[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 467 Introduced in Senate (IS)]
103d CONGRESS
1st Session
S. 467
To amend the Internal Revenue Code of 1986 to provide tax relief for
certain disaster victims, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
February 25 (legislative day, January 5), 1993
Mr. Mack (for himself, Mr. Graham, Mr. Inouye, Mr. Akaka, Mr. Breaux,
and Mr. Johnston) introduced the following bill; which was read twice
and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to provide tax relief for
certain disaster victims, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; AMENDMENTS OF 1986 CODE.
(a) Short Title.--This Act may be cited as the ``Natural Disaster
Tax Relief Act of 1993''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is expressed in
terms of an amendment to, or repeal of, a section or other provision,
the reference shall be considered to be made to a section or other
provision of the Internal Revenue Code of 1986.
SEC. 2. DISTRIBUTIONS FROM CERTAIN PLANS MAY BE USED WITHOUT PENALTY TO
REPLACE HOMES.
(a) In General.--No additional tax shall be imposed under section
72(t) of the Internal Revenue Code of 1986 on any distribution
described in subsection (b) to the extent such distribution is used,
within 60 days of the distribution, to pay qualified acquisition costs
with respect to a principal residence of an eligible individual.
(b) Distributions.--Subsection (a) shall apply to distributions--
(1) from an individual retirement plan, or
(2) from amounts attributable to employer contributions
made pursuant to elective deferrals described in subparagraph
(A) or (C) of section 402(g)(3) of the Internal Revenue Code of
1986 or section 501(c)(18)(D)(iii) of such Code.
(c) Definitions and Special Rules.--
(1) Eligible individual.--The term ``eligible individual''
means an individual--
(A) who receives a distribution described in
subsection (b), or who is the spouse, child, or
grandchild of such individual, and
(B) whose principal residence was destroyed or
substantially damaged by Hurricane Andrew, Hurricane
Iniki, or Typhoon Omar.
(2) Qualified acquisition costs.--The term ``qualified
acquisition costs'' means the costs of acquiring, constructing,
or reconstructing a residence. Such term includes any usual or
reasonable settlement, financing, or other closing costs.
(3) Principal residence.--The term ``principal residence''
has the same meaning as when used in section 1034 of such Code.
(4) Distributions allowed.--A distribution to which
subsection (a) applies shall be treated as a distribution
allowed under section 401(k)(2)(B)(i) or 403(b)(11) of such
Code.
(5) Transition.--In the case of any distribution before the
date of the enactment of this Act, qualified acquisition costs
paid within 90 days of such date shall be treated as paid
within 60 days of the distribution.
(d) Effective Date.--This section shall apply to distributions
after July 31, 1992.
SEC. 3. SPECIAL RULE FOR INCLUSION OF CROP PROCEEDS OF CERTAIN DISASTER
VICTIMS.
(a) In General.--If, for the taxpayer's taxable year which includes
the designation date described in subsection (b), the taxpayer has
income derived from the sale or exchange of crops grown in a qualified
disaster area, the taxpayer may elect to include such income for the
taxable year following the taxable year in which such sale or exchange
occurs.
(b) Qualified Disaster Area.--For purposes of subsection (a), the
term ``qualified disaster area'' means an area designated by the
President of the United States to warrant assistance by the Federal
Government under the Robert T. Stafford Disaster Relief and Emergency
Assistance Act by reason of Hurricane Andrew, Hurricane Iniki, or
Typhoon Omar.
(c) Limitation.--Subsection (a) shall apply only to a taxpayer
whose principal trade or business is farming (within the meaning of
section 6420(c)(3) of the Internal Revenue Code of 1986).
(d) Special Rules for Self-Employment Tax.--If, for any taxable
year, a taxpayer includes in gross income any amounts which, but for
subsection (a), would have been included in gross income for the
preceding taxable year, then the applicable contribution base for
purposes of section 1402(b) of such Code for the taxable year of
inclusion shall be increased by the lesser of--
(1) the applicable contribution base for the preceding
taxable year, reduced by the self-employment income of the
taxpayer for the preceding taxable year, or
(2) the amounts so included in gross income for the taxable
year of inclusion.
(e) Effective Date.--The provisions of this section shall apply to
taxable years ending after December 31, 1991.
SEC. 4. MODIFICATION OF INVOLUNTARY CONVERSION RULES FOR CERTAIN
DISASTER-RELATED CONVERSIONS.
(a) In General.--Section 1033 (relating to involuntary conversions)
is amended by redesignating subsection (h) as subsection (i) and by
inserting after subsection (g) the following new subsection:
``(h) Special Rules for Principal Residences Damaged by
Presidentially Declared Disasters.--
``(1) In general.--If the taxpayer's principal residence or
any of its contents is compulsorily or involuntarily converted
as a result of a Presidentially declared disaster--
``(A) Treatment of insurance proceeds.--
``(i) Exclusion for unscheduled personal
property.--No gain shall be recognized by
reason of the receipt of any insurance proceeds
for personal property which was part of such
contents and which was not scheduled property
for purposes of such insurance.
``(ii) Other proceeds treated as common
fund.--In case of any insurance proceeds (not
described in clause (i)) for such residence or
contents--
``(I) such proceeds shall be
treated as received for the conversion
of a single item of property, and
``(II) any property which is
similar or related in service or use to
the residence so converted (or contents
thereof) shall be treated for purposes
of subsection (a)(2) as property
similar or related in service or use to
such single item of property.
``(B) Extension of replacement period.--Subsection
(a)(2)(B) shall be applied with respect to any property
so converted by substituting `4 years' for `2 years'.
``(2) Presidentially declared disaster.--For purposes of
this subsection, the term `Presidentially declared disaster'
means any disaster which, with respect to the area in which the
residence is located, resulted in a subsequent determination by
the President that such area warrants assistance by the Federal
Government under the Robert T. Stafford Disaster Relief and
Emergency Assistance Act.
``(3) Principal residence.--For purposes of this
subsection, the term `principal residence' has the same meaning
as when used in section 1034, except that no ownership
requirement shall be imposed.''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to property compulsorily or involuntarily converted as a result
of disasters for which the determination referred to in section
1033(h)(2) of the Internal Revenue Code of 1986 (as added by this
section) is made on or after September 1, 1991, and to taxable years
ending on or after such date.
SEC. 5. APPLICATION OF LOW-INCOME HOUSING CREDITS AND MORTGAGE REVENUE
BONDS TO NATURAL DISASTER AREAS.
(a) Low-Income Housing Credits.--
(1) Waiver of 24-month completion requirement.--In the case
of any qualified building located in a qualified disaster area
with respect to which a low-income housing allocation is made
before the occurrence of the natural disaster, the Secretary
may extend the period described in section 42(h)(1)(E)(i) of
the Internal Revenue Code of 1986 to not later than the close
of the fourth calendar year following the calendar year in
which the allocation is made.
(2) Waiver of written income verification requirement.--
(A) In general.--With respect to any occupant of a
low-income unit in any qualified low-income building
located in a qualified disaster area or any such
occupant in any other qualified low-income building who
immediately prior to such occupation resided in a
qualified disaster area, the Secretary may waive the
requirements of paragraphs (1) and (2) of section 42(l)
of such Code regarding occupant income information
until such information is reasonably obtainable.
(B) Discovery of ineligibility.--If upon receipt of
occupant income information the income of any occupant
of a low-income unit in the building is determined to
exceed the income limitation under section 42(g) of
such Code, such unit shall continue to be treated as a
low-income unit if no subsequently available
residential rental unit in the building is occupied by
a new resident whose income exceeds such income
limitation and such occupant vacates the unit upon the
later of the lease termination or 30 days after receipt
of such information by the Secretary.
(3) Waiver of tenant income limitations.--With respect to
any tenant occupying a unit in a qualified low-income housing
project located in a qualified disaster area who relocates to
any other unit of a qualified low-income housing project, the
Secretary may waive the income limitation of subparagraph (A)
or (B) of section 42(g)(1) of such Code if the income of such
tenant does not exceed 140 percent of such income limitation.
(4) Waiver of 6-month residence requirement.--With respect
to any unit in a building located in a qualified disaster area
or any unit occupied by individuals who immediately prior to
such occupation resided in a qualified disaster area, the
Secretary may waive the requirement of clause (i) of section
42(i)(3)(B) of such Code and allow the use of such unit on a
transient basis.
(5) Waiver on 10-year rule for existing buildings.--The
Secretary may waive the requirement of subparagraph (B)(ii) of
section 42(d)(2) of such Code with respect to any building
located in a qualified disaster area.
(6) Waiver of the national pool allocation.--The Secretary
may modify the formula described in the penultimate sentence of
section 42(h)(3)(D)(iii) of such Code for any calendar year
with respect to the allocation to any qualified State in which
is located a qualified disaster area to increase such
allocation to take into account the effects of such disaster.
(7) Effective date.--This subsection shall take effect on
July 1, 1992.
(b) Waiver of Dollar Limitation for Home Improvement Loans for
Residences in Qualified Disaster Areas.--The $15,000 limitation
specified in the last sentence of section 143(k)(4) of such Code shall
not apply to any loan for residences located in a qualified disaster
area if such loan is made on or after June 30, 1992, and before January
1, 1994.
(c) Qualified Disaster Area.--For purposes of this section, the
term ``qualified disaster area'' means an area designated by the
President of the United States to warrant assistance by the Federal
Government under the Robert T. Stafford Disaster Relief and Emergency
Assistance Act by reason of Hurricane Andrew, Hurricane Iniki, or
Typhoon Omar.
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