[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6683 Introduced in House (IH)]
112th CONGRESS
2d Session
H. R. 6683
To amend the Internal Revenue Code of 1986 to provide tax relief for
damages relating to Hurricane Sandy, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
December 19, 2012
Mr. Pascrell (for himself, Mr. Rangel, Mr. Smith of New Jersey, Mr.
Pallone, Ms. DeLauro, Mr. LoBiondo, Mr. Frelinghuysen, Mr. Crowley, Mr.
Larson of Connecticut, Mr. Garrett, Mr. Lance, Mr. Grimm, Mr. Runyan,
Mr. Turner of New York, Mrs. Lowey, Mr. Israel, Mr. Reed, Mr. Engel,
Mr. Towns, Mr. Sires, Mr. Higgins, Mr. Andrews, Mr. Courtney, Mr.
Langevin, Mr. Ackerman, Mr. Payne, and Mr. Holt) introduced the
following bill; which was referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to provide tax relief for
damages relating to Hurricane Sandy, 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, ETC.
(a) Short Title.--This Act may be cited as the ``Hurricane Sandy
Tax Relief Act of 2012''.
(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.
(c) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title, etc.
Sec. 2. Waiver of adjusted gross income limitation for losses and
increase in standard deduction by disaster
casualty losses attributable to Hurricane
Sandy.
Sec. 3. Expensing of qualified disaster expenses.
Sec. 4. Net operating losses attributable to federally declared
disasters.
Sec. 5. Waiver of certain mortgage revenue bond requirements following
federally declared disasters.
Sec. 6. Increased expensing for Hurricane Sandy qualified disaster
assistance property.
Sec. 7. Increased limitation on charitable contributions for disaster
relief; certain contributions paid before
April 15, 2013, treated as paid in 2012.
Sec. 8. Increase in new markets tax credit for investments in community
development entities serving Hurricane
Sandy disaster areas.
Sec. 9. Extension of expensing for environmental remediation costs.
Sec. 10. Special rule for public utility casualty losses.
Sec. 11. Determination of earned income for purposes of earned income
credit and child tax credit.
Sec. 12. Work Opportunity Credit.
Sec. 13. Hurricane Sandy Bonds.
Sec. 14. Additional low-income housing credit may be allocated in
States damaged by Hurricane Sandy.
Sec. 15. Special rules for use of retirement funds.
SEC. 2. WAIVER OF ADJUSTED GROSS INCOME LIMITATION FOR LOSSES AND
INCREASE IN STANDARD DEDUCTION BY DISASTER CASUALTY
LOSSES ATTRIBUTABLE TO HURRICANE SANDY.
(a) In General.--Subclause (I) of section 165(h)(3)(B)(i) is
amended by striking ``January 1, 2010'' and inserting ``January 1,
2010, or the Hurricane Sandy federally declared disaster''.
(b) Hurricane Sandy Federally Declared Disaster.--Paragraph (3) of
section 165(h) is amended by adding at the end the following new
subparagraph:
``(D) Application to hurricane sandy.--
``(i) In general.--Personal casualty losses
shall be treated as described in subparagraph
(B)(i) if such losses--
``(I) are attributable to the
Hurricane Sandy federally declared
disaster, and
``(II) occur in the Hurricane Sandy
disaster area.
``(ii) Hurricane sandy federally declared
disaster.--For purposes of clause (i), the term
`Hurricane Sandy federally declared disaster'
means the disaster occurring by reason of
Hurricane Sandy and determined by the President
before November 4, 2012, to warrant individual
or individual and public assistance from the
Federal Government under the Robert T. Stafford
Disaster Relief and Emergency Assistance Act.
``(iii) Hurricane sandy disaster area.--The
term `Hurricane Sandy disaster area' means the
area so determined to warrant such
assistance.''.
(c) Effective Date.--The amendments made by this subsection shall
apply to taxable years ending after October 28, 2012.
SEC. 3. EXPENSING OF QUALIFIED DISASTER EXPENSES.
(a) In General.--Paragraph (2) of 198A(b) is amended--
(1) in subparagraph (A) by striking ``January 1, 2010'' and
inserting ``January 1, 2010, or released in the Hurricane Sandy
disaster area on account of the Hurricane Sandy federally
declared disaster, as defined by section 165(h)(3)(D)'',
(2) in subparagraph (B) by striking ``such date'' and
inserting ``such date or which is business-related property in
the Hurricane Sandy disaster area that is damaged or destroyed
as a result of the Hurricane Sandy federally declared disaster
(as so defined)'', and
(3) in subparagraph (C) by striking ``such date'' and
inserting ``such date or which is business-related property in
the Hurricane Sandy disaster area that is damaged as a result
of the Hurricane Sandy federally declared disaster (as so
defined)''.
(b) Effective Date.--The amendments made by this section shall
apply to amounts paid or incurred after October 28, 2012.
SEC. 4. NET OPERATING LOSSES ATTRIBUTABLE TO FEDERALLY DECLARED
DISASTERS.
(a) In General.--Subsection (j) of section 172 is amended by adding
at the end the following new paragraph:
``(5) Application to hurricane sandy.--
``(A) In general.--Losses shall be treated as
described in paragraph (1)(A)(i) if such losses are
attributable to the Hurricane Sandy federally declared
disaster (as defined in section 165(h)(3)(D)) and occur
in the Hurricane Sandy disaster area (as so defined).
``(B) Special rule.--For purposes of subparagraph
(A), paragraph (4) shall not apply.''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years ending after October 28, 2012.
SEC. 5. WAIVER OF CERTAIN MORTGAGE REVENUE BOND REQUIREMENTS FOLLOWING
FEDERALLY DECLARED DISASTERS.
(a) In General.--Subparagraphs (A)(i) and (B)(i) of section
143(k)(12), as added by the Tax Extenders and Alternative Minimum Tax
Relief Act of 2008, are each amended by striking ``January 1, 2010''
and inserting ``January 1, 2010, or in the case of a residence located
in the Hurricane Sandy disaster area on October 29, 2012, by reason of
the Hurricane Sandy federally declared disaster, as defined by section
165(h)(3)(D)''.
(b) Conforming Amendments.--Subparagraph (A)(ii) of such section is
amended by striking ``such date'' and inserting ``such date or by
reason of the Hurricane Sandy federally declared disaster (as so
defined)''.
(c) Effective Date.--The amendments made by this section shall
apply to disasters occurring after October 28, 2012.
SEC. 6. INCREASED EXPENSING FOR HURRICANE SANDY QUALIFIED DISASTER
ASSISTANCE PROPERTY.
(a) In General.--Subsection (e) of section 179 is amended to read
as follows:
``(e) Special Rules for Hurricane Sandy.--
``(1) In general.--If a taxpayer elects the application of
this subsection for a taxable year and places in service during
the taxable year any Hurricane Sandy qualified disaster
assistance property--
``(A) the dollar amount in effect under subsection
(b)(1) for the taxable year shall be increased by the
qualified disaster limitation amount, and
``(B) the dollar amount in effect under subsection
(b)(2) for the taxable year shall be increased by the
qualified disaster limitation reduction amount.
``(2) Qualified disaster limitation amount.--For purposes
of paragraph (1), the term `qualified disaster limitation
amount' means the lesser of--
``(A) $500,000, or
``(B) the cost of Hurricane Sandy qualified
disaster assistance property placed in service during
the taxable year.
``(3) Qualified disaster limitation reduction amount.--For
purposes of paragraph (1), the term `qualified disaster
limitation amount' means the lesser of--
``(A) $2,000,000, or
``(B) the cost of Hurricane Sandy qualified
disaster assistance property placed in service during
the taxable year.
``(4) Hurricane sandy qualified disaster assistance
property.--For purposes of this subsection--
``(A) In general.--The term `Hurricane Sandy
qualified disaster assistance property' means section
179 property (as defined in subsection (d)) and
qualified property--
``(i) the original use of which in the
Hurricane Sandy disaster area commences with
the taxpayer on or after October 29, 2012,
``(ii) substantially all of the use of
which is--
``(I) in the Hurricane Sandy
disaster area, and
``(II) in the active conduct of a
trade or business by the taxpayer in
the Hurricane Sandy disaster area,
``(iii) which--
``(I) rehabilitates property
damaged, or replaces property destroyed
or condemned, as a result of the
Hurricane Sandy federally declared
disaster, except that, for purposes of
this clause, property shall be treated
as replacing property destroyed or
condemned if, as part of an integrated
plan, such property replaces property
which is included in a continuous area
which includes real property destroyed
or condemned, and
``(II) is located in the same
county as the property being
rehabilitated or replaced,
``(iv) which is placed in service or
acquired by the taxpayer by purchase (as
defined in subsection (d)) on or after October
29, 2012, but only if no written binding
contract for the acquisition was in effect
before such date, and
``(v) which is placed in service by the
taxpayer on or after October 29, 2012, and
before December 31, 2015 (December 31, 2016, in
the case of nonresidential real property and
residential rental property).
``(B) Qualified property.--The term `qualified
property' means property which is--
``(i) tangible property to which section
168 applies and which has a recovery period of
39 years or less, or
``(ii) computer software (as defined in
section 167(f)(1)(B)) for which a deduction is
allowable under section 167(a).
``(C) Exceptions.--
``(i) Alternative depreciation property.--
Such term shall not include any property to
which the alternative depreciation system under
section 168(g) applies, determined without
regard to paragraph (7) thereof (relating to
election to have system apply).
``(ii) Tax-exempt bond financed property.--
Such term shall not include any property any
portion of which is financed with the proceeds
of any obligation the interest on which is
exempt from tax under section 103.
``(D) Election.--An election under this subsection
for any taxable year shall--
``(i) specify the items of Hurricane Sandy
qualified disaster assistance property to which
the election applies and the portion of the
cost of each of such items which is to be taken
into account under paragraph (1), and
``(ii) be made on the taxpayer's return of
the tax imposed by this chapter for the taxable
year.
``(E) Special rules.--For purposes of this
subsection, rules similar to the rules of subparagraph
(E) of section 168(k)(2) shall apply, except that such
subparagraph shall be applied--
``(i) by substituting `the date of the
Hurricane Sandy federally declared disaster'
for `December 31, 2007' each place it appears
therein,
``(ii) by substituting `January 1, 2014'
for `January 1, 2013' in clause (i) thereof,
and
``(iii) by substituting `Hurricane Sandy
qualified section 179 disaster assistance
property' for `qualified property' in clause
(iv) thereof.
``(5) Terms relating to hurricane sandy.--For purposes of
this subsection, the terms `Hurricane Sandy federally declared
disaster' and `Hurricane Sandy disaster area' have the meanings
given such terms by section 165(h)(3)(D).
``(6) Recapture.--For purposes of this subsection, rules
similar to the rules under subsection (d)(10) shall apply with
respect to any qualified section 179 disaster assistance
property which ceases to be qualified section 179 disaster
assistance property.''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years ending after October 28, 2012.
SEC. 7. INCREASED LIMITATION ON CHARITABLE CONTRIBUTIONS FOR DISASTER
RELIEF; CERTAIN CONTRIBUTIONS PAID BEFORE APRIL 15, 2013,
TREATED AS PAID IN 2012.
(a) Individuals.--Paragraph (1) of section 170(b) is amended by
redesignating subparagraphs (F) and (G) as subparagraphs (G) and (H),
respectively, and by inserting after subparagraph (E) the following new
subparagraph:
``(F) Qualified hurricane sandy disaster
contributions.--
``(i) In general.--Any qualified Hurricane
Sandy disaster contribution shall be allowed to
the extent that the aggregate of such
contributions does not exceed the excess of 80
percent of the taxpayer's contribution base
over the amount of all other charitable
contributions allowable under this paragraph.
``(ii) Qualified hurricane sandy disaster
contribution.--For purposes of this
subparagraph, the term `qualified Hurricane
Sandy disaster contribution' means any
charitable contribution if--
``(I) such contribution--
``(aa) is paid during the
period beginning on October 29,
2012, and ending on December
31, 2013, in cash to an
organization described in
subparagraph (A), and
``(bb) is made for relief
efforts in the Hurricane Sandy
disaster area related to the
Hurricane Sandy federally
declared disaster,
``(II) the taxpayer obtains from
such organization contemporaneous
written acknowledgment (within the
meaning of subsection (f)(8)) that such
contribution was used (or is to be
used) for relief efforts in the
Hurricane Sandy disaster area related
to the Hurricane Sandy federally
declared disaster, and
``(III) the taxpayer has elected
the application of this subparagraph
with respect to such contribution.
``(iii) Exception.--A qualified Hurricane
Sandy disaster contribution shall not include a
contribution by a donor if the contribution
is--
``(I) to an organization described
in section 509(a)(3), or
``(II) for establishment of a new,
or maintenance of an existing, donor
advised fund (as defined in section
4966(d)(2)).
``(iv) Carryover.--
``(I) In general.--If the aggregate
amount of contributions described in
clause (i) exceeds the limitation under
clause (i), such excess shall be
treated (in a manner consistent with
the rules of subsection (d)(1)) as a
charitable contribution to which clause
(i) applies in each of the 5 succeeding
years in order of time.
``(II) Coordination with other
subparagraphs.--For purposes of
applying this subparagraph and
subsection (d)(1), contributions
described in clause (i) shall not be
treated as described in subparagraph
(A) and such subparagraph shall be
applied without regard to such
contributions.
``(v) Application of election to
partnerships and s corporations.--In the case
of a partnership or S corporation, the election
under subparagraph (A)(iii) shall be made
separately by each partner or shareholder.
``(vi) Hurricane sandy federally declared
disaster and disaster area.--For purposes of
this subparagraph, the terms `Hurricane Sandy
federally declared disaster' and `Hurricane
Sandy disaster area' have the meanings given
such terms by section 165(h)(3)(D).''.
(b) Corporations.--
(1) In general.--Paragraph (2) of section 170(b) is amended
by redesignating subparagraph (C) as subparagraph (D) and by
inserting after subparagraph (B) the following new
subparagraph:
``(C) Qualified disaster contributions.--
``(i) In general.--Any qualified Hurricane
Sandy disaster contribution shall be allowed to
the extent that the aggregate of such
contributions does not exceed the excess of 20
percent of the taxpayer's taxable income over
the amount of charitable contributions allowed
under subparagraph (A).
``(ii) Carryover.--If the aggregate amount
of contributions described in clause (i)
exceeds the limitation under clause (i), such
excess shall be treated (in a manner consistent
with the rules of subsection (d)(1)) as a
charitable contribution to which clause (i)
applies in each of the 5 succeeding years in
order of time.
``(iii) Qualified disaster contribution.--
The term `qualified Hurricane Sandy disaster
contribution' has the meaning given such term
under paragraph (1)(F).''.
(2) Conforming amendments.--
(A) Subparagraph (A) of section 170(b)(2) is
amended by striking ``subparagraph (B) applies'' and
inserting ``subparagraphs (B) and (C) apply''.
(B) Subparagraph (B) of section 170(b)(2) is
amended by striking ``subparagraph (A)'' and inserting
``subparagraphs (A) and (C)''.
(c) Contributions Treated as Made in Prior Year.--Subsection (b) of
section 170 of such Code is amended by adding at the end the following
new paragraph:
``(4) Contributions treated as made in prior year.--For
purposes of this section, a taxpayer may treat any qualified
Hurricane Sandy disaster contribution (as defined in paragraph
(1)(F)) which is paid after December 31, 2012, and on or before
April 15, 2013, as if such contribution was made on December
31, 2012, and not in 2013.''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years ending after the date of the enactment of this
Act.
SEC. 8. INCREASE IN NEW MARKETS TAX CREDIT FOR INVESTMENTS IN COMMUNITY
DEVELOPMENT ENTITIES SERVING HURRICANE SANDY DISASTER
AREAS.
(a) In General.--Paragraph (1) of section 45D(f) is amended by
striking the period at the end of subparagraph (G) and inserting ``,
and'' and by adding at the end the following:
``(H) in the case of the Hurricane Sandy Federal
disaster area, $250,000,000.''.
(b) Rules Relating to Hurricane Sandy.--Subsection (f) of section
45D is amended by adding at the end the following new paragraph:
``(4) Increased special allocation for community
development entities serving hurricane sandy federal disaster
areas.--
``(A) In general.--The limitation under paragraph
(1)(H) shall be allocated among qualified community
development entities to make qualified low-income
community investments within the Hurricane Sandy
disaster area (as defined in section 165(h)(3)(D)).
``(B) Allocation of increase.--The limitation under
subparagraph (A) shall be allocated by the Secretary
under paragraph (2) to qualified community development
entities and shall give priority to such entities with
a record of having successfully provided capital or
technical assistance to businesses or communities
within the Hurricane Sandy disaster area.
``(C) Separate carryover of unused limitation.--
Paragraph (3) shall be applied separately with respect
to the limitation under paragraph (1)(H).''.
(c) Effective Date.--The amendments made by this section shall
apply to calendar years beginning after 2011.
SEC. 9. EXTENSION OF EXPENSING FOR ENVIRONMENTAL REMEDIATION COSTS.
(a) In General.--Section 198 is amended by adding at the end the
following:
``(i) Extension Relating to Hurricane Sandy.--Subsection (h) shall
not apply in the case of any qualified environmental remediation
expenditure paid or incurred after the date of the Hurricane Sandy
federally declared disaster (as defined in section 165(h)(3)(D)) and
before January 1, 2015, by reason of such disaster at a qualified
contaminated site located in the Hurricane Sandy disaster area (as so
defined).''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to expenditures paid or incurred after October 28, 2012.
SEC. 10. SPECIAL RULE FOR PUBLIC UTILITY CASUALTY LOSSES.
(a) In General.--Subsection (f) of section 172 is amended by adding
at the end the following:
``(7) Hurricane sandy public utility casualty losses.--
``(A) In general.--The amount described in
paragraph (1)(A) for any taxable year shall be
increased by the Hurricane Sandy public utility
casualty loss for such taxable year.
``(B) Hurricane sandy public utility casualty
loss.--For purposes of this paragraph, the term
`Hurricane Sandy public utility casualty loss' means
any casualty loss of public utility property (as
defined in section 168(i)(10)) located in the Hurricane
Sandy disaster area if--
``(i) such loss is allowed as a deduction
under section 165 for the taxable year,
``(ii) such loss is by reason of Hurricane
Sandy, and
``(iii) the taxpayer elects the application
of this paragraph with respect to such loss.
``(C) Reduction for gains from involuntary
conversion.--The amount of any Hurricane Sandy public
utility casualty loss which would (but for this
subparagraph) be taken into account under subparagraph
(A) for any taxable year shall be reduced by the amount
of any gain recognized by the taxpayer for such year
from the involuntary conversion by reason of Hurricane
Sandy of public utility property (as so defined)
located in the Hurricane Sandy disaster area.
``(D) Hurricane sandy disaster area.--For purposes
of this paragraph, the term `Hurricane Sandy disaster
area' has the meaning given such term by section
165(h)(3)(D).
``(E) Coordination with general disaster loss
rules.--Section 168(k) and section 165(i) shall not
apply to any Hurricane Sandy public utility casualty
loss to the extent such loss is taken into account
under subparagraph (A).
``(F) Election.--Any election under subparagraph
(B)(iii) shall be made in such manner as may be
prescribed by the Secretary and shall be made by the
due date (including extensions of time) for filing the
taxpayer's return for the taxable year of the loss.
Such election, once made for any taxable year, shall be
irrevocable for such taxable year.''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to losses arising in taxable years ending after October 28, 2012.
SEC. 11. DETERMINATION OF EARNED INCOME FOR PURPOSES OF EARNED INCOME
CREDIT AND CHILD TAX CREDIT.
(a) Earned Income Credit.--Section 32 is amended by adding at the
end the following new subsection:
``(n) Special Rule Relating to Hurricane Sandy.--For purposes of
this section and section 24(d)--
``(1) In general.--In the case of a qualified individual,
if the earned income of the taxpayer for the taxable year which
includes the applicable date is less than the earned income of
the taxpayer for the preceding taxable year, the credit allowed
under subsection (a) may, at the election of the taxpayer, be
determined by substituting--
``(A) such earned income for the preceding taxable
year, for
``(B) such earned income for the taxable year which
includes the applicable date.
``(2) Qualified individual.--For purposes of this
subsection, the term `qualified individual' means any
individual--
``(A) whose principal place of abode on the
applicable date was located in the Hurricane Sandy
disaster area and such individual was displaced from
such principal place of abode by reason of the
Hurricane Sandy federally declared disaster, or
``(B) who performed substantially all employment
services in the disaster area and was so employed on
the applicable date.
``(3) Other definitions.--For purposes of this subsection--
``(A) Applicable date.--The term `applicable date'
means any day on or after October 29, 2012, and on or
before November 3, 2012.
``(B) Hurricane sandy federally declared disaster
and disaster area.--The terms `Hurricane Sandy
federally declared disaster' and `Hurricane Sandy
disaster area' have the meanings given such terms by
section 165(h)(3)(D).
``(4) Special rules.--
``(A) Application to joint returns.--For purposes
of paragraph (1), in the case of a joint return for a
taxable year which includes the applicable date--
``(i) such paragraph shall apply if either
spouse is a qualified individual, and
``(ii) the earned income of the taxpayer
for the preceding taxable year shall be the sum
of the earned income of each spouse for such
preceding taxable year.
``(B) Uniform application of election.--Any
election made under paragraph (1) shall apply with
respect to both this section and section 24(d).
``(C) Errors treated as mathematical error.--For
purposes of section 6213, an incorrect use on a return
of earned income pursuant to paragraph (1) shall be
treated as a mathematical or clerical error.
``(D) No effect on determination of gross income,
etc.--Except as otherwise provided in this subsection,
this title shall be applied without regard to any
substitution under paragraph (1).''.
(b) Child Tax Credit.--Subsection (d) of section 24 is amended by
adding at the end the following new paragraph:
``(5) Special rule relating to hurricane sandy.--See
section 32(n) for determination of earned income with respect
to the Hurricane Sandy federally declared disaster.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years ending after October 28, 2012.
SEC. 12. WORK OPPORTUNITY CREDIT.
(a) In General.--Paragraph (1) of section 51(d) is amended by
striking ``or'' at the end of subparagraph (H), by striking the period
at the end of subparagraph (I) and inserting ``, or'', and by inserting
after subparagraph (I) the following new subparagraph:
``(J) a Hurricane Sandy employee.''.
(b) Hurricane Sandy Employee.--Subsection (d) of section 51 is
amended by adding at the end the following:
``(15) Hurricane sandy employee.--
``(A) In general.--The term `Hurricane Sandy
employee' means any individual--
``(i) who, on or after October 29, 2012,
and on or before November 3, 2012, had a
principal place of abode in the Hurricane Sandy
disaster area,
``(ii) who did not apply for or receive
unemployment compensation under State or
Federal law in 2012 before October 29, 2012,
but first applied for or received such
compensation after such date and before
February 15, 2013,
``(iii) who receives such compensation
without a break until the earlier of exhausting
such compensation under Federal or State law or
the hiring date, and
``(iv) whose hiring date for a position the
principal place of employment of which is
located in the Hurricane Sandy disaster area
(as defined in section 165(h)(3)(D)) is before
January 1, 2014.
``(B) Reasonable identification acceptable.--In
lieu of the certification requirement under
subparagraph (A) of paragraph (13), an individual may
provide to the employer reasonable evidence that the
individual is a Hurricane Sandy employee, and
subparagraph (B) of such paragraph shall be applied as
if such evidence were a certification described in such
subparagraph.
``(C) Special rules.--For purposes of this
paragraph--
``(i) subsection (c)(4) shall not apply,
and
``(ii) subsection (i)(2) shall not apply
with respect to the first hire of such employee
as a Hurricane Sandy employee, unless such
employee was an employee of the employer on
October 28, 2012.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years ending after October 28, 2012.
SEC. 13. HURRICANE SANDY BONDS.
(a) In General.--Subpart A of part IV of subchapter B of chapter 1
is amended by inserting after section 146 the following new section:
``SEC. 146A. HURRICANE SANDY BONDS.
``(a) In General.--For purposes of this title, any qualified
Hurricane Sandy Bond shall--
``(1) be treated as an exempt facility bond, and
``(2) not be subject to section 146.
``(b) Qualified Hurricane Sandy Bond.--For purposes of this
section, the term `qualified Hurricane Sandy bond' means any bond
issued as part of an issue if--
``(1) 95 percent or more of the net proceeds of such issue
are to be used for qualified project costs,
``(2) such bond is issued by a State or any political
subdivision thereof any part of which is in the Hurricane Sandy
disaster area,
``(3) the Governor of the issuing State designates such
bond for purposes of this section, and
``(4) such bond is issued after the date of the enactment
of this section and before January 1, 2016.
``(c) Limitation on Amount of Bonds.--
``(1) In general.--The maximum aggregate face amount of
bonds which may be designated under this section shall not
exceed--
``(A) $3,200,000,000 in the case of Connecticut,
``(B) $9,200,000,000 in the case of New Jersey, and
``(C) $9,200,000,000 in the case of New York.
``(2) Reduction for failure to issue bonds.--
``(A) 2013.--If after the date of enactment of this
section and before January 1, 2014, less than 10
percent of the face amount of the bond limitation for a
State has been issued, the authorized limitation for
such State under paragraph (1) shall be reduced by the
amount by which 10 percent of the face amount of the
bond limitation for such State exceeds the face amount
of issued bonds.
``(B) 2014.--If after the date of enactment of this
section and before January 1, 2015, less than 30
percent of the face amount of the bond limitation for a
State has been issued, the authorized limitation for
such State shall be reduced by the amount by which 10
percent of the face amount of the bond limitation for
such State exceeds the face amount of issued bonds.
``(3) Movable property.--No bonds shall be issued which are
to be used for movable fixtures and equipment.
``(4) Treatment of current refunding bonds.--Paragraph (1)
shall not apply to any bond (or series of bonds) issued to
refund a qualified Hurricane Sandy bond, if--
``(A) the average maturity date of the issue of
which the refunding bond is a part is not later than
the average maturity date of the bonds to be refunded
by such issue,
``(B) the amount of the refunding bond does not
exceed the outstanding amount of the refunded bond, and
``(C) the net proceeds of the refunding bond are
used to redeem the refunded bond not later than 90 days
after the date of the issuance of the refunding bond.
For purposes of subparagraph (A), average maturity shall be
determined in accordance with section 147(b)(2)(A).
``(d) Qualified Project Costs.--For purposes of this section, the
term `qualified project costs' means the cost of acquisition,
construction, reconstruction, and renovation of--
``(1) residential rental property (as defined in section
142(d)),
``(2) nonresidential real property (including fixed
improvements associated with such property),
``(3) a facility described in paragraph (2) or (3) of
section 142(a), or
``(4) public utility property (as defined in section
168(i)(10)),
which is located in the Hurricane Sandy Disaster area and was damaged
or destroyed by reason of the Hurricane Sandy federally declared
disaster.
``(e) Special Rules.--In applying this title to any qualified
Hurricane Sandy Bond, the following modifications shall apply:
``(1) Section 147(d) (relating to acquisition of existing
property not permitted) shall be applied by substituting `50
percent' for `15 percent' each place it appears.
``(2) Section 148(f)(4)(C) (relating to exception from
rebate for certain proceeds to be used to finance construction
expenditures) shall apply to the available construction
proceeds of bonds issued under this section. For purposes of
the preceding sentence, the following spending requirements
shall apply in lieu of the requirements in clause (ii) of such
section:
``(A) 40 percent of such available construction
proceeds are spent for the governmental purposes of the
issue within the 2-year period beginning on the date
the bonds are issued,
``(B) 60 percent of such proceeds are spent for
such purposes within the 3-year period beginning on
such date,
``(C) 80 percent of such proceeds are spent for
such purposes within the 4-year period beginning on
such date, and
``(D) 100 percent of such proceeds are spent for
such purposes within the 5-year period beginning on
such date.
``(3) Repayments of principal on financing provided by the
issue--
``(A) may not be used to provide financing, and
``(B) must be used not later than the close of the
1st semiannual period beginning after the date of the
repayment to redeem bonds which are part of such issue.
The requirement of subparagraph (B) shall be treated as met
with respect to amounts received within 5 years after the date
of issuance of the issue (or, in the case of a refunding bond,
the date of issuance of the original bond) if such amounts are
used by the close of such 5 years to redeem bonds which are
part of such issue.
``(4) Section 57(a)(5) shall not apply.
``(f) Separate Issue Treatment of Portions of an Issue.--This
section shall not apply to the portion of an issue which (if issued as
a separate issue) would be treated as a qualified bond or as a bond
that is not a private activity bond (determined without regard to
paragraph (1)), if the issuer elects to so treat such portion.
``(g) Hurricane Sandy Federally Declared Disaster and Disaster
Area.--The terms `Hurricane Sandy federally declared disaster' and
`Hurricane Sandy disaster area' have the meanings given such terms by
section 165(h)(3)(D).''.
(b) Clerical Amendment.--The table of sections for subpart A of
part IV of subchapter B of chapter 1 is amended by inserting after the
item relating to section 146 the following new item:
``Sec. 146A. Hurricane Sandy Bonds.''.
(c) Effective Date.--The amendments made by this section shall
apply to obligations issued after the date of the enactment of this
Act.
SEC. 14. ADDITIONAL LOW-INCOME HOUSING CREDIT MAY BE ALLOCATED IN
STATES DAMAGED BY HURRICANE SANDY.
(a) In General.--Paragraph (3) of section 42(h) of the Internal
Revenue Code of 1986 (relating to limitation on aggregate credit
allowable with respect to projects located in a State) is amended by
adding at the end the following new subparagraph:
``(J) Increase in state housing credit for states
damaged by hurricane sandy.--
``(i) In general.--In the case of calendar
year 2013, the State housing credit ceiling of
each State any portion of which includes any
portion of the Hurricane Sandy disaster area
shall be increased by so much of the aggregate
housing credit dollar amount as does not exceed
the applicable limitation allocated by the
State housing credit agency of such State for
such calendar year to buildings located in such
disaster area.
``(ii) Applicable limitation.--For purposes
of clause (i), the applicable limitation is the
greater of--
``(I) $8 multiplied by the
population of the area described in
clause (vii)(I), or
``(II) 50 percent of the State
housing credit ceiling (determined
without regard to this subparagraph)
for 2013.
``(iii) Applicable percentage.--For
purposes of this section, the applicable
percentage with respect to any building to
which amounts allocated under clause (i) shall
be determined under subsection (b)(2), except
that subparagraph (A) thereof shall be applied
by substituting `December 31, 2015' for
`December 31, 2013'.
``(iv) Allocations treated as made first
from additional allocation amount for purposes
of determining carryover.--For purposes of
determining the unused State housing credit
ceiling under subparagraph (C) for any calendar
year, any increase in the State housing credit
ceiling under clause (i) shall be treated as an
amount described in clause (ii) of such
subparagraph.
``(v) Difficult development area.--
``(I) In general.--In the case of
property placed in service during 2013,
2014, or 2015, the Hurricane Sandy
disaster area shall be treated as a
difficult development area designated
under subclause (I) of subsection
(d)(5)(B)(iii), and shall not be taken
into account for purposes of applying
the limitation under subclause (II) of
such subsection.
``(II) Application of clause.--
Subclause (I) shall apply only to--
``(aa) housing credit
dollar amounts allocated during
2013, and
``(bb) to the extent that
paragraph (1) does not apply to
any building by reason of
paragraph (4), only with
respect to bonds issued after
December 31, 2012.
``(vi) Hurricane sandy disaster area and
hurricane sandy federally declared disaster.--
For purposes of this subparagraph--
``(I) Disaster area.--The term
`Hurricane Sandy disaster area' means
each county included in the
geographical area covered by the
Hurricane Sandy federally declared
disaster.
``(II) Hurricane sandy federally
declared disaster and disaster area.--
The term `Hurricane Sandy federally
declared disaster' has the meaning
given such term by section
165(h)(3)(D).''.
(b) Effective Date.--The amendment made by this section shall take
effect on the date of the enactment of this Act.
SEC. 15. SPECIAL RULES FOR USE OF RETIREMENT FUNDS.
(a) Early Withdrawal From Retirement Plans.--Paragraph (2) of
section 72(t) is amended by adding at the end the following new
subparagraph:
``(H) Hurricane sandy distributions.--Distributions
to an individual which are Hurricane Sandy
distributions (as defined in paragraph (11)).''.
(b) Special Rules.--Subsection (t) of section 72 is amended by
adding at the end the following:
``(11) Special rules relating to use of retirement funds
relating to hurricane sandy.--
``(A) Distributions.--For purposes of this
paragraph--
``(i) In general.--The term `Hurricane
Sandy distribution' means any distribution from
an eligible retirement plan (as defined by
section 402(c)(8)(B)) made on or after October
29, 2012, and before January 1, 2014, to an
individual whose principal place of abode on
October 29, 2012, is located in the Hurricane
Sandy disaster area (as defined in section
165(h)(3)(D)) and who has sustained an economic
loss by reason of Hurricane Sandy.
``(ii) Aggregate dollar limitation.--
``(I) In general.--For purposes of
this paragraph, the aggregate amount of
distributions received by an individual
which may be treated as Hurricane Sandy
distributions for any taxable year
shall not exceed the excess (if any)
of--
``(aa) $100,000, over
``(bb) the aggregate
amounts treated as Hurricane
Sandy distributions received by
such individual for all prior
taxable years.
``(II) Treatment of plan
distributions.--If a distribution to an
individual would (without regard to
subclause (I)) be a Hurricane Sandy
distribution, a plan shall not be
treated as violating any requirement of
this title merely because the plan
treats such distribution as a Hurricane
Sandy distribution, unless the
aggregate amount of such distributions
from all plans maintained by the
employer (and any member of any
controlled group which includes the
employer) to such individual exceeds
$100,000.
``(III) Controlled group.--For
purposes of subclause (II), the term
`controlled group' means any group
treated as a single employer under
subsection (b), (c), (m), or (o) of
section 414.
``(iii) Amount distributed may be repaid.--
``(I) In general.--Any individual
who receives a Hurricane Sandy
distribution may, at any time during
the 3-year period beginning on the day
after the date on which such
distribution was received, make one or
more contributions in an aggregate
amount not to exceed the amount of such
distribution to an eligible retirement
plan of which such individual is a
beneficiary and to which a rollover
contribution of such distribution could
be made under section 402(c),
403(a)(4), 403(b)(8), 408(d)(3), or
457(e)(16), as the case may be.
``(II) Treatment of repayments of
distributions from eligible retirement
plans other than iras.--For purposes of
this title, if a contribution is made
pursuant to subclause (I) with respect
to a Hurricane Sandy distribution from
an eligible retirement plan other than
an individual retirement plan, then the
taxpayer shall, to the extent of the
amount of the contribution, be treated
as having received the Hurricane Sandy
distribution in an eligible rollover
distribution (as defined in section
402(c)(4)) and as having transferred
the amount to the eligible retirement
plan in a direct trustee to trustee
transfer within 60 days of the
distribution.
``(III) Treatment of repayments for
distributions from iras.--For purposes
of this title, if a contribution is
made pursuant to subclause (I) with
respect to a Hurricane Sandy
distribution from an individual
retirement plan (as defined by section
7701(a)(37)), then, to the extent of
the amount of the contribution, the
Hurricane Sandy distribution shall be
treated as a distribution described in
section 408(d)(3) and as having been
transferred to the eligible retirement
plan in a direct trustee to trustee
transfer within 60 days of the
distribution.
``(iv) Income inclusion spread over 3-year
period.--
``(I) In general.--In the case of
any Hurricane Sandy distribution,
unless the taxpayer elects not to have
this clause apply for any taxable year,
any amount required to be included in
gross income for such taxable year
shall be so included ratably over the
3-taxable year period beginning with
such taxable year.
``(II) Special rule.--For purposes
of subclause (I), rules similar to the
rules of subparagraph (E) of section
408A(d)(3) shall apply.
``(v) Special rules.--
``(I) Exemption of distributions
from trustee to trustee transfer and
withholding rules.--For purposes of
sections 401(a)(31), 402(f), and 3405,
Hurricane Sandy distributions shall not
be treated as eligible rollover
distributions.
``(II) Hurricane sandy
distributions treated as meeting plan
distribution requirements.--For
purposes this title, a Hurricane Sandy
distribution shall be treated as
meeting the requirements of sections
401(k)(2)(B)(i), 403(b)(7)(A)(ii),
403(b)(11), and 457(d)(1)(A).
``(B) Recontributions of withdrawals for home
purchases.--
``(i) In general.--Any individual who
received a distribution described in clause
(ii) may, during the applicable period, make
one or more contributions in an aggregate
amount not to exceed the amount of such
distribution to an eligible retirement plan (as
defined in section 402(c)(8)(B)) of which such
individual is a beneficiary and to which a
rollover contribution of such distribution
could be made under section 402(c), 403(a)(4),
403(b)(8), or 408(d)(3), as the case may be.
``(ii) Distribution described.--For
purposes of clause (i), a distribution is
described in this clause if the distribution--
``(I) is described in paragraph
(2)(F) or section 401(k)(2)(B)(i)(IV),
403(b)(7)(A)(ii) (but only to the
extent such distribution relates to
financial hardship), or 403(b)(11)(B),
``(II) is received after April 29,
2012, and before October 30, 2012, and
``(III) was to be used to purchase
or construct a principal residence in
the Hurricane Sandy disaster area (as
defined in section 165(h)(3)(D)), but
which was not so purchased or
constructed on account of Hurricane
Sandy.
``(iii) Applicable period.--For purposes of
this subparagraph, the term `applicable period'
means the period beginning on October 29, 2012,
and ending five months after the date of
enactment of the Hurricane Sandy Tax Relief Act
of 2012.
``(iv) Treatment of repayments.--Rules
similar to the rules of subclauses (II) and
(III) of subparagraph (A)(iii) shall apply for
purposes of this subparagraph.''.
(c) Loans From Qualified Plans.--Subsection (p) of section 72 is
amended by adding at the end the following:
``(6) Special rules relating to hurricane sandy.--
``(A) Increase in limit on loans not treated as
distributions.--In the case of any loan from a
qualified employer plan to a qualified individual made
during the applicable period--
``(i) paragraph (2)(A)(i) shall be applied
by substituting `$100,000' for `$50,000', and
``(ii) paragraph (2)(A)(ii) shall be
applied by substituting `the present value of
the nonforfeitable accrued benefit of the
employee under the plan' for `one-half of the
present value of the nonforfeitable accrued
benefit of the employee under the plan'.
``(B) Delay of repayment.--In the case of a
qualified individual with an outstanding loan on or
after the qualified beginning date from a qualified
employer plan--
``(i) if the due date pursuant to
subparagraph (B) or (C) of paragraph (2) for
any repayment with respect to such loan occurs
during the period beginning on the qualified
beginning date and ending on December 31, 2013,
such due date shall be delayed for 1 year,
``(ii) any subsequent repayments with
respect to any such loan shall be appropriately
adjusted to reflect the delay in the due date
under clause (i) and any interest accruing
during such delay, and
``(iii) in determining the 5-year period
and the term of a loan under subparagraph (B)
or (C) of paragraph (2), the period described
in clause (i) shall be disregarded.
``(C) Qualified individual.--For purposes of this
paragraph--
``(i) In general.--The term `qualified
individual' means any qualified Hurricane Sandy
individual.
``(ii) Qualified hurricane sandy
individual.--The term `qualified Hurricane
Sandy individual' means an individual whose
principal place of abode on October 29, 2012,
is located in the Hurricane Sandy disaster area
(as defined in section 165(h)(3)(D)) and who
has sustained an economic loss by reason of
Hurricane Sandy.
``(D) Other definitions.--For purposes of this
paragraph--
``(i) Applicable period.--The applicable
period is the period beginning on the date of
enactment of the Hurricane Sandy Tax Relief Act
of 2012 and ending on December 31, 2013.
``(ii) Qualified beginning date.--The
qualified beginning date is October 29,
2012.''.
(d) Effective Date.--The amendments made by this section shall
apply to years ending after October 28, 2012.
(e) Provisions Relating to Plan Amendments.--
(1) In general.--If this subsection applies to any
amendment to any plan or annuity contract, such plan or
contract shall be treated as being operated in accordance with
the terms of the plan during the period described in paragraph
(2)(B)(i).
(2) Amendments to which subsection applies.--
(A) In general.--This subsection shall apply to any
amendment to any plan or annuity contract which is
made--
(i) pursuant to any provision of or
amendment made by this section, or pursuant to
any regulation issued by the Secretary of the
Treasury or the Secretary of Labor under any
provision of or amendment made by this section,
and
(ii) on or before the last day of the first
plan year beginning on or after January 1,
2014, or such later date as the Secretary of
the Treasury may prescribe.
In the case of a governmental plan (as defined in
section 414(d)), clause (ii) shall be applied by
substituting the date which is 2 years after the date
otherwise applied under clause (ii).
(B) Conditions.--This subsection shall not apply to
any amendment unless--
(i) during the period--
(I) beginning on the date that this
section or the regulation described in
subparagraph (A)(i) takes effect (or in
the case of a plan or contract
amendment not required by this section
or such regulation, the effective date
specified by the plan), and
(II) ending on the date described
in subparagraph (A)(ii) (or, if
earlier, the date the plan or contract
amendment is adopted), the plan or
contract is operated as if such plan or
contract amendment were in effect; and
(ii) such plan or contract amendment
applies retroactively for such period.
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