[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4440 Enrolled Bill (ENR)]
H.R.4440
One Hundred Ninth Congress
of the
United States of America
AT THE FIRST SESSION
Begun and held at the City of Washington on Tuesday,
the fourth day of January, two thousand and five
An Act
To amend the Internal Revenue Code of 1986 to provide tax benefits for
the Gulf Opportunity Zone and certain areas affected by Hurricanes Rita
and Wilma, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; ETC.
(a) Short Title.--This Act may be cited as the ``Gulf Opportunity
Zone Act of 2005''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment 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
provision of the Internal Revenue Code of 1986.
(c) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; etc.
TITLE I--ESTABLISHMENT OF GULF OPPORTUNITY ZONE
Sec. 101. Tax benefits for Gulf Opportunity Zone.
Sec. 102. Expansion of Hope Scholarship and Lifetime Learning Credit for
students in the Gulf Opportunity Zone.
Sec. 103. Housing relief for individuals affected by Hurricane Katrina.
Sec. 104. Extension of special rules for mortgage revenue bonds.
Sec. 105. Special extension of bonus depreciation placed in service date
for taxpayers affected by Hurricanes Katrina, Rita, and Wilma.
TITLE II--TAX BENEFITS RELATED TO HURRICANES RITA AND WILMA
Sec. 201. Extension of certain emergency tax relief for Hurricane
Katrina to Hurricanes Rita and Wilma.
TITLE III--OTHER PROVISIONS
Sec. 301. Gulf Coast Recovery Bonds.
Sec. 302. Election to include combat pay as earned income for purposes
of earned income credit.
Sec. 303. Modification of effective date of exception from suspension
rules for certain listed and reportable transactions.
Sec. 304. Authority for undercover operations.
Sec. 305. Disclosures of certain tax return information.
TITLE IV--TECHNICALS
Subtitle A--Tax Technicals
Sec. 401. Short title.
Sec. 402. Amendments related to Energy Policy Act of 2005.
Sec. 403. Amendments related to the American Jobs Creation Act of 2004.
Sec. 404. Amendments related to the Working Families Tax Relief Act of
2004.
Sec. 405. Amendments related to the Jobs and Growth Tax Relief
Reconciliation Act of 2003.
Sec. 406. Amendment related to the Victims of Terrorism Tax Relief Act
of 2001.
Sec. 407. Amendments related to the Economic Growth and Tax Relief
Reconciliation Act of 2001.
Sec. 408. Amendments related to the Internal Revenue Service
Restructuring and Reform Act of 1998.
Sec. 409. Amendments related to the Taxpayer Relief Act of 1997.
Sec. 410. Amendment related to the Omnibus Budget Reconciliation Act of
1990.
Sec. 411. Amendment related to the Omnibus Budget Reconciliation Act of
1987.
Sec. 412. Clerical corrections.
Sec. 413. Other corrections related to the American Jobs Creation Act of
2004.
Subtitle B--Trade Technicals
Sec. 421. Technical corrections to regional value content methods for
rules of origin under Public Law 109-53.
TITLE V--EMERGENCY REQUIREMENT
Sec. 501. Emergency requirement.
TITLE I--ESTABLISHMENT OF GULF OPPORTUNITY ZONE
SEC. 101. TAX BENEFITS FOR GULF OPPORTUNITY ZONE.
(a) In General.--Subchapter Y of chapter 1 is amended by adding at
the end the following new part:
``PART II--TAX BENEFITS FOR GO ZONES
``Sec. 1400M. Definitions.
``Sec. 1400N. Tax benefits for Gulf Opportunity Zone.
``SEC. 1400M. DEFINITIONS.
``For purposes of this part--
``(1) Gulf opportunity zone.--The terms `Gulf Opportunity Zone'
and `GO Zone' mean that portion of the Hurricane Katrina 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 Hurricane Katrina.
``(2) Hurricane katrina disaster area.--The term `Hurricane
Katrina disaster area' means an area with respect to which a major
disaster has been declared by the President before September 14,
2005, under section 401 of such Act by reason of Hurricane Katrina.
``(3) 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 such Act by reason of Hurricane Rita.
``(4) 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 before October 6, 2005, under
section 401 of such Act by reason of Hurricane Rita.
``(5) Wilma go zone.--The term `Wilma GO Zone' means that
portion of the Hurricane Wilma disaster area determined by the
President to warrant individual or individual and public assistance
from the Federal Government under such Act by reason of Hurricane
Wilma.
``(6) 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 before November 14, 2005, under
section 401 of such Act by reason of Hurricane Wilma.
``SEC. 1400N. TAX BENEFITS FOR GULF OPPORTUNITY ZONE.
``(a) Tax-Exempt Bond Financing.--
``(1) In general.--For purposes of this title--
``(A) any qualified Gulf Opportunity Zone Bond described in
paragraph (2)(A)(i) shall be treated as an exempt facility
bond, and
``(B) any qualified Gulf Opportunity Zone Bond described in
paragraph (2)(A)(ii) shall be treated as a qualified mortgage
bond.
``(2) Qualified gulf opportunity zone bond.--For purposes of
this subsection, the term `qualified Gulf Opportunity Zone Bond'
means any bond issued as part of an issue if--
``(A)(i) 95 percent or more of the net proceeds (as defined
in section 150(a)(3)) of such issue are to be used for
qualified project costs, or
``(ii) such issue meets the requirements of a qualified
mortgage issue, except as otherwise provided in this
subsection,
``(B) such bond is issued by the State of Alabama,
Louisiana, or Mississippi, or any political subdivision
thereof,
``(C) such bond is designated for purposes of this section
by--
``(i) in the case of a bond which is required under
State law to be approved by the bond commission of such
State, such bond commission, and
``(ii) in the case of any other bond, the Governor of
such State,
``(D) such bond is issued after the date of the enactment
of this section and before January 1, 2011, and
``(E) no portion of the proceeds of such issue is to be
used to provide any property described in section 144(c)(6)(B).
``(3) Limitations on bonds.--
``(A) Aggregate amount designated.--The maximum aggregate
face amount of bonds which may be designated under this
subsection with respect to any State shall not exceed the
product of $2,500 multiplied by the portion of the State
population which is in the Gulf Opportunity Zone (as determined
on the basis of the most recent census estimate of resident
population released by the Bureau of Census before August 28,
2005).
``(B) Movable property.--No bonds shall be issued which are
to be used for movable fixtures and equipment.
``(4) Qualified project costs.--For purposes of this
subsection, the term `qualified project costs' means--
``(A) the cost of any qualified residential rental project
(as defined in section 142(d)) located in the Gulf Opportunity
Zone, and
``(B) the cost of acquisition, construction,
reconstruction, and renovation of--
``(i) nonresidential real property (including fixed
improvements associated with such property) located in the
Gulf Opportunity Zone, and
``(ii) public utility property (as defined in section
168(i)(10)) located in the Gulf Opportunity Zone.
``(5) Special rules.--In applying this title to any qualified
Gulf Opportunity Zone Bond, the following modifications shall
apply:
``(A) Section 142(d)(1) (defining qualified residential
rental project) shall be applied--
``(i) by substituting `60 percent' for `50 percent' in
subparagraph (A) thereof, and
``(ii) by substituting `70 percent' for `60 percent' in
subparagraph (B) thereof.
``(B) Section 143 (relating to mortgage revenue bonds:
qualified mortgage bond and qualified veterans' mortgage bond)
shall be applied--
``(i) only with respect to owner-occupied residences in
the Gulf Opportunity Zone,
``(ii) by treating any such residence in the Gulf
Opportunity Zone as a targeted area residence,
``(iii) by applying subsection (f)(3) thereof without
regard to subparagraph (A) thereof, and
``(iv) by substituting `$150,000' for `$15,000' in
subsection (k)(4) thereof.
``(C) Except as provided in section 143, repayments of
principal on financing provided by the issue of which such bond
is a part may not be used to provide financing.
``(D) Section 146 (relating to volume cap) shall not apply.
``(E) Section 147(d)(2) (relating to acquisition of
existing property not permitted) shall be applied by
substituting `50 percent' for `15 percent' each place it
appears.
``(F) Section 148(f)(4)(C) (relating to exception from
rebate for certain proceeds to be used to finance construction
expenditures) shall apply to the available construction
proceeds of bonds which are part of an issue described in
paragraph (2)(A)(i).
``(G) Section 57(a)(5) (relating to tax-exempt interest)
shall not apply.
``(6) Separate issue treatment of portions of an issue.--This
subsection shall not apply to the portion of an issue which (if
issued as a separate issue) would be treated as a qualified bond or
as a bond that is not a private activity bond (determined without
regard to paragraph (1)), if the issuer elects to so treat such
portion.
``(b) Advance Refundings of Certain Tax-Exempt Bonds.--
``(1) In general.--With respect to a bond described in
paragraph (3), one additional advance refunding after the date of
the enactment of this section and before January 1, 2011, shall be
allowed under the applicable rules of section 149(d) if--
``(A) the Governor of the State designates the advance
refunding bond for purposes of this subsection, and
``(B) the requirements of paragraph (5) are met.
``(2) Certain private activity bonds.--With respect to a bond
described in paragraph (3) which is an exempt facility bond
described in paragraph (1) or (2) of section 142(a), one advance
refunding after the date of the enactment of this section and
before January 1, 2011, shall be allowed under the applicable rules
of section 149(d) (notwithstanding paragraph (2) thereof) if the
requirements of subparagraphs (A) and (B) of paragraph (1) are met.
``(3) Bonds described.--A bond is described in this paragraph
if such bond was outstanding on August 28, 2005, and is issued by
the State of Alabama, Louisiana, or Mississippi, or a political
subdivision thereof.
``(4) Aggregate limit.--The maximum aggregate face amount of
bonds which may be designated under this subsection by the Governor
of a State shall not exceed--
``(A) $4,500,000,000 in the case of the State of Louisiana,
``(B) $2,250,000,000 in the case of the State of
Mississippi, and
``(C) $1,125,000,000 in the case of the State of Alabama.
``(5) Additional requirements.--The requirements of this
paragraph are met with respect to any advance refunding of a bond
described in paragraph (3) if--
``(A) no advance refundings of such bond would be allowed
under this title on or after August 28, 2005,
``(B) the advance refunding bond is the only other
outstanding bond with respect to the refunded bond, and
``(C) the requirements of section 148 are met with respect
to all bonds issued under this subsection.
``(6) Use of proceeds requirement.--This subsection shall not
apply to any advance refunding of a bond which is issued as part of
an issue if any portion of the proceeds of such issue (or any prior
issue) was (or is to be) used to provide any property described in
section 144(c)(6)(B).
``(c) Low-Income Housing Credit.--
``(1) Additional housing credit dollar amount for gulf
opportunity zone.--
``(A) In general.--For purposes of section 42, in the case
of calendar years 2006, 2007, and 2008, the State housing
credit ceiling of each State, any portion of which is located
in the Gulf Opportunity Zone, shall be increased by the lesser
of--
``(i) the aggregate housing credit dollar amount
allocated by the State housing credit agency of such State
to buildings located in the Gulf Opportunity Zone for such
calendar year, or
``(ii) the Gulf Opportunity housing amount for such
State for such calendar year.
``(B) Gulf opportunity housing amount.--For purposes of
subparagraph (A), the term `Gulf Opportunity housing amount'
means, for any calendar year, the amount equal to the product
of $18.00 multiplied by the portion of the State population
which is in the Gulf Opportunity Zone (as determined on the
basis of the most recent census estimate of resident population
released by the Bureau of Census before August 28, 2005).
``(C) Allocations treated as made first from additional
allocation amount for purposes of determining carryover.--For
purposes of determining the unused State housing credit ceiling
under section 42(h)(3)(C) for any calendar year, any increase
in the State housing credit ceiling under subparagraph (A)
shall be treated as an amount described in clause (ii) of such
section.
``(2) Additional housing credit dollar amount for texas and
florida.--For purposes of section 42, in the case of calendar year
2006, the State housing credit ceiling of Texas and Florida shall
each be increased by $3,500,000.
``(3) Difficult development area.--
``(A) In general.--For purposes of section 42, in the case
of property placed in service during 2006, 2007, or 2008, the
Gulf Opportunity Zone, the Rita GO Zone, and the Wilma GO
Zone--
``(i) shall be treated as difficult development areas
designated under subclause (I) of section 42(d)(5)(C)(iii),
and
``(ii) shall not be taken into account for purposes of
applying the limitation under subclause (II) of such
section.
``(B) Application.--Subparagraph (A) shall apply only to--
``(i) housing credit dollar amounts allocated during
the period beginning on January 1, 2006, and ending on
December 31, 2008, and
``(ii) buildings placed in service during such period
to the extent that paragraph (1) of section 42(h) does not
apply to any building by reason of paragraph (4) thereof,
but only with respect to bonds issued after December 31,
2005.
``(4) Special rule for applying income tests.--In the case of
property placed in service--
``(A) during 2006, 2007, or 2008,
``(B) in the Gulf Opportunity Zone, and
``(C) in a nonmetropolitan area (as defined in section
42(d)(5)(C)(iv)(IV)),
section 42 shall be applied by substituting `national
nonmetropolitan median gross income (determined under rules similar
to the rules of section 142(d)(2)(B))' for `area median gross
income' in subparagraphs (A) and (B) of section 42(g)(1).
``(5) Definitions.--Any term used in this subsection which is
also used in section 42 shall have the same meaning as when used in
such section.
``(d) Special Allowance for Certain Property Acquired on or After
August 28, 2005.--
``(1) Additional allowance.--In the case of any qualified Gulf
Opportunity Zone property--
``(A) the depreciation deduction provided by section 167(a)
for the taxable year in which such property is placed in
service shall include an allowance equal to 50 percent of the
adjusted basis of such property, and
``(B) the adjusted basis of the qualified Gulf Opportunity
Zone property shall be reduced by the amount of such deduction
before computing the amount otherwise allowable as a
depreciation deduction under this chapter for such taxable year
and any subsequent taxable year.
``(2) Qualified gulf opportunity zone property.--For purposes
of this subsection--
``(A) In general.--The term `qualified Gulf Opportunity
Zone property' means property--
``(i)(I) which is described in section 168(k)(2)(A)(i),
or
``(II) which is nonresidential real property or
residential rental property,
``(ii) substantially all of the use of which is in the
Gulf Opportunity Zone and is in the active conduct of a
trade or business by the taxpayer in such Zone,
``(iii) the original use of which in the Gulf
Opportunity Zone commences with the taxpayer on or after
August 28, 2005,
``(iv) which is acquired by the taxpayer by purchase
(as defined in section 179(d)) on or after August 28, 2005,
but only if no written binding contract for the acquisition
was in effect before August 28, 2005, and
``(v) which is placed in service by the taxpayer on or
before December 31, 2007 (December 31, 2008, in the case of
nonresidential real property and residential rental
property).
``(B) Exceptions.--
``(i) Alternative depreciation property.--Such term
shall not include any property described in section
168(k)(2)(D)(i).
``(ii) Tax-exempt bond-financed property.--Such term
shall not include any property any portion of which is
financed with the proceeds of any obligation the interest
on which is exempt from tax under section 103.
``(iii) Qualified revitalization buildings.--Such term
shall not include any qualified revitalization building
with respect to which the taxpayer has elected the
application of paragraph (1) or (2) of section 1400I(a).
``(iv) Election out.--If a taxpayer makes an election
under this clause with respect to any class of property for
any taxable year, this subsection shall not apply to all
property in such class placed in service during such
taxable year.
``(3) Special rules.--For purposes of this subsection, rules
similar to the rules of subparagraph (E) of section 168(k)(2) shall
apply, except that such subparagraph shall be applied--
``(A) by substituting `August 27, 2005' for `September 10,
2001' each place it appears therein,
``(B) by substituting `January 1, 2008' for `January 1,
2005' in clause (i) thereof, and
``(C) by substituting `qualified Gulf Opportunity Zone
property' for `qualified property' in clause (iv) thereof.
``(4) Allowance against alternative minimum tax.--For purposes
of this subsection, rules similar to the rules of section
168(k)(2)(G) shall apply.
``(5) Recapture.--For purposes of this subsection, rules
similar to the rules under section 179(d)(10) shall apply with
respect to any qualified Gulf Opportunity Zone property which
ceases to be qualified Gulf Opportunity Zone property.
``(e) Increase in Expensing Under Section 179.--
``(1) In general.--For purposes of section 179--
``(A) the dollar amount in effect under section 179(b)(1)
for the taxable year shall be increased by the lesser of--
``(i) $100,000, or
``(ii) the cost of qualified section 179 Gulf
Opportunity Zone property placed in service during the
taxable year, and
``(B) the dollar amount in effect under section 179(b)(2)
for the taxable year shall be increased by the lesser of--
``(i) $600,000, or
``(ii) the cost of qualified section 179 Gulf
Opportunity Zone property placed in service during the
taxable year.
``(2) Qualified section 179 gulf opportunity zone property.--
For purposes of this subsection, the term `qualified section 179
Gulf Opportunity Zone property' means section 179 property (as
defined in section 179(d)) which is qualified Gulf Opportunity Zone
property (as defined in subsection (d)(2)).
``(3) Coordination with empowerment zones and renewal
communities.--For purposes of sections 1397A and 1400J, qualified
section 179 Gulf Opportunity Zone property shall not be treated as
qualified zone property or qualified renewal property, unless the
taxpayer elects not to take such qualified section 179 Gulf
Opportunity Zone property into account for purposes of this
subsection.
``(4) Recapture.--For purposes of this subsection, rules
similar to the rules under section 179(d)(10) shall apply with
respect to any qualified section 179 Gulf Opportunity Zone property
which ceases to be qualified section 179 Gulf Opportunity Zone
property.
``(f) Expensing for Certain Demolition and Clean-up Costs.--
``(1) In general.--A taxpayer may elect to treat 50 percent of
any qualified Gulf Opportunity Zone clean-up cost as an expense
which is not chargeable to capital account. Any cost so treated
shall be allowed as a deduction for the taxable year in which such
cost is paid or incurred.
``(2) Qualified gulf opportunity zone clean-up cost.--For
purposes of this subsection, the term `qualified Gulf Opportunity
Zone clean-up cost' means any amount paid or incurred during the
period beginning on August 28, 2005, and ending on December 31,
2007, for the removal of debris from, or the demolition of
structures on, real property which is located in the Gulf
Opportunity Zone and which is--
``(A) held by the taxpayer for use in a trade or business
or for the production of income, or
``(B) property described in section 1221(a)(1) in the hands
of the taxpayer.
For purposes of the preceding sentence, amounts paid or incurred
shall be taken into account only to the extent that such amount
would (but for paragraph (1)) be chargeable to capital account.
``(g) Extension of Expensing for Environmental Remediation Costs.--
With respect to any qualified environmental remediation expenditure (as
defined in section 198(b)) paid or incurred on or after August 28,
2005, in connection with a qualified contaminated site located in the
Gulf Opportunity Zone, section 198 (relating to expensing of
environmental remediation costs) shall be applied--
``(1) in the case of expenditures paid or incurred on or after
August 28, 2005, and before January 1, 2008, by substituting
`December 31, 2007' for the date contained in section 198(h), and
``(2) except as provided in section 198(d)(2), by treating
petroleum products (as defined in section 4612(a)(3)) as a
hazardous substance.
``(h) Increase in Rehabilitation Credit.--In the case of qualified
rehabilitation expenditures (as defined in section 47(c)) paid or
incurred during the period beginning on August 28, 2005, and ending on
December 31, 2008, with respect to any qualified rehabilitated building
or certified historic structure (as defined in section 47(c)) located
in the Gulf Opportunity Zone, subsection (a) of section 47 (relating to
rehabilitation credit) shall be applied--
``(1) by substituting `13 percent' for `10 percent' in
paragraph (1) thereof, and
``(2) by substituting `26 percent' for `20 percent' in
paragraph (2) thereof.
``(i) Special Rules for Small Timber Producers.--
``(1) Increased expensing for qualified timber property.--In
the case of qualified timber property any portion of which is
located in the Gulf Opportunity Zone, in that portion of the Rita
GO Zone which is not part of the Gulf Opportunity Zone, or in the
Wilma GO Zone, the limitation under subparagraph (B) of section
194(b)(1) shall be increased by the lesser of--
``(A) the limitation which would (but for this subsection)
apply under such subparagraph, or
``(B) the amount of reforestation expenditures (as defined
in section 194(c)(3)) paid or incurred by the taxpayer with
respect to such qualified timber property during the specified
portion of the taxable year.
``(2) 5 year nol carryback of certain timber losses.--For
purposes of determining any farming loss under section 172(i),
income and deductions which are allocable to the specified portion
of the taxable year and which are attributable to qualified timber
property any portion of which is located in the Gulf Opportunity
Zone, in that portion of the Rita GO Zone which is not part of the
Gulf Opportunity Zone, or in the Wilma GO Zone shall be treated as
attributable to farming businesses.
``(3) Rules not applicable to certain entities.--Paragraphs (1)
and (2) shall not apply to any taxpayer which--
``(A) is a corporation the stock of which is publicly
traded on an established securities market, or
``(B) is a real estate investment trust.
``(4) Rules not applicable to large timber producers.--
``(A) Expensing.--Paragraph (1) shall not apply to any
taxpayer if such taxpayer holds more than 500 acres of
qualified timber property at any time during the taxable year.
``(B) NOL carryback.--Paragraph (2) shall not apply with
respect to any qualified timber property unless--
``(i) such property was held by the taxpayer--
``(I) on August 28, 2005, in the case of qualified
timber property any portion of which is located in the
Gulf Opportunity Zone,
``(II) on September 23, 2005, in the case of
qualified timber property (other than property
described in subclause (I)) any portion of which is
located in that portion of the Rita GO Zone which is
not part of the Gulf Opportunity Zone, or
``(III) on October 23, 2005, in the case of
qualified timber property (other than property
described in subclause (I) or (II)) any portion of
which is located in the Wilma GO Zone, and
``(ii) such taxpayer held not more than 500 acres of
qualified timber property on such date.
``(5) Definitions.--For purposes of this subsection--
``(A) Specified portion.--
``(i) In general.--The term `specified portion' means--
``(I) in the case of qualified timber property any
portion of which is located in the Gulf Opportunity
Zone, that portion of the taxable year which is on or
after August 28, 2005, and before the termination date,
``(II) in the case of qualified timber property
(other than property described in clause (i)) any
portion of which is located in the Rita GO Zone, that
portion of the taxable year which is on or after
September 23, 2005, and before the termination date, or
``(III) in the case of qualified timber property
(other than property described in clause (i) or (ii))
any portion of which is located in the Wilma GO Zone,
that portion of the taxable year which is on or after
October 23, 2005, and before the termination date.
``(ii) Termination date.--The term `termination date'
means--
``(I) for purposes of paragraph (1), January 1,
2008, and
``(II) for purposes of paragraph (2), January 1,
2007.
``(B) Qualified timber property.--The term `qualified
timber property' has the meaning given such term in section
194(c)(1).
``(j) Special Rule for Gulf Opportunity Zone Public Utility
Casualty Losses.--
``(1) In general.--The amount described in section 172(f)(1)(A)
for any taxable year shall be increased by the Gulf Opportunity
Zone public utility casualty loss for such taxable year.
``(2) Gulf opportunity zone public utility casualty loss.--For
purposes of this subsection, the term `Gulf Opportunity Zone public
utility casualty loss' means any casualty loss of public utility
property (as defined in section 168(i)(10)) located in the Gulf
Opportunity Zone if--
``(A) such loss is allowed as a deduction under section 165
for the taxable year,
``(B) such loss is by reason of Hurricane Katrina, and
``(C) the taxpayer elects the application of this
subsection with respect to such loss.
``(3) Reduction for gains from involuntary conversion.--The
amount of any Gulf Opportunity Zone public utility casualty loss
which would (but for this paragraph) be taken into account under
paragraph (1) for any taxable year shall be reduced by the amount
of any gain recognized by the taxpayer for such year from the
involuntary conversion by reason of Hurricane Katrina of public
utility property (as so defined) located in the Gulf Opportunity
Zone.
``(4) Coordination with general disaster loss rules.--
Subsection (k) and section 165(i) shall not apply to any Gulf
Opportunity Zone public utility casualty loss to the extent such
loss is taken into account under paragraph (1).
``(5) Election.--Any election under paragraph (2)(C) shall be
made in such manner as may be prescribed by the Secretary and shall
be made by the due date (including extensions of time) for filing
the taxpayer's return for the taxable year of the loss. Such
election, once made for any taxable year, shall be irrevocable for
such taxable year.
``(k) Treatment of Net Operating Losses Attributable to Gulf
Opportunity Zone Losses.--
``(1) In general.--If a portion of any net operating loss of
the taxpayer for any taxable year is a qualified Gulf Opportunity
Zone loss, the following rules shall apply:
``(A) Extension of carryback period.--Section 172(b)(1)
shall be applied with respect to such portion--
``(i) by substituting `5 taxable years' for `2 taxable
years' in subparagraph (A)(i), and
``(ii) by not taking such portion into account in
determining any eligible loss of the taxpayer under
subparagraph (F) thereof for the taxable year.
``(B) Suspension of 90 percent amt limitation.--Section
56(d)(1) shall be applied by increasing the amount determined
under subparagraph (A)(ii)(I) thereof by the sum of the
carrybacks and carryovers of any net operating loss
attributable to such portion.
``(2) Qualified gulf opportunity zone loss.--For purposes of
paragraph (1), the term `qualified Gulf Opportunity Zone loss'
means the lesser of--
``(A) the excess of--
``(i) the net operating loss for such taxable year,
over
``(ii) the specified liability loss for such taxable
year to which a 10-year carryback applies under section
172(b)(1)(C), or
``(B) the aggregate amount of the following deductions to
the extent taken into account in computing the net operating
loss for such taxable year:
``(i) Any deduction for any qualified Gulf Opportunity
Zone casualty loss.
``(ii) Any deduction for moving expenses paid or
incurred after August 27, 2005, and before January 1, 2008,
and allowable under this chapter to any taxpayer in
connection with the employment of any individual--
``(I) whose principal place of abode was located in
the Gulf Opportunity Zone before August 28, 2005,
``(II) who was unable to remain in such abode as
the result of Hurricane Katrina, and
``(III) whose principal place of employment with
the taxpayer after such expense is located in the Gulf
Opportunity Zone.
For purposes of this clause, the term `moving expenses' has
the meaning given such term by section 217(b), except that
the taxpayer's former residence and new residence may be
the same residence if the initial vacating of the residence
was as the result of Hurricane Katrina.
``(iii) Any deduction allowable under this chapter for
expenses paid or incurred after August 27, 2005, and before
January 1, 2008, to temporarily house any employee of the
taxpayer whose principal place of employment is in the Gulf
Opportunity Zone.
``(iv) Any deduction for depreciation (or amortization
in lieu of depreciation) allowable under this chapter with
respect to any qualified Gulf Opportunity Zone property (as
defined in subsection (d)(2), but without regard to
subparagraph (B)(iv) thereof)) for the taxable year such
property is placed in service.
``(v) Any deduction allowable under this chapter for
repair expenses (including expenses for removal of debris)
paid or incurred after August 27, 2005, and before January
1, 2008, with respect to any damage attributable to
Hurricane Katrina and in connection with property which is
located in the Gulf Opportunity Zone.
``(3) Qualified gulf opportunity zone casualty loss.--
``(A) In general.--For purposes of paragraph (2)(B)(i), the
term `qualified Gulf Opportunity Zone casualty loss' means any
uncompensated section 1231 loss (as defined in section
1231(a)(3)(B)) of property located in the Gulf Opportunity Zone
if--
``(i) such loss is allowed as a deduction under section
165 for the taxable year, and
``(ii) such loss is by reason of Hurricane Katrina.
``(B) Reduction for gains from involuntary conversion.--The
amount of qualified Gulf Opportunity Zone casualty loss which
would (but for this subparagraph) be taken into account under
subparagraph (A) for any taxable year shall be reduced by the
amount of any gain recognized by the taxpayer for such year
from the involuntary conversion by reason of Hurricane Katrina
of property located in the Gulf Opportunity Zone.
``(C) Coordination with general disaster loss rules.--
Section 165(i) shall not apply to any qualified Gulf
Opportunity Zone casualty loss to the extent such loss is taken
into account under this subsection.
``(4) Special rules.--For purposes of paragraph (1), rules
similar to the rules of paragraphs (2) and (3) of section 172(i)
shall apply with respect to such portion.
``(l) Credit to Holders of Gulf Tax Credit Bonds.--
``(1) Allowance of credit.--If a taxpayer holds a Gulf tax
credit bond on one or more credit allowance dates of the bond
occurring during any taxable year, there shall be allowed as a
credit against the tax imposed by this chapter for the taxable year
an amount equal to the sum of the credits determined under
paragraph (2) with respect to such dates.
``(2) Amount of credit.--
``(A) In general.--The amount of the credit determined
under this paragraph with respect to any credit allowance date
for a Gulf tax credit bond is 25 percent of the annual credit
determined with respect to such bond.
``(B) Annual credit.--The annual credit determined with
respect to any Gulf tax credit bond is the product of--
``(i) the credit rate determined by the Secretary under
subparagraph (C) for the day on which such bond was sold,
multiplied by
``(ii) the outstanding face amount of the bond.
``(C) Determination.--For purposes of subparagraph (B),
with respect to any Gulf tax credit bond, the Secretary shall
determine daily or cause to be determined daily a credit rate
which shall apply to the first day on which there is a binding,
written contract for the sale or exchange of the bond. The
credit rate for any day is the credit rate which the Secretary
or the Secretary's designee estimates will permit the issuance
of Gulf tax credit bonds with a specified maturity or
redemption date without discount and without interest cost to
the issuer.
``(D) Credit allowance date.--For purposes of this
subsection, the term `credit allowance date' means March 15,
June 15, September 15, and December 15. Such term also includes
the last day on which the bond is outstanding.
``(E) Special rule for issuance and redemption.--In the
case of a bond which is issued during the 3-month period ending
on a credit allowance date, the amount of the credit determined
under this paragraph with respect to such credit allowance date
shall be a ratable portion of the credit otherwise determined
based on the portion of the 3-month period during which the
bond is outstanding. A similar rule shall apply when the bond
is redeemed or matures.
``(3) Limitation based on amount of tax.--The credit allowed
under paragraph (1) for any taxable year shall not exceed the
excess of--
``(A) the sum of the regular tax liability (as defined in
section 26(b)) plus the tax imposed by section 55, over
``(B) the sum of the credits allowable under part IV of
subchapter A (other than subpart C and this subsection).
``(4) Gulf tax credit bond.--For purposes of this subsection--
``(A) In general.--The term `Gulf tax credit bond' means
any bond issued as part of an issue if--
``(i) the bond is issued by the State of Alabama,
Louisiana, or Mississippi,
``(ii) 95 percent or more of the proceeds of such issue
are to be used to--
``(I) pay principal, interest, or premiums on
qualified bonds issued by such State or any political
subdivision of such State, or
``(II) make a loan to any political subdivision of
such State to pay principal, interest, or premiums on
qualified bonds issued by such political subdivision,
``(iii) the Governor of such State designates such bond
for purposes of this subsection,
``(iv) the bond is a general obligation of such State
and is in registered form (within the meaning of section
149(a)),
``(v) the maturity of such bond does not exceed 2
years, and
``(vi) the bond is issued after December 31, 2005, and
before January 1, 2007.
``(B) State matching requirement.--A bond shall not be
treated as a Gulf tax credit bond unless--
``(i) the issuer of such bond pledges as of the date of
the issuance of the issue an amount equal to the face
amount of such bond to be used for payments described in
subclause (I) of subparagraph (A)(ii), or loans described
in subclause (II) of such subparagraph, as the case may be,
with respect to the issue of which such bond is a part, and
``(ii) any such payment or loan is made in equal
amounts from the proceeds of such issue and from the amount
pledged under clause (i).
The requirement of clause (ii) shall be treated as met with
respect to any such payment or loan made during the 1-year
period beginning on the date of the issuance (or any successor
1-year period) if such requirement is met when applied with
respect to the aggregate amount of such payments and loans made
during such period.
``(C) Aggregate limit on bond designations.--The maximum
aggregate face amount of bonds which may be designated under
this subsection by the Governor of a State shall not exceed--
``(i) $200,000,000 in the case of the State of
Louisiana,
``(ii) $100,000,000 in the case of the State of
Mississippi, and
``(iii) $50,000,000 in the case of the State of
Alabama.
``(D) Special rules relating to arbitrage.--A bond which is
part of an issue shall not be treated as a Gulf tax credit bond
unless, with respect to the issue of which the bond is a part,
the issuer satisfies the arbitrage requirements of section 148
with respect to proceeds of the issue and any loans made with
such proceeds.
``(5) Qualified bond.--For purposes of this subsection--
``(A) In general.--The term `qualified bond' means any
obligation of a State or political subdivision thereof which
was outstanding on August 28, 2005.
``(B) Exception for private activity bonds.--Such term
shall not include any private activity bond.
``(C) Exception for advance refundings.--Such term shall
not include any bond with respect to which there is any
outstanding refunded or refunding bond during the period in
which a Gulf tax credit bond is outstanding with respect to
such bond.
``(D) Use of proceeds requirement.--Such term shall not
include any bond issued as part of an issue if any portion of
the proceeds of such issue was (or is to be) used to provide
any property described in section 144(c)(6)(B).
``(6) Credit included in gross income.--Gross income includes
the amount of the credit allowed to the taxpayer under this
subsection (determined without regard to paragraph (3)) and the
amount so included shall be treated as interest income.
``(7) Other definitions and special rules.--For purposes of
this subsection--
``(A) Bond.--The term `bond' includes any obligation.
``(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 investment 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 credit bonds shall
submit reports similar to the reports required under section
149(e).
``(E) Credit treated as nonrefundable bondholder credit.--
For purposes of this title, the credit allowed by this
subsection shall 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 section 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 otherwise
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 development entities to make qualified low-
income community investments within the Gulf Opportunity Zone,
and
``(B) $400,000,000 for 2007, to be so allocated, and
``(3) subsection (f)(3) thereof shall be applied separately
with respect to the amount of the increase under paragraph (2).
``(n) Treatment of Representations Regarding Income Eligibility for
Purposes of Qualified Residential Rental Project Requirements.--For
purposes of determining if any residential rental project meets the
requirements of section 142(d)(1) and if any certification 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 tenancy 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 tenancy
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 Disaster Losses.--
``(1) In general.--Upon the election of the taxpayer, in the
case of any eligible public utility property loss--
``(A) section 165(i) shall be applied by substituting `the
fifth taxable year immediately preceding' for `the taxable year
immediately preceding',
``(B) an application for a tentative carryback adjustment
of the tax for any prior taxable year affected by the
application of subparagraph (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 public utility
property loss' means any loss with respect to public utility
property located in the Gulf Opportunity Zone and attributable
to Hurricane Katrina.
``(B) Public utility property.--The term `public utility
property' has the meaning given such term by section 168(i)(10)
without regard 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 allowed 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
described in paragraph (3).
``(2) Qualified gulf opportunity zone casualty losses.--For
purposes of subsection (k)(2)(B)(i), the term `qualified Gulf
Opportunity Zone casualty loss' shall not include any loss with
respect to any property described in paragraph (3).
``(3) Property described.--
``(A) In general.--For purposes of this subsection,
property is described in this paragraph if such property is--
``(i) any property used in connection with any private
or commercial golf course, country club, massage parlor,
hot tub facility, suntan facility, or any store the
principal business of which is the sale of alcoholic
beverages for consumption off premises, or
``(ii) any gambling or animal racing property.
``(B) Gambling or animal racing property.--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 directly in connection with gambling, the
racing of animals, or the on-site viewing of such
racing, and
``(II) the portion of any real property (determined
by square footage) 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--
(A) by inserting ``or 1400N(l)(6)'' after ``section
54(g)'', and
(B) by inserting ``or 1400N(l)(2)(D), as the case may be''
after ``section 54(b)(4)''.
(3) So much of subchapter Y of chapter 1 as precedes section
1400L is amended to read as 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 paragraph (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.
SEC. 102. EXPANSION OF HOPE SCHOLARSHIP AND LIFETIME 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)) located 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 defined 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 substituting `40
percent' for `20 percent'.''.
(b) Conforming Amendment.--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. 1400O. Education tax benefits.''.
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 employee'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 section 38, in the case of a qualified
employer, the Hurricane Katrina housing credit for any month during the
taxable 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 section, 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 August 28, 2005, and
``(2) who performs substantially all employment services--
``(A) in the Gulf Opportunity Zone, and
``(B) for the qualified employer which furnishes lodging to
such individual.
``(d) Qualified Employer.--For purposes of this section, 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--
``(1) beginning on the first day of the first month beginning
after the date of the enactment of this section, 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 striking the period at the end of
paragraph (26) and inserting ``, and'', and by adding at the end
the following new paragraph:
``(27) the Hurricane Katrina housing credit determined 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''.
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 described 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 defined 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
section 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 taxpayer 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 account
the effect of one or more hurricanes on the date of such placement by
the taxpayer.
TITLE II--TAX BENEFITS RELATED 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 Retirement 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 taxable year shall not exceed the excess (if any) of--
``(i) $100,000, over
``(ii) the aggregate amounts treated as qualified
hurricane distributions received by such individual for all
prior taxable years.
``(B) Treatment of plan distributions.--If a distribution
to an individual would (without regard to subparagraph (A)) be
a qualified hurricane distribution, a plan shall not be treated
as violating any requirement of this title merely because the
plan treats such 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 receives a qualified
hurricane distribution may, at any time during the 3-year
period beginning on the day after the date on which such
distribution 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
distribution 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 distributions from
eligible retirement plans other than iras.--For purposes of
this title, if a contribution is made pursuant to subparagraph
(A) with respect to a qualified hurricane distribution from an
eligible 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 eligible 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 distribution.
``(C) Treatment of repayments for distributions from
iras.--For purposes of this title, if a contribution is made
pursuant to subparagraph (A) with respect to a qualified
hurricane distribution from an individual 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 retirement plan in a direct trustee to trustee
transfer within 60 days of the distribution.
``(4) Definitions.--For purposes of this subsection--
``(A) Qualified hurricane distribution.--Except as provided
in paragraph (2), the term `qualified hurricane distribution'
means--
``(i) any distribution from an eligible retirement plan
made on or after August 25, 2005, and before January 1,
2007, to an individual whose principal place of abode on
August 28, 2005, is located in the Hurricane Katrina
disaster area and who has sustained an economic loss by
reason of Hurricane Katrina,
``(ii) any distribution (which is not described in
clause (i)) from an eligible retirement plan made on or
after September 23, 2005, and before January 1, 2007, to an
individual whose principal place of abode on September 23,
2005, is located in the Hurricane Rita disaster area and
who has sustained an economic loss by reason of Hurricane
Rita, and
``(iii) any distribution (which is not described in
clause (i) or (ii)) from an eligible retirement plan made
on or after October 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 taxpayer elects not to have this
paragraph apply for any taxable year, any amount required to be
included in gross income for such taxable year shall be so
included ratably over the 3-taxable year period beginning with
such taxable year.
``(B) Special rule.--For purposes of subparagraph (A),
rules similar to the rules of subparagraph (E) of section
408A(d)(3) shall apply.
``(6) Special rules.--
``(A) Exemption of distributions from trustee to trustee
transfer and withholding rules.--For purposes of sections
401(a)(31), 402(f), and 3405, qualified hurricane distributions
shall not be treated as eligible rollover distributions.
``(B) Qualified hurricane distributions treated as meeting
plan distribution 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.--
``(A) In general.--Any individual who received a qualified
distribution may, during the applicable period, make one or
more contributions in an aggregate amount not to exceed the
amount of such qualified distribution to an eligible retirement
plan (as defined in section 402(c)(8)(B)) of which such
individual is a beneficiary 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 distribution' means
any qualified Katrina distribution, any qualified Rita
distribution, and any qualified Wilma distribution.
``(B) Qualified katrina distribution.--The term `qualified
Katrina distribution' means any distribution--
``(i) described in section 401(k)(2)(B)(i)(IV),
403(b)(7)(A)(ii) (but only to the extent such distribution
relates to financial hardship), 403(b)(11)(B), or
72(t)(2)(F),
``(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 account of
Hurricane Katrina.
``(C) Qualified rita distribution.--The term `qualified
Rita distribution' means any distribution (other than a
qualified Katrina 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
September 24, 2005, and
``(iii) which was to be used to purchase or construct a
principal residence in the Hurricane Rita disaster area,
but which was not so purchased or constructed on account 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 account 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,
``(B) with respect to any qualified Rita distribution, 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 applied 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
employee 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))--
``(A) if the due date pursuant to subparagraph (B) or (C)
of section 72(p)(2) for any repayment 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 respect to any such
loan shall be appropriately adjusted 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 individual' means
any qualified Hurricane Katrina individual, any qualified
Hurricane Rita individual, and any qualified Hurricane Wilma
individual.
``(B) Qualified hurricane katrina individual.--The term
`qualified Hurricane Katrina individual' means an individual
whose principal place of abode on August 28, 2005, is located
in the Hurricane Katrina disaster area and who has sustained an
economic loss by reason of Hurricane Katrina.
``(C) Qualified hurricane rita individual.--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 reason of Hurricane Rita.
``(D) Qualified hurricane wilma individual.--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 reason
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--
``(i) the applicable period is the period beginning on
September 24, 2005, and ending 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 operated in accordance with the terms of the plan
during the period described in paragraph (2)(B)(i).
``(2) Amendments to which subsection applies.--
``(A) In general.--This subsection shall apply to any
amendment to any plan or annuity 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 January 1, 2007, or such later date
as the Secretary 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 in subparagraph (A)(i) takes
effect (or in the case of a plan or contract amendment
not required by this section 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
amendment 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 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 `eligible 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 before January 1, 2006, as a result of
damage sustained by reason of Hurricane Katrina.
``(B) Eligible employee.--The term `eligible employee'
means with respect to an eligible employer an employee whose
principal place of employment on August 28, 2005, with such
eligible employer was in the GO Zone.
``(C) Qualified wages.--The term `qualified 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 August
28, 2005, and before January 1, 2006, which occurs during the
period--
``(i) beginning on the date on which the trade or
business described in subparagraph (A) first became
inoperable at the principal place of employment of the
employee 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 employment.
Such term shall include wages paid without regard to whether
the employee performs no services, performs services at a
different place of employment than such principal place of
employment, 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 section 51 with respect 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
employer for such taxable year. For purposes of the 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 `eligible 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 before January 1, 2006, as a result
of damage sustained by reason of Hurricane Rita.
``(B) Eligible employee.--The term `eligible 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 `qualified 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 subparagraph (A) first became
inoperable at the principal place of employment of the
employee 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 employment.
Such term shall include wages paid without regard to whether
the employee performs no services, performs services at a
different place of employment than such principal place of
employment, 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 period.
``(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 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 `eligible 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 before January 1, 2006, as a result
of damage sustained by reason of Hurricane Wilma.
``(B) Eligible employee.--The term `eligible employee'
means with respect to an eligible employer an employee whose
principal place of employment on October 23, 2005, with such
eligible employer was in the Wilma GO Zone.
``(C) Qualified wages.--The term `qualified 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 October
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 subparagraph (A) first became
inoperable at the principal place of employment of the
employee 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 employment.
Such term shall include wages paid without regard to whether
the employee performs no services, performs services at a
different place of employment than such principal place of
employment, 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 (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
contributions.
``(2) Treatment of excess contributions.--For purposes of
section 170--
``(A) Individuals.--In the case of an individual--
``(i) Limitation.--Any qualified contribution shall be
allowed only to the extent that the aggregate of such
contributions does not exceed the excess of the taxpayer's
contribution 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).
``(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 subparagraph (A) of such
section which precedes clause (i) thereof for purposes of
applying such section.
``(B) Corporations.--In the case of a corporation--
``(i) Limitation.--Any qualified contribution shall be
allowed only to the extent that the aggregate of such
contributions does not exceed the excess of the taxpayer's
taxable income (as determined under paragraph (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 qualified contributions paid during the taxable year
shall not be treated as an itemized deduction for purposes 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 application of
this subsection with respect to such contribution.
``(B) Exception.--Such term shall not include a
contribution if the contribution is for establishment of a new,
or maintenance in an existing, segregated fund or account with
respect to which the donor (or any person appointed or
designated by such donor) has, or reasonably expects to have,
advisory privileges with respect to distributions or
investments by reason of the donor's status as a donor.
``(C) Application of election to partnerships and s
corporations.--In the case of a partnership or S corporation,
the election under subparagraph (A)(iii) shall be made
separately by each partner or shareholder.
``(b) Suspension of Certain Limitations on Personal 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 disaster 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 disaster area on or
after October 23, 2005, and which are attributable to Hurricane
Wilma.
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 Income.--
``(1) In general.--In the case of a qualified individual, 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 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--
``(A) In general.--The term `qualified individual' means
any qualified Hurricane Katrina individual, any qualified
Hurricane Rita individual, and any qualified Hurricane Wilma
individual.
``(B) Qualified hurricane katrina individual.--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 disaster area (but
outside the GO Zone) and such individual was displaced from
such principal place of abode by reason of Hurricane
Katrina.
``(C) Qualified hurricane rita individual.--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 Hurricane Rita.
``(D) Qualified hurricane wilma individual.--The term
`qualified Hurricane Wilma individual' means any 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
Hurricane 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).
``(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 either 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 election.--Any election made
under paragraph (1) shall apply with respect to both sections
24(d) and section 32.
``(C) Errors treated as mathematical error.--For purposes
of section 6213, an incorrect use on a return of earned income
pursuant to paragraph (1) shall be treated as a mathematical or
clerical error.
``(D) No effect on determination of gross income, etc.--
Except as otherwise provided in this subsection, this title
shall be applied without regard to any substitution under
paragraph (1).
``(e) Secretarial Authority To Make Adjustments Regarding Taxpayer
and Dependency Status.--With respect to taxable years beginning in 2005
or 2006, the Secretary may make such adjustments 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
Katrina, 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 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 without regard to
subparagraph (A) thereof, and
``(3) by substituting `$150,000' for `$15,000' in subsection
(k)(4) thereof.
``(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 adding 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 repealed:
(A) Title I.
(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 Hurricanes 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 subsection (a) shall
apply to taxable years beginning after December 31, 2005.
SEC. 303. MODIFICATION OF EFFECTIVE DATE OF EXCEPTION FROM SUSPENSION
RULES FOR CERTAIN LISTED AND REPORTABLE TRANSACTIONS.
(a) Effective Date Modification.--
(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 interest 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 amendments 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
Announcement 2005-80 with respect to such transaction,
or
``(II) the taxpayer has entered into a settlement
agreement pursuant to such an initiative.
Subclause (I) shall not apply to any taxpayer if, after
January 23, 2006, the taxpayer withdraws from, or
terminates, participation 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 interest relates arose is prevented by the
operation of any law or rule of law, or
``(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 taxable year is filed, the taxpayer provides
to the Secretary 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.
SEC. 304. AUTHORITY FOR UNDERCOVER OPERATIONS.
Paragraph (6) of section 7608(c) (relating to application 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 INFORMATION.
(a) Disclosures To Facilitate Combined Employment Tax Reporting.--
(1) In general.--Subparagraph (B) of section 6103(d)(5)
(relating to termination) is amended by striking ``December 31,
2005'' and inserting ``December 31, 2006''.
(2) Effective date.--The amendment made by paragraph (1) shall
apply to disclosures after December 31, 2005.
(b) Disclosures Relating to Terrorist Activities.--
(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 December 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 ``December 31, 2006''.
(2) Effective date.--The amendment made by paragraph (1) shall
apply to requests made after December 31, 2005.
TITLE IV--TECHNICALS
Subtitle A--Tax Technicals
SEC. 401. SHORT TITLE.
This subtitle may be cited as the ``Tax Technical Corrections 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 repealed.
(2) Section 1223 is amended by striking paragraph (3) and by
redesignating paragraphs (4) through (16) as paragraphs (3) through
(15), respectively.
(3) Section 121(g) is amended by striking ``1223(7)'' and
inserting ``1223(6)''.
(4) Section 246(c)(3)(B) is amended by striking ``paragraph (4)
of section 1223'' and inserting ``paragraph (3) of section 1223''.
(5) Section 247(b)(2)(D) is amended by inserting ``as in effect
before its repeal'' after ``part VI of subchapter O''.
(6)(A) Section 1245(b) is amended by striking paragraph (5) and
redesignating paragraphs (6) through (9) as paragraphs (5) through
(8), respectively.
(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), respectively.
(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 ``nonhazardous lignin waste
material'' and inserting ``lignin material''.
(c) Amendments Related to Section 1303.--
(1) Subsection (l) of section 54 is amended by striking
paragraph (5), and by redesignating paragraphs (6) and (7) as
paragraphs (5) and (6), respectively.
(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 paragraph (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 beginning 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.
``(B) Phaseout adjustment based on inflation.--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 rounded 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.--Subparagraph (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 operation 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
January 1, 2009, in the case of a net operating loss for a
taxable year ending after December 31, 2002, and before
January 1, 2006, 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 control facility capital expenditures of the
taxpayer 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 redesignating 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 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 treated as
references to the taxable year for which such election
is made.''.
(g) Amendment Related to Section 1322.--Subsection (a) of section
45K is amended by striking ``if the taxpayer elects to have this
section apply,''.
(h) Amendment Related to Section 1331.--Paragraph (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 subsection (c))'' after
``subsection (a)''.
(2) Subparagraphs (A) and (B) of section 25D(e)(4) are amended
to read as follows:
``(A) Maximum expenditures.--The maximum amount of
expenditures which may be taken into account under subsection
(a) by all 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 qualified solar water
heating property expenditures, 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
expenditures 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 expenditures set
forth in subparagraph (A) multiplied by a fraction--
``(I) the numerator of which is the amount of such
expenditures with respect to such dwelling made by such
individual during such calendar year, and
``(II) the denominator of which is the total
expenditures made by all such individuals with respect
to such dwelling 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 alternative minimum tax.--In the case of a
taxable year to which section 26(a)(2) applies, if the credit
allowable 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 allowable 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.
``(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 subsection (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 forward under this
subsection to any taxable year following 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 allowed to a taxpayer
under subpart C shall be increased by the lesser of--
``(A) the credit which would be allowed under this section
without regard to this subsection 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 (determined 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 taxpayer'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 section for the
taxable year.
The amount of the credit allowed under this subsection shall not be
treated as a credit allowed under this subpart and shall reduce the
amount of credit otherwise allowable under subsection (a) without
regard to section 26(a)(2) or subsection (b)(3), as the case may
be. For purposes of subparagraph (B), any amount excluded from
gross income by reason of section 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 purposes 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 limitation imposed by section
26(a)(2) for the taxable 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).''.
(D) The matter preceding paragraph (1) of section 25B(g) 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''.
(E) Subsection (c) of section 25D is amended to read as
follows:
``(c) Carryforward of Unused Credit.--
``(1) Rule for years in which all personal credits allowed
against regular and alternative minimum tax.--In the case of a
taxable year to which section 26(a)(2) applies, if the credit
allowable under subsection (a) exceeds the limitation imposed by
section 26(a)(2) for such taxable year reduced by the sum of the
credits allowable under this subpart (other than this section),
such excess shall be carried to the succeeding taxable year and
added to the credit allowable under subsection (a) for such
succeeding taxable year.
``(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) exceeds the limitation imposed by section
26(a)(1) for such taxable year reduced by the sum of the credits
allowable under this subpart (other than this section and sections
23, 24, and 25B), such excess shall be carried to the succeeding
taxable year and added to the credit allowable under subsection (a)
for such succeeding taxable year.''.
(F) Subsection (d) of section 1400C is amended to read as
follows:
``(d) Carryforward of Unused Credit.--
``(1) Rule for years in which all personal credits allowed
against regular and alternative minimum tax.--In the case of a
taxable year to which section 26(a)(2) applies, if the credit
allowable under subsection (a) exceeds the limitation imposed by
section 26(a)(2) for such taxable year reduced by the sum of the
credits allowable under subpart A of part IV of subchapter A (other
than this section and section 25D), such excess shall be carried to
the succeeding taxable year and added to the credit allowable under
subsection (a) for such taxable year.
``(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) exceeds the limitation imposed by section
26(a)(1) for such taxable year reduced by the sum of the credits
allowable under subpart A of part IV of subchapter A (other than
this section and sections 23, 24, 25B, and 25D), such excess shall
be carried to the succeeding taxable year and added to the credit
allowable under subsection (a) for such taxable year.''.
(G) Subsection (i) of section 904 is amended to read as
follows:
``(i) Coordination With Nonrefundable Personal Credits.--In the
case of any taxable year of an individual to which section 26(a)(2)
does not apply, for purposes of subsection (a), the tax against which
the credit is taken is such tax reduced by the sum of the credits
allowable under subpart A of part IV of subchapter A of this chapter
(other than sections 23, 24, and 25B).''.
(H) Application of egtrra sunset.--The amendments made by this
paragraph (and each part thereof) shall be subject to title IX of
the Economic Growth and Tax Relief Reconciliation Act of 2001 in
the same manner as the provisions of such Act to which such
amendment (or part thereof) relates.
(4) Subsection (b) of section 1335 of the Energy Policy Act of
2005 is amended by striking paragraphs (1), (2), and (3). The
Internal Revenue Code of 1986 shall be applied and administered as
if the amendments made such paragraphs had never been enacted.
(j) Amendment Related to Section 1341.--Paragraph (6) of section
30B(h) is amended by adding at the end the following sentence: ``For
purposes of subsection (g), property to which this paragraph applies
shall be treated as of a character subject to an allowance for
depreciation.''.
(k) Amendment Related to Section 1342.--Paragraph (2) of section
30C(e) is amended by adding at the end the following sentence: ``For
purposes of subsection (d), property to which this paragraph applies
shall be treated as of a character subject to an allowance for
depreciation.''.
(l) Amendments Related to Section 1351.--
(1) Paragraph (6) of section 41(f) (relating to special rules)
is amended by adding at the end the following:
``(C) Foreign research.--For purposes of subsection (a)(3),
amounts paid or incurred for any energy research conducted
outside the United States, the Commonwealth of Puerto Rico, or
any possession of the United States shall not be taken into
account.
``(D) Denial of double benefit.--Any amount taken into
account under subsection (a)(3) shall not be taken into account
under paragraph (1) or (2) of subsection (a).''.
(2) Clause (ii) of section 41(b)(3)(C) is amended by striking
``(other than an energy research consortium)''.
(m) Effective Date.--
(1) In general.--Except as provided in paragraphs (2) and (3),
the amendments made by this section shall take effect as if
included in the provisions of the Energy Policy Act of 2005 to
which they relate.
(2) Repeal of public utility holding company act of 1935.--The
amendments made by subsection (a) shall not apply with respect to
any transaction ordered in compliance with the Public Utility
Holding Company Act of 1935 before its repeal.
(3) Coordination of personal credits.--The amendments made by
subsection (i)(3) shall apply to taxable years beginning after
December 31, 2005.
SEC. 403. AMENDMENTS RELATED TO THE AMERICAN JOBS CREATION ACT OF 2004.
(a) Amendments Related to Section 102 of the Act.--
(1) Paragraph (1) of section 199(b) is amended by striking
``the employer'' and inserting ``the taxpayer''.
(2) Paragraph (2) of section 199(b) is amended to read as
follows:
``(2) W-2 wages.--For purposes of this section, the term `W-2
wages' means, with respect to any person for any taxable year of
such person, the sum of the amounts described in paragraphs (3) and
(8) of section 6051(a) paid by such person with respect to
employment of employees by such person during the calendar year
ending during such taxable year. Such term shall not include any
amount which is not properly included in a return filed with the
Social Security Administration on or before the 60th day after the
due date (including extensions) for such return.''.
(3) Subparagraph (B) of section 199(c)(1) is amended by
inserting ``and'' at the end of clause (i), by striking clauses
(ii) and (iii), and by inserting after clause (i) the following:
``(ii) other expenses, losses, or deductions (other
than the deduction allowed under this section), which are
properly allocable to such receipts.''.
(4) Paragraph (2) of section 199(c) is amended to read as
follows:
``(2) Allocation method.--The Secretary shall prescribe rules
for the proper allocation of items described in paragraph (1) for
purposes of determining qualified production activities income.
Such rules shall provide for the proper allocation of items whether
or not such items are directly allocable to domestic production
gross receipts.''.
(5) Subparagraph (A) of section 199(c)(4) is amended by
striking clauses (ii) and (iii) and inserting the following new
clauses:
``(ii) in the case of a taxpayer engaged in the active
conduct of a construction trade or business, construction
of real property performed in the United States by the
taxpayer in the ordinary course of such trade or business,
or
``(iii) in the case of a taxpayer engaged in the active
conduct of an engineering or architectural services trade
or business, engineering or architectural services
performed in the United States by the taxpayer in the
ordinary course of such trade or business with respect to
the construction of real property in the United States.''.
(6) Subparagraph (B) of section 199(c)(4) is amended by
striking ``and'' at the end of clause (i), by striking the period
at the end of clause (ii) and inserting ``, or'', and by adding at
the end the following:
``(iii) the lease, rental, license, sale, exchange, or
other disposition of land.''.
(7) Paragraph (4) of section 199(c) is amended by adding at the
end the following new subparagraphs:
``(C) Special rule for certain government contracts.--Gross
receipts derived from the manufacture or production of any
property described in subparagraph (A)(i)(I) shall be treated
as meeting the requirements of subparagraph (A)(i) if--
``(i) such property is manufactured or produced by the
taxpayer pursuant to a contract with the Federal
Government, and
``(ii) the Federal Acquisition Regulation requires that
title or risk of loss with respect to such property be
transferred to the Federal Government before the
manufacture or production of such property is complete.
``(D) Partnerships owned by expanded affiliated groups.--
For purposes of this paragraph, if all of the interests in the
capital and profits of a partnership are owned by members of a
single expanded affiliated group at all times during the
taxable year of such partnership, the partnership and all
members of such group shall be treated as a single taxpayer
during such period.''.
(8) Paragraph (1) of section 199(d) is amended to read as
follows:
``(1) Application of section to pass-thru entities.--
``(A) Partnerships and s corporations.--In the case of a
partnership or S corporation--
``(i) this section shall be applied at the partner or
shareholder level,
``(ii) each partner or shareholder shall take into
account such person's allocable share of each item
described in subparagraph (A) or (B) of subsection (c)(1)
(determined without regard to whether the items described
in such subparagraph (A) exceed the items described in such
subparagraph (B)), and
``(iii) each partner or shareholder shall be treated
for purposes of subsection (b) as having W-2 wages for the
taxable year in an amount equal to the lesser of--
``(I) such person's allocable share of the W-2
wages of the partnership or S corporation for the
taxable year (as determined under regulations
prescribed by the Secretary), or
``(II) 2 times 9 percent of so much of such
person's qualified production activities income as is
attributable to items allocated under clause (ii) for
the taxable year.
``(B) Trusts and estates.--In the case of a trust or
estate--
``(i) the items referred to in subparagraph (A)(ii) (as
determined therein) and the W-2 wages of the trust or
estate for the taxable year, shall be apportioned between
the beneficiaries and the fiduciary (and among the
beneficiaries) under regulations prescribed by the
Secretary, and
``(ii) for purposes of paragraph (2), adjusted gross
income of the trust or estate shall be determined as
provided in section 67(e) with the adjustments described in
such paragraph.
``(C) Regulations.--The Secretary may prescribe rules
requiring or restricting the allocation of items and wages
under this paragraph and may prescribe such reporting
requirements as the Secretary determines appropriate.''.
(9) Paragraph (3) of section 199(d) is amended to read as
follows:
``(3) Agricultural and horticultural cooperatives.--
``(A) Deduction allowed to patrons.--Any person who
receives a qualified payment from a specified agricultural or
horticultural cooperative shall be allowed for the taxable year
in which such payment is received a deduction under subsection
(a) equal to the portion of the deduction allowed under
subsection (a) to such cooperative which is--
``(i) allowed with respect to the portion of the
qualified production activities income to which such
payment is attributable, and
``(ii) identified by such cooperative in a written
notice mailed to such person during the payment period
described in section 1382(d).
``(B) Cooperative denied deduction for portion of qualified
payments.--The taxable income of a specified agricultural or
horticultural cooperative shall not be reduced under section
1382 by reason of that portion of any qualified payment as does
not exceed the deduction allowable under subparagraph (A) with
respect to such payment.
``(C) Taxable income of cooperatives determined without
regard to certain deductions.--For purposes of this section,
the taxable income of a specified agricultural or horticultural
cooperative shall be computed without regard to any deduction
allowable under subsection (b) or (c) of section 1382 (relating
to patronage dividends, per-unit retain allocations, and
nonpatronage distributions).
``(D) Special rule for marketing cooperatives.--For
purposes of this section, a specified agricultural or
horticultural cooperative described in subparagraph (F)(ii)
shall be treated as having manufactured, produced, grown, or
extracted in whole or significant part any qualifying
production property marketed by the organization which its
patrons have so manufactured, produced, grown, or extracted.
``(E) Qualified payment.--For purposes of this paragraph,
the term `qualified payment' means, with respect to any person,
any amount which--
``(i) is described in paragraph (1) or (3) of section
1385(a),
``(ii) is received by such person from a specified
agricultural or horticultural cooperative, and
``(iii) is attributable to qualified production
activities income with respect to which a deduction is
allowed to such cooperative under subsection (a).
``(F) Specified agricultural or horticultural
cooperative.--For purposes of this paragraph, the term
`specified agricultural or horticultural cooperative' means an
organization to which part I of subchapter T applies which is
engaged--
``(i) in the manufacturing, production, growth, or
extraction in whole or significant part of any agricultural
or horticultural product, or
``(ii) in the marketing of agricultural or
horticultural products.''.
(10) Clause (i) of section 199(d)(4)(B) is amended--
(A) by striking ``50 percent'' and inserting ``more than 50
percent'', and
(B) by striking ``80 percent'' and inserting ``at least 80
percent''.
(11)(A) Paragraph (6) of section 199(d) is amended to read as
follows:
``(6) Coordination with minimum tax.--For purposes of
determining alternative minimum taxable income under section 55--
``(A) qualified production activities income shall be
determined without regard to any adjustments under sections 56
through 59, and
``(B) in the case of a corporation, subsection (a)(1)(B)
shall be applied by substituting `alternative minimum taxable
income' for `taxable income'.''.
(B) Paragraph (2) of section 199(a) is amended by striking
``subsections (d)(1) and (d)(6)'' and inserting ``subsection
(d)(1)''.
(12) Subsection (d) of section 199 is amended by redesignating
paragraph (7) as paragraph (8) and by inserting after paragraph (6)
the following new paragraph:
``(7) Unrelated business taxable income.--For purposes of
determining the tax imposed by section 511, subsection (a)(1)(B)
shall be applied by substituting `unrelated business taxable
income' for `taxable income'.''.
(13) Paragraph (8) of section 199(d), as redesignated by
paragraph (12), is amended by inserting ``, including regulations
which prevent more than 1 taxpayer from being allowed a deduction
under this section with respect to any activity described in
subsection (c)(4)(A)(i)'' before the period at the end.
(14) Clauses (i)(II) and (ii)(II) of section 56(d)(1)(A) are
each amended by striking ``such deduction'' and inserting ``such
deduction and the deduction under section 199''.
(15) Clause (i) of section 163(j)(6)(A) is amended by striking
``and'' at the end of subclause (II), by redesignating subclause
(III) as subclause (IV), and by inserting after subclause (II) the
following new subclause:
``(III) any deduction allowable under section 199,
and''.
(16) Paragraph (2) of section 170(b) is amended by
redesignating subparagraphs (C) and (D) as subparagraphs (D) and
(E), respectively, and by inserting after subparagraph (B) the
following new subparagraph:
``(C) section 199,''.
(17) Subsection (d) of section 172 is amended by adding at the
end the following new paragraph:
``(7) Manufacturing deduction.--The deduction under section 199
shall not be allowed.''.
(18) Paragraph (1) of section 613A(d) is amended by
redesignating subparagraphs (B), (C), and (D) as subparagraphs (C),
(D), and (E), respectively, and by inserting after subparagraph (A)
the following new subparagraph:
``(B) any deduction allowable under section 199,''.
(19) Subsection (e) of section 102 of the American Jobs
Creation Act of 2004 is amended to read as follows:
``(e) Effective Date.--
``(1) In general.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2004.
``(2) Application to pass-thru entities, etc.--In determining
the deduction under section 199 of the Internal Revenue Code of
1986 (as added by this section), items arising from a taxable year
of a partnership, S corporation, estate, or trust beginning before
January 1, 2005, shall not be taken into account for purposes of
subsection (d)(1) of such section.''.
(b) Amendment Related to Section 231 of the Act.--Paragraph (1) of
section 1361(c) is amended to read as follows:
``(1) Members of a family treated as 1 shareholder.--
``(A) In general.--For purposes of subsection (b)(1)(A),
there shall be treated as one shareholder--
``(i) a husband and wife (and their estates), and
``(ii) all members of a family (and their estates).
``(B) Members of a family.--For purposes of this
paragraph--
``(i) In general.--The term `members of a family' means
a common ancestor, any lineal descendant of such common
ancestor, and any spouse or former spouse of such common
ancestor or any such lineal descendant.
``(ii) Common ancestor.--An individual shall not be
considered to be a common ancestor if, on the applicable
date, the individual is more than 6 generations removed
from the youngest generation of shareholders who would (but
for this subparagraph) be members of the family. For
purposes of the preceding sentence, a spouse (or former
spouse) shall be treated as being of the same generation as
the individual to whom such spouse is (or was) married.
``(iii) Applicable date.--The term `applicable date'
means the latest of--
``(I) the date the election under section 1362(a)
is made,
``(II) the earliest date that an individual
described in clause (i) holds stock in the S
corporation, or
``(III) October 22, 2004.
``(C) Effect of adoption, etc.--Any legally adopted child
of an individual, any child who is lawfully placed with an
individual for legal adoption by the individual, and any
eligible foster child of an individual (within the meaning of
section 152(f)(1)(C)), shall be treated as a child of such
individual by blood.''.
(c) Amendment Related to Section 235 of the Act.--Subsection (b) of
section 235 of the American Jobs Creation Act of 2004 is amended by
striking ``taxable years beginning'' and inserting ``transfers''.
(d) Amendments Related to Section 243 of the Act.--
(1) Paragraph (7) of section 856(c) is amended to read as
follows:
``(7) Rules of application for failure to satisfy paragraph
(4).--
``(A) In general.--A corporation, trust, or association
that fails to meet the requirements of paragraph (4) (other
than a failure to meet the requirements of paragraph
(4)(B)(iii) which is described in subparagraph (B)(i) of this
paragraph) for a particular quarter shall nevertheless be
considered to have satisfied the requirements of such paragraph
for such quarter if--
``(i) following the corporation, trust, or
association's identification of the failure to satisfy the
requirements of such paragraph for a particular quarter, a
description of each asset that causes the corporation,
trust, or association to fail to satisfy the requirements
of such paragraph at the close of such quarter of any
taxable year is set forth in a schedule for such quarter
filed in accordance with regulations prescribed by the
Secretary,
``(ii) the failure to meet the requirements of such
paragraph for a particular quarter is due to reasonable
cause and not due to willful neglect, and
``(iii)(I) the corporation, trust, or association
disposes of the assets set forth on the schedule specified
in clause (i) within 6 months after the last day of the
quarter in which the corporation, trust or association's
identification of the failure to satisfy the requirements
of such paragraph occurred or such other time period
prescribed by the Secretary and in the manner prescribed by
the Secretary, or
``(II) the requirements of such paragraph are otherwise
met within the time period specified in subclause (I).
``(B) Rule for certain de minimis failures.--A corporation,
trust, or association that fails to meet the requirements of
paragraph (4)(B)(iii) for a particular quarter shall
nevertheless be considered to have satisfied the requirements
of such paragraph for such quarter if--
``(i) such failure is due to the ownership of assets
the total value of which does not exceed the lesser of--
``(I) 1 percent of the total value of the trust's
assets at the end of the quarter for which such
measurement is done, and
``(II) $10,000,000, and
``(ii)(I) the corporation, trust, or association,
following the identification of such failure, disposes of
assets in order to meet the requirements of such paragraph
within 6 months after the last day of the quarter in which
the corporation, trust or association's identification of
the failure to satisfy the requirements of such paragraph
occurred or such other time period prescribed by the
Secretary and in the manner prescribed by the Secretary, or
``(II) the requirements of such paragraph are otherwise
met within the time period specified in subclause (I).
``(C) Tax.--
``(i) Tax imposed.--If subparagraph (A) applies to a
corporation, trust, or association for any taxable year,
there is hereby imposed on such corporation, trust, or
association a tax in an amount equal to the greater of--
``(I) $50,000, or
``(II) the amount determined (pursuant to
regulations promulgated by the Secretary) by
multiplying the net income generated by the assets
described in the schedule specified in subparagraph
(A)(i) for the period specified in clause (ii) by the
highest rate of tax specified in section 11.
``(ii) Period.--For purposes of clause (i)(II), the
period described in this clause is the period beginning on
the first date that the failure to satisfy the requirements
of such paragraph (4) occurs as a result of the ownership
of such assets and ending on the earlier of the date on
which the trust disposes of such assets or the end of the
first quarter when there is no longer a failure to satisfy
such paragraph (4).
``(iii) Administrative provisions.--For purposes of
subtitle F, the taxes imposed by this subparagraph shall be
treated as excise taxes with respect to which the
deficiency procedures of such subtitle apply.''.
(2) Subsection (m) of section 856 is amended by adding at the
end the following new paragraph:
``(6) Transition rule.--
``(A) In general.--Notwithstanding paragraph (2)(C),
securities held by a trust shall not be considered securities
held by the trust for purposes of subsection
(c)(4)(B)(iii)(III) during any period beginning on or before
October 22, 2004, if such securities--
``(i) are held by such trust continuously during such
period, and
``(ii) would not be taken into account for purposes of
such subsection by reason of paragraph (7)(C) of subsection
(c) (as in effect on October 22, 2004) if the amendments
made by section 243 of the American Jobs Creation Act of
2004 had never been enacted.
``(B) Rule not to apply to securities held after maturity
date.--Subparagraph (A) shall not apply with respect to any
security after the later of October 22, 2004, or the latest
maturity date under the contract (as in effect on October 22,
2004) taking into account any renewal or extension permitted
under the contract if such renewal or extension does not
significantly modify any other terms of the contract.
``(C) Successors.--If the successor of a trust to which
this paragraph applies acquires securities in a transaction to
which section 381 applies, such trusts shall be treated as a
single entity for purposes of determining the holding period of
such securities under subparagraph (A).''.
(3) Subparagraph (E) of section 857(b)(2) is amended by
striking ``section 856(c)(7)(B)(iii), and section 856(g)(1).'' and
inserting ``section 856(c)(7)(C), and section 856(g)(5)''.
(4) Subsection (g) of section 243 of the American Jobs Creation
Act of 2004 is amended to read as follows:
``(g) Effective Dates.--
``(1) Subsections (a) and (b).--The amendments made by
subsections (a) and (b) shall apply to taxable years beginning
after December 31, 2000.
``(2) Subsections (c) and (e).--The amendments made by
subsections (c) and (e) shall apply to taxable years beginning
after the date of the enactment of this Act.
``(3) Subsection (d).--The amendment made by subsection (d)
shall apply to transactions entered into after December 31, 2004.
``(4) Subsection (f).--
``(A) The amendment made by paragraph (1) of subsection (f)
shall apply to failures with respect to which the requirements
of subparagraph (A) or (B) of section 856(c)(7) of the Internal
Revenue Code of 1986 (as added by such paragraph) are satisfied
after the date of the enactment of this Act.
``(B) The amendment made by paragraph (2) of subsection (f)
shall apply to failures with respect to which the requirements
of paragraph (6) of section 856(c) of the Internal Revenue Code
of 1986 (as amended by such paragraph) are satisfied after the
date of the enactment of this Act.
``(C) The amendments made by paragraph (3) of subsection
(f) shall apply to failures with respect to which the
requirements of paragraph (5) of section 856(g) of the Internal
Revenue Code of 1986 (as added by such paragraph) are satisfied
after the date of the enactment of this Act.
``(D) The amendment made by paragraph (4) of subsection (f)
shall apply to taxable years ending after the date of the
enactment of this Act.
``(E) The amendments made by paragraph (5) of subsection
(f) shall apply to statements filed after the date of the
enactment of this Act.''.
(e) Amendments Related to Section 244 of the Act.--
(1) Paragraph (2) of section 181(d) is amended by striking the
last sentence in subparagraph (A), by redesignating subparagraph
(B) as subparagraph (C), and by inserting after subparagraph (A)
the following new subparagraph:
``(B) Special rules for television series.--In the case of
a television series--
``(i) each episode of such series shall be treated as a
separate production, and
``(ii) only the first 44 episodes of such series shall
be taken into account.''.
(2) Subparagraph (C) of section 1245(a)(2) is amended by
inserting ``181,'' after ``179B,''.
(f) Amendments Related to Section 245 of the Act.--
(1) Subsection (b) of section 45G is amended to read as
follows:
``(b) Limitation.--
``(1) In general.--The credit allowed under subsection (a) for
any taxable year shall not exceed the product of--
``(A) $3,500, multiplied by
``(B) the sum of--
``(i) the number of miles of railroad track owned or
leased by the eligible taxpayer as of the close of the
taxable year, and
``(ii) the number of miles of railroad track assigned
for purposes of this subsection to the eligible taxpayer by
a Class II or Class III railroad which owns or leases such
railroad track as of the close of the taxable year.
``(2) Assignments.--With respect to any assignment of a mile of
railroad track under paragraph (1)(B)(ii)--
``(A) such assignment may be made only once per taxable
year of the Class II or Class III railroad and shall be treated
as made as of the close of such taxable year,
``(B) such mile may not be taken into account under this
section by such railroad for such taxable year, and
``(C) such assignment shall be taken into account for the
taxable year of the assignee which includes the date that such
assignment is treated as effective.''.
(2) Paragraph (2) of section 45G(c) is amended to read as
follows:
``(2) any person who transports property using the rail
facilities of a Class II or Class III railroad or who furnishes
railroad-related property or services to a Class II or Class III
railroad, but only with respect to miles of railroad track assigned
to such person by such Class II or Class III railroad for purposes
of subsection (b).''.
(g) Amendments Related to Section 248 of the Act.--
(1)(A) Subsection (d) of section 1353 is amended by striking
``ownership and charter interests'' and inserting ``ownership,
charter, and operating agreement interests''.
(B) Subsection (a) of section 1355 is amended by striking
paragraph (8).
(C) Paragraph (1) of section 1355(b) is amended to read as
follows:
``(1) In general.--Except as provided in paragraph (2), a
person is treated as operating any vessel during any period if--
``(A)(i) such vessel is owned by, or chartered (including a
time charter) to, the person, or
``(ii) the person provides services for such vessel
pursuant to an operating agreement, and
``(B) such vessel is in use as a qualifying vessel during
such period.''.
(D) Paragraph (3) of section 1355(d) is amended to read as
follows:
``(3) the extent of a partner's ownership, charter, or
operating agreement interest in any vessel operated by the
partnership shall be determined on the basis of the partner's
interest in the partnership.''.
(2) Paragraph (3) of section 1355(c) is amended by striking
``determined--'' and all that follows and inserting ``determined by
treating all members of such group as 1 person.''.
(3) Subsection (c) of section 1356 is amended--
(A) by striking paragraph (3), and
(B) by adding at the end of paragraph (2) the following new
flush sentence:
``Such term shall not include any core qualifying activities.''.
(4) The last sentence of section 1354(b) is amended by
inserting ``on or'' after ``only if made''.
(h) Amendment Related to Section 314 of the Act.--Paragraph (2) of
section 55(c) is amended by striking ``regular tax'' and inserting
``regular tax liability''.
(i) Amendments Related to Section 322 of the Act.--
(1)(A) Subparagraph (B) of section 194(b)(1) is amended to read
as follows:
``(B) Dollar limitation.--The aggregate amount of
reforestation expenditures which may be taken into account
under subparagraph (A) with respect to each qualified timber
property for any taxable year shall not exceed--
``(i) except as provided in clause (ii) or (iii),
$10,000,
``(ii) in the case of a separate return by a married
individual (as defined in section 7703), $5,000, and
``(iii) in the case of a trust, zero.''.
(B) Paragraph (4) of section 194(c) is amended to read as
follows:
``(4) Treatment of trusts and estates.--The aggregate amount of
reforestation expenditures incurred by any trust or estate shall be
apportioned between the income beneficiaries and the fiduciary
under regulations prescribed by the Secretary. Any amount so
apportioned to a beneficiary shall be taken into account as
expenditures incurred by such beneficiary in applying this section
to such beneficiary.''.
(2) Subparagraph (C) of section 1245(a)(2) is amended by
striking ``or 193'' and inserting ``193, or 194''.
(j) Amendments Related to Section 336 of the Act.--
(1) Clause (iv) of section 168(k)(2)(A) is amended by striking
``subparagraphs (B) and (C)'' and inserting ``subparagraph (B) or
(C)''.
(2) Clause (iii) of section 168(k)(4)(B) is amended by striking
``and paragraph (2)(C)'' and inserting ``or paragraph (2)(C) (as so
modified)''.
(k) Amendment Related to Section 402 of the Act.--Paragraph (2) of
section 904(g) is amended to read as follows:
``(2) Overall domestic loss.--For purposes of this subsection--
``(A) In general.--The term `overall domestic loss' means--
``(i) with respect to any qualified taxable year, the
domestic loss for such taxable year to the extent such loss
offsets taxable income from sources without the United
States for the taxable year or for any preceding qualified
taxable year by reason of a carryback, and
``(ii) with respect to any other taxable year, the
domestic loss for such taxable year to the extent such loss
offsets taxable income from sources without the United
States for any preceding qualified taxable year by reason
of a carryback.
``(B) Domestic loss.--For purposes of subparagraph (A), the
term `domestic loss' means the amount by which the gross income
for the taxable year from sources within the United States is
exceeded by the sum of the deductions properly apportioned or
allocated thereto (determined without regard to any carryback
from a subsequent taxable year).
``(C) Qualified taxable year.--For purposes of subparagraph
(A), the term `qualified taxable year' means any taxable year
for which the taxpayer chose the benefits of this subpart.''.
(l) Amendment Related to Section 403 of the Act.--Section 403 of
the American Jobs Creation Act of 2004 is amended by adding at the end
the following new subsection:
``(d) Transition Rule.--If the taxpayer elects (at such time and in
such form and manner as the Secretary of the Treasury may prescribe) to
have the rules of this subsection apply--
``(1) the amendments made by this section shall not apply to
taxable years beginning after December 31, 2002, and before January
1, 2005, and
``(2) in the case of taxable years beginning after December 31,
2004, clause (iv) of section 904(d)(4)(C) of the Internal Revenue
Code of 1986 (as amended by this section) shall be applied by
substituting `January 1, 2005' for `January 1, 2003' both places it
appears.''.
(m) Amendment Related to Section 412 of the Act.--Subparagraph (B)
of section 954(c)(4) is amended by adding at the end the following:
``If a controlled foreign corporation is treated as owning a capital or
profits interest in a partnership under constructive ownership rules
similar to the rules of section 958(b), the controlled foreign
corporation shall be treated as owning such interest directly for
purposes of this subparagraph.''.
(n) Amendments Related to Section 413 of the Act.--
(1) Subsection (b) of section 532 is amended by striking
paragraph (2) and redesignating paragraphs (3) and (4) as
paragraphs (2) and (3), respectively.
(2) Subsection (b) of section 535 is amended by adding at the
end the following new paragraph:
``(10) Controlled foreign corporations.--There shall be allowed
as a deduction the amount of the corporation's income for the
taxable year which is included in the gross income of a United
States shareholder under section 951(a). In the case of any
corporation the accumulated taxable income of which would (but for
this sentence) be determined without allowance of any deductions,
the deduction under this paragraph shall be allowed and shall be
appropriately adjusted to take into account any deductions which
reduced such inclusion.''.
(3)(A) Section 6683 is repealed.
(B) The table of sections for part I of subchapter B of chapter
68 is amended by striking the item relating to section 6683.
(o) Amendment Related to Section 415 of the Act.--Subparagraph (D)
of section 904(d)(2) is amended by inserting ``as in effect before its
repeal'' after ``section 954(f)''.
(p) Amendments Related to Section 418 of the Act.--
(1) The second sentence of section 897(h)(1) is amended--
(A) by striking ``any distribution'' and all that follows
through ``any class of stock'' and inserting ``any distribution
by a real estate investment trust with respect to any class of
stock'', and
(B) by striking ``the taxable year'' and inserting ``the 1-
year period ending on the date of the distribution''.
(2) Subsection (c) of section 418 of the American Jobs Creation
Act of 2004 is amended to read as follows:
``(c) Effective Date.--The amendments made by this section shall
apply to--
``(1) any distribution by a real estate investment trust which
is treated as a deduction for a taxable year of such trust
beginning after the date of the enactment of this Act, and
``(2) any distribution by a real estate investment trust made
after such date which is treated as a deduction under section 860
for a taxable year of such trust beginning on or before such
date.''.
(q) Amendments Related to Section 422 of the Act.--
(1) Subparagraph (B) of section 965(a)(2) is amended by
inserting ``from another controlled foreign corporation in such
chain of ownership'' before ``, but only to the extent''.
(2) Subparagraph (A) of section 965(b)(2) is amended by
inserting ``cash'' before ``dividends''.
(3) Paragraph (3) of section 965(b) is amended by adding at the
end the following: ``The Secretary may prescribe such regulations
as may be necessary or appropriate to prevent the avoidance of the
purposes of this paragraph, including regulations which provide
that cash dividends shall not be taken into account under
subsection (a) to the extent such dividends are attributable to the
direct or indirect transfer (including through the use of
intervening entities or capital contributions) of cash or other
property from a related person (as so defined) to a controlled
foreign corporation.''.
(4) Paragraph (1) of section 965(c) is amended to read as
follows:
``(1) Applicable financial statement.--The term `applicable
financial statement' means--
``(A) with respect to a United States shareholder which is
required to file a financial statement with the Securities and
Exchange Commission (or which is included in such a statement
so filed by another person), the most recent audited annual
financial statement (including the notes which form an integral
part of such statement) of such shareholder (or which includes
such shareholder)--
``(i) which was so filed on or before June 30, 2003,
and
``(ii) which was certified on or before June 30, 2003,
as being prepared in accordance with generally accepted
accounting principles, and
``(B) with respect to any other United States shareholder,
the most recent audited financial statement (including the
notes which form an integral part of such statement) of such
shareholder (or which includes such shareholder)--
``(i) which was certified on or before June 30, 2003,
as being prepared in accordance with generally accepted
accounting principles, and
``(ii) which is used for the purposes of a statement or
report--
``(I) to creditors,
``(II) to shareholders, or
``(III) for any other substantial nontax
purpose.''.
(5) Paragraph (2) of section 965(d) is amended by striking
``properly allocated and apportioned'' and inserting ``directly
allocable''.
(6) Subsection (d) of section 965 is amended by adding at the
end the following new paragraph:
``(4) Coordination with section 78.--Section 78 shall not apply
to any tax which is not allowable as a credit under section 901 by
reason of this subsection.''.
(7) The last sentence of section 965(e)(1) is amended by
inserting ``which are imposed by foreign countries and possessions
of the United States and are'' after ``taxes''.
(8) Subsection (f) of section 965 is amended by inserting ``on
or'' before ``before the due date''.
(r) Amendments Related to Section 501 of the Act.--
(1) Subparagraph (A) of section 164(b)(5) is amended to read as
follows:
``(A) Election to deduct state and local sales taxes in
lieu of state and local income taxes.--At the election of the
taxpayer for the taxable year, subsection (a) shall be
applied--
``(i) without regard to the reference to State and
local income taxes, and
``(ii) as if State and local general sales taxes were
referred to in a paragraph thereof.''.
(2) Clause (ii) of section 56(b)(1)(A) is amended by inserting
``or clause (ii) of section 164(b)(5)(A)'' before the period at the
end.
(s) Amendments Related to Section 708 of the Act.--Section 708 of
the American Jobs Creation Act of 2004 is amended--
(1) in subsection (a), by striking ``contract commencement
date'' and inserting ``construction commencement date'', and
(2) by redesignating subsection (d) as subsection (e) and
inserting after subsection (c) the following new subsection:
``(d) Certain Adjustments Not to Apply.--Section 481 of the
Internal Revenue Code of 1986 shall not apply with respect to any
change in the method of accounting which is required by this
section.''.
(t) Amendment Related to Section 710 of the Act.--Clause (i) of
section 45(c)(7)(A) is amended by striking ``synthetic''.
(u) Amendment Related to Section 801 of the Act.--Paragraph (3) of
section 7874(a) is amended to read as follows:
``(3) Coordination with subsection (b).--A corporation which is
treated as a domestic corporation under subsection (b) shall not be
treated as a surrogate foreign corporation for purposes of
paragraph (2)(A).''.
(v) Amendments Related to Section 804 of the Act.--
(1) Subparagraph (C) of section 877(g)(2) is amended by
striking ``section 7701(b)(3)(D)(ii)'' and inserting ``section
7701(b)(3)(D)''.
(2) Subsection (n) of section 7701 is amended to read as
follows:
``(n) Special Rules for Determining When an Individual Is No Longer
a United States Citizen or Long-Term Resident.--For purposes of this
chapter--
``(1) United states citizens.--An individual who would (but for
this paragraph) cease to be treated as a citizen of the United
States shall continue to be treated as a citizen of the United
States until such individual--
``(A) gives notice of an expatriating act (with the
requisite intent to relinquish citizenship) to the Secretary of
State, and
``(B) provides a statement in accordance with section 6039G
(if such a statement is otherwise required).
``(2) Long-term residents.--A long-term resident (as defined in
section 877(e)(2)) who would (but for this paragraph) be described
in section 877(e)(1) shall be treated as a lawful permanent
resident of the United States and as not described in section
877(e)(1) until such individual--
``(A) gives notice of termination of residency (with the
requisite intent to terminate residency) to the Secretary of
Homeland Security, and
``(B) provides a statement in accordance with section 6039G
(if such a statement is otherwise required).''.
(w) Amendment Related to Section 811 of the Act.--Subsection (c) of
section 811 of the American Jobs Creation Act of 2004 is amended by
inserting ``and which were not filed before such date'' before the
period at the end.
(x) Amendments Related to Section 812 of the Act.--
(1) Subsection (b) of section 6662 is amended by adding at the
end the following new sentence: ``Except as provided in paragraph
(1) or (2)(B) of section 6662A(e), this section shall not apply to
the portion of any underpayment which is attributable to a
reportable transaction understatement on which a penalty is imposed
under section 6662A.''.
(2) Paragraph (2) of section 6662A(e) is amended to read as
follows:
``(2) Coordination with other penalties.--
``(A) Coordination with fraud penalty.--This section shall
not apply to any portion of an understatement on which a
penalty is imposed under section 6663.
``(B) Coordination with gross valuation misstatement
penalty.--This section shall not apply to any portion of an
understatement on which a penalty is imposed under section 6662
if the rate of the penalty is determined under section
6662(h).''.
(3) Subsection (f) of section 812 of the American Jobs Creation
Act of 2004 is amended to read as follows:
``(f) Effective Dates.--
``(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to taxable years ending
after the date of the enactment of this Act.
``(2) Disqualified opinions.--Section 6664(d)(3)(B) of the
Internal Revenue Code of 1986 (as added by subsection (c)) shall
not apply to the opinion of a tax advisor if--
``(A) the opinion was provided to the taxpayer before the
date of the enactment of this Act,
``(B) the opinion relates to one or more transactions all
of which were entered into before such date, and
``(C) the tax treatment of items relating to each such
transaction was included on a return or statement filed by the
taxpayer before such date.''.
(y) Amendment Related to Section 814 of the Act.--Subparagraph (B)
of section 6501(c)(10) is amended by striking ``(as defined in section
6111)''.
(z) Amendment Related to Section 815 of the Act.--Paragraph (1) of
section 6112(b) is amended by inserting ``(or was required to maintain
a list under subsection (a) as in effect before the enactment of the
American Jobs Creation Act of 2004)'' after ``a list under subsection
(a)''.
(aa) Amendments Related to Section 832 of the Act.--
(1) Subsection (e) of section 853 is amended to read as
follows:
``(e) Treatment of Certain Taxes Not Allowed as a Credit Under
Section 901.--This section shall not apply to any tax with respect to
which the regulated investment company is not allowed a credit under
section 901 by reason of subsection (k) or (l) of such section.''.
(2) Clause (i) of section 901(l)(2)(C) is amended by striking
``if such security were stock''.
(bb) Amendments Related to Section 833 of the Act.--
(1) Subsection (a) of section 734 is amended by inserting
``with respect to such distribution'' before the period at the end.
(2) So much of subsection (b) of section 734 as precedes
paragraph (1) is amended to read as follows:
``(b) Method of Adjustment.--In the case of a distribution of
property to a partner by a partnership with respect to which the
election provided in section 754 is in effect or with respect to which
there is a substantial basis reduction, the partnership shall--''.
(cc) Amendment Related to Section 835 of the Act.--Paragraph (3) of
section 860G(a) is amended--
(1) in subparagraph (A)(iii)(I), by striking ``the obligation''
and inserting ``a reverse mortgage loan or other obligation'', and
(2) by striking all that follows subparagraph (C) and inserting
the following:
``For purposes of subparagraph (A), any obligation secured by stock
held by a person as a tenant-stockholder (as defined in section
216) in a cooperative housing corporation (as so defined) shall be
treated as secured by an interest in real property. For purposes of
subparagraph (A), any obligation originated by the United States or
any State (or any political subdivision, agency, or instrumentality
of the United States or any State) shall be treated as principally
secured by an interest in real property if more than 50 percent of
such obligations which are transferred to, or purchased by, the
REMIC are principally secured by an interest in real property
(determined without regard to this sentence).''.
(dd) Amendments Related to Section 836 of the Act.--
(1) Paragraph (1) of section 334(b) is amended by striking
``except that'' and all that follows and inserting ``except that,
in the hands of such distributee--
``(A) the basis of such property shall be the fair market
value of the property at the time of the distribution in any
case in which gain or loss is recognized by the liquidating
corporation with respect to such property, and
``(B) the basis of any property described in section
362(e)(1)(B) shall be the fair market value of the property at
the time of the distribution in any case in which such
distributee's aggregate adjusted basis of such property would
(but for this subparagraph) exceed the fair market value of
such property immediately after such liquidation.''.
(2) Clause (ii) of section 362(e)(2)(C) is amended to read as
follows:
``(ii) Election.--Any election under clause (i) shall
be made at such time and in such form and manner as the
Secretary may prescribe, and, once made, shall be
irrevocable.''.
(ee) Amendment Related to Section 840 of the Act.--Subsection (d)
of section 121 is amended--
(1) by redesignating the paragraph (10) relating to property
acquired from a decedent as paragraph (11) and by moving such
paragraph to the end of such subsection, and
(2) by amending the paragraph (10) relating to property
acquired in like-kind exchange to read as follows:
``(10) Property acquired in like-kind exchange.--If a taxpayer
acquires property in an exchange with respect to which gain is not
recognized (in whole or in part) to the taxpayer under subsection
(a) or (b) of section 1031, subsection (a) shall not apply to the
sale or exchange of such property by such taxpayer (or by any
person whose basis in such property is determined, in whole or in
part, by reference to the basis in the hands of such taxpayer)
during the 5-year period beginning with the date of such
acquisition.''.
(ff) Amendment Related to Section 849 of the Act.--Subsection (a)
of section 849 of the American Jobs Creation Act of 2004 is amended by
inserting ``, and in the case of property treated as tax-exempt use
property other than by reason of a lease, to property acquired after
March 12, 2004'' before the period at the end.
(gg) Amendment Related to Section 884 of the Act.--Subparagraph (B)
of section 170(f)(12) is amended by adding at the end the following new
clauses:
``(v) Whether the donee organization provided any goods
or services in consideration, in whole or in part, for the
qualified vehicle.
``(vi) A description and good faith estimate of the
value of any goods or services referred to in clause (v)
or, if such goods or services consist solely of intangible
religious benefits (as defined in paragraph (8)(B)), a
statement to that effect.''.
(hh) Amendments Related to Section 885 of the Act.--
(1) Paragraph (2) of section 26(b) is amended by striking
``and'' at the end of subparagraph (R), by striking the period at
the end of subparagraph (S) and inserting ``, and'', and by adding
at the end the following new subparagraph:
``(T) subsections (a)(1)(B)(i) and (b)(4)(A) of section
409A (relating to interest and additional tax with respect to
certain deferred compensation).''.
(2) Clause (ii) of section 409A(a)(4)(C) is amended by striking
``first''.
(3)(A) Notwithstanding section 885(d)(1) of the American Jobs
Creation Act of 2004, subsection (b) of section 409A of the
Internal Revenue Code of 1986 shall take effect on January 1, 2005.
(B) Not later than 90 days after the date of the enactment of
this Act, the Secretary of the Treasury shall issue guidance under
which a nonqualified deferred compensation plan which is in
violation of the requirements of section 409A(b) of such Code shall
be treated as not having violated such requirements if such plan
comes into conformance with such requirements during such limited
period as the Secretary may specify in such guidance.
(4) Subsection (f) of section 885 of the American Jobs Creation
Act of 2004 is amended by striking ``December 31, 2004'' the first
place it appears and inserting ``January 1, 2005''.
(ii) Amendment Related to Section 888 of the Act.--Paragraph (2) of
section 1092(a) is amended by striking the last sentence and adding at
the end the following new subparagraph:
``(C) Regulations.--The Secretary shall prescribe such
regulations or other guidance as may be necessary or
appropriate to carry out the purposes of this paragraph. Such
regulations or other guidance may specify the proper methods
for clearly identifying a straddle as an identified straddle
(and for identifying the positions comprising such straddle),
the rules for the application of this section to a taxpayer
which fails to comply with those identification requirements,
and the ordering rules in cases where a taxpayer disposes (or
otherwise ceases to be the holder) of any part of any position
which is part of an identified straddle.''.
(jj) Amendments Related to Section 898 of the Act.--
(1) Paragraph (3) of section 361(b) is amended by inserting
``(reduced by the amount of the liabilities assumed (within the
meaning of section 357(c)))'' before the period at the end.
(2) Paragraph (1) of section 357(d) is amended by inserting
``section 361(b)(3),'' after ``section 358(h),''.
(kk) Amendment Related to Section 899 of the Act.--Subparagraph (A)
of section 351(g)(3) is amended by adding at the end the following:
``If there is not a real and meaningful likelihood that dividends
beyond any limitation or preference will actually be paid, the
possibility of such payments will be disregarded in determining whether
stock is limited and preferred as to dividends.''.
(ll) Amendment Related to Section 902 of the Act.--Paragraph (1) of
section 709(b) is amended by striking ``taxpayer'' both places it
appears and inserting ``partnership''.
(mm) Amendments Related to Section 907 of the Act.--Clause (ii) of
section 274(e)(2)(B) is amended--
(1) in subclause (I), by inserting ``or a related party to the
taxpayer'' after ``the taxpayer'',
(2) in subclause (II), by inserting ``(or such related party)''
after ``the taxpayer'', and
(3) by adding at the end the following new flush sentence:
``For purposes of this clause, a person is a related party
with respect to another person if such person bears a
relationship to such other person described in section
267(b) or 707(b).''.
(nn) Effective Date.--The amendments made by this section shall
take effect as if included in the provisions of the American Jobs
Creation Act of 2004 to which they relate.
SEC. 404. AMENDMENTS RELATED TO THE WORKING FAMILIES TAX RELIEF ACT OF
2004.
(a) Amendment Related to Section 201 of the Act.--Subsection (e) of
section 152 is amended to read as follows:
``(e) Special Rule for Divorced Parents, Etc.--
``(1) In general.--Notwithstanding subsection (c)(1)(B),
(c)(4), or (d)(1)(C), if--
``(A) a child receives over one-half of the child's support
during the calendar year from the child's parents--
``(i) who are divorced or legally separated under a
decree of divorce or separate maintenance,
``(ii) who are separated under a written separation
agreement, or
``(iii) who live apart at all times during the last 6
months of the calendar year, and--
``(B) such child is in the custody of 1 or both of the
child's parents for more than one-half of the calendar year,
such child shall be treated as being the qualifying child or
qualifying relative of the noncustodial parent for a calendar
year if the requirements described in paragraph (2) or (3) are
met.
``(2) Exception where custodial parent releases claim to
exemption for the year.--For purposes of paragraph (1), the
requirements described in this paragraph are met with respect to
any calendar year if--
``(A) the custodial parent signs a written declaration (in
such manner and form as the Secretary may by regulations
prescribe) that such custodial parent will not claim such child
as a dependent for any taxable year beginning in such calendar
year, and
``(B) the noncustodial parent attaches such written
declaration to the noncustodial parent's return for the taxable
year beginning during such calendar year.
``(3) Exception for certain pre-1985 instruments.--
``(A) In general .--For purposes of paragraph (1), the
requirements described in this paragraph are met with respect
to any calendar year if--
``(i) a qualified pre-1985 instrument between the
parents applicable to the taxable year beginning in such
calendar year provides that the noncustodial parent shall
be entitled to any deduction allowable under section 151
for such child, and
``(ii) the noncustodial parent provides at least $600
for the support of such child during such calendar year.
For purposes of this subparagraph, amounts expended for the
support of a child or children shall be treated as received
from the noncustodial parent to the extent that such parent
provided amounts for such support.
``(B) Qualified pre-1985 instrument.--For purposes of this
paragraph, the term `qualified pre-1985 instrument' means any
decree of divorce or separate maintenance or written
agreement--
``(i) which is executed before January 1, 1985,
``(ii) which on such date contains the provision
described in subparagraph (A)(i), and
``(iii) which is not modified on or after such date in
a modification which expressly provides that this paragraph
shall not apply to such decree or agreement.
``(4) Custodial parent and noncustodial parent.--For purposes
of this subsection--
``(A) Custodial parent.--The term `custodial parent' means
the parent having custody for the greater portion of the
calendar year.
``(B) Noncustodial parent.--The term `noncustodial parent'
means the parent who is not the custodial parent.
``(5) Exception for multiple-support agreement.--This
subsection shall not apply in any case where over one-half of the
support of the child is treated as having been received from a
taxpayer under the provision of subsection (d)(3).
``(6) Special rule for support received from new spouse of
parent.--For purposes of this subsection, in the case of the
remarriage of a parent, support of a child received from the
parent's spouse shall be treated as received from the parent.''.
(b) Amendment Related to Section 203 of the Act.--Subparagraph (B)
of section 21(b)(1) is amended by inserting ``(as defined in section
152, determined without regard to subsections (b)(1), (b)(2), and
(d)(1)(B))'' after ``dependent of the taxpayer''.
(c) Amendment Related to Section 207 of the Act.--Subparagraph (A)
of section 223(d)(2) is amended by inserting ``, determined without
regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof'' after
``section 152''.
(d) Effective Date.--The amendments made by this section shall take
effect as if included in the provisions of the Working Families Tax
Relief Act of 2004 to which they relate.
SEC. 405. AMENDMENTS RELATED TO THE JOBS AND GROWTH TAX RELIEF
RECONCILIATION ACT OF 2003.
(a) Amendments Related to Section 201 of the Act.--
(1) Clause (ii) of section 168(k)(4)(B) is amended to read as
follows:
``(ii) which is--
``(I) acquired by the taxpayer after May 5, 2003,
and before January 1, 2005, but only if no written
binding contract for the acquisition was in effect
before May 6, 2003, or
``(II) acquired by the taxpayer pursuant to a
written binding contract which was entered into after
May 5, 2003, and before January 1, 2005, and''.
(2) Subparagraph (D) of section 1400L(b)(2) is amended by
striking ``September 11, 2004'' and inserting ``January 1, 2005''.
(b) Effective Date.--The amendments made by this section shall take
effect as if included in section 201 of the Jobs and Growth Tax Relief
and Reconciliation Act of 2003.
SEC. 406. AMENDMENT RELATED TO THE VICTIMS OF TERRORISM TAX RELIEF ACT
OF 2001.
(a) Amendment Related to Section 201 of the Act.--Paragraph (17) of
section 6103(l) is amended by striking ``subsection (f), (i)(7), or
(p)'' and inserting ``subsection (f), (i)(8), or (p)''.
(b) Effective Date.--The amendment made by this section shall take
effect as if included in section 201 of the Victims of Terrorism Tax
Relief Act of 2001.
SEC. 407. AMENDMENTS RELATED TO THE ECONOMIC GROWTH AND TAX RELIEF
RECONCILIATION ACT OF 2001.
(a) Amendments Related to Section 617 of the Act.--
(1) Clause (ii) of section 402(g)(7)(A) is amended to read as
follows:
``(ii) $15,000 reduced by the sum of--
``(I) the amounts not included in gross income for
prior taxable years by reason of this paragraph, plus
``(II) the aggregate amount of designated Roth
contributions (as defined in section 402A(c)) for prior
taxable years, or''.
(2) Subparagraph (A) of section 402(g)(1) is amended by
inserting ``to'' after ``shall not apply''.
(b) Amendment Related to Section 632 of the Act.--Subparagraph (C)
of section 415(c)(7) is amended by striking ``the greater of $3,000''
and all that follows and inserting ``$3,000. This subparagraph shall
not apply with respect to any taxable year to any individual whose
adjusted gross income for such taxable year (determined separately and
without regard to community property laws) exceeds $17,000.''.
(c) Effective Date.--The amendments made by this section shall take
effect as if included in the provisions of the Economic Growth and Tax
Relief Reconciliation Act of 2001 to which they relate.
SEC. 408. AMENDMENTS RELATED TO THE INTERNAL REVENUE SERVICE
RESTRUCTURING AND REFORM ACT OF 1998.
(a) Amendments Related to Section 3415 of the Act.--
(1) Paragraph (2) of section 7609(c) is amended by inserting
``or'' at the end of subparagraph (D), by striking ``; or'' at the
end of subparagraph (E) and inserting a period, and by striking
subparagraph (F).
(2) Subsection (c) of section 7609 is amended by redesignating
paragraph (3) as paragraph (4) and by inserting after paragraph (2)
the following new paragraph:
``(3) John doe and certain other summonses.--Subsection (a)
shall not apply to any summons described in subsection (f) or
(g).''.
(b) Effective Date.--The amendments made by this section shall take
effect as if included in section 3415 of the Internal Revenue Service
Restructuring and Reform Act of 1998.
SEC. 409. AMENDMENTS RELATED TO THE TAXPAYER RELIEF ACT OF 1997.
(a) Amendments Related to Section 1055 of the Act.--
(1) The last sentence of section 6411(a) is amended by striking
``6611(f)(3)(B)'' and inserting ``6611(f)(4)(B)''.
(2) Paragraph (4) of section 6601(d) is amended by striking
``6611(f)(3)(A)'' and inserting ``6611(f)(4)(A)''.
(b) Amendment Related to Section 1112 of the Act.--Subsection (c)
of section 961 is amended to read as follows:
``(c) Basis Adjustments in Stock Held by Foreign Corporations.--
Under regulations prescribed by the Secretary, if a United States
shareholder is treated under section 958(a)(2) as owning stock in a
controlled foreign corporation which is owned by another controlled
foreign corporation, then adjustments similar to the adjustments
provided by subsections (a) and (b) shall be made to--
``(1) the basis of such stock, and
``(2) the basis of stock in any other controlled foreign
corporation by reason of which the United States shareholder is
considered under section 958(a)(2) as owning the stock described in
paragraph (1),
but only for the purposes of determining the amount included under
section 951 in the gross income of such United States shareholder (or
any other United States shareholder who acquires from any person any
portion of the interest of such United States shareholder by reason of
which such shareholder was treated as owning such stock, but only to
the extent of such portion, and subject to such proof of identity of
such interest as the Secretary may prescribe by regulations). The
preceding sentence shall not apply with respect to any stock to which a
basis adjustment applies under subsection (a) or (b).''.
(c) Amendment Related to Section 1144 of the Act.--Subparagraph (B)
of section 6038B(a)(1) is amended by inserting ``or'' at the end.
(d) Effective Date.--The amendments made by this section shall take
effect as if included in the provisions of the Taxpayer Relief Act of
1997 to which they relate.
SEC. 410. AMENDMENT RELATED TO THE OMNIBUS BUDGET RECONCILIATION ACT OF
1990.
(a) Amendment Related to Section 11813 of the Act.--Subclause (I)
of section 168(e)(3)(B)(vi) is amended by striking ``if `solar and
wind' were substituted for `solar' in clause (i) thereof'' and
inserting ``if `solar or wind energy' were substituted for `solar
energy' in clause (i) thereof''.
(b) Effective Date.--The amendment made by this section shall take
effect as if included in section 11813 of the Omnibus Budget
Reconciliation Act of 1990.
SEC. 411. AMENDMENT RELATED TO THE OMNIBUS BUDGET RECONCILIATION ACT OF
1987.
(a) Amendment Related to Section 10227 of the Act.--Section 1363(d)
is amended by adding at the end the following new paragraph:
``(5) Special rule.--Sections 1367(a)(2)(D) and 1371(c)(1)
shall not apply with respect to any increase in the tax imposed by
reason of this subsection.''.
(b) Effective Date.--The amendment made by this section shall take
effect as if included in section 10227 of the Omnibus Budget
Reconciliation Act of 1987.
SEC. 412. CLERICAL CORRECTIONS.
(a) Subparagraph (C) of section 2(b)(2) is amended by striking
``subparagraph (C)'' and inserting ``subparagraph (B)''.
(b) Paragraph (2) of section 25C(b) is amended by striking
``subsection (c)(3)(B)'' and inserting ``subsection (c)(2)(B)''.
(c) Subparagraph (E) of section 26(b)(2) is amended by striking
``section 530(d)(3)'' and inserting ``section 530(d)(4)''.
(d) Subparagraph (A) of section 30B(g)(2) and subparagraph (A) of
section 30C(d)(2) are each amended by striking ``regular tax'' and
inserting ``regular tax liability (as defined in section 26(b))''.
(e) The table of sections for subpart B of part IV of subchapter A
of chapter 1 is amended by striking the item relating to section 30C
and inserting the following new item:
``Sec. 30C. Alternative fuel vehicle refueling property credit.''.
(f)(1) Subclause (II) of section 38(c)(2)(A)(ii) is amended by
striking ``or the New York Liberty Zone business employee credit or the
specified credits'' and inserting ``, the New York Liberty Zone
business employee credit, and the specified credits''.
(2) Subclause (II) of section 38(c)(3)(A)(ii) is amended by
striking ``or the specified credits'' and inserting ``and the specified
credits''.
(3) Subparagraph (B) of section 38(c)(4) is amended--
(A) by striking ``includes'' and inserting ``means'', and
(B) by inserting ``and'' at the end of clause (i).
(g)(1) Subparagraph (A) of section 39(a)(1) is amended by striking
``each of the 1 taxable years'' and inserting ``the taxable year''.
(2) Subparagraph (B) of section 39(a)(3) is amended to read as
follows:
``(B) paragraph (1) shall be applied by substituting `each
of the 5 taxable years' for `the taxable year' in subparagraph
(A) thereof, and''.
(h) Subparagraph (B) of section 40A(b)(5) is amended by striking
``(determined without regard to the last sentence of subsection
(d)(2))''.
(i) Paragraph (5) of section 43(c) is amended to read as follows:
``(5) Alaska natural gas.--For purposes of paragraph (1)(D)--
``(A) In general.--The term `Alaska natural gas' means
natural gas entering the Alaska natural gas pipeline (as
defined in section 168(i)(16) (determined without regard to
subparagraph (B) thereof)) which is produced from a well--
``(i) located in the area of the State of Alaska lying
north of 64 degrees North latitude, determined by excluding
the area of the Alaska National Wildlife Refuge (including
the continental shelf thereof within the meaning of section
638(1)), and
``(ii) pursuant to the applicable State and Federal
pollution prevention, control, and permit requirements from
such area (including the continental shelf thereof within
the meaning of section 638(1)).
``(B) Natural gas.--The term `natural gas' has the meaning
given such term by section 613A(e)(2).''.
(j) Subsection (d) of section 45 is amended--
(1) in paragraph (8) by striking ``The term'' and inserting
``In the case of a facility that produces refined coal, the term'',
and
(2) in paragraph (10) by striking ``The term'' and inserting
``In the case of a facility that produces Indian coal, the term''.
(k) Paragraph (2) of section 45I(a) is amended by striking
``qualified credit oil production'' and inserting ``qualified crude oil
production''.
(l) Subsection (g) of section 45K, as redesignated by section 1322
of the Energy Policy Act of 2005, is amended--
(1) in the matter preceding paragraph (1), by striking
``subsection (f)'' and inserting ``subsection (e)'', and
(2) in paragraph (2)(C), by striking ``subsection (g)'' and
inserting ``subsection (f)''.
(m) Paragraph (1) of section 48(a), as amended by section 1336 of
the Energy Policy Act of 2005, is amended by striking ``paragraph
(1)(B) or (2)(B) of subsection (d)'' and inserting ``paragraphs (1)(B)
and (2)(B) of subsection (c)''.
(n) Subparagraph (A) of section 48(a)(3) is amended--
(1) by redesignating clause (iii) (relating to qualified fuel
cell property or qualified microturbine property), as added by
section 1336 of the Energy Policy Act of 2005, as clause (iv) and
by moving such clause to the end of such subparagraph, and
(2) by striking ``or'' at the end of clause (ii).
(o) Subparagraph (E) of section 50(a)(2) is amended by striking
``section 48(a)(5)'' and inserting ``section 48(b)''.
(p)(1) Paragraph (3) of section 55(c) is amended by inserting
``30B(g)(2), 30C(d)(2),'' after ``30(b)(3),''.
(2) Section 1341(b)(3) of the Energy Policy Act of 2005 is
repealed.
(3) Section 1342(b)(3) of the Energy Policy Act of 2005 is
repealed.
(q)(1) Subsection (a) of section 62 is amended--
(A) by redesignating paragraph (19) (relating to costs
involving discrimination suits, etc.), as added by section 703 of
the American Jobs Creation Act of 2004, as paragraph (20), and
(B) by moving such paragraph after paragraph (19) (relating to
health savings accounts).
(2) Subsection (e) of section 62 is amended by striking
``subsection (a)(19)'' and inserting ``subsection (a)(20)''.
(r) Paragraph (3) of section 167(f) is amended by striking
``section 197(e)(7)'' and inserting ``section 197(e)(6)''.
(s) Subparagraph (D) of section 168(i)(15) is amended by striking
``This paragraph shall not apply to'' and inserting ``Such term shall
not include''.
(t) Paragraph (2) of section 221(d) is amended by striking ``this
Act'' and inserting ``the Taxpayer Relief Act of 1997''.
(u) Paragraph (8) of section 318(b) is amended by striking
``section 6038(d)(2)'' and inserting ``section 6038(e)(2)''.
(v) Subparagraph (B) of section 332(d)(1) is amended by striking
``distribution to which section 301 applies'' and inserting
``distribution of property to which section 301 applies''.
(w) Subparagraph (B) of section 403(b)(9) is amended by inserting
``or'' before ``a convention''.
(x)(1) Clause (i) of section 412(m)(4)(B) is amended by striking
``subsection (c)'' and inserting ``subsection (d)''.
(2) Clause (i) of section 302(e)(4)(B) of the Employee Retirement
Income Security Act of 1974 is amended by striking ``subsection (c)''
and inserting ``subsection (d)''.
(y) Paragraph (1) of section 415(l) is amended by striking
``individual medical account'' and inserting ``individual medical
benefit account''.
(z) The matter following clause (iv) of section 415(n)(3)(C) is
amended by striking ``clauses'' and inserting ``clause''.
(aa) Subparagraph (C) of section 461(i)(3) is amended by striking
``section 6662(d)(2)(C)(iii)'' and inserting ``section
6662(d)(2)(C)(ii)''.
(bb) Paragraph (12) of section 501(c) is amended--
(1) by striking ``subparagraph (C)(iii)'' in subparagraph (F)
and inserting ``subparagraph (C)(iv)'', and
(2) by striking ``subparagraph (C)(iv)'' in subparagraph (G)
and inserting ``subparagraph (C)(v)''.
(cc) Clause (ii) of section 501(c)(22)(B) is amended by striking
``clause (ii) of paragraph (21)(B)'' and inserting ``clause (ii) of
paragraph (21)(D)''.
(dd) Paragraph (1) of section 512(b) is amended by striking
``section 512(a)(5)'' and inserting ``subsection (a)(5)''.
(ee)(1) Subsection (b) of section 512 is amended--
(A) by redesignating paragraph (18) (relating to the treatment
of gain or loss on sale or exchange of certain brownfield sites),
as added by section 702 of the American Jobs Creation Act of 2004,
as paragraph (19), and
(B) by moving such paragraph to the end of such subsection.
(2) Subparagraph (E) of section 514(b)(1) is amended by striking
``section 512(b)(18)'' and inserting ``section 512(b)(19)''.
(3) Paragraph (6) of section 529(c) is amended by striking
``education individual retirement account'' and inserting ``Coverdell
education savings account''.
(ff)(1) Subsection (b) of section 530 is amended by striking
paragraph (3) and by redesignating paragraphs (4) and (5) as paragraphs
(3) and (4), respectively.
(2) Clause (ii) of section 530(b)(2)(A) is amended by striking
``paragraph (4)'' and inserting ``paragraph (3)''.
(gg) Subparagraph (H) of section 613(c)(4) is amended by inserting
``(including in situ retorting)'' after ``and retorting''.
(hh) Subparagraph (A) of section 856(g)(5) is amended by striking
``subsection (c)(6) or (c)(7) of section 856'' and inserting
``paragraph (2), (3), or (4) of subsection (c)''.
(ii) Paragraph (6) of section 857(b) is amended--
(1) in subparagraph (E), by striking ``subparagraph (C)'' and
inserting ``subparagraphs (C) and (D)'', and
(2) in subparagraph (F)--
(A) by striking ``subparagraph (C) of this paragraph'' and
inserting ``subparagraph (C) or (D)'', and
(B) by striking ``subparagraphs (C) and (D)'' and inserting
``subparagraphs (C), (D), and (E)''.
(jj) Subparagraph (C) of section 881(e)(1) is amended by inserting
``interest-related dividend received by a controlled foreign
corporation'' after ``shall apply to any''.
(kk) Clause (ii) of section 952(c)(1)(B) is amended--
(1) by striking ``clause (iii)(III) or (IV)'' and inserting
``subclause (II) or (III) of clause (iii)'', and
(2) by striking ``clause (iii)(II)'' and inserting ``clause
(iii)(I)''.
(ll) Clause (i) of section 954(c)(1)(C) is amended by striking
``paragraph (4)(A)'' and inserting ``paragraph (5)(A)''.
(mm) Subparagraph (F) of section 954(c)(1) is amended by striking
``Net income from notional principal contracts.'' after ``Income from
notional principal contracts.--''.
(nn) Paragraph (23) of section 1016(a) is amended by striking
``1045(b)(4)'' and inserting ``1045(b)(3)''.
(oo) Paragraph (1) of section 1256(f) is amended by striking
``subsection (e)(2)(C)'' and inserting ``subsection (e)(2)''.
(pp) The matter preceding clause (i) of section 1031(h)(2)(B) is
amended by striking ``subparagraph'' and inserting ``subparagraphs''.
(qq) Paragraphs (1) and (2) of section 1375(d) are each amended by
striking ``subchapter C'' and inserting ``accumulated''.
(rr) Each of the following provisions are amended by striking
``General Accounting Office'' each place it appears therein and
inserting ``Government Accountability Office'':
(1) Clause (ii) of section 1400E(c)(4)(A).
(2) Paragraph (1) of section 6050M(b).
(3) Subparagraphs (A), (B)(i), and (B)(ii) of section
6103(i)(8).
(4) Paragraphs (3)(C)(i), (4), (5), and (6)(B) of section
6103(p).
(5) Subsection (e) of section 8021.
(ss)(1) Clause (ii) of section 1400L(b)(2)(C) is amended by
striking ``section 168(k)(2)(C)(i)'' and inserting ``section
168(k)(2)(D)(i)''.
(2) Clause (iv) of section 1400L(b)(2)(C) is amended by striking
``section 168(k)(2)(C)(iii)'' and inserting ``section
168(k)(2)(D)(iii)''.
(3) Subparagraph (D) of section 1400L(b)(2) is amended by striking
``section 168(k)(2)(D)'' and inserting ``section 168(k)(2)(E)''.
(4) Subparagraph (E) of section 1400L(b)(2) is amended by striking
``section 168(k)(2)(F)'' and inserting ``section 168(k)(2)(G)''.
(5) Paragraph (5) of section 1400L(c) is amended by striking
``section 168(k)(2)(C)(iii)'' and inserting ``section
168(k)(2)(D)(iii)''.
(tt) Section 3401 is amended by redesignating subsection (h) as
subsection (g).
(uu) Paragraph (2) of section 4161(a) is amended to read as
follows:
``(2) 3 percent rate of tax for electric outboard motors.--In
the case of an electric outboard motor, paragraph (1) shall be
applied by substituting `3 percent' for `10 percent'.''.
(vv) Subparagraph (C) of section 4261(e)(4) is amended by striking
``imposed subsection (b)'' and inserting ``imposed by subsection (b)''.
(ww) Subsection (a) of section 4980D is amended by striking
``plans'' and inserting ``plan''.
(xx) The matter following clause (iii) of section 6045(e)(5)(A) is
amended by striking ``for `$250,000'.'' and all that follows through
``to the Treasury.'' and inserting ``for `$250,000'. The Secretary may
by regulation increase the dollar amounts under this subparagraph if
the Secretary determines that such an increase will not materially
reduce revenues to the Treasury.''.
(yy) Subsection (p) of section 6103 is amended--
(1) by striking so much of paragraph (4) as precedes
subparagraph (A) and inserting the following:
``(4) Safeguards.--Any Federal agency described in subsection
(h)(2), (h)(5), (i)(1), (2), (3), (5), or (7), (j)(1), (2), or (5),
(k)(8), (l)(1), (2), (3), (5), (10), (11), (13), (14), or (17) or
(o)(1), the Government Accountability Office, the Congressional
Budget Office, or any agency, body, or commission described in
subsection (d), (i)(3)(B)(i) or 7(A)(ii), or (l)(6), (7), (8), (9),
(12), (15), or (16) or any other person described in subsection
(l)(16), (18), (19), or (20) shall, as a condition for receiving
returns or return information--'',
(2) by amending paragraph (4)(F)(i) to read as follows:
``(i) in the case of an agency, body, or commission
described in subsection (d), (i)(3)(B)(i), or (l)(6), (7),
(8), (9), or (16), or any other person described in
subsection (l)(16), (18), (19), or (20) return to the
Secretary such returns or return information (along with
any copies made therefrom) or make such returns or return
information undisclosable in any manner and furnish a
written report to the Secretary describing such manner,'',
and
(3) by striking the first full sentence in the matter following
subparagraph (F) of paragraph (4) and inserting the following: ``If
the Secretary determines that any such agency, body, or commission,
including an agency or any other person described in subsection
(l)(16), (18), (19), or (20), or the Government Accountability
Office or the Congressional Budget Office, has failed to, or does
not, meet the requirements of this paragraph, he may, after any
proceedings for review established under paragraph (7), take such
actions as are necessary to ensure such requirements are met,
including refusing to disclose returns or return information to
such agency, body, or commission, including an agency or any other
person described in subsection (l)(16), (18), (19), or (20), or the
Government Accountability Office or the Congressional Budget
Office, until he determines that such requirements have been or
will be met.''.
(zz) Clause (ii) of section 6111(b)(1)(A) is amended by striking
``advice or assistance'' and inserting ``aid, assistance, or advice''.
(aaa) Paragraph (3) of section 6662(d) is amended by striking
``the'' before ``1 or more''.
SEC. 413. OTHER CORRECTIONS RELATED TO THE AMERICAN JOBS CREATION ACT
OF 2004.
(a) Amendments Related to Section 233 of the Act.--
(1) Clause (vi) of section 1361(c)(2)(A) is amended--
(A) by inserting ``or a depository institution holding
company (as defined in section 3(w)(1) of the Federal Deposit
Insurance Act (12 U.S.C. 1813(w)(1))'' after ``a bank (as
defined in section 581)'', and
(B) by inserting ``or company'' after ``such bank''.
(2) Paragraph (16) of section 4975(d) is amended--
(A) in subparagraph (A), by inserting ``or a depository
institution holding company (as defined in section 3(w)(1) of
the Federal Deposit Insurance Act (12 U.S.C. 1813(w)(1))''
after ``a bank (as defined in section 581)'', and
(B) in subparagraph (C), by inserting ``or company'' after
``such bank''.
(b) Amendment Related to Section 237 of the Act.--Subparagraph (F)
of section 1362(d)(3) is amended by striking ``a bank holding company''
and all that follows through ``section 2(p) of such Act)'' and
inserting ``a depository institution holding company (as defined in
section 3(w)(1) of the Federal Deposit Insurance Act (12 U.S.C.
1813(w)(1))''.
(c) Amendments Related to Section 239 of the Act.--Paragraph (3) of
section 1361(b) is amended--
(1) in subparagraph (A), by striking ``and in the case of
information returns required under part III of subchapter A of
chapter 61'', and
(2) by adding at the end the following new subparagraph:
``(E) Information returns.--Except to the extent provided
by the Secretary, this paragraph shall not apply to part III of
subchapter A of chapter 61 (relating to information
returns).''.
(d) Effective Date.--The amendments made by this section shall take
effect as if included in the provisions of the American Jobs Creation
Act of 2004 to which they relate.
Subtitle B--Trade Technicals
SEC. 421. TECHNICAL CORRECTIONS TO REGIONAL VALUE-CONTENT METHODS FOR
RULES OF ORIGIN UNDER PUBLIC LAW 109-53.
Section 203(c) of the Dominican Republic-Central America-United
States Free Trade Agreement Implementation Act (Public Law 109-53; 19
U.S.C. 4033(c)) is amended as follows:
(1) In paragraph (2)(A), by striking all that follows ``the
following build-down method:'' and inserting the following:
av-vnm
``rvc = -------- <greek-e> 100''.
av
(2) In paragraph (3)(A), by striking all that follows ``the
following build-up method:'' and inserting the following:
vom
``rvc = -------- <greek-e> 100''.
av
(3) In paragraph (4)(A), by striking all that follows ``the
following net cost method:'' and inserting the following:
nc-vnm
``rvc = -------- <greek-e> 100''.
nc
TITLE V--EMERGENCY REQUIREMENT
SEC. 501. EMERGENCY REQUIREMENT.
Any provision of this Act causing an effect on receipts, budget
authority, or outlays is designated as an emergency requirement
pursuant to section 402 of H. Con. Res. 95 (109th Congress).
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.