GULF OPPORTUNITY ZONE ACT OF 2005 -- (Senate - December 16, 2005)
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Mr. KERRY. Mr. President, I commend Senate Finance Chairman GRASSLEY and Ranking Member BAUCUS for putting together a bipartisan bill that will provide tax relief to individuals and businesses who are struggling due to the aftermath of Hurricane Katrina. This legislation creates a gulf opportunity zone in those areas in Alabama, Louisiana, and Mississippi that were hardest hit by the hurricane. Businesses operating in this zone will be eligible for specified tax breaks. In addition, the legislation provides relief to help with housing and the cost of higher education.
I support providing businesses with the appropriate tax relief that will help them rebuild. However, I am concerned that this tax relief will not be helpful if we do not provide assistance to small businesses. If the assistance to small businesses continues at its present pace, tax relief will be somewhat meaningless. Currently, 74 percent of hurricane-related Small Business Administration, SBA, disaster business loan applications have not even been processed, and less than 10 percent of the approved business loans have been fully disbursed. I have introduced legislation that would allow the affected States to distribute $450 million in bridge loans to help businesses that are waiting for an SBA loan to begin rebuilding immediately. If we do not provide businesses with loans, they will not be able to rebuild and benefit from these tax incentives.
I am pleased that this legislation includes a provision that would extend the current law provision that allows military personnel the option of treating certain combat pay as earned income for the purpose of computing the earned income tax credit, EITC, for 1 year. I have introduced legislation that strengthens the EITC. It includes a provision to allow permanently military personnel to elect to treat certain combat pay as income for purposes of calculating the EITC. During the debate on S. 2020, the Tax Relief Act of 2005, I along with Senator OBAMA offered an amendment on the EITC that would have extended this provision through 2007, but it was subject to a point of order because it included outlays.
This provision should be made permanent, but it is important that we are not allowing it to expire. It is a commonsense provision that would prevent members of the armed services from losing their EITC when they are mobilized and serving their country. Military families are often faced with increased expenses when a loved one is deployed. Thousands of reservists, for example, take a cut in pay when they are called to active duty.
Without this extension, several military families that are benefiting from the EITC would not longer be eligible for the credit. Eligibility for the EITC is based on income, and certain combat pay does not count as income for tax purposes. The election included in this provision would allow military personnel to choose whether they want their combat zone pay to count as income for purposes of calculating the EITC.
This provision will help military families with some of their financial burdens. It does not repay the sacrifices that they are making for us, but it shows that we are supporting our troops at home as well as abroad.