II 

109TH CONGRESS 

2D SESSION S. 2451 

To amend the Internal Revenue Code of 1986 to expand certain tax benefits 

related to Hurricane Katrina and to Hurricane Rita. 

IN THE SENATE OF THE UNITED STATES 

MARCH 16 (legislative day, MARCH 15), 2006 

Ms. LANDRIEU introduced the following bill; which was read twice and 

referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to expand 

certain tax benefits related to Hurricane Katrina and 

to Hurricane Rita. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Hurricane Rita Relief 

5 Act of 2006’’. 


hmoore on PROD1PC68 with HMBILLS
2 

•S 2451 IS

1 SEC. 2. EXPANSION OF CERTAIN TAX BENEFITS FOR INDI2 VIDUALS AFFECTED BY HURRICANE KATRINA 

3 TO INDIVIDUALS AFFECTED BY HURRICANE 

4 RITA. 

5 (a) WORK OPPORTUNITY TAX CREDIT FOR HURRI6 CANE RITA EMPLOYEES.— 

7 (1) IN GENERAL.—For purposes of section 51 

8 of the Internal Revenue Code of 1986, a Hurricane 

9 Rita employee shall be treated as a member of a tar10 geted group. 

11 (2) HURRICANE RITA EMPLOYEE.—For pur12 poses of this subsection, the term ‘‘Hurricane Rita 

13 employee’’ means any individual who is certified as 

14 an individual who on September 23, 2005, had a 

15 principal place of abode in that portion of the Rita 

16 GO Zone which is not part of the Gulf Opportunity 

17 Zone and who is hired during the 2-year period be18 ginning on such date for a position the principal 

19 place of employment of which is located in the Rita 

20 GO Zone or the Gulf Opportunity Zone. 

21 (3) REASONABLE IDENTIFICATION ACCEPT22 ABLE.—In lieu of the certification requirement 

23 under subparagraph (A) of section 51(d)(12) of such 

24 Code, an individual may provide to the employer rea25 sonable evidence that the individual is a Hurricane 

26 Rita employee, and subparagraph (B) of such secVerDate Aug 31 2005 00:16 Mar 21, 2006 Jkt 049200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S2451.IS S2451

hmoore on PROD1PC68 with HMBILLS
3 

•S 2451 IS

1 tion shall be applied as if such evidence were a cer2 tification described in such subparagraph. 

3 (4) SPECIAL RULES FOR DETERMINING CRED4 IT.—For purposes of applying subpart F of part IV 

5 of subchapter A of chapter 1 of such Code to wages 

6 paid or incurred to any Hurricane Rita employee— 

7 (A) section 51(c)(4) of such Code shall not 

8 apply, and 

9 (B) section 51(i)(2) of such Code shall not 

10 apply with respect to the first hire of such em11 ployee as a Hurricane Rita employee, unless 

12 such employee was an employee of the employer 

13 on September 23, 2005. 

14 (b) ADDITIONAL EXEMPTION FOR HOUSING HURRI15 CANE RITA DISPLACED INDIVIDUALS.— 

16 (1) IN GENERAL.—In the case of taxable years 

17 of a natural person beginning in 2005 and 2006, for 

18 purposes of the Internal Revenue Code of 1986, tax19 able income shall be reduced by $500 for each Hur20 ricane Rita displaced individual of the taxpayer for 

21 the taxable year. 

22 (2) LIMITATIONS.— 

23 (A) DOLLAR LIMITATION.—The reduction 

24 under paragraph (1) shall not exceed $2,000, 

25 reduced by the amount of the reduction under 


hmoore on PROD1PC68 with HMBILLS
4 

•S 2451 IS

1 this subsection and section 302(a) of the 

2 Katrina Emergency Tax Relief Act of 2005 for 

3 all previous taxable years. 

4 (B) INDIVIDUALS TAKEN INTO ACCOUNT

5 ONLY ONCE.—An individual shall not be taken 

6 into account under paragraph (1) if such indi7 vidual was taken into account under such para8 graph or under section 302(a) of the Katrina 

9 Emergency Tax Relief Act of 2005 by the tax10 payer in any prior taxable year. 

11 (C) IDENTIFYING INFORMATION RE12 QUIRED.—An individual shall not be taken into 

13 account under paragraph (1) for a taxable year 

14 unless the taxpayer identification number of 

15 such individual is included on the return of the 

16 taxpayer for such taxable year. 

17 (3) HURRICANE RITA DISPLACED INDI18 VIDUAL.—For purposes of this subsection, the term 

19 ‘‘Hurricane Rita displaced individual’’ means, with 

20 respect to any taxpayer for any taxable year, a nat21 ural person if— 

22 (A) such person is not a Hurricane 

23 Katrina displaced individual (within the mean24 ing of section 302(c) of the Katrina Emergency 

25 Tax Relief Act of 2005), 


hmoore on PROD1PC68 with HMBILLS
5 

•S 2451 IS

1 (B) such person’s principal place of abode 

2 on September 23, 2005, was in the Hurricane 

3 Rita disaster area, 

4 (C)(i) in the case of such an abode located 

5 in the Rita GO Zone, such person is displaced 

6 from such abode, or 

7 (ii) in the case of such an abode located 

8 outside the Rita GO Zone, such person is dis9 placed from such abode, and 

10 (I) such abode was damaged by Hur11 ricane Rita, or 

12 (II) such person was evacuated from 

13 such abode by reason of Hurricane Rita, 

14 and 

15 (D) such person is provided housing free of 

16 charge by the taxpayer in the principal resi17 dence of the taxpayer for a period of 60 con18 secutive days which ends in such taxable year. 

19 Such term shall not include the spouse or any de20 pendent of the taxpayer. 

21 (4) COMPENSATION FOR HOUSING.—No deduc22 tion shall be allowed under this subsection if the tax23 payer receives any rent or other amount (from any 

24 source) in connection with the providing of such 

25 housing. 


hmoore on PROD1PC68 with HMBILLS
6 

•S 2451 IS

1 (c) MILEAGE REIMBURSEMENT TO CHARITABLE

2 VOLUNTEERS EXCLUDED FROM GROSS INCOME.— 

3 (1) IN GENERAL.—For purposes of the Internal 

4 Revenue Code of 1986, gross income of an individual 

5 for taxable years ending on or after September 23, 

6 2005, does not include amounts received, from an 

7 organization described in section 170(c) of such 

8 Code, as reimbursement of operating expenses with 

9 respect to use of a passenger automobile for the ben10 efit of such organization in connection with pro11 viding relief relating to Hurricane Rita during the 

12 period beginning on September 23, 2005, and end13 ing on December 31, 2006. The preceding sentence 

14 shall apply only to the extent that the expenses 

15 which are reimbursed would be deductible under 

16 chapter 1 of such Code if section 274(d) of such 

17 Code were applied— 

18 (A) by using the standard business mileage 

19 rate in effect under section 162(a) of such Code 

20 at the time of such use, and 

21 (B) as if the individual were an employee 

22 of an organization not described in section 

23 170(c) of such Code. 

24 (2) APPLICATION TO VOLUNTEER SERVICES

25 ONLY.—Paragraph (1) shall not apply with respect 


hmoore on PROD1PC68 with HMBILLS
7 

•S 2451 IS

1 to any expenses relating to the performance of serv2 ices for compensation. 

3 (3) NO DOUBLE BENEFIT.—No deduction or 

4 credit shall be allowed under any other provision of 

5 such Code with respect to the expenses excludable 

6 from gross income under paragraph (1). 

7 (d) EXCLUSIONS OF CERTAIN CANCELLATIONS OF

8 INDEBTEDNESS FOR VICTIMS OF HURRICANE RITA.— 

9 (1) IN GENERAL.—For purposes of the Internal 

10 Revenue Code of 1986, gross income shall not in11 clude any amount which (but for this subsection) 

12 would be includible in gross income by reason of the 

13 discharge (in whole or in part) of indebtedness of a 

14 natural person described in paragraph (2) by an ap15 plicable entity (as defined in section 6050P(c)(1) of 

16 such Code). 

17 (2) PERSON DESCRIBED.—A natural person is 

18 described in this paragraph if the principal place of 

19 abode of such person on September 23, 2005, was 

20 located— 

21 (A) in the Rita GO Zone, or 

22 (B) in the Hurricane Rita disaster area 

23 (but outside the Rita GO Zone) and such per24 son suffered economic loss by reason of Hurri25 cane Rita. 


hmoore on PROD1PC68 with HMBILLS
8 

•S 2451 IS

1 (3) EXCEPTIONS.— 

2 (A) BUSINESS INDEBTEDNESS.—Para3 graph (1) shall not apply to any indebtedness 

4 incurred in connection with a trade or business. 

5 (B) REAL PROPERTY OUTSIDE RITA GO

6 ZONE.—Paragraph (1) shall not apply to any 

7 discharge of indebtedness to the extent that real 

8 property constituting security for such indebt9 edness is located outside the Hurricane Rita 

10 disaster area. 

11 (4) DENIAL OF DOUBLE BENEFIT.—For pur12 poses of the Internal Revenue Code of 1986, the 

13 amount excluded from gross income under para14 graph (1) shall treated in the same manner as an 

15 amount excluded under section 108(a) of such Code. 

16 (5) EFFECTIVE DATE.—This subsection shall 

17 apply to discharges made on or after September 23, 

18 2005, and before January 1, 2007. 

19 (e) DEFINITIONS.—For purposes of this section, the 

20 terms ‘‘Rita GO Zone’’, ‘‘Hurricane Rita disaster area’’, 

21 and ‘‘Gulf Opportunity Zone’’ have the meanings given 

22 such terms under section 1400M of the Internal Revenue 

23 Code of 1986. 


hmoore on PROD1PC68 with HMBILLS
9 

•S 2451 IS

1 SEC. 3. EXPANSION OF EDUCATION TAX BENEFITS AND 

2 HOUSING TAX BENEFITS TO PERSONS AF3 FECTED BY HURRICANE RITA. 

4 (a) EDUCATION TAX BENEFITS.—Section 1400O of 

5 the Internal Revenue Code of 1986 is amended by insert6 ing ‘‘or the Rita GO Zone’’ after ‘‘Gulf Opportunity 

7 Zone’’. 

8 (b) HOUSING TAX BENEFITS.— 

9 (1) QUALIFIED EMPLOYEE.—Subsection (c) of 

10 section 1400P of the Internal Revenue Code of 1986 

11 is amended to read as follows: 

12 ‘‘(c) QUALIFIED EMPLOYEE.—For purposes of this 

13 section, the term ‘qualified employee’ means, with respect 

14 to any month— 

15 ‘‘(1) any individual— 

16 ‘‘(A) who had a principal residence (as de17 fined in section 121) in the Gulf Opportunity 

18 Zone on August 28, 2005, and 

19 ‘‘(B) who performs substantially all em20 ployment services— 

21 ‘‘(i) in the Gulf Opportunity Zone, 

22 and 

23 ‘‘(ii) for the qualified employer which 

24 furnishes lodging to such individual, and 

25 ‘‘(2) any individual— 


hmoore on PROD1PC68 with HMBILLS
10 

•S 2451 IS

1 ‘‘(A) who had a principal residence (as de2 fined in section 121) in the Rita GO Zone on 

3 September 23, 2005, and 

4 ‘‘(B) who performs substantially all em5 ployment services— 

6 ‘‘(i) in the Rita GO Zone, and 

7 ‘‘(ii) for the qualified employer which 

8 furnishes lodging to such individual.’’. 

9 (2) QUALIFIED EMPLOYER.—Subsection (d) of 

10 section 1400P of the Internal Revenue Code of 1986 

11 is amended to read as follows: 

12 ‘‘(d) QUALIFIED EMPLOYER.—The term ‘qualified 

13 employer’ means— 

14 ‘‘(1) with respect to a qualified employee de15 scribed in subsection (c)(1), any employer with a 

16 trade or business located in the Gulf Opportunity 

17 Zone, and 

18 ‘‘(2) with respect to a qualified employee de19 scribed in subsection (c)(2), any employer with a 

20 trade or business located in the Rita GO Zone.’’. 

21 (3) CONFORMING AMENDMENTS.— 

22 (A) The heading for subsection (a) of sec23 tion 1400P of the Internal Revenue Code of 

24 1986 is amended by striking ‘‘INDIVIDUAL AF25 FECTED BY HURRICANE KATRINA’’ and insertVerDate Aug 31 2005 00:16 Mar 21, 2006 Jkt 049200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S2451.IS S2451

hmoore on PROD1PC68 with HMBILLS
11 

•S 2451 IS

1 ing ‘‘INDIVIDUALS AFFECTED BY HURRICANES

2 KATRINA AND RITA’’. 

3 (B) Section 1400P(b) of such Code is 

4 amended— 

5 (i) by inserting ‘‘of a qualified em6 ployee’’ after ‘‘in the case of a qualified 

7 employer’’, 

8 (ii) by striking ‘‘the Hurricane 

9 Katrina housing credit’’ and inserting ‘‘the 

10 Hurricane Katrina and Rita housing cred11 it’’, 

12 (iii) by striking ‘‘of a qualified em13 ployee of such employer’’ and inserting ‘‘of 

14 all qualified employees of such employer’’, 

15 and 

16 (iv) by striking ‘‘HURRICANE

17 KATRINA’’ in the heading and inserting 

18 ‘‘HURRICANES KATRINA AND RITA’’. 

19 (C) Section 38(b)(27) of such Code is 

20 amended by striking ‘‘Hurricane Katrina hous21 ing credit’’ and inserting ‘‘Hurricane Katrina 

22 and Rita housing credit’’. 

23 (c) EFFECTIVE DATE.—The amendments made by 

24 this section shall take effect as if included in the Gulf Op25 portunity Zone Act of 2005. 


hmoore on PROD1PC68 with HMBILLS
12 

•S 2451 IS

1 SEC. 4. EXPANSION OF CERTAIN GULF OPPORTUNITY ZONE 

2 BENEFITS TO THE RITA GO ZONE. 

3 (a) IN GENERAL.—Section 1400N is amended by 

4 adding at the end the following new subsection: 

5 ‘‘(q) APPLICATION OF SECTION TO RITA GO 

6 ZONE.— 

7 ‘‘(1) IN GENERAL.—For purposes of sub8 sections (d), (e), (f), (g), (h), and (k)— 

9 ‘‘(A) the term ‘Gulf Opportunity Zone’ 

10 shall include the Rita GO Zone, 

11 ‘‘(B) any reference to August 28, 2005, 

12 shall be treated as a reference to September 23, 

13 2005, with respect to that portion of the Rita 

14 GO Zone which is not a part of the Gulf Oppor15 tunity Zone, 

16 ‘‘(C) any reference to August 27, 2005, 

17 shall be treated as a reference to September 22, 

18 2005, with respect to that portion of the Rita 

19 GO Zone which is not a part of the Gulf Oppor20 tunity Zone, and 

21 ‘‘(D) any reference to Hurricane Katrina 

22 shall be treated as a reference to Hurricane 

23 Rita with respect to any portion of the Gulf Op24 portunity Zone (after the application of sub25 paragraph (A)) which is also a part of the Rita 

26 GO Zone. 


hmoore on PROD1PC68 with HMBILLS
13 

•S 2451 IS

1 ‘‘(2) SPECIAL RULE.—For purposes of sub2 section (k)(2), in the case of any individual whose 

3 principal place of abode was located in that portion 

4 of the Rita GO Zone which is not a part of the Gulf 

5 Opportunity Zone (as defined in section 1400M(1) 

6 without regard to paragraph (1)(A)), no deduction 

7 for moving expenses under subparagraph (B)(ii) 

8 thereof shall be taken into account unless the prin9 cipal place of employment of such individual is lo10 cated in the Rita GO Zone.’’. 

11 (b) EFFECTIVE DATE.—The amendment made by 

12 this section shall take effect as if included in the Gulf Op13 portunity Zone Act of 2005. 

Æ 


hmoore on PROD1PC68 with HMBILLS