[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 494 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 494

    To amend the Internal Revenue Code of 1986 with respect to the 
               treatment of crops destroyed by casualty.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 21, 1997

  Mr. Thomas introduced the following bill; which was referred to the 
                      Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
    To amend the Internal Revenue Code of 1986 with respect to the 
               treatment of crops destroyed by casualty.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. TREATMENT OF CROPS DESTROYED BY CASUALTY.

    (a) General Rule.--Paragraph (2) of section 263A(d) of the Internal 
Revenue Code of 1986 is amended by redesignating subparagraph (B) as 
subparagraph (G) and by striking subparagraph (A) and inserting the 
following new subparagraphs:
                    ``(A) In general.--If plants bearing an edible crop 
                for human consumption were lost or damaged (while in 
                the hands of the taxpayer) by reason of freezing 
                temperatures, disease, drought, pests, or casualty and 
                the taxpayer replants plants bearing the same type of 
                crop (whether on the same parcel of land on which such 
                lost or damaged plants were located or any other parcel 
                of land of the same acreage in the United States), this 
                section and section 263 shall not apply to--
                            ``(i) the costs of the taxpayer of such 
                        replanting (other than special replanting 
                        costs),
                            ``(ii) 80 percent of the taxpayer's special 
                        replanting costs of such replanting,
                            ``(iii) the costs of the taxpayer to remove 
                        such plants, and
                            ``(iv) the preproductive costs of the 
                        taxpayer of such replanting.
                    ``(B) Special replanting costs.--For purposes of 
                this subsection, the term `special replanting costs' 
                means direct costs incurred for--
                            ``(i) plants (including qualified 
                        additional plants) and supporting structures,
                            ``(ii) replacing irrigation and drainage 
                        systems destroyed during removal of the lost or 
                        damaged plants, and
                            ``(iii) land preparation and fumigation.
                For purposes of the preceding sentence, the term 
                `qualified additional plants' means plants (other than 
                replacement plants) which bear the same type of crop as 
                the lost or damaged plants referred to in subparagraph 
                (A) and which are planted on the same parcel of land as 
                the replacement plants.
                    ``(C) Preproductive costs.--For purposes of this 
                subsection, the term `preproductive costs' means costs 
                incurred during the preproductive period which are 
                attributable to--
                            ``(i) the cultivation, maintenance, and 
                        development of the replantings,
                            ``(ii) the administration of the activities 
                        referred to in clause (i), and
                            ``(iii) interest on financing such 
                        activities.
                Such term shall not include special replanting costs.
                    ``(D) Exclusion of nonreplacement assets.--In no 
                event shall subparagraph (A) apply to costs incurred 
                for any asset which is not substantially equivalent for 
                commercial purposes to an asset used on the parcel of 
                land on which the lost or damaged plants were located.
                    ``(E) Loss limitation rule.--Any costs otherwise 
                eligible for the treatment under subparagraph (A) with 
                respect to any parcel shall be reduced by the deduction 
                (if any) allowed to the taxpayer under section 165 
                which relates to the most recent prior loss or damage 
                to plants located on such parcel.
                    ``(F) Coordination with election under paragraph 
                (3).--The provisions of this paragraph shall apply 
                notwithstanding that an election is made under 
                paragraph (3).''
    (b) Conforming Amendment.--Section 165 of such Code is amended by 
redesignating subsection (m) as subsection (n) and by inserting after 
subsection (l) the following new subsection:
    ``(m) Losses to Which Section 263A(d)(2) Deductions Are Taken.--No 
deduction shall be allowed under this section with respect to any loss 
for which the costs of replanting are deducted under section 
263A(d)(2)(A).''
    (c) Effective Date.--The amendments in this section shall apply to 
costs incurred after December 31, 1996, in taxable years ending after 
such date.
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