Senate OKs Katrina bill, casinos get reprieve
WASHINGTON (Reuters) – The Senate approved a revised tax
incentive package to help rebuild the hurricane-devastated Gulf
Coast on Friday after resolving differences with the House of
Representatives over items such as breaks for casinos.
Under a deal with House leaders brokered by Sen. Trent
Lott, a Mississippi Republican, the measure will allow casinos
to reap bonus depreciation incentives for all facilities except
gaming equipment and gaming room construction.
This means that they can claim a first-year depreciation
deduction of 50 percent of the cost rebuilding main buildings,
hotel facilities, restaurants and entertainment venues
destroyed by Hurricane Katrina.
The bill’s biggest subsidy, valued at about $2 billion,
grants this benefit to all businesses investing in the
federally declared Gulf Opportunity Zone disaster area for
structures built before the end of 2008 and equipment bought
before the end of 2007.
House legislation passed last week had excluded casinos,
massage parlors, tanning salons, country clubs and certain
other businesses in the zone covering much of Louisiana and
Mississippi and portions of Alabama.
“By significantly lowering the cost of capital for small,
medium, and large businesses alike, the provisions in this
legislation will spur business investment on the Gulf Coast,
increase the supply of affordable housing, and put dislocated
employees back to work,” Lott said in a statement.
The measure, passed by unanimous consent, authorizes
issuance of $14.8 billion in tax-exempt bonds to finance
reconstruction of homes and businesses in the Gulf Opportunity
Zone, including $7.9 billion for Louisiana, $4.8 billion for
Mississippi and $2.1 billion for Alabama.
The bonds are similar to the $8 billion New York Liberty
bond program enacted in response to the September 11, 2001
attacks to help rebuild lower Manhattan.
The bill also will allow municipalities to restructure
their debts by allowing bond issuers one additional advance
refunding before January 1, 2011. These are capped at $4.5
billion for Louisiana, $2.25 billion for Mississippi and $1.125
billion for Alabama.
The Senate’s revised measure also follows the House bill’s
more generous $1 billion subsidy to encourage construction of
low-income housing in the Gulf Opportunity Zone. The measure is
expected to be considered by the House later this week.