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New Direction for Energy Independence, National Security, and Consumer Protection Act and the Renewable Energy and Energy Conservation Tax Act of 2007

Floor Speech

By:
Date:
Location: Washington, DC


NEW DIRECTION FOR ENERGY INDEPENDENCE, NATIONAL SECURITY, AND CONSUMER PROTECTION ACT AND THE RENEWABLE ENERGY AND ENERGY CONSERVATION TAX ACT OF 2007 -- (Senate - April 04, 2008)

AMENDMENT NO. 4389, AS FURTHER MODIFIED

Ms. LANDRIEU. Mr. President, I ask unanimous consent that my amendment No. 4389 be further modified, the text of which is at the desk.

The PRESIDING OFFICER. Is there objection to the further modification of the amendment?

Without objection, it is so ordered.

The amendment, as further modified, is as follows:

On page 82, between lines 7 and 8, insert the following:

SEC. 605. USE OF AMENDED INCOME TAX RETURNS TO TAKE INTO ACCOUNT RECEIPT OF CERTAIN HURRICANE-RELATED CASUALTY LOSS GRANTS BY DISALLOWING PREVIOUSLY TAKEN CASUALTY LOSS DEDUCTIONS.

(a) In General.--Notwithstanding any other provision of the Internal Revenue Code of 1986, if a taxpayer claims a deduction for any taxable year with respect to a casualty loss to a personal residence (within the meaning of section 121 of such Code) resulting from Hurricane Katrina or Hurricane Rita and in a subsequent taxable year receives a grant under Public Law 109-148, 109-234, or 110-116 as reimbursement for such loss from the State of Louisiana or the State of Mississippi, such taxpayer may elect to file an amended income tax return for the taxable year in which such deduction was allowed and disallow such deduction. If elected, such amended return must be filed not later than the due date for filing the tax return for the taxable year in which the taxpayer receives such reimbursement or the date that is 4 months after the date of the enactment of this Act, whichever is later. Any increase in Federal income tax resulting from such disallowance if such amended return is filed--

(1) shall be subject to interest on the underpaid tax for one year at the underpayment rate determined under section 6621(a)(2) of such Code; and

(2) shall not be subject to any penalty under such Code.

(b) Emergency Designation.--For purposes of Senate enforcement, all provisions of this section are designated as emergency requirements and necessary to meet emergency needs pursuant to section 204 of S. Con. Res. 21 (110th Congress), the concurrent resolution on the budget for fiscal year 2008.

SEC. 606. WAIVER OF DEADLINE ON CONSTRUCTION OF GO ZONE PROPERTY ELIGIBLE FOR BONUS DEPRECIATION.

(a) In General.--Subparagraph (B) of section 1400N(d)(3) of the Internal Revenue Code of 1986 is amended to read as follows:

``(B) without regard to `and before January 1, 2009' in clause (i) thereof,''.

(b) Effective Date.--The amendment made by this section shall apply to property placed in service after December 31, 2007.

(c) Emergency Designation.--For purposes of Senate enforcement, all provisions of this section are designated as emergency requirements and necessary to meet emergency needs pursuant to section 204 of S. Con. Res. 21 (110th Congress), the concurrent resolution on the budget for fiscal year 2008.

SEC. 607. TEMPORARY TAX RELIEF FOR KIOWA COUNTY, KANSAS AND SURROUNDING AREA.

(a) In General.--The following provisions of or relating to the Internal Revenue Code of 1986 shall apply, in addition to the areas described in such provisions, to an area with respect to which a major disaster has been declared by the President under section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (FEMA-1699-DR, as in effect on the date of the enactment of this Act) by reason of severe storms and tornados beginning on May 4, 2007, and determined by the President to warrant individual or individual and public assistance from the Federal Government under such Act with respect to damages attributed to such storms and tornados:

(1) SUSPENSION OF CERTAIN LIMITATIONS ON PERSONAL CASUALTY LOSSES.--Section 1400S(b)(1) of the Internal Revenue Code of 1986, by substituting ``May 4, 2007'' for ``August 25, 2005''.

(2) EXTENSION OF REPLACEMENT PERIOD FOR NONRECOGNITION OF GAIN.--Section 405 of the Katrina Emergency Tax Relief Act of 2005, by substituting ``on or after May 4, 2007, by reason of the May 4, 2007, storms and tornados'' for ``on or after August 25, 2005, by reason of Hurricane Katrina''.

(3) EMPLOYEE RETENTION CREDIT FOR EMPLOYERS AFFECTED BY MAY 4 STORMS AND TORNADOS.--Section 1400R(a) of the Internal Revenue Code of 1986--

(A) by substituting ``May 4, 2007'' for ``August 28, 2005'' each place it appears,

(B) by substituting ``January 1, 2008'' for ``January 1, 2006'' both places it appears, and

(C) only with respect to eligible employers who employed an average of not more than 200 employees on business days during the taxable year before May 4, 2007.

(4) SPECIAL ALLOWANCE FOR CERTAIN PROPERTY ACQUIRED ON OR AFTER MAY 5, 2007.--Section 1400N(d) of such Code--

(A) by substituting ``qualified Recovery Assistance property'' for ``qualified Gulf Opportunity Zone property'' each place it appears,

(B) by substituting ``May 5, 2007'' for ``August 28, 2005'' each place it appears,

(C) by substituting ``December 31, 2008'' for ``December 31, 2007'' in paragraph (2)(A)(v),

(D) by substituting ``December 31, 2009'' for ``December 31, 2008'' in paragraph (2)(A)(v),

(E) by substituting ``May 4, 2007'' for ``August 27, 2005'' in paragraph (3)(A),

(F) by substituting ``January 1, 2009'' for ``January 1, 2008'' in paragraph (3)(B), and

(G) determined without regard to paragraph (6) thereof.

(5) INCREASE IN EXPENSING UNDER SECTION 179.--Section 1400N(e) of such Code, by substituting ``qualified section 179 Recovery Assistance property'' for ``qualified section 179 Gulf Opportunity Zone property'' each place it appears.

(6) EXPENSING FOR CERTAIN DEMOLITION AND CLEAN-UP COSTS.--Section 1400N(f) of such Code--

(A) by substituting ``qualified Recovery Assistance clean-up cost'' for ``qualified Gulf Opportunity Zone clean-up cost'' each place it appears, and

(B) by substituting ``beginning on May 4, 2007, and ending on December 31, 2009'' for ``beginning on August 28, 2005, and ending on December 31, 2007'' in paragraph (2) thereof.

(7) TREATMENT OF PUBLIC UTILITY PROPERTY DISASTER LOSSES.--Section 1400N(o) of such Code.

(8) TREATMENT OF NET OPERATING LOSSES ATTRIBUTABLE TO STORM LOSSES.--Section 1400N(k) of such Code--

(A) by substituting ``qualified Recovery Assistance loss'' for ``qualified Gulf Opportunity Zone loss'' each place it appears,

(B) by substituting ``after May 3, 2007, and before on January 1, 2010'' for ``after August 27, 2005, and before January 1, 2008'' each place it appears,

(C) by substituting ``May 4, 2007'' for ``August 28, 2005'' in paragraph (2)(B)(ii)(I) thereof,

(D) by substituting ``qualified Recovery Assistance property'' for ``qualified Gulf Opportunity Zone property'' in paragraph (2)(B)(iv) thereof, and

(E) by substituting ``qualified Recovery Assistance casualty loss'' for ``qualified Gulf Opportunity Zone casualty loss'' each place it appears.

(9) TREATMENT OF REPRESENTATIONS REGARDING INCOME ELIGIBILITY FOR PURPOSES OF QUALIFIED RENTAL PROJECT REQUIREMENTS.--Section 1400N(n) of such Code.

(10) SPECIAL RULES FOR USE OF RETIREMENT FUNDS.--Section 1400Q of such Code--

(A) by substituting ``qualified Recovery Assistance distribution'' for ``qualified hurricane distribution'' each place it appears,

(B) by substituting ``on or after May 4, 2007, and before January 1, 2009'' for ``on or after August 25, 2005, and before January 1, 2007'' in subsection (a)(4)(A)(i),

(C) by substituting ``qualified storm distribution'' for ``qualified Katrina distribution'' each place it appears,

(D) by substituting ``after November 4, 2006, and before May 5, 2007'' for ``after February 28, 2005, and before August 29, 2005'' in subsection (b)(2)(B)(ii),

(E) by substituting ``beginning on May 4, 2007, and ending on November 5, 2007'' for ``beginning on August 25, 2005, and ending on February 28, 2006'' in subsection (b)(3)(A),

(F) by substituting ``qualified storm individual'' for ``qualified Hurricane Katrina individual'' each place it appears,

(G) by substituting ``December 31, 2007'' for ``December 31, 2006'' in subsection (c)(2)(A),

(H) by substituting ``beginning on June 4, 2007, and ending on December 31, 2007'' for ``beginning on September 24, 2005, and ending on December 31, 2006'' in subsection (c)(4)(A)(i),

(I) by substituting ``May 4, 2007'' for ``August 25, 2005'' in subsection (c)(4)(A)(ii), and

(J) by substituting ``January 1, 2008'' for ``January 1, 2007'' in subsection (d)(2)(A)(ii).

(b) Emergency Designation.--For purposes of Senate enforcement, all provisions of this section are designated as emergency requirements and necessary to meet emergency needs pursuant to section 204 of S. Con. Res. 21 (110th Congress), the concurrent resolution on the budget for fiscal year 2008.

Ms. LANDRIEU. Mr. President, the junior Senator from Mississippi wishes to speak on our amendment.

BREAK IN TRANSCRIPT

AMENDMENT NO. 4404 TO AMENDMENT NO. 4387

Ms. LANDRIEU. Mr. President, I ask unanimous consent that the pending amendment be laid aside and call up amendment No. 4404.

The PRESIDING OFFICER. Without objection, it is so ordered.

The clerk will report.

The assistant legislative clerk read as follows:

The Senator from Louisiana [Ms. Landrieu] proposes an amendment numbered 4404 to amendment No. 4387.

Ms. LANDRIEU. Mr. President, I ask unanimous consent that reading of the amendment be dispensed with.

The PRESIDING OFFICER. Without objection, it is so ordered.

The amendment is as follows:

(Purpose: To amend the provisions relating to qualified mortgage bonds to include relief for persons in areas affected by Hurricanes Katrina, Rita, and Wilma)

Beginning on page 68, strike line 22 and all that follows through line 4 on page 69 and and insert the following:

``(A) IN GENERAL.--Notwithstanding the requirements of subsection (i)(1), the proceeds of a qualified mortgage issue may be used to refinance a mortgage which--

``(i) was originally financed by the mortgagor through a qualified subprime loan, or

``(ii) is a mortgage on a residence--

``(I) located in the Gulf Opportunity Zone (as defined in section 1400M(1)) and damaged or rendered uninhabitable by reason of Hurricane Katrina,

``(II) located in the Rita GO Zone (as defined in section 1400M(3)) and damaged or rendered uninhabitable by reason of Hurricane Rita, or

``(III) located in the Wilma GO Zone (as defined in section 1400M(5)) and damaged or rendered uninhabitable by reason of Hurricane Wilma.

On page 72, between lines 10 and 11, insert the following:

(c) Waiver of 3-Year Requirement for Homes Damaged by Hurricanes Katrina, Rita, and Wilma.--Paragraph (2) of section 143(d) of the Internal Revenue Code of 1986 is amended by striking ``and'' at the end of subparagraph (C), by inserting ``and'' at the end of subparagraph (D), and by inserting after subparagraph (D) the following new subparagraph:

``(E) in the case of bonds issued after the date of the enactment of this subparagraph and before January 1, 2011, financing with respect to the purchase of any residence--

``(i) located in the Gulf Opportunity Zone (as defined in section 1400M(1)) and damaged or rendered uninhabitable by reason of Hurricane Katrina,

``(ii) located in the Rita GO Zone (as defined in section 1400M(3)) and damaged or rendered uninhabitable by reason of Hurricane Rita, or

``(iii) located in the Wilma GO Zone (as defined in section 1400M(5)) and damaged or rendered uninhabitable by reason of Hurricane Wilma,''.

On page 72, line 11, strike ``(c)'' and insert ``(d)''.

On page 73, line 19, strike ``(d)'' and insert ``(e)''.

Ms. LANDRIEU. Mr. President, I appreciate the support earlier today of an amendment that I, Senator Cochran, Senator Vitter, and Senator Wicker brought forward for the people of the gulf coast--thousands and thousands and thousands of homeowners, responsible homeowners, homeowners who did not exploit opportunities for fancy-dancy mortgages, homeowners who took just the regular standard mortgages, who had actually paid their mortgages off, and kept insurance their whole life. Then, in 2005, two storms hit the gulf coast and literally wiped out the net worth--literally, a great deal of the net worth--of hundreds of thousands of families on the gulf coast.

The reason I continue to come to the Senate floor is because the Stafford Act, which would normally come, if you would, to the rescue of people in our country in this situation, is wholly inadequate for either the initial recovery or the long-term rebuilding. It is not just what Mary Landrieu says, the Senator from Louisiana. It is what Secretary Chertoff testified before our committee last week. I am going to submit his actual quote for the Record. It is what Chief Paulson of FEMA said yesterday, testifying before the committee. It is what the inspector general of the Homeland Security Department said yesterday testifying before our committee.

So this is my dilemma as a Senator from a State that has had an unprecedented disaster. I would have been happy to receive the Stafford Act and just make it work for us. But since it is not working for us, I am kind of inventing things as we go along, trying to take appropriate and responsible advantage of other bills that come along that actually might be appropriate for our situation.

I am trying not to ask for too much but only what we need. But since the structure we have is not applicable, I have no choice. So I have been waiting for a year and a half to get a housing bill on the Senate floor so we could make some of these changes. I appreciate my colleagues being understanding and supportive, and everybody has been just terrific.

As I said earlier this week, we have had some terrible situations in Detroit, in California, in Las Vegas, in Sacramento, thousands and thousands in San Bernardino, CA. But as I said, some of these homeowners could have gotten themselves in trouble. They might have done things they should not have done. I do not know. Maybe some people were victims of fraud. That will be worked out, I hope, through some of the legislation we are passing.

But the reason I pull this chart up is to say that even in the worst area in the country right now for foreclosures, which is Detroit, Dearborn, MI, with 42,000 homes--these are official numbers--only 4.9 percent of the houses in this whole area are basically in foreclosure or for which there is a threatening pending foreclosure.

I bring this contrast to show you that down on the gulf coast, those numbers are dwarfed by what Katrina and Rita and the subsequent levee breaks did to our homeowners. In St. Bernard Parish, almost 55 percent--not 4 percent, not 10 percent, not 20 percent but 54 percent of the homes in St. Bernard Parish--had damage exceeding 30,000. Some of these homes were only worth $50,000. Some were worth $350,000. But they are basically completely damaged.

In fact, the sheriff and the parish president told me that there were only five homes undamaged in the whole parish after Katrina and Rita--after those waters went down--5 out of the 67,000 people who live in this parish.

For Cameron Parish, almost 50 percent of their households have had completely devastating damage to their homes.

So, if you can, picture a place that does not have just a spattering of houses and weeds and emptiness but places that have blocks and blocks and miles and miles of homes that are empty and gutted with the windows and doors open and the families gone. People are struggling to come back with a very inadequate Federal framework right now to help them.

I know we have sent down a lot of community development block grant money. After a lot of contortions that everybody went through, we finally crafted a plan to give each of these homeowners, if they qualified--they had to prove they owned the land; they had to prove they paid taxes; they had to prove they were actually the right homeowner--we gave them a grant, no more than $150,000. The average is about $60,000 for Mississippi and Louisiana. Our plans are similar but not the same.

But you can imagine the problem with a family who owned their house outright, they had no mortgage. It was worth $350,000 or $400,000 or $500,000, and the most grant they could possibly get is $150,000.

So we are far away from trying to make people whole. Why should we try to make them whole? Again, it is nothing they did. They did not cause the hurricane. Some of them did not even live in floodplains. Some of the families did not have flood insurance because they were told by their mortgage holder and their bankers they did not need it. They were told by the Federal Government they did not need it.

So my amendment is an attempt to help these homeowners by not adding a penny to the underlying bill, which is a wonderful thing--that we do not have to add any money to the underlying bill because I know we are trying to keep the cost of all this down. But all my amendment would do would be to allow there to be a third reason that bonds could be issued at the State level.

In the underlying bill, the first reason, which is a good reason, is to allow first-time home buyers to buy some of the homes that have been foreclosed on that are sitting empty in neighborhoods. So what a good way to kind of get these homes back in circulation, to allow first-time home buyers with limited incomes--it is $65,000 in my State. I am not sure what it is in everybody else's State, but that would be a lot of families with teachers, firefighters, nurses, et cetera. They are not very wealthy but not poor middle-class families. These families could come in and buy some of these homes. That is a great idea.

I used to be the State treasurer. I issued these bonds. It works. It is a happy thing when people can buy a home. The underlying bill also allows these bonds to be issued to build more multifamily dwellings. This is a desperate need in Louisiana because while we spend a lot of time talking about our homeowners who have lost homes, we had over 60 percent of the population in New Orleans, maybe between 50 and 60 percent who were not even homeowners. They were renters. Some of them were very wealthy renters. They chose to live in nice places, but a lot of the people in New Orleans--my hometown--were poor, and they could not afford a home, so they were renting. Their places have been destroyed, and we now have a growing homeless population of historic proportions.

So the provision in the underlying bill that gives the opportunity to issue bonds to build multifamily dwellings is great. We can build for the elderly, who really need affordable housing in the country. I also believe the underlying provision allows for the building of places, rentals for the disabled, which is also a growing need.

But what my amendment simply says is, there will be a third option for these bonds, and it will help to refinance homes that have been destroyed along the gulf coast in basically the storms of 2005. That is what the current amendment says.

But let me say that I am very open to modify my amendment, if the leadership wants to do that, to allow the use of these bonds to go to basically any home that was destroyed by a disaster in the whole country. I think it would be a very good use of these bonds because, as I said, there is not a lot of help outside of just general insurance that helps people to rebuild. If people have insurance, fine; they can rebuild their home from insurance proceeds.

But many people who had their houses destroyed by tornadoes or flash floods or hurricanes or earthquakes were not required to have insurance by the current law, and if they already paid off their mortgage, even if they were required to have insurance, they weren't required to after they paid off their mortgage; so a disaster hits and there is no way.

This is not a grant. This is not a giveaway. It is an opportunity to provide mortgage lending for people who may want to buy some of these homes that have been destroyed. They are not foreclosed homes; they were destroyed and owned basically now by, in our case, Government entities that are trying to recirculate these properties back into the housing market.

So that is basically what my amendment does. I hope we will have an opportunity, of course, as the day goes on, to maybe speak about it more or to have a vote on it next week, whenever the Senate decides to proceed.

I thank the Senator from Connecticut. As I was saying before he came in, the amendment I am offering now adds no cost to the underlying bill. It takes the mortgage provision piece and makes it applicable for trying to help with homes that were destroyed in a disaster. Right now, we are trying to help with homes that were destroyed, if you will, by a foreclosure situation. We are also hoping to build multifamily housing, which is great.

All we are asking for with this amendment is to basically add a third voluntary--not mandatory but voluntary on the part of the States if they want to include disaster, without adding any additional expense to the bill.

So I thank the Senator from Connecticut. I hope we will take up this amendment whenever we can.

I yield the floor.


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