In the Senate of the United States,
December 16, 2005.
Resolved, That the bill from the House of Representa-
tives (H.R. 4440) entitled ‘‘An Act to amend the Internal
Revenue Code of 1986 to provide tax benefits for the Gulf
Opportunity Zone and certain areas affected by Hurricanes
Rita and Wilma, and for other purposes.’’, do pass with the
following
AMENDMENT:
Strike out all after the enacting clause and insert:
SECTION 1. SHORT TITLE; ETC.
(a) SHORT TITLE.—This Act may be cited as the ‘‘Gulf
Opportunity Zone Act of 2005’’.
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(b) AMENDMENT OF 1986 CODE.—Except as otherwise
expressly provided, whenever in this Act an amendment or
repeal is expressed in terms of an amendment to, or repeal
of, a section or other provision, the reference shall be consid-
ered to be made to a section or other provision of the Inter-
nal Revenue Code of 1986.
(c) TABLE OF CONTENTS.—The table of contents of this
Act is as follows:
Sec. 1. Short title; etc.
TITLE I—ESTABLISHMENT OF GULF OPPORTUNITY ZONE
Sec. 101. Tax benefits for Gulf Opportunity Zone.
Sec. 102. Expansion of Hope Scholarship and Lifetime Learning Credit for stu-
dents in the Gulf Opportunity Zone.
Sec. 103. Housing relief for individuals affected by Hurricane Katrina.
Sec. 104. Extension of special rules for mortgage revenue bonds.
Sec. 105. Special extension of bonus depreciation placed in service date for tax-
payers affected by Hurricanes Katrina, Rita, and Wilma.
TITLE II—TAX BENEFITS RELATED TO HURRICANES RITA AND
WILMA
Sec. 201. Extension of certain emergency tax relief for Hurricane Katrina to
Hurricanes Rita and Wilma.
TITLE III—OTHER PROVISIONS
Sec. 301. Gulf Coast Recovery Bonds.
Sec. 302. Election to include combat pay as earned income for purposes of earned
income credit.
Sec. 303. Modification of effective date of exception from suspension rules for cer-
tain listed and reportable transactions.
Sec. 304. Authority for undercover operations.
Sec. 305. Disclosures of certain tax return information.
TITLE IV—TECHNICALS
Subtitle A—Tax Technicals
Sec. 401. Short title.
Sec. 402. Amendments related to Energy Policy Act of 2005.
Sec. 403. Amendments related to the American Jobs Creation Act of 2004.
Sec. 404. Amendments related to the Working Families Tax Relief Act of 2004.
Sec. 405. Amendments related to the Jobs and Growth Tax Relief Reconciliation
Act of 2003.
Sec. 406. Amendment related to the Victims of Terrorism Tax Relief Act of 2001.
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Sec. 407. Amendments related to the Economic Growth and Tax Relief Reconcili-
ation Act of 2001.
Sec. 408. Amendments related to the Internal Revenue Service Restructuring and
Reform Act of 1998.
Sec. 409. Amendments related to the Taxpayer Relief Act of 1997.
Sec. 410. Amendment related to the Omnibus Budget Reconciliation Act of 1990.
Sec. 411. Amendment related to the Omnibus Budget Reconciliation Act of 1987.
Sec. 412. Clerical corrections.
Sec. 413. Other corrections related to the American Jobs Creation Act of 2004.
Subtitle B—Trade Technicals
Sec. 421. Technical corrections to regional value content methods for rules of ori-
gin under Public Law 109–53.
TITLE V—EMERGENCY REQUIREMENT
Sec. 501. Emergency requirement.
TITLE I—ESTABLISHMENT OF
GULF OPPORTUNITY ZONE
SEC. 101. TAX BENEFITS FOR GULF OPPORTUNITY ZONE.
(a) IN GENERAL.—Subchapter Y of chapter 1 is
amended by adding at the end the following new part:
‘‘PART II—TAX BENEFITS FOR GO ZONES
‘‘Sec. 1400M. Definitions.
‘‘Sec. 1400N. Tax benefits for Gulf Opportunity Zone.
‘‘SEC. 1400M. DEFINITIONS.
‘‘For purposes of this part—
‘‘(1) GULF
OPPORTUNITY
ZONE.—The terms
‘Gulf Opportunity Zone’ and ‘GO Zone’ mean that
portion of the Hurricane Katrina disaster area deter-
mined by the President to warrant individual or in-
dividual and public assistance from the Federal Gov-
ernment under the Robert T. Stafford Disaster Relief
and Emergency Assistance Act by reason of Hurri-
cane Katrina.
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‘‘(2) HURRICANE
KATRINA
DISASTER
AREA.—
The term ‘Hurricane Katrina disaster area’ means
an area with respect to which a major disaster has
been declared by the President before September 14,
2005, under section 401 of such Act by reason of Hur-
ricane Katrina.
‘‘(3) RITA GO ZONE.—The term ‘Rita GO Zone’
means that portion of the Hurricane Rita disaster
area determined by the President to warrant indi-
vidual or individual and public assistance from the
Federal Government under such Act by reason of
Hurricane Rita.
‘‘(4) HURRICANE
RITA
DISASTER
AREA.—The
term ‘Hurricane Rita disaster area’ means an area
with respect to which a major disaster has been de-
clared by the President before October 6, 2005, under
section 401 of such Act by reason of Hurricane Rita.
‘‘(5) WILMA GO ZONE.—The term ‘Wilma GO
Zone’ means that portion of the Hurricane Wilma
disaster area determined by the President to warrant
individual or individual and public assistance from
the Federal Government under such Act by reason of
Hurricane Wilma.
‘‘(6) HURRICANE WILMA DISASTER AREA.—The
term ‘Hurricane Wilma disaster area’ means an area
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with respect to which a major disaster has been de-
clared by the President before November 14, 2005,
under section 401 of such Act by reason of Hurricane
Wilma.
‘‘SEC. 1400N. TAX BENEFITS FOR GULF OPPORTUNITY
ZONE.
‘‘(a) TAX-EXEMPT BOND FINANCING.—
‘‘(1) IN GENERAL.—For purposes of this title—
‘‘(A) any qualified Gulf Opportunity Zone
Bond described in paragraph (2)(A)(i) shall be
treated as an exempt facility bond, and
‘‘(B) any qualified Gulf Opportunity Zone
Bond described in paragraph (2)(A)(ii) shall be
treated as a qualified mortgage bond.
‘‘(2) QUALIFIED
GULF
OPPORTUNITY
ZONE
BOND.—For purposes of this subsection, the term
‘qualified Gulf Opportunity Zone Bond’ means any
bond issued as part of an issue if—
‘‘(A)(i) 95 percent or more of the net pro-
ceeds (as defined in section 150(a)(3)) of such
issue are to be used for qualified project costs, or
‘‘(ii) such issue meets the requirements of a
qualified mortgage issue, except as otherwise pro-
vided in this subsection,
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‘‘(B) such bond is issued by the State of
Alabama, Louisiana, or Mississippi, or any po-
litical subdivision thereof,
‘‘(C) such bond is designated for purposes of
this section by—
‘‘(i) in the case of a bond which is re-
quired under State law to be approved by
the bond commission of such State, such
bond commission, and
‘‘(ii) in the case of any other bond, the
Governor of such State,
‘‘(D) such bond is issued after the date of
the enactment of this section and before January
1, 2011, and
‘‘(E) no portion of the proceeds of such issue
is to be used to provide any property described
in section 144(c)(6)(B).
‘‘(3) LIMITATIONS ON BONDS.—
‘‘(A) AGGREGATE AMOUNT DESIGNATED.—
The maximum aggregate face amount of bonds
which may be designated under this subsection
with respect to any State shall not exceed the
product of $2,500 multiplied by the portion of
the State population which is in the Gulf Oppor-
tunity Zone (as determined on the basis of the
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most recent census estimate of resident popu-
lation released by the Bureau of Census before
August 28, 2005).
‘‘(B) MOVABLE PROPERTY.—No bonds shall
be issued which are to be used for movable fix-
tures and equipment.
‘‘(4) QUALIFIED PROJECT COSTS.—For purposes
of this subsection, the term ‘qualified project costs’
means—
‘‘(A) the cost of any qualified residential
rental project (as defined in section 142(d)) lo-
cated in the Gulf Opportunity Zone, and
‘‘(B) the cost of acquisition, construction,
reconstruction, and renovation of—
‘‘(i) nonresidential real property (in-
cluding fixed improvements associated with
such property) located in the Gulf Oppor-
tunity Zone, and
‘‘(ii) public utility property (as de-
fined in section 168(i)(10)) located in the
Gulf Opportunity Zone.
‘‘(5) SPECIAL RULES.—In applying this title to
any qualified Gulf Opportunity Zone Bond, the fol-
lowing modifications shall apply:
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‘‘(A) Section 142(d)(1) (defining qualified
residential rental project) shall be applied—
‘‘(i) by substituting ‘60 percent’ for ‘50
percent’ in subparagraph (A) thereof, and
‘‘(ii) by substituting ‘70 percent’ for
‘60 percent’ in subparagraph (B) thereof.
‘‘(B) Section 143 (relating to mortgage rev-
enue bonds: qualified mortgage bond and quali-
fied veterans’ mortgage bond) shall be applied—
‘‘(i) only with respect to owner-occu-
pied residences in the Gulf Opportunity
Zone,
‘‘(ii) by treating any such residence in
the Gulf Opportunity Zone as a targeted
area residence,
‘‘(iii) by applying subsection (f)(3)
thereof without regard to subparagraph (A)
thereof, and
‘‘(iv) by substituting ‘$150,000’ for
‘$15,000’ in subsection (k)(4) thereof.
‘‘(C) Except as provided in section 143, re-
payments of principal on financing provided by
the issue of which such bond is a part may not
be used to provide financing.
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‘‘(D) Section 146 (relating to volume cap)
shall not apply.
‘‘(E) Section 147(d)(2) (relating to acquisi-
tion of existing property not permitted) shall be
applied by substituting ‘50 percent’ for ‘15 per-
cent’ each place it appears.
‘‘(F) Section 148(f)(4)(C) (relating to excep-
tion from rebate for certain proceeds to be used
to finance construction expenditures) shall apply
to the available construction proceeds of bonds
which are part of an issue described in para-
graph (2)(A)(i).
‘‘(G) Section 57(a)(5) (relating to tax-ex-
empt interest) shall not apply.
‘‘(6) SEPARATE ISSUE TREATMENT OF PORTIONS
OF AN ISSUE.—This subsection shall not apply to the
portion of an issue which (if issued as a separate
issue) would be treated as a qualified bond or as a
bond that is not a private activity bond (determined
without regard to paragraph (1)), if the issuer elects
to so treat such portion.
‘‘(b) ADVANCE REFUNDINGS OF CERTAIN TAX-EXEMPT
BONDS.—
‘‘(1) IN GENERAL.—With respect to a bond de-
scribed in paragraph (3), one additional advance re-
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funding after the date of the enactment of this section
and before January 1, 2011, shall be allowed under
the applicable rules of section 149(d) if—
‘‘(A) the Governor of the State designates
the advance refunding bond for purposes of this
subsection, and
‘‘(B) the requirements of paragraph (5) are
met.
‘‘(2) CERTAIN PRIVATE ACTIVITY BONDS.—With
respect to a bond described in paragraph (3) which
is an exempt facility bond described in paragraph (1)
or (2) of section 142(a), one advance refunding after
the date of the enactment of this section and before
January 1, 2011, shall be allowed under the applica-
ble rules of section 149(d) (notwithstanding para-
graph (2) thereof) if the requirements of subpara-
graphs (A) and (B) of paragraph (1) are met.
‘‘(3) BONDS DESCRIBED.—A bond is described in
this paragraph if such bond was outstanding on Au-
gust 28, 2005, and is issued by the State of Alabama,
Louisiana, or Mississippi, or a political subdivision
thereof.
‘‘(4) AGGREGATE LIMIT.—The maximum aggre-
gate face amount of bonds which may be designated
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under this subsection by the Governor of a State shall
not exceed—
‘‘(A) $4,500,000,000 in the case of the State
of Louisiana,
‘‘(B) $2,250,000,000 in the case of the State
of Mississippi, and
‘‘(C) $1,125,000,000 in the case of the State
of Alabama.
‘‘(5) ADDITIONAL REQUIREMENTS.—The require-
ments of this paragraph are met with respect to any
advance refunding of a bond described in paragraph
(3) if—
‘‘(A) no advance refundings of such bond
would be allowed under this title on or after Au-
gust 28, 2005,
‘‘(B) the advance refunding bond is the only
other outstanding bond with respect to the re-
funded bond, and
‘‘(C) the requirements of section 148 are met
with respect to all bonds issued under this sub-
section.
‘‘(6) USE
OF
PROCEEDS
REQUIREMENT.—This
subsection shall not apply to any advance refunding
of a bond which is issued as part of an issue if any
portion of the proceeds of such issue (or any prior