H. R. 1424—148 
inserting ‘‘$9,000,000 on October 1, 2009, and $9,000,000 on October 
1, 2010’’. 
TITLE VII—DISASTER RELIEF 
Subtitle A—Heartland and Hurricane Ike 
Disaster Relief 
SEC. 701. SHORT TITLE. 
This subtitle may be cited as the ‘‘Heartland Disaster Tax 
Relief Act of 2008’’. 
SEC. 702. TEMPORARY TAX RELIEF FOR AREAS DAMAGED BY 2008 MID-
WESTERN SEVERE STORMS, TORNADOS, AND FLOODING. 
(a) IN GENERAL.—Subject to the modifications described in this 
section, the following provisions of or relating to the Internal Rev-
enue 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 benefits) other than 
subsections (b), (d), (e), (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 employee 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 mort-
gage revenue bonds). 
(2) OTHER BENEFITS INCLUDED IN KATRINA EMERGENCY TAX 
RELIEF
ACT
OF
2005.—Sections 302, 303, 304, 401, and 405 
of the Katrina Emergency Tax Relief Act of 2005. 
(b) MIDWESTERN DISASTER AREA.— 
(1) IN
GENERAL.—For purposes of this section and for 
applying the substitutions described in subsections (d) and 
(e), 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 flooding occurring 
in any of the States of Arkansas, Illinois, Indiana, Iowa, 
Kansas, Michigan, Minnesota, Missouri, Nebraska, and 
Wisconsin, and 
(B) determined by the President to warrant individual 
or individual and public assistance from the Federal 
Government under such Act with respect to damages attrib-
utable to such severe storms, tornados, or flooding. 
(2) CERTAIN BENEFITS AVAILABLE TO AREAS ELIGIBLE ONLY 
FOR PUBLIC ASSISTANCE.—For purposes of applying this section 
to benefits under the following provisions, paragraph (1) shall 
be applied without regard to subparagraph (B):
H. R. 1424—149 
(A) Sections 1400Q, 1400S(b), and 1400S(d) of the 
Internal Revenue Code of 1986. 
(B) Sections 302, 401, and 405 of the Katrina Emer-
gency Tax Relief Act of 2005. 
(c) REFERENCES.— 
(1) AREA.—Any reference in such provisions to the Hurri-
cane Katrina disaster area or the Gulf Opportunity Zone shall 
be treated as a reference to any Midwestern disaster area 
and any reference to the Hurricane Katrina disaster area or 
the Gulf Opportunity Zone within a State shall be treated 
as a reference 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, 
tornados, or flooding giving rise to any Presidential declaration 
described in subsection (b)(1)(A). 
(3) APPLICABLE DISASTER DATE.—For purposes of applying 
the substitutions described in subsections (d) and (e), the term 
‘‘applicable disaster date’’ means, with respect to any Mid-
western disaster area, the date on which the severe storms, 
tornados, or flooding giving rise to the Presidential declaration 
described in subsection (b)(1)(A) occurred. 
(d) 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 Opportunity Zone Bond’’ each 
place it appears, except that in determining whether a 
bond is a qualified Midwestern disaster area bond— 
(i) paragraph (2)(A)(i) shall be applied by only 
treating costs as qualified project costs if— 
(I) in the case of a project involving a private 
business use (as defined in section 141(b)(6)), 
either the person using the property suffered a 
loss in a trade or business attributable to the 
severe storms, tornados, or flooding giving rise 
to any Presidential declaration described in sub-
section (b)(1)(A) or is a person designated for pur-
poses of this section by the Governor 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 relating to public 
utility property, the project involves repair or 
reconstruction of public utility property damaged 
by such severe storms, tornados, or flooding, and 
(ii) paragraph (2)(A)(ii) shall be applied 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 suffered damages to their 
principal residences attributable to such severe storms, 
tornados, or flooding.
H. R. 1424—150 
(B) by substituting ‘‘any State in which a Midwestern 
disaster area is located’’ for ‘‘the State of Alabama, Lou-
isiana, or Mississippi’’ in paragraph (2)(B), 
(C) by substituting ‘‘designated for purposes 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 
(ii) by substituting ‘‘before the earliest applicable 
disaster date for Midwestern disaster areas within the 
State’’ for ‘‘before August 28, 2005’’, 
(F) by substituting ‘‘qualified Midwestern disaster area 
repair or construction’’ for ‘‘qualified GO Zone repair or 
construction’’ each place it appears, 
(G) by substituting ‘‘after the date of the enactment 
of the Heartland Disaster Tax Relief 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), and 
(H) by disregarding paragraph (8) thereof. 
(2) LOW-INCOME HOUSING CREDIT.—Section 1400N(c)— 
(A) only with respect to calendar years 2008, 2009, 
and 2010, 
(B) by substituting ‘‘Disaster Recovery Assistance 
housing amount’’ for ‘‘Gulf Opportunity housing amount’’ 
each place it appears, 
(C) in paragraph (1)(B)— 
(i) by substituting ‘‘$8.00’’ for ‘‘$18.00’’, and 
(ii) by substituting ‘‘before the earliest applicable 
disaster date for Midwestern disaster areas within the 
State’’ for ‘‘before August 28, 2005’’, and 
(D) determined without regard to paragraphs (2), (3), 
(4), (5), and (6) thereof. 
(3) EXPENSING
FOR
CERTAIN
DEMOLITION
AND
CLEAN-UP 
COSTS.—Section 1400N(f)— 
(A) by substituting ‘‘qualified Disaster Recovery Assist-
ance clean-up cost’’ for ‘‘qualified Gulf Opportunity Zone 
clean-up cost’’ each place it appears, 
(B) by substituting ‘‘beginning on the applicable dis-
aster date and ending on December 31, 2010’’ for ‘‘beginning 
on August 28, 2005, and ending on December 31, 2007’’ 
in paragraph (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 the severe storms, tornados, or flooding 
giving rise to any Presidential declaration described in 
subsection (b)(1)(A). 
(4) EXTENSION OF EXPENSING FOR ENVIRONMENTAL REMEDI-
ATION COSTS.—Section 1400N(g)— 
(A) by substituting ‘‘the applicable disaster date’’ for 
‘‘August 28, 2005’’ each place it appears,
H. R. 1424—151 
(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 contaminated 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 (b)(1)(A). 
(5) 
INCREASE
IN
REHABILITATION
CREDIT.—Section 
1400N(h), as amended by this Act— 
(A) by substituting ‘‘the applicable disaster date’’ for 
‘‘August 28, 2005’’, 
(B) by substituting ‘‘December 31, 2011’’ for ‘‘December 
31, 2009’’ in paragraph (1), and 
(C) by only applying such subsection to qualified 
rehabilitation expenditures with respect to any building 
or structure which was damaged or destroyed as a result 
of the severe storms, tornados, or flooding giving rise to 
any Presidential declaration described in subsection 
(b)(1)(A). 
(6) TREATMENT OF NET OPERATING LOSSES ATTRIBUTABLE 
TO DISASTER LOSSES.—Section 1400N(k)— 
(A) by substituting ‘‘qualified Disaster Recovery Assist-
ance loss’’ for ‘‘qualified Gulf Opportunity Zone loss’’ each 
place it appears, 
(B) by substituting ‘‘after the day before the applicable 
disaster date, and before January 1, 2011’’ for ‘‘after August 
27, 2005, and before January 1, 2008’’ each place it appears, 
(C) by substituting ‘‘the applicable disaster date’’ for 
‘‘August 28, 2005’’ in paragraph (2)(B)(ii)(I), 
(D) by substituting ‘‘qualified Disaster Recovery Assist-
ance property’’ for ‘‘qualified Gulf Opportunity Zone prop-
erty’’ in paragraph (2)(B)(iv), and 
(E) by substituting ‘‘qualified Disaster Recovery Assist-
ance casualty loss’’ for ‘‘qualified Gulf Opportunity Zone 
casualty loss’’ each place it appears. 
(7) 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 or any instrumentality of the State’’ 
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 Mid-
western 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 State. The population of a State 
within any area shall be determined on the basis of the 
most recent census estimate of resident population released
H. R. 1424—152 
by the Bureau of Census before the earliest applicable 
disaster date for Midwestern disaster areas within the 
State.’’ for ‘‘shall not exceed’’ and all that follows in para-
graph (4)(C), and 
(E) by substituting ‘‘the earliest applicable disaster 
date for Midwestern disaster areas within the State’’ for 
‘‘August 28, 2005’’ in paragraph (5)(A). 
(8) EDUCATION
TAX
BENEFITS.—Section 1400O, by sub-
stituting ‘‘2008 or 2009’’ for ‘‘2005 or 2006’’. 
(9) HOUSING TAX BENEFITS.—Section 1400P, by substituting 
‘‘the applicable disaster date’’ for ‘‘August 28, 2005’’ in sub-
section (c)(1). 
(10) SPECIAL RULES FOR USE OF RETIREMENT FUNDS.—Sec-
tion 1400Q— 
(A) by substituting ‘‘qualified Disaster Recovery Assist-
ance distribution’’ for ‘‘qualified hurricane distribution’’ 
each place it appears, 
(B) by substituting ‘‘on or after the applicable disaster 
date and before January 1, 2010’’ for ‘‘on or after August 
25, 2005, and before January 1, 2007’’ in subsection 
(a)(4)(A)(i), 
(C) by substituting ‘‘the applicable disaster date’’ for 
‘‘August 28, 2005’’ in subsections (a)(4)(A)(i) and (c)(3)(B), 
(D) by disregarding clauses (ii) and (iii) of subsection 
(a)(4)(A) thereof, 
(E) by substituting ‘‘qualified storm damage distribu-
tion’’ for ‘‘qualified Katrina distribution’’ each place it 
appears, 
(F) by substituting ‘‘after the date which is 6 months 
before the applicable disaster date and before the date 
which is the day after the applicable disaster date’’ for 
‘‘after February 28, 2005, and before August 29, 2005’’ 
in subsection (b)(2)(B)(ii), 
(G) by substituting ‘‘the Midwestern disaster area, but 
not so purchased or constructed on account of severe 
storms, tornados, or flooding giving rise to the designation 
of the area as a disaster area’’ for ‘‘the Hurricane Katrina 
disaster area, but not so purchased or constructed on 
account of Hurricane Katrina’’ in subsection (b)(2)(B)(iii), 
(H) by substituting ‘‘beginning on the applicable dis-
aster date and ending on the date which is 5 months 
after the date of the enactment of the Heartland Disaster 
Tax Relief Act of 2008’’ for ‘‘beginning on August 25, 2005, 
and ending on February 28, 2006’’ in subsection (b)(3)(A), 
(I) by substituting ‘‘qualified storm damage individual’’ 
for ‘‘qualified Hurricane Katrina individual’’ each place it 
appears, 
(J) by substituting ‘‘December 31, 2009’’ for ‘‘December 
31, 2006’’ in subsection (c)(2)(A), 
(K) by disregarding subparagraphs (C) and (D) of sub-
section (c)(3) thereof, 
(L) by substituting ‘‘beginning on the date of the enact-
ment of the Heartland Disaster Tax Relief Act of 2008 
and ending on December 31, 2009’’ for ‘‘beginning on Sep-
tember 24, 2005, and ending on December 31, 2006’’ in 
subsection (c)(4)(A)(i),
H. R. 1424—153 
(M) by substituting ‘‘the applicable disaster date’’ for 
‘‘August 25, 2005’’ in subsection (c)(4)(A)(ii), and 
(N) by substituting ‘‘January 1, 2010’’ for ‘‘January 
1, 2007’’ in subsection (d)(2)(A)(ii). 
(11) 
EMPLOYEE
RETENTION
CREDIT
FOR
EMPLOYERS 
AFFECTED BY SEVERE STORMS, TORNADOS, AND FLOODING.—Sec-
tion 1400R(a)— 
(A) by substituting ‘‘the applicable disaster date’’ for 
‘‘August 28, 2005’’ each place it appears, 
(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. 
(12) TEMPORARY
SUSPENSION
OF
LIMITATIONS
ON
CHARI-
TABLE 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 contribu-
tion (as defined in section 170(c)) if— 
‘‘(i) such contribution— 
‘‘(I) is paid during the period beginning on 
the earliest applicable disaster date for all States 
and ending 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 acknowledgment (within the 
meaning of section 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 application of 
this subsection with respect to such contribution. 
‘‘(B) EXCEPTION.—Such term shall not include a con-
tribution by a donor if the contribution 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 PARTNERSHIPS AND 
S CORPORATIONS.—In the case of a partnership or S corpora-
tion, the election under subparagraph (A)(iii) shall be made 
separately by each partner or shareholder.’’. 
(13) SUSPENSION
OF
CERTAIN
LIMITATIONS
ON
PERSONAL 
CASUALTY
LOSSES.—Section 1400S(b)(1), by substituting ‘‘the 
applicable disaster date’’ for ‘‘August 25, 2005’’. 
(14) 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 located in a Midwestern dis-
aster area,
H. R. 1424—154 
(B) by treating the applicable disaster date with respect 
to any such individual as the applicable 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 subsection (b)(2) of this section (relating 
to areas eligible only for public assistance). 
(15) ADJUSTMENTS REGARDING TAXPAYER AND DEPENDENCY 
STATUS.—Section 1400S(e), by substituting ‘‘2008 or 2009’’ for 
‘‘2005 or 2006’’. 
(e) MODIFICATIONS TO KATRINA EMERGENCY TAX RELIEF ACT 
OF 2005.—The following provisions of the Katrina Emergency Tax 
Relief Act of 2005 shall be applied with the following modifications: 
(1) ADDITIONAL EXEMPTION FOR HOUSING DISPLACED INDI-
VIDUAL.—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 section (relating to areas eligible only for 
public assistance). 
(2) INCREASE IN STANDARD MILEAGE RATE.—Section 303, 
by substituting ‘‘beginning on the applicable disaster date and 
ending on December 31, 2008’’ for ‘‘beginning on August 25, 
2005, and ending on December 31, 2006’’. 
(3) MILEAGE
REIMBURSEMENTS
FOR
CHARITABLE
VOLUN-
TEERS.—Section 304— 
(A) by substituting ‘‘beginning on the applicable dis-
aster date and ending on December 31, 2008’’ for ‘‘beginning 
on August 25, 2005, and ending on December 31, 2006’’ 
in subsection (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 principal place 
of abode on the applicable disaster date was in a Mid-
western disaster area (determined without regard to sub-
section (b)(2) of this section) as an individual described 
in subsection (b)(1) thereof, and by treating an individual 
whose principal place of abode on the applicable disaster 
date was in a Midwestern disaster area solely by reason 
of subsection (b)(2) of this section as an individual described 
in subsection (b)(2) thereof, 
(B) by substituting ‘‘the applicable disaster date’’ for 
‘‘August 28, 2005’’ both places it appears, and 
(C) by substituting ‘‘January 1, 2010’’ for ‘‘January 
1, 2007’’ in subsection (e). 
(5) EXTENSION OF REPLACEMENT PERIOD FOR NONRECOGNI-
TION OF GAIN.—Section 405, by substituting ‘‘on or after the 
applicable disaster date’’ for ‘‘on or after August 25, 2005’’.
H. R. 1424—155 
SEC. 703. REPORTING REQUIREMENTS RELATING TO DISASTER 
RELIEF CONTRIBUTIONS. 
(a) IN GENERAL.—Section 6033(b) (relating to returns of certain 
organizations described in section 501(c)(3)) is amended by striking 
‘‘and’’ at the end of paragraph (13), by redesignating 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, including the amount and 
use of qualified contributions 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. 
SEC. 704. TEMPORARY TAX-EXEMPT BOND FINANCING AND LOW- 
INCOME HOUSING TAX RELIEF FOR AREAS DAMAGED BY 
HURRICANE IKE. 
(a) TAX-EXEMPT BOND FINANCING.—Section 1400N(a) of the 
Internal Revenue Code of 1986 shall apply to any Hurricane Ike 
disaster area in addition to any other area referenced in such 
section, but with the following modifications: 
(1) By substituting ‘‘qualified Hurricane Ike disaster area 
bond’’ for ‘‘qualified Gulf Opportunity Zone Bond’’ each place 
it appears, except that in determining whether a bond is a 
qualified Hurricane Ike disaster area bond— 
(A) paragraph (2)(A)(i) shall be applied by only treating 
costs as qualified project costs if— 
(i) in the case of a project involving a private 
business use (as defined in section 141(b)(6)), either 
the person using the property suffered a loss in a 
trade or business attributable to Hurricane Ike or is 
a person designated for purposes of this section by 
the Governor 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 relating to public utility 
property, the project involves repair or reconstruction 
of public utility property damaged by Hurricane Ike, 
and 
(B) paragraph (2)(A)(ii) shall be applied 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 mortga-
gors who suffered damages to their principal residences 
attributable to Hurricane Ike. 
(2) By substituting ‘‘any State in which any Hurricane 
Ike disaster area is located’’ for ‘‘the State of Alabama, Lou-
isiana, or Mississippi’’ in paragraph (2)(B). 
(3) By substituting ‘‘designated for purposes 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). 
(4) By substituting ‘‘January 1, 2013’’ for ‘‘January 1, 2011’’ 
in paragraph (2)(D).
H. R. 1424—156 
(5) By substituting the following for subparagraph (A) of 
paragraph (3): 
‘‘(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 $2,000 multiplied by the portion 
of the State population which is in— 
‘‘(i) in the case of Texas, the counties of Brazoria, 
Chambers, Galveston, Jefferson, and Orange, and 
‘‘(ii) in the case of Louisiana, the parishes of 
Calcasieu and Cameron, 
(as determined on the basis of the most recent census 
estimate of resident population released by the Bureau 
of Census before September 13, 2008).’’. 
(6) By substituting ‘‘qualified Hurricane Ike disaster area 
repair or construction’’ for ‘‘qualified GO Zone repair or 
construction’’ each place it appears. 
(7) By substituting ‘‘after the date of the enactment of 
the Heartland Disaster Tax Relief 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). 
(8) By disregarding paragraph (8) thereof. 
(9) By substituting ‘‘any Hurricane Ike disaster area’’ for 
‘‘the Gulf Opportunity Zone’’ each place it appears. 
(b) LOW-INCOME HOUSING CREDIT.—Section 1400N(c) of the 
Internal Revenue Code of 1986 shall apply to any Hurricane Ike 
disaster area in addition to any other area referenced in such 
section, but with the following modifications: 
(1) Only with respect to calendar years 2008, 2009, and 
2010. 
(2) By substituting ‘‘any Hurricane Ike disaster area’’ for 
‘‘the Gulf Opportunity Zone’’ each place it appears. 
(3) By substituting ‘‘Hurricane Ike Recovery Assistance 
housing amount’’ for ‘‘Gulf Opportunity housing amount’’ each 
place it appears. 
(4) By substituting the following for subparagraph (B) of 
paragraph (1): 
‘‘(B) HURRICANE IKE HOUSING AMOUNT.—For purposes 
of subparagraph (A), the term ‘Hurricane Ike housing 
amount’ means, for any calendar year, the amount equal 
to the product of $16.00 multiplied by the portion of the 
State population which is in— 
‘‘(i) in the case of Texas, the counties of Brazoria, 
Chambers, Galveston, Jefferson, and Orange, and 
‘‘(ii) in the case of Louisiana, the parishes of 
Calcasieu and Cameron, 
(as determined on the basis of the most recent census 
estimate of resident population released by the Bureau 
of Census before September 13, 2008).’’. 
(5) Determined without regard to paragraphs (2), (3), (4), 
(5), and (6) thereof. 
(c) HURRICANE IKE DISASTER AREA.—For purposes of this sec-
tion and for applying the substitutions described in subsections 
(a) and (b), the term ‘‘Hurricane Ike disaster area’’ means an 
area in the State of Texas or Louisiana— 
(1) with respect to which a major disaster has been declared 
by the President on September 13, 2008, under section 401
H. R. 1424—157 
of the Robert T. Stafford Disaster Relief and Emergency Assist-
ance Act by reason of Hurricane Ike, and 
(2) determined by the President to warrant individual or 
individual and public assistance from the Federal Government 
under such Act with respect to damages attributable to Hurri-
cane Ike. 
Subtitle B—National Disaster Relief 
SEC. 706. LOSSES ATTRIBUTABLE TO FEDERALLY DECLARED DISAS-
TERS. 
(a) WAIVER OF ADJUSTED GROSS INCOME LIMITATION.— 
(1) IN GENERAL.—Subsection (h) of section 165 is amended 
by redesignating paragraphs (3) and (4) as paragraphs (4) and 
(5), respectively, and by inserting after paragraph (2) the fol-
lowing new paragraph: 
‘‘(3) SPECIAL RULE FOR LOSSES IN FEDERALLY DECLARED 
DISASTERS.— 
‘‘(A) IN GENERAL.—If an individual has a net disaster 
loss for any taxable year, the amount determined under 
paragraph (2)(A)(ii) shall be the sum of— 
‘‘(i) such net disaster loss, and 
‘‘(ii) so much of the excess referred to in the matter 
preceding clause (i) of paragraph (2)(A) (reduced by 
the amount in clause (i) of this subparagraph) as 
exceeds 10 percent of the adjusted gross income of 
the individual. 
‘‘(B) NET DISASTER LOSS.—For purposes of subpara-
graph (A), the term ‘net disaster loss’ means the excess 
of— 
‘‘(i) the personal casualty losses— 
‘‘(I) attributable to a federally declared dis-
aster occurring before January 1, 2010, and 
‘‘(II) occurring in a disaster area, over 
‘‘(ii) personal casualty gains. 
‘‘(C) FEDERALLY DECLARED DISASTER.—For purposes of 
this paragraph— 
‘‘(i) FEDERALLY
DECLARED
DISASTER.—The term 
‘federally declared disaster’ means any disaster subse-
quently determined by the President of the United 
States to warrant assistance by the Federal Govern-
ment under the Robert T. Stafford Disaster Relief and 
Emergency Assistance Act. 
‘‘(ii) DISASTER
AREA.—The term ‘disaster area’ 
means the area so determined to warrant such assist-
ance.’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Section 165(h)(4)(B) (as so redesignated) is 
amended by striking ‘‘paragraph (2)’’ and inserting ‘‘para-
graphs (2) and (3)’’. 
(B) Section 165(i)(1) is amended by striking ‘‘loss’’ and 
all that follows through ‘‘Act’’ and inserting ‘‘loss occurring 
in a disaster area (as defined by clause (ii) of subsection 
(h)(3)(C)) and attributable to a federally declared disaster 
(as defined by clause (i) of such subsection)’’.
H. R. 1424—158 
(C) Section 165(i)(4) is amended by striking ‘‘Presi-
dentially 
declared 
disaster 
(as 
defined 
by 
section 
1033(h)(3))’’ and inserting ‘‘federally declared disaster (as 
defined by subsection (h)(3)(C)(i)’’. 
(D)(i) So much of subsection (h) of section 1033 as 
precedes subparagraph (A) of paragraph (1) thereof is 
amended to read as follows: 
‘‘(h) SPECIAL RULES FOR PROPERTY DAMAGED BY FEDERALLY 
DECLARED DISASTERS.— 
‘‘(1) PRINCIPAL
RESIDENCES.—If the taxpayer’s principal 
residence or any of its contents is located in a disaster area 
and is compulsorily or involuntarily converted as a result of 
a federally declared disaster—’’. 
(ii) Paragraph (2) of section 1033(h) is amended by 
striking ‘‘investment’’ and all that follows through ‘‘dis-
aster’’ and inserting ‘‘investment located in a disaster area 
and compulsorily or involuntarily converted as a result 
of a federally declared disaster’’. 
(iii) Paragraph (3) of section 1033(h) is amended to 
read as follows: 
‘‘(3) FEDERALLY DECLARED DISASTER; DISASTER AREA.—The 
terms ‘‘federally declared disaster’’ and ‘‘disaster area’’ shall 
have the respective meaning given such terms by section 
165(h)(3)(C).’’. 
(iv) Section 139(c)(2) is amended to read as follows: 
‘‘(2) federally declared disaster (as defined by section 
165(h)(3)(C)(i)),’’. 
(v) Subclause (II) of section 172(b)(1)(F)(ii) is amended 
by striking ‘‘Presidentially declared disasters (as defined 
in section 1033(h)(3))’’ and inserting ‘‘federally declared 
disasters (as defined by subsection (h)(3)(C)(i))’’. 
(vi) Subclause (III) of section 172(b)(1)(F)(ii) is amended 
by striking ‘‘Presidentially declared disasters’’ and inserting 
‘‘federally declared disasters’’. 
(vii) Subsection (a) of section 7508A is amended by 
striking ‘‘Presidentially declared disaster (as defined in 
section 1033(h)(3))’’ and inserting ‘‘federally declared dis-
aster (as defined by section 165(h)(3)(C)(i))’’. 
(b) INCREASE IN STANDARD DEDUCTION BY DISASTER CASUALTY 
LOSS.— 
(1) IN
GENERAL.—Paragraph (1) of section 63(c), as 
amended by the Housing Assistance Tax Act of 2008, is 
amended by striking ‘‘and’’ at the end of subparagraph (B), 
by striking the period at the end of subparagraph (C) and 
inserting ‘‘, and’’, and by adding at the end the following new 
subparagraph: 
‘‘(D) the disaster loss deduction.’’. 
(2) DISASTER LOSS DEDUCTION.—Subsection (c) of section 
63, as amended by the Housing Assistance Tax Act of 2008, 
is amended by adding at the end the following new paragraph: 
‘‘(8) DISASTER LOSS DEDUCTION.—For the purposes of para-
graph (1), the term ‘disaster loss deduction’ means the net 
disaster loss (as defined in section 165(h)(3)(B)).’’. 
(3) ALLOWANCE IN COMPUTING ALTERNATIVE MINIMUM TAX-
ABLE INCOME.—Subparagraph (E) of section 56(b)(1) is amended 
by adding at the end the following new sentence: ‘‘The preceding
H. R. 1424—159 
sentence shall not apply to so much of the standard deduction 
as is determined under section 63(c)(1)(D).’’. 
(c) INCREASE
IN LIMITATION
ON INDIVIDUAL LOSS PER CAS-
UALTY.—Paragraph (1) of section 165(h) is amended by striking 
‘‘$100’’ and inserting ‘‘$500 ($100 for taxable years beginning after 
December 31, 2009)’’. 
(d) EFFECTIVE DATES.— 
(1) IN
GENERAL.—Except as provided by paragraph (2), 
the amendments made by this section shall apply to disasters 
declared in taxable years beginning after December 31, 2007. 
(2) INCREASE IN LIMITATION ON INDIVIDUAL LOSS PER CAS-
UALTY.—The amendment made by subsection (c) shall apply 
to taxable years beginning after December 31, 2008. 
SEC. 707. EXPENSING OF QUALIFIED DISASTER EXPENSES. 
(a) IN GENERAL.—Part VI of subchapter B of chapter 1 is 
amended by inserting after section 198 the following new section: 
‘‘SEC. 198A. EXPENSING OF QUALIFIED DISASTER EXPENSES. 
‘‘(a) IN GENERAL.—A taxpayer may elect to treat any qualified 
disaster expenses which are paid or incurred by the taxpayer as 
an expense which is not chargeable to capital account. Any expense 
which is so treated shall be allowed as a deduction for the taxable 
year in which it is paid or incurred. 
‘‘(b) QUALIFIED DISASTER EXPENSE.—For purposes of this sec-
tion, the term ‘qualified disaster expense’ means any expenditure— 
‘‘(1) which is paid or incurred in connection with a trade 
or business or with business-related property, 
‘‘(2) which is— 
‘‘(A) for the abatement or control of hazardous sub-
stances that were released on account of a federally 
declared disaster occurring before January 1, 2010, 
‘‘(B) for the removal of debris from, or the demolition 
of structures on, real property which is business-related 
property damaged or destroyed as a result of a federally 
declared disaster occurring before such date, or 
‘‘(C) for the repair of business-related property dam-
aged as a result of a federally declared disaster occurring 
before such date, and 
‘‘(3) which is otherwise chargeable to capital account. 
‘‘(c) OTHER DEFINITIONS.—For purposes of this section— 
‘‘(1) BUSINESS-RELATED
PROPERTY.—The term ‘business- 
related property’ means property— 
‘‘(A) held by the taxpayer for use in a trade or business 
or for the production of income, or 
‘‘(B) described in section 1221(a)(1) in the hands of 
the taxpayer. 
‘‘(2) FEDERALLY DECLARED DISASTER.—The term ‘federally 
declared disaster’ has the meaning given such term by section 
165(h)(3)(C)(i). 
‘‘(d) DEDUCTION RECAPTURED AS ORDINARY INCOME ON SALE, 
ETC.—Solely for purposes of section 1245, in the case of property 
to which a qualified disaster expense would have been capitalized 
but for this section— 
‘‘(1) the deduction allowed by this section for such expense 
shall be treated as a deduction for depreciation, and
H. R. 1424—160 
‘‘(2) such property (if not otherwise section 1245 property) 
shall be treated as section 1245 property solely for purposes 
of applying section 1245 to such deduction. 
‘‘(e) COORDINATION WITH OTHER PROVISIONS.—Sections 198, 
280B, and 468 shall not apply to amounts which are treated as 
expenses under this section. 
‘‘(f) REGULATIONS.—The Secretary shall prescribe such regula-
tions as may be necessary or appropriate to carry out the purposes 
of this section.’’. 
(b) CLERICAL AMENDMENT.—The table of sections for part VI 
of subchapter B of chapter 1 is amended by inserting after the 
item relating to section 198 the following new item: 
‘‘Sec. 198A. Expensing of Qualified Disaster Expenses.’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to amounts paid or incurred after December 31, 2007 
in connection with disaster declared after such date. 
SEC. 708. NET OPERATING LOSSES ATTRIBUTABLE TO FEDERALLY 
DECLARED DISASTERS. 
(a) IN GENERAL.—Paragraph (1) of section 172(b) is amended 
by adding at the end the following new subparagraph: 
‘‘(J) 
CERTAIN
LOSSES
ATTRIBUTABLE
FEDERALLY 
DECLARED DISASTERS.—In the case of a taxpayer who has 
a qualified disaster loss (as defined in subsection (j)), such 
loss shall be a net operating loss carryback to each of 
the 5 taxable years preceding the taxable year of such 
loss.’’. 
(b) QUALIFIED DISASTER LOSS.—Section 172 is amended by 
redesignating subsections (j) and (k) as subsections (k) and (l), 
respectively, and by inserting after subsection (i) the following 
new subsection: 
‘‘(j) RULES RELATING TO QUALIFIED DISASTER LOSSES.—For pur-
poses of this section— 
‘‘(1) IN GENERAL.—The term ‘qualified disaster loss’ means 
the lesser of— 
‘‘(A) the sum of— 
‘‘(i) the losses allowable under section 165 for the 
taxable year— 
‘‘(I) attributable to a federally declared dis-
aster (as defined in section 165(h)(3)(C)(i)) occur-
ring before January 1, 2010, and 
‘‘(II) occurring in a disaster area (as defined 
in section 165(h)(3)(C)(ii)), and 
‘‘(ii) the deduction for the taxable year for qualified 
disaster expenses which is allowable under section 
198A(a) or which would be so allowable if not otherwise 
treated as an expense, or 
‘‘(B) the net operating loss for such taxable year. 
‘‘(2) COORDINATION WITH SUBSECTION (b)(2).—For purposes 
of applying subsection (b)(2), a qualified disaster loss for any 
taxable year shall be treated in a manner similar to the manner 
in which a specified liability loss is treated. 
‘‘(3) ELECTION.—Any taxpayer entitled to a 5-year 
carryback under subsection (b)(1)(J) from any loss year may 
elect to have the carryback period with respect to such loss 
year determined without regard to subsection (b)(1)(J). Such
H. R. 1424—161 
election 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 net operating loss. Such election, once 
made for any taxable year, shall be irrevocable for such taxable 
year. 
‘‘(4) EXCLUSION.—The term ‘qualified disaster loss’ shall 
not include any loss with respect to any property described 
in section 1400N(p)(3).’’. 
(c) LOSS DEDUCTION ALLOWED
IN COMPUTING ALTERNATIVE 
MINIMUM
TAXABLE
INCOME.—Subsection (d) of section 56 is 
amended by adding at the end the following new paragraph: 
‘‘(3) NET
OPERATING
LOSS
ATTRIBUTABLE
TO
FEDERALLY 
DECLARED DISASTERS.—In the case of a taxpayer which has 
a qualified disaster loss (as defined by section 172(b)(1)(J)) 
for the taxable year, paragraph (1) shall be applied by 
increasing the amount determined under subparagraph (A)(ii)(I) 
thereof by the sum of the carrybacks and carryovers of such 
loss.’’. 
(d) CONFORMING AMENDMENTS.— 
(1) Clause (ii) of section 172(b)(1)(F) is amended by 
inserting ‘‘or qualified disaster loss (as defined in subsection 
(j))’’ before the period at the end of the last sentence. 
(2) Paragraph (1) of section 172(i) is amended by adding 
at the end the following new flush sentence: 
‘‘Such term shall not include any qualified disaster loss (as 
defined in subsection (j)).’’. 
(e) EFFECTIVE DATE.—The amendments made by this section 
shall apply to losses arising in taxable years beginning after 
December 31, 2007, in connection with disasters declared after 
such date. 
SEC. 709. WAIVER OF CERTAIN MORTGAGE REVENUE BOND REQUIRE-
MENTS FOLLOWING FEDERALLY DECLARED DISASTERS. 
(a) IN GENERAL.—Subsection (k) of section 143 is amended 
by adding at the end the following new paragraph: 
‘‘(12) SPECIAL RULES FOR RESIDENCES DESTROYED IN FEDER-
ALLY DECLARED DISASTERS.— 
‘‘(A) PRINCIPAL RESIDENCE DESTROYED.—At the election 
of the taxpayer, if the principal residence (within the 
meaning of section 121) of such taxpayer is— 
‘‘(i) rendered unsafe for use as a residence by rea-
son of a federally declared disaster occurring before 
January 1, 2010, or 
‘‘(ii) demolished or relocated by reason of an order 
of the government of a State or political subdivision 
thereof on account of a federally declared disaster 
occurring before such date, 
then, for the 2-year period beginning on the date of the 
disaster declaration, subsection (d)(1) shall not apply with 
respect to such taxpayer and subsection (e) shall be applied 
by substituting ‘110’ for ‘90’ in paragraph (1) thereof. 
‘‘(B) PRINCIPAL RESIDENCE DAMAGED.— 
‘‘(i) IN GENERAL.—At the election of the taxpayer, 
if the principal residence (within the meaning of section 
121) of such taxpayer was damaged as the result of 
a federally declared disaster occurring before January
H. R. 1424—162 
1, 2010, any owner-financing provided in connection 
with the repair or reconstruction of such residence 
shall be treated as a qualified rehabilitation loan. 
‘‘(ii) LIMITATION.—The aggregate owner-financing 
to which clause (i) applies shall not exceed the lesser 
of— 
‘‘(I) the cost of such repair or reconstruction, 
or 
‘‘(II) $150,000. 
‘‘(C) FEDERALLY DECLARED DISASTER.—For purposes of 
this paragraph, the term ‘federally declared disaster’ has 
the meaning given such term by section 165(h)(3)(C)(i). 
‘‘(D) ELECTION; DENIAL OF DOUBLE BENEFIT.— 
‘‘(i) ELECTION.—An election under this paragraph 
may not be revoked except with the consent of the 
Secretary. 
‘‘(ii) DENIAL OF DOUBLE BENEFIT.—If a taxpayer 
elects the application of this paragraph, paragraph 
(11) shall not apply with respect to the purchase or 
financing of any residence by such taxpayer.’’. 
(b) EFFECTIVE DATE.—The amendment made by subsection (a) 
shall apply to disasters occurring after December 31, 2007. 
SEC. 710. SPECIAL DEPRECIATION ALLOWANCE FOR QUALIFIED DIS-
ASTER PROPERTY. 
(a) IN GENERAL.—Section 168, as amended by this Act, is 
amended by adding at the end the following new subsection: 
‘‘(n) SPECIAL ALLOWANCE FOR QUALIFIED DISASTER ASSISTANCE 
PROPERTY.— 
‘‘(1) IN GENERAL.—In the case of any qualified disaster 
assistance 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 the qualified disaster assistance 
property, and 
‘‘(B) the adjusted basis of the qualified disaster assist-
ance property shall be reduced by the amount of such 
deduction before computing the amount otherwise allow-
able as a depreciation deduction under this chapter for 
such taxable year and any subsequent taxable year. 
‘‘(2) QUALIFIED DISASTER ASSISTANCE PROPERTY.—For pur-
poses of this subsection— 
‘‘(A) IN GENERAL.—The term ‘qualified disaster assist-
ance property’ means any property— 
‘‘(i)(I) which is described in subsection (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— 
‘‘(I) in a disaster area with respect to a feder-
ally declared disaster occurring before January 1, 
2010, and 
‘‘(II) in the active conduct of a trade or busi-
ness by the taxpayer in such disaster area, 
‘‘(iii) which—