WASHINGTON, DC – Seeking another vehicle for moving critical Greensburg tax relief passed by the Senate but stalled in the House, U.S. Senator Pat Roberts offered an amendment to the Housing Bill to include this relief to help in the rebuilding of the town and surrounding areas hit by a tornado May 4, 2007. The amendment including Senator Roberts’ language was approved with strong bipartisan support by a vote of 74-5.

"The Senate has approved this legislation three times now," Senator Roberts said. "It is past time for the House to act."

U.S. Senator Sam Brownback said, "Senator Roberts’ amendment will grant much needed tax relief to those affected by the Greensburg tornado last year. The Senate has shown strong support for this provision by passing it three times, and I hope that my colleagues in the House match this support and pass the legislation this time."

In May, 2007, Senator Roberts and Senator Sam Brownback introduced the original bill. Senator Roberts, a member of the Senate Committee on Finance which has jurisdiction on tax issues, worked with Finance Chairman Max Baucus (D-MT) and Ranking Member Charles Grassley (R-IA) on getting the legislation immediately to the Senate floor. The bill was unanimously approved by the Senate nine days later. It is rare to get a tax bill approved by the U.S. Senate so quickly.

Following inaction in the House, Senators Roberts and Brownback attached the tax relief to the Farm Bill which was approved by the Senate in December. Due to ongoing negotiations on the Farm Bill, Senator Roberts offered the bill as an amendment to the Housing Bill, which, due to a bipartisan agreement, is expected to quickly move through the Congress.

"With so many financial uncertainties facing victims of these storms, especially those in Greensburg, we need to provide residents with every tool they can possibly use as they rebuild their homes, businesses and lives," Roberts said. "During the President’s visit to Greensburg, we met with Kelly Estes, President of the John Deere Dealership, and learned that he planned to pay his employees despite business suffering from the storms. We were able to include an employee retention tax credit for small businesses to help employers like Kelly preserve their operations."

This tax relief is applicable to any counties declared eligible for individual assistance as of date of enactment. The following provisions are included in the bill:

• Employee Retention Credit for Small Businesses – Establishes a tax credit for wages paid after May 4, 2007, and before December 31, 2007, by employers located in an eligible county. The credit only applies while the business is not operating.
• Casualty Loss – Eliminates the ten percent and one-hundred dollar floor for casualty losses resulting from the storms and incurred in eligible counties, including those claimed on amended returns.
• Extended Replacement Period for Damaged Property – Extends the replacement period to five years for business and residential property that was damaged or destroyed as a result of the storms.
• Provides 50-percent bonus depreciation to help businesses rebuild – Permits businesses to claim an additional first-year depreciation deduction equal to 50 percent of the cost of new property investments made in an eligible county.
• Increase in Expensing for Small Businesses – Doubles the expensing limit for expenses and increases the level of investment at which benefits phase out from $400,000 of annual investments to $1 million.
• Partial Expensing for Demolition and Cleanup Costs – Allows businesses to expense up to 50 percent of the clean-up and demolition costs.
• Net Operating Loss Carryback – Extends the net operating loss carryback period from two to five years for net operating losses attributable to (1) new investment and repairing existing investment; (2) business casualty losses; and (3) moving expenses and temporary housing expenses for employees working in the affected area.
• Income Eligibility for Residential Rentals – Allow operators of qualified residential rental projects to rely on the representations of prospective tenants displaced by the disaster for purposes of determining whether they satisfy the income limitations for qualified rental projects.
• Early Withdrawals from Retirement Plans – Waives the penalty for early withdrawal from IRAs and other retirement plans for individuals in the affected area, allows individuals to re-contribute withdrawals over a three year period.

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