H. Res. 454

In the House of Representatives, U.S., 

September 21, 2005.

Resolved, That, upon the adoption of this resolution, the 

House shall be considered to have taken from the Speaker’s 

table the bill H.R. 3768, with the Senate amendment thereto, 

and to have concurred in the Senate amendment to the bill 

with the following amendment: 

In lieu of the matter proposed to be inserted by the 

amendment of the Senate to the bill, insert the following:

1 SECTION 1. SHORT TITLE, ETC. 

2 (a) SHORT TITLE.—This Act may be cited as the 

3 ‘‘Katrina Emergency Tax Relief Act of 2005’’. 

4 (b) TABLE OF CONTENTS.—The table of contents for 

5 this Act is as follows:

Sec. 1. Short title, etc. 

Sec. 2. Hurricane Katrina disaster area. 

TITLE I—SPECIAL RULES FOR USE OF RETIREMENT FUNDS FOR 

RELIEF RELATING TO HURRICANE KATRINA 

Sec. 101. Tax-favored withdrawals from retirement plans for relief relating to 

Hurricane Katrina. 

Sec. 102. Recontributions of withdrawals for home purchases cancelled due to 

Hurricane Katrina. 

Sec. 103. Loans from qualified plans for relief relating to Hurricane Katrina. 

Sec. 104. Provisions relating to plan amendments. 

TITLE II—EMPLOYMENT RELIEF 
2

•HRES 454 EH 

Sec. 201. Work opportunity tax credit for Hurricane Katrina employees. 

Sec. 202. Employee retention credit for employers affected by Hurricane 

Katrina. 

TITLE III—CHARITABLE GIVING INCENTIVES 

Sec. 301. Temporary suspension of limitations on charitable contributions. 

Sec. 302. Additional exemption for housing Hurricane Katrina displaced individuals. 

Sec. 303. Increase in standard mileage rate for charitable use of vehicles. 

Sec. 304. Mileage reimbursements to charitable volunteers excluded from gross 

income. 

Sec. 305. Charitable deduction for contributions of food inventory. 

Sec. 306. Charitable deduction for contributions of book inventories to public 

schools. 

TITLE IV—ADDITIONAL TAX RELIEF PROVISIONS 

Sec. 401. Exclusions of certain cancellations of indebtedness by reason of Hurricane Katrina. 

Sec. 402. Suspension of certain limitations on personal casualty losses. 

Sec. 403. Required exercise of authority under section 7508A for tax relief relating to Hurricane Katrina. 

Sec. 404. Special rules for mortgage revenue bonds. 

Sec. 405. Extension of replacement period for nonrecognition of gain for property located in Hurricane Katrina disaster area. 

Sec. 406. Special rule for determining earned income. 

Sec. 407. Secretarial authority to make adjustments regarding taxpayer and dependency status. 

TITLE V—EMERGENCY REQUIREMENT 

Sec. 501. Emergency requirement.

1 SEC. 2. HURRICANE KATRINA DISASTER AREA. 

2 For purposes of this Act—

3 (1) HURRICANE KATRINA DISASTER AREA.—

4 The term ‘‘Hurricane Katrina disaster area’’ means 

5 an area with respect to which a major disaster has 

6 been declared by the President before September 14, 

7 2005, under section 401 of the Robert T. Stafford 

8 Disaster Relief and Emergency Assistance Act by 

9 reason of Hurricane Katrina. 

10 (2) CORE DISASTER AREA.—The term ‘‘core 

11 disaster area’’ means that portion of the Hurricane 
3

•HRES 454 EH 

1 Katrina disaster area determined by the President to 

2 warrant individual or individual and public assist3 ance from the Federal Government under such Act. 

4 TITLE I—SPECIAL RULES FOR 

5 USE OF RETIREMENT FUNDS 

6 FOR RELIEF RELATING TO 

7 HURRICANE KATRINA 

8 SEC. 101. TAX-FAVORED WITHDRAWALS FROM RETIRE9 MENT PLANS FOR RELIEF RELATING TO HUR10 RICANE KATRINA. 

11 (a) IN GENERAL.—Section 72(t) of the Internal Rev12 enue Code of 1986 shall not apply to any qualified Hurri13 cane Katrina distribution. 

14 (b) AGGREGATE DOLLAR LIMITATION.—

15 (1) IN GENERAL.—For purposes of this section, 

16 the aggregate amount of distributions received by an 

17 individual which may be treated as qualified Hurri18 cane Katrina distributions for any taxable year shall 

19 not exceed the excess (if any) of—

20 (A) $100,000, over 

21 (B) the aggregate amounts treated as 

22 qualified Hurricane Katrina distributions re23 ceived by such individual for all prior taxable 

24 years. 
4

•HRES 454 EH 

1 (2) TREATMENT OF PLAN DISTRIBUTIONS.—If 

2 a distribution to an individual would (without regard 

3 to paragraph (1)) be a qualified Hurricane Katrina 

4 distribution, a plan shall not be treated as violating 

5 any requirement of the Internal Revenue Code of 

6 1986 merely because the plan treats such distribu7 tion as a qualified Hurricane Katrina distribution, 

8 unless the aggregate amount of such distributions 

9 from all plans maintained by the employer (and any 

10 member of any controlled group which includes the 

11 employer) to such individual exceeds $100,000. 

12 (3) CONTROLLED GROUP.—For purposes of 

13 paragraph (2), the term ‘‘controlled group’’ means 

14 any group treated as a single employer under sub15 section (b), (c), (m), or (o) of section 414 of such 

16 Code. 

17 (c) AMOUNT DISTRIBUTED MAY BE REPAID.—

18 (1) IN GENERAL.—Any individual who receives 

19 a qualified Hurricane Katrina distribution may, at 

20 any time during the 3-year period beginning on the 

21 day after the date on which such distribution was re22 ceived, make one or more contributions in an aggre23 gate amount not to exceed the amount of such dis24 tribution to an eligible retirement plan of which such 

25 individual is a beneficiary and to which a rollover 
5

•HRES 454 EH 

1 contribution of such distribution could be made 

2 under section 402(c), 403(a)(4), 403(b)(8), 

3 408(d)(3), or 457(e)(16) of such Code, as the case 

4 may be. 

5 (2) TREATMENT OF REPAYMENTS OF DISTRIBU6 TIONS FROM ELIGIBLE RETIREMENT PLANS OTHER

7 THAN IRAS.—For purposes of such Code, if a con8 tribution is made pursuant to paragraph (1) with re9 spect to a qualified Hurricane Katrina distribution 

10 from an eligible retirement plan other than an indi11 vidual retirement plan, then the taxpayer shall, to 

12 the extent of the amount of the contribution, be 

13 treated as having received the qualified Hurricane 

14 Katrina distribution in an eligible rollover distribu15 tion (as defined in section 402(c)(4) of such Code) 

16 and as having transferred the amount to the eligible 

17 retirement plan in a direct trustee to trustee trans18 fer within 60 days of the distribution. 

19 (3) TREATMENT OF REPAYMENTS FOR DIS20 TRIBUTIONS FROM IRAS.—For purposes of such 

21 Code, if a contribution is made pursuant to para22 graph (1) with respect to a qualified Hurricane 

23 Katrina distribution from an individual retirement 

24 plan (as defined by section 7701(a)(37) of such 

25 Code), then, to the extent of the amount of the con-
6

•HRES 454 EH 

1 tribution, the qualified Hurricane Katrina distribu2 tion shall be treated as a distribution described in 

3 section 408(d)(3) of such Code and as having been 

4 transferred to the eligible retirement plan in a direct 

5 trustee to trustee transfer within 60 days of the dis6 tribution. 

7 (d) DEFINITIONS.—For purposes of this section—

8 (1) QUALIFIED HURRICANE KATRINA DISTRIBU9 TION.—Except as provided in subsection (b), the 

10 term ‘‘qualified Hurricane Katrina distribution’’ 

11 means any distribution from an eligible retirement 

12 plan made on or after August 25, 2005, and before 

13 January 1, 2007, to an individual whose principal 

14 place of abode on August 28, 2005, is located in the 

15 Hurricane Katrina disaster area and who has sus16 tained an economic loss by reason of Hurricane 

17 Katrina. 

18 (2) ELIGIBLE RETIREMENT PLAN.—The term 

19 ‘‘eligible retirement plan’’ shall have the meaning 

20 given such term by section 402(c)(8)(B) of such 

21 Code. 

22 (e) INCOME INCLUSION SPREAD OVER 3 YEAR PE23 RIOD FOR QUALIFIED HURRICANE KATRINA DISTRIBU24 TIONS.—
7

•HRES 454 EH 

1 (1) IN GENERAL.—In the case of any qualified 

2 Hurricane Katrina distribution, unless the taxpayer 

3 elects not to have this subsection apply for any tax4 able year, any amount required to be included in 

5 gross income for such taxable year shall be so in6 cluded ratably over the 3-taxable year period begin7 ning with such taxable year. 

8 (2) SPECIAL RULE.—For purposes of para9 graph (1), rules similar to the rules of subparagraph 

10 (E) of section 408A(d)(3) of such Code shall apply. 

11 (f) SPECIAL RULES.—

12 (1) EXEMPTION OF DISTRIBUTIONS FROM

13 TRUSTEE TO TRUSTEE TRANSFER AND WITH14 HOLDING RULES.—For purposes of sections 

15 401(a)(31), 402(f), and 3405 of such Code, qualified 

16 Hurricane Katrina distributions shall not be treated 

17 as eligible rollover distributions. 

18 (2) QUALIFIED HURRICANE KATRINA DISTRIBU19 TIONS TREATED AS MEETING PLAN DISTRIBUTION

20 REQUIREMENTS.—For purposes of such Code, a 

21 qualified Hurricane Katrina distribution shall be 

22 treated as meeting the requirements of sections 

23 401(k)(2)(B)(i), 403(b)(7)(A)(ii), 403(b)(11), and 

24 457(d)(1)(A) of such Code. 
8

•HRES 454 EH 

1 SEC. 102. RECONTRIBUTIONS OF WITHDRAWALS FOR HOME 

2 PURCHASES CANCELLED DUE TO HURRI3 CANE KATRINA. 

4 (a) RECONTRIBUTIONS.—

5 (1) IN GENERAL.—Any individual who received 

6 a qualified distribution may, during the period be7 ginning on August 25, 2005, and ending on Feb8 ruary 28, 2006, make one or more contributions in 

9 an aggregate amount not to exceed the amount of 

10 such qualified distribution to an eligible retirement 

11 plan (as defined in section 402(c)(8)(B) of the Inter12 nal Revenue Code of 1986) of which such individual 

13 is a beneficiary and to which a rollover contribution 

14 of such distribution could be made under section 

15 402(c), 403(a)(4), 403(b)(8), or 408(d)(3) of such 

16 Code, as the case may be. 

17 (2) TREATMENT OF REPAYMENTS.—Rules simi18 lar to the rules of paragraphs (2) and (3) of section 

19 101(c) of this Act shall apply for purposes of this 

20 section. 

21 (b) QUALIFIED DISTRIBUTION DEFINED.—For pur22 poses of this section, the term ‘‘qualified distribution’’ 

23 means any distribution—

24 (1) described in section 401(k)(2)(B)(i)(IV), 

25 403(b)(7)(A)(ii) (but only to the extent such dis-
9

•HRES 454 EH 

1 tribution relates to financial hardship), 

2 403(b)(11)(B), or 72(t)(2)(F) of such Code, 

3 (2) received after February 28, 2005, and be4 fore August 29, 2005, and 

5 (3) which was to be used to purchase or con6 struct a principal residence in the Hurricane 

7 Katrina disaster area, but which was not so pur8 chased or constructed on account of Hurricane 

9 Katrina. 

10 SEC. 103. LOANS FROM QUALIFIED PLANS FOR RELIEF RE11 LATING TO HURRICANE KATRINA. 

12 (a) INCREASE IN LIMIT ON LOANS NOT TREATED AS

13 DISTRIBUTIONS.—In the case of any loan from a qualified 

14 employer plan (as defined under section 72(p)(4) of the 

15 Internal Revenue Code of 1986) to a qualified individual 

16 made after the date of enactment of this Act and before 

17 January 1, 2007—

18 (1) clause (i) of section 72(p)(2)(A) of such 

19 Code shall be applied by substituting ‘‘$100,000’’ 

20 for ‘‘$50,000’’, and 

21 (2) clause (ii) of such section shall be applied 

22 by substituting ‘‘the present value of the nonforfeit23 able accrued benefit of the employee under the plan’’ 

24 for ‘‘one-half of the present value of the nonforfeit-
10

•HRES 454 EH 

1 able accrued benefit of the employee under the 

2 plan’’. 

3 (b) DELAY OF REPAYMENT.—In the case of a quali4 fied individual with an outstanding loan on or after Au5 gust 25, 2005, from a qualified employer plan (as defined 

6 in section 72(p)(4) of such Code)—

7 (1) if the due date pursuant to subparagraph 

8 (B) or (C) of section 72(p)(2) of such Code for any 

9 repayment with respect to such loan occurs during 

10 the period beginning on August 25, 2005, and end11 ing on December 31, 2006, such due date shall be 

12 delayed for 1 year, 

13 (2) any subsequent repayments with respect to 

14 any such loan shall be appropriately adjusted to re15 flect the delay in the due date under paragraph (1) 

16 and any interest accruing during such delay, and 

17 (3) in determining the 5-year period and the 

18 term of a loan under subparagraph (B) or (C) of 

19 section 72(p)(2) of such Code, the period described 

20 in paragraph (1) shall be disregarded. 

21 (c) QUALIFIED INDIVIDUAL.—For purposes of this 

22 section, the term ‘‘qualified individual’’ means an indi23 vidual whose principal place of abode on August 28, 2005, 

24 is located in the Hurricane Katrina disaster area and who 
11

•HRES 454 EH 

1 has sustained an economic loss by reason of Hurricane 

2 Katrina. 

3 SEC. 104. PROVISIONS RELATING TO PLAN AMENDMENTS. 

4 (a) IN GENERAL.—If this section applies to any 

5 amendment to any plan or annuity contract, such plan or 

6 contract shall be treated as being operated in accordance 

7 with the terms of the plan during the period described in 

8 subsection (b)(2)(A). 

9 (b) AMENDMENTS TO WHICH SECTION APPLIES.—

10 (1) IN GENERAL.—This section shall apply to 

11 any amendment to any plan or annuity contract 

12 which is made—

13 (A) pursuant to any amendment made by 

14 this title, or pursuant to any regulation issued 

15 by the Secretary of the Treasury or the Sec16 retary of Labor under this title, and 

17 (B) on or before the last day of the first 

18 plan year beginning on or after January 1, 

19 2007, or such later date as the Secretary of the 

20 Treasury may prescribe. 

21 In the case of a governmental plan (as defined in 

22 section 414(d) of the Internal Revenue Code of 

23 1986), subparagraph (B) shall be applied by sub24 stituting the date which is 2 years after the date 

25 otherwise applied under subparagraph (B). 
12

•HRES 454 EH 

1 (2) CONDITIONS.—This section shall not apply 

2 to any amendment unless—

3 (A) during the period—

4 (i) beginning on the date the legisla5 tive or regulatory amendment described in 

6 paragraph (1)(A) takes effect (or in the 

7 case of a plan or contract amendment not 

8 required by such legislative or regulatory 

9 amendment, the effective date specified by 

10 the plan), and 

11 (ii) ending on the date described in 

12 paragraph (1)(B) (or, if earlier, the date 

13 the plan or contract amendment is adopt14 ed), 

15 the plan or contract is operated as if such plan 

16 or contract amendment were in effect; and 

17 (B) such plan or contract amendment ap18 plies retroactively for such period. 

19 TITLE II—EMPLOYMENT RELIEF 

20 SEC. 201. WORK OPPORTUNITY TAX CREDIT FOR HURRI21 CANE KATRINA EMPLOYEES. 

22 (a) IN GENERAL.—For purposes of section 51 of the 

23 Internal Revenue Code of 1986, a Hurricane Katrina em24 ployee shall be treated as a member of a targeted group. 
13

•HRES 454 EH 

1 (b) HURRICANE KATRINA EMPLOYEE.—For pur2 poses of this section, the term ‘‘Hurricane Katrina em3 ployee’’ means—

4 (1) any individual who on August 28, 2005, 

5 had a principal place of abode in the core disaster 

6 area and who is hired during the 2-year period be7 ginning on such date for a position the principal 

8 place of employment of which is located in the core 

9 disaster area, and 

10 (2) any individual who on such date had a prin11 cipal place of abode in the core disaster area, who 

12 is displaced from such abode by reason of Hurricane 

13 Katrina, and who is hired during the period begin14 ning on such date and ending on December 31, 

15 2005. 

16 (c) REASONABLE IDENTIFICATION ACCEPTABLE.—In 

17 lieu of the certification requirement under subparagraph 

18 (A) of section 51(d)(12) of such Code, an individual may 

19 provide to the employer reasonable evidence that the indi20 vidual is a Hurricane Katrina employee, and subpara21 graph (B) of such section shall be applied as if such evi22 dence were a certification described in such subparagraph. 

23 (d) SPECIAL RULES FOR DETERMINING CREDIT.—

24 For purposes of applying subpart F of part IV of sub-
14

•HRES 454 EH 

1 chapter A of chapter 1 of such Code to wages paid or in2 curred to any Hurricane Katrina employee—

3 (1) section 51(c)(4) of such Code shall not 

4 apply, and 

5 (2) section 51(i)(2) of such Code shall not 

6 apply with respect to the first hire of such employee 

7 as a Hurricane Katrina employee, unless such em8 ployee was an employee of the employer on August 

9 28, 2005. 

10 SEC. 202. EMPLOYEE RETENTION CREDIT FOR EMPLOYERS 

11 AFFECTED BY HURRICANE KATRINA. 

12 (a) IN GENERAL.—In the case of an eligible em13 ployer, there shall be allowed as a credit against the tax 

14 imposed by chapter 1 of the Internal Revenue Code of 

15 1986 for the taxable year an amount equal to 40 percent 

16 of the qualified wages with respect to each eligible em17 ployee of such employer for such taxable year. For pur18 poses of the preceding sentence, the amount of qualified 

19 wages which may be taken into account with respect to 

20 any individual shall not exceed $6,000. 

21 (b) DEFINITIONS.—For purposes of this section—

22 (1) ELIGIBLE EMPLOYER.—The term ‘‘eligible 

23 employer’’ means any employer—
15

•HRES 454 EH 

1 (A) which conducted an active trade or 

2 business on August 28, 2005, in a core disaster 

3 area, and 

4 (B) with respect to whom the trade or 

5 business described in subparagraph (A) is inop6 erable on any day after August 28, 2005, and 

7 before January 1, 2006, as a result of damage 

8 sustained by reason of Hurricane Katrina. 

9 (2) ELIGIBLE EMPLOYEE.—The term ‘‘eligible 

10 employee’’ means with respect to an eligible em11 ployer an employee whose principal place of employ12 ment on August 28, 2005, with such eligible em13 ployer was in a core disaster area. 

14 (3) QUALIFIED WAGES.—The term ‘‘qualified 

15 wages’’ means wages (as defined in section 51(c)(1) 

16 of such Code, but without regard to section 

17 3306(b)(2)(B) of such Code) paid or incurred by an 

18 eligible employer with respect to an eligible employee 

19 on any day after August 28, 2005, and before Janu20 ary 1, 2006, which occurs during the period—

21 (A) beginning on the date on which the 

22 trade or business described in paragraph (1) 

23 first became inoperable at the principal place of 

24 employment of the employee immediately before 

25 Hurricane Katrina, and 
16

•HRES 454 EH 

1 (B) ending on the date on which such 

2 trade or business has resumed significant oper3 ations at such principal place of employment. 

4 Such term shall include wages paid without regard 

5 to whether the employee performs no services, per6 forms services at a different place of employment 

7 than such principal place of employment, or per8 forms services at such principal place of employment 

9 before significant operations have resumed. 

10 (c) CREDIT NOT ALLOWED FOR LARGE BUSI11 NESSES.—The term ‘‘eligible employer’’ shall not include 

12 any trade or business for any taxable year if such trade 

13 or business employed an average of more than 200 em14 ployees on business days during the taxable year. 

15 (d) CERTAIN RULES TO APPLY.—For purposes of 

16 this section, rules similar to the rules of sections 51(i)(1), 

17 52, and 280C(a) of such Code shall apply. 

18 (e) EMPLOYEE NOT TAKEN INTO ACCOUNT MORE

19 THAN ONCE.—An employee shall not be treated as an eli20 gible employee for purposes of this section for any period 

21 with respect to any employer if such employer is allowed 

22 a credit under section 51 of such Code with respect to 

23 such employee for such period. 

24 (f) CREDIT TO BE PART OF GENERAL BUSINESS

25 CREDIT.—The credit allowed under this section shall be 
17

•HRES 454 EH 

1 added to the current year business credit under section 

2 38(b) of such Code and shall be treated as a credit allowed 

3 under subpart D of part IV of subchapter A of chapter 

4 1 of such Code. 

5 TITLE III—CHARITABLE GIVING 

6 INCENTIVES 

7 SEC. 301. TEMPORARY SUSPENSION OF LIMITATIONS ON 

8 CHARITABLE CONTRIBUTIONS. 

9 (a) IN GENERAL.—Except as otherwise provided in 

10 subsection (b), section 170(b) of the Internal Revenue 

11 Code of 1986 shall not apply to qualified contributions and 

12 such contributions shall not be taken into account for pur13 poses of applying subsections (b) and (d) of section 170 

14 of such Code to other contributions. 

15 (b) TREATMENT OF EXCESS CONTRIBUTIONS.—For 

16 purposes of section 170 of such Code—

17 (1) INDIVIDUALS.—In the case of an indi18 vidual—

19 (A) LIMITATION.—Any qualified contribu20 tion shall be allowed only to the extent that the 

21 aggregate of such contributions does not exceed 

22 the excess of the taxpayer’s contribution base 

23 (as defined in subparagraph (F) of section 

24 170(b)(1) of such Code) over the amount of all 
18

•HRES 454 EH 

1 other charitable contributions allowed under 

2 such section 170(b)(1). 

3 (B) CARRYOVER.—If the aggregate 

4 amount of qualified contributions made in the 

5 contribution year (within the meaning of section 

6 170(d)(1) of such Code) exceeds the limitation 

7 of subparagraph (A), such excess shall be added 

8 to the excess described in the portion of sub9 paragraph (A) of such section which precedes 

10 clause (i) thereof for purposes of applying such 

11 section. 

12 (2) CORPORATIONS.—In the case of a corpora13 tion—

14 (A) LIMITATION.—Any qualified contribu15 tion shall be allowed only to the extent that the 

16 aggregate of such contributions does not exceed 

17 the excess of the taxpayer’s taxable income (as 

18 determined under paragraph (2) of section 

19 170(b) of such Code) over the amount of all 

20 other charitable contributions allowed under 

21 such paragraph. 

22 (B) CARRYOVER.—Rules similar to the 

23 rules of paragraph (1)(B) shall apply for pur24 poses of this paragraph. 
19

•HRES 454 EH 

1 (c) EXCEPTION TO OVERALL LIMITATION ON

2 ITEMIZED DEDUCTIONS.—So much of any deduction al3 lowed under section 170 of such Code as does not exceed 

4 the qualified contributions paid during the taxable year 

5 shall not be treated as an itemized deduction for purposes 

6 of section 68 of such Code. 

7 (d) QUALIFIED CONTRIBUTIONS.—

8 (1) IN GENERAL.—For purposes of this section, 

9 the term ‘‘qualified contribution’’ means any chari10 table contribution (as defined in section 170(c) of 

11 such Code)—

12 (A) paid during the period beginning on 

13 August 28, 2005, and ending on December 31, 

14 2005, in cash to an organization described in 

15 section 170(b)(1)(A) of such Code (other than 

16 an organization described in section 509(a)(3) 

17 of such Code), 

18 (B) in the case of a contribution paid by 

19 a corporation, such contribution is for relief ef20 forts related to Hurricane Katrina, and 

21 (C) with respect to which the taxpayer has 

22 elected the application of this section. 

23 (2) EXCEPTION.—Such term shall not include a 

24 contribution if the contribution is for establishment 

25 of a new, or maintenance in an existing, segregated 
20

•HRES 454 EH 

1 fund or account with respect to which the donor (or 

2 any person appointed or designated by such donor) 

3 has, or reasonably expects to have, advisory privi4 leges with respect to distributions or investments by 

5 reason of the donor’s status as a donor. 

6 (3) APPLICATION OF ELECTION TO PARTNER7 SHIPS AND S CORPORATIONS.—In the case of a part8 nership or S corporation, the election under para9 graph (1)(C) shall be made separately by each part10 ner or shareholder. 

11 SEC. 302. ADDITIONAL EXEMPTION FOR HOUSING HURRI12 CANE KATRINA DISPLACED INDIVIDUALS. 

13 (a) IN GENERAL.—In the case of taxable years of a 

14 natural person beginning in 2005 or 2006, for purposes 

15 of the Internal Revenue Code of 1986, taxable income 

16 shall be reduced by $500 for each Hurricane Katrina dis17 placed individual of the taxpayer for the taxable year. 

18 (b) LIMITATIONS.—

19 (1) DOLLAR LIMITATION.—The reduction under 

20 subsection (a) shall not exceed $2,000, reduced by 

21 the amount of the reduction under this section for 

22 all prior taxable years. 

23 (2) INDIVIDUALS TAKEN INTO ACCOUNT ONLY

24 ONCE.—An individual shall not be taken into ac25 count under subsection (a) if such individual was 
21

•HRES 454 EH 

1 taken into account under such subsection by the tax2 payer for any prior taxable year. 

3 (3) IDENTIFYING INFORMATION REQUIRED.—

4 An individual shall not be taken into account under 

5 subsection (a) for a taxable year unless the taxpayer 

6 identification number of such individual is included 

7 on the return of the taxpayer for such taxable year. 

8 (c) HURRICANE KATRINA DISPLACED INDIVIDUAL.—

9 For purposes of this section, the term ‘‘Hurricane Katrina 

10 displaced individual’’ means, with respect to any taxpayer 

11 for any taxable year, any natural person if—

12 (1) such person’s principal place of abode on 

13 August 28, 2005, was in the Hurricane Katrina dis14 aster area, 

15 (2)(A) in the case of such an abode located in 

16 the core disaster area, such person is displaced from 

17 such abode, or 

18 (B) in the case of such an abode located outside 

19 of the core disaster area, such person is displaced 

20 from such abode, and 

21 (i) such abode was damaged by Hurricane 

22 Katrina, or 

23 (ii) such person was evacuated from such 

24 abode by reason of Hurricane Katrina, and 
22

•HRES 454 EH 

1 (3) such person is provided housing free of 

2 charge by the taxpayer in the principal residence of 

3 the taxpayer for a period of 60 consecutive days 

4 which ends in such taxable year. 

5 Such term shall not include the spouse or any dependent 

6 of the taxpayer. 

7 (d) COMPENSATION FOR HOUSING.—No deduction 

8 shall be allowed under this section if the taxpayer receives 

9 any rent or other amount (from any source) in connection 

10 with the providing of such housing. 

11 SEC. 303. INCREASE IN STANDARD MILEAGE RATE FOR 

12 CHARITABLE USE OF VEHICLES. 

13 Notwithstanding section 170(i) of the Internal Rev14 enue Code of 1986, for purposes of computing the deduc15 tion under section 170 of such Code for use of a vehicle 

16 described in subsection (f)(12)(E)(i) of such section for 

17 provision of relief related to Hurricane Katrina during the 

18 period beginning on August 25, 2005, and ending on De19 cember 31, 2006, the standard mileage rate shall be 70 

20 percent of the standard mileage rate in effect under sec21 tion 162(a) of such Code at the time of such use. Any 

22 increase under this section shall be rounded to the next 

23 highest cent. 
23

•HRES 454 EH 

1 SEC. 304. MILEAGE REIMBURSEMENTS TO CHARITABLE 

2 VOLUNTEERS EXCLUDED FROM GROSS IN3 COME. 

4 (a) IN GENERAL.—For purposes of the Internal Rev5 enue Code of 1986, gross income of an individual for tax6 able years ending on or after August 25, 2005, does not 

7 include amounts received, from an organization described 

8 in section 170(c) of such Code, as reimbursement of oper9 ating expenses with respect to use of a passenger auto10 mobile for the benefit of such organization in connection 

11 with providing relief relating to Hurricane Katrina during 

12 the period beginning on August 25, 2005, and ending on 

13 December 31, 2006. The preceding sentence shall apply 

14 only to the extent that the expenses which are reimbursed 

15 would be deductible under chapter 1 of such Code if sec16 tion 274(d) of such Code were applied—

17 (1) by using the standard business mileage rate 

18 in effect under section 162(a) at the time of such 

19 use, and 

20 (2) as if the individual were an employee of an 

21 organization not described in section 170(c) of such 

22 Code. 

23 (b) APPLICATION TO VOLUNTEER SERVICES ONLY.—

24 Subsection (a) shall not apply with respect to any expenses 

25 relating to the performance of services for compensation. 
24

•HRES 454 EH 

1 (c) NO DOUBLE BENEFIT.—No deduction or credit 

2 shall be allowed under any other provision of such Code 

3 with respect to the expenses excludable from gross income 

4 under subsection (a). 

5 SEC. 305. CHARITABLE DEDUCTION FOR CONTRIBUTIONS 

6 OF FOOD INVENTORY. 

7 (a) IN GENERAL.—Paragraph (3) of section 170(e) 

8 of the Internal Revenue Code of 1986 (relating to special 

9 rule for certain contributions of inventory and other prop10 erty) is amended by redesignating subparagraph (C) as 

11 subparagraph (D) and by inserting after subparagraph 

12 (B) the following new subparagraph: 

13 ‘‘(C) SPECIAL RULE FOR CONTRIBUTIONS

14 OF FOOD INVENTORY.—

15 ‘‘(i) GENERAL RULE.—In the case of 

16 a charitable contribution of food from any 

17 trade or business of the taxpayer, this 

18 paragraph shall be applied—

19 ‘‘(I) without regard to whether 

20 the contribution is made by a C cor21 poration, and 

22 ‘‘(II) only to food that is appar23 ently wholesome food. 

24 ‘‘(ii) LIMITATION.—In the case of a 

25 taxpayer other than a C corporation, the 
25

•HRES 454 EH 

1 aggregate amount of such contributions for 

2 any taxable year which may be taken into 

3 account under this section shall not exceed 

4 10 percent of the taxpayer’s aggregate net 

5 income for such taxable year from all 

6 trades or businesses from which such con7 tributions were made for such year, com8 puted without regard to this section. 

9 ‘‘(iii) APPARENTLY WHOLESOME

10 FOOD.—For purposes of this subpara11 graph, the term ‘apparently wholesome 

12 food’ has the meaning given to such term 

13 by section 22(b)(2) of the Bill Emerson 

14 Good Samaritan Food Donation Act (42 

15 U.S.C. 1791(b)(2)), as in effect on the 

16 date of the enactment of this subpara17 graph. 

18 ‘‘(iv) TERMINATION.—This subpara19 graph shall not apply to contributions 

20 made after December 31, 2005.’’. 

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

22 this section shall apply to contributions made on or after 

23 August 28, 2005, in taxable years ending after such date. 
26

•HRES 454 EH 

1 SEC. 306. CHARITABLE DEDUCTION FOR CONTRIBUTIONS 

2 OF BOOK INVENTORIES TO PUBLIC SCHOOLS. 

3 (a) IN GENERAL.—Paragraph (3) of section 170(e) 

4 of the Internal Revenue Code of 1986 (relating to certain 

5 contributions of ordinary income and capital gain prop6 erty), as amended by section 305, is amended by redesig7 nating subparagraph (D) as subparagraph (E) and by in8 serting after subparagraph (C) the following new subpara9 graph: 

10 ‘‘(D) SPECIAL RULE FOR CONTRIBUTIONS

11 OF BOOK INVENTORY TO PUBLIC SCHOOLS.—

12 ‘‘(i) CONTRIBUTIONS OF BOOK INVEN13 TORY.—In determining whether a qualified 

14 book contribution is a qualified contribu15 tion, subparagraph (A) shall be applied 

16 without regard to whether the donee is an 

17 organization described in the matter pre18 ceding clause (i) of subparagraph (A). 

19 ‘‘(ii) QUALIFIED BOOK CONTRIBU20 TION.—For purposes of this paragraph, 

21 the term ‘qualified book contribution’ 

22 means a charitable contribution of books to 

23 a public school which is an educational or24 ganization described in subsection 

25 (b)(1)(A)(ii) and which provides elemen-
27

•HRES 454 EH 

1 tary education or secondary education 

2 (kindergarten through grade 12). 

3 ‘‘(iii) CERTIFICATION BY DONEE.—

4 Subparagraph (A) shall not apply to any 

5 contribution unless (in addition to the cer6 tifications required by subparagraph (A) 

7 (as modified by this subparagraph)), the 

8 donee certifies in writing that—

9 ‘‘(I) the books are suitable, in 

10 terms of currency, content, and quan11 tity, for use in the donee’s educational 

12 programs, and 

13 ‘‘(II) the donee will use the books 

14 in its educational programs. 

15 ‘‘(iv) TERMINATION.—This subpara16 graph shall not apply to contributions 

17 made after December 31, 2005.’’. 

18 (b) EFFECTIVE DATE.—The amendments made by 

19 this section shall apply to contributions made on or after 

20 August 28, 2005, in taxable years ending after such date. 
28

•HRES 454 EH 

1 TITLE IV—ADDITIONAL TAX 

2 RELIEF PROVISIONS 

3 SEC. 401. EXCLUSIONS OF CERTAIN CANCELLATIONS OF IN4 DEBTEDNESS BY REASON OF HURRICANE 

5 KATRINA. 

6 (a) IN GENERAL.—For purposes of the Internal Rev7 enue Code of 1986, gross income shall not include any 

8 amount which (but for this section) would be includible 

9 in gross income by reason of the discharge (in whole or 

10 in part) of indebtedness of a natural person described in 

11 subsection (b) by an applicable entity (as defined in sec12 tion 6050P(c)(1) of such Code). 

13 (b) PERSONS DESCRIBED.—A natural person is de14 scribed in this subsection if the principal place of abode 

15 of such person on August 25, 2005, was located—

16 (1) in the core disaster area, or 

17 (2) in the Hurricane Katrina disaster area (but 

18 outside the core disaster area) and such person suf19 fered economic loss by reason of Hurricane Katrina. 

20 (c) EXCEPTIONS.—

21 (1) BUSINESS INDEBTEDNESS.—Subsection (a) 

22 shall not apply to any indebtedness incurred in con23 nection with a trade or business. 

24 (2) REAL PROPERTY OUTSIDE CORE DISASTER

25 AREA.—Subsection (a) shall not apply to any dis-
29

•HRES 454 EH 

1 charge of indebtedness to the extent that real prop2 erty constituting security for such indebtedness is lo3 cated outside of the Hurricane Katrina disaster 

4 area. 

5 (d) DENIAL OF DOUBLE BENEFIT.—For purposes of 

6 the Internal Revenue Code of 1986, the amount excluded 

7 from gross income under subsection (a) shall be treated 

8 in the same manner as an amount excluded under section 

9 108(a) of such Code. 

10 (e) EFFECTIVE DATE.—This section shall apply to 

11 discharges made on or after August 25, 2005, and before 

12 January 1, 2007. 

13 SEC. 402. SUSPENSION OF CERTAIN LIMITATIONS ON PER14 SONAL CASUALTY LOSSES. 

15 Paragraphs (1) and (2)(A) of section 165(h) of the 

16 Internal Revenue Code of 1986 shall not apply to losses 

17 described in section 165(c)(3) of such Code which arise 

18 in the Hurricane Katrina disaster area on or after August 

19 25, 2005, and which are attributable to Hurricane 

20 Katrina. In the case of any other losses, section 

21 165(h)(2)(A) of such Code shall be applied without regard 

22 to the losses referred to in the preceding sentence. 
30

•HRES 454 EH 

1 SEC. 403. REQUIRED EXERCISE OF AUTHORITY UNDER SEC2 TION 7508A FOR TAX RELIEF RELATING TO 

3 HURRICANE KATRINA. 

4 (a) AUTHORITY INCLUDES SUSPENSION OF PAY5 MENT OF EMPLOYMENT AND EXCISE TAXES.—Subpara6 graphs (A) and (B) of section 7508(a)(1) of the Internal 

7 Revenue Code of 1986 are amended to read as follows: 

8 ‘‘(A) Filing any return of income, estate, 

9 gift, employment, or excise tax; 

10 ‘‘(B) Payment of any income, estate, gift, 

11 employment, or excise tax or any installment 

12 thereof or of any other liability to the United 

13 States in respect thereof;’’. 

14 (b) APPLICATION WITH RESPECT TO HURRICANE

15 KATRINA.—In the case of any taxpayer determined by the 

16 Secretary of the Treasury to be affected by the Presi17 dentially declared disaster relating to Hurricane Katrina, 

18 any relief provided by the Secretary of the Treasury under 

19 section 7508A of the Internal Revenue Code of 1986 shall 

20 be for a period ending not earlier than February 28, 2006, 

21 and shall be treated as applying to the filing of returns 

22 relating to, and the payment of, employment and excise 

23 taxes. 

24 (c) EFFECTIVE DATE.—The amendment made by 

25 subsection (a) shall apply for any period for performing 

26 an act which has not expired before August 25, 2005. 
31

•HRES 454 EH 

1 SEC. 404. SPECIAL RULES FOR MORTGAGE REVENUE 

2 BONDS. 

3 (a) IN GENERAL.—In the case of financing provided 

4 with respect to a qualified Hurricane Katrina recovery res5 idence, subsection (d) of section 143 of the Internal Rev6 enue Code of 1986 shall be applied as if such residence 

7 were a targeted area residence. 

8 (b) QUALIFIED HURRICANE KATRINA RECOVERY

9 RESIDENCE.—For purposes of this section, the term 

10 ‘‘qualified Hurricane Katrina recovery residence’’ 

11 means—

12 (1) any residence in the core disaster area, and 

13 (2) any other residence if—

14 (A) such other residence is located in the 

15 same State as the principal residence referred 

16 to in subparagraph (B), and 

17 (B) the mortgagor with respect to such 

18 other residence owned a principal residence on 

19 August 28, 2005, which—

20 (i) was located in the Hurricane 

21 Katrina disaster area, and 

22 (ii) was rendered uninhabitable by 

23 reason of Hurricane Katrina. 

24 (c) SPECIAL RULE FOR HOME IMPROVEMENT

25 LOANS.—In the case of any loan with respect to a resi26 dence in the Hurricane Katrina disaster area, section 
32

•HRES 454 EH 

1 143(k)(4) of such Code shall be applied by substituting 

2 $150,000 for the dollar amount contained therein to the 

3 extent such loan is for the repair of damage by reason 

4 of Hurricane Katrina. 

5 (d) APPLICATION.—Subsection (a) shall not apply to 

6 financing provided after December 31, 2007. 

7 SEC. 405. EXTENSION OF REPLACEMENT PERIOD FOR NON8 RECOGNITION OF GAIN FOR PROPERTY LO9 CATED IN HURRICANE KATRINA DISASTER 

10 AREA. 

11 Clause (i) of section 1033(a)(2)(B) of the Internal 

12 Revenue Code of 1986 shall be applied by substituting ‘‘5 

13 years’’ for ‘‘2 years’’ with respect to property in the Hurri14 cane Katrina disaster area which is compulsorily or invol15 untarily converted on or after August 25, 2005, by reason 

16 of Hurricane Katrina, but only if substantially all of the 

17 use of the replacement property is in such area. 

18 SEC. 406. SPECIAL RULE FOR DETERMINING EARNED IN19 COME. 

20 (a) IN GENERAL.—In the case of a qualified indi21 vidual, if the earned income of the taxpayer for the taxable 

22 year which includes August 25, 2005, is less than the 

23 earned income of the taxpayer for the preceding taxable 

24 year, the credits allowed under sections 24(d) and 32 of 
33

•HRES 454 EH 

1 the Internal Revenue Code of 1986 may, at the election 

2 of the taxpayer, be determined by substituting—

3 (1) such earned income for the preceding tax4 able year, for 

5 (2) such earned income for the taxable year 

6 which includes August 25, 2005. 

7 (b) QUALIFIED INDIVIDUAL.—For purposes of this 

8 section, the term ‘‘qualified individual’’ means any indi9 vidual whose principal place of abode on August 25, 2005, 

10 was located—

11 (1) in the core disaster area, or 

12 (2) in the Hurricane Katrina disaster area (but 

13 outside the core disaster area) and such individual 

14 was displaced from such principal place of abode by 

15 reason of Hurricane Katrina. 

16 (c) EARNED INCOME.—For purposes of this section, 

17 the term ‘‘earned income’’ has the meaning given such 

18 term under section 32(c) of such Code. 

19 (d) SPECIAL RULES.—

20 (1) APPLICATION TO JOINT RETURNS.—For 

21 purpose of subsection (a), in the case of a joint re22 turn for a taxable year which includes August 25, 

23 2005—

24 (A) such subsection shall apply if either 

25 spouse is a qualified individual, and 
34

•HRES 454 EH 

1 (B) the earned income of the taxpayer for 

2 the preceding taxable year shall be the sum of 

3 the earned income of each spouse for such pre4 ceding taxable year. 

5 (2) UNIFORM APPLICATION OF ELECTION.—

6 Any election made under subsection (a) shall apply 

7 with respect to both section 24(d) and section 32 of 

8 such Code. 

9 (3) ERRORS TREATED AS MATHEMATICAL

10 ERROR.—For purposes of section 6213 of such 

11 Code, an incorrect use on a return of earned income 

12 pursuant to subsection (a) shall be treated as a 

13 mathematical or clerical error. 

14 (4) NO EFFECT ON DETERMINATION OF GROSS

15 INCOME, ETC.—Except as otherwise provided in this 

16 section, the Internal Revenue Code of 1986 shall be 

17 applied without regard to any substitution under 

18 subsection (a). 

19 SEC. 407. SECRETARIAL AUTHORITY TO MAKE ADJUST20 MENTS REGARDING TAXPAYER AND DEPEND21 ENCY STATUS. 

22 With respect to taxable years beginning in 2005 or 

23 2006, the Secretary of the Treasury or the Secretary’s del24 egate may make such adjustments in the application of 

25 the internal revenue laws as may be necessary to ensure 
35

•HRES 454 EH 

1 that taxpayers do not lose any deduction or credit or expe2 rience a change of filing status by reason of temporary 

3 relocations by reason of Hurricane Katrina. Any adjust4 ments made under the preceding sentence shall ensure 

5 that an individual is not taken into account by more than 

6 one taxpayer with respect to the same tax benefit. 

7 TITLE V—EMERGENCY 

8 REQUIREMENT 

9 SEC. 501. EMERGENCY REQUIREMENT. 

10 Any provision of this Act causing an effect on re11 ceipts, budget authority, or outlays is designated as an 

12 emergency requirement pursuant to section 402 of H. 

13 Con. Res. 95 (109th Congress). 

Attest:

Clerk.