I 
109TH CONGRESS 
1ST SESSION H. R. 4323 
To amend the Internal Revenue Code of 1986 to extend certain expiring 
provisions, to provide certain hurricane-related tax relief, and for other 
purposes. 
IN THE HOUSE OF REPRESENTATIVES 
NOVEMBER 15, 2005 
Mr. THOMAS introduced the following bill; which was referred to the 
Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to extend 
certain expiring provisions, to provide certain hurricane- 
related tax relief, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE, ETC. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Tax Revision Act of 2005’’. 
(b) AMENDMENT OF 1986 CODE.—Except as other-
wise expressly provided, whenever in this Act an amend-
ment or repeal is expressed in terms of an amendment 
to, or repeal of, a section or other provision, the reference
shall be considered to be made to a section or other provi-
sion of the Internal Revenue Code of 1986. 
(c) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title, etc. 
Sec. 2. Election to include combat pay as earned income for purposes of earned 
income credit. 
Sec. 3. Cover over of tax on distilled spirits. 
Sec. 4. Authority for undercover operations. 
Sec. 5. Disclosures of certain tax return information. 
Sec. 6. Deduction allowable with respect to income attributable to domestic pro-
duction activities in Puerto Rico. 
Sec. 7. Federal guarantee of certain State bonds. 
Sec. 8. Certain tax relief related to Hurricanes Rita and Wilma. 
Sec. 9. Gulf Coast Recovery Bonds. 
SEC. 2. 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 
subsection (a) shall apply to taxable years beginning after 
December 31, 2005. 
SEC. 3. COVER OVER OF TAX ON DISTILLED SPIRITS. 
(a) IN GENERAL.—Paragraph (1) of section 7652(f) 
(relating to limitation on cover over of tax on distilled spir-
its) is amended by striking ‘‘January 1, 2006’’ and insert-
ing ‘‘January 1, 2007’’.
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to articles brought into the 
United States after December 31, 2005. 
SEC. 4. 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. 5. DISCLOSURES OF CERTAIN TAX RETURN INFORMA-
TION. 
(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 ‘‘De-
cember 31, 2006’’. 
(2) EFFECTIVE DATE.—The amendment made 
by paragraph (1) shall apply to disclosures after De-
cember 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.— 
(1) IN GENERAL.—Subparagraph (D) of section 
6103(l)(13) (relating to termination) is amended by 
striking ‘‘December 31, 2005’’ and inserting ‘‘De-
cember 31, 2006’’. 
(2) EFFECTIVE DATE.—The amendment made 
by paragraph (1) shall apply to requests made after 
December 31, 2005. 
SEC. 6. DEDUCTION ALLOWABLE WITH RESPECT TO IN-
COME ATTRIBUTABLE TO DOMESTIC PRO-
DUCTION ACTIVITIES IN PUERTO RICO. 
(a) IN GENERAL.—Subsection (d) of section 199 (re-
lating to definitions and special rules) is amended by re-
designating paragraph (7) as paragraph (8) and by insert-
ing after paragraph (6) the following new paragraph: 
‘‘(7) TREATMENT
OF
ACTIVITIES
IN
PUERTO 
RICO.—In the case of any taxpayer with gross re-
ceipts for any taxable year from sources within the 
Commonwealth of Puerto Rico, if all of such receipts 
are taxable under section 1 or 11 for such taxable 
year, then for purposes of determining the domestic 
production gross receipts of such taxpayer for such
taxable year under subsection (c)(4), the term 
‘United States’ shall include the Commonwealth of 
Puerto Rico’’. 
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall apply to taxable years beginning after 
December 31, 2005. 
SEC. 7. FEDERAL GUARANTEE OF CERTAIN STATE BONDS. 
(a) STATE BONDS DESCRIBED.—This section shall 
apply to a bond issued as part of an issue if— 
(1) the issue of which such bond is part is an 
issue of the State of Alabama, Louisiana, or Mis-
sissippi, 
(2) the bond is a general obligation of the 
issuing State and is in registered form, 
(3) the proceeds of the bond are distributed to 
one or more political subdivisions of the issuing 
State, 
(4) the maturity of such bond does not exceed 
5 years, 
(5) the bond is issued after the date of the en-
actment of this Act and before January 1, 2008, 
and 
(6) the bond is designated by the Secretary of 
the Treasury for purposes of this section. 
(b) APPLICATION.—
(1) IN GENERAL.—The Secretary of the Treas-
ury may only designate a bond for purposes of this 
section pursuant to an application submitted to the 
Secretary by the State which demonstrates the need 
for such designation on the basis of the criteria 
specified in paragraph (2). 
(2) CRITERIA.—For purposes of paragraph (1), 
the criteria specified in this paragraph are— 
(A) the loss of revenue base of one or more 
political subdivisions of the State by reason of 
Hurricane Katrina, 
(B) the need for resources to fund infra-
structure within, or operating expenses of, any 
such political subdivision, 
(C) the lack of access of such political sub-
division to capital, and 
(D) any other criteria as may be deter-
mined by the Secretary. 
(3) GUIDANCE FOR SUBMISSION AND CONSID-
ERATION OF APPLICATIONS.—The Secretary of the 
Treasury shall prescribe regulations or other guid-
ance which provide for the time and manner for the 
submission and consideration of applications under 
this subsection.
(c) FEDERAL GUARANTEE.—A bond described in 
subsection (a) is guaranteed by the United States in an 
amount equal to 50 percent of the outstanding principal 
with respect to such bond. 
(d) AGGREGATE LIMIT ON BOND DESIGNATIONS.— 
The maximum aggregate face amount of bonds which may 
be 
issued 
under 
this 
section 
shall 
not 
exceed 
$3,000,000,000. 
SEC. 8. CERTAIN TAX RELIEF RELATED TO HURRICANES 
RITA AND WILMA. 
(a) 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 
preceding taxable year, the credits allowed under 
sections 24(d) and 32 of the Internal Revenue Code 
of 1986 may, at the election of the taxpayer, be de-
termined 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— 
(A) IN GENERAL.—The term ‘‘qualified in-
dividual’’ means any qualified Hurricane Rita 
individual and any qualified Hurricane Wilma 
individual. 
(B) 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 
such individual was displaced from such 
principal place of abode by reason of Hur-
ricane Rita. 
(C) QUALIFIED HURRICANE WILMA INDI-
VIDUAL.—The 
term 
‘‘qualified 
Hurricane 
Wilma individual’’ means any individual (other 
than a qualified Hurricane Katrina individual 
or a qualified Hurricane Rita individual) whose 
principal 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. 
(D) QUALIFIED HURRICANE KATRINA IN-
DIVIDUAL.—The term ‘‘qualified Hurricane 
Katrina individual’’ has the meaning given such 
term by section 406 of the Katrina Emergency 
Tax Relief Act of 2005. 
(3) APPLICABLE DATE.—For purposes of this 
subsection, the term ‘‘applicable date’’ means— 
(A) in the case of a qualified Hurricane 
Rita individual, September 23, 2005, and 
(B) in the case of a qualified Hurricane 
Wilma individual, October 23, 2005. 
(4) RITA AND WILMA GO ZONE; ETC.—For pur-
poses of this subsection— 
(A) RITA GO ZONE.—The term ‘‘Rita GO 
Zone’’ means that portion of the Hurricane 
Rita disaster area determined by the President 
to warrant individual or individual and public 
assistance from the Federal Government under 
the Robert T. Stafford Disaster Relief and
Emergency Assistance Act by reason of Hurri-
cane Rita. 
(B) HURRICANE RITA DISASTER AREA.— 
The term ‘‘Hurricane Rita disaster area’’ 
means an area with respect to which a major 
disaster has been declared by the President, be-
fore October 6, 2005, under section 401 of such 
Act by reason of Hurricane Rita. 
(C) WILMA GO ZONE.—The term ‘‘Wilma 
GO Zone’’ means that portion of the Hurricane 
Wilma disaster area determined by the Presi-
dent to warrant individual or individual and 
public assistance from the Federal Government 
under such Act by reason of Hurricane Wilma. 
(D) HURRICANE WILMA DISASTER AREA.— 
The term ‘‘Hurricane Wilma disaster area’’ 
means an area with respect to which a major 
disaster has been declared by the President, be-
fore November 14, 2005, under section 401 of 
such Act by reason of Hurricane Wilma. 
(5) EARNED
INCOME.—For purposes of this 
subsection, the term ‘‘earned income’’ has the mean-
ing given such term under section 32(c) of the Inter-
nal Revenue Code of 1986. 
(6) 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 of the Internal Revenue Code of 
1986. 
(C) ERRORS TREATED AS MATHEMATICAL 
ERROR.—For purposes of section 6213 of the 
Internal Revenue Code of 1986, an incorrect 
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, the Internal Revenue
Code of 1986 shall be applied without regard to 
any substitution under paragraph (1). 
(b) SECRETARIAL AUTHORITY TO MAKE ADJUST-
MENTS REGARDING TAXPAYER AND DEPENDENCY STA-
TUS.—With respect to taxable years beginning in 2005 or 
2006, the Secretary of the Treasury may make such ad-
justments in the application 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 temporary relocations by reason of 
Hurricane Rita or Hurricane Wilma. Any adjustments 
made under the preceding sentence shall ensure that an 
individual is not taken into account by more than one tax-
payer with respect to the same tax benefit. 
SEC. 9. 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 Hurricanes Katrina, Rita, and Wilma. 
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