(This measure has not been amended since it was introduced. The summary has been expanded because action occurred on the measure.)
Gulf Opportunity Zone Public Finance Relief Act of 2005 - Amends the Internal Revenue Code to allow a tax credit for investment in Gulf tax credit bonds. Defines a"Gulf tax credit bond" as any bond: (1) that is issued by Alabama, Louisiana, or Mississippi after December 31, 2005, and before January 1, 2007; (2) 95 percent of the proceeds of which are used to refinance existing bonds or make loans to localities for such refinancing; and (3) the maturity of which does not exceed two years. Requires states issuing Gulf tax credit bonds to pledge matching amounts equal to the face amount of such bonds.
Limits the amount of eligible Gulf tax credit bonds to $200 billion for Louisiana, $100 billion for Mississippi, and $50 billion for Alabama.
Allows for one additional advance refunding of outstanding bond obligations of Alabama, Louisiana, or Mississippi until December 31, 2010. Limits the amount of bonds eligible for an advance refunding to $4.5 billion for Louisiana, $2.25 billion for Mississippi, and $1.125 billion for Alabama.
Provides for federal guarantees of up to $3 billion of the bonds issued by Alabama, Louisiana, or Mississippi before January 1, 2008, for the purpose of restoring lost revenue and funding infrastructure in areas affected by Hurricane Katrina. Limits such guarantee to 50% of bond principal.
[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4337 Considered and Passed House (CPH)]
109th CONGRESS
1st Session
H. R. 4337
To amend the Internal Revenue Code of 1986 to provide for Gulf tax
credit bonds and advance refundings of certain tax-exempt bonds, and to
provide a Federal guarantee of certain State bonds.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
November 16, 2005
Mr. Jefferson (for himself, Mr. McCrery, Mr. Baker, Mr. Alexander, Mr.
Melancon, Mr. Jindal, and Mr. Boustany) introduced the following bill;
which was referred to the Committee on Ways and Means
November 16, 2005
The Committee on Ways and Means discharged; considered and passed
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to provide for Gulf tax
credit bonds and advance refundings of certain tax-exempt bonds, and to
provide a Federal guarantee of certain State bonds.
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 ``Gulf Opportunity Zone Public Finance
Relief Act of 2005''.
SEC. 2. GULF TAX CREDIT BONDS.
(a) In General.--Subpart H of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 is amended by adding at the end
the following new section:
``SEC. 54A. CREDIT TO HOLDERS OF GULF TAX CREDIT BONDS.
``(a) 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 subsection (b) with respect to such
dates.
``(b) Amount of Credit.--
``(1) In general.--The amount of the credit determined
under this subsection 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.
``(2) Annual credit.--The annual credit determined with
respect to any Gulf tax credit bond is the product of--
``(A) the credit rate determined by the Secretary
under paragraph (3) for the day on which such bond was
sold, multiplied by
``(B) the outstanding face amount of the bond.
``(3) Determination.--For purposes of paragraph (2), 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.
``(4) Credit allowance date.--For purposes of this section,
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.
``(5) 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 subsection 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.
``(c) Limitation Based on Amount of Tax.--The credit allowed under
subsection (a) for any taxable year shall not exceed the excess of--
``(1) the sum of the regular tax liability (as defined in
section 26(b)) plus the tax imposed by section 55, over
``(2) the sum of the credits allowable under this part
(other than subpart C and this section).
``(d) Gulf Tax Credit Bond.--For purposes of this section--
``(1) In general.--The term `Gulf tax credit bond' means
any bond issued as part of an issue if--
``(A) the bond is issued by the State of Alabama,
Louisiana, or Mississippi,
``(B) 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,
``(C) the Governor of such State designates such
bond for purposes of this section,
``(D) the bond is a general obligation of such
State and is in registered form (within the meaning of
section 149(a)),
``(E) the maturity of such bond does not exceed 2
years, and
``(F) the bond is issued after December 31, 2005,
and before January 1, 2007.
``(2) State matching requirement.--A bond shall not be
treated as a Gulf tax credit bond unless--
``(A) 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 clause (i) of paragraph (1)(B), or loans
described in clause (ii) of such paragraph, as the case
may be, with respect to the issue of which such bond is
a part, and
``(B) any such payment or loan is made in equal
amounts from the proceeds of such issue and from the
amount pledged under subparagraph (A).
The requirement of subparagraph (B) 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.
``(3) Aggregate limit on bond designations.--The maximum
aggregate face amount of bonds which may be designated under
this section by the Governor of a State shall not exceed--
``(A) $200,000,000 in the case of the State of
Louisiana,
``(B) $100,000,000 in the case of the State of
Mississippi, and
``(C) $50,000,000 in the case of the State of
Alabama.
``(4) 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.
``(e) Qualified Bond.--For purposes of this section--
``(1) In general.--The term `qualified bond' means any
obligation of a State or political subdivision thereof which
was outstanding on August 28, 2005.
``(2) Exception for private activity bonds.--Such term
shall not include any private activity bond.
``(3) Exception for advance refundings.--Such term shall
not include any bond--
``(A) which is designated as an advance refunding
bond under section 149(d)(7), or
``(B) with respect to which there is any
outstanding bond to refund such bond.
``(f) Credit Included in Gross Income.--Gross income includes the
amount of the credit allowed to the taxpayer under this section
(determined without regard to subsection (c)) and the amount so
included shall be treated as interest income.
``(g) Other Definitions and Special Rules.--For purposes of this
section--
``(1) Bond.--The term `bond' includes any obligation.
``(2) Partnership; s corporation; and other pass-thru
entities.--
``(A) 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 subsection (a).
``(B) 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.
``(3) Bonds held by regulated investment companies.--If any
Gulf tax credit bond is held by a regulated investment company,
the credit determined under subsection (a) shall be allowed to
shareholders of such company under procedures prescribed by the
Secretary.
``(4) Reporting.--Issuers of Gulf tax credit bonds shall
submit reports similar to the reports required under section
149(e).''.
(b) Conforming Amendments.--
(1) Paragraph (2) of section 54(c) of such Code is amended
by inserting ``, section 54A,'' after ``subpart C''.
(2) Subparagraph (A) of section 6049(d)(8) of such Code is
amended--
(A) by inserting ``or 54A(f)'' after ``section
54(g)'', and
(B) by inserting ``or 54A(b)(4), as the case may
be'' after ``section 54(b)(4)''.
(3) The table of sections for subpart H of part IV of
subchapter A of chapter 1 of such Code is amended by adding at
the end the following new item:
``Sec. 54A. Credit to holders of Gulf tax credit bonds.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years ending after December 31, 2005.
SEC. 3. ADVANCE REFUNDINGS OF CERTAIN TAX-EXEMPT BONDS.
(a) In General.--Subsection (d) of section 149 of the Internal
Revenue Code of 1986 (relating to advance refundings) is amended by
redesignating paragraph (7) as paragraph (8) and by inserting after
paragraph (6) the following new paragraph:
``(7) Advance refundings of certain gulf coast bonds.--
``(A) In general.--With respect to a bond described
in subparagraph (C) which is not a qualified 501(c)(3)
bond, one additional advance refunding after the date
of the enactment of this paragraph and before January
1, 2011, shall be allowed under the applicable rules of
this subsection if--
``(i) the Governor of the State designates
the advance refunding bond for purposes of this
paragraph, and
``(ii) the requirements of subparagraph (E)
are met.
``(B) Certain private activity bonds.--With respect
to a bond described in subparagraph (C) 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 paragraph and before January
1, 2011, shall be allowed under the applicable rules of
this subsection (notwithstanding paragraph (2)) if the
requirements of clauses (i) and (ii) of subparagraph
(A) are met.
``(C) Bonds described.--A bond is described in this
subparagraph 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.
``(D) Aggregate limit.--The maximum aggregate face
amount of bonds which may be designated under this
paragraph by the Governor of a State shall not exceed--
``(i) $4,500,000,000 in the case of the
State of Louisiana,
``(ii) $2,250,000,000 in the case of the
State of Mississippi, and
``(iii) $1,125,000,000 in the case of the
State of Alabama.
``(E) Additional requirements.--The requirements of
this subparagraph are met with respect to any advance
refunding of a bond described in subparagraph (C) if--
``(i) no advance refundings of such bond
would be allowed under this title on or after
August 28, 2005,
``(ii) the advance refunding bond is the
only other outstanding bond with respect to the
refunded bond, and
``(iii) the requirements of section 148 are
met with respect to all bonds issued under this
paragraph.''.
(b) Effective Date.--The amendments made by this section shall
apply to advance refundings after the date of the enactment of this
Act.
SEC. 4. FEDERAL GUARANTEE OF CERTAIN STATE BONDS.
(a) State Bonds Described.--This section shall apply to a bond
issued as part of an issue if--
(1) the issue of which such bond is part is an issue of the
State of Alabama, Louisiana, or Mississippi,
(2) the bond is a general obligation of the issuing State
and is in registered form,
(3) the proceeds of the bond are distributed to one or more
political subdivisions of the issuing State,
(4) the maturity of such bond does not exceed 5 years,
(5) the bond is issued after the date of the enactment of
this Act and before January 1, 2008, and
(6) the bond is designated by the Secretary of the Treasury
for purposes of this section.
(b) Application.--
(1) In general.--The Secretary of the Treasury may only
designate a bond for purposes of this section pursuant to an
application submitted to the Secretary by the State which
demonstrates the need for such designation on the basis of the
criteria specified in paragraph (2).
(2) Criteria.--For purposes of paragraph (1), the criteria
specified in this paragraph are--
(A) the loss of revenue base of one or more
political subdivisions of the State by reason of
Hurricane Katrina,
(B) the need for resources to fund infrastructure
within, or operating expenses of, any such political
subdivision,
(C) the lack of access of such political
subdivision to capital, and
(D) any other criteria as may be determined by the
Secretary.
(3) Guidance for submission and consideration of
applications.--The Secretary of the Treasury shall prescribe
regulations or other guidance which provide for the time and
manner for the submission and consideration of applications
under this subsection.
(c) Federal Guarantee.--A bond described in subsection (a) is
guaranteed by the United States in an amount equal to 50 percent of the
outstanding principal with respect to such bond.
(d) Aggregate Limit on Bond Designations.--The maximum aggregate
face amount of bonds which may be issued under this section shall not
exceed $3,000,000,000.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
Committee on Ways and Means discharged.
Committee on Ways and Means discharged.
Mr. McCrery asked unanimous consent to discharge from committee and consider.
Considered by unanimous consent. (consideration: CR H10363-10365)
RESERVATION OF OBJECTION - Mr. Jefferson reserved the right to object in order to allow discussion of the measure. Subsequently, the reservation was removed.
Passed/agreed to in House: On passage Passed without objection.(text: CR H10363-10365)
On passage Passed without objection. (text: CR H10363-10365)
Motion to reconsider laid on the table Agreed to without objection.
Received in the Senate.
Llama 3.2 · runs locally in your browser
Ask anything about this bill. The AI reads the full text to answer.
Enter to send · Shift+Enter for new line
Read twice and referred to the Committee on Finance.