SEC. 2. TEMPORARY TAX RELIEF FOR AREAS DAMAGED BY 
2008 MIDWESTERN SEVERE STORMS, TOR-
NADOS, AND FLOODING. 
(a) IN GENERAL.—Subject to the modifications de-
scribed in this section, the following provisions of or relat-
ing to the Internal Revenue Code of 1986 shall apply to 
any Midwestern disaster area in addition to the areas to 
which such provisions otherwise apply: 
(1) GO ZONE BENEFITS.— 
(A) Section 1400N (relating to tax bene-
fits) other than subsections (b), (i), (j), (m), 
and (o) thereof. 
(B) Section 1400O (relating to education 
tax benefits). 
(C) Section 1400P (relating to housing tax 
benefits). 
(D) Section 1400Q (relating to special 
rules for use of retirement funds). 
(E) Section 1400R(a) (relating to em-
ployee retention credit for employers). 
(F) Section 1400S (relating to additional 
tax relief) other than subsection (d) thereof. 
(G) Section 1400T (relating to special 
rules for mortgage revenue bonds). 
(2) OTHER BENEFITS INCLUDED IN KATRINA 
EMERGENCY
TAX
RELIEF
ACT
OF
2005.—Sections 
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302, 303, 304, 401, and 405 of the Katrina Emer-
gency Tax Relief Act of 2005. 
(b) USE OF AMENDED INCOME TAX RETURNS TO 
TAKE INTO ACCOUNT RECEIPT OF CERTAIN CASUALTY 
LOSS GRANTS
BY DISALLOWING PREVIOUSLY TAKEN 
CASUALTY LOSS DEDUCTIONS.— 
(1) IN GENERAL.—Notwithstanding any other 
provision of the Internal Revenue Code of 1986, if 
a taxpayer claims a deduction for any taxable year 
with respect to a casualty loss to a principal resi-
dence (within the meaning of section 121 of such 
Code) resulting from the severe storms, tornados, or 
flooding giving rise to any Presidential declaration 
described in subsection (c)(1)(A) and in a subse-
quent taxable year receives a grant under any Fed-
eral or State program as reimbursement for such 
loss, such taxpayer may elect to file an amended in-
come tax return for the taxable year in which such 
deduction was allowed (and for any taxable year to 
which such deduction is carried) and reduce (but not 
below zero) the amount of such deduction by the 
amount of such reimbursement. 
(2) TIME
OF
FILING
AMENDED
RETURN.— 
Paragraph (1) shall apply with respect to any grant 
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only if any amended income tax returns with respect 
to such grant are filed not later than the later of— 
(A) the due date for filing the tax return 
for the taxable year in which the taxpayer re-
ceives such grant, or 
(B) the date which is 1 year after the date 
of the enactment of this Act. 
(3) WAIVER OF PENALTIES AND INTEREST.— 
Any underpayment of tax resulting from the reduc-
tion under paragraph (1) of the amount otherwise 
allowable as a deduction shall not be subject to any 
penalty or interest under such Code if such tax is 
paid not later than 1 year after the filing of the 
amended return to which such reduction relates. 
(c) MIDWESTERN DISASTER AREA.— 
(1) IN GENERAL.—For purposes of this section 
and for applying the substitutions described in sub-
sections (e) and (f), the term ‘‘Midwestern disaster 
area’’ means an area— 
(A) with respect to which a major disaster 
has been declared by the President on or after 
May 20, 2008, and before August 1, 2008, 
under section 401 of the Robert T. Stafford 
Disaster Relief and Emergency Assistance Act 
by reason of severe storms, tornados, or flood-
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ing occurring in any of the States of Arkansas, 
Illinois, Indiana, Iowa, Kansas, Michigan, Min-
nesota, Missouri, Nebraska, and Wisconsin, and 
(B) determined by the President to war-
rant individual or individual and public assist-
ance from the Federal Government under such 
Act with respect to damages attributable to 
such severe storms, tornados, or flooding. 
(2) CERTAIN BENEFITS AVAILABLE TO AREAS 
ELIGIBLE ONLY FOR PUBLIC ASSISTANCE.—For pur-
poses of applying this section to benefits under the 
following provisions, paragraph (1) shall be applied 
without regard to subparagraph (B): 
(A) 
Sections 
1400Q, 
1400S(b), 
and 
1400S(d) of the Internal Revenue Code of 
1986. 
(B) Sections 302, 401, and 405 of the 
Katrina Emergency Tax Relief Act of 2005. 
(d) REFERENCES.— 
(1) AREA.—Any reference in such provisions to 
the Hurricane Katrina disaster area or the Gulf Op-
portunity Zone shall be treated as a reference to any 
Midwestern disaster area and any reference to the 
Hurricane Katrina disaster area or the Gulf Oppor-
tunity Zone within a State shall be treated as a ref-
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erence to all Midwestern disaster areas within the 
State. 
(2) ITEMS ATTRIBUTABLE TO DISASTER.—Any 
reference in such provisions to any loss, damage, or 
other item attributable to Hurricane Katrina shall 
be treated as a reference to any loss, damage, or 
other item attributable to the severe storms, tor-
nados, or flooding giving rise to any Presidential 
declaration described in subsection (c)(1)(A). 
(3) APPLICABLE
DISASTER
DATE.—For pur-
poses of applying the substitutions described in sub-
sections (e) and (f), the term ‘‘applicable disaster 
date’’ means, with respect to any Midwestern dis-
aster area, the date on which the severe storms, tor-
nados, or flooding giving rise to the Presidential dec-
laration described in subsection (c)(1)(A) occurred. 
(e) MODIFICATIONS TO 1986 CODE.—The following 
provisions of the Internal Revenue Code of 1986 shall be 
applied with the following modifications: 
(1) TAX-EXEMPT
BOND
FINANCING.—Section 
1400N(a)— 
(A) by substituting ‘‘qualified Midwestern 
disaster area bond’’ for ‘‘qualified Gulf Oppor-
tunity Zone Bond’’ each place it appears, except 
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that in determining whether a bond is a quali-
fied Midwestern disaster area bond— 
(i) paragraph (2)(A)(i) shall be ap-
plied by only treating costs as qualified 
project costs if— 
(I) in the case of a project involv-
ing a private business use (as defined 
in section 141(b)(6)), either the per-
son using the property suffered a loss 
in a trade or business attributable to 
the severe storms, tornados, or flood-
ing giving rise to any Presidential dec-
laration 
described 
in 
subsection 
(c)(1)(A) or is a person designated for 
purposes of this section by the Gov-
ernor of the State in which the project 
is located as a person carrying on a 
trade or business replacing a trade or 
business with respect to which another 
person suffered such a loss, and 
(II) in the case of a project relat-
ing to public utility property, the 
project involves repair or reconstruc-
tion of public utility property dam-
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aged by such severe storms, tornados, 
or flooding, and 
(ii) paragraph (2)(A)(ii) shall be ap-
plied by treating an issue as a qualified 
mortgage issue only if 95 percent or more 
of the net proceeds (as defined in section 
150(a)(3)) of the issue are to be used to 
provide financing for mortgagors who suf-
fered damages to their principal residences 
attributable to such severe storms, tor-
nados, or flooding, 
(B) by substituting ‘‘any State in which a 
Midwestern disaster area is located’’ for ‘‘the 
State of Alabama, Louisiana, or Mississippi’’ in 
paragraph (2)(B), 
(C) by substituting ‘‘designated for pur-
poses of this section (on the basis of providing 
assistance to areas in the order in which such 
assistance is most needed)’’ for ‘‘designated for 
purposes of this section’’ in paragraph (2)(C), 
(D) by substituting ‘‘January 1, 2013’’ for 
‘‘January 1, 2011’’ in paragraph (2)(D), 
(E) in paragraph (3)(A)— 
(i) by substituting ‘‘$1,000’’ for 
‘‘$2,500’’, and 
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(ii) by substituting ‘‘before the ear-
liest applicable disaster date for Mid-
western disaster areas within the State’’ 
for ‘‘before August 28, 2005’’, 
(F) by substituting ‘‘qualified Midwestern 
disaster area repair or construction’’ for ‘‘quali-
fied GO Zone repair or construction’’ each place 
it appears, and 
(G) by substituting ‘‘after the date of the 
enactment of the Housing and Economic Recov-
ery Act of 2008 and before January 1, 2013’’ 
for ‘‘after the date of the enactment of this 
paragraph and before January 1, 2011’’ in 
paragraph (7)(C). 
(2) LOW-INCOME
HOUSING
CREDIT.—Section 
1400N(c)— 
(A) only with respect to calendar years 
2009, 2010, and 2011, 
(B) by substituting ‘‘Disaster Recovery As-
sistance housing amount’’ for ‘‘Gulf Oppor-
tunity housing amount’’, 
(C) in paragraph (1)(B)— 
(i) 
by 
substituting 
‘‘$4.00’’ 
for 
‘‘$18.00’’, and 
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(ii) by substituting ‘‘before the ear-
liest applicable disaster date for Mid-
western disaster areas within the State’’ 
for ‘‘before August 28, 2005’’, and 
(D) determined without regard to para-
graphs (2), (3), (4), (5), and (6) thereof. 
(3) SPECIAL ALLOWANCE FOR CERTAIN PROP-
ERTY
ACQUIRED
ON
OR
AFTER
THE
APPLICABLE 
DISASTER DATE.—Section 1400N(d)— 
(A) by substituting ‘‘qualified Disaster Re-
covery Assistance property’’ for ‘‘qualified Gulf 
Opportunity Zone property’’ each place it ap-
pears, except that a taxpayer shall be allowed 
additional bonus depreciation and expensing 
under such subsection or section 1400N(e) with 
respect to such property only if— 
(i) the taxpayer suffered an economic 
loss attributable to the severe storms, tor-
nados, or flooding giving rise to any Presi-
dential declaration described in subsection 
(c)(1)(A), and 
(ii) such property— 
(I) rehabilitates property dam-
aged, or replaces property destroyed 
or condemned, as a result of such se-
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vere storms, tornados, or flooding, ex-
cept that, for purposes of this clause, 
property shall be treated as replacing 
property destroyed or condemned if, 
as part of an integrated plan, such 
property replaces property which is in-
cluded in a continuous area which in-
cludes real property destroyed or con-
demned, and 
(II) is similar in nature to, and 
located in the same county as, the 
property being rehabilitated or re-
placed, 
(B) by substituting ‘‘the applicable disaster 
date’’ for ‘‘August 28, 2005’’ each place it ap-
pears, 
(C) by substituting ‘‘December 31, 2011’’ 
for 
‘‘December 
31, 
2007’’ 
in 
paragraph 
(2)(A)(v), 
(D) by substituting ‘‘December 31, 2012’’ 
for 
‘‘December 
31, 
2008’’ 
in 
paragraph 
(2)(A)(v), 
(E) by substituting ‘‘the day before the ap-
plicable disaster date’’ for ‘‘August 27, 2005’’ 
in paragraph (3)(A), 
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(F) determined without regard to para-
graph (6) thereof, and 
(G) by not including as qualified Disaster 
Recovery Assistance property any property to 
which section 168(k) applies. 
(4) INCREASE IN EXPENSING UNDER SECTION 
179.—Section 1400N(e), by substituting ‘‘qualified 
section 179 Disaster Recovery Assistance property’’ 
for ‘‘qualified section 179 Gulf Opportunity Zone 
property’’ each place it appears. 
(5) EXPENSING FOR CERTAIN DEMOLITION AND 
CLEAN-UP COSTS.—Section 1400N(f)— 
(A) by substituting ‘‘qualified Disaster Re-
covery Assistance clean-up cost’’ for ‘‘qualified 
Gulf Opportunity Zone clean-up cost’’ each 
place it appears, 
(B) by substituting ‘‘beginning on the ap-
plicable disaster date and ending on December 
31, 2010’’ for ‘‘beginning on August 28, 2005, 
and ending on December 31, 2007’’ in para-
graph (2), and 
(C) by treating costs as qualified Disaster 
Recovery Assistance clean-up costs only if the 
removal of debris or demolition of any structure 
was necessary due to damage attributable to 
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the severe storms, tornados, or flooding giving 
rise to any Presidential declaration described in 
subsection (c)(1)(A). 
(6) EXTENSION OF EXPENSING FOR ENVIRON-
MENTAL REMEDIATION COSTS.—Section 1400N(g)— 
(A) by substituting ‘‘the applicable disaster 
date’’ for ‘‘August 28, 2005’’ each place it ap-
pears, 
(B) by substituting ‘‘January 1, 2011’’ for 
‘‘January 1, 2008’’ in paragraph (1), 
(C) by substituting ‘‘December 31, 2010’’ 
for ‘‘December 31, 2007’’ in paragraph (1), and 
(D) by treating a site as a qualified con-
taminated site only if the release (or threat of 
release) or disposal of a hazardous substance at 
the site was attributable to the severe storms, 
tornados, or flooding giving rise to any Presi-
dential declaration described in subsection 
(c)(1)(A). 
(7) INCREASE IN REHABILITATION CREDIT.— 
Section 1400N(h)— 
(A) by substituting ‘‘the applicable disaster 
date’’ for ‘‘August 28, 2005’’, 
(B) by substituting ‘‘January 1, 2011’’ for 
‘‘January 1, 2008’’ in paragraph (1), and 
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(E) by substituting ‘‘qualified Disaster Re-
covery Assistance casualty loss’’ for ‘‘qualified 
Gulf Opportunity Zone casualty loss’’ each 
place it appears. 
(9) CREDIT
TO
HOLDERS
OF
TAX
CREDIT 
BONDS.—Section 1400N(l)— 
(A) by substituting ‘‘Midwestern tax credit 
bond’’ for ‘‘Gulf tax credit bond’’ each place it 
appears, 
(B) by substituting ‘‘any State in which a 
Midwestern disaster area is located’’ for ‘‘the 
State of Alabama, Louisiana, or Mississippi’’ in 
paragraph (4)(A)(i), 
(C) by substituting ‘‘after December 31, 
2008 and before January 1, 2010’’ for ‘‘after 
December 31, 2005, and before January 1, 
2007’’, 
(D) by substituting ‘‘shall not exceed 
$100,000,000 for any State with an aggregate 
population located in all Midwestern disaster 
areas within the State of at least 2,000,000, 
$50,000,000 for any State with an aggregate 
population located in all Midwestern disaster 
areas within the State of at least 1,000,000 but 
less than 2,000,000, and zero for any other 
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(13) EMPLOYEE RETENTION CREDIT FOR EM-
PLOYERS
AFFECTED
BY
SEVERE
STORMS, TOR-
NADOS, AND FLOODING.—Section 1400R(a)— 
(A) by substituting ‘‘the applicable disaster 
date’’ for ‘‘August 28, 2005’’ each place it ap-
pears, 
(B) by substituting ‘‘January 1, 2009’’ for 
‘‘January 1, 2006’’ both places it appears, and 
(C) only with respect to eligible employers 
who employed an average of not more than 200 
employees on business days during the taxable 
year before the applicable disaster date. 
(14) TEMPORARY SUSPENSION OF LIMITATIONS 
ON
CHARITABLE
CONTRIBUTIONS.—Section 
1400S(a), by substituting the following paragraph 
for paragraph (4) thereof: 
‘‘(4) QUALIFIED CONTRIBUTIONS.— 
‘‘(A) IN GENERAL.—For purposes of this 
subsection, the term ‘qualified contribution’ 
means any charitable contribution (as defined 
in section 170(c)) if— 
‘‘(i) such contribution— 
‘‘(I) is paid during the period be-
ginning on the earliest applicable dis-
aster date for all States and ending 
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on December 31, 2008, in cash to an 
organization 
described 
in 
section 
170(b)(1)(A), and 
‘‘(II) is made for relief efforts in 
1 or more Midwestern disaster areas, 
‘‘(ii) the taxpayer obtains from such 
organization contemporaneous written ac-
knowledgment (within the meaning of sec-
tion 170(f)(8)) that such contribution was 
used (or is to be used) for relief efforts in 
1 or more Midwestern disaster areas, and 
‘‘(iii) the taxpayer has elected the ap-
plication of this subsection with respect to 
such contribution. 
‘‘(B) EXCEPTION.—Such term shall not in-
clude a contribution by a donor if the contribu-
tion is— 
‘‘(i) to an organization described in 
section 509(a)(3), or 
‘‘(ii) for establishment of a new, or 
maintenance of an existing, donor advised 
fund (as defined in section 4966(d)(2)). 
‘‘(C) APPLICATION OF ELECTION TO PART-
NERSHIPS AND S CORPORATIONS.—In the case 
of a partnership or S corporation, the election 
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under subparagraph (A)(iii) shall be made sepa-
rately by each partner or shareholder.’’. 
(15) SUSPENSION OF CERTAIN LIMITATIONS ON 
PERSONAL
CASUALTY
LOSSES.—Section 
1400S(b)(1), by substituting ‘‘the applicable disaster 
date’’ for ‘‘August 25, 2005’’. 
(16) 
SPECIAL
RULE
FOR
DETERMINING 
EARNED INCOME.—Section 1400S(d)— 
(A) by treating an individual as a qualified 
individual if such individual’s principal place of 
abode on the applicable disaster date was lo-
cated in a Midwestern disaster area, 
(B) by treating the applicable disaster date 
with respect to any such individual as the appli-
cable date for purposes of such subsection, and 
(C) by treating an area as described in 
paragraph (2)(B)(ii) thereof if the area is a 
Midwestern disaster area only by reason of sub-
section (b)(2) of this section (relating to areas 
eligible only for public assistance). 
(17) ADJUSTMENTS REGARDING TAXPAYER AND 
DEPENDENCY STATUS.—Section 1400S(e), by sub-
stituting ‘‘2008 or 2009’’ for ‘‘2005 or 2006’’. 
(f) MODIFICATIONS TO KATRINA EMERGENCY TAX 
RELIEF ACT OF 2005.—The following provisions of the 
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Katrina Emergency Tax Relief Act of 2005 shall be ap-
plied with the following modifications: 
(1) ADDITIONAL EXEMPTION FOR HOUSING DIS-
PLACED INDIVIDUAL.—Section 302— 
(A) by substituting ‘‘2008 or 2009’’ for 
‘‘2005 or 2006’’ in subsection (a) thereof, 
(B) by substituting ‘‘Midwestern displaced 
individual’’ for ‘‘Hurricane Katrina displaced 
individual’’ each place it appears, and 
(C) by treating an area as a core disaster 
area for purposes of applying subsection (c) 
thereof if the area is a Midwestern disaster area 
without regard to subsection (b)(2) of this sec-
tion (relating to areas eligible only for public 
assistance). 
(2) INCREASE IN STANDARD MILEAGE RATE.— 
Section 303, by substituting ‘‘beginning on the ap-
plicable disaster date and ending on December 31, 
2008’’ for ‘‘beginning on August 25, 2005, and end-
ing on December 31, 2006’’. 
(3) MILEAGE
REIMBURSEMENTS
FOR
CHARI-
TABLE VOLUNTEERS.—Section 304— 
(A) by substituting ‘‘beginning on the ap-
plicable disaster date and ending on December 
31, 2008’’ for ‘‘beginning on August 25, 2005, 
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and ending on December 31, 2006’’ in sub-
section (a), and 
(B) by substituting ‘‘the applicable disaster 
date’’ for ‘‘August 25, 2005’’ in subsection (a). 
(4) EXCLUSION OF CERTAIN CANCELLATION OF 
INDEBTEDNESS INCOME.—Section 401— 
(A) by treating an individual whose prin-
cipal place of abode on the applicable disaster 
date was in a Midwestern disaster area (deter-
mined without regard to subsection (b)(2) of 
this section) as an individual described in sub-
section (b)(1) thereof, and by treating an indi-
vidual whose principal place of abode on the ap-
plicable disaster date was in a Midwestern dis-
aster area solely by reason of subsection (b)(2) 
of this section as an individual described in sub-
section (b)(2) thereof, 
(B) by substituting ‘‘the applicable disaster 
date’’ for ‘‘August 28, 2005’’ both places it ap-
pears, and 
(C) by substituting ‘‘January 1, 2010’’ for 
‘‘January 1, 2007’’ in subsection (e). 
(5) EXTENSION OF REPLACEMENT PERIOD FOR 
NONRECOGNITION OF GAIN.—Section 405, by sub-
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stituting ‘‘on or after the applicable disaster date’’ 
for ‘‘on or after August 25, 2005’’. 
SEC. 3. ENHANCED CHARITABLE DEDUCTIONS FOR CON-
TRIBUTIONS OF FOOD INVENTORY. 
(a) INCREASED AMOUNT OF DEDUCTION.— 
(1) IN
GENERAL.—Clause (iv) of section 
170(e)(3)(C) (relating to termination) of the Inter-
nal Revenue Code of 1986 is amended by striking 
‘‘December 31, 2007’’ and inserting ‘‘December 31, 
2009’’. 
(2) EFFECTIVE DATE.—The amendment made 
by this subsection shall apply to contributions made 
after December 31, 2007. 
(b) TEMPORARY SUSPENSION OF LIMITATIONS ON 
CHARITABLE CONTRIBUTIONS.— 
(1) IN GENERAL.—Section 170(b) of such Code 
is amended by adding at the end the following new 
paragraph: 
‘‘(3) TEMPORARY SUSPENSION OF LIMITATIONS 
ON CHARITABLE CONTRIBUTIONS.—In the case of a 
qualified farmer or rancher (as defined in paragraph 
(1)(E)(v)), any charitable contribution of food— 
‘‘(A) to which subsection (e)(3)(C) applies 
(without regard to clause (ii) thereof), and 
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‘‘(B) which is made during the period be-
ginning on the date of the enactment of this 
paragraph and before January 1, 2009, 
shall be treated for purposes of paragraph (1)(E) or 
(2)(B), whichever is applicable, as if it were a quali-
fied conservation contribution which is made by a 
qualified farmer or rancher and which otherwise 
meets the requirements of such paragraph.’’. 
(2) EFFECTIVE DATE.—The amendment made 
by this subsection shall apply to taxable years end-
ing after the date of the enactment of this Act. 
SEC. 4. EXTENSION OF ENHANCED CHARITABLE DEDUC-
TION FOR CONTRIBUTIONS OF BOOK INVEN-
TORY. 
(a) EXTENSION.—Clause (iv) of section 170(e)(3)(D) 
of the Internal Revenue Code of 1986 (relating to termi-
nation) of the Internal Revenue Code of 1986 is amended 
by striking ‘‘December 31, 2007’’ and inserting ‘‘Decem-
ber 31, 2009’’. 
(b) CLERICAL AMENDMENT.—Clause (iii) of section 
170(e)(3)(D) of such Code (relating to certification by 
donee) is amended by inserting ‘‘of books’’ after ‘‘to any 
contribution’’. 
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(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to contributions made after De-
cember 31, 2007. 
SEC. 5. REPORTING REQUIREMENTS RELATING TO DIS-
ASTER RELIEF CONTRIBUTIONS. 
(a) IN GENERAL.—Section 6033(b) of the Internal 
Revenue Code of 1986 (relating to returns of certain orga-
nizations described in section 501(c)(3)) is amended by 
striking ‘‘and’’ at the end of paragraph (13), by redesig-
nating paragraph (14) as paragraph (15), and by adding 
after paragraph (13) the following new paragraph: 
‘‘(14) such information as the Secretary may 
require with respect to disaster relief activities, in-
cluding the amount and use of qualified contribu-
tions to which section 1400S(a) applies, and’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to returns the due date for which 
(determined without regard to any extension) occurs after 
December 31, 2008. 
Æ 
VerDate Aug 31 2005 
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smartinez on PROD1PC64 with BILLS