H. R. 3768—5
(3) in determining the 5-year period and the term of a 
loan under subparagraph (B) or (C) of section 72(p)(2) of such 
Code, the period described in paragraph (1) shall be dis-
regarded. 
(c) QUALIFIED INDIVIDUAL.—For purposes of this section, the 
term ‘‘qualified individual’’ means an individual whose principal 
place of abode on August 28, 2005, is located in the Hurricane 
Katrina disaster area and who has sustained an economic loss 
by reason of Hurricane Katrina. 
SEC. 104. PROVISIONS RELATING TO PLAN AMENDMENTS. 
(a) IN GENERAL.—If this section applies to any amendment 
to any plan or annuity contract, such plan or contract shall be 
treated as being operated in accordance with the terms of the 
plan during the period described in subsection (b)(2)(A). 
(b) AMENDMENTS TO WHICH SECTION APPLIES.—
(1) IN GENERAL.—This section shall apply to any amend-
ment to any plan or annuity contract which is made—
(A) pursuant to any amendment made by this title, 
or pursuant to any regulation issued by the Secretary 
of the Treasury or the Secretary of Labor under this title, 
and 
(B) on or before the last day of the first plan year 
beginning on or after January 1, 2007, or such later date 
as the Secretary of the Treasury may prescribe. 
In the case of a governmental plan (as defined in section 
414(d) of the Internal Revenue Code of 1986), subparagraph 
(B) shall be applied by substituting the date which is 2 years 
after the date otherwise applied under subparagraph (B). 
(2) CONDITIONS.—This section shall not apply to any 
amendment unless—
(A) during the period—
(i) beginning on the date the legislative or regu-
latory amendment described in paragraph (1)(A) takes 
effect (or in the case of a plan or contract amendment 
not required by such legislative or regulatory amend-
ment, the effective date specified by the plan), and 
(ii) ending on the date described in paragraph 
(1)(B) (or, if earlier, the date the plan or contract 
amendment is adopted), 
the plan or contract is operated as if such plan or contract 
amendment were in effect; and 
(B) such plan or contract amendment applies retro-
actively for such period. 
TITLE II—EMPLOYMENT RELIEF 
SEC. 201. WORK OPPORTUNITY TAX CREDIT FOR HURRICANE KATRINA 
EMPLOYEES. 
(a) IN GENERAL.—For purposes of section 51 of the Internal 
Revenue Code of 1986, a Hurricane Katrina employee shall be 
treated as a member of a targeted group. 
(b) HURRICANE KATRINA EMPLOYEE.—For purposes of this sec-
tion, the term ‘‘Hurricane Katrina employee’’ means—
(1) any individual who on August 28, 2005, had a principal 
place of abode in the core disaster area and who is hired
H. R. 3768—6
during the 2-year period beginning on such date for a position 
the principal place of employment of which is located in the 
core disaster area, and 
(2) any individual who on such date had a principal place 
of abode in the core disaster area, who is displaced from such 
abode by reason of Hurricane Katrina, and who is hired during 
the period beginning on such date and ending on December 
31, 2005. 
(c) REASONABLE IDENTIFICATION ACCEPTABLE.—In lieu of the 
certification requirement under subparagraph (A) of section 
51(d)(12) of such Code, an individual may provide to the employer 
reasonable evidence that the individual is a Hurricane Katrina 
employee, and subparagraph (B) of such section shall be applied 
as if such evidence were a certification described in such subpara-
graph. 
(d) SPECIAL RULES FOR DETERMINING CREDIT.—For purposes 
of applying subpart F of part IV of subchapter A of chapter 1 
of such Code to wages paid or incurred to any Hurricane Katrina 
employee—
(1) section 51(c)(4) of such Code shall not apply, and 
(2) section 51(i)(2) of such Code shall not apply with respect 
to the first hire of such employee as a Hurricane Katrina 
employee, unless such employee was an employee of the 
employer on August 28, 2005. 
SEC. 202. EMPLOYEE RETENTION CREDIT FOR EMPLOYERS AFFECTED 
BY HURRICANE KATRINA. 
(a) IN GENERAL.—In the case of an eligible employer, there 
shall be allowed as a credit against the tax imposed by chapter 
1 of the Internal Revenue Code of 1986 for the taxable year an 
amount equal to 40 percent of the qualified wages with respect 
to each eligible employee of such employer for such taxable year. 
For purposes of the preceding sentence, the amount of qualified 
wages which may be taken into account with respect to any indi-
vidual shall not exceed $6,000. 
(b) DEFINITIONS.—For purposes of this section—
(1) ELIGIBLE
EMPLOYER.—The term ‘‘eligible employer’’ 
means any employer—
(A) which conducted an active trade or business on 
August 28, 2005, in a core disaster area, and 
(B) with respect to whom the trade or business 
described in subparagraph (A) is inoperable on any day 
after August 28, 2005, and before January 1, 2006, as 
a result of damage sustained by reason of Hurricane 
Katrina. 
(2) ELIGIBLE
EMPLOYEE.—The term ‘‘eligible employee’’ 
means with respect to an eligible employer an employee whose 
principal place of employment on August 28, 2005, with such 
eligible employer was in a core disaster area. 
(3) QUALIFIED WAGES.—The term ‘‘qualified wages’’ means 
wages (as defined in section 51(c)(1) of such Code, but without 
regard to section 3306(b)(2)(B) of such Code) paid or incurred 
by an eligible employer with respect to an eligible employee 
on any day after August 28, 2005, and before January 1, 
2006, which occurs during the period—
(A) beginning on the date on which the trade or busi-
ness described in paragraph (1) first became inoperable
H. R. 3768—7
at the principal place of employment of the employee imme-
diately before Hurricane Katrina, and 
(B) ending on the date on which such trade or business 
has resumed significant operations at such principal place 
of employment. 
Such term shall include wages paid without regard to whether 
the employee performs no services, performs services at a dif-
ferent place of employment than such principal place of employ-
ment, or performs services at such principal place of employ-
ment before significant operations have resumed. 
(c) CREDIT NOT ALLOWED FOR LARGE BUSINESSES.—The term 
‘‘eligible employer’’ shall not include any trade or business for 
any taxable year if such trade or business employed an average 
of more than 200 employees on business days during the taxable 
year. 
(d) CERTAIN RULES TO APPLY.—For purposes of this section, 
rules similar to the rules of sections 51(i)(1), 52, and 280C(a) of 
such Code shall apply. 
(e) EMPLOYEE NOT TAKEN INTO ACCOUNT MORE THAN ONCE.—
An employee shall not be treated as an eligible employee for pur-
poses of this section for any period with respect to any employer 
if such employer is allowed a credit under section 51 of such 
Code with respect to such employee for such period. 
(f) CREDIT TO BE PART OF GENERAL BUSINESS CREDIT.—The 
credit allowed under this section shall be added to the current 
year business credit under section 38(b) of such Code and shall 
be treated as a credit allowed under subpart D of part IV of 
subchapter A of chapter 1 of such Code. 
TITLE III—CHARITABLE GIVING 
INCENTIVES 
SEC. 301. TEMPORARY SUSPENSION OF LIMITATIONS ON CHARITABLE 
CONTRIBUTIONS. 
(a) IN GENERAL.—Except as otherwise provided in subsection 
(b), section 170(b) of the Internal Revenue Code of 1986 shall 
not apply to qualified contributions and such contributions shall 
not be taken into account for purposes of applying subsections 
(b) and (d) of section 170 of such Code to other contributions. 
(b) TREATMENT OF EXCESS CONTRIBUTIONS.—For purposes of 
section 170 of such Code—
(1) INDIVIDUALS.—In the case of an individual—
(A) LIMITATION.—Any qualified contribution shall be 
allowed only to the extent that the aggregate of such con-
tributions does not exceed the excess of the taxpayer’s 
contribution base (as defined in subparagraph (F) of section 
170(b)(1) of such Code) over the amount of all other chari-
table contributions allowed under such section 170(b)(1). 
(B) CARRYOVER.—If the aggregate amount of qualified 
contributions made in the contribution year (within the 
meaning of section 170(d)(1) of such Code) exceeds the 
limitation of subparagraph (A), such excess shall be added 
to the excess described in the portion of subparagraph 
(A) of such section which precedes clause (i) thereof for 
purposes of applying such section. 
(2) CORPORATIONS.—In the case of a corporation—
H. R. 3768—8
(A) LIMITATION.—Any qualified contribution shall be 
allowed only to the extent that the aggregate of such con-
tributions does not exceed the excess of the taxpayer’s 
taxable income (as determined under paragraph (2) of sec-
tion 170(b) of such Code) over the amount of all other 
charitable contributions allowed under such paragraph. 
(B) CARRYOVER.—Rules similar to the rules of para-
graph (1)(B) shall apply for purposes of this paragraph. 
(c) EXCEPTION TO OVERALL LIMITATION ON ITEMIZED DEDUC-
TIONS.—So much of any deduction allowed under section 170 of 
such Code as does not exceed the qualified contributions paid during 
the taxable year shall not be treated as an itemized deduction 
for purposes of section 68 of such Code. 
(d) QUALIFIED CONTRIBUTIONS.—
(1) IN GENERAL.—For purposes of this section, the term 
‘‘qualified contribution’’ means any charitable contribution (as 
defined in section 170(c) of such Code)—
(A) paid during the period beginning on August 28, 
2005, and ending on December 31, 2005, in cash to an 
organization described in section 170(b)(1)(A) of such Code 
(other than an organization described in section 509(a)(3) 
of such Code), 
(B) in the case of a contribution paid by a corporation, 
such contribution is for relief efforts related to Hurricane 
Katrina, and 
(C) with respect to which the taxpayer has elected 
the application of this section. 
(2) EXCEPTION.—Such term shall not include a contribution 
if the contribution is for establishment of a new, or maintenance 
in an existing, segregated fund or account with respect to 
which the donor (or any person appointed or designated by 
such donor) has, or reasonably expects to have, advisory privi-
leges with respect to distributions or investments by reason 
of the donor’s status as a donor. 
(3) APPLICATION OF ELECTION TO PARTNERSHIPS AND S COR-
PORATIONS.—In the case of a partnership or S corporation, 
the election under paragraph (1)(C) shall be made separately 
by each partner or shareholder. 
SEC. 
302. 
ADDITIONAL 
EXEMPTION 
FOR 
HOUSING 
HURRICANE 
KATRINA DISPLACED INDIVIDUALS. 
(a) IN GENERAL.—In the case of taxable years of a natural 
person beginning in 2005 or 2006, for purposes of the Internal 
Revenue Code of 1986, taxable income shall be reduced by $500 
for each Hurricane Katrina displaced individual of the taxpayer 
for the taxable year. 
(b) LIMITATIONS.—
(1) DOLLAR LIMITATION.—The reduction under subsection 
(a) shall not exceed $2,000, reduced by the amount of the 
reduction under this section for all prior taxable years. 
(2) INDIVIDUALS TAKEN INTO ACCOUNT ONLY ONCE.—An indi-
vidual shall not be taken into account under subsection (a) 
if such individual was taken into account under such subsection 
by the taxpayer for any prior taxable year. 
(3) IDENTIFYING
INFORMATION
REQUIRED.—An individual 
shall not be taken into account under subsection (a) for a 
taxable year unless the taxpayer identification number of such