Teacher:In this task, you are given text for US Congressional and California state bills, your task is to generate a summary for this bill.
Teacher: Now, understand the problem? Solve this instance: SECTION 1. SHORT TITLE.

This Act may be cited as the ''Economic Relief for Gulf Coast
Families and Businesses Act''.

SEC. 2. TAX BENEFITS RELATED TO HURRICANE KATRINA DISASTER AREA.

(a) In General.--Subchapter Y of chapter 1 of the Internal Revenue
Code of 1986 is amended by adding at the end the following new section:

''SEC. 1400M. TAX BENEFITS RELATED TO HURRICANE KATRINA DISASTER AREA.

''(a) Zero Percent Capital Gains Rate.--
''(1) Exclusion.--Gross income shall not include qualified
capital gain from the sale or exchange of any Katrina Zone
asset held for more than 5 years.
''(2) Katrina zone.--For purposes of this subsection, the
term 'Katrina Zone asset' means--
''(A) any Katrina Zone business stock,
''(B) any Katrina Zone partnership interest, and
''(C) any Katrina Zone business property.
''(3) Katrina zone business stock.--For purposes of this
subsection--
''(A) In general.--The term 'Katrina Zone business
stock' means any stock in a domestic corporation which
is originally issued after August 28, 2005, if--
''(i) such stock is acquired by the
taxpayer, before January 1, 2007, at its
original issue (directly or through an
underwriter) solely in exchange for cash,
''(ii) as of the time such stock was
issued, such corporation was a Katrina Zone
business (or, in the case of a new corporation,
such corporation was being organized for
purposes of being a Katrina Zone business), and
''(iii) during substantially all of the
taxpayer's holding period for such stock, such
corporation qualified as a Katrina Zone
business.
''(B) Redemptions.--A rule similar to the rule of
section 1202(c)(3) shall apply for purposes of this
paragraph.
''(4) Katrina zone partnership interest.--For purposes of
this subsection, the term 'Katrina Zone partnership interest'
means any capital or profits interest in a domestic partnership
which is originally issued after August 28, 2005, if--
''(A) such interest is acquired by the taxpayer,
before January 1, 2007, from the partnership solely in
exchange for cash,
''(B) as of the time such interest was acquired,
such partnership was a Katrina Zone business (or, in
the case of a new partnership, such partnership was
being organized for purposes of being a Katrina Zone
business), and
''(C) during substantially all of the taxpayer's
holding period for such interest, such partnership
qualified as a Katrina Zone business.
A rule similar to the rule of subparagraph (B)(ii) shall apply
for purposes of this paragraph.
''(5) Katrina zone business property.--For purposes of this
subsection--
''(A) In general.--The term 'Katrina Zone business
property' means tangible property if--
''(i) such property was acquired by the
taxpayer by purchase (as defined in section
179(d)(2)) after August 28, 2005, and before
January 1, 2007,
''(ii) the original use of such property in
the Katrina Zone commences with the taxpayer,
and
''(iii) during substantially all of the
taxpayer's holding period for such property,
substantially all of the use of such property
was in a Katrina Zone business of the taxpayer.
''(B) Special rule for buildings which are
substantially improved.--
''(i) In general.--The requirements of
clauses (i) and (ii) of subparagraph (A) shall
be treated as met with respect to--
''(I) property which is
substantially improved by the taxpayer
before January 1, 2007, and
''(II) any land on which such
property is located.
''(ii) Substantial improvement.--For
purposes of clause (i), property shall be
treated as substantially improved by the
taxpayer only if, during any 24-month period
beginning after August 28, 2005, additions to
basis with respect to such property in the
hands of the taxpayer exceed the greater of--
''(I) an amount equal to the
adjusted basis of such property at the
beginning of such 24-month period in
the hands of the taxpayer, or
''(II) $5,000.
''(6) Katrina zone business.--For purposes of this
subsection, the term 'Katrina Zone business' means any
corporation, partnership, or business which would be an
enterprise zone business (as defined in section 1397C) if such
section were applied by substituting 'Katrina Zone' for
'empowerment zone' each place it appears.
''(7) Special rules related to katrina zone assets.--For
purposes of this subsection--
''(A) Treatment of subsequent purchasers, etc.--For
purposes of this subsection, the term 'Katrina Zone
asset' includes any property which would be a Katrina
Zone asset but for paragraph (3)(A)(i), (4)(A), or
(5)(A)(i) or (ii) in the hands of the taxpayer if such
property was a Katrina Zone asset in the hands of a
prior holder.
''(B) 5-year safe harbor.--If any property ceases
to be a Katrina Zone asset by reason of paragraph
(3)(A)(iii), (4)(C), or (5)(A)(iii) after the 5-year
period beginning on the date the taxpayer acquired such
property, such property shall continue to be treated as
meeting the requirements of such paragraph; except that
the amount of gain to which paragraph (1) applies on
any sale or exchange of such property shall not exceed
the amount which would be qualified capital gain had
such property been sold on the date of such cessation.
''(8) Qualified capital gain.--For purposes of this
subsection--
''(A) In general.--Except as otherwise provided in
this paragraph, the term 'qualified capital gain' means
any gain recognized on the sale or exchange of--
''(i) a capital asset, or
''(ii) property used in the trade or
business (as defined in section 1231(b).
''(B) Gain before hurricane or after 2011 not
qualified.--The term 'qualified capital gain' shall not
include any gain attributable to periods before August
29, 2005, or after December 31, 2011.
''(C) Certain ordinary income gain not qualified.--
The term 'qualified capital gain' shall not include any
gain which would be treated as ordinary income under
section 1245 or under section 1250 if section 1250
applied to all depreciation rather than the additional
depreciation.
''(D) Intangibles and land not integral part of
katrina zone business.--The term 'qualified capital
gain' shall not include any gain which is attributable
to real property, or an intangible asset, which is not
an integral part of a Katrina Zone business.
''(E) Related party transactions.--The term
'qualified capital gain' shall not include any gain
attributable, directly or indirectly, in whole or in
part, to a transaction with a related person. For
purposes of this subparagraph, persons are related to
each other if such persons are described in section
267(b) or 707(b)(1).
''(9) Certain other rules to apply.--Rules similar to the
rules of subsections (g), (h), (i)(2), and (j) of section 1202
shall apply for purposes of this subsection.
''(10) Sales and exchanges of interests in partnerships and
s corporations which are katrina zone businesses.--In the case
of the sale or exchange of an interest in a partnership, or of
stock in an S corporation, which was a Katrina Zone business
during substantially all of the period the taxpayer held such
interest or stock, the amount of qualified capital gain shall
be determined without regard to--
''(A) any gain which is attributable to real
property, or an intangible asset, which is not an
integral part of a Katrina Zone business, and
''(B) any gain attributable to periods before
August 29, 2005, or after December 31, 2011.
''(b) Estate Tax Reduction for Hurricane Katrina Victims.--
''(1) In general.-- For purposes of this title, a Hurricane
Katrina victim shall be treated as a qualified decedent within
the meaning of section 2201(b).
''(2) Hurricane katrina victim.--For purposes of this
section, the term 'Hurricane Katrina victim' means any decedent
who dies after August 28, 2005, as a result of wounds or
injuries incurred in the Katrina Zone as a result of Hurricane
Katrina.
''(c) Katrina Zone.--For purposes of this section, the term
'Katrina Zone' means an 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 Hurricane Katrina.''.
(b) Conforming Amendments.--
(1) The heading for subchapter Y of chapter 1 of such Code
is amended to read as follows:

''Subchapter Y--Short-term Regional Benefits''.

(2) The table of sections for such subchapter is amended by
adding at the end the following new item:

''Sec. 1400M. Tax benefits related to Hurricane Katrina disaster
area.''.
Student:
Economic Relief for Gulf Coast Families and Businesses Act - Amends the Internal Revenue Code to: (1) exclude from gross income gain from the sale or exchange of Hurricane Katrina Zone assets held for more than five years; and (2) allow reduced estate tax rates for Hurricane Katrina victims. Includes as such assets: (1) Katrina Zone business stock or principal interests issued after August 28, 2005, and acquired by the taxpayer before January 1, 2007; and (2) Katrina Zone business property acquired between such dates, provided its original use in the Zone commences with the taxpayer.