To allow a credit against income tax for providing housing to victims of Hurricane Katrina and to amend the Internal Revenue Code of 1986 to waive the limitation on charitable donations by individuals for donations for the relief of the victims of Hurricane Katrina.

September 14, 2005

Mr. SALAZAR introduced the following bill; which was read twice and referred to the Committee on Finance

To allow a credit against income tax for providing housing to victims of Hurricane Katrina and to amend the Internal Revenue Code of 1986 to waive the limitation on charitable donations by individuals for donations for the relief of the 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. CREDIT FOR EXPENSES INCURRED FOR HOUSING VICTIMS OF HURRICANE KATRINA.

(a) In General- In the case of an individual, there shall be allowed as a credit against the tax imposed by chapter 1 of the Internal Revenue Code of 1986 for the taxable year an amount equal to $20 for each day the taxpayer houses a Hurricane Katrina evacuee in the taxpayer's principal place of abode during the period beginning on August 26, 2005, and ending on December 31, 2005.

(b) Limitations-

(1) DOLLAR LIMITATION- The credit allowed under subsection (a) shall not exceed--

(A) $900 with respect to any Hurricane Katrina evacuee, and

(B) $2,000 with respect to any taxpayer.

(2) MINIMUM LENGTH OF STAY- No credit shall be allowed under subsection (a) with respect to any Hurricane Katrina evacuee unless such evacuee is housed at the taxpayer's principal residence for at least 7 consecutive days.

(c) Hurricane Katrina Evacuee- For purposes of this section, the term `Hurricane Katrina evacuee' means any individual--

(1) whose principal place of abode is within an area--

(A) with respect to which a major disaster has been declared by the President before September 14, 2005, under section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act in connection with Hurricane Katrina, and

(B) which is determined by the President before such date to warrant individual assistance, or individual and public assistance, from the Federal Government under such Act, and

(2) who is not able to inhabit such principal place of abode due to damage sustained from Hurricane Katrina.

(d) Treatment of Credit- Except as provided in subsection (e), for purposes of the Internal Revenue Code of 1986, the credit allowed under subsection (a) shall be treated as a credit allowed under subpart A of part IV of subchapter A of chapter 1 of such Code.

(e) Portion of Credit Refundable- The aggregate credits allowed to a taxpayer under subpart C of the Internal Revenue Code of 1986 shall be increased by the lesser of--

(1) the amount of the credit which would be allowed under this section without regard to this subsection and the limitation under section 26(a) of such Code, or

(2) $500.

The amount of the credit allowed under this subsection shall reduce the amount of the credit otherwise allowable under subsection (a) without regard to section 26(a) of such Code.

SEC. 2. WAIVER OF LIMIT ON CHARITABLE DONATIONS FOR RELIEF OF VICTIMS OF HURRICANE KATRINA.

(a) In General- Paragraph (1) of section 170(b) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:

`(G) WAIVER OF LIMITATION FOR HURRICANE KATRINA CONTRIBUTIONS-

`(i) IN GENERAL- This paragraph shall be disregarded with respect to the aggregate of contributions for any taxable year which are described in clause (ii).

`(ii) CONTRIBUTION DESCRIBED- A contribution is described in this clause if such contribution is a cash contribution made before January 1, 2010, for the relief of victims in areas affected by Hurricane Katrina.'.

(b) Effective Date- The amendment made by subsection (a) shall apply to contributions made after August 28, 2005.

END