Katrina Assistance Tax Relief Incentives for Necessities Act of 2005 or the KATRINA Act of 2005 - Amends the Internal Revenue Code to: (1) designate Hurricane Katrina disaster victims as members of a targeted group for purposes of the work opportunity tax credit; (2) allow a tax credit, up to $1,000 annually, for individuals who house Hurricane Katrina disaster victims free of charge; (3) allow a tax credit, up to $5,000, for Hurricane Katrina disaster victims who purchase a principal residence in the Hurricane Katrina disaster area; and (4) increase the per capita housing credit ceiling for the low-income housing tax credit for Alabama, Louisiana, and Mississippi for 2006 and 2007 (from $1.75 to $3.70 multiplied by the state's population) and to waive certain requirements for such credit.
[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3769 Introduced in House (IH)]
109th CONGRESS
1st Session
H. R. 3769
To amend the Internal Revenue Code of 1986 to provide tax relief to
victims of Hurricane Katrina.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
September 14, 2005
Mrs. Jones of Ohio (for herself, Mr. Jefferson, Mr. Lewis of Georgia,
Mr. Emanuel, Mr. Doggett, and Mr. Neal of Massachusetts) introduced the
following bill; which was referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to provide tax relief to
victims of Hurricane Katrina.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Katrina Assistance Tax Relief
Incentives for Necessities Act of 2005'' or the ``KATRINA Act of
2005''.
SEC. 2. HURRICANE KATRINA DISASTER VICTIMS MADE MEMBERS OF TARGETED
GROUPS UNDER WORK OPPORTUNITY TAX CREDIT.
(a) In General.--Paragraph (1) of section 51(d) of the Internal
Revenue Code of 1986 (defining generally members of targeted group) is
amended by striking ``or'' at the end of subparagraph (G), by striking
the period at the end of subparagraph (H) and inserting ``, or'', and
by inserting after subparagraph (H) the following new subparagraph:
``(I) a Hurricane Katrina disaster victim.''.
(b) Qualified Disaster Victim.--Subsection (d) of section 51 of
such Code (relating to members of targeted groups) is amended by
redesignating paragraphs (10), (11), and (12) as paragraphs (11), (12),
and (13), respectively, and by inserting after paragraph (9) the
following new paragraph:
``(10) Hurricane katrina disaster victim.--The term
`Hurricane Katrina disaster victim' means an individual who is
certified by the designated local agency as being a eligible to
receive assistance from the Federal Government under the Robert
T. Stafford Disaster Relief and Emergency Assistance Act by
reason of Hurricane Katrina.''.
(c) Termination.--Subparagraph (B) of section 51(c)(4) of such Code
is amended by inserting ``(2006 in the case of a Hurricane Katrina
disaster victim)'' before the period.
(d) Effective Date.--The amendments made by this section shall
apply to individuals who begin work for the employer after August 28,
2005.
SEC. 3. HURRICANE KATRINA DISPLACED RESIDENT CREDIT.
(a) In General.--Subpart A of of part IV of subchapter A of chapter
1 of the Internal Revenue Code of 1986 (relating to nonrefundable
personal credits) is amended by inserting after section 25D the
following new section:
``SEC. 25E. HURRICANE KATRINA DISPLACED RESIDENT CREDIT.
``(a) Allowance of Credit.--
``(1) In general.--There shall be allowed as a credit
against the tax imposed by this chapter for the taxable year
with respect to all qualified displaced persons residing
without charge with the taxpayer in the principal residence of
the taxpayer an amount equal to the applicable percentage of
$1,000.
``(2) Applicable percentage.--For purposes of paragraph
(1), the applicable percentage is the ratio (expressed as a
percentage) which--
``(A) the number of days the qualified displace
persons reside without charge with the taxpayer in the
principal residence of the taxpayer during the taxable
year, bears to
``(B) 360.
``(b) Limitations.--
``(1) Limitation based on adjusted gross income.--The
amount of the credit allowable under subsection (a) shall be
reduced (but not below zero) by $50 for each $1,000 (or
fraction thereof) by which the taxpayer's modified adjusted
gross income exceeds the threshold amount. For purposes of the
preceding sentence, the term `modified adjusted gross income'
means adjusted gross income increased by any amount excluded
from gross income under section 911, 931, or 933.
``(2) Threshold amount.--For purposes of paragraph (1), the
term `threshold amount' means--
``(A) $110,000 in the case of a joint return,
``(B) $75,000 in the case of an individual who is
not married, and
``(C) $55,000 in the case of a married individual
filing a separate return.
For purposes of this paragraph, marital status shall be
determined under section 7703.
``(3) Limitation based on amount of tax.--
``(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 this
subpart (other than this section and sections 23 and
25B) and section 27 for the taxable year.
``(c) Qualified Displaced Person.--For purposes of this section,
the term `qualified displaced person' means, with respect to any
taxpayer for any taxable year, any individual--
``(1) who is displaced by reason of Hurricane Katrina, and
``(2) who, after such displacement, resides with the
taxpayer without charge for not less than 90 days.
Such term shall not include the spouse or any dependent of the
taxpayer.
``(d) Identification Requirement.--No credit shall be allowed under
this section to a taxpayer with respect to any qualified displaced
person unless the taxpayer includes the name and taxpayer
identification number of such qualified displaced person on the return
of tax for the taxable year.
``(e) Taxable Year Must Be Full Taxable Year.--Except in the case
of a taxable year closed by reason of the death of the taxpayer, no
credit shall be allowable under this section in the case of a taxable
year covering a period of less than 12 months.
``(f) Termination.--This section shall not apply to taxable years
beginning after December 31, 2006.''.
(b) Clerical Amendment.--The table of sections for subpart A of of
part IV of subchapter A of chapter 1 of such Code is amended by adding
at the end the following new item:
``Sec. 25E. Hurricane Katrina displaced resident credit.''.
SEC. 4. HOME PURCHASE BY VICTIMS OF HURRICANE KATRINA.
(a) In General.--Subpart A of of part IV of subchapter A of chapter
1 of the Internal Revenue Code of 1986 (relating to nonrefundable
personal credits) is amended by inserting after section 25E the
following new section:
``SEC. 25F. HOME PURCHASE BY INDIVIDUALS DISPLACED BY HURRICANE
KATRINA.
``(a) Allowance of Credit.--In the case of an eligible homebuyer
who purchases a principal residence in the Hurricane Katrina disaster
area, there shall be allowed as a credit against the tax imposed by
this chapter for the taxable year an amount equal to so much of the
purchase price of the residence as does not exceed $5,000.
``(b) Limitation Based on Modified Adjusted Gross Income.--
``(1) In general.--The amount allowable as a credit under
subsection (a) (determined without regard to this subsection
and subsection (d)) for the taxable year shall be reduced (but
not below zero) by the amount which bears the same ratio to the
credit so allowable as--
``(A) the excess (if any) of--
``(i) the taxpayer's modified adjusted
gross income for such taxable year, over
``(ii) $70,000 ($110,000 in the case of a
joint return), bears to
``(B) $20,000.
``(2) Modified adjusted gross income.--For purposes of
paragraph (1), the term `modified adjusted gross income' means
the adjusted gross income of the taxpayer for the taxable year
increased by any amount excluded from gross income under
section 911, 931, or 933.
``(c) Eligible Homebuyer.--For purposes of this section--
``(1) In general.--The term `eligible homebuyer' means any
individual if--
``(A) on August 29, 2005, the principal place of
abode of such individual (and if married, such
individual's spouse) was located in the Hurricane
Katrina disaster area, and such principal place of
abode was rendered uninhabitable by Hurricane Katrina,
and
``(B) the principal residence for which the credit
is allowed under subsection (a) is located in the same
State as such principal place of abode.
``(2) One-time only.--If an individual is allowed a credit
under this section with respect to any principal residence,
such individual may not be allowed a credit under this section
with respect to any other principal residence.
``(3) Principal residence.--The term `principal residence'
has the same meaning as when used in section 121.
``(d) Carryover of Credit.--If the credit allowable under
subsection (a) exceeds the limitation imposed by section 26(a) for such
taxable year reduced by the sum of the credits allowable under this
subpart (other than this section and sections 23, 24, 25B, and 1400C)
such excess shall be carried to the succeeding taxable year and added
to the credit allowable under subsection (a) for such taxable year.
``(e) Other Definitions and Special Rules.--For purposes of this
section--
``(1) Hurricane katrina disaster area.--The term `Hurricane
Katrina disaster area' means an area determined by the
President to warrant assistance from the Federal Government
under the Robert T. Stafford Disaster Relief and Emergency
Assistance Act by reason of Hurricane Katrina.
``(2) Allocation of dollar limitation.--
``(A) Married individuals filing separately.--In
the case of a married individual filing a separate
return, subsection (a) shall be applied by substituting
`$2,500' for `$5,000'.
``(B) Other taxpayers.--If 2 or more individuals
who are not married purchase a principal residence, the
amount of the credit allowed under subsection (a) shall
be allocated among such individuals in such manner as
the Secretary may prescribe, except that the total
amount of the credits allowed to all such individuals
shall not exceed $5,000.
``(3) Purchase.--
``(A) In general.--The term `purchase' means any
acquisition, but only if--
``(i) the property is not acquired from a
person whose relationship to the person
acquiring it would result in the disallowance
of losses under section 267 or 707(b) (but, in
applying section 267(b) and (c) for purposes of
this section, paragraph (4) of section 267(c)
shall be treated as providing that the family
of an individual shall include only his spouse,
ancestors, and lineal descendants), and
``(ii) the basis of the property in the
hands of the person acquiring it is not
determined--
``(I) in whole or in part by
reference to the adjusted basis of such
property in the hands of the person
from whom acquired, or
``(II) under section 1014(a)
(relating to property acquired from a
decedent).
``(B) Construction.--A residence which is
constructed by the taxpayer shall be treated as
purchased by the taxpayer on the date the taxpayer
first occupies such residence.
``(4) Purchase price.--The term `purchase price' means the
adjusted basis of the principal residence on the date such
residence is purchased.
``(f) Reporting.--If the Secretary requires information reporting
under section 6045 by a person described in subsection (e)(2) thereof
to verify the eligibility of taxpayers for the credit allowable by this
section, the exception provided by section 6045(e)(5) shall not apply.
``(g) Basis Adjustment.--For purposes of this subtitle, if a credit
is allowed under this section with respect to the purchase of any
residence, the basis of such residence shall be reduced by the amount
of the credit so allowed.
``(h) Application of Section.--This section shall apply to property
purchased after August 28, 2005, and before January 1, 2007.''.
(b) Conforming Amendment.--Section 1016(a) of such Code is amended
by striking ``and'' at the end of paragraph (36), by striking the
period at the end of paragraph (37) and inserting ``, and'', and by
adding at the end the following new paragraph:
``(38) to the extent provided in section 25F(g).''.
(c) Clerical Amendment.--The table of sections for subpart A of of
part IV of subchapter A of chapter 1 of such Code is amended by
inserting after the item relating to section 25E the following new
item:
``Sec. 25F. Home purchase by individuals displaced by Hurricane
Katrina.''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years ending after the date of the enactment of this
Act.
SEC. 5. RELIEF THROUGH LOW-INCOME HOUSING CREDIT RELATING TO HURRICANE
KATRINA.
(a) Increase in Housing Credit Dollar Amount.--For purposes of
determining the State housing credit ceiling of the States of Alabama,
Louisiana, and Mississippi for 2006 and 2007, section
42(h)(3)(C)(ii)(I) of the Internal Revenue Code of 1986 shall be
applied by substituting ``$3.70'' for ``$1.75''.
(b) Authority to Waive Percentage Limitation to Treat Hurricane
Katrina Disaster Areas as Difficult Development Areas.--In the case of
taxable years beginning in 2005, 2006, and 2007, any area in the State
of Alabama, Florida, Louisiana, or Mississippi located within the area
determined by the President to warrant assistance from the Federal
Government under the Robert T. Stafford Disaster Relief and Emergency
Assistance Act by reason of Hurricane Katrina shall be treated as a
difficult development area for purposes of section 42(d)(5)(C) of the
Internal Revenue Code of 1986, notwithstanding the percentage
limitation in clause (iii)(II) of such section.
(c) Waiver of Full Subscription Requirement.--In the case of the
States of Alabama, Florida, Louisiana, and Mississippi for 2005, 2006,
and 2007, section 42(h)(3)(D) of such Code shall be applied without
regard to clause (iv)(I) of such section.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
Sponsor introductory remarks on measure. (CR H8805)
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