 2010. Hopefully, the 
modifications we are making today will allow the States to get these 
housing projects financed and constructed long before that sunset date.
  It is my understanding from the Joint Committee that the cost of this 
bill is not the result of additional credits being used. Rather, it is 
that credits will be used more quickly than expected under current law.
  Under these circumstances, I believe the changes in the bill before 
us are an appropriate response to the unique and unprecedented 
challenges in the gulf coast region and will help ensure that goals of 
the 2005 legislation are met. Unique circumstances sometimes require 
unique solutions.
  Finally, I would like to comment on a provision of the bill being 
used to offset these costs. As originally considered by the committee, 
the measure would slightly alter the circumstances under which the 
government can levy the assets of an employer for unpaid employment 
taxes. During committee considerations, questions were raised about the 
provision, and I am pleased that the bill we are considering today 
contains an important modification to the provision that ensures that 
employers who unknowingly fall behind in their payment of employment 
taxes are properly protected.
  On that count, particular thanks are due to the chairman, the staff 
of the IRS and the Treasury and the staff of the Joint Committee on 
Taxation for their help in working through this difficult but important 
issue.
  Mr. Chairman, let me again express my appreciation to you and your 
staff for working across the aisle to craft this measure that I hope 
will make it possible for thousands of residents of the gulf States to 
go home soon.
  Mr. Speaker, I reserve the balance of my time.
  Mr. LEWIS of Georgia. Mr. Speaker, I yield myself as much time as I 
may consume.
  Mr. Speaker, on March 13, 2007, the Ways and Means Subcommittee on 
Oversight held a hearing on housing tax issues related to the 
rebuilding of communities affected by Hurricanes Katrina, Rita and 
Wilma. These hurricanes created and caused more damage than any other 
natural disaster and left over 700,000 residents in the Gulf Coast 
without housing.
  The Congress has provided $15 billion in tax relief to victims of the 
hurricanes, but it is clear that we must do more and we can do more. 
The Katrina Housing Tax Relief Act of 2007 will help families affected 
by the hurricane to return home. This bill will extend incentives for 
low-income rental housing. It will also expand existing incentives so 
they can be used to refinance homes that need to be rebuilt from 
scratch.
  Mr. Speaker, this is a good bill. This is a necessary bill. I 
wholeheartedly support H.R. 1562 and urge all of my colleagues to vote 
in favor of this bill.
  Mr. Speaker, I reserve the balance of my time.
  Mr. CAMP of Michigan. At this time, I yield such time as he may 
consume to the distinguished gentleman from New York, a member of the 
Ways and Means Committee.
  Mr. REYNOLDS. I thank the gentleman from Michigan for yielding me 
this time, and I rise in support of the amended version of H.R. 1562 
that is before us. I greatly appreciate the remarks of the ranking 
member of this side, Dave Camp, as he outlined the legislation and our 
support for it and the need for it, and the amendments that were 
brought forth by Chairman Rangel and by Ranking Member McCrery.
  Mr. Speaker, it has been that type of cooperation in working on 
legislation such as this that we were able to take a bill that is 
vitally needed in the Katrina zone for low-income housing tax credits 
to work and do their job, but to also make it work for the taxpayers as 
we consider the PAYGO requirements set forth by the rules of the House. 
I believe that we have worked diligently, through the efforts of staff 
on both the majority and the minority and Joint Tax as well as IRS, as 
has been outlined by previous speakers, to bring forth legislation that 
will work to get the job done for Katrina victims, for the States and, 
importantly, to see a recovery come about under the intent of this 
legislation. So I am going to support it.
  I greatly appreciate the cooperation of Chairman Rangel and Ranking 
Member McCrery in working forward to have legislation language that 
meets some of the outlines of concerns that Mr. Johnson and I had and 
have been fully met by their hard work.

                              {time}  1945


                             General Leave

  Mr. LEWIS of Georgia. Mr. Speaker, I ask unanimous consent that all 
Members have 5 legislative days to revise and extend their remarks and 
include extraneous material on the bill, H.R. 1562.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Georgia?
  There was no objection.
  Mr. LEWIS of Georgia. Mr. Speaker, I yield 2 minutes to the gentleman 
from New Jersey, Congressman Pascrell.
  Mr. PASCRELL. Mr. Speaker, Hurricane Katrina was more than a natural 
catastrophe. The painful images of folks suffering, dying, and calling 
desperately for help will forever be seared in our collective 
conscience. I rise today in strong support of the Katrina Housing 
Relief Act, critical legislation designed to respond to the needs of 
hurricane victims by getting affordable housing in the gulf coast 
region expeditiously built.
  I want to commend Chairman Rangel for the steady hand he has 
displayed in crafting this legislation and also for the collegial 
spirit he has fostered on the Ways and Means Committee thus far. This 
is the second noteworthy tax package that has come to the floor in 
recent weeks, and I am heartened at the bipartisanship that has been 
displayed. And when it comes to helping those who suffered from 
Katrina, bipartisanship is the only way to operate.
  Unfortunately, the immediate response from Washington was handled 
poorly, insufficiently, and only exacerbated the suffering. Today, we 
take a step in the right direction. We need to get help to people and 
get them back in their homes, and this bill does that.
  H.R. 1562 strengthens existing tax incentives to builders of 
affordable rental housing by extending the current deadline within 
which those units must be inhabited by an extra 2 years, to 2010. The 
bill makes it easier for a greater number of homeowners to benefit from 
tax-exempt bonds issued by local governments for substantial 
renovations and to refinance existing residential mortgage loans.
  These are prudent, practical measures that will do a great deal of 
good for those in need. I implore my colleagues to support this bill. I 
again commend the leadership for bringing this to the floor.
  Mr. CAMP of Michigan. Mr. Speaker, I yield such time as he may 
consume to the gentleman from Louisiana (Mr. Boustany).
  Mr. BOUSTANY. Mr. Speaker, I rise in support of this bill. I want to 
thank my colleague. I also want to thank Chairman Rangel and Ranking 
Member McCrery for bringing this bill to the floor.
  And while I am pleased that this bill is being brought to the floor 
this evening, its title is actually a misnomer. The Katrina Housing Tax 
Relief Act also covers many areas hit by my district in southwest 
Louisiana and southeast Texas, those areas hit by Hurricane Rita.
  My district in southwest Louisiana received about $10 billion in 
damage from Hurricane Rita, and this was to small rural communities 
that don't have the ability to bounce back. As we recover in southwest 
Louisiana, we have learned all too well that government cannot 
micromanage the full recovery process, and this GO-Zone legislation has 
played a very important role in providing a foundation for businesses 
and families to get back on their feet. So I am pleased that today's 
legislation extends many of these successful provisions and programs 
for southwest Louisiana communities.
  Two of the most important include an extension of the placed-in-
service

[[Page 7991]]

deadline and a waiver of the 10 percent rule for GO-Zone credits. These 
provisions will help those who are on the front lines of our housing 
recovery, rather than revert funding back to the State.
  Additionally, the bill allows GO-Zone low-income housing projects to 
receive additional federally subsidized loans without facing a 
reduction in tax credits.
  Mr. Speaker, while I take issue with the bill's title, I fully 
support its provisions. It is a good bill. Again, I thank Chairman 
Rangel and Ranking Member McCrery for their support and urge support of 
this bill.
  Mr. LEWIS of Georgia. Mr. Speaker, I yield 3\3/4\ minutes to the 
gentleman from Louisiana, who represents New Orleans in the Congress, 
Mr. Jefferson.
  Mr. JEFFERSON. I thank the gentleman for yielding.
  Mr. Speaker, I rise in support of H.R. 1562, the Katrina Housing Tax 
Relief Act of 2007.
  I am extremely grateful to Chairman Rangel, Ranking Member McCrery, 
Mr. Lewis, Mr. Camp, and the members of the Ways and Means Committee 
for their bipartisan support of this bill and for bringing it to the 
floor in this expeditious manner. As Chairman Rangel stated, it 
represents this Congress ``doing our part,'' he said, ``to make things 
right and that begins with helping people get back to their homes.''
  Few needs are greater in the city of New Orleans and surrounding 
areas than affordable housing. One New Orleanian who currently resides 
in a FEMA trailer 1 hour north of the city surmises that many people 
want to move back to the city, but after looking at the rental prices 
has said, who could afford that? In the gulf coast, Katrina destroyed 
over one-quarter million homes. More than 30 percent of these losses 
involved affordable housing losses, most of which were rental 
properties.
  Post-Katrina, the average rental payment in New Orleans has risen 70 
percent. Before Katrina, Mary Wright of our city paid about $300 in 
rent. Now she pays triple that amount. There are folks who were paying 
about $500 in rent are now paying $850. New Orleans' population has 
diminished to only 237,000 residents from 437,000 before the storm. It 
is not because residents do not wish to return. It is because many 
cannot afford to return. The lack of affordable housing has caused not 
only a problem for citizens wishing to return, but it is also a problem 
for developers, planners, and investors who are strapped in their 
options to increase affordable housing. The lack of quality affordable 
housing that is sustainable discourages the return of a workforce and 
the restoration of the economy of the city.
  The Low Income Housing Tax Credit is of great assistance to helping 
our people of the gulf region return home. The credits will be 
competitively awarded to qualified developers who are then put under 
the constant scrutiny by our State housing authority to ensure that the 
buildings that are built are quality affordable housing. The safeguard 
in the system also provides for 30 years of high-quality housing, and 
for 15 years the rental properties developed using these tax credits 
must be maintained as affordable units. Should the properties not 
continue to meet the criteria specified when receiving the reward, the 
IRS will recapture the tax credits.
  In December of 2005, Congress passed the Gulf Opportunities Zone Act, 
and among other much needed tax incentives it included a significant 
increase in housing credits for the Gulf States, and a 130 percent 
basis boost in which they treated all regions as difficult to develop 
areas, thus allowing them more funding for rebuilding.
  The gulf coast faces many obstacles to redevelopment. Extending the 
placed-in-service deadline for both the credits and for the treatment 
of difficult to develop areas will remove one of them by giving 
planners and developers in these communities a reasonable time to 
effectively reinvest in that community.
  Finally, mortgage revenue bonds have provided over 3.5 million lower-
income Americans affordable homeownership opportunities and another 1 
million with rental housing opportunities. Since Katrina, they have 
backed many homeowners but their utility has been limited in that these 
bonds are typically for first-time home buyers only. Provisions in this 
legislation waive this requirement for those whose homes were damaged 
by the hurricanes. This will assist with the rebuilding efforts, 
allowing mortgage revenue bond proceeds to go towards refinancing home 
loans, to free up funds for the reconstruction of homes and renewal of 
families.
  We need to do everything we can to facilitate recovery, and this bill 
removes critical obstacles to rebuilding the homes, rental properties, 
indeed the very life blood of the families of the gulf region. I urge 
passage and full support of this legislation.
  Mr. CAMP of Michigan. Mr. Speaker, I reserve the balance of my time.
  Mr. LEWIS of Georgia. Mr. Speaker, I yield 2\1/4\ minutes to the 
gentleman from Louisiana (Mr. Melancon).
  Mr. MELANCON. Mr. Speaker, I thank the gentleman. I would like to 
thank the leadership for the bipartisan effort also. It has been a long 
18, going on 19, months for the folks of Louisiana; and this is the 
kind of thing that they have needed for a long time.
  I am here today to speak in support of the Katrina Housing Tax and, 
as Mr. Boustany pointed out, the Rita Housing Tax, also, which will 
extend important tax credits and waivers that are boosting rebuilding 
efforts along the gulf coast.
  It is hard to exaggerate the devastation Hurricanes Katrina and Rita 
caused in south Louisiana. Over 1 million people had to flee their 
homes, and over 200,000 homes were damaged or completely destroyed. In 
St. Bernard Parish, a community to the east of New Orleans that I 
represent, it is reported that only five or six homes out of the 27,000 
were inhabitable after the storm. It will take many years to repair the 
damage Katrina and Rita and the levee failures caused in just a few 
days.
  The enormous extent of the damage and the unprecedented time and 
money it will take to recover are why we need to pass the Katrina-Rita 
Housing Relief Act. For south Louisiana to rebuild, we need to continue 
encouraging developers to build affordable housing, not just high-
priced condos. There is a severe housing shortage in the region, and 
rental prices have increased by 39 percent and more since the storm. 
Home sale prices in suburban parishes have also skyrocketed. Average 
working people can't move home because they can't find affordable 
housing.
  One of the most important features of this bill is the extension of 
the Gulf Opportunity Zone low-income housing tax credit until the end 
of 2010. Louisiana is offering these tax credits to developers who 
build affordable housing in the hurricane-affected communities, but 
current law requires that developers have the project built and 
occupied by the end of 2008.
  In the post-storm world of south Louisiana, this is almost 
impossible. The Housing Financing Agency in New Orleans estimates that 
65 percent of the affordable housing units under development, about 
11,050 units, won't make the deadline to be available for rent by the 
deadline at the end of 2008. Add all the extenuating circumstances of 
post-Katrina Louisiana, mold remediation for flood-damaged 
rehabilitation projects, elevation of property, getting permits, going 
through the zoning requirements, all the things that take time, 
including needing water, sewer, and gas lines, there is no way that 
developers can finish.
  Finally, as a fiscal conservative and a Blue Dog, I want to point out 
that this bill follows House PAYGO rules and will not increase the 
deficit. In fact, the offsets that are contained in the bill will cause 
an increase in revenue.
  I thank the gentleman from Georgia, and I thank the bipartisan effort 
of the committee.
  Mr. LEWIS of Georgia. Mr. Speaker, I yield myself as much time as I 
may consume.
  I fully support H.R. 1562, the Katrina Housing Relief Act of 2007. 
Adequate and affordable housing is a basic

[[Page 7992]]

human right, and today Congress is stepping in again to give our 
citizens of the gulf coast some help. This bill will provide tax 
incentives to ensure that adequate and affordable housing is available 
in the gulf coast region.
  I urge all of my colleagues on both sides of the aisle to vote 
``yes'' for this bill.
  Mr. SAM JOHNSON of Texas. I rise today in support of the amended 
version of H.R. 1562. During the Committee debate on this bill I raised 
concerns about the revenue offset used to pay for this legislation. The 
original bill would have permitted the IRS to seize the assets of a 
taxpayer prior to a hearing. The provision was scored as raising $240 
million. The reason for the change was that there are some taxpayers 
who are serial abusers of the payroll tax withholding mechanism who 
needed to be shut down to prevent a drain on revenues.
  The problem is that we cannot begin to close the tax gap at the 
expense of basic civil liberties. We would have a taxpayer revolt at 
such heavy-handed tactics. Congress put in place many taxpayer 
protections against heavy-handed IRS tactics and I think we need to be 
very careful as we contemplate rolling back any of them in the name of 
closing the ``tax gap.''
  The amended bill before us now would go after the serial abusers of 
the payroll tax system. It would require that if someone has already 
been through the hearing process in the last two years, then they don't 
get to keep scamming the tax system. They cannot hide behind the 
protections meant for taxpayers who have simply made a mistake in 
filing payroll taxes for their employees.
  The protection of having a hearing prior to IRS seizure of assets is 
important in many circumstances. One of the leading reasons for this 
protection is innocent spouse relief. If a husband messes up his 
company's payroll taxes in one quarter, the Committee approved bill and 
the version already approved by the other body, would have allowed the 
IRS to seize his wife's assets and give her no ability to claim 
innocent spouse relief until roughly eight months after the seizure. I 
don't think this is good policy and I think it is a lousy way to close 
the ``tax gap.''
  I commend Chairman Rangel and Ranking Member McCrery for working to 
be sure that these situations are addressed by the amendment we have 
worked out. I hope that whenever the House and Senate put this revenue 
raiser into a final agreement later this year, that the House version 
prevails.
  Again, I support the version of this legislation that we are debating 
on the House floor today and I want to personally thank the Chairman 
and Ranking Member for working so hard to address these concerns.
  Mr. LEWIS of Georgia. Mr. Speaker, I'm submitting the CBO cost 
estimate on H.R. 1562, the Katrina Housing Tax Relief Act of 2007.
                                                    U.S. Congress,


                                  Congressional Budget Office,

                                   Washington, DC, March 23, 2007.
     Hon. Charles B. Rangel,
     Chairman, Committee on Ways and Means, House of 
         Representatives, Washington, DC.
       Dear Mr. Chairman: The Congressional Budget Office has 
     prepared the enclosed cost estimate for H.R. 1562, the 
     Katrina Housing Tax Relief Act of 2007.
       If you wish further details on this estimate, we will be 
     pleased to provide them. The CBO staff contact is Emily 
     Schlect.
           Sincerely,
                                                  Peter R. Orszag.
       Enclosure.
     H.R. 1562--Katrina Housing Tax Relief Act
       Summary: H.R. 1562 would extend and expand certain tax laws 
     specific to areas affected by Hurricane Katrina, which were 
     enacted in the Gulf Opportunity Zone Act of 2005. The bill 
     would also raise revenue by changing the collection due 
     process procedures for employment taxes.
       The Joint Committee on Taxation (JCT) estimates that 
     enacting H.R. 1562 would decrease revenues by $1 million in 
     2007 and increase revenues by $42 million over the 2007-2012 
     period and by $4 million over the 2007-2017 period. The 
     Congressional Budget Office estimates that implementing H.R 
     1562 would have discretionary costs of less than $500,000 in 
     2007 and 2008, subject to the availability of appropriated 
     funds.
       JCT has determined that the tax provisions of the bill 
     contain no private-sector or intergovernmental mandates as 
     defined in the Unfunded Mandates Reform Act (UMRA). CBO has 
     determined that the non-tax provisions (section 4) contain no 
     private-sector or intergovernmental mandates as defined in 
     UMRA and would impose no costs .on state, local, or tribal 
     governments.
       Estimated cost to the Federal Government: The estimated 
     budgetary impact of the bill over the 2007-2017 period is 
     shown in the following table.

 
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              By fiscal year, in millions of dollars--
                                          --------------------------------------------------------------------------------------------------------------
                                            2007    2008    2009    2010    2011    2012     2013    2014    2015    2016    2017   2007-2012  2007-2017
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 CHANGES IN REVENUES\1\
 
Low-Income Housing Provisions............       0       0     -61     -97     -53     -10        0       0       0       0       0      -221       -221
Treatment of Repairs for Bond Purposes...      -1      -4      -7      -4       0       0        0       0       0       0       0       -16        -16
Modification of Collection Due Process...       0      53      54      28      20      17       20      23      26       0       0       172        241
Corporate Estimated Tax Payments.........       0       0       0       0       0     107     -107       0       0       0       0       107          0
Total Changes............................      -1      49     -14     -73     -33     114      -87      23      26       0       0        42          4
    On-Budget............................      -1       6     -58     -96     -49     100     -103       4       5       0       0       -97       -191
    Off-Budget...........................       0      43      44      23      16      14       16      19      21       0       0       139       195
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\Assuming availability of appropriated funds, the cost of the Government Accountability Office report required by the bill would be less than
  $500,000.
 
 Note: Numbers may not sum to totals because of rounding.

       Basis of estimate: For this estimate, JCT assumes that the 
     bill will be enacted by July 1, 2007.
     Revenues
       The legislation would reduce revenues through two 
     provisions related to areas affected by Hurricane Katrina, 
     and it would also raise revenues by changing collection due 
     process procedures for employment tax liabilities and making 
     other changes. All in all, JCT estimates that the bill would 
     increase revenues by $42 million over the 2007-2012 period 
     and by $4 million over the 2007-2017 period.
       First, H.R. 1562 would decrease revenues by extending and 
     expanding low-income housing credit rules that were enacted 
     in response to damage caused by Hurricane Katrina. Generally, 
     low-income housing credits are subject to a cap. In response 
     to Hurricane Katrina, this ceiling amount was increased for 
     the states affected, for the years 2006 through 2008. This 
     bill would extend the higher cap for two years (through 
     December 31, 2010). It would also make changes to the 
     carryover allocation rules that specifies the time by which 
     the housing must be completed to still qualify for the 
     credit. This provision, JCT estimates, would reduce revenues 
     by $221 million over the 2009-2012 period.
       Second, the bill would reduce revenues by treating certain 
     repairs in the Gulf Opportunity Zone (composed of areas 
     affected by the hurricane) as qualified rehabilitation for 
     purposes of certain bond rules. In general, qualified 
     mortgage bonds are tax-exempt and must be used for new 
     mortgages. Qualified rehabilitation loans, on the other hand, 
     may be used for replacing existing mortgages. Since the 
     hurricane, states in the Gulf Opportunity Zone have been 
     allowed to issue Gulf Opportunity Zone Bonds for construction 
     and rehabilitation of property. This bill would allow loans 
     financed with qualified mortgage bonds and Gulf Opportunity 
     Zone Bonds to be used for existing mortgages, regardless of 
     certain rules in place for normal qualified rehabilitation 
     loans. JCT estimates that this provision would reduce 
     revenues by $1 million in 2007 and by $16 million over the 
     2007-2012 period.
       H.R. 1562 would raise revenue by changing collection due 
     process procedures with regards to employment tax 
     liabilities. Currently, the Internal Revenue Service (IRS) 
     may seize a taxpayer's property given a federal tax lien. 
     Prior to seizing the property, the IRS must notify taxpayers 
     that they have a right to a collection due process hearing. 
     This bill would enable the IRS to seize property without 
     first having a hearing. JCT estimates that this provision 
     would increase revenues by $172 million over the 2007-2012 
     period and by $241 million over the 2007-2017 period. Of the 
     revenue gain, JCT estimates that a portion would be off-
     budget--totaling $195 million over the 2007-2017 period.
       Finally, one provision would shift revenues between 2012 
     and 2013. For corporations with at least $1 billion in assets 
     in 2012, the bill would increase the portion of corporate 
     estimated tax payments due in July through September of that 
     year. This change would increase revenues by $107 million in 
     2012 and decrease revenues by $107 million in 2013.

[[Page 7993]]


     Spending Subject to Appropriation
       Section 4 would require the Government Accountability 
     Office to report recommendations to the Congress on the use 
     of federal tax incentives provided to state and local 
     governments affected by Hurricanes Katrina, Rita, and Wilma. 
     Based on similar reports, CBO estimates that preparing and 
     distributing the report would cost less than $500,000 in any 
     one fiscal year.
       Intergovernmental and private-sector impact: JCT has 
     determined that the tax provisions of the bill contain no 
     private-sector or intergovernmental mandates as defined in 
     the UMRA. CBO has determined that the non-tax provisions 
     (section 4) contain no private-sector or intergovernmental 
     mandates as defined in UMRA and would impose no costs on 
     state. local, or tribal governments.
       Estimate prepared by: Federal revenues: Emily Schlect. 
     Federal spending: Matthew Pickford. Impact on state, local, 
     and tribal governments: Melissa Merrell. Impact on the 
     private sector: Nabeel Alsalam.
       Estimate approved by: G. Thomas Woodward, Assistant 
     Director for Tax Analysis. Peter H. Fontaine, Deputy 
     Assistant Director for Budget Analysis.
  Mr. Speaker, I yield back the balance of my time.
  Mr. CAMP of Michigan. Mr. Speaker, I yield back the balance of my 
time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from New York (Mr. Rangel) that the House suspend the rules 
and pass the bill, H.R. 1562, as amended.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

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