"I am thankful that these provisions were included in this important legislation to ensure that these roadblocks are finally eliminated for so many on the Gulf Coast trying to rebound from Hurricanes Katrina and Rita," said Rep. Gene Taylor (D-Miss.). "This will eliminate two unfair technicalities that have slowed recovery efforts for some people who are struggling to rebuild."

The Gulf Opportunity (GO) Zone Act of 2005 allows a bonus depreciation tax deduction for property placed in service before December 31, 2010, in the five Mississippi counties and seven Louisiana parishes that suffered the most damage from the hurricanes. However, in 2006 when Congress extended the deadline for finishing construction projects, it did not extend the December 31, 2007, deadline to begin construction. Because of this, only projects that broke ground by the end of 2007 are eligible for the bonus tax deduction.

The bill eliminates the deadline to begin construction to qualify for the bonus depreciation deduction of the GO Zone Act. This applies the same language to the GO Zone Act as the language in the New York Liberty Zone Act, which allowed businesses and employees in the area damaged by the 9/11 terrorist attacks to be eligible for a tax deduction. The Liberty Zone had no deadline to begin construction, only a deadline to place property in service.

The language in the provision to eliminate the GO Zone start-construction deadline is identical to the text of H.R. 5612, which Taylor introduced in March.

The bill also allows grant recipients in Mississippi and Louisiana who previously deducted their loss after the 2005 hurricanes from their taxes to be able to amend previous returns, rather than be forced to count the grant as current taxable income. By law, a grant recipient who did not deduct their loss cannot have their grant taxed as income. This measure would ensure that no grant recipients would be forced to count the grant as taxable income.

In May, the House passed the provision as part of the Renewable Energy and Job Creation Act of 2008, but the Senate has not yet voted on their version of the legislation. The Senate also previously passed the provision as part of their version of the Foreclosure Prevention Act of 2008.