[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1134 Enrolled Bill (ENR)]

        H.R.1134

                       One Hundred Ninth Congress

                                 of the

                        United States of America


                          AT THE FIRST SESSION

          Begun and held at the City of Washington on Tuesday,
            the fourth day of January, two thousand and five


                                 An Act


 
To amend the Internal Revenue Code of 1986 to provide for the proper tax 
           treatment of certain disaster mitigation payments.

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

SECTION 1. PROPER TAX TREATMENT OF CERTAIN DISASTER MITIGATION 
              PAYMENTS.

    (a) Qualified Disaster Mitigation Payments Excluded From Gross 
Income.--
        (1) In general.--Section 139 of the Internal Revenue Code of 
    1986 (relating to disaster relief payments) is amended by adding at 
    the end the following new subsections:
    ``(g) Qualified Disaster Mitigation Payments.--
        ``(1) In general.--Gross income shall not include any amount 
    received as a qualified disaster mitigation payment.
        ``(2) Qualified disaster mitigation payment defined.--For 
    purposes of this section, the term `qualified disaster mitigation 
    payment' means any amount which is paid pursuant to the Robert T. 
    Stafford Disaster Relief and Emergency Assistance Act (as in effect 
    on the date of the enactment of this subsection) or the National 
    Flood Insurance Act (as in effect on such date) to or for the 
    benefit of the owner of any property for hazard mitigation with 
    respect to such property. Such term shall not include any amount 
    received for the sale or disposition of any property.
        ``(3) No increase in basis.--Notwithstanding any other 
    provision of this subtitle, no increase in the basis or adjusted 
    basis of any property shall result from any amount excluded under 
    this subsection with respect to such property.
    ``(h) Denial of Double Benefit.--Notwithstanding any other 
provision of this subtitle, no deduction or credit shall be allowed (to 
the person for whose benefit a qualified disaster relief payment or 
qualified disaster mitigation payment is made) for, or by reason of, 
any expenditure to the extent of the amount excluded under this section 
with respect to such expenditure.''.
        (2) Conforming amendments.--
            (A) Subsection (d) of section 139 of such Code is amended 
        by striking ``a qualified disaster relief payment'' and 
        inserting ``qualified disaster relief payments and qualified 
        disaster mitigation payments''.
            (B) Subsection (e) of section 139 of such Code is amended 
        by striking ``and (f)'' and inserting ``, (f), and (g)''.
    (b) Certain Dispositions of Property Under Hazard Mitigation 
Programs Treated as Involuntary Conversions.--Section 1033 of such Code 
(relating to involuntary conversions) is amended by redesignating 
subsection (k) as subsection (l) and by inserting after subsection (j) 
the following new subsection:
    ``(k) Sales or Exchanges Under Certain Hazard Mitigation 
Programs.--For purposes of this subtitle, if property is sold or 
otherwise transferred to the Federal Government, a State or local 
government, or an Indian tribal government to implement hazard 
mitigation under the Robert T. Stafford Disaster Relief and Emergency 
Assistance Act (as in effect on the date of the enactment of this 
subsection) or the National Flood Insurance Act (as in effect on such 
date), such sale or transfer shall be treated as an involuntary 
conversion to which this section applies.''.
    (c) Effective Date.--
        (1) Qualified disaster mitigation payments.--The amendments 
    made by subsection (a) shall apply to amounts received before, on, 
    or after the date of the enactment of this Act.
        (2) Dispositions of property under hazard mitigation 
    programs.--The amendments made by subsection (b) shall apply to 
    sales or other dispositions before, on, or after the date of the 
    enactment of this Act.

                               Speaker of the House of Representatives.

                            Vice President of the United States and    
                                               President of the Senate.