Text: H.R.6587 — 110th Congress (2007-2008)All Information (Except Text)

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Introduced in House (07/23/2008)


110th CONGRESS
2d Session
H. R. 6587


To provide tax relief for the victims of severe storms, tornados, and flooding in the Midwest, and for other purposes.


IN THE HOUSE OF REPRESENTATIVES

July 23, 2008

Mr. Loebsack (for himself, Mr. Boswell, Mr. Latham, Mr. Braley of Iowa, and Mr. King of Iowa) introduced the following bill; which was referred to the Committee on Ways and Means


A BILL

To provide tax relief for the victims of severe storms, tornados, and flooding in the Midwest, 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.

This Act may be cited as the “Midwestern Disaster Tax Relief Act of 2008”.

SEC. 2. Temporary tax relief for areas damaged by 2008 Midwestern severe storms, tornados, and flooding.

(a) In general.—Subject to the modifications described in this section, the following provisions of or relating to the Internal Revenue Code of 1986 shall apply to any Midwestern disaster area in addition to the areas to which such provisions otherwise apply:

(1) GO ZONE BENEFITS.—

(A) Section 1400N (relating to tax benefits) other than subsections (b), (i), (j), (m), and (o) thereof.

(B) Section 1400O (relating to education tax benefits).

(C) Section 1400P (relating to housing tax benefits).

(D) Section 1400Q (relating to special rules for use of retirement funds).

(E) Section 1400R(a) (relating to employee retention credit for employers).

(F) Section 1400S (relating to additional tax relief) other than subsection (d) thereof.

(G) Section 1400T (relating to special rules for mortgage revenue bonds).

(2) OTHER BENEFITS INCLUDED IN KATRINA EMERGENCY TAX RELIEF ACT OF 2005.—Sections 302, 303, 304, 401, and 405 of the Katrina Emergency Tax Relief Act of 2005.

(b) Use of amended income tax returns To take into account receipt of certain casualty loss grants by disallowing previously taken casualty loss deductions.—

(1) IN GENERAL.—Notwithstanding any other provision of the Internal Revenue Code of 1986, if a taxpayer claims a deduction for any taxable year with respect to a casualty loss to a principal residence (within the meaning of section 121 of such Code) resulting from the severe storms, tornados, or flooding giving rise to any Presidential declaration described in subsection (c)(1)(A) and in a subsequent taxable year receives a grant under any Federal or State program as reimbursement for such loss, such taxpayer may elect to file an amended income tax return for the taxable year in which such deduction was allowed (and for any taxable year to which such deduction is carried) and reduce (but not below zero) the amount of such deduction by the amount of such reimbursement.

(2) TIME OF FILING AMENDED RETURN.—Paragraph (1) shall apply with respect to any grant only if any amended income tax returns with respect to such grant are filed not later than the later of—

(A) the due date for filing the tax return for the taxable year in which the taxpayer receives such grant, or

(B) the date which is 1 year after the date of the enactment of this Act.

(3) WAIVER OF PENALTIES AND INTEREST.—Any underpayment of tax resulting from the reduction under paragraph (1) of the amount otherwise allowable as a deduction shall not be subject to any penalty or interest under such Code if such tax is paid not later than 1 year after the filing of the amended return to which such reduction relates.

(c) Midwestern disaster area.—

(1) IN GENERAL.—For purposes of this section and for applying the substitutions described in subsections (e) and (f), the term “Midwestern disaster area” means an area—

(A) with respect to which a major disaster has been declared by the President on or after May 20, 2008, and before August 1, 2008, under section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act by reason of severe storms, tornados, or flooding occurring in any of the States of Arkansas, Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, and Wisconsin, and

(B) determined by the President to warrant individual or individual and public assistance from the Federal Government under such Act with respect to damages attributable to such severe storms, tornados, or flooding.

(2) CERTAIN BENEFITS AVAILABLE TO AREAS ELIGIBLE ONLY FOR PUBLIC ASSISTANCE.—For purposes of applying this section to benefits under the following provisions, paragraph (1) shall be applied without regard to subparagraph (B):

(A) Sections 1400Q, 1400S(b), and 1400S(d) of the Internal Revenue Code of 1986.

(B) Sections 302, 401, and 405 of the Katrina Emergency Tax Relief Act of 2005.

(d) References.—

(1) AREA.—Any reference in such provisions to the Hurricane Katrina disaster area or the Gulf Opportunity Zone shall be treated as a reference to any Midwestern disaster area and any reference to the Hurricane Katrina disaster area or the Gulf Opportunity Zone within a State shall be treated as a reference to all Midwestern disaster areas within the State.

(2) ITEMS ATTRIBUTABLE TO DISASTER.—Any reference in such provisions to any loss, damage, or other item attributable to Hurricane Katrina shall be treated as a reference to any loss, damage, or other item attributable to the severe storms, tornados, or flooding giving rise to any Presidential declaration described in subsection (c)(1)(A).

(3) APPLICABLE DISASTER DATE.—For purposes of applying the substitutions described in subsections (e) and (f), the term “applicable disaster date” means, with respect to any Midwestern disaster area, the date on which the severe storms, tornados, or flooding giving rise to the Presidential declaration described in subsection (c)(1)(A) occurred.

(e) Modifications to 1986 Code.—The following provisions of the Internal Revenue Code of 1986 shall be applied with the following modifications:

(1) TAX-EXEMPT BOND FINANCING.—Section 1400N(a)—

(A) by substituting “qualified Midwestern disaster area bond” for “qualified Gulf Opportunity Zone Bond” each place it appears, except that in determining whether a bond is a qualified Midwestern disaster area bond—

(i) paragraph (2)(A)(i) shall be applied by only treating costs as qualified project costs if—

(I) in the case of a project involving a private business use (as defined in section 141(b)(6)), either the person using the property suffered a loss in a trade or business attributable to the severe storms, tornados, or flooding giving rise to any Presidential declaration described in subsection (c)(1)(A) or is a person designated for purposes of this section by the Governor of the State in which the project is located as a person carrying on a trade or business replacing a trade or business with respect to which another person suffered such a loss, and

(II) in the case of a project relating to public utility property, the project involves repair or reconstruction of public utility property damaged by such severe storms, tornados, or flooding, and

(ii) paragraph (2)(A)(ii) shall be applied by treating an issue as a qualified mortgage issue only if 95 percent or more of the net proceeds (as defined in section 150(a)(3)) of the issue are to be used to provide financing for mortgagors who suffered damages to their principal residences attributable to such severe storms, tornados, or flooding,

(B) by substituting “any State in which a Midwestern disaster area is located” for “the State of Alabama, Louisiana, or Mississippi” in paragraph (2)(B),

(C) by substituting “designated for purposes of this section (on the basis of providing assistance to areas in the order in which such assistance is most needed)” for “designated for purposes of this section” in paragraph (2)(C),

(D) by substituting “January 1, 2013” for “January 1, 2011” in paragraph (2)(D),

(E) in paragraph (3)(A)—

(i) by substituting “$1,000” for “$2,500”, and

(ii) by substituting “before the earliest applicable disaster date for Midwestern disaster areas within the State” for “before August 28, 2005”,

(F) by substituting “qualified Midwestern disaster area repair or construction” for “qualified GO Zone repair or construction” each place it appears, and

(G) by substituting “after the date of the enactment of the Housing and Economic Recovery Act of 2008 and before January 1, 2013” for “after the date of the enactment of this paragraph and before January 1, 2011” in paragraph (7)(C).

(2) LOW-INCOME HOUSING CREDIT.—Section 1400N(c)—

(A) only with respect to calendar years 2009, 2010, and 2011,

(B) by substituting “Disaster Recovery Assistance housing amount” for “Gulf Opportunity housing amount”,

(C) in paragraph (1)(B)—

(i) by substituting “$4.00” for “$18.00”, and

(ii) by substituting “before the earliest applicable disaster date for Midwestern disaster areas within the State” for “before August 28, 2005”, and

(D) determined without regard to paragraphs (2), (3), (4), (5), and (6) thereof.

(3) SPECIAL ALLOWANCE FOR CERTAIN PROPERTY ACQUIRED ON OR AFTER THE APPLICABLE DISASTER DATE.—Section 1400N(d)—

(A) by substituting “qualified Disaster Recovery Assistance property” for “qualified Gulf Opportunity Zone property” each place it appears, except that a taxpayer shall be allowed additional bonus depreciation and expensing under such subsection or section 1400N(e) with respect to such property only if—

(i) the taxpayer suffered an economic loss attributable to the severe storms, tornados, or flooding giving rise to any Presidential declaration described in subsection (c)(1)(A), and

(ii) such property—

(I) rehabilitates property damaged, or replaces property destroyed or condemned, as a result of such severe storms, tornados, or flooding, 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 similar in nature to, and located in the same county as, the property being rehabilitated or replaced,

(B) by substituting “the applicable disaster date” for “August 28, 2005” each place it appears,

(C) by substituting “December 31, 2011” for “December 31, 2007” in paragraph (2)(A)(v),

(D) by substituting “December 31, 2012” for “December 31, 2008” in paragraph (2)(A)(v),

(E) by substituting “the day before the applicable disaster date” for “August 27, 2005” in paragraph (3)(A),

(F) determined without regard to paragraph (6) thereof, and

(G) by not including as qualified Disaster Recovery Assistance property any property to which section 168(k) applies.

(4) INCREASE IN EXPENSING UNDER SECTION 179.—Section 1400N(e), by substituting “qualified section 179 Disaster Recovery Assistance property” for “qualified section 179 Gulf Opportunity Zone property” each place it appears.

(5) EXPENSING FOR CERTAIN DEMOLITION AND CLEAN-UP COSTS.—Section 1400N(f)—

(A) by substituting “qualified Disaster Recovery Assistance clean-up cost” for “qualified Gulf Opportunity Zone clean-up cost” each place it appears,

(B) by substituting “beginning on the applicable disaster date and ending on December 31, 2010” for “beginning on August 28, 2005, and ending on December 31, 2007” in paragraph (2), and

(C) by treating costs as qualified Disaster Recovery Assistance clean-up costs only if the removal of debris or demolition of any structure was necessary due to damage attributable to the severe storms, tornados, or flooding giving rise to any Presidential declaration described in subsection (c)(1)(A).

(6) EXTENSION OF EXPENSING FOR ENVIRONMENTAL REMEDIATION COSTS.—Section 1400N(g)—

(A) by substituting “the applicable disaster date” for “August 28, 2005” each place it appears,

(B) by substituting “January 1, 2011” for “January 1, 2008” in paragraph (1),

(C) by substituting “December 31, 2010” for “December 31, 2007” in paragraph (1), and

(D) by treating a site as a qualified contaminated site only if the release (or threat of release) or disposal of a hazardous substance at the site was attributable to the severe storms, tornados, or flooding giving rise to any Presidential declaration described in subsection (c)(1)(A).

(7) INCREASE IN REHABILITATION CREDIT.—Section 1400N(h)—

(A) by substituting “the applicable disaster date” for “August 28, 2005”,

(B) by substituting “January 1, 2011” for “January 1, 2008” in paragraph (1), and

(C) by only applying such subsection to qualified rehabilitation expenditures with respect to any building or structure which was damaged or destroyed as a result of the severe storms, tornados, or flooding giving rise to any Presidential declaration described in subsection (c)(1)(A).

(8) TREATMENT OF NET OPERATING LOSSES ATTRIBUTABLE TO DISASTER LOSSES.—Section 1400N(k)—

(A) by substituting “qualified Disaster Recovery Assistance loss” for “qualified Gulf Opportunity Zone loss” each place it appears,

(B) by substituting “after the day before the applicable disaster date, and before January 1, 2011” for “after August 27, 2005, and before January 1, 2008” each place it appears,

(C) by substituting “the applicable disaster date” for “August 28, 2005” in paragraph (2)(B)(ii)(I),

(D) by substituting “qualified Disaster Recovery Assistance property” for “qualified Gulf Opportunity Zone property” in paragraph (2)(B)(iv), and

(E) by substituting “qualified Disaster Recovery Assistance casualty loss” for “qualified Gulf Opportunity Zone casualty loss” each place it appears.

(9) CREDIT TO HOLDERS OF TAX CREDIT BONDS.—Section 1400N(l)—

(A) by substituting “Midwestern tax credit bond” for “Gulf tax credit bond” each place it appears,

(B) by substituting “any State in which a Midwestern disaster area is located” for “the State of Alabama, Louisiana, or Mississippi” in paragraph (4)(A)(i),

(C) by substituting “after December 31, 2008 and before January 1, 2010” for “after December 31, 2005, and before January 1, 2007”,

(D) by substituting “shall not exceed $100,000,000 for any State with an aggregate population located in all Midwestern disaster areas within the State of at least 2,000,000, $50,000,000 for any State with an aggregate population located in all Midwestern disaster areas within the State of at least 1,000,000 but less than 2,000,000, and zero for any other State. The population of a State within any area shall be determined on the basis of the most recent census estimate of resident population released by the Bureau of Census before the earliest applicable disaster date for Midwestern disaster areas within the State.” for “shall not exceed” and all that follows in paragraph (4)(C), and

(E) by substituting “the earliest applicable disaster date for Midwestern disaster areas within the State” for “August 28, 2005” in paragraph (5)(A).

(10) EDUCATION TAX BENEFITS.—Section 1400O, by substituting “2008 or 2009” for “2005 or 2006”.

(11) HOUSING TAX BENEFITS.—Section 1400P, by substituting “the applicable disaster date” for “August 28, 2005” in subsection (c)(1).

(12) SPECIAL RULES FOR USE OF RETIREMENT FUNDS.—Section 1400Q—

(A) by substituting “qualified Disaster Recovery Assistance distribution” for “qualified hurricane distribution” each place it appears,

(B) by substituting “on or after the applicable disaster date and before January 1, 2010” for “on or after August 25, 2005, and before January 1, 2007” in subsection (a)(4)(A)(i),

(C) by substituting “the applicable disaster date” for “August 28, 2005” in subsections (a)(4)(A)(i) and (c)(3)(B),

(D) by disregarding clauses (ii) and (iii) of subsection (a)(4)(A) thereof,

(E) by substituting “qualified storm damage distribution” for “qualified Katrina distribution” each place it appears,

(F) by substituting “after the date which is 6 months before the applicable disaster date and before the date which is the day after the applicable disaster date” for “after February 28, 2005, and before August 29, 2005” in subsection (b)(2)(B)(ii),

(G) by substituting “the Midwestern disaster area, but not so purchased or constructed on account of severe storms, tornados, or flooding giving rise to the designation of the area as a disaster area” for “the Hurricane Katrina disaster area, but not so purchased or constructed on account of Hurricane Katrina” in subsection (b)(2)(B)(iii),

(H) by substituting “beginning on the applicable disaster date and ending on the date which is 5 months after the date of the enactment of the Housing and Economic Recovery Act of 2008” for “beginning on August 25, 2005, and ending on February 28, 2006” in subsection (b)(3)(A),

(I) by substituting “qualified storm damage individual” for “qualified Hurricane Katrina individual” each place it appears,

(J) by substituting “December 31, 2009” for “December 31, 2006” in subsection (c)(2)(A),

(K) by substituting “beginning on the date of the enactment of the Housing and Economic Recovery Act of 2008 and ending on December 31, 2009” for “beginning on September 24, 2005, and ending on December 31, 2006” in subsection (c)(4)(A)(i),

(L) by substituting “the applicable disaster date” for “August 25, 2005” in subsection (c)(4)(A)(ii), and

(M) by substituting “January 1, 2010” for “January 1, 2007” in subsection (d)(2)(A)(ii).

(13) EMPLOYEE RETENTION CREDIT FOR EMPLOYERS AFFECTED BY SEVERE STORMS, TORNADOS, AND FLOODING.—Section 1400R(a)—

(A) by substituting “the applicable disaster date” for “August 28, 2005” each place it appears,

(B) by substituting “January 1, 2009” for “January 1, 2006” both places it appears, and

(C) only with respect to eligible employers who employed an average of not more than 200 employees on business days during the taxable year before the applicable disaster date.

(14) TEMPORARY SUSPENSION OF LIMITATIONS ON CHARITABLE CONTRIBUTIONS.—Section 1400S(a), by substituting the following paragraph for paragraph (4) thereof:

“(4) QUALIFIED CONTRIBUTIONS.—

“(A) IN GENERAL.—For purposes of this subsection, the term ‘qualified contribution’ means any charitable contribution (as defined in section 170(c)) if—

“(i) such contribution—

“(I) is paid during the period beginning on the earliest applicable disaster date for all States and ending on December 31, 2008, in cash to an organization described in section 170(b)(1)(A), and

“(II) is made for relief efforts in 1 or more Midwestern disaster areas,

“(ii) the taxpayer obtains from such organization contemporaneous written acknowledgment (within the meaning of section 170(f)(8)) that such contribution was used (or is to be used) for relief efforts in 1 or more Midwestern disaster areas, and

“(iii) the taxpayer has elected the application of this subsection with respect to such contribution.

“(B) EXCEPTION.—Such term 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)).

“(C) 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.”.

(15) SUSPENSION OF CERTAIN LIMITATIONS ON PERSONAL CASUALTY LOSSES.—Section 1400S(b)(1), by substituting “the applicable disaster date” for “August 25, 2005”.

(16) SPECIAL RULE FOR DETERMINING EARNED INCOME.—Section 1400S(d)—

(A) by treating an individual as a qualified individual if such individual's principal place of abode on the applicable disaster date was located in a Midwestern disaster area,

(B) by treating the applicable disaster date with respect to any such individual as the applicable date for purposes of such subsection, and

(C) by treating an area as described in paragraph (2)(B)(ii) thereof if the area is a Midwestern disaster area only by reason of subsection (b)(2) of this section (relating to areas eligible only for public assistance).

(17) ADJUSTMENTS REGARDING TAXPAYER AND DEPENDENCY STATUS.—Section 1400S(e), by substituting “2008 or 2009” for “2005 or 2006”.

(f) Modifications to Katrina Emergency Tax Relief Act of 2005.—The following provisions of the Katrina Emergency Tax Relief Act of 2005 shall be applied with the following modifications:

(1) ADDITIONAL EXEMPTION FOR HOUSING DISPLACED INDIVIDUAL.—Section 302—

(A) by substituting “2008 or 2009” for “2005 or 2006” in subsection (a) thereof,

(B) by substituting “Midwestern displaced individual” for “Hurricane Katrina displaced individual” each place it appears, and

(C) by treating an area as a core disaster area for purposes of applying subsection (c) thereof if the area is a Midwestern disaster area without regard to subsection (b)(2) of this section (relating to areas eligible only for public assistance).

(2) INCREASE IN STANDARD MILEAGE RATE.—Section 303, by substituting “beginning on the applicable disaster date and ending on December 31, 2008” for “beginning on August 25, 2005, and ending on December 31, 2006”.

(3) MILEAGE REIMBURSEMENTS FOR CHARITABLE VOLUNTEERS.—Section 304—

(A) by substituting “beginning on the applicable disaster date and ending on December 31, 2008” for “beginning on August 25, 2005, and ending on December 31, 2006” in subsection (a), and

(B) by substituting “the applicable disaster date” for “August 25, 2005” in subsection (a).

(4) EXCLUSION OF CERTAIN CANCELLATION OF INDEBTEDNESS INCOME.—Section 401—

(A) by treating an individual whose principal place of abode on the applicable disaster date was in a Midwestern disaster area (determined without regard to subsection (b)(2) of this section) as an individual described in subsection (b)(1) thereof, and by treating an individual whose principal place of abode on the applicable disaster date was in a Midwestern disaster area solely by reason of subsection (b)(2) of this section as an individual described in subsection (b)(2) thereof,

(B) by substituting “the applicable disaster date” for “August 28, 2005” both places it appears, and

(C) by substituting “January 1, 2010” for “January 1, 2007” in subsection (e).

(5) EXTENSION OF REPLACEMENT PERIOD FOR NONRECOGNITION OF GAIN.—Section 405, by substituting “on or after the applicable disaster date” for “on or after August 25, 2005”.

SEC. 3. Enhanced charitable deductions for contributions of food inventory.

(a) Increased amount of deduction.—

(1) IN GENERAL.—Clause (iv) of section 170(e)(3)(C) (relating to termination) of the Internal Revenue Code of 1986 is amended by striking “December 31, 2007” and inserting “December 31, 2009”.

(2) EFFECTIVE DATE.—The amendment made by this subsection shall apply to contributions made after December 31, 2007.

(b) Temporary suspension of limitations on charitable contributions.—

(1) IN GENERAL.—Section 170(b) of such Code is amended by adding at the end the following new paragraph:

“(3) TEMPORARY SUSPENSION OF LIMITATIONS ON CHARITABLE CONTRIBUTIONS.—In the case of a qualified farmer or rancher (as defined in paragraph (1)(E)(v)), any charitable contribution of food—

“(A) to which subsection (e)(3)(C) applies (without regard to clause (ii) thereof), and

“(B) which is made during the period beginning on the date of the enactment of this paragraph and before January 1, 2009,

shall be treated for purposes of paragraph (1)(E) or (2)(B), whichever is applicable, as if it were a qualified conservation contribution which is made by a qualified farmer or rancher and which otherwise meets the requirements of such paragraph.”.

(2) EFFECTIVE DATE.—The amendment made by this subsection shall apply to taxable years ending after the date of the enactment of this Act.

SEC. 4. Extension of enhanced charitable deduction for contributions of book inventory.

(a) Extension.—Clause (iv) of section 170(e)(3)(D) of the Internal Revenue Code of 1986 (relating to termination) of the Internal Revenue Code of 1986 is amended by striking “December 31, 2007” and inserting “December 31, 2009”.

(b) Clerical amendment.—Clause (iii) of section 170(e)(3)(D) of such Code (relating to certification by donee) is amended by inserting “of books” after “to any contribution”.

(c) Effective date.—The amendments made by this section shall apply to contributions made after December 31, 2007.

SEC. 5. Reporting requirements relating to disaster relief contributions.

(a) In general.—Section 6033(b) of the Internal Revenue Code of 1986 (relating to returns of certain organizations described in section 501(c)(3)) is amended by striking “and” at the end of paragraph (13), by redesignating paragraph (14) as paragraph (15), and by adding after paragraph (13) the following new paragraph:

“(14) such information as the Secretary may require with respect to disaster relief activities, including the amount and use of qualified contributions to which section 1400S(a) applies, and”.

(b) Effective date.—The amendments made by this section shall apply to returns the due date for which (determined without regard to any extension) occurs after December 31, 2008.