[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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