169 
that helps prepare individuals for the apprenticeship pro-
gram and for the basics tests necessary to become an ap-
prentice. 
(b) CERTIFICATION.—An apprenticeship program 
may be certified for purposes of this section if such pro-
gram— 
(1) is certified by a State employment services 
authority or other local authority that oversees ap-
prenticeship and job training programs; or 
(2) is registered with the Bureau of Apprentice-
ship and Training of the Department of Labor 
under part 29 of chapter 1 of title 29, Code of Fed-
eral Regulations. 
(c) DEFINITIONS.—In this section: 
(1) The term ‘‘hurricane reconstruction con-
tractor’’ means a person or entity receiving Federal 
funds provided under the Robert T. Stafford Dis-
aster Relief and Emergency Assistance Act (42 
U.S.C 5121 et seq.), or party to a contract funded 
under such Act, for repair or reconstruction in the 
regions affected by Hurricane Katrina. 
(2) The term ‘‘regions affected by Hurricane 
Katrina’’ means a county or parish in Mississippi, 
Alabama, or Texas, or a parish in Louisiana, where 
a major disaster has been declared under section
170 
401 of the Robert T. Stafford Disaster Relief and 
Emergency Assistance Act (42 U.S.C 5170) as a re-
sult of Hurricane Katrina. 
SEC. 807. RESTATEMENT OF FULL APPLICATION OF STATU-
TORY REQUIREMENTS OF EQUAL EMPLOY-
MENT OPPORTUNITY APPLICABLE TO CON-
TRACTS AND SUBCONTRACTS TO PROVIDE 
HURRICANE KATRINA RELIEF. 
(a) CONTINUING NONDISCRIMINATION REQUIRED IN 
CONTRACTS AND SUBCONTRACTS TO PROVIDE HURRI-
CANE KATRINA RELIEF.—The provisions of— 
(1) Executive Order No. 11246 (42 U.S.C. 
2000e–1 note), excluding section 204 of such order, 
(2) section 503 of the Rehabilitation Act of 
1973 (29 U.S.C. 793), excluding subsection (c) of 
such section, and 
(3) section 4212 of title 38 of the United States 
Code, 
shall apply with respect to contracts and subcontracts en-
tered into to provide Hurricane Katrina relief, in the same 
manner as such provisions apply to contracts and sub-
contracts with respect to which the Secretary of Labor has 
not granted any waiver or any exemption with respect to 
any of such provisions.
171 
(b) WAIVERS AND EXEMPTIONS VOID.—Every waiver 
of, and every exemption from, the application of any provi-
sion of law referred to in subsection (a) granted by the 
Secretary of Labor with respect to contracts and sub-
contracts to provide Hurricane Katrina relief, granted be-
fore the date of the enactment of the Act are void as of 
the date of the enactment of this Act. 
Subtitle B—Disaster Loans and 
Small Business Relief 
SEC. 811. DEFINITIONS. 
In this subtitle— 
(1) the terms ‘‘Administration’’ and ‘‘Adminis-
trator’’ mean the Small Business Administration 
and the Administrator thereof, respectively; 
(2) the term ‘‘Disaster Area’’ means an area 
which the President has designated as a disaster 
area as a result of Hurricane Katrina of August 
2005; and 
(3) the term ‘‘small business concern’’ has the 
same meaning as under section 3 of the Small Busi-
ness Act (15 U.S.C. 632). 
SEC. 812. DISASTER LOANS AFTER HURRICANE KATRINA. 
(a) LOANS
TO NONPROFITS.—The Administrator 
may make a loan under section 7(b) of the Small Business 
Act (15 U.S.C. 636(b)) (either directly or in cooperation
172 
with a bank or other lending institution through agree-
ments to participate on an immediate or deferred basis) 
to a nonprofit organization located or operating in a Dis-
aster Area or providing services to persons who have evac-
uated from a Disaster Area. 
(b) INCREASED LOAN CAPS.— 
(1) AGGREGATE
LOAN
AMOUNTS.—Except as 
provided in paragraph (2), the aggregate amount of 
all loans outstanding and committed to a borrower 
under such section (except for loans under para-
graph (5) or (6) of such section) made by reason of 
Hurricane Katrina, may not exceed $10,000,000. 
(2) WAIVER
AUTHORITY.—The Administrator 
may, at the discretion of the Administrator, waive 
the aggregate loan amount established under para-
graph (1). 
(c) DEFERMENT OF DISASTER LOAN PAYMENTS.— 
(1) IN GENERAL.—Notwithstanding any other 
provision of law, payments of principal and interest 
on a loan under section 7(b) of the Small Business 
Act (15 U.S.C. 636(b)) to a borrower located in a 
Disaster Area made before August 24, 2007, shall 
be deferred, and no interest shall accrue with respect 
to such loan, during the time period described in 
paragraph (2).
173 
(2) TIME PERIOD.— 
(A) IN
GENERAL.—The time period re-
ferred to in paragraph (1) is the one-year pe-
riod that begins on the latter of the following 
dates: 
(i) The date of the enactment of this 
subtitle. 
(ii) The date on which the loan is 
made. 
(B) EXTENSION.—The Administrator may 
extend the time period described in subpara-
graph (A) for one year after the date on which 
it would otherwise expire, if the Administrator 
finds that such an extension is appropriate. 
(3) RESUMPTION OF PAYMENTS.—Upon the ex-
piration of the time period described in paragraph 
(2), the payment of periodic installments of principal 
and interest shall be required with respect to a loan 
for which payments are deferred under paragraph 
(1) in the same manner and subject to the same 
terms and conditions as would otherwise apply. 
(d) REFINANCING DISASTER LOANS AFTER HURRI-
CANE KATRINA.— 
(1) REFINANCING PERMITTED.—A small busi-
ness concern that is located in a Disaster Area or
174 
was located in such an area as of August 24, 2005, 
may refinance any loan made under section 7(b) of 
the Small Business Act (15 U.S.C. 636(b)) that, as 
of August 24, 2005, was outstanding as to principal 
or interest, and the refinanced amount shall be con-
sidered to be part of the new loan for purposes of 
this subsection and section 7(b) of the Small Busi-
ness Act (15 U.S.C. 636(b)). 
(2) NO EFFECT ON ELIGIBILITY FOR OTHER 
LOANS.—A refinancing under paragraph (1) by a 
small business concern shall have no effect on the 
eligibility of that small business concern for any 
other loan under the Small Business Act (15 U.S.C. 
632 et seq.). 
(3) INTEREST RATE.—A loan under this sub-
section shall be made at the same interest rate as 
economic injury loans under section 7(b)(2) of the 
Small Business Act (15 U.S.C. 636(b)(2)). 
(e) REFINANCING BUSINESS DEBT.— 
(1) REFINANCING PERMITTED.—A small busi-
ness concern that is located in a Disaster Area or 
was located in such an area as of August 24, 2005, 
may refinance any business debt of that small busi-
ness concern that was outstanding as to principal or 
interest as of August 24, 2005.
175 
(2) PRINCIPAL AND INTEREST.—With respect 
to a refinancing under this subsection, payments of 
principal shall be deferred, and interest may accrue, 
during the 1-year period beginning on the date of 
the refinancing, and the refinanced amount shall be 
considered to be part of a new loan for purposes of 
this subsection and section 7(b) of the Small Busi-
ness Act (15 U.S.C. 636(b)). 
(3) RESUMPTION OF PAYMENTS.—Upon the ex-
piration of the one-year period described in para-
graph (2), the payment of periodic installments of 
principal and interest shall be required with respect 
to a refinancing for which payments are deferred 
under such paragraph in the same manner and sub-
ject to the same terms and conditions as would oth-
erwise apply. 
(4) INTEREST RATE.—A loan under this sub-
section shall be made at the same interest rate as 
economic injury loans under section 7(b)(2) of the 
Small Business Act (15 U.S.C. 636(b)(2)). 
(f) EXTENDED
APPLICATION
PERIOD.—Notwith-
standing any other provision of law, the Administrator 
shall accept applications for assistance under this section 
from small business concerns adversely affected by Hurri-
cane Katrina until one year after the date on which the
176 
President designated the area as a disaster area as a re-
sult of Hurricane Katrina. 
(g) NO SALE.—No loan under this section made as 
a result of Hurricane Katrina may be sold. 
SEC. 813. NATIONWIDE DISASTER LOANS. 
(a) LOANS AUTHORIZED.—The Administrator may 
make such loans as the Administrator determines appro-
priate under section 7(b) of the Small Business Act (15 
U.S.C. 636(b)) (either directly or in cooperation with 
banks or other lending institutions through agreements to 
participate on an immediate or deferred basis) to a small 
business concern, small agricultural cooperative, small 
nursery, or small producer cooperative located anywhere 
in the United States that demonstrates a direct adverse 
economic impact caused by Hurricane Katrina, based on 
such criteria as the Administrator may set by rule, regula-
tion, or order. 
(b) DISASTER MITIGATION.— 
(1) IN
GENERAL.—Section 7(b)(1)(A) of the 
Small Business Act (15 U.S.C. 636(b)(1)(A)) is 
amended by inserting ‘‘of the aggregate costs of 
such damage or destruction (whether or not com-
pensated for by insurance or otherwise)’’ after ‘‘20 
per centum’’.
177 
(2) EFFECTIVE DATE.—The amendment made 
by paragraph (1) shall apply with respect to a loan 
or guarantee made after the date of enactment of 
this Act. 
(c) TECHNICAL AMENDMENTS.—Section 7(b) of the 
Small Business Act (15 U.S.C. 636(b)) is amended— 
(1) in the matter preceding paragraph (1), by 
striking ‘‘the, Administration’’ and inserting ‘‘the 
Administration’’; 
(2) in paragraph (2)(A), by striking ‘‘Disaster 
Relief and Emergency Assistance Act’’ and inserting 
‘‘Robert T. Stafford Disaster Relief and Emergency 
Assistance Act (42 U.S.C. 5121 et seq.)’’; and 
(3) in the undesignated matter at the end— 
(A) by striking ‘‘, (2), and (4)’’ and insert-
ing ‘‘and (2)’’; and 
(B) by striking ‘‘, (2), or (4)’’ and insert-
ing ‘‘(2)’’. 
(d) DISASTER LOAN ADDITIONAL AMOUNTS.—In ad-
dition to any other amounts otherwise appropriated for 
such purpose, there is authorized to be appropriated to 
the Administration $86,000,000, to make loans under sec-
tion 7(b) of the Small Business Act.
178 
SEC. 814. SMALL BUSINESS EMERGENCY RELIEF. 
(a) 
BUSINESS
LOAN
PROGRAMS.—Section 
20(e)(1)(B) of the Small Business Act (15 U.S.C. 631 
note) is amended— 
(1) in the matter preceding clause (i), by strik-
ing 
‘‘$25,050,000,000’’ 
and 
inserting 
‘‘$40,050,000,000’’; 
(2) in clause (i), by striking ‘‘$17,000,000,000’’ 
and inserting ‘‘$27,000,000,000’’; and 
(3) in clause (ii), by striking ‘‘$7,500,000,000’’ 
and inserting ‘‘$12,500,000,000’’. 
(b) GRANTS TO STATES ADVERSELY AFFECTED BY 
HURRICANE KATRINA.— 
(1) IN GENERAL.—The Secretary of Commerce 
shall make grants to the States of Louisiana, Ala-
bama, and Mississippi to be used by appropriate 
State agencies in accordance with this subsection. 
(2) DISBURSEMENT OF FUNDS.—The Secretary 
of Commerce shall make grants under paragraph (1) 
in the most expeditious manner possible to the des-
ignated States, based on— 
(A) the number of businesses directly dam-
aged or disrupted by reason of Hurricane 
Katrina in the State; 
(B) the number of residents displaced from 
the State by reason of Hurricane Katrina;
179 
(C) the number of jobs lost or disrupted by 
reason of Hurricane Katrina in the State; 
(D) the extent of economic disruption by 
reason of Hurricane Katrina in the State; and 
(E) the number of evacuees from any other 
State by reason of Hurricane Katrina to whom 
the designated State is providing assistance. 
(3) USE OF FUNDS.— 
(A) IN GENERAL.—Grants awarded to a 
State under paragraph (1) shall be used by the 
State to provide bridge grants and loans, which 
may be made to any person located in a Dis-
aster Area who was directly adversely affected 
by Hurricane Katrina, to assist such person in 
covering costs until the person is able to obtain 
loans through Administration assistance pro-
grams or other sources. 
(B) REIMBURSEMENT.—A State may use a 
grant awarded under paragraph (1) as reim-
bursement for any State funds used to provide 
bridge grants or loans to any person located in 
a Disaster Area who was directly adversely af-
fected by Hurricane Katrina before the date on 
which the funds authorized under paragraph 
(1) are disbursed.
180 
(C) 
CRITERIA.—Notwithstanding 
any 
other provision of law, in making bridge grants 
and loans under subparagraph (A), the State 
may use such criteria as the State determines 
appropriate, and shall not be required to apply 
eligibility criteria for programs administered by 
the Department of Commerce. 
(D) TERMS.—For any loan made by a 
State under subparagraph (A)— 
(i) such a loan may initially be a 
noncollateralized, low-interest loan; 
(ii) payments and interest on such a 
loan may be deferred for at least 1 year 
after the date on which the loan is made; 
(iii) the balance remaining on such a 
loan 5 years after the date on which the 
loan is made may be forgiven entirely by 
the State, if the borrower has continued to 
operate during that 5-year period in a Dis-
aster Area; and 
(iv) such a loan may be forgiven by 
the State, under such terms as it may set, 
if the borrower cannot repay such loan. 
(E) 
ADMINISTRATIVE
EXPENSES.—The 
Department of Commerce may use not more
181 
than $1,000,000 of the funds authorized under 
paragraph (4) to administer the provision of 
grants to the designated States under this sub-
section. 
(4) AUTHORIZATION
OF
APPROPRIATIONS.— 
There is authorized to be appropriated to the Sec-
retary of Commerce $450,000,000 for the Economic 
Development Administration of the Department of 
Commerce to carry out this subsection. 
SEC. 815. AUTHORIZATION OF APPROPRIATIONS FOR BUSI-
NESS COUNSELING. 
In addition to any other amounts authorized for any 
fiscal year, there are authorized to be appropriated to the 
Administration, to remain available until expended, for fis-
cal year 2006— 
(1) $21,000,000, to be used for activities of 
small business development centers pursuant to sec-
tion 21 of the Small Business Act (15 U.S.C. 648), 
not less than $15,000,000 of which shall be non- 
matching funds and used to aid and assist small 
business concerns affected by Hurricane Katrina; 
(2) $2,000,000, to be used for the SCORE pro-
gram authorized by section 8(b)(1) of the Small 
Business Act (15 U.S.C. 637(b)(1)), for the activi-
ties described in subparagraph (B)(ii) of such sec-
182 
tion, not less than $1,000,000 of which shall be used 
to aid and assist small business concerns affected by 
Hurricane Katrina; 
(3) $4,500,000, to be used for activities of 
women’s business centers authorized by section 
29(b) of the Small Business Act (15 U.S.C. 656(b)) 
and for recipients of a grant under section 29(l) of 
that Act (15 U.S.C. 656(l)), not less than 
$2,500,000 of which shall be non-matching funds 
used to aid and assist small business concerns af-
fected by Hurricane Katrina, which may also be 
made available to a women’s business center whose 
5-year project ended in fiscal year 2004; 
(4) $1,250,000, to be used for activities of the 
office of veteran’s business development pursuant to 
section 32 of the Small Business Act (15 U.S.C. 
657b), not less than $750,000 of which shall be used 
to aid and assist small business concerns affected by 
Hurricane Katrina; and 
(5) $5,000,000, to be used for activities of the 
microloan program authorized by clauses (ii) and 
(iii) of section 7(m)(1)(G) of the Small Business Act 
(15 U.S.C. 636(m)(1)(G)) to aid and assist small 
business concerns adversely affected by Hurricane 
Katrina.
183 
SEC. 816. SMALL BUSINESS DEVELOPMENT CENTERS. 
(a) AVAILABILITY OF GRANTS.—The Administrator 
shall make available grants under section 21 of the Small 
Business Act (15 U.S.C. 648) to small business develop-
ment centers assisting small business concerns adversely 
affected by Hurricane Katrina. 
(b) WAIVER OF MAXIMUM GRANT AMOUNT.—For 
each of fiscal years 2005 and 2006, the Administrator 
may waive the maximum amount of $100,000 for non- 
matching grants under section 21(a)(4)(C)(viii) of the 
Small Business Act (15 U.S.C. 648(a)(4)(C)(viii)). 
(c) ASSISTANCE TO SMALL BUSINESS CONCERNS IN 
DISASTER AREAS.— 
(1) The Administrator shall authorize any small 
business development center, regardless of location, 
to provide advice, information, and assistance, as de-
scribed in section 21(c) of such Act (15 U.S.C. 
648(c)), to a small business concern located in a 
Disaster Area. 
(2) A small business development center that 
provides counselors to a Disaster Area shall, to the 
maximum extent practicable, ensure continuity of 
services in the State it currently serves. 
SEC. 817. HUBZONES. 
Notwithstanding any other provision of law, a Dis-
aster Area shall be deemed to be a historically
184 
underutlized business zone within the meaning of section 
3(p)(1) of the Small Business Act (15 U.S.C. 632(p)(1). 
SEC. 818. SMALL BUSINESS BONDING THRESHOLD. 
(a) IN GENERAL.—Notwithstanding any other provi-
sion of law, for all procurements related to Hurricane 
Katrina, the Administrator may, upon such terms and 
conditions as the Administrator may prescribe, guarantee, 
and enter into commitments to guarantee any surety 
against loss resulting from a breach of the terms of a bid 
bond, payment bond, performance bond, or bonds ancillary 
thereto, by a principal on any total work order or contract 
amount at the time of bond execution that does not exceed 
$5,000,000 
(b) DISCRETIONARY INCREASE.—The Administrator 
may increase the maximum amount of a work order or 
contract to which subsection (a) applies to $10,000,000, 
at the discretion of the Administrator. 
SEC. 819. LOAN DEFAULTS. 
Notwithstanding any other provision of law, no loan 
made before August 24, 2005, under subsection (a) or (m) 
of section 7 of the Small Business Act (15 U.S.C. 636) 
or under title III or section 503 of the Small Business 
Investment Act of 1958 (15 U.S.C. 661 et seq.) for which 
the borrower goes into default by reason of Hurricane 
Katrina shall be considered a cost (as that term is defined
185 
in section 502 of the Federal Credit Reform Act of 1990 
(2 U.S.C. 622)) to the Administration for purposes of cal-
culating the subsidy rate for loans under subsection (a) 
or (m) of section 7 of the Small Business Act or title III 
or section 503 of the Small Business Investment Act of 
1958, respectively. 
SEC. 
820. 
BUDGETARY 
TREATMENT 
OF 
LOANS 
AND 
FINANCINGS. 
(a) IN GENERAL.—Assistance made available under 
any loan made or approved by the Administration under 
this subtitle, subsections (a) or (b) of section 7 of the 
Small Business Act (15 U.S.C. 636), or financings made 
under title V of the Small Business Investment Act of 
1958 (15 U.S.C. 695 et seq.), on and after the date of 
enactment of this subtitle, shall be treated as separate pro-
grams of the Administration for purposes of the Federal 
Credit Reform Act of 1990 only. 
(b) USE OF FUNDS.—Assistance under this subtitle 
and the amendments made by this subtitle shall be avail-
able only to the extent that funds are made available 
under appropriations Acts, which funds shall be utilized 
to offset the cost (as such term is defined in section 502 
of the Federal Credit Reform Act of 1990) of such assist-
ance.
186 
SEC. 821. EMERGENCY PROCUREMENT AUTHORITY. 
(a) SMALL BUSINESS RESERVATION OFFSET.—Sec-
tion 15(j) of the Small Business Act (15 U.S.C. 644(j)) 
is amended by adding at the end the following: 
‘‘(4) For any contract involving the use of the special 
emergency procurement authority under section 32A(c) of 
the Office of Federal Procurement Policy Act (41 U.S.C. 
428a(c)), the dollar ceiling of the small business reserva-
tion established in paragraph (1) shall be adjusted to 
match the applicable amount of the simplified acquisition 
threshold.’’. 
(b) RETENTION
OF
SMALL
BUSINESS
SUBCON-
TRACTING.—Section 8(d)(4)(D) of the Small Business Act 
(15 U.S.C. 637(d)(4)(D)) is amended— 
(1) by striking ‘‘(D) No contract’’ and inserting 
the following: 
‘‘(D) SMALL BUSINESS PARTICIPATION.— 
‘‘(i) IN GENERAL.—No contract’’; and 
(2) by adding at the end the following: 
‘‘(ii) EMERGENCY PROCUREMENTS.— 
‘‘(I) IN GENERAL.—For any contract that 
otherwise meets the requirements of this sub-
section and that involves the use of special 
emergency procurement authority under section 
32A(c) of the Office of Federal Procurement 
Policy Act (41 U.S.C. 428a(c)), the subcon-
187 
tracting plan required under this subsection 
shall be negotiated as soon as is practicable, 
but not later than 30 days after the date on 
which the contract is awarded. 
‘‘(II) PAYMENT.—Not more than 50 per-
cent of the amount due under any contract de-
scribed in subclause (I) may be paid, unless a 
subcontracting plan compliant with this sub-
section is negotiated by the contractor.’’. 
TITLE IX—TAX PROVISIONS 
SEC. 901. HOME PURCHASE BY VICTIMS OF HURRICANE 
KATRINA. 
(a) IN GENERAL.—Subpart A of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 (relating to nonrefundable personal credits) is 
amended by inserting after section 25D the following new 
section: 
‘‘SEC. 25E. HOME PURCHASE BY INDIVIDUALS DISPLACED 
BY HURRICANE KATRINA. 
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an eli-
gible homebuyer who purchases a principal residence in 
the Hurricane Katrina disaster area, there shall be al-
lowed as a credit against the tax imposed by this chapter 
for the taxable year an amount equal to so much of the 
purchase price of the residence as does not exceed $5,000.
188 
‘‘(b) LIMITATION BASED ON MODIFIED ADJUSTED 
GROSS INCOME.— 
‘‘(1) IN GENERAL.—The amount allowable as a 
credit under subsection (a) (determined without re-
gard to this subsection and subsection (d)) for the 
taxable year shall be reduced (but not below zero) by 
the amount which bears the same ratio to the credit 
so allowable as— 
‘‘(A) the excess (if any) of— 
‘‘(i) the taxpayer’s modified adjusted 
gross income for such taxable year, over 
‘‘(ii) $70,000 ($110,000 in the case of 
a joint return), bears to 
‘‘(B) $20,000. 
‘‘(2) MODIFIED
ADJUSTED
GROSS
INCOME.— 
For purposes of paragraph (1), the term ‘modified 
adjusted gross income’ means the adjusted gross in-
come of the taxpayer for the taxable year increased 
by any amount excluded from gross income under 
section 911, 931, or 933. 
‘‘(c) ELIGIBLE HOMEBUYER.—For purposes of this 
section— 
‘‘(1) IN GENERAL.—The term ‘eligible home-
buyer’ means any individual if—
189 
‘‘(A) on August 29, 2005, the principal 
place of abode of such individual (and if mar-
ried, such individual’s spouse) was located in 
the Hurricane Katrina disaster area, and such 
principal place of abode was rendered uninhab-
itable by Hurricane Katrina, and 
‘‘(B) the principal residence for which the 
credit is allowed under subsection (a) is located 
in the same State as such principal place of 
abode. 
‘‘(2) ONE-TIME ONLY.—If an individual is al-
lowed a credit under this section with respect to any 
principal residence, such individual may not be al-
lowed a credit under this section with respect to any 
other principal residence. 
‘‘(3) PRINCIPAL RESIDENCE.—The term ‘prin-
cipal residence’ has the same meaning as when used 
in section 121. 
‘‘(d) CARRYOVER OF CREDIT.—If the credit allowable 
under subsection (a) exceeds the limitation imposed by 
section 26(a) for such taxable year reduced by the sum 
of the credits allowable under this subpart (other than this 
section and sections 23, 24, 25B, and 1400C) such excess 
shall be carried to the succeeding taxable year and added
190 
to the credit allowable under subsection (a) for such tax-
able year. 
‘‘(e) OTHER DEFINITIONS AND SPECIAL RULES.— 
For purposes of this section— 
‘‘(1) HURRICANE KATRINA DISASTER AREA.— 
The term ‘Hurricane Katrina disaster area’ means 
an area determined by the President to warrant as-
sistance from the Federal Government under the 
Robert T. Stafford Disaster Relief and Emergency 
Assistance Act by reason of Hurricane Katrina. 
‘‘(2) ALLOCATION OF DOLLAR LIMITATION.— 
‘‘(A) MARRIED INDIVIDUALS FILING SEPA-
RATELY.—In the case of a married individual 
filing a separate return, subsection (a) shall be 
applied by substituting ‘$2,500’ for ‘$5,000.’ 
‘‘(B) OTHER TAXPAYERS.—If 2 or more 
individuals who are not married purchase a 
principal residence, the amount of the credit al-
lowed under subsection (a) shall be allocated 
among such individuals in such manner as the 
Secretary may prescribe, except that the total 
amount of the credits allowed to all such indi-
viduals shall not exceed $5,000. 
‘‘(3) PURCHASE.—
191 
‘‘(A) IN GENERAL.—The term ‘purchase’ 
means any acquisition, but only if— 
‘‘(i) the property is not acquired from 
a person whose relationship to the person 
acquiring it would result in the disallow-
ance of losses under section 267 or 707(b) 
(but, in applying section 267(b) and (c) for 
purposes of this section, paragraph (4) of 
section 267(c) shall be treated as providing 
that the family of an individual shall in-
clude only his spouse, ancestors, and lineal 
descendants), and 
‘‘(ii) the basis of the property in the 
hands of the person acquiring it is not de-
termined— 
‘‘(I) in whole or in part by ref-
erence to the adjusted basis of such 
property in the hands of the person 
from whom acquired, or 
‘‘(II) under section 1014(a) (re-
lating to property acquired from a de-
cedent). 
‘‘(B) CONSTRUCTION.—A residence which 
is constructed by the taxpayer shall be treated
192 
as purchased by the taxpayer on the date the 
taxpayer first occupies such residence. 
‘‘(4) PURCHASE
PRICE.—The term ‘purchase 
price’ means the adjusted basis of the principal resi-
dence on the date such residence is purchased. 
‘‘(f) REPORTING.—If the Secretary requires informa-
tion reporting under section 6045 by a person described 
in subsection (e)(2) thereof to verify the eligibility of tax-
payers for the credit allowable by this section, the excep-
tion provided by section 6045(e)(5) shall not apply. 
‘‘(g) BASIS ADJUSTMENT.—For purposes of this sub-
title, if a credit is allowed under this section with respect 
to the purchase of any residence, the basis of such resi-
dence shall be reduced by the amount of the credit so al-
lowed. 
‘‘(h) APPLICATION OF SECTION.—This section shall 
apply to property purchased after August 28, 2005, and 
before January 1, 2007.’’. 
(b) CONFORMING AMENDMENT.—Section 1016(a) of 
such Code is amended by striking ‘‘and’’ at the end of 
paragraph (36), by striking the period at the end of para-
graph (37) and inserting ‘‘, and’’, and by adding at the 
end the following new paragraph: 
‘‘(38) to the extent provided in section 
25E(g).’’.
193 
(c) CLERICAL AMENDMENT.—The table of sections 
for subpart A of part IV of subchapter A of chapter 1 
of such Code is amended by inserting after the item relat-
ing to section 25D the following new item: 
‘‘Sec. 25E. Home purchase by individuals displaced by Hurricane Katrina.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years ending after the 
date of the enactment of this Act. 
SEC. 902. RELIEF THROUGH LOW-INCOME HOUSING CRED-
IT RELATING TO HURRICANE KATRINA. 
(a) INCREASE
IN
HOUSING
CREDIT
DOLLAR 
AMOUNT.—For purposes of determining the State housing 
credit ceiling of the States of Alabama, Louisiana, and 
Mississippi for 2006 and 2007, section 42(h)(3)(C)(ii)(I) 
of the Internal Revenue Code of 1986 shall be applied by 
substituting ‘‘$3.70’’ for ‘‘$1.75’’. 
(b) AUTHORITY TO WAIVE PERCENTAGE LIMITATION 
TO TREAT HURRICANE KATRINA DISASTER AREAS AS 
DIFFICULT DEVELOPMENT AREAS.—In the case of tax-
able years beginning in 2005, 2006, and 2007, any area 
in the State of Alabama, Louisiana, or Mississippi located 
within the area determined by the President to warrant 
assistance from the Federal Government under the Robert 
T. Stafford Disaster Relief and Emergency Assistance Act 
by reason of Hurricane Katrina shall be treated as a dif-
ficult 
development 
area 
for 
purposes 
of 
section
194 
42(d)(5)(C) of the Internal Revenue Code of 1986, not-
withstanding the percentage limitation in clause (iii)(II) 
of such section. 
(c) WAIVER
OF FULL SUBSCRIPTION REQUIRE-
MENT.—In the case of the States of Alabama, Louisiana, 
and Mississippi for 2005, 2006, and 2007, section 
42(h)(3)(D) of such Code shall be applied without regard 
to clause (iv)(I) of such section. 
SEC. 903. TAX EXEMPT BONDS FOR QUALIFIED GULF COAST 
RECOVERY PROJECTS. 
Section 149(h) of the Internal Revenue Code of 1986 
(relating to bonds that must be registered to be tax ex-
empt; other requirements) is amended by adding at the 
end the following: 
‘‘(h) TREATMENT
OF
GULF
COAST
RECOVERY 
BONDS.— 
‘‘(1) IN GENERAL.—Section 103(a) shall apply 
to any qualified Gulf Coast recovery bond. 
‘‘(2) 
QUALIFIED
GULF
COAST
RECOVERY 
BOND.—For purposes of this subsection, the term 
‘qualified Gulf Coast recovery bond’ means any bond 
if— 
‘‘(A) the issuer reasonably expects that at 
least 95 percent of the net proceeds of the issue
195 
will be used for facilities in a qualified hurri-
cane disaster area, 
‘‘(B) the issue of which such bond is a part 
would, without regard to the application of sub-
section (b) and section 146, otherwise meet the 
requirements for excluding the interest on such 
bond from gross income under section 103 and 
applicable requirements of this part, and 
‘‘(C) if the aggregate face amount of bonds 
of which such bond is a part issued pursuant to 
such issue, when added to the aggregate face 
amount of qualified Gulf Coast recovery bonds 
previously issued by the issuing authority dur-
ing the calendar year, does not exceed such 
authority’s volume cap specified in paragraph 
(4). 
‘‘(3) FEDERAL GUARANTEE.—For purposes of 
this subsection— 
‘‘(A) FEDERAL
GUARANTEE.—The Sec-
retary may guarantee the payment of principal 
or interest with respect to any qualified Gulf 
Coast recovery bond under such terms and con-
ditions as the Secretary may require, except 
that in the case of a default of such bond, the 
Secretary shall condition the granting of such
196 
guarantee on the agreement by the State to a 
repayment schedule (including interest) for 
such bonds. 
‘‘(B) TREATMENT OF BOND AS TAX EX-
EMPT.—Subparagraph (b) shall not apply to a 
qualified Gulf Coast recovery bond. 
‘‘(4) VOLUME CAP.—For purposes of this sub-
section, the volume cap for a State shall be— 
‘‘(A) in the case of the State of Alabama, 
$10,000,000,000, 
‘‘(B) in the case of the State of Louisiana, 
$20,000,000,000, 
‘‘(C) in the case of the State of Mis-
sissippi, $20,000,000,000, and 
‘‘(D) zero in any other case. 
‘‘(5) QUALIFIED HURRICANE DISASTER AREA.— 
The term ‘qualified hurricane disaster area’ means 
the portion of an area determined by the President 
to warrant individual or individual and public assist-
ance from the Federal Government under the Robert 
T. Stafford Disaster Relief and Emergency Assist-
ance Act with respect to which a major disaster has 
been declared under section 401 of such Act by rea-
son of Hurricane Katrina.
197 
‘‘(6) SECTION 146 NOT APPLICABLE.—Section 
146 shall not apply with respect to any bond issued 
under this subsection. 
‘‘(7) TERMINATION.—This subsection shall not 
apply to bonds issued after December 31, 2010.’’. 
TITLE X—BANKRUPTCY 
SEC. 1001. SHORT TITLE. 
This title may be cited as the ‘‘Hurricane Katrina 
Bankruptcy Relief and Community Protection Act of 
2005’’. 
SEC. 1002. DEFINITIONS; WHO MAY BE A DEBTOR. 
(a) 
CURRENT
MONTHLY
INCOME.—Section 
101(10A)(B) is amended— 
(1) by striking ‘‘and payments’’ and inserting 
‘‘payments’’, and 
(2) by inserting before the period at the end ‘‘, 
and payments to victims of a natural disaster on ac-
count of their status as victims of a natural dis-
aster’’. 
(b) 
NATURAL
DISASTER; 
NATURAL
DISASTER 
ZONE.—Section 101 of title 11, United States Code, is 
amended— 
(1) by redesignating paragraphs (40A) and 
(40B) as paragraphs (40C) and (40D), respectively, 
and