H. R. 4440
One Hundred Ninth Congress
of the
United States of America 
AT THE FIRST SESSION 
Begun and held at the City of Washington on Tuesday, 
the fourth day of January, two thousand and five 
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.
Be it enacted by the Senate and House of Representatives of 
the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; ETC. 
(a) SHORT TITLE.—This Act may be cited as the ‘‘Gulf Oppor-
tunity Zone Act of 2005’’. 
(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 considered to be made to a section 
or other provision of the Internal 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 students 
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 Hurri-
canes 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.
H. R. 4440—2
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 origin 
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 Oppor-
tunity Zone’ and ‘GO Zone’ mean that portion of the Hurricane 
Katrina disaster area determined by the President 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. 
‘‘(2) HURRICANE KATRINA DISASTER AREA.—The term ‘Hurri-
cane 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 Hurricane 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 individual 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 declared 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 ‘Hurri-
cane Wilma disaster area’ means an area with respect to which
H. R. 4440—3
a major disaster has been declared 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 quali-
fied mortgage bond. 
‘‘(2) QUALIFIED GULF OPPORTUNITY ZONE BOND.—For pur-
poses 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 proceeds (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 provided in this sub-
section, 
‘‘(B) such bond is issued by the State of Alabama, 
Louisiana, or Mississippi, or any political subdivision 
thereof, 
‘‘(C) such bond is designated for purposes of this section 
by— 
‘‘(i) in the case of a bond which is required 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 Opportunity 
Zone (as determined on the basis of the most recent census 
estimate of resident population 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 fixtures and equipment. 
‘‘(4) QUALIFIED PROJECT COSTS.—For purposes of this sub-
section, the term ‘qualified project costs’ means— 
‘‘(A) the cost of any qualified residential rental project 
(as defined in section 142(d)) located in the Gulf Oppor-
tunity Zone, and 
‘‘(B) the cost of acquisition, construction, reconstruc-
tion, and renovation of—
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‘‘(i) nonresidential real property (including fixed 
improvements associated with such property) located 
in the Gulf Opportunity Zone, and 
‘‘(ii) public utility property (as defined 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 following modifications shall 
apply: 
‘‘(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 revenue bonds: 
qualified mortgage bond and qualified veterans’ mortgage 
bond) shall be applied— 
‘‘(i) only with respect to owner-occupied 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 sub-
section (k)(4) thereof. 
‘‘(C) Except as provided in section 143, repayments 
of principal on financing provided by the issue of which 
such bond is a part may not be used to provide financing. 
‘‘(D) Section 146 (relating to volume cap) shall not 
apply. 
‘‘(E) Section 147(d)(2) (relating to acquisition of existing 
property not permitted) shall be applied by substituting 
‘50 percent’ for ‘15 percent’ each place it appears. 
‘‘(F) Section 148(f)(4)(C) (relating to exception from 
rebate for certain proceeds to be used to finance construc-
tion expenditures) shall apply to the available construction 
proceeds of bonds which are part of an issue described 
in paragraph (2)(A)(i). 
‘‘(G) Section 57(a)(5) (relating to tax-exempt 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 described in 
paragraph (3), one additional advance refunding 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
H. R. 4440—5
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 applicable rules of section 149(d) (notwithstanding para-
graph (2) thereof) if the requirements of subparagraphs (A) 
and (B) of paragraph (1) are met. 
‘‘(3) BONDS DESCRIBED.—A bond is described in this para-
graph if such bond was outstanding on August 28, 2005, and 
is issued by the State of Alabama, Louisiana, or Mississippi, 
or a political subdivision thereof. 
‘‘(4) AGGREGATE
LIMIT.—The maximum aggregate face 
amount of bonds which may be designated under this subsection 
by the Governor of a State shall not exceed— 
‘‘(A) $4,500,000,000 in the case of the State of Lou-
isiana, 
‘‘(B) $2,250,000,000 in the case of the State of Mis-
sissippi, and 
‘‘(C) $1,125,000,000 in the case of the State of Alabama. 
‘‘(5) ADDITIONAL REQUIREMENTS.—The requirements 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 August 28, 2005, 
‘‘(B) the advance refunding bond is the only other 
outstanding bond with respect to the refunded bond, and 
‘‘(C) the requirements of section 148 are met with 
respect to all bonds issued under this subsection. 
‘‘(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 issue) was (or is to be) used to provide 
any property described in section 144(c)(6)(B). 
‘‘(c) LOW-INCOME HOUSING CREDIT.— 
‘‘(1) ADDITIONAL HOUSING CREDIT DOLLAR AMOUNT FOR GULF 
OPPORTUNITY ZONE.— 
‘‘(A) IN GENERAL.—For purposes of section 42, in the 
case of calendar years 2006, 2007, and 2008, the State 
housing credit ceiling of each State, any portion of which 
is located in the Gulf Opportunity Zone, shall be increased 
by the lesser of— 
‘‘(i) the aggregate housing credit dollar amount 
allocated by the State housing credit agency of such 
State to buildings located in the Gulf Opportunity Zone 
for such calendar year, or 
‘‘(ii) the Gulf Opportunity housing amount for such 
State for such calendar year. 
‘‘(B) GULF OPPORTUNITY HOUSING AMOUNT.—For pur-
poses of subparagraph (A), the term ‘Gulf Opportunity 
housing amount’ means, for any calendar year, the amount 
equal to the product of $18.00 multiplied by the portion 
of the State population which is in the Gulf Opportunity 
Zone (as determined on the basis of the most recent census 
estimate of resident population released by the Bureau 
of Census before August 28, 2005). 
‘‘(C) ALLOCATIONS TREATED AS MADE FIRST FROM ADDI-
TIONAL
ALLOCATION
AMOUNT
FOR
PURPOSES
OF
DETER-
MINING
CARRYOVER.—For purposes of determining the
H. R. 4440—6
unused 
State 
housing 
credit 
ceiling 
under 
section 
42(h)(3)(C) for any calendar year, any increase in the State 
housing credit ceiling under subparagraph (A) shall be 
treated as an amount described in clause (ii) of such section. 
‘‘(2) ADDITIONAL
HOUSING
CREDIT
DOLLAR
AMOUNT
FOR 
TEXAS AND FLORIDA.—For purposes of section 42, in the case 
of calendar year 2006, the State housing credit ceiling of Texas 
and Florida shall each be increased by $3,500,000. 
‘‘(3) DIFFICULT DEVELOPMENT AREA.— 
‘‘(A) IN GENERAL.—For purposes of section 42, in the 
case of property placed in service during 2006, 2007, or 
2008, the Gulf Opportunity Zone, the Rita GO Zone, and 
the Wilma GO Zone— 
‘‘(i) shall be treated as difficult development areas 
designated 
under 
subclause 
(I) 
of 
section 
42(d)(5)(C)(iii), and 
‘‘(ii) shall not be taken into account for purposes 
of applying the limitation under subclause (II) of such 
section. 
‘‘(B) APPLICATION.—Subparagraph (A) shall apply only 
to— 
‘‘(i) housing credit dollar amounts allocated during 
the period beginning on January 1, 2006, and ending 
on December 31, 2008, and 
‘‘(ii) buildings placed in service during such period 
to the extent that paragraph (1) of section 42(h) does 
not apply to any building by reason of paragraph (4) 
thereof, but only with respect to bonds issued after 
December 31, 2005. 
‘‘(4) SPECIAL RULE FOR APPLYING INCOME TESTS.—In the 
case of property placed in service— 
‘‘(A) during 2006, 2007, or 2008, 
‘‘(B) in the Gulf Opportunity Zone, and 
‘‘(C) in a nonmetropolitan area (as defined in section 
42(d)(5)(C)(iv)(IV)), 
section 42 shall be applied by substituting ‘national nonmetro-
politan median gross income (determined under rules similar 
to the rules of section 142(d)(2)(B))’ for ‘area median gross 
income’ in subparagraphs (A) and (B) of section 42(g)(1). 
‘‘(5) DEFINITIONS.—Any term used in this subsection which 
is also used in section 42 shall have the same meaning as 
when used in such section. 
‘‘(d) SPECIAL ALLOWANCE
FOR CERTAIN PROPERTY ACQUIRED 
ON OR AFTER AUGUST 28, 2005.— 
‘‘(1) ADDITIONAL ALLOWANCE.—In the case of any qualified 
Gulf Opportunity Zone property— 
‘‘(A) the depreciation deduction provided by section 
167(a) for the taxable year in which such property is placed 
in service shall include an allowance equal to 50 percent 
of the adjusted basis of such property, and 
‘‘(B) the adjusted basis of the qualified Gulf Oppor-
tunity Zone property shall be reduced by the amount of 
such deduction before computing the amount otherwise 
allowable as a depreciation deduction under this chapter 
for such taxable year and any subsequent taxable year. 
‘‘(2) QUALIFIED GULF OPPORTUNITY ZONE PROPERTY.—For 
purposes of this subsection—
H. R. 4440—7
‘‘(A) IN
GENERAL.—The term ‘qualified Gulf Oppor-
tunity Zone property’ means property— 
‘‘(i)(I) which is described in section 168(k)(2)(A)(i), 
or 
‘‘(II) which is nonresidential real property or resi-
dential rental property, 
‘‘(ii) substantially all of the use of which is in 
the Gulf Opportunity Zone and is in the active conduct 
of a trade or business by the taxpayer in such Zone, 
‘‘(iii) the original use of which in the Gulf Oppor-
tunity Zone commences with the taxpayer on or after 
August 28, 2005, 
‘‘(iv) which is acquired by the taxpayer by purchase 
(as defined in section 179(d)) on or after August 28, 
2005, but only if no written binding contract for the 
acquisition was in effect before August 28, 2005, and 
‘‘(v) which is placed in service by the taxpayer 
on or before December 31, 2007 (December 31, 2008, 
in the case of nonresidential real property and residen-
tial rental property). 
‘‘(B) EXCEPTIONS.— 
‘‘(i) ALTERNATIVE DEPRECIATION PROPERTY.—Such 
term shall not include any property described in section 
168(k)(2)(D)(i). 
‘‘(ii) TAX-EXEMPT BOND-FINANCED PROPERTY.—Such 
term shall not include any property any portion of 
which is financed with the proceeds of any obligation 
the interest on which is exempt from tax under section 
103. 
‘‘(iii) QUALIFIED REVITALIZATION BUILDINGS.—Such 
term shall not include any qualified revitalization 
building with respect to which the taxpayer has elected 
the application of paragraph (1) or (2) of section 
1400I(a). 
‘‘(iv) ELECTION OUT.—If a taxpayer makes an elec-
tion under this clause with respect to any class of 
property for any taxable year, this subsection shall 
not apply to all property in such class placed in service 
during such taxable year. 
‘‘(3) SPECIAL RULES.—For purposes of this subsection, rules 
similar to the rules of subparagraph (E) of section 168(k)(2) 
shall apply, except that such subparagraph shall be applied— 
‘‘(A) by substituting ‘August 27, 2005’ for ‘September 
10, 2001’ each place it appears therein, 
‘‘(B) by substituting ‘January 1, 2008’ for ‘January 
1, 2005’ in clause (i) thereof, and 
‘‘(C) by substituting ‘qualified Gulf Opportunity Zone 
property’ for ‘qualified property’ in clause (iv) thereof. 
‘‘(4) ALLOWANCE AGAINST ALTERNATIVE MINIMUM TAX.—For 
purposes of this subsection, rules similar to the rules of section 
168(k)(2)(G) shall apply. 
‘‘(5) RECAPTURE.—For purposes of this subsection, rules 
similar to the rules under section 179(d)(10) shall apply with 
respect to any qualified Gulf Opportunity Zone property which 
ceases to be qualified Gulf Opportunity Zone property. 
‘‘(e) INCREASE IN EXPENSING UNDER SECTION 179.— 
‘‘(1) IN GENERAL.—For purposes of section 179—
H. R. 4440—8
‘‘(A) the dollar amount in effect under section 179(b)(1) 
for the taxable year shall be increased by the lesser of— 
‘‘(i) $100,000, or 
‘‘(ii) the cost of qualified section 179 Gulf Oppor-
tunity Zone property placed in service during the tax-
able year, and 
‘‘(B) the dollar amount in effect under section 179(b)(2) 
for the taxable year shall be increased by the lesser of— 
‘‘(i) $600,000, or 
‘‘(ii) the cost of qualified section 179 Gulf Oppor-
tunity Zone property placed in service during the tax-
able year. 
‘‘(2) QUALIFIED SECTION 179 GULF OPPORTUNITY ZONE PROP-
ERTY.—For purposes of this subsection, the term ‘qualified sec-
tion 179 Gulf Opportunity Zone property’ means section 179 
property (as defined in section 179(d)) which is qualified Gulf 
Opportunity Zone property (as defined in subsection (d)(2)). 
‘‘(3) COORDINATION
WITH
EMPOWERMENT
ZONES
AND 
RENEWAL COMMUNITIES.—For purposes of sections 1397A and 
1400J, qualified section 179 Gulf Opportunity Zone property 
shall not be treated as qualified zone property or qualified 
renewal property, unless the taxpayer elects not to take such 
qualified section 179 Gulf Opportunity Zone property into 
account for purposes of this subsection. 
‘‘(4) RECAPTURE.—For purposes of this subsection, rules 
similar to the rules under section 179(d)(10) shall apply with 
respect to any qualified section 179 Gulf Opportunity Zone 
property which ceases to be qualified section 179 Gulf Oppor-
tunity Zone property. 
‘‘(f) EXPENSING
FOR
CERTAIN
DEMOLITION
AND
CLEAN-UP 
COSTS.— 
‘‘(1) IN GENERAL.—A taxpayer may elect to treat 50 percent 
of any qualified Gulf Opportunity Zone clean-up cost as an 
expense which is not chargeable to capital account. Any cost 
so treated shall be allowed as a deduction for the taxable 
year in which such cost is paid or incurred. 
‘‘(2) QUALIFIED GULF OPPORTUNITY ZONE CLEAN-UP COST.—
For purposes of this subsection, the term ‘qualified Gulf Oppor-
tunity Zone clean-up cost’ means any amount paid or incurred 
during the period beginning on August 28, 2005, and ending 
on December 31, 2007, for the removal of debris from, or 
the demolition of structures on, real property which is located 
in the Gulf Opportunity Zone and which is— 
‘‘(A) held by the taxpayer for use in a trade or business 
or for the production of income, or 
‘‘(B) property described in section 1221(a)(1) in the 
hands of the taxpayer. 
For purposes of the preceding sentence, amounts paid or 
incurred shall be taken into account only to the extent that 
such amount would (but for paragraph (1)) be chargeable to 
capital account. 
‘‘(g) EXTENSION OF EXPENSING FOR ENVIRONMENTAL REMEDI-
ATION COSTS.—With respect to any qualified environmental remedi-
ation expenditure (as defined in section 198(b)) paid or incurred 
on or after August 28, 2005, in connection with a qualified contami-
nated site located in the Gulf Opportunity Zone, section 198
H. R. 4440—9
(relating to expensing of environmental remediation costs) shall 
be applied— 
‘‘(1) in the case of expenditures paid or incurred on or 
after August 28, 2005, and before January 1, 2008, by sub-
stituting ‘December 31, 2007’ for the date contained in section 
198(h), and 
‘‘(2) except as provided in section 198(d)(2), by treating 
petroleum products (as defined in section 4612(a)(3)) as a haz-
ardous substance. 
‘‘(h) INCREASE IN REHABILITATION CREDIT.—In the case of quali-
fied rehabilitation expenditures (as defined in section 47(c)) paid 
or incurred during the period beginning on August 28, 2005, and 
ending on December 31, 2008, with respect to any qualified rehabili-
tated building or certified historic structure (as defined in section 
47(c)) located in the Gulf Opportunity Zone, subsection (a) of section 
47 (relating to rehabilitation credit) shall be applied— 
‘‘(1) by substituting ‘13 percent’ for ‘10 percent’ in para-
graph (1) thereof, and 
‘‘(2) by substituting ‘26 percent’ for ‘20 percent’ in para-
graph (2) thereof. 
‘‘(i) SPECIAL RULES FOR SMALL TIMBER PRODUCERS.— 
‘‘(1) INCREASED EXPENSING FOR QUALIFIED TIMBER PROP-
ERTY.—In the case of qualified timber property any portion 
of which is located in the Gulf Opportunity Zone, in that 
portion of the Rita GO Zone which is not part of the Gulf 
Opportunity Zone, or in the Wilma GO Zone, the limitation 
under subparagraph (B) of section 194(b)(1) shall be increased 
by the lesser of— 
‘‘(A) the limitation which would (but for this subsection) 
apply under such subparagraph, or 
‘‘(B) the amount of reforestation expenditures (as 
defined in section 194(c)(3)) paid or incurred by the tax-
payer with respect to such qualified timber property during 
the specified portion of the taxable year. 
‘‘(2) 5 YEAR NOL CARRYBACK OF CERTAIN TIMBER LOSSES.—
For purposes of determining any farming loss under section 
172(i), income and deductions which are allocable to the speci-
fied portion of the taxable year and which are attributable 
to qualified timber property any portion of which is located 
in the Gulf Opportunity Zone, in that portion of the Rita 
GO Zone which is not part of the Gulf Opportunity Zone, 
or in the Wilma GO Zone shall be treated as attributable 
to farming businesses. 
‘‘(3) RULES NOT APPLICABLE TO CERTAIN ENTITIES.—Para-
graphs (1) and (2) shall not apply to any taxpayer which— 
‘‘(A) is a corporation the stock of which is publicly 
traded on an established securities market, or 
‘‘(B) is a real estate investment trust. 
‘‘(4) RULES NOT APPLICABLE TO LARGE TIMBER PRODUCERS.— 
‘‘(A) EXPENSING.—Paragraph (1) shall not apply to any 
taxpayer if such taxpayer holds more than 500 acres of 
qualified timber property at any time during the taxable 
year. 
‘‘(B) NOL CARRYBACK.—Paragraph (2) shall not apply 
with respect to any qualified timber property unless— 
‘‘(i) such property was held by the taxpayer—
H. R. 4440—10
‘‘(I) on August 28, 2005, in the case of qualified 
timber property any portion of which is located 
in the Gulf Opportunity Zone, 
‘‘(II) on September 23, 2005, in the case of 
qualified timber property (other than property 
described in subclause (I)) any portion of which 
is located in that portion of the Rita GO Zone 
which is not part of the Gulf Opportunity Zone, 
or 
‘‘(III) on October 23, 2005, in the case of quali-
fied timber property (other than property described 
in subclause (I) or (II)) any portion of which is 
located in the Wilma GO Zone, and 
‘‘(ii) such taxpayer held not more than 500 acres 
of qualified timber property on such date. 
‘‘(5) DEFINITIONS.—For purposes of this subsection— 
‘‘(A) SPECIFIED PORTION.— 
‘‘(i) IN
GENERAL.—The term ‘specified portion’ 
means— 
‘‘(I) in the case of qualified timber property 
any portion of which is located in the Gulf Oppor-
tunity Zone, that portion of the taxable year which 
is on or after August 28, 2005, and before the 
termination date, 
‘‘(II) in the case of qualified timber property 
(other than property described in clause (i)) any 
portion of which is located in the Rita GO Zone, 
that portion of the taxable year which is on or 
after September 23, 2005, and before the termi-
nation date, or 
‘‘(III) in the case of qualified timber property 
(other than property described in clause (i) or (ii)) 
any portion of which is located in the Wilma GO 
Zone, that portion of the taxable year which is 
on or after October 23, 2005, and before the termi-
nation date. 
‘‘(ii) TERMINATION
DATE.—The term ‘termination 
date’ means— 
‘‘(I) for purposes of paragraph (1), January 
1, 2008, and 
‘‘(II) for purposes of paragraph (2), January 
1, 2007. 
‘‘(B) QUALIFIED TIMBER PROPERTY.—The term ‘qualified 
timber property’ has the meaning given such term in sec-
tion 194(c)(1). 
‘‘(j) SPECIAL RULE FOR GULF OPPORTUNITY ZONE PUBLIC UTILITY 
CASUALTY LOSSES.— 
‘‘(1) IN
GENERAL.—The amount described in section 
172(f)(1)(A) for any taxable year shall be increased by the 
Gulf Opportunity Zone public utility casualty loss for such 
taxable year. 
‘‘(2) GULF
OPPORTUNITY
ZONE
PUBLIC
UTILITY
CASUALTY 
LOSS.—For purposes of this subsection, the term ‘Gulf Oppor-
tunity Zone public utility casualty loss’ means any casualty 
loss of public utility property (as defined in section 168(i)(10)) 
located in the Gulf Opportunity Zone if—
H. R. 4440—11
‘‘(A) such loss is allowed as a deduction under section 
165 for the taxable year, 
‘‘(B) such loss is by reason of Hurricane Katrina, and 
‘‘(C) the taxpayer elects the application of this sub-
section with respect to such loss. 
‘‘(3) REDUCTION
FOR
GAINS
FROM
INVOLUNTARY
CONVER-
SION.—The amount of any Gulf Opportunity Zone public utility 
casualty loss which would (but for this paragraph) be taken 
into account under paragraph (1) for any taxable year shall 
be reduced by the amount of any gain recognized by the tax-
payer for such year from the involuntary conversion by reason 
of Hurricane Katrina of public utility property (as so defined) 
located in the Gulf Opportunity Zone. 
‘‘(4) COORDINATION WITH GENERAL DISASTER LOSS RULES.—
Subsection (k) and section 165(i) shall not apply to any Gulf 
Opportunity Zone public utility casualty loss to the extent 
such loss is taken into account under paragraph (1). 
‘‘(5) ELECTION.—Any election under paragraph (2)(C) shall 
be made in such manner as may be prescribed by the Secretary 
and shall be made by the due date (including extensions of 
time) for filing the taxpayer’s return for the taxable year of 
the loss. Such election, once made for any taxable year, shall 
be irrevocable for such taxable year. 
‘‘(k) TREATMENT OF NET OPERATING LOSSES ATTRIBUTABLE TO 
GULF OPPORTUNITY ZONE LOSSES.— 
‘‘(1) IN GENERAL.—If a portion of any net operating loss 
of the taxpayer for any taxable year is a qualified Gulf Oppor-
tunity Zone loss, the following rules shall apply: 
‘‘(A) 
EXTENSION
OF
CARRYBACK
PERIOD.—Section 
172(b)(1) shall be applied with respect to such portion— 
‘‘(i) by substituting ‘5 taxable years’ for ‘2 taxable 
years’ in subparagraph (A)(i), and 
‘‘(ii) by not taking such portion into account in 
determining any eligible loss of the taxpayer under 
subparagraph (F) thereof for the taxable year. 
‘‘(B) SUSPENSION
OF
PERCENT
AMT
LIMITATION.—
Section 56(d)(1) shall be applied by increasing the amount 
determined under subparagraph (A)(ii)(I) thereof by the 
sum of the carrybacks and carryovers of any net operating 
loss attributable to such portion. 
‘‘(2) QUALIFIED GULF OPPORTUNITY ZONE LOSS.—For pur-
poses of paragraph (1), the term ‘qualified Gulf Opportunity 
Zone loss’ means the lesser of— 
‘‘(A) the excess of— 
‘‘(i) the net operating loss for such taxable year, 
over 
‘‘(ii) the specified liability loss for such taxable 
year to which a 10-year carryback applies under section 
172(b)(1)(C), or 
‘‘(B) the aggregate amount of the following deductions 
to the extent taken into account in computing the net 
operating loss for such taxable year: 
‘‘(i) Any deduction for any qualified Gulf Oppor-
tunity Zone casualty loss. 
‘‘(ii) Any deduction for moving expenses paid or 
incurred after August 27, 2005, and before January
H. R. 4440—12
1, 2008, and allowable under this chapter to any tax-
payer in connection with the employment of any indi-
vidual— 
‘‘(I) whose principal place of abode was located 
in the Gulf Opportunity Zone before August 28, 
2005, 
‘‘(II) who was unable to remain in such abode 
as the result of Hurricane Katrina, and 
‘‘(III) whose principal place of employment 
with the taxpayer after such expense is located 
in the Gulf Opportunity Zone. 
For purposes of this clause, the term ‘moving expenses’ 
has the meaning given such term by section 217(b), 
except that the taxpayer’s former residence and new 
residence may be the same residence if the initial 
vacating of the residence was as the result of Hurricane 
Katrina. 
‘‘(iii) Any deduction allowable under this chapter 
for expenses paid or incurred after August 27, 2005, 
and before January 1, 2008, to temporarily house any 
employee of the taxpayer whose principal place of 
employment is in the Gulf Opportunity Zone. 
‘‘(iv) Any deduction for depreciation (or amortiza-
tion in lieu of depreciation) allowable under this 
chapter with respect to any qualified Gulf Opportunity 
Zone property (as defined in subsection (d)(2), but with-
out regard to subparagraph (B)(iv) thereof)) for the 
taxable year such property is placed in service. 
‘‘(v) Any deduction allowable under this chapter 
for repair expenses (including expenses for removal 
of debris) paid or incurred after August 27, 2005, and 
before January 1, 2008, with respect to any damage 
attributable to Hurricane Katrina and in connection 
with property which is located in the Gulf Opportunity 
Zone. 
‘‘(3) QUALIFIED GULF OPPORTUNITY ZONE CASUALTY LOSS.— 
‘‘(A) IN GENERAL.—For purposes of paragraph (2)(B)(i), 
the term ‘qualified Gulf Opportunity Zone casualty loss’ 
means any uncompensated section 1231 loss (as defined 
in section 1231(a)(3)(B)) of property located in the Gulf 
Opportunity Zone if— 
‘‘(i) such loss is allowed as a deduction under sec-
tion 165 for the taxable year, and 
‘‘(ii) such loss is by reason of Hurricane Katrina. 
‘‘(B) 
REDUCTION
FOR
GAINS
FROM
INVOLUNTARY 
CONVERSION.—The amount of qualified Gulf Opportunity 
Zone casualty loss which would (but for this subparagraph) 
be taken into account under subparagraph (A) for any 
taxable year shall be reduced by the amount of any gain 
recognized by the taxpayer for such year from the involun-
tary conversion by reason of Hurricane Katrina of property 
located in the Gulf Opportunity Zone. 
‘‘(C) COORDINATION
WITH
GENERAL
DISASTER
LOSS 
RULES.—Section 165(i) shall not apply to any qualified Gulf 
Opportunity Zone casualty loss to the extent such loss 
is taken into account under this subsection.
H. R. 4440—13
‘‘(4) SPECIAL RULES.—For purposes of paragraph (1), rules 
similar to the rules of paragraphs (2) and (3) of section 172(i) 
shall apply with respect to such portion. 
‘‘(l) CREDIT TO HOLDERS OF GULF TAX CREDIT BONDS.— 
‘‘(1) ALLOWANCE OF CREDIT.—If a taxpayer holds a Gulf 
tax credit bond on one or more credit allowance dates of the 
bond occurring during any taxable year, there shall be allowed 
as a credit against the tax imposed by this chapter for the 
taxable year an amount equal to the sum of the credits deter-
mined under paragraph (2) with respect to such dates. 
‘‘(2) AMOUNT OF CREDIT.— 
‘‘(A) IN GENERAL.—The amount of the credit determined 
under this paragraph with respect to any credit allowance 
date for a Gulf tax credit bond is 25 percent of the annual 
credit determined with respect to such bond. 
‘‘(B) ANNUAL CREDIT.—The annual credit determined 
with respect to any Gulf tax credit bond is the product 
of— 
‘‘(i) the credit rate determined by the Secretary 
under subparagraph (C) for the day on which such 
bond was sold, multiplied by 
‘‘(ii) the outstanding face amount of the bond. 
‘‘(C) DETERMINATION.—For purposes of subparagraph 
(B), with respect to any Gulf tax credit bond, the Secretary 
shall determine daily or cause to be determined daily a 
credit rate which shall apply to the first day on which 
there is a binding, written contract for the sale or exchange 
of the bond. The credit rate for any day is the credit 
rate which the Secretary or the Secretary’s designee esti-
mates will permit the issuance of Gulf tax credit bonds 
with a specified maturity or redemption date without dis-
count and without interest cost to the issuer. 
‘‘(D) CREDIT ALLOWANCE DATE.—For purposes of this 
subsection, the term ‘credit allowance date’ means March 
15, June 15, September 15, and December 15. Such term 
also includes the last day on which the bond is outstanding. 
‘‘(E) SPECIAL RULE FOR ISSUANCE AND REDEMPTION.—
In the case of a bond which is issued during the 3-month 
period ending on a credit allowance date, the amount of 
the credit determined under this paragraph with respect 
to such credit allowance date shall be a ratable portion 
of the credit otherwise determined based on the portion 
of the 3-month period during which the bond is outstanding. 
A similar rule shall apply when the bond is redeemed 
or matures. 
‘‘(3) LIMITATION BASED ON AMOUNT OF TAX.—The credit 
allowed under paragraph (1) for any taxable year shall not 
exceed the excess of— 
‘‘(A) the sum of the regular tax liability (as defined 
in section 26(b)) plus the tax imposed by section 55, over 
‘‘(B) the sum of the credits allowable under part IV 
of subchapter A (other than subpart C and this subsection). 
‘‘(4) GULF TAX CREDIT BOND.—For purposes of this sub-
section— 
‘‘(A) IN
GENERAL.—The term ‘Gulf tax credit bond’ 
means any bond issued as part of an issue if—
H. R. 4440—14
‘‘(i) the bond is issued by the State of Alabama, 
Louisiana, or Mississippi, 
‘‘(ii) 95 percent or more of the proceeds of such 
issue are to be used to— 
‘‘(I) pay principal, interest, or premiums on 
qualified bonds issued by such State or any polit-
ical subdivision of such State, or 
‘‘(II) make a loan to any political subdivision 
of such State to pay principal, interest, or pre-
miums on qualified bonds issued by such political 
subdivision, 
‘‘(iii) the Governor of such State designates such 
bond for purposes of this subsection, 
‘‘(iv) the bond is a general obligation of such State 
and is in registered form (within the meaning of section 
149(a)), 
‘‘(v) the maturity of such bond does not exceed 
2 years, and 
‘‘(vi) the bond is issued after December 31, 2005, 
and before January 1, 2007. 
‘‘(B) STATE MATCHING REQUIREMENT.—A bond shall not 
be treated as a Gulf tax credit bond unless— 
‘‘(i) the issuer of such bond pledges as of the date 
of the issuance of the issue an amount equal to the 
face amount of such bond to be used for payments 
described in subclause (I) of subparagraph (A)(ii), or 
loans described in subclause (II) of such subparagraph, 
as the case may be, with respect to the issue of which 
such bond is a part, and 
‘‘(ii) any such payment or loan is made in equal 
amounts from the proceeds of such issue and from 
the amount pledged under clause (i). 
The requirement of clause (ii) shall be treated as met 
with respect to any such payment or loan made during 
the 1-year period beginning on the date of the issuance 
(or any successor 1-year period) if such requirement is 
met when applied with respect to the aggregate amount 
of such payments and loans made during such period. 
‘‘(C) AGGREGATE LIMIT ON BOND DESIGNATIONS.—The 
maximum aggregate face amount of bonds which may be 
designated under this subsection by the Governor of a 
State shall not exceed— 
‘‘(i) $200,000,000 in the case of the State of Lou-
isiana, 
‘‘(ii) $100,000,000 in the case of the State of Mis-
sissippi, and 
‘‘(iii) $50,000,000 in the case of the State of Ala-
bama. 
‘‘(D) SPECIAL RULES RELATING TO ARBITRAGE.—A bond 
which is part of an issue shall not be treated as a Gulf 
tax credit bond unless, with respect to the issue of which 
the bond is a part, the issuer satisfies the arbitrage require-
ments of section 148 with respect to proceeds of the issue 
and any loans made with such proceeds. 
‘‘(5) QUALIFIED BOND.—For purposes of this subsection—
H. R. 4440—15
‘‘(A) IN
GENERAL.—The term ‘qualified bond’ means 
any obligation of a State or political subdivision thereof 
which was outstanding on August 28, 2005. 
‘‘(B) EXCEPTION FOR PRIVATE ACTIVITY BONDS.—Such 
term shall not include any private activity bond. 
‘‘(C) EXCEPTION FOR ADVANCE REFUNDINGS.—Such term 
shall not include any bond with respect to which there 
is any outstanding refunded or refunding bond during the 
period in which a Gulf tax credit bond is outstanding 
with respect to such bond. 
‘‘(D) USE OF PROCEEDS REQUIREMENT.—Such term shall 
not include any bond issued as part of an issue if any 
portion of the proceeds of such issue was (or is to be) 
used to provide any property described in section 
144(c)(6)(B). 
‘‘(6) CREDIT INCLUDED IN GROSS INCOME.—Gross income 
includes the amount of the credit allowed to the taxpayer 
under this subsection (determined without regard to paragraph 
(3)) and the amount so included shall be treated as interest 
income. 
‘‘(7) OTHER DEFINITIONS AND SPECIAL RULES.—For purposes 
of this subsection— 
‘‘(A) BOND.—The term ‘bond’ includes any obligation. 
‘‘(B) PARTNERSHIP; S CORPORATION; AND OTHER PASS-
THRU ENTITIES.— 
‘‘(i) IN GENERAL.—Under regulations prescribed by 
the Secretary, in the case of a partnership, trust, S 
corporation, or other pass-thru entity, rules similar 
to the rules of section 41(g) shall apply with respect 
to the credit allowable under paragraph (1). 
‘‘(ii) NO BASIS ADJUSTMENT.—In the case of a bond 
held by a partnership or an S corporation, rules similar 
to the rules under section 1397E(i) shall apply. 
‘‘(C) BONDS HELD BY REGULATED INVESTMENT COMPA-
NIES.—If any Gulf tax credit bond is held by a regulated 
investment company, the credit determined under para-
graph (1) shall be allowed to shareholders of such company 
under procedures prescribed by the Secretary. 
‘‘(D) REPORTING.—Issuers of Gulf tax credit bonds shall 
submit reports similar to the reports required under section 
149(e). 
‘‘(E) CREDIT TREATED AS NONREFUNDABLE BONDHOLDER 
CREDIT.—For purposes of this title, the credit allowed by 
this subsection shall be treated as a credit allowable under 
subpart H of part IV of subchapter A of this chapter. 
‘‘(m) APPLICATION OF NEW MARKETS TAX CREDIT TO INVEST-
MENTS
IN
COMMUNITY
DEVELOPMENT
ENTITIES
SERVING
GULF 
OPPORTUNITY ZONE.—For purposes of section 45D— 
‘‘(1) a qualified community development entity shall be 
eligible for an allocation under subsection (f)(2) thereof of the 
increase in the new markets tax credit limitation described 
in paragraph (2) only if a significant mission of such entity 
is the recovery and redevelopment of the Gulf Opportunity 
Zone, 
‘‘(2) the new markets tax credit limitation otherwise deter-
mined under subsection (f)(1) thereof shall be increased by 
an amount equal to—
H. R. 4440—16
‘‘(A) $300,000,000 for 2005 and 2006, to be allocated 
among qualified community development entities to make 
qualified low-income community investments within the 
Gulf Opportunity Zone, and 
‘‘(B) $400,000,000 for 2007, to be so allocated, and 
‘‘(3) subsection (f)(3) thereof shall be applied separately 
with respect to the amount of the increase under paragraph 
(2). 
‘‘(n) TREATMENT
OF
REPRESENTATIONS
REGARDING
INCOME 
ELIGIBILITY
FOR PURPOSES
OF QUALIFIED RESIDENTIAL RENTAL 
PROJECT REQUIREMENTS.—For purposes of determining if any resi-
dential rental project meets the requirements of section 142(d)(1) 
and if any certification with respect to such project meets the 
requirements under section 142(d)(7), the operator of the project 
may rely on the representations of any individual applying for 
tenancy in such project that such individual’s income will not exceed 
the applicable income limits of section 142(d)(1) upon commence-
ment of the individual’s tenancy if such tenancy begins during 
the 6-month period beginning on and after the date such individual 
was displaced by reason of Hurricane Katrina. 
‘‘(o) TREATMENT
OF
PUBLIC
UTILITY
PROPERTY
DISASTER 
LOSSES.— 
‘‘(1) IN GENERAL.—Upon the election of the taxpayer, in 
the case of any eligible public utility property loss— 
‘‘(A) section 165(i) shall be applied by substituting ‘the 
fifth taxable year immediately preceding’ for ‘the taxable 
year immediately preceding’, 
‘‘(B) an application for a tentative carryback adjust-
ment of the tax for any prior taxable year affected by 
the application of subparagraph (A) may be made under 
section 6411, and 
‘‘(C) section 6611 shall not apply to any overpayment 
attributable to such loss. 
‘‘(2) ELIGIBLE PUBLIC UTILITY PROPERTY LOSS.—For pur-
poses of this subsection— 
‘‘(A) IN
GENERAL.—The term ‘eligible public utility 
property loss’ means any loss with respect to public utility 
property located in the Gulf Opportunity Zone and attrib-
utable to Hurricane Katrina. 
‘‘(B) PUBLIC
UTILITY
PROPERTY.—The term ‘public 
utility property’ has the meaning given such term by sec-
tion 168(i)(10) without regard to the matter following 
subparagraph (D) thereof. 
‘‘(3) WAIVER OF LIMITATIONS.—If refund or credit of any 
overpayment of tax resulting from the application of paragraph 
(1) is prevented at any time before the close of the 1-year 
period beginning on the date of the enactment of this section 
by the operation of any law or rule of law (including res judi-
cata), such refund or credit may nevertheless be made or 
allowed if claim therefor is filed before the close of such period. 
‘‘(p) TAX BENEFITS NOT AVAILABLE WITH RESPECT TO CERTAIN 
PROPERTY.—
‘‘(1) QUALIFIED GULF OPPORTUNITY ZONE PROPERTY.—For 
purposes of subsections (d), (e), and (k)(2)(B)(iv), the term ‘quali-
fied Gulf Opportunity Zone property’ shall not include any 
property described in paragraph (3).
H. R. 4440—17
‘‘(2) 
QUALIFIED
GULF
OPPORTUNITY
ZONE
CASUALTY 
LOSSES.—For purposes of subsection (k)(2)(B)(i), the term ‘quali-
fied Gulf Opportunity Zone casualty loss’ shall not include 
any loss with respect to any property described in paragraph 
(3). 
‘‘(3) PROPERTY DESCRIBED.—
‘‘(A) IN
GENERAL.—For purposes of this subsection, 
property is described in this paragraph if such property 
is—
‘‘(i) any property used in connection with any pri-
vate or commercial golf course, country club, massage 
parlor, hot tub facility, suntan facility, or any store 
the principal business of which is the sale of alcoholic 
beverages for consumption off premises, or 
‘‘(ii) any gambling or animal racing property. 
‘‘(B) GAMBLING OR ANIMAL RACING PROPERTY.—For pur-
poses of subparagraph (A)(ii)—
‘‘(i) IN GENERAL.—The term ‘gambling or animal 
racing property’ means—
‘‘(I) any equipment, furniture, software, or 
other property used directly in connection with 
gambling, the racing of animals, or the on-site 
viewing of such racing, and 
‘‘(II) the portion of any real property (deter-
mined by square footage) which is dedicated to 
gambling, the racing of animals, or the on-site 
viewing of such racing. 
‘‘(ii) DE MINIMIS PORTION.—Clause (i)(II) shall not 
apply to any real property if the portion so dedicated 
is less than 100 square feet.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Paragraph (2) of section 54(c) is amended by inserting 
‘‘, section 1400N(l),’’ after ‘‘subpart C’’. 
(2) Subparagraph (A) of section 6049(d)(8) is amended— 
(A) by inserting ‘‘or 1400N(l)(6)’’ after ‘‘section 54(g)’’, 
and 
(B) by inserting ‘‘or 1400N(l)(2)(D), as the case may 
be’’ after ‘‘section 54(b)(4)’’. 
(3) So much of subchapter Y of chapter 1 as precedes 
section 1400L is amended to read as follows: 
‘‘Subchapter Y—Short-Term Regional Benefits
‘‘PART I—TAX BENEFITS FOR NEW YORK LIBERTY ZONE 
‘‘PART II—TAX BENEFITS FOR GO ZONES
‘‘PART I—TAX BENEFITS FOR NEW YORK 
LIBERTY ZONE
‘‘Sec. 1400L. Tax benefits for New York Liberty Zone.’’.
(4) The item relating to subchapter Y in the table of sub-
chapters for chapter 1 is amended to read as follows:
‘‘SUBCHAPTER Y—SHORT-TERM REGIONAL BENEFITS’’.
(c) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as provided in paragraph (2), the 
amendments made by this section shall apply to taxable years 
ending on or after August 28, 2005.
H. R. 4440—18
(2) CARRYBACKS.—Subsections (i)(2), (j), and (k) of section 
1400N of the Internal Revenue Code of 1986 (as added by 
this section) shall apply to losses arising in such taxable years. 
SEC. 
102. 
EXPANSION 
OF 
HOPE 
SCHOLARSHIP 
AND 
LIFETIME 
LEARNING CREDIT FOR STUDENTS IN THE GULF OPPOR-
TUNITY ZONE. 
(a) IN GENERAL.—Part II of subchapter Y of chapter 1 (as 
added by this Act) is amended by adding at the end the following 
new section: 
‘‘SEC. 1400O. EDUCATION TAX BENEFITS. 
‘‘In the case of an individual who attends an eligible educational 
institution (as defined in section 25A(f)(2)) located in the Gulf 
Opportunity Zone for any taxable year beginning during 2005 or 
2006— 
‘‘(1) in applying section 25A, the term ‘qualified tuition 
and related expenses’ shall include any costs which are qualified 
higher education expenses (as defined in section 529(e)(3)), 
‘‘(2) each of the dollar amounts in effect under of subpara-
graphs (A) and (B) of section 25A(b)(1) shall be twice the 
amount otherwise in effect before the application of this sub-
section, and 
‘‘(3) section 25A(c)(1) shall be applied by substituting ‘40 
percent’ for ‘20 percent’.’’. 
(b) CONFORMING AMENDMENT.—The table of sections for part 
II of subchapter Y of chapter 1 is amended by adding at the 
end the following new item:
‘‘Sec. 1400O. Education tax benefits.’’.
SEC. 103. HOUSING RELIEF FOR INDIVIDUALS AFFECTED BY HURRI-
CANE KATRINA. 
(a) IN GENERAL.—Part II of subchapter Y of chapter 1 (as 
added by this Act) is amended by adding at the end the following 
new section: 
‘‘SEC. 1400P. HOUSING TAX BENEFITS . 
‘‘(a) EXCLUSION OF EMPLOYER PROVIDED HOUSING FOR INDI-
VIDUAL AFFECTED BY HURRICANE KATRINA.— 
‘‘(1) IN GENERAL.—Gross income of a qualified employee 
shall not include the value of any lodging furnished in-kind 
to such employee (and such employee’s spouse or any of such 
employee’s dependents) by or on behalf of a qualified employer 
for any month during the taxable year. 
‘‘(2) LIMITATION.—The amount which may be excluded 
under paragraph (1) for any month for which lodging is fur-
nished during the taxable year shall not exceed $600. 
‘‘(3) TREATMENT OF EXCLUSION.—The exclusion under para-
graph (1) shall be treated as an exclusion under section 119 
(other 
than 
for 
purposes 
of 
sections 
3121(a)(19) 
and 
3306(b)(14)). 
‘‘(b) EMPLOYER CREDIT
FOR HOUSING EMPLOYEES AFFECTED 
BY HURRICANE KATRINA.—For purposes of section 38, in the case 
of a qualified employer, the Hurricane Katrina housing credit for 
any month during the taxable year is an amount equal to 30 
percent of any amount which is excludable from the gross income 
of a qualified employee of such employer under subsection (a) and 
not otherwise excludable under section 119.
H. R. 4440—19
‘‘(c) QUALIFIED EMPLOYEE.—For purposes of this section, the 
term ‘qualified employee’ means, with respect to any month, an 
individual— 
‘‘(1) who had a principal residence (as defined in section 
121) in the Gulf Opportunity Zone on August 28, 2005, and 
‘‘(2) who performs substantially all employment services— 
‘‘(A) in the Gulf Opportunity Zone, and 
‘‘(B) for the qualified employer which furnishes lodging 
to such individual. 
‘‘(d) QUALIFIED EMPLOYER.—For purposes of this section, the 
term ‘qualified employer’ means any employer with a trade or 
business located in the Gulf Opportunity Zone. 
‘‘(e) CERTAIN RULES TO APPLY.—For purposes of this subsection, 
rules similar to the rules of sections 51(i)(1) and 52 shall apply. 
‘‘(f) APPLICATION
OF SECTION.—This section shall apply to 
lodging furnished during the period— 
‘‘(1) beginning on the first day of the first month beginning 
after the date of the enactment of this section, and 
‘‘(2) ending on the date which is 6 months after the first 
day described in paragraph (1).’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Subsection (b) of section 38 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 Hurricane Katrina housing credit determined 
under section 1400P(b).’’. 
(2) Section 280C(a) is amended by striking ‘‘and 1396(a)’’ 
and inserting ‘‘1396(a), and 1400P(b)’’. 
(3) The table of sections for part II of subchapter Y of 
chapter 1 is amended by adding at the end the following new 
item:
‘‘Sec. 1400P. Housing tax benefits.’’.
SEC. 104. EXTENSION OF SPECIAL RULES FOR MORTGAGE REVENUE 
BONDS. 
Section 404(d) of the Katrina Emergency Tax Relief Act of 
2005 is amended by striking ‘‘December 31, 2007’’ and inserting 
‘‘December 31, 2010’’. 
SEC. 105. SPECIAL EXTENSION OF BONUS DEPRECIATION PLACED IN 
SERVICE DATE FOR TAXPAYERS AFFECTED BY HURRI-
CANES KATRINA, RITA, AND WILMA. 
In applying the rule under section 168(k)(2)(A)(iv) of the 
Internal Revenue Code of 1986 to any property described in 
subparagraph (B) or (C) of section 168(k)(2) of such Code— 
(1) the placement in service of which— 
(A) is to be located in the GO Zone (as defined in 
section 1400M(1) of such Code), the Rita GO Zone (as 
defined in section 1400M(3) of such Code), or the Wilma 
GO Zone (as defined in section 1400M(5) of such Code), 
and 
(B) is to be made by any taxpayer affected by Hurricane 
Katrina, Rita, or Wilma, or 
(2) which is manufactured in such Zone by any person 
affected by Hurricane Katrina, Rita, or Wilma,