II 

110TH CONGRESS 

1ST SESSION S. 1180 

To amend the Internal Revenue Code of 1986 to extend the placed-inservice date requirement for low-income housing credit buildings in the 

Gulf Opportunity Zone, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

APRIL 20, 2007 

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 extend 

the placed-in-service date requirement for low-income 

housing credit buildings in the Gulf Opportunity 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. 

4 This Act may be cited as the ‘‘Workforce Housing 

5 Construction for the GO Zone Act of 2007’’. 


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1 SEC. 2. EXTENSION OF PLACED-IN-SERVICE DATE RE2 QUIREMENT FOR LOW-INCOME HOUSING 

3 CREDIT BUILDINGS IN GULF OPPORTUNITY 

4 ZONE. 

5 Section 1400N(c) of the Internal Revenue Code of 

6 1986 is amended— 

7 (1) by striking ‘‘or 2008’’ in paragraph (3)(A) 

8 and inserting ‘‘2008, 2009, or 2010’’, 

9 (2) by striking ‘‘during such period’’ in para10 graph (3)(B)(ii) and inserting ‘‘during the period de11 scribed in subparagraph (A)’’, and 

12 (3) by striking ‘‘or 2008’’ in paragraph (4)(A) 

13 and inserting ‘‘2008, 2009, or 2010’’. 

14 SEC. 3. PRESERVATION OF PREVIOUS LOW-INCOME HOUS15 ING CREDIT BUILDINGS IN GULF OPPOR16 TUNITY ZONE. 

17 (a) IN GENERAL.—If an owner of a qualified low-in18 come building (as defined in section 42(c)(2) of the Inter19 nal Revenue Code of 1986) located in the GO Zone (as 

20 defined in section 1400M(1) of such Code) in the second 

21 taxable year or later of the credit period (as defined in 

22 section 42(f)(1) of such Code) for such building— 

23 (1) suffers a reduction in the qualified basis (as 

24 determined under section 42(b)(1) of such Code) of 

25 such building (hereinafter referred to as the ‘‘lost 

26 qualified basis’’) as a result of a disaster that caused 


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1 the President to issue a major disaster declaration 

2 as a result of Hurricanes Katrina and Rita, but 

3 under subsection (j)(4)(E) of section 42 of such 

4 Code avoids recapture or loss of low-income housing 

5 credits previously allowed under such section with 

6 respect to such building (hereinafter referred to as 

7 the ‘‘existing credits’’) by restoring the lost qualified 

8 basis by reconstruction, replacement, or rehabilita9 tion within a reasonable period established by the 

10 Secretary of the Treasury, and 

11 (2) obtains an allocation of additional low-in12 come housing credits under such section to fund, in 

13 whole or in part, the reconstruction, replacement, or 

14 rehabilitation of such building (hereinafter referred 

15 to as the ‘‘new credits’’), 

16 then the qualified basis of such building for purposes of 

17 determining the new credits shall equal the excess (if any) 

18 of such building’s qualified basis as of the close of the 

19 first taxable year of the credit period (as so defined) with 

20 respect to the new credits (assuming such reconstruction, 

21 replacement, or rehabilitation expenditures meet the re22 quirements for treatment as a separate new building), over 

23 such building’s qualified basis with respect to the existing 

24 credits as determined immediately prior to the disaster re25 ferred to in paragraph (1). 


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1 (b) SPECIAL RULE FOR TIME FOR MAKING ALLOCA2 TIONS OF CREDITS.—For purposes of section 

3 42(h)(1)(E)(ii) of the Internal Revenue Code of 1986, 

4 buildings described in subsection (a) shall be deemed to 

5 be qualified buildings. 

6 (c) AVOIDANCE OF RECAPTURE OF CREDIT.—For 

7 purposes of section 42(j)(4)(E) of the Internal Revenue 

8 Code of 1986, qualified low-income housing projects (as 

9 defined in section 42(g)(1) of such Code) suffering cas10 ualty as a result of a disaster that caused the President 

11 to issue a major disaster declaration for the Go Zone (as 

12 defined in section 1400M(1))shall be deemed to have re13 stored any casualty loss by reconstruction or replacement 

14 within a reasonable period if such loss is restored before 

15 January 1, 2011. 

16 SEC. 4. CREDIT ALLOWABLE FOR CERTAIN BUILDINGS AC17 QUIRED DURING 10-YEAR PERIOD IN THE 

18 KATRINA, RITA, AND WILMA DISASTER 

19 AREAS. 

20 Section 1400N(c) of the Internal Revenue Code of 

21 1986 is amended by redesignating paragraph (5) as para22 graph (6) and by inserting after paragraph (4) the fol23 lowing new paragraph: 

24 ‘‘(5) CREDIT ALLOWABLE FOR BUILDINGS AC25 QUIRED DURING 10-YEAR PERIOD.—A waiver may be 


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1 granted under section 42(d)(6)(A) (without regard 

2 to any clause thereof) with respect to any building 

3 in the Gulf Opportunity Zone, the Rita GO Zone, or 

4 the Wilma GO Zone.’’. 

5 SEC. 5. INCLUSION OF BASIS OF PROPERTY FOR MIXED IN6 COME HOUSING IN KATRINA, RITA, AND 

7 WILMA DISASTER AREAS. 

8 Section 1400N(c) of the Internal Revenue Code of 

9 1986, as amended by this Act, is amended by redesig10 nating paragraph (6) as paragraph (7) and by inserting 

11 after paragraph (5) the following new paragraph: 

12 ‘‘(6) INCREASE IN APPLICABLE FRACTION FOR

13 MIXED INCOME PROJECTS.— 

14 ‘‘(A) IN GENERAL.—In the case of any 

15 qualified low-income housing project under sec16 tion 42(g) which is located in the Gulf Oppor17 tunity Zone, the Rita GO Zone, or the Wilma 

18 GO Zone and in which the applicable fraction 

19 for any building of such qualified low-income 

20 housing project is not less than 20 percent and 

21 not more than 60 percent but for the provisions 

22 of this subparagraph, the numerator of the ap23 plicable fraction under section 42(c)(1)(B) shall 

24 be increased by— 


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1 ‘‘(i) one or 5 percent of the total num2 ber of units (whichever adjustment pro3 vides the largest unit fraction) for each 

4 building in the qualified low income hous5 ing project in the case of the unit fraction 

6 under section 42(c)(1)(C), and 

7 ‘‘(ii) five percent of the total floor 

8 space in the case of the floor space fraction 

9 under section 42(c)(1)(D). 

10 ‘‘(B) APPLICATION.—Subparagraph (A) 

11 shall apply to— 

12 ‘‘(i) housing credit dollar amounts al13 located after December 31, 2007, and 

14 ‘‘(ii) buildings placed in service after 

15 such date to the extent paragraph (1) of 

16 section 42(h) does not apply to any build17 ing by reason of paragraph (4) thereof, but 

18 only with respect to bonds issued after 

19 such date.’’. 

20 SEC. 6. OVER INCOME LOANS FOR KATRINA, RITA, AND 

21 WILMA DISASTER AREAS. 

22 (a) IN GENERAL.—Section 1400N(a)(5)(B) of the 

23 Internal Revenue Code of 1986 is amended by adding 

24 ‘‘and’’ at the end of clause (ii), by striking clause (iii), 

25 and by redesignating clause (iv) as clause (iii). 


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1 (b) MORTGAGE REVENUE BONDS.—Section 

2 1400T(a) of the Internal Revenue Code of 1986 is amend3 ed by adding ‘‘and’’ at the end of paragraph (1), by strik4 ing paragraph (2), and by redesignating paragraph (3) as 

5 paragraph (2). 

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

7 this section shall apply to bonds issued after the date of 

8 the enactment of this Act. 

9 SEC. 7. COMMUNITY DEVELOPMENT BLOCK GRANTS NOT 

10 TAKEN INTO ACCOUNT IN DETERMINING IF 

11 BUILDINGS ARE FEDERALLY SUBSIDIZED. 

12 Section 1400N(c) of the Internal Revenue Code of 

13 1986, as amended by this Act, is amended by redesig14 nating paragraph (7) as paragraph (8) and by inserting 

15 after paragraph (6) the following new paragraph: 

16 ‘‘(7) COMMUNITY DEVELOPMENT BLOCK

17 GRANTS NOT TAKEN INTO ACCOUNT IN DETER18 MINING IF BUILDINGS ARE FEDERALLY SUB19 SIDIZED.—For purpose of applying section 

20 42(i)(2)(D) to any building which is placed in serv21 ice in the Gulf Opportunity Zone, the Rita GO Zone, 

22 or the Wilma GO Zone during the period beginning 

23 on January 1, 2006, and ending on December 31, 

24 2010, a loan shall not be treated as a below market 

25 Federal loan solely by reason of any assistance proVerDate Aug 31 2005 17:43 Apr 22, 2007 Jkt 059200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1180.IS S1180

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1 vided under section 106, 107, or 108 of the Housing 

2 and Community Development Act of 1974 by reason 

3 of section 122 of such Act or any provision of the 

4 Department of Defense Appropriations Act, 2006, or 

5 the Emergency Supplemental Appropriations Act for 

6 Defense, the Global War on Terror, and Hurricane 

7 Recovery, 2006.’’. 

8 SEC. 8. APPLICATION OF THE DEFINITIONS AND SPECIAL 

9 RULES UNDER SECTION 42(I) OF THE INTER10 NAL REVENUE CODE OF 1986 FOR BOND-FI11 NANCED PROJECTS. 

12 (a) IN GENERAL.—For purposes of qualifying as a 

13 qualified residential rental project under section 142(d)(1) 

14 of the Internal Revenue Code of 1986 [in the Gulf Oppor15 tunity Zone, the Rita GO Zone, or the Wilma GO Zone], 

16 the special definitions and special rules for low-income 

17 units in section 42(i)(3) of such Code shall apply. 

18 (b) EFFECTIVE DATE.—This section shall take apply 

19 to bonds issued after the date of the enactment of this 

20 Act. 


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1 SEC. 9. SPECIAL TAX-EXEMPT BOND FINANCING RULE FOR 

2 REPAIRS AND RECONSTRUCTIONS OF RESI3 DENCES IN THE GO ZONES. 

4 Section 1400N(a) of the Internal Revenue Code of 

5 1986 is amended by adding at the end the following new 

6 paragraph: 

7 ‘‘(7) SPECIAL RULE FOR REPAIRS AND RECON8 STRUCTIONS.— 

9 ‘‘(A) IN GENERAL.—For purposes of sec10 tion 143 and this subsection, any qualified GO 

11 Zone repair or reconstruction shall be treated 

12 as a qualified rehabilitation. 

13 ‘‘(B) QUALIFIED GO ZONE REPAIR OR RE14 CONSTRUCTION.—For purposes of subpara15 graph (A), the term ‘qualified GO Zone repair 

16 or reconstruction’ means any repair of damage 

17 caused by Hurricane Katrina, Hurricane Rita, 

18 or Hurricane Wilma to a building located in the 

19 Gulf Opportunity Zone, the Rita GO Zone, or 

20 the Wilma GO Zone (or reconstruction of such 

21 building in the case of damage constituting de22 struction) if the expenditures for such repair or 

23 reconstruction are 25 percent or more of the 

24 mortgagor’s adjusted basis in the residence. 

25 For purposes of the preceding sentence, the 

26 mortgagor’s adjusted basis shall be determined 


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1 as of the completion of the repair or reconstruc2 tion or, if later, the date on which the mort3 gagor acquires the residence. 

4 ‘‘(C) TERMINATION.—This paragraph shall 

5 apply only to owner-financing provided after the 

6 date of the enactment of this paragraph and be7 fore January 1, 2011.’’. 

Æ 


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