I 
109TH CONGRESS 
1ST SESSION H. R. 4404 
To amend the Internal Revenue Code of 1986 to allow a credit against 
tax for qualified equity investments in companies affected by Hurricane 
Katrina. 
IN THE HOUSE OF REPRESENTATIVES 
NOVEMBER 18, 2005 
Mr. JEFFERSON introduced the following bill; which was referred to the 
Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to allow a 
credit against tax for qualified equity investments in 
companies affected by Hurricane Katrina. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Americans Helping 
Americans Tax Credit Act of 2005’’. 
SEC. 2. KATRINA INVESTMENT TAX CREDIT. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 (relating to business related cred-
its) is amended by adding at the end the following new 
section: 
‘‘SEC. 45N. KATRINA INVESTMENT TAX CREDIT. 
‘‘(a) GENERAL RULE.—For purposes of section 38, 
in the case of a recovery area company, the Katrina invest-
ment tax credit determined under this section for the tax-
able year is an amount equal to 25 percent of the amount 
of the qualified equity investments made by the recovery 
area company during the taxable year. 
‘‘(b) QUALIFIED EQUITY INVESTMENT.—For pur-
poses of this section— 
‘‘(1) IN GENERAL.—The term ‘qualified equity 
investment’ means— 
‘‘(A) the transfer of cash, cash equivalents, 
or other property in exchange for stock or cap-
ital interest in a recovery area company, and 
‘‘(B) the cost of any qualified property ac-
quired by a recovery area company to be used 
in its trade or business. 
‘‘(2) RECOVERY
AREA
COMPANY.—The term 
‘recovery area company’ means a domestic corpora-
tion or partnership— 
‘‘(A) the principal place of business of 
which is physically located in an area deter-
mined by the President before October 15,
2005, to warrant individual or individual and 
public assistance from the Federal Government 
under the Robert T. Stafford Disaster Relief 
and Emergency Assistance Act by reason of 
Hurricane Katrina, 
‘‘(B) at least 50 percent of the gross in-
come of which is derived from the conduct of 
business in such area or the coastal waters ad-
jacent thereto, 
‘‘(C) a substantial portion of the use of the 
tangible personal property of such entity 
(whether owned or leased) is within such area 
or the coastal waters adjacent thereto, and 
‘‘(D) a substantial portion of the services 
performed by such entity or by its employees 
are performed in such area or in the coastal 
waters adjacent thereto. 
‘‘(3) QUALIFIED PROPERTY.—The term ‘quali-
fied property’ means section 1245 property (as de-
fined in section 1245(a)(3)). 
‘‘(c) RECAPTURE OF CREDIT.— 
‘‘(1) IN GENERAL.—If, at any time during the 
5-year period beginning on the date on which a 
qualified equity investment in a recovery area com-
pany is made, there is a recapture event with respect
to such investment, then the tax imposed by this 
chapter for the taxable year in which such event oc-
curs shall be increased by the credit recapture 
amount. 
‘‘(2) CREDIT RECAPTURE AMOUNT.—For pur-
poses of paragraph (1), the credit recapture amount 
is an amount equal to the applicable percentage of 
an amount equal to the sum of— 
‘‘(A) the aggregate decrease in the credits 
allowed to the taxpayer under section 38 for all 
prior taxable years which would have resulted if 
no credit had been determined under this sec-
tion with respect to such investment, plus 
‘‘(B) interest at the underpayment rate es-
tablished under section 6621 on the amount de-
termined under subparagraph (A) for each 
prior taxable year for the period beginning on 
the due date for filing the return for the prior 
taxable year involved. 
No deduction shall be allowed under this chapter for 
interest described in subparagraph (B). 
‘‘(3) APPLICABLE PERCENTAGE.—For purposes 
of paragraph (2), the applicable percentage is— 
‘‘(A) in the case of a recapture event that 
occurs within 1 year after the date that the
qualified equity investment is made, 100 per-
cent, 
‘‘(B) in the case of a recapture event that 
occurs within 2 years after such date, 80 per-
cent, 
‘‘(C) in the case of a recapture event that 
occurs within 3 years after such date, 60 per-
cent, 
‘‘(D) in the case of a recapture event that 
occurs within 4 years after such date, 40 per-
cent, and 
‘‘(E) in the case of a recapture event that 
occurs within 5 years after such date, 20 per-
cent. 
‘‘(4) RECAPTURE EVENT.—For purposes of this 
subsection, there is a recapture event with respect to 
a qualified equity investment if— 
‘‘(A) the recovery area company that made 
such investment ceases to be a recovery area 
company, 
‘‘(B) the qualified equity investment is re-
deemed by the recovery area company that 
made such investment, or 
‘‘(C) the qualified property acquired by a 
recovery area company ceases to be used by the
recovery area company in its trade or business 
or such property is sold or otherwise disposed 
of by the recovery area company. 
‘‘(d) CREDIT MAY BE TRANSFERRED.— 
‘‘(1) IN GENERAL.—Nothing in any law or rule 
of law shall be construed to limit the transferability 
of the credit allowed by this section through sale or 
repurchase agreements. 
‘‘(2) TRANSFERRED CREDIT EXCLUDED FROM 
GROSS INCOME.—The amount of a credit that is 
transferred through sale or repurchase agreements 
pursuant to this section shall not be included in 
gross income by the taxpayer to whom the credit is 
transferred. 
‘‘(e) TERMINATION.—This section shall not apply to 
qualified equity investments made after December 31, 
2007.’’. 
(b) CREDIT MADE PART OF GENERAL BUSINESS 
CREDIT.—Subsection (b) of section 38 of such Code is 
amended by striking ‘‘and’’ at the end of paragraph (25), 
by striking the period at the end of paragraph (26) and 
inserting ‘‘, and’’, and by adding at the end the following 
new paragraph: 
‘‘(27) the Katrina investment tax credit deter-
mined under section 45N(a).’’.
(c) CLERICAL AMENDMENT.—The table of sections 
for subpart D of part IV of subchapter A of chapter 1 
of such Code is amended by adding at the end the fol-
lowing new item: 
‘‘Sec. 45N. Katrina investment tax credit.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to qualified equity investments 
made after September 1, 2005, in taxable years ending 
after such date. 
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