IIB 

110TH CONGRESS 

1ST SESSION H. R. 1562 

IN THE SENATE OF THE UNITED STATES 

MARCH 28, 2007 

Received; read twice and referred to the Committee on Finance 

AN ACT 

To amend the Internal Revenue Code of 1986 to extend 

and expand certain rules with respect to housing in the 

GO Zones. 

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

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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Katrina Housing Tax 

3 Relief Act of 2007’’. 

4 SEC. 2. EXTENSION AND EXPANSION OF LOW-INCOME 

5 HOUSING CREDIT RULES FOR BUILDINGS IN 

6 THE GO ZONES. 

7 (a) TIME FOR MAKING LOW-INCOME HOUSING

8 CREDIT ALLOCATIONS.—Subsection (c) of section 1400N 

9 of the Internal Revenue Code of 1986 (relating to low10 income housing credit) is amended by redesignating para11 graph (5) as paragraph (6) and by inserting after para12 graph (4) the following new paragraph: 

13 ‘‘(5) TIME FOR MAKING LOW-INCOME HOUSING

14 CREDIT ALLOCATIONS.—Section 42(h)(1)(B) shall 

15 not apply to an allocation of housing credit dollar 

16 amount to a building located in the Gulf Oppor17 tunity Zone, the Rita GO Zone, or the Wilma GO 

18 Zone, if such allocation is made in 2006, 2007, or 

19 2008, and such building is placed in service before 

20 January 1, 2011.’’. 

21 (b) EXTENSION OF PERIOD FOR TREATING GO 

22 ZONES AS DIFFICULT DEVELOPMENT AREAS.— 

23 (1) IN GENERAL.—Subparagraph (A) of section 

24 1400N(c)(3) of such Code is amended by striking 

25 ‘‘2006, 2007, or 2008’’ and inserting ‘‘the period bemstockstill on PROD1PC66 with BILLS

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1 ginning on January 1, 2006, and ending on Decem2 ber 31, 2010’’. 

3 (2) CONFORMING AMENDMENT.—Clause (ii) of 

4 section 1400N(c)(3)(B) of such Code is amended by 

5 striking ‘‘such period’’ and inserting ‘‘the period de6 scribed in subparagraph (A)’’. 

7 (c) COMMUNITY DEVELOPMENT BLOCK GRANTS NOT

8 TAKEN INTO ACCOUNT IN DETERMINING IF BUILDINGS

9 ARE FEDERALLY SUBSIDIZED.—Subsection (c) of section 

10 1400N of such Code (relating to low-income housing cred11 it), as amended by this Act, is amended by redesignating 

12 paragraph (6) as paragraph (7) and by inserting after 

13 paragraph (5) the following new paragraph: 

14 ‘‘(6) COMMUNITY DEVELOPMENT BLOCK

15 GRANTS NOT TAKEN INTO ACCOUNT IN DETER16 MINING IF BUILDINGS ARE FEDERALLY SUB17 SIDIZED.—For purpose of applying section 

18 42(i)(2)(D) to any building which is placed in serv19 ice in the Gulf Opportunity Zone, the Rita GO Zone, 

20 or the Wilma GO Zone during the period beginning 

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

22 2010, a loan shall not be treated as a below market 

23 Federal loan solely by reason of any assistance pro24 vided under section 106, 107, or 108 of the Housing 

25 and Community Development Act of 1974 by reason 

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

2 Department of Defense Appropriations Act, 2006, or 

3 the Emergency Supplemental Appropriations Act for 

4 Defense, the Global War on Terror, and Hurricane 

5 Recovery, 2006.’’. 

6 SEC. 3. SPECIAL TAX-EXEMPT BOND FINANCING RULE FOR 

7 REPAIRS AND RECONSTRUCTIONS OF RESI8 DENCES IN THE GO ZONES. 

9 Subsection (a) of section 1400N of the Internal Rev10 enue Code of 1986 (relating to tax-exempt bond financing) 

11 is amended by adding at the end the following new para12 graph: 

13 ‘‘(7) SPECIAL RULE FOR REPAIRS AND RECON14 STRUCTIONS.— 

15 ‘‘(A) IN GENERAL.—For purposes of sec16 tion 143 and this subsection, any qualified GO 

17 Zone repair or reconstruction shall be treated 

18 as a qualified rehabilitation. 

19 ‘‘(B) QUALIFIED GO ZONE REPAIR OR RE20 CONSTRUCTION.—For purposes of subpara21 graph (A), the term ‘qualified GO Zone repair 

22 or reconstruction’ means any repair of damage 

23 caused by Hurricane Katrina, Hurricane Rita, 

24 or Hurricane Wilma to a building located in the 

25 Gulf Opportunity Zone, the Rita GO Zone, or 

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1 the Wilma GO Zone (or reconstruction of such 

2 building in the case of damage constituting de3 struction) if the expenditures for such repair or 

4 reconstruction are 25 percent or more of the 

5 mortgagor’s adjusted basis in the residence. 

6 For purposes of the preceding sentence, the 

7 mortgagor’s adjusted basis shall be determined 

8 as of the completion of the repair or reconstruc9 tion or, if later, the date on which the mort10 gagor acquires the residence. 

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

12 apply only to owner-financing provided after the 

13 date of the enactment of this paragraph and be14 fore January 1, 2011.’’. 

15 SEC. 4. GAO STUDY OF PRACTICES EMPLOYED BY STATE 

16 AND LOCAL GOVERNMENTS IN ALLOCATING 

17 AND UTILIZING TAX INCENTIVES PROVIDED 

18 PURSUANT TO THE GULF OPPORTUNITY 

19 ZONE ACT OF 2005. 

20 (a) IN GENERAL.—The Comptroller General of the 

21 United States shall conduct a study of the practices em22 ployed by State and local governments, and subdivisions 

23 thereof, in allocating and utilizing tax incentives provided 

24 pursuant to the Gulf Opportunity Zone Act of 2005 and 

25 this Act. 

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1 (b) SUBMISSION OF REPORT.—Not later than one 

2 year after the date of the enactment of this Act, the Comp3 troller General shall submit a report on the findings of 

4 the study conducted under subsection (a) and shall include 

5 therein recommendations (if any) relating to such find6 ings. The report shall be submitted to the Committee on 

7 Ways and Means of the House of Representatives and the 

8 Committee on Finance of the Senate. 

9 (c) CONGRESSIONAL HEARINGS.—In the case that 

10 the report submitted under this section includes findings 

11 of significant fraud, waste or abuse, each Committee spec12 ified in subsection (b) shall, within 60 days after the date 

13 the report is submitted under subsection (b), hold a public 

14 hearing to review such findings. 

15 SEC. 5. MODIFICATION OF COLLECTION DUE PROCESS 

16 PROCEDURES FOR EMPLOYMENT TAX LI17 ABILITIES. 

18 (a) IN GENERAL.—Section 6330(f) of the Internal 

19 Revenue Code of 1986 (relating to jeopardy and State re20 fund collection) is amended— 

21 (1) by striking ‘‘; or’’ at the end of paragraph 

22 (1) and inserting a comma, 

23 (2) by adding ‘‘or’’ at the end of paragraph (2), 

24 and 

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1 (3) by inserting after paragraph (2) the fol2 lowing new paragraph: 

3 ‘‘(3) the Secretary has served a disqualified em4 ployment tax levy,’’. 

5 (b) DISQUALIFIED EMPLOYMENT TAX LEVY.—Sec6 tion 6330 of such Code (relating to notice and opportunity 

7 for hearing before levy) is amended by adding at the end 

8 the following new subsection: 

9 ‘‘(h) DISQUALIFIED EMPLOYMENT TAX LEVY.—For 

10 purposes of subsection (f), a disqualified employment tax 

11 levy is any levy in connection with the collection of employ12 ment taxes for any taxable period if— 

13 ‘‘(1) the person subject to the levy (or any 

14 predecessor thereof) requested a hearing under this 

15 section with respect to unpaid employment taxes 

16 arising in the most recent 2-year period before the 

17 beginning of the taxable period with respect to which 

18 the levy is served, and 

19 ‘‘(2) such levy is served before February 29, 

20 2016. 

21 For purposes of the preceding sentence, the term ‘employ22 ment taxes’ means any taxes under chapter 21, 22, 23, 

23 or 24.’’. 

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

25 this section shall apply to levies served on or after the date 

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1 that is 120 days after the date of the enactment of this 

2 Act. 

3 SEC. 6. TIME FOR PAYMENT OF CORPORATE ESTIMATED 

4 TAXES. 

5 Subparagraph (B) of section 401(1) of the Tax In6 crease Prevention and Reconciliation Act of 2005 is 

7 amended by striking ‘‘106.25 percent’’ and inserting 

8 ‘‘106.45 percent’’. 

Passed the House of Representatives March 27, 

2007. 

Attest: LORRAINE C. MILLER, 

Clerk. 

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