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‘‘(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 INVEST-
MENT COMPANIES.—If any Gulf tax credit bond
is held by a regulated investment company, 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 cred-
it bonds shall submit reports similar to the re-
ports required under section 149(e).
‘‘(E) CREDIT TREATED AS NONREFUNDABLE
BONDHOLDER
CREDIT.—For purposes of this
title, the credit allowed by this subsection shall
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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
INVESTMENTS
IN COMMUNITY DEVELOPMENT ENTITIES
SERVING GULF OPPORTUNITY ZONE.—For purposes of sec-
tion 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 other-
wise determined under subsection (f)(1) thereof shall
be increased by an amount equal to—
‘‘(A) $300,000,000 for 2005 and 2006, to be
allocated among qualified community develop-
ment entities to make qualified low-income com-
munity investments within the Gulf Opportunity
Zone, and
‘‘(B) $400,000,000 for 2007, to be so allo-
cated, and
‘‘(3) subsection (f)(3) thereof shall be applied sep-
arately with respect to the amount of the increase
under paragraph (2).
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‘‘(n) TREATMENT OF REPRESENTATIONS REGARDING
INCOME ELIGIBILITY FOR PURPOSES OF QUALIFIED RESI-
DENTIAL RENTAL PROJECT REQUIREMENTS.—For pur-
poses of determining if any residential rental project meets
the requirements of section 142(d)(1) and if any certifi-
cation 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 ten-
ancy in such project that such individual’s income will not
exceed the applicable income limits of section 142(d)(1)
upon commencement of the individual’s tenancy if such ten-
ancy 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 DIS-
ASTER LOSSES.—
‘‘(1) IN GENERAL.—Upon the election of the tax-
payer, in the case of any eligible public utility prop-
erty loss—
‘‘(A) section 165(i) shall be applied by sub-
stituting ‘the fifth taxable year immediately pre-
ceding’ for ‘the taxable year immediately pre-
ceding’,
‘‘(B) 
an 
application 
for 
a 
tentative
carryback adjustment of the tax for any prior
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taxable year affected by the application of sub-
paragraph (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 purposes of this subsection—
‘‘(A) IN GENERAL.—The term ‘eligible pub-
lic utility property loss’ means any loss with re-
spect to public utility property located in the
Gulf Opportunity Zone and attributable to Hur-
ricane Katrina.
‘‘(B) 
PUBLIC
UTILITY
PROPERTY.—The
term ‘public utility property’ has the meaning
given such term by section 168(i)(10) without re-
gard 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 judicata),
such refund or credit may nevertheless be made or al-
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lowed 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 ‘qualified Gulf Opportunity
Zone property’ shall not include any property de-
scribed in paragraph (3).
‘‘(2) QUALIFIED GULF OPPORTUNITY ZONE CAS-
UALTY
LOSSES.—For 
purposes 
of 
subsection
(k)(2)(B)(i), the term ‘qualified Gulf Opportunity
Zone casualty loss’ shall not include any loss with re-
spect to any property described in paragraph (3).
‘‘(3) PROPERTY DESCRIBED.—
‘‘(A) IN
GENERAL.—For purposes of this
subsection, property is described in this para-
graph if such property is—
‘‘(i) any property used in connection
with any private or commercial golf course,
country club, massage parlor, hot tub facil-
ity, suntan facility, or any store the prin-
cipal business of which is the sale of alco-
holic beverages for consumption off prem-
ises, or
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‘‘(ii) any gambling or animal racing
property.
‘‘(B) GAMBLING OR ANIMAL RACING PROP-
ERTY.—For purposes of subparagraph (A)(ii)—
‘‘(i) IN GENERAL.—The term ‘gambling
or animal racing property’ means—
‘‘(I) any equipment, furniture,
software, or other property used di-
rectly in connection with gambling, the
racing of animals, or the on-site view-
ing of such racing, and
‘‘(II) the portion of any real
property (determined by square foot-
age) 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—
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(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 pre-
cedes 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 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 August 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.
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SEC. 102. EXPANSION OF HOPE SCHOLARSHIP AND LIFE-
TIME LEARNING CREDIT FOR STUDENTS IN
THE GULF OPPORTUNITY 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)) lo-
cated 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 de-
fined in section 529(e)(3)),
‘‘(2) each of the dollar amounts in effect under
of subparagraphs (A) and (B) of section 25A(b)(1)
shall be twice the amount otherwise in effect before the
application of this subsection, and
‘‘(3) section 25A(c)(1) shall be applied by sub-
stituting ‘40 percent’ for ‘20 percent’.’’.
(b) CONFORMING AMENDMENT.—The table of sections
for part II of subchapter Y of chapter 1 is amended by add-
ing at the end the following new item:
‘‘Sec. 1400O. Education tax benefits.’’.
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SEC. 103. HOUSING RELIEF FOR INDIVIDUALS AFFECTED BY
HURRICANE 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 INDIVIDUAL 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 employ-
ee’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 furnished during the taxable year
shall not exceed $600.
‘‘(3) TREATMENT OF EXCLUSION.—The exclusion
under paragraph (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 sec-
tion 38, in the case of a qualified employer, the Hurricane
Katrina housing credit for any month during the taxable
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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.
‘‘(c) QUALIFIED EMPLOYEE.—For purposes of this sec-
tion, 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 Au-
gust 28, 2005, and
‘‘(2) who performs substantially all employment
services—
‘‘(A) in the Gulf Opportunity Zone, and
‘‘(B) for the qualified employer which fur-
nishes lodging to such individual.
‘‘(d) QUALIFIED EMPLOYER.—For purposes of this sec-
tion, 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—
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‘‘(1) beginning on the first day of the first month
beginning after the date of the enactment of this sec-
tion, 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 strik-
ing the period at the end of paragraph (26) and in-
serting ‘‘, and’’, and by adding at the end the fol-
lowing new paragraphs:
‘‘(27) the Hurricane Katrina housing credit de-
termined 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’’.
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SEC. 105. SPECIAL EXTENSION OF BONUS DEPRECIATION
PLACED IN SERVICE DATE FOR TAXPAYERS
AFFECTED BY HURRICANES 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 de-
scribed 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 de-
fined 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 sec-
tion 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,
the Secretary of the Treasury may, on a taxpayer by tax-
payer basis, extend the required date of the placement in
service of such property under such section by such period
of time as is determined necessary by the Secretary but not
to exceed 1 year. For purposes of the preceding sentence,
the determination shall be made by only taking into ac-
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count the effect of one or more hurricanes on the date of
such placement by the taxpayer.
TITLE 
II—TAX 
BENEFITS 
RE-
LATED TO HURRICANES RITA
AND WILMA
SEC. 201. EXTENSION OF CERTAIN EMERGENCY TAX RELIEF
FOR HURRICANE KATRINA TO HURRICANES
RITA AND WILMA.
(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 sections:
‘‘SEC. 1400Q. 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 distributions
received by an individual which may be treated
as qualified hurricane distributions for any tax-
able year shall not exceed the excess (if any) of—
‘‘(i) $100,000, over
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‘‘(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 quali-
fied hurricane distribution, a plan shall not be
treated as violating any requirement of this title
merely because the plan treats such distribution
as a qualified hurricane distribution, unless the
aggregate amount of such distributions from all
plans maintained by the employer (and any
member of any controlled group which includes
the 
employer) 
to 
such 
individual 
exceeds
$100,000.
‘‘(C) CONTROLLED
GROUP.—For purposes
of subparagraph (B), the term ‘controlled group’
means any group treated as a single employer
under subsection (b), (c), (m), or (o) of section
414.
‘‘(3) AMOUNT DISTRIBUTED MAY BE REPAID.—
‘‘(A) IN GENERAL.—Any individual who re-
ceives a qualified hurricane distribution may, at
any time during the 3-year period beginning on
the day after the date on which such distribution
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was received, make one or more contributions 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 dis-
tribution could be made under section 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 DIS-
TRIBUTIONS FROM ELIGIBLE RETIREMENT PLANS
OTHER THAN IRAS.—For purposes of this title, if
a contribution is made pursuant to subpara-
graph (A) with respect to a qualified hurricane
distribution from an eligible retirement 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 distribution in an eligi-
ble rollover distribution (as defined in section
402(c)(4)) and as having transferred the amount
to the eligible retirement plan in a direct trustee
to trustee transfer within 60 days of the distribu-
tion.
‘‘(C) TREATMENT OF REPAYMENTS FOR DIS-
TRIBUTIONS FROM IRAS.—For purposes of this
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title, if a contribution is made pursuant to sub-
paragraph (A) with respect to a qualified hurri-
cane distribution from an individual retirement
plan (as defined by section 7701(a)(37)), then, to
the extent of the amount of the contribution, the
qualified hurricane distribution shall be treated
as a distribution described in section 408(d)(3)
and as having been transferred to the eligible re-
tirement plan in a direct trustee to trustee trans-
fer within 60 days of the distribution.
‘‘(4) 
DEFINITIONS.—For 
purposes 
of 
this
subsection—
‘‘(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 Hurri-
cane Katrina disaster area and who has
sustained an economic loss by reason of
Hurricane Katrina,
‘‘(ii) any distribution (which is not de-
scribed in clause (i)) from an eligible retire-
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ment plan made on or after September 23,
2005, and before January 1, 2007, to an in-
dividual whose principal place of abode on
September 23, 2005, is located in the Hur-
ricane Rita disaster area and who has sus-
tained an economic loss by reason of Hurri-
cane Rita, and
‘‘(iii) any distribution (which is not
described in clause (i) or (ii)) from an eligi-
ble retirement plan made on or after Octo-
ber 23, 2005, and before January 1, 2007,
to an individual whose principal place of
abode on October 23, 2005, is located in the
Hurricane Wilma disaster area and who
has sustained an economic loss by reason of
Hurricane Wilma.
‘‘(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
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any taxable year, any amount required to be in-
cluded 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 sub-
paragraph (A), rules similar to the rules of sub-
paragraph (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 hurricane
distributions shall not be treated as eligible roll-
over distributions.
‘‘(B) QUALIFIED
HURRICANE
DISTRIBU-
TIONS
TREATED
AS
MEETING
PLAN
DISTRIBU-
TION REQUIREMENTS.—For purposes this title, a
qualified hurricane distribution shall be treated
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.—
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‘‘(A) IN GENERAL.—Any individual who re-
ceived 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 eligi-
ble retirement plan (as defined in section
402(c)(8)(B)) of which such individual is a bene-
ficiary 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 purposes
of this subsection.
‘‘(2) QUALIFIED
DISTRIBUTION.—For purposes
of this subsection—
‘‘(A) IN GENERAL.—The term ‘qualified dis-
tribution’ means any qualified Katrina distribu-
tion, any qualified Rita distribution, and any
qualified Wilma distribution.
‘‘(B) QUALIFIED KATRINA DISTRIBUTION.—
The term ‘qualified Katrina distribution’ means
any distribution—
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‘‘(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),
‘‘(ii) received after February 28, 2005,
and before August 29, 2005, and
‘‘(iii) which was to be used to purchase
or construct a principal residence in the
Hurricane Katrina disaster area, but which
was not so purchased or constructed on ac-
count of Hurricane Katrina.
‘‘(C) QUALIFIED RITA DISTRIBUTION.—The
term ‘qualified Rita distribution’ means any dis-
tribution (other than a qualified Katrina dis-
tribution)—
‘‘(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),
‘‘(ii) received after February 28, 2005,
and before September 24, 2005, and
‘‘(iii) which was to be used to purchase
or construct a principal residence in the
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Hurricane Rita disaster area, but which
was not so purchased or constructed on ac-
count of Hurricane Rita.
‘‘(D) QUALIFIED
WILMA
DISTRIBUTION.—
The term ‘qualified Wilma distribution’ means
any distribution (other than a qualified Katrina
distribution or a qualified Rita 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),
‘‘(ii) received after February 28, 2005,
and before October 24, 2005, and
‘‘(iii) which was to be used to purchase
or construct a principal residence in the
Hurricane Wilma disaster area, but which
was not so purchased or constructed on ac-
count of Hurricane Wilma.
‘‘(3) APPLICABLE PERIOD.—For purposes of this
subsection, the term ‘applicable period’ means—
‘‘(A) with respect to any qualified Katrina
distribution, the period beginning on August 25,
2005, and ending on February 28, 2006,
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‘‘(B) with respect to any qualified Rita dis-
tribution, the period beginning on September 23,
2005, and ending on February 28, 2006, and
‘‘(C) with respect to any qualified Wilma
distribution, the period beginning on October 23,
2005, and ending on February 28, 2006.
‘‘(c) LOANS FROM QUALIFIED PLANS.—
‘‘(1) INCREASE IN LIMIT ON LOANS NOT TREATED
AS DISTRIBUTIONS.—In the case of any loan from a
qualified employer plan (as defined under section
72(p)(4)) to a qualified individual made during the
applicable period—
‘‘(A) clause (i) of section 72(p)(2)(A) shall
be 
applied 
by 
substituting 
‘$100,000’ 
for
‘$50,000’, and
‘‘(B) clause (ii) of such section shall be ap-
plied by substituting ‘the present value of the
nonforfeitable accrued benefit of the employee
under the plan’ for ‘one-half of the present value
of the nonforfeitable accrued benefit of the em-
ployee under the plan’.
‘‘(2) DELAY OF REPAYMENT.—In the case of a
qualified individual with an outstanding loan on or
after the qualified beginning date from a qualified
employer plan (as defined in section 72(p)(4))—
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‘‘(A) if the due date pursuant to subpara-
graph (B) or (C) of section 72(p)(2) for any re-
payment with respect to such loan occurs during
the period beginning on the qualified beginning
date and ending on December 31, 2006, such due
date shall be delayed for 1 year,
‘‘(B) any subsequent repayments with re-
spect to any such loan shall be appropriately ad-
justed to reflect the delay in the due date under
paragraph (1) and any interest accruing during
such delay, and
‘‘(C) in determining the 5-year period and
the term of a loan under subparagraph (B) or
(C) of section 72(p)(2), the period described in
subparagraph (A) shall be disregarded.
‘‘(3) QUALIFIED INDIVIDUAL.—For purposes of
this subsection—
‘‘(A) IN GENERAL.—The term ‘qualified in-
dividual’ 
means 
any 
qualified 
Hurricane
Katrina individual, any qualified Hurricane
Rita individual, and any qualified Hurricane
Wilma individual.
‘‘(B) QUALIFIED HURRICANE KATRINA INDI-
VIDUAL.—The 
term 
‘qualified 
Hurricane
Katrina individual’ means an individual whose
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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.
‘‘(C) QUALIFIED
HURRICANE
RITA
INDI-
VIDUAL.—The term ‘qualified Hurricane Rita
individual’ means an individual (other than a
qualified Hurricane Katrina 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 rea-
son of Hurricane Rita.
‘‘(D) QUALIFIED HURRICANE WILMA INDI-
VIDUAL.—The term ‘qualified Hurricane Wilma
individual’ means an individual (other than a
qualified Hurricane Katrina individual or a
qualified Hurricane Rita individual) whose
principal place of abode on October 23, 2005, is
located in the Hurricane Wilma disaster area
and who has sustained an economic loss by rea-
son of Hurricane Wilma.
‘‘(4) APPLICABLE PERIOD; QUALIFIED BEGINNING
DATE.—For purposes of this subsection—
‘‘(A) HURRICANE KATRINA.—In the case of
any qualified Hurricane Katrina individual—
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‘‘(i) the applicable period is the period
beginning on September 24, 2005, and end-
ing on December 31, 2006, and
‘‘(ii) the qualified beginning date is
August 25, 2005.
‘‘(B) HURRICANE RITA.—In the case of any
qualified Hurricane Rita individual—
‘‘(i) the applicable period is the period
beginning on the date of the enactment of
this subsection and ending on December 31,
2006, and
‘‘(ii) the qualified beginning date is
September 23, 2005.
‘‘(C) HURRICANE WILMA.—In the case of
any qualified Hurricane Wilma individual—
‘‘(i) the applicable period is the period
beginning on the date of the enactment of
this subparagraph and ending on December
31, 2006, and
‘‘(ii) the qualified beginning date is
October 23, 2005.
‘‘(d) PROVISIONS RELATING TO PLAN AMENDMENTS.—
‘‘(1) IN GENERAL.—If this subsection applies to
any amendment to any plan or annuity contract,
such plan or contract shall be treated as being oper-
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ated in accordance with the terms of the plan during
the period described in paragraph (2)(B)(i).
‘‘(2) AMENDMENTS TO WHICH SUBSECTION AP-
PLIES.—
‘‘(A) IN
GENERAL.—This subsection shall
apply to any amendment to any plan or annu-
ity contract which is made—
‘‘(i) pursuant to any provision of this
section, or pursuant to any regulation
issued by the Secretary or the Secretary of
Labor under any provision of this section,
and
‘‘(ii) on or before the last day of the
first plan year beginning on or after Janu-
ary 1, 2007, or such later date as the Sec-
retary may prescribe.
In the case of a governmental plan (as defined
in section 414(d)), clause (ii) shall be applied by
substituting the date which is 2 years after the
date otherwise applied under clause (ii).
‘‘(B) CONDITIONS.—This subsection shall
not apply to any amendment unless—
‘‘(i) during the period—
‘‘(I) beginning on the date that
this section or the regulation described
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in subparagraph (A)(i) takes effect (or
in the case of a plan or contract
amendment not required by this sec-
tion or such regulation, the effective
date specified by the plan), and
‘‘(II) ending on the date described
in subparagraph (A)(ii) (or, if earlier,
the date the plan or contract amend-
ment is adopted),
the plan or contract is operated as if such
plan or contract amendment were in effect;
and
‘‘(ii) such plan or contract amendment
applies retroactively for such period.
‘‘SEC. 1400R. EMPLOYMENT RELIEF.
‘‘(a) EMPLOYEE RETENTION CREDIT FOR EMPLOYERS
AFFECTED BY HURRICANE KATRINA.—
‘‘(1) IN GENERAL.—For purposes of section 38,
in the case of an eligible employer, the Hurricane
Katrina employee retention credit for any taxable
year is an amount equal to 40 percent of the qualified
wages with respect to each eligible employee of such
employer for such taxable year. For purposes of the
preceding sentence, the amount of qualified wages
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which may be taken into account with respect to any
individual shall not exceed $6,000.
‘‘(2) 
DEFINITIONS.—For 
purposes 
of 
this
subsection—
‘‘(A) ELIGIBLE EMPLOYER.—The term ‘eli-
gible employer’ means any employer—
‘‘(i) which conducted an active trade or
business on August 28, 2005, in the GO
Zone, and
‘‘(ii) with respect to whom the trade or
business described in clause (i) is inoperable
on any day after August 28, 2005, and be-
fore January 1, 2006, as a result of damage
sustained by reason of Hurricane Katrina.
‘‘(B) ELIGIBLE EMPLOYEE.—The term ‘eli-
gible employee’ means with respect to an eligible
employer an employee whose principal place of
employment on August 28, 2005, with such eligi-
ble employer was in the GO Zone.
‘‘(C) QUALIFIED WAGES.—The term ‘quali-
fied wages’ means wages (as defined in section
51(c)(1), 
but 
without 
regard 
to 
section
3306(b)(2)(B)) paid or incurred by an eligible
employer with respect to an eligible employee on
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any day after August 28, 2005, and before Janu-
ary 1, 2006, which occurs during the period—
‘‘(i) beginning on the date on which
the trade or business described in subpara-
graph (A) first became inoperable at the
principal place of employment of the em-
ployee 
immediately 
before 
Hurricane
Katrina, and
‘‘(ii) ending on the date on which such
trade or business has resumed significant
operations at such principal place of em-
ployment.
Such term shall include wages paid without re-
gard to whether the employee performs no serv-
ices, performs services at a different place of em-
ployment than such principal place of employ-
ment, or performs services at such principal
place of employment before significant operations
have resumed.
‘‘(3) CERTAIN RULES TO APPLY.—For purposes
of this subsection, rules similar to the rules of sections
51(i)(1) and 52 shall apply.
‘‘(4) EMPLOYEE
NOT
TAKEN
INTO
ACCOUNT
MORE THAN ONCE.—An employee shall not be treated
as an eligible employee for purposes of this subsection
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for any period with respect to any employer if such
employer is allowed a credit under section 51 with re-
spect to such employee for such period.
‘‘(b) EMPLOYEE RETENTION CREDIT FOR EMPLOYERS
AFFECTED BY HURRICANE RITA.—
‘‘(1) IN GENERAL.—For purposes of section 38,
in the case of an eligible employer, the Hurricane
Rita employee retention credit for any taxable year is
an amount equal to 40 percent of the qualified wages
with respect to each eligible employee of such em-
ployer for such taxable year. For purposes of the pre-
ceding sentence, the amount of qualified wages which
may be taken into account with respect to any indi-
vidual shall not exceed $6,000.
‘‘(2) 
DEFINITIONS.—For 
purposes 
of 
this
subsection—
‘‘(A) ELIGIBLE EMPLOYER.—The term ‘eli-
gible employer’ means any employer—
‘‘(i) which conducted an active trade or
business on September 23, 2005, in the Rita
GO Zone, and
‘‘(ii) with respect to whom the trade or
business described in clause (i) is inoperable
on any day after September 23, 2005, and
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before January 1, 2006, as a result of dam-
age sustained by reason of Hurricane Rita.
‘‘(B) ELIGIBLE EMPLOYEE.—The term ‘eli-
gible employee’ means with respect to an eligible
employer an employee whose principal place of
employment on September 23, 2005, with such
eligible employer was in the Rita GO Zone.
‘‘(C) QUALIFIED WAGES.—The term ‘quali-
fied wages’ means wages (as defined in section
51(c)(1), 
but 
without 
regard 
to 
section
3306(b)(2)(B)) paid or incurred by an eligible
employer with respect to an eligible employee on
any day after September 23, 2005, and before
January 1, 2006, which occurs during the
period—
‘‘(i) beginning on the date on which
the trade or business described in subpara-
graph (A) first became inoperable at the
principal place of employment of the em-
ployee immediately before Hurricane Rita,
and
‘‘(ii) ending on the date on which such
trade or business has resumed significant
operations at such principal place of em-
ployment.
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Such term shall include wages paid without re-
gard to whether the employee performs no serv-
ices, performs services at a different place of em-
ployment than such principal place of employ-
ment, or performs services at such principal
place of employment before significant operations
have resumed.
‘‘(3) CERTAIN RULES TO APPLY.—For purposes
of this subsection, rules similar to the rules of sections
51(i)(1) and 52 shall apply.
‘‘(4) EMPLOYEE
NOT
TAKEN
INTO
ACCOUNT
MORE THAN ONCE.—An employee shall not be treated
as an eligible employee for purposes of this subsection
for any period with respect to any employer if such
employer is allowed a credit under subsection (a) or
section 51 with respect to such employee for such pe-
riod.
‘‘(c) EMPLOYEE RETENTION CREDIT FOR EMPLOYERS
AFFECTED BY HURRICANE WILMA.—
‘‘(1) IN GENERAL.—For purposes of section 38,
in the case of an eligible employer, the Hurricane
Wilma employee retention credit for any taxable year
is an amount equal to 40 percent of the qualified
wages with respect to each eligible employee of such
employer for such taxable year. For purposes of the
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preceding sentence, the amount of qualified wages
which may be taken into account with respect to any
individual shall not exceed $6,000.
‘‘(2) 
DEFINITIONS.—For 
purposes 
of 
this
subsection—
‘‘(A) ELIGIBLE EMPLOYER.—The term ‘eli-
gible employer’ means any employer—
‘‘(i) which conducted an active trade or
business on October 23, 2005, in the Wilma
GO Zone, and
‘‘(ii) with respect to whom the trade or
business described in clause (i) is inoperable
on any day after October 23, 2005, and be-
fore January 1, 2006, as a result of damage
sustained by reason of Hurricane Wilma.
‘‘(B) ELIGIBLE EMPLOYEE.—The term ‘eli-
gible employee’ means with respect to an eligible
employer an employee whose principal place of
employment on October 23, 2005, with such eli-
gible employer was in the Wilma GO Zone.
‘‘(C) QUALIFIED WAGES.—The term ‘quali-
fied wages’ means wages (as defined in section
51(c)(1), 
but 
without 
regard 
to 
section
3306(b)(2)(B)) paid or incurred by an eligible
employer with respect to an eligible employee on
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any day after October 23, 2005, and before Jan-
uary 1, 2006, which occurs during the period—
‘‘(i) beginning on the date on which
the trade or business described in subpara-
graph (A) first became inoperable at the
principal place of employment of the em-
ployee 
immediately 
before 
Hurricane
Wilma, and
‘‘(ii) ending on the date on which such
trade or business has resumed significant
operations at such principal place of em-
ployment.
Such term shall include wages paid without re-
gard to whether the employee performs no serv-
ices, performs services at a different place of em-
ployment than such principal place of employ-
ment, or performs services at such principal
place of employment before significant operations
have resumed.
‘‘(3) CERTAIN RULES TO APPLY.—For purposes
of this subsection, rules similar to the rules of sections
51(i)(1) and 52 shall apply.
‘‘(4) EMPLOYEE
NOT
TAKEN
INTO
ACCOUNT
MORE THAN ONCE.—An employee shall not be treated
as an eligible employee for purposes of this subsection
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for any period with respect to any employer if such
employer is allowed a credit under subsection (a) or
(b) or section 51 with respect to such employee for
such period.
‘‘SEC. 1400S. ADDITIONAL TAX RELIEF PROVISIONS.
‘‘(a) TEMPORARY SUSPENSION OF LIMITATIONS ON
CHARITABLE CONTRIBUTIONS.—
‘‘(1) IN GENERAL.—Except as otherwise provided
in paragraph (2), section 170(b) shall not apply to
qualified contributions and such contributions shall
not be taken into account for purposes of applying
subsections (b) and (d) of section 170 to other con-
tributions.
‘‘(2) TREATMENT OF EXCESS CONTRIBUTIONS.—
For purposes of section 170—
‘‘(A) INDIVIDUALS.—In the case of an
individual—
‘‘(i) LIMITATION.—Any qualified con-
tribution shall be allowed only to the extent
that the aggregate of such contributions does
not exceed the excess of the taxpayer’s con-
tribution base (as defined in subparagraph
(F) of section 170(b)(1)) over the amount of
all other charitable contributions allowed
under section 170(b)(1).
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‘‘(ii) CARRYOVER.—If the aggregate
amount of qualified contributions made in
the contribution year (within the meaning
of section 170(d)(1)) exceeds the limitation
of clause (i), such excess shall be added to
the excess described in the portion of sub-
paragraph (A) of such section which pre-
cedes clause (i) thereof for purposes of ap-
plying such section.
‘‘(B) CORPORATIONS.—In the case of a
corporation—
‘‘(i) LIMITATION.—Any qualified con-
tribution shall be allowed only to the extent
that the aggregate of such contributions does
not exceed the excess of the taxpayer’s tax-
able income (as determined under para-
graph (2) of section 170(b)) over the
amount of all other charitable contributions
allowed under such paragraph.
‘‘(ii) CARRYOVER.—Rules similar to
the rules of subparagraph (A)(ii) shall
apply for purposes of this subparagraph.
‘‘(3) EXCEPTION
TO
OVERALL
LIMITATION
ON
ITEMIZED DEDUCTIONS.—So much of any deduction
allowed under section 170 as does not exceed the
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qualified contributions paid during the taxable year
shall not be treated as an itemized deduction for pur-
poses of section 68.
‘‘(4) QUALIFIED CONTRIBUTIONS.—
‘‘(A) IN
GENERAL.—For purposes of this
subsection, the term ‘qualified contribution’
means any charitable contribution (as defined in
section 170(c)) if—
‘‘(i) such contribution is paid during
the period beginning on August 28, 2005,
and ending on December 31, 2005, in cash
to an organization described in section
170(b)(1)(A) (other than an organization
described in section 509(a)(3)),
‘‘(ii) in the case of a contribution paid
by a corporation, such contribution is for
relief efforts related to Hurricane Katrina,
Hurricane Rita, or Hurricane Wilma, and
‘‘(iii) the taxpayer has elected the ap-
plication of this subsection with respect to
such contribution.
‘‘(B) EXCEPTION.—Such term shall not in-
clude a contribution if the contribution is for es-
tablishment of a new, or maintenance in an ex-
isting, segregated fund or account with respect to
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which the donor (or any person appointed or
designated by such donor) has, or reasonably ex-
pects to have, advisory privileges with respect to
distributions or investments by reason of the do-
nor’s status as a donor.
‘‘(C) APPLICATION OF ELECTION TO PART-
NERSHIPS AND S CORPORATIONS.—In the case of
a partnership or S corporation, the election
under subparagraph (A)(iii) shall be made sepa-
rately by each partner or shareholder.
‘‘(b) SUSPENSION OF CERTAIN LIMITATIONS ON PER-
SONAL CASUALTY LOSSES.—Paragraphs (1) and (2)(A) of
section 165(h) shall not apply to losses described in section
165(c)(3)—
‘‘(1) which arise in the Hurricane Katrina dis-
aster area on or after August 25, 2005, and which are
attributable to Hurricane Katrina,
‘‘(2) which arise in the Hurricane Rita disaster
area on or after September 23, 2005, and which are
attributable to Hurricane Rita, or
‘‘(3) which arise in the Hurricane Wilma dis-
aster area on or after October 23, 2005, and which
are attributable to Hurricane Wilma.
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In the case of any other losses, section 165(h)(2)(A) shall
be applied without regard to the losses referred to in the
preceding sentence.
‘‘(c) REQUIRED EXERCISE
OF AUTHORITY UNDER
SECTION 7508A.—In the case of any taxpayer determined
by the Secretary to be affected by the Presidentially declared
disaster relating to Hurricane Katrina, Hurricane Rita, or
Hurricane Wilma, any relief provided by the Secretary
under section 7508A shall be for a period ending not earlier
than February 28, 2006.
‘‘(d) SPECIAL RULE FOR DETERMINING EARNED IN-
COME.—
‘‘(1) IN GENERAL.—In the case of a qualified in-
dividual, if the earned income of the taxpayer for the
taxable year which includes the applicable date is less
than the earned income of the taxpayer for the pre-
ceding taxable year, the credits allowed under sections
24(d) and 32 may, at the election of the taxpayer, be
determined by substituting—
‘‘(A) such earned income for the preceding
taxable year, for
‘‘(B) such earned income for the taxable
year which includes the applicable date.
‘‘(2) QUALIFIED INDIVIDUAL.—For purposes of
this subsection—
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‘‘(A) IN GENERAL.—The term ‘qualified in-
dividual’ 
means 
any 
qualified 
Hurricane
Katrina individual, any qualified Hurricane
Rita individual, and any qualified Hurricane
Wilma individual.
‘‘(B) QUALIFIED HURRICANE KATRINA INDI-
VIDUAL.—The 
term 
‘qualified 
Hurricane
Katrina individual’ means any individual whose
principal place of abode on August 25, 2005,
was located—
‘‘(i) in the GO Zone, or
‘‘(ii) in the Hurricane Katrina dis-
aster area (but outside the GO Zone) and
such individual was displaced from such
principal place of abode by reason of Hur-
ricane Katrina.
‘‘(C) QUALIFIED
HURRICANE
RITA
INDI-
VIDUAL.—The term ‘qualified Hurricane Rita
individual’ means any individual (other than a
qualified Hurricane Katrina individual) whose
principal place of abode on September 23, 2005,
was located—
‘‘(i) in the Rita GO Zone, or
‘‘(ii) in the Hurricane Rita disaster
area (but outside the Rita GO Zone) and
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such individual was displaced from such
principal place of abode by reason of Hur-
ricane Rita.
‘‘(D) QUALIFIED HURRICANE WILMA INDI-
VIDUAL.—The term ‘qualified Hurricane Wilma
individual’ means any individual whose prin-
cipal place of abode on October 23, 2005, was
located—
‘‘(i) in the Wilma GO Zone, or
‘‘(ii) in the Hurricane Wilma disaster
area (but outside the Wilma GO Zone) and
such individual was displaced from such
principal place of abode by reason of Hur-
ricane Wilma.
‘‘(3) APPLICABLE DATE.—For purposes of this
subsection, the term ‘applicable date’ means—
‘‘(A) in the case of a qualified Hurricane
Katrina individual, August 25, 2005,
‘‘(B) in the case of a qualified Hurricane
Rita individual, September 23, 2005, and
‘‘(C) in the case of a qualified Hurricane
Wilma individual, October 23, 2005.
‘‘(4) EARNED
INCOME.—For purposes of this
subsection, the term ‘earned income’ has the meaning
given such term under section 32(c).
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‘‘(5) SPECIAL RULES.—
‘‘(A) APPLICATION
TO
JOINT
RETURNS.—
For purposes of paragraph (1), in the case of a
joint return for a taxable year which includes the
applicable date—
‘‘(i) such paragraph shall apply if ei-
ther spouse is a qualified individual, and
‘‘(ii) the earned income of the taxpayer
for the preceding taxable year shall be the
sum of the earned income of each spouse for
such preceding taxable year.
‘‘(B) UNIFORM
APPLICATION
OF
ELEC-
TION.—Any election made under paragraph (1)
shall apply with respect to both section 24(d)
and section 32.
‘‘(C) ERRORS TREATED AS MATHEMATICAL
ERROR.—For purposes of section 6213, an incor-
rect use on a return of earned income pursuant
to paragraph (1) shall be treated as a mathe-
matical or clerical error.
‘‘(D) NO
EFFECT
ON
DETERMINATION
OF
GROSS INCOME, ETC.—Except as otherwise pro-
vided in this subsection, this title shall be ap-
plied without regard to any substitution under
paragraph (1).
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‘‘(e) SECRETARIAL AUTHORITY TO MAKE ADJUST-
MENTS REGARDING TAXPAYER
AND DEPENDENCY STA-
TUS.—With respect to taxable years beginning in 2005 or
2006, the Secretary may make such adjustments in the ap-
plication of the internal revenue laws as may be necessary
to ensure that taxpayers do not lose any deduction or credit
or experience a change of filing status by reason of tem-
porary relocations by reason of Hurricane Katrina, Hurri-
cane Rita, or Hurricane Wilma. Any adjustments made
under the preceding sentence shall ensure that an indi-
vidual is not taken into account by more than one taxpayer
with respect to the same tax benefit.
‘‘SEC. 1400T. SPECIAL RULES FOR MORTGAGE REVENUE
BONDS.
‘‘(a) IN GENERAL.—In the case of financing provided
with respect to owner-occupied residences in the GO Zone,
the Rita GO Zone, or the Wilma GO Zone, section 143 shall
be applied—
‘‘(1) by treating any such residence in the Rita
GO Zone or the Wilma GO Zone as a targeted area
residence,
‘‘(2) by applying subsection (f)(3) thereof with-
out regard to subparagraph (A) thereof, and
‘‘(3) by substituting ‘$150,000’ for ‘$15,000’ in
subsection (k)(4) thereof.
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‘‘(b) APPLICATION.—Subsection (a) shall not apply to
financing provided after December 31, 2010.’’.
(b) CONFORMING AMENDMENTS.—
(1) Subsection (b) of section 38, as amended by
this Act, is amended by striking ‘‘and’’ at the end of
paragraph (26), by striking the period at the end of
paragraph (27) and inserting a comma, and by add-
ing at the end the following new paragraphs:
‘‘(28) the Hurricane Katrina employee retention
credit determined under section 1400R(a),
‘‘(29) the Hurricane Rita employee retention
credit determined under section 1400R(b), and
‘‘(30) the Hurricane Wilma employee retention
credit determined under section 1400R(c).’’.
(2) Section 280C(a), as amended by this Act, is
amended by striking ‘‘and 1400P(b)’’ and inserting
‘‘1400P(b), and 1400R’’.
(3) The table of sections for part II of subchapter
Y of chapter 1 is amended by adding at the end the
following new items:
‘‘Sec. 1400Q. Special rules for use of retirement funds.
‘‘Sec. 1400R. Employment relief.
‘‘Sec. 1400S. Additional tax relief provisions.’’.
(4) The following provisions of the Katrina
Emergency Tax Relief Act of 2005 are hereby re-
pealed:
(A) Title I.
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(B) Sections 202, 301, 402, 403(b), 406,
and 407.
TITLE III—OTHER PROVISIONS
SEC. 301. GULF COAST RECOVERY BONDS.
It is the sense of the Congress that the Secretary of
the Treasury, or the Secretary’s delegate, should designate
one or more series of bonds or certificates (or any portion
thereof) issued under section 3105 of title 31, United States
Code, as ‘‘Gulf Coast Recovery Bonds’’ in response to Hur-
ricanes Katrina, Rita, and Wilma.
SEC. 302. ELECTION TO INCLUDE COMBAT PAY AS EARNED
INCOME FOR PURPOSES OF EARNED INCOME
CREDIT.
(a) 
IN
GENERAL.—Subclause 
(II) 
of 
section
32(c)(2)(B)(vi) is amended by striking ‘‘January 1, 2006’’
and inserting ‘‘January 1, 2007’’.
(b) EFFECTIVE DATE.—The amendment made by sub-
section (a) shall apply to taxable years beginning after De-
cember 31, 2005.
SEC. 303. MODIFICATION OF EFFECTIVE DATE OF EXCEP-
TION FROM SUSPENSION RULES FOR CER-
TAIN 
LISTED 
AND 
REPORTABLE 
TRANS-
ACTIONS.
(a) EFFECTIVE DATE MODIFICATION.—
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(1) IN
GENERAL.—Paragraph (2) of section
903(d) of the American Jobs Creation Act of 2004 is
amended to read as follows:
‘‘(2) EXCEPTION FOR REPORTABLE OR LISTED
TRANSACTIONS.—
‘‘(A) IN GENERAL.—The amendments made
by subsection (c) shall apply with respect to in-
terest accruing after October 3, 2004.
‘‘(B) SPECIAL RULE FOR CERTAIN LISTED
AND REPORTABLE TRANSACTIONS.—
‘‘(i) IN GENERAL.—Except as provided
in clauses (ii), (iii), and (iv), the amend-
ments made by subsection (c) shall also
apply with respect to interest accruing on
or before October 3, 2004.
‘‘(ii) PARTICIPANTS
IN
SETTLEMENT
INITIATIVES.—Clause (i) shall not apply to
any transaction if, as of January 23,
2006—
‘‘(I) the taxpayer is participating
in a settlement initiative described in
Internal Revenue Service Announce-
ment 2005–80 with respect to such
transaction, or
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‘‘(II) the taxpayer has entered
into a settlement agreement pursuant
to such an initiative.
Subclause (I) shall not apply to any tax-
payer if, after January 23, 2006, the tax-
payer withdraws from, or terminates, par-
ticipation in the initiative or the Secretary
of the Treasury or the Secretary’s delegate
determines that a settlement agreement will
not be reached pursuant to the initiative
within a reasonable period of time.
‘‘(iii) TAXPAYERS
ACTING
IN
GOOD
FAITH.—The Secretary of the Treasury may
except from the application of clause (i)
any transaction in which the taxpayer has
acted reasonably and in good faith.
‘‘(iv) CLOSED TRANSACTIONS.—Clause
(i) shall not apply to a transaction if, as of
December 14, 2005—
‘‘(I) the assessment of all Federal
income taxes for the taxable year in
which the tax liability to which the in-
terest relates arose is prevented by the
operation of any law or rule of law, or
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‘‘(II) a closing agreement under
section 7121 has been entered into with
respect to the tax liability arising in
connection with the transaction.’’.
(2) EFFECTIVE DATE.—The amendment made by
this subsection shall take effect as if included in the
provisions of the American Jobs Creation Act of 2004
to which it relates.
(b) TREATMENT OF AMENDED RETURNS AND OTHER
SIMILAR NOTICES OF ADDITIONAL TAX OWED.—
(1) IN GENERAL.—Section 6404(g)(1) (relating
to suspension) is amended by adding at the end the
following new sentence: ‘‘If, after the return for a tax-
able year is filed, the taxpayer provides to the Sec-
retary 1 or more signed written documents showing
that the taxpayer owes an additional amount of tax
for the taxable year, clause (i) shall be applied by
substituting the date the last of the documents was
provided for the date on which the return is filed.’’.
(2) EFFECTIVE DATE.—The amendment made by
this subsection shall apply to documents provided on
or after the date of the enactment of this Act.
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SEC. 304. AUTHORITY FOR UNDERCOVER OPERATIONS.
Paragraph (6) of section 7608(c) (relating to applica-
tion of section) is amended by striking ‘‘January 1, 2006’’
both places is appears and inserting ‘‘January 1, 2007’’.
SEC. 305. DISCLOSURES OF CERTAIN TAX RETURN INFOR-
MATION.
(a) DISCLOSURES TO FACILITATE COMBINED EM-
PLOYMENT TAX REPORTING.—
(1) IN GENERAL.—Subparagraph (B) of section
6103(d)(5) (relating to termination) is amended by
striking ‘‘December 31, 2005’’ and inserting ‘‘Decem-
ber 31, 2006’’.
(2) EFFECTIVE DATE.—The amendment made by
paragraph (1) shall apply to disclosures after Decem-
ber 31, 2005.
(b) DISCLOSURES RELATING TO TERRORIST ACTIVI-
TIES.—
(1) 
IN
GENERAL.—Clause 
(iv) 
of 
section
6103(i)(3)(C) and subparagraph (E) of section
6103(i)(7) are each amended by striking ‘‘December
31, 2005’’ and inserting ‘‘December 31, 2006’’.
(2) EFFECTIVE DATE.—The amendments made
by paragraph (1) shall apply to disclosures after De-
cember 31, 2005.
(c) DISCLOSURES RELATING TO STUDENT LOANS.—
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(1) IN GENERAL.—Subparagraph (D) of section
6103(l)(13) (relating to termination) is amended by
striking ‘‘December 31, 2005’’ and inserting ‘‘Decem-
ber 31, 2006’’.
(2) EFFECTIVE DATE.—The amendment made by
paragraph (1) shall apply to requests made after De-
cember 31, 2005.
TITLE IV—TECHNICALS
Subtitle A—Tax Technicals
SEC. 401. SHORT TITLE.
This subtitle may be cited as the ‘‘Tax Technical Cor-
rections Act of 2005’’.
SEC. 402. AMENDMENTS RELATED TO ENERGY POLICY ACT
OF 2005.
(a) AMENDMENTS RELATED TO SECTION 1263.—
(1) Part VI of subchapter O of chapter 1 is re-
pealed.
(2) Section 1223 is amended by striking para-
graph (3) and by redesignating paragraphs (4)
through (16) as paragraphs (3) through (15), respec-
tively.
(3) Section 121(g) is amended by striking
‘‘1223(7)’’ and inserting ‘‘1223(6)’’.
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(4) Section 246(c)(3)(B) is amended by striking
‘‘paragraph (4) of section 1223’’ and inserting ‘‘para-
graph (3) of section 1223’’.
(5) Section 247(b)(2)(D) is amended by inserting
‘‘as in effect before its repeal’’ after ‘‘part VI of sub-
chapter O’’.
(6)(A) Section 1245(b) is amended by striking
paragraph (5) and redesignating paragraphs (6)
through (9) as paragraphs (5) through (8), respec-
tively.
(B) Section 1245(b)(3) is amended by striking
‘‘paragraph (7)’’ and inserting ‘‘paragraph (6)’’.
(7)(A) Section 1250(d) is amended by striking
paragraph (5) and redesignating paragraphs (6)
through (8) as paragraphs (5) through (7), respec-
tively.
(B) Section 1250(e)(2) is amended by striking
‘‘(3), or (5)’’ and inserting ‘‘or (3)’’.
(b) AMENDMENT RELATED TO SECTION 1301.—Clause
(ii) of section 45(c)(3)(A) is amended by striking ‘‘nonhaz-
ardous lignin waste material’’ and inserting ‘‘lignin mate-
rial’’.
(c) AMENDMENTS RELATED TO SECTION 1303.—
(1) Subsection (l) of section 54 is amended by
striking paragraph (5), and by redesignating para-
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graphs (6) and (7) as paragraphs (5) and (6), respec-
tively.
(2) Subsection (e) of section 1303 of the Energy
Policy Act of 2005 is amended to read as follows:
‘‘(e) EFFECTIVE DATES.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section shall
apply to bonds issued after December 31, 2005.
‘‘(2) SUBSECTION (C).—The amendments made
by subsection (c) shall apply to taxable years begin-
ning after December 31, 2005.’’.
(d) AMENDMENTS RELATED TO SECTION 1306.—
(1) Paragraph (2) of section 45J(c) is amended
to read as follows:
‘‘(2) PHASEOUT OF CREDIT.—
‘‘(A) IN
GENERAL.—The amount of the
credit determined under subsection (a) shall be
reduced by an amount which bears the same
ratio to the amount of the credit (determined
without regard to this paragraph) as—
‘‘(i) the amount by which the reference
price (as defined in section 45(e)(2)(C)) for
the calendar year in which the sale occurs
exceeds 8 cents, bears to
‘‘(ii) 3 cents.
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‘‘(B) PHASEOUT ADJUSTMENT BASED ON IN-
FLATION.—The 8 cent amount in subparagraph
(A) shall be adjusted by multiplying such
amount by the inflation adjustment factor (as
defined in section 45(e)(2)(B)) for the calendar
year in which the sale occurs. If any amount as
increased under the preceding sentence is not a
multiple of 0.1 cent, such amount shall be round-
ed to the nearest multiple of 0.1 cent.’’.
(2) Subsection (e) of section 45J is amended by
striking ‘‘(2),’’.
(e) AMENDMENT RELATED TO SECTION 1309.—Sub-
paragraph (B) of section 169(d)(5) is amended by adding
at beginning thereof ‘‘in the case of facility placed in service
in connection with a plant or other property placed in oper-
ation after December 31, 1975,’’.
(f) AMENDMENTS RELATED TO SECTION 1311.—
(1) Clause (i) of section 172(b)(1)(I) is amended
to read as follows:
‘‘(i) IN GENERAL.—At the election of
the taxpayer for any taxable year ending
after December 31, 2005, and before Janu-
ary 1, 2009, in the case of a net operating
loss for a taxable year ending after Decem-
ber 31, 2002, and before January 1, 2006,
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there shall be a net operating loss carryback
to each of the 5 taxable years preceding the
taxable year of such loss to the extent that
such loss does not exceed 20 percent of the
sum of the electric transmission property
capital expenditures and the pollution con-
trol facility capital expenditures of the tax-
payer for the taxable year preceding the
taxable year for which such election is
made.’’.
(2) Clause (ii) of section 172(b)(1)(I) is amended
by striking ‘‘in a taxable year’’ and inserting ‘‘for a
taxable year’’.
(3) Subparagraph (I) of section 172(b)(1) is
amended by striking clause (iv) and (v), by redesig-
nating clause (vi) as clause (v), and by inserting after
clause (iii) the following:
‘‘(iv) SPECIAL
RULES
RELATING
TO
CREDIT
OR
REFUND.—In the case of the
portion of the loss which is carried back 5
years by reason of clause (i)—
‘‘(I) an application under section
6411(a) with respect to such portion
shall not fail to be treated as timely
filed if filed within 24 months after the
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due date specified under such section,
and
‘‘(II) 
references 
in 
sections
6501(h), 6511(d)(2)(A), and 6611(f)(1)
to the taxable year in which such net
operating loss arises or results in a net
operating loss carryback shall be treat-
ed as references to the taxable year for
which such election is made.’’.
(g) AMENDMENT RELATED TO SECTION 1322.—Sub-
section (a) of section 45K is amended by striking ‘‘if the
taxpayer elects to have this section apply,’’.
(h) AMENDMENT RELATED TO SECTION 1331.—Para-
graph (3) of section 1250(b) is amended by striking ‘‘or by
section 179D’’.
(i) AMENDMENTS RELATED TO SECTION 1335.—
(1) Paragraph (1) of section 25D(b) is amended
by inserting ‘‘(determined without regard to sub-
section (c))’’ after ‘‘subsection (a)’’.
(2) Subparagraphs (A) and (B) of section
25D(e)(4) are amended to read as follows:
‘‘(A) MAXIMUM EXPENDITURES.—The max-
imum amount of expenditures which may be
taken into account under subsection (a) by all
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such individuals with respect to such dwelling
unit during such calendar year shall be—
‘‘(i) $6,667 in the case of any qualified
photovoltaic property expenditures,
‘‘(ii) $6,667 in the case of any quali-
fied solar water heating property expendi-
tures, and
‘‘(iii) $1,667 in the case of each half
kilowatt of capacity of qualified fuel cell
property (as defined in section 48(c)(1)) for
which qualified fuel cell property expendi-
tures are made.
‘‘(B) ALLOCATION OF EXPENDITURES.—The
expenditures allocated to any individual for the
taxable year in which such calendar year ends
shall be an amount equal to the lesser of—
‘‘(i) the amount of expenditures made
by such individual with respect to such
dwelling during such calendar year, or
‘‘(ii) the maximum amount of such ex-
penditures set forth in subparagraph (A)
multiplied by a fraction—
‘‘(I) the numerator of which is the
amount of such expenditures with re-
spect to such dwelling made by such
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individual during such calendar year,
and
‘‘(II) the denominator of which is
the total expenditures made by all such
individuals with respect to such dwell-
ing during such calendar year.’’.
(3)(A)(i) The matter preceding subparagraph
(A) of section 23(b)(4) is amended by striking ‘‘The
credit’’ and inserting ‘‘In the case of a taxable year
to which section 26(a)(2) does not apply, the credit’’.
(ii) Subsection (c) of section 23 is amended to
read as follows:
‘‘(c) CARRYFORWARDS OF UNUSED CREDIT.—
‘‘(1) RULE FOR YEARS IN WHICH ALL PERSONAL
CREDITS
ALLOWED
AGAINST
REGULAR
AND
ALTER-
NATIVE MINIMUM TAX.—In the case of a taxable year
to which section 26(a)(2) applies, if the credit allow-
able under subsection (a) for any taxable year exceeds
the limitation imposed by section 26(a)(2) for such
taxable year reduced by the sum of the credits allow-
able under this subpart (other than this section and
sections 25D and 1400C), such excess shall be carried
to the succeeding taxable year and added to the credit
allowable under subsection (a) for such taxable year.
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‘‘(2) RULE FOR OTHER YEARS.—In the case of a
taxable year to which section 26(a)(2) does not apply,
if the credit allowable under subsection (a) for any
taxable year exceeds the limitation imposed by sub-
section (b)(4) for such taxable year, such excess shall
be carried to the succeeding taxable year and added
to the credit allowable under subsection (a) for such
taxable year.
‘‘(3) LIMITATION.—No credit may be carried for-
ward under this subsection to any taxable year fol-
lowing the fifth taxable year after the taxable year in
which the credit arose. For purposes of the preceding
sentence, credits shall be treated as used on a first-in
first-out basis.’’.
(B)(i) The matter preceding subparagraph (A) of
section 24(b)(3) is amended by striking ‘‘The credit’’
and inserting ‘‘In the case of a taxable year to which
section 26(a)(2) does not apply, the credit’’.
(ii) Paragraph (1) of section 24(d) is amended
to read as follows:
‘‘(1) IN
GENERAL.—The aggregate credits al-
lowed to a taxpayer under subpart C shall be in-
creased by the lesser of—
‘‘(A) the credit which would be allowed
under this section without regard to this sub-
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section and the limitation under section 26(a)(2)
or subsection (b)(3), as the case may be, or
‘‘(B) the amount by which the aggregate
amount of credits allowed by this subpart (deter-
mined without regard to this subsection) would
increase if the limitation imposed by section
26(a)(2) or subsection (b)(3), as the case may be,
were increased by the excess (if any) of—
‘‘(i) 15 percent of so much of the tax-
payer’s earned income (within the meaning
of section 32) which is taken into account
in computing taxable income for the taxable
year as exceeds $10,000, or
‘‘(ii) in the case of a taxpayer with 3
or more qualifying children, the excess (if
any) of—
‘‘(I) the taxpayer’s social security
taxes for the taxable year, over
‘‘(II) the credit allowed under sec-
tion for the taxable year.
The amount of the credit allowed under this sub-
section shall not be treated as a credit allowed under
this subpart and shall reduce the amount of credit
otherwise allowable under subsection (a) without re-
gard to section 26(a)(2) or subsection (b)(3), as the
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case may be. For purposes of subparagraph (B), any
amount excluded from gross income by reason of sec-
tion 112 shall be treated as earned income which is
taken into account in computing taxable income for
the taxable year.’’.
(C) Subparagraph (C) of section 25(e)(1) is
amended to read as follows:
‘‘(C) APPLICABLE
TAX
LIMIT.—For pur-
poses of this paragraph, the term ‘applicable tax
limit’ means—
‘‘(i) in the case of a taxable year to
which section 26(a)(2) applies, the limita-
tion imposed by section 26(a)(2) for the tax-
able year reduced by the sum of the credits
allowable under this subpart (other than
this section and sections 23, 25D, and
1400C), and
‘‘(ii) in the case of a taxable year to
which section 26(a)(2) does not apply, the
limitation imposed by section 26(a)(1) for
the taxable year reduced by the sum of the
credits allowable under this subpart (other
than this section and sections 23, 24, 25B,
25D, and 1400C).’’.