II 

110TH CONGRESS 

1ST SESSION S. 538 

To reduce income tax withholding deposits to reflect a FICA payroll tax 

credit for certain employers located in specified portions of the GO 

Zone, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

FEBRUARY 8, 2007 

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

referred to the Committee on Finance 

A BILL 

To reduce income tax withholding deposits to reflect a FICA 

payroll tax credit for certain employers located in specified portions of the GO Zone, and for other purposes. 

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; ETC. 

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

5 ‘‘Work, Hope, and Opportunity for the Disaster Area 

6 Today Act’’. 

7 (b) AMENDMENT OF 1986 CODE.—Except as other8 wise expressly provided, whenever in this Act an amend9 ment or repeal is expressed in terms of an amendment 


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1 to, or repeal of, a section or other provision, the reference 

2 shall be considered to be made to a section or other provi3 sion of the Internal Revenue Code of 1986. 

4 SEC. 2. REDUCTION IN INCOME TAX WITHHOLDING DEPOS5 ITS TO REFLECT FICA PAYROLL TAX CREDIT 

6 FOR CERTAIN EMPLOYERS LOCATED IN 

7 SPECIFIED PORTIONS OF THE GO ZONE DUR8 ING 2007. 

9 (a) GENERAL RULE.—In the case of any applicable 

10 calendar quarter— 

11 (1) the aggregate amount of required income 

12 tax deposits of an eligible employer for the calendar 

13 quarter following the applicable calendar quarter 

14 shall be reduced by the payroll tax credit equivalent 

15 amount for the applicable calendar quarter, and 

16 (2) the amount of any deduction allowable to 

17 the eligible employer under chapter 1 of the Internal 

18 Revenue Code of 1986 for taxes paid under section 

19 3111 of such Code with respect to employment dur20 ing the applicable calendar quarter shall be reduced 

21 by such payroll tax credit equivalent amount. 

22 For purposes of the Internal Revenue Code of 1986, an 

23 eligible employer shall be treated as having paid, and an 

24 eligible employee shall be treated as having received, any 


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1 wages or compensation deducted and withheld but not de2 posited by reason of paragraph (1). 

3 (b) CARRYOVERS OF UNUSED AMOUNTS.—If the 

4 payroll tax credit equivalent amount for any applicable cal5 endar quarter exceeds the required income tax deposits for 

6 the following calendar quarter— 

7 (1) such excess shall be added to the payroll tax 

8 credit equivalent amount for the next applicable cal9 endar quarter, and 

10 (2) in the case of the last applicable calendar 

11 quarter, such excess shall be used to reduce required 

12 income tax deposits for any succeeding calendar 

13 quarter until such excess is used. 

14 (c) PAYROLL TAX CREDIT EQUIVALENT AMOUNT.— 

15 For purposes of this section— 

16 (1) IN GENERAL.—The term ‘‘payroll tax credit 

17 equivalent amount’’ means, with respect to any ap18 plicable calendar quarter, an amount equal to 7.65 

19 percent of the aggregate amount of wages or com20 pensation— 

21 (A) paid or incurred by the eligible em22 ployer with respect to employment of eligible 

23 employees during the applicable calendar quar24 ter, and 


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1 (B) subject to the tax imposed by section 

2 3111 of the Internal Revenue Code of 1986. 

3 (2) TRADE OR BUSINESS REQUIREMENT.—A 

4 rule similar to the rule of section 51(f) of such Code 

5 shall apply for purposes of this section. 

6 (3) LIMITATION ON WAGES SUBJECT TO CRED7 IT.—For purposes of this subsection, only wages and 

8 compensation of an eligible employee in an applica9 ble calendar quarter, when added to such wages and 

10 compensation for any preceding applicable calendar 

11 quarter, not exceeding $15,000 shall be taken into 

12 account with respect to such employee. 

13 (d) ELIGIBLE EMPLOYER; ELIGIBLE EMPLOYEE.— 

14 For purposes of this section— 

15 (1) ELIGIBLE EMPLOYER.— 

16 (A) IN GENERAL.—The term ‘‘eligible em17 ployer’’ means any employer which conducts an 

18 active trade or business in one or more specified 

19 portions of the GO Zone and employs not more 

20 than 100 full-time employees on the date of the 

21 enactment of this Act. 

22 (B) SPECIFIED PORTIONS OF THE GO

23 ZONE.—The term ‘‘specified portions of the GO 

24 Zone’’ has the meaning given such term by secVerDate Aug 31 2005 01:54 Feb 10, 2007 Jkt 059200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S538.IS S538

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1 tion 1400N(d)(6)(C) of the Internal Revenue 

2 Code of 1986. 

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

4 employee’’ means with respect to an eligible em5 ployer an employee whose principal place of employ6 ment with such eligible employer is in one or more 

7 specified portions of the GO Zone. Such term shall 

8 not include an employee described in section 

9 401(c)(1)(A). 

10 (e) APPLICABLE CALENDAR QUARTER.—For pur11 poses of this section, the term ‘‘applicable calendar quar12 ter’’ means any of the 4 calendar quarters beginning in 

13 2007. 

14 (f) SPECIAL RULES.—For purposes of this section— 

15 (1) REQUIRED INCOME TAX DEPOSITS.—The 

16 term ‘‘required income tax deposits’’ means deposits 

17 an eligible employer is required to make under sec18 tion 6302 of the Internal Revenue Code of 1986 of 

19 taxes such employer is required to deduct and with20 hold under section 3402 of such Code. 

21 (2) AGGREGATION RULES.—Rules similar to the 

22 rules of subsections (a) and (b) of section 52 of the 

23 Internal Revenue Code of 1986 shall apply. 

24 (3) EMPLOYERS NOT ON QUARTERLY SYS25 TEM.—The Secretary of the Treasury shall prescribe 


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1 rules for the application of this section in the case 

2 of an eligible employer whose required income tax 

3 deposits are not made on a quarterly basis. 

4 (4) ADJUSTMENTS FOR CERTAIN ACQUISITIONS, 

5 ETC.—Under regulations prescribed by the Sec6 retary— 

7 (A) ACQUISITIONS.—If, after December 

8 31, 2006, an employer acquires the major por9 tion of a trade or business of another person 

10 (hereafter in this paragraph referred to as the 

11 ‘‘predecessor’’) or the major portion of a sepa12 rate unit of a trade or business of a prede13 cessor, then, for purposes of applying this sec14 tion for any calendar quarter ending after such 

15 acquisition, the amount of wages or compensa16 tion deemed paid by the employer during peri17 ods before such acquisition shall be increased by 

18 so much of such wages or compensation paid by 

19 the predecessor with respect to the acquired 

20 trade or business as is attributable to the por21 tion of such trade or business acquired by the 

22 employer. 

23 (B) DISPOSITIONS.—If, after December 

24 31, 2006— 


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1 (i) an employer disposes of the major 

2 portion of any trade or business of the em3 ployer or the major portion of a separate 

4 unit of a trade or business of the employer 

5 in a transaction to which paragraph (1) 

6 applies, and 

7 (ii) the employer furnishes the acquir8 ing person such information as is nec9 essary for the application of subparagraph 

10 (A), 

11 then, for purposes of applying this section for 

12 any calendar quarter ending after such disposi13 tion, the amount of wages or compensation 

14 deemed paid by the employer during periods be15 fore such disposition shall be decreased by so 

16 much of such wages as is attributable to such 

17 trade or business or separate unit. 

18 (5) OTHER RULES.— 

19 (A) GOVERNMENT EMPLOYERS.—This sec20 tion shall not apply if the employer is the Gov21 ernment of the United States, the government 

22 of any State or political subdivision of the 

23 State, or any agency or instrumentality of any 

24 such government. 


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1 (B) TREATMENT OF OTHER ENTITIES.— 

2 Rules similar to the rules of subsections (d) and 

3 (e) of section 52 of such Code shall apply for 

4 purposes of this section. 

5 SEC. 3. BONUS BUSINESS TRAVEL DEDUCTION IN SPECI6 FIED PORTIONS OF THE GO ZONE. 

7 (a) IN GENERAL.—Section 274(n)(2) (relating to ex8 ceptions) is amended by striking ‘‘or’’ at the end of sub9 paragraph (D), by striking the period at the end of sub10 paragraph (E)(iv) and inserting ‘‘, or’’, and by inserting 

11 after subparagraph (E)(iv) the following new subpara12 graph: 

13 ‘‘(F) such expense is for goods, services, or 

14 facilities made available before January 1, 

15 2010, in one or more specified portions of the 

16 GO Zone (as defined in section 

17 1400N(d)(6)(C).’’. 

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

19 this section shall apply to expenses paid or incurred after 

20 the date of the enactment of this Act, in taxable years 

21 ending after such date. 


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1 SEC. 4. EXTENSION OF INCREASED EXPENSING FOR QUALI2 FIED SECTION 179 GULF OPPORTUNITY ZONE 

3 PROPERTY LOCATED IN SPECIFIED POR4 TIONS OF THE GO ZONE. 

5 Paragraph (2) of section 1400N(e) (relating to quali6 fied section 179 Gulf Opportunity Zone property) is 

7 amended— 

8 (1) by striking ‘‘this subsection, the term’’ and 

9 inserting ‘‘this subsection— 

10 ‘‘(A) IN GENERAL.—The term’’, and 

11 (2) by adding at the end the following new sub12 paragraph: 

13 ‘‘(B) EXTENSION FOR CERTAIN PROP14 ERTY.—In the case of property substantially all 

15 of the use of which is in one or more specified 

16 portions of the GO Zone (as defined in sub17 section (d)(6)(C)), such term shall include sec18 tion 179 property (as so defined) which is de19 scribed in subsection (d)(2), determined— 

20 ‘‘(i) without regard to subsection 

21 (d)(6), and 

22 ‘‘(ii) by substituting, in subparagraph 

23 (A)(v) thereof— 

24 ‘‘(I) ‘2009’ for ‘2007’, and 

25 ‘‘(II) ‘2009’ for ‘2008’.’’. 


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1 SEC. 5. EXTENSION OF WORK OPPORTUNITY TAX CREDIT 

2 FOR HURRICANE KATRINA EMPLOYEES 

3 HIRED BY SMALL BUSINESSES LOCATED IN 

4 SPECIFIED PORTIONS OF THE GO ZONE. 

5 (a) IN GENERAL.—Section 201(b)(1) of the Katrina 

6 Emergency Tax Relief Act of 2005 (Public Law 109–73) 

7 is amended by striking ‘‘who is hired during the 2-year 

8 period’’ and all that follows and inserting ‘‘who— 

9 ‘‘(A) is hired during the 2-year period be10 ginning on such date for a position the prin11 cipal place of employment which is located in 

12 the core disaster area, or 

13 ‘‘(B) is hired— 

14 ‘‘(i) during the period beginning on 

15 the date of the enactment of the Work, 

16 Hope, Opportunity, and Disaster Area Tax 

17 Act of 2007 and ending before January 1, 

18 2010, for a position the principal place of 

19 employment which is located in one or 

20 more specified portions of the GO Zone (as 

21 defined in subsection 1400N(d)(6)(C) of 

22 the Internal Revenue Code of 1986), and 

23 ‘‘(ii) by an employer who has no more 

24 than 100 employees on the date such indi25 vidual is hired, and’’. 


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

2 this section take effect as if included in section 201 of 

3 the Katrina Emergency Tax Relief Act of 2005. 

4 SEC. 6. EXTENSION AND MODIFICATION OF 15-YEAR 

5 STRAIGHT-LINE COST RECOVERY FOR QUALI6 FIED LEASEHOLD IMPROVEMENTS AND 

7 QUALIFIED RESTAURANT IMPROVEMENTS 

8 LOCATED IN SPECIFIED PORTIONS OF THE 

9 GO ZONE; 15-YEAR STRAIGHT-LINE COST RE10 COVERY FOR CERTAIN IMPROVEMENTS TO 

11 RETAIL SPACE LOCATED IN SPECIFIED POR12 TIONS OF THE GO ZONE. 

13 (a) EXTENSION OF LEASEHOLD AND RESTAURANT

14 IMPROVEMENTS.— 

15 (1) IN GENERAL.—Clauses (iv) and (v) of sec16 tion 168(e)(3)(E) (relating to 15-year property) are 

17 each amended by striking ‘‘January 1, 2008’’ and 

18 inserting ‘‘January 1, 2008 (January 1, 2009, in the 

19 case of property placed in service in one or more 

20 specified portions of the GO Zone (as defined in sub21 section 1400Nd)(6)(C))’’. 

22 (2) EFFECTIVE DATE.—The amendment made 

23 by this subsection shall apply to property placed in 

24 service after December 31, 2007. 


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1 (b) MODIFICATION OF TREATMENT OF QUALIFIED

2 RESTAURANT PROPERTY AS 15-YEAR PROPERTY FOR

3 PURPOSES OF DEPRECIATION DEDUCTION.— 

4 (1) TREATMENT TO INCLUDE NEW CONSTRUC5 TION.—Paragraph (7) of section 168(e) (relating to 

6 classification of property) is amended to read as fol7 lows: 

8 ‘‘(7) QUALIFIED RESTAURANT PROPERTY.— 

9 ‘‘(A) IN GENERAL.—Except as provided in 

10 subparagraph (B), the term ‘qualified res11 taurant property’ means any section 1250 prop12 erty which is an improvement to a building if— 

13 ‘‘(i) such improvement is placed in 

14 service more than 3 years after the date 

15 such building was first placed in service, 

16 and 

17 ‘‘(ii) more than 50 percent of the 

18 building’s square footage is devoted to 

19 preparation of, and seating for on-premises 

20 consumption of, prepared meals. 

21 ‘‘(B) PROPERTY LOCATED IN CERTAIN

22 AREAS OF GO ZONE.—In the case of property 

23 placed in service in one or more specified por24 tions of the GO Zone (as defined in subsection 

25 1400Nd)(6)(C)), such term means any section 


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1 1250 property which is a building (or its struc2 tural components) or an improvement to such 

3 building if more than 50 percent of such build4 ing’s square footage is devoted to preparation 

5 of, and seating for on-premises consumption of, 

6 prepared meals.’’. 

7 (2) EFFECTIVE DATE.—The amendment made 

8 by this subsection shall apply to any property placed 

9 in service after the date of the enactment of this 

10 Act. 

11 (c) RECOVERY PERIOD FOR DEPRECIATION OF CER12 TAIN IMPROVEMENTS TO RETAIL SPACE.— 

13 (1) 15-YEAR RECOVERY PERIOD.—Section 

14 168(e)(3)(E) (relating to 15-year property) is 

15 amended by striking ‘‘and’’ at the end of clause 

16 (vii), by striking the period at the end of clause (viii) 

17 and inserting ‘‘, and’’, and by adding at the end the 

18 following new clause: 

19 ‘‘(ix) any qualified retail improvement 

20 property placed in service before January 

21 1, 2009, in one or more specified portions 

22 of the GO Zone (as defined in subsection 

23 1400Nd)(6)(C).’’. 


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1 (2) QUALIFIED RETAIL IMPROVEMENT PROP2 ERTY.—Section 168(e) is amended by adding at the 

3 end the following new paragraph: 

4 ‘‘(8) QUALIFIED RETAIL IMPROVEMENT PROP5 ERTY.— 

6 ‘‘(A) IN GENERAL.—The term ‘qualified 

7 retail improvement property’ means any im8 provement to an interior portion of a building 

9 which is nonresidential real property if— 

10 ‘‘(i) such portion is open to the gen11 eral public and is used in the retail trade 

12 or business of selling tangible personal 

13 property to the general public, and 

14 ‘‘(ii) such improvement is placed in 

15 service more than 3 years after the date 

16 the building was first placed in service. 

17 ‘‘(B) IMPROVEMENTS MADE BY OWNER.— 

18 In the case of an improvement made by the 

19 owner of such improvement, such improvement 

20 shall be qualified retail improvement property 

21 (if at all) only so long as such improvement is 

22 held by such owner. Rules similar to the rules 

23 under paragraph (6)(B) shall apply for pur24 poses of the preceding sentence. 


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1 ‘‘(C) CERTAIN IMPROVEMENTS NOT IN2 CLUDED.—Such term shall not include any im3 provement for which the expenditure is attrib4 utable to— 

5 ‘‘(i) the enlargement of the building, 

6 ‘‘(ii) any elevator or escalator, 

7 ‘‘(iii) any structural component bene8 fitting a common area, or 

9 ‘‘(iv) the internal structural frame10 work of the building.’’. 

11 (3) REQUIREMENT TO USE STRAIGHT LINE

12 METHOD.—Section 168(b)(3) is amended by adding 

13 at the end the following new subparagraph: 

14 ‘‘(I) Qualified retail improvement property 

15 described in subsection (e)(8).’’. 

16 (4) ALTERNATIVE SYSTEM.—The table con17 tained in section 168(g)(3)(B) is amended by insert18 ing after the item relating to subparagraph (E)(viii) 

19 the following new item: 

‘‘(E)(ix) ........................................................................................... 39’’. 

20 (5) EFFECTIVE DATE.—The amendments made 

21 by this section shall apply to property placed in serv22 ice after the date of the enactment of this Act. 

Æ 


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