bond is held by a regulated investment com-
pany, the credit determined under paragraph 
(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
NONREFUND-
ABLE BONDHOLDER CREDIT.—For purposes of 
this title, the credit allowed by this subsection 
shall be treated as a credit allowable under sub-
part H of part IV of subchapter A of this chap-
ter.’’. 
(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 fol-
lows: 
‘‘Subchapter Y—Short-term Regional Benefits 
‘‘PART I—TAX BENEFITS FOR NEW YORK LIBERTY ZONE 
‘‘PART II—TAX BENEFITS FOR GULF OPPORTUNITY ZONE 
‘‘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 subchapters 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 para-
graph (2), the amendments made by this section 
shall apply to taxable years ending on or after Au-
gust 28, 2005. 
(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. FEDERAL GUARANTEE OF CERTAIN STATE 
BONDS. 
(a) STATE BONDS DESCRIBED.—This section shall 
apply to a bond issued as part of an issue if— 
(1) the issue of which such bond is part is an 
issue of the State of Alabama, Louisiana, or Mis-
sissippi, 
(2) the bond is a general obligation of the 
issuing State and is in registered form, 
(3) the proceeds of the bond are distributed to 
one or more political subdivisions of the issuing 
State, 
(4) the maturity of such bond does not exceed 
5 years, 
(5) the bond is issued after the date of the en-
actment of this Act and before January 1, 2008, 
and 
(6) the bond is designated by the Secretary of 
the Treasury for purposes of this section. 
(b) APPLICATION.— 
(1) IN GENERAL.—The Secretary of the Treas-
ury may only designate a bond for purposes of this 
section pursuant to an application submitted to the 
Secretary by the State which demonstrates the need 
for such designation on the basis of the criteria 
specified in paragraph (2).
(2) CRITERIA.—For purposes of paragraph (1), 
the criteria specified in this paragraph are— 
(A) the loss of revenue base of one or more 
political subdivisions of the State by reason of 
Hurricane Katrina, 
(B) the need for resources to fund infra-
structure within, or operating expenses of, any 
such political subdivision, 
(C) the lack of access of such political sub-
division to capital, and 
(D) any other criteria as may be deter-
mined by the Secretary. 
(3) GUIDANCE FOR SUBMISSION AND CONSID-
ERATION OF APPLICATIONS.—The Secretary of the 
Treasury shall prescribe regulations or other guid-
ance which provide for the time and manner for the 
submission and consideration of applications under 
this subsection. 
(c) FEDERAL GUARANTEE.—A bond described in 
subsection (a) is guaranteed by the United States in an 
amount equal to 50 percent of the outstanding principal 
with respect to such bond. 
(d) AGGREGATE LIMIT ON BOND DESIGNATIONS.— 
The maximum aggregate face amount of bonds which may
be 
issued 
under 
this 
section 
shall 
not 
exceed 
$3,000,000,000. 
TITLE II—TAX BENEFITS 
RELATED TO HURRICANE RITA 
SEC. 201. EXTENSION OF CERTAIN EMERGENCY TAX RE-
LIEF FOR HURRICANE KATRINA TO HURRI-
CANE RITA. 
(a) IN GENERAL.—Part II of subchapter Y of chap-
ter 1 (as added by this Act) is amended by adding at the 
end the following new sections: 
‘‘SEC. 1400O. SPECIAL RULES FOR USE OF RETIREMENT 
FUNDS. 
‘‘(a) TAX-FAVORED WITHDRAWALS FROM RETIRE-
MENT PLANS.— 
‘‘(1) IN
GENERAL.—Section 72(t) shall not 
apply to any qualified hurricane distribution. 
‘‘(2) AGGREGATE DOLLAR LIMITATION.— 
‘‘(A) IN GENERAL.—For purposes of this 
subsection, the aggregate amount of distribu-
tions received by an individual which may be 
treated as qualified hurricane distributions for 
any taxable year shall not exceed the excess (if 
any) of— 
‘‘(i) $100,000, over
‘‘(ii) the aggregate amounts treated as 
qualified hurricane distributions received 
by such individual for all prior taxable 
years. 
‘‘(B) TREATMENT
OF
PLAN
DISTRIBU-
TIONS.—If a distribution to an individual would 
(without regard to subparagraph (A)) be a 
qualified hurricane distribution, a plan shall not 
be treated as violating any requirement of this 
title merely because the plan treats such dis-
tribution as a qualified hurricane distribution, 
unless the aggregate amount of such distribu-
tions from all plans maintained by the employer 
(and any member of any controlled group which 
includes the employer) to such individual ex-
ceeds $100,000. 
‘‘(C) CONTROLLED GROUP.—For purposes 
of subparagraph (B), the term ‘controlled 
group’ means any group treated as a single em-
ployer under subsection (b), (c), (m), or (o) of 
section 414. 
‘‘(3) AMOUNT DISTRIBUTED MAY BE REPAID.— 
‘‘(A) IN
GENERAL.—Any individual who 
receives a qualified hurricane distribution may, 
at any time during the 3-year period beginning
on the day after the date on which such dis-
tribution was received, make one or more con-
tributions in an aggregate amount not to exceed 
the amount of such distribution to an eligible 
retirement plan of which such individual is a 
beneficiary and to which a rollover contribution 
of such distribution could be made under sec-
tion 402(c), 403(a)(4), 403(b)(8), 408(d)(3), or 
457(e)(16), as the case may be. 
‘‘(B) TREATMENT
OF
REPAYMENTS
OF 
DISTRIBUTIONS
FROM
ELIGIBLE
RETIREMENT 
PLANS
OTHER
THAN
IRAS.—For purposes of 
this title, if a contribution is made pursuant to 
subparagraph (A) with respect to a qualified 
hurricane distribution from an eligible retire-
ment plan other than an individual retirement 
plan, then the taxpayer shall, to the extent of 
the amount of the contribution, be treated as 
having received the qualified hurricane distribu-
tion in an eligible rollover distribution (as de-
fined in section 402(c)(4)) and as having trans-
ferred the amount to the eligible retirement 
plan in a direct trustee to trustee transfer with-
in 60 days of the distribution.
‘‘(C) TREATMENT
OF
REPAYMENTS
FOR 
DISTRIBUTIONS FROM IRAS.—For purposes of 
this title, if a contribution is made pursuant to 
subparagraph (A) with respect to a qualified 
hurricane distribution from an individual retire-
ment plan (as defined by section 7701(a)(37)), 
then, to the extent of the amount of the con-
tribution, the qualified hurricane distribution 
shall be treated as a distribution described in 
section 408(d)(3) and as having been trans-
ferred to the eligible retirement plan in a direct 
trustee to trustee transfer within 60 days of the 
distribution. 
‘‘(4) DEFINITIONS.—For purposes of this sub-
section— 
‘‘(A) QUALIFIED
HURRICANE
DISTRIBU-
TION.—Except as provided in paragraph (2), 
the term ‘qualified hurricane distribution’ 
means— 
‘‘(i) any distribution from an eligible 
retirement plan made on or after August 
25, 2005, and before January 1, 2007, to 
an individual whose principal place of 
abode on August 28, 2005, is located in 
the Hurricane Katrina disaster area and
who has sustained an economic loss by rea-
son of Hurricane Katrina, and 
‘‘(ii) any distribution (which is not de-
scribed in clause (i)) from an eligible re-
tirement plan made on or after September 
23, 2005, and before January 1, 2007, to 
an individual whose principal place of 
abode on September 23, 2005, is located in 
the Hurricane Rita disaster area and who 
has sustained an economic loss by reason 
of Hurricane Rita. 
‘‘(B) ELIGIBLE RETIREMENT PLAN.—The 
term ‘eligible retirement plan’ shall have the 
meaning 
given 
such 
term 
by 
section 
402(c)(8)(B). 
‘‘(5) INCOME INCLUSION SPREAD OVER 3-YEAR 
PERIOD.— 
‘‘(A) IN
GENERAL.—In the case of any 
qualified hurricane distribution, unless the tax-
payer elects not to have this paragraph apply 
for any taxable year, any amount required to be 
included in gross income for such taxable year 
shall be so included ratably over the 3-taxable 
year period beginning with such taxable year.
‘‘(B) SPECIAL
RULE.—For purposes of 
subparagraph (A), rules similar to the rules of 
subparagraph (E) of section 408A(d)(3) shall 
apply. 
‘‘(6) SPECIAL RULES.— 
‘‘(A) EXEMPTION OF DISTRIBUTIONS FROM 
TRUSTEE TO TRUSTEE TRANSFER AND WITH-
HOLDING
RULES.—For purposes of sections 
401(a)(31), 402(f), and 3405, qualified hurri-
cane distributions shall not be treated as eligi-
ble rollover distributions. 
‘‘(B) QUALIFIED
HURRICANE
DISTRIBU-
TIONS TREATED AS MEETING PLAN DISTRIBU-
TION REQUIREMENTS.—For purposes this title, 
a qualified hurricane distribution shall be treat-
ed as meeting the requirements of sections 
401(k)(2)(B)(i), 403(b)(7)(A)(ii), 403(b)(11), 
and 457(d)(1)(A). 
‘‘(b) RECONTRIBUTIONS
OF
WITHDRAWALS
FOR 
HOME PURCHASES.— 
‘‘(1) RECONTRIBUTIONS.— 
‘‘(A) IN
GENERAL.—Any individual who 
received a qualified distribution may, during the 
applicable period, make one or more contribu-
tions in an aggregate amount not to exceed the
amount of such qualified distribution to an eli-
gible retirement plan (as defined in section 
402(c)(8)(B)) of which such individual is a ben-
eficiary and to which a rollover contribution of 
such distribution could be made under section 
402(c), 403(a)(4), 403(b)(8), or 408(d)(3), as 
the case may be. 
‘‘(B) TREATMENT
OF
REPAYMENTS.— 
Rules similar to the rules of subparagraphs (B) 
and (C) of subsection (a)(3) shall apply for pur-
poses of this subsection. 
‘‘(2) QUALIFIED DISTRIBUTION.—For purposes 
of this subsection— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
distribution’ means any qualified Katrina dis-
tribution and any qualified Rita distribution. 
‘‘(B) 
QUALIFIED
KATRINA
DISTRIBU-
TION.—The term ‘qualified Katrina distribu-
tion’ means any distribution— 
‘‘(i) 
described 
in 
section 
401(k)(2)(B)(i)(IV), 403(b)(7)(A)(ii) (but 
only to the extent such distribution relates 
to financial hardship), 403(b)(11)(B), or 
72(t)(2)(F),