110 HR 3987 IH: California Wildfire Tax Relief Act of
U.S. House of Representatives
2007-10-29
text/xml
EN
Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
1.This Act may be cited as the
California Wildfire Tax Relief Act of
2007
.
2.Congress finds the following:
(1)On
October 21, 2007, and the days that followed, wildfires exploded in San
Bernardino, Riverside, San Diego, Los Angeles, Ventura, Santa Barbara, and
Orange Counties.
(2)More than 753
square miles of land were consumed by the relentless flames that were further
ignited by Santa Ana winds.
(3)2,205 structures
were destroyed.
(4)14 lives were lost
and more than 600 people were injured.
(5)The projected
damages of property exceed $1,000,000,000.
(6)The President
declared portions of California a natural disaster area and the Governor of
California declared a state of emergency.
<enum>I</enum><header>General tax relief
provisions related to California wildfires of October 2007</header>
<section id="H5CE8389FB6BF48D7B0ED066C6473DC78"><enum>101.</enum><header>Extension of
replacement period for nonrecognition of gain related to California wildfires
of October 2007</header><text display-inline="no-display-inline">Clause (i) of
<external-xref legal-doc="usc" parsable-cite="usc/26/1033">section 1033(a)(2)(B)</external-xref> of the Internal Revenue Code of 1986 shall be applied by
substituting <quote>5 years</quote> for <quote>2 years</quote> with respect to
property which—</text>
<paragraph id="HB67AD22419634620BC006B007799004D"><enum>(1)</enum><text>is located in an
area determined by the President to warrant individual or individual and public
assistance from the Federal Government under the Robert T. Stafford Disaster
Relief and Emergency Assistance Act by reason of the wildfires which burned in
California during October 2007, and</text>
</paragraph><paragraph id="H393271608A764E248DE81EF7CB2B0000"><enum>(2)</enum><text>is compulsorily or
involuntarily converted as a result of such wildfire,</text>
</paragraph><continuation-text continuation-text-level="section">but only if
substantially all of the use of the replacement property is located in any such
area.</continuation-text></section><section id="HA8C3ECACABFB4A19844BE2983353F88E"><enum>102.</enum><header>Suspension of
limitations on charitable contributions for relief efforts related to
California wildfires of October 2007</header>
<subsection id="H2F12565020FC41C196EEAB831FE00BD"><enum>(a)</enum><header>In
general</header><text>Except as otherwise provided in subsection (b), qualified
disaster contributions shall not be taken into account for purposes of
subsections (b) and (d) of section 170 of the Internal Revenue Code of
1986.</text>
</subsection><subsection id="HC7815AFC54FB478085BD19A28E8887C"><enum>(b)</enum><header>Treatment of
excess contributions</header><text>For purposes of section 170 of such
Code—</text>
<paragraph id="H5765065D602D44509976F1352BC51648"><enum>(1)</enum><header>Individuals</header><text>In
the case of an individual—</text>
<subparagraph id="H2A36714CB059449C9528B1D19056F90"><enum>(A)</enum><header>Limitation</header><text>Any
qualified disaster contribution shall be allowed only to the extent that the
aggregate of such contributions does not exceed the excess of the taxpayer’s
contribution base (as defined in paragraph (1) of section 170(b) of such Code)
over the amount of all other charitable contributions allowed under such
paragraph.</text>
</subparagraph><subparagraph id="HFEE018B0EAE945E39BD5A8DCB1B9DDA"><enum>(B)</enum><header>Carryover</header><text>If
the aggregate amount of qualified disaster contributions made in the
contribution year (within the meaning of section 170(d)(1) of such Code)
exceeds the limitation of subparagraph (A), such excess shall be added to the
excess described in the portion of subparagraph (A) of such section which
precedes clause (i) thereof for purposes of applying such section.</text>
</subparagraph></paragraph><paragraph id="H0E50ACB83D6D49568F001DD76221757B"><enum>(2)</enum><header>Corporations</header><text>In
the case of a corporation—</text>
<subparagraph id="HEEE774B8BC494BC29620169ECD096F11"><enum>(A)</enum><header>Limitation</header><text>Any
qualified disaster contribution shall be allowed only to the extent that the
aggregate of such contributions does not exceed the excess of the taxpayer’s
taxable income (as determined under paragraph (2) of section 170(b) of such
Code) over the amount of all other charitable contributions allowed under such
paragraph.</text>
</subparagraph><subparagraph id="HBC2C90E1E9634AF5943882113C25C2D3"><enum>(B)</enum><header>Carryover</header><text>Rules
similar to the rules of paragraph (1)(B) shall apply for purposes of this
paragraph.</text>
</subparagraph></paragraph></subsection><subsection id="H69B58FC9A8E04E8692BD53E83758933C"><enum>(c)</enum><header>Exception to
overall limitation on itemized deductions</header><text>So much of any
deduction allowed under section 170 of such Code as does not exceed the
qualified disaster contributions made during the taxable year shall not be
treated as an itemized deduction for purposes of section 68 of such
Code.</text>
</subsection><subsection id="HCD2BED3348AA4E68870056B6AF94E7A9"><enum>(d)</enum><header>Qualified
disaster contributions</header><text>For purposes of this section, the term
<quote>qualified disaster contribution</quote> means any charitable
contribution (as defined in section 170(c) of such Code)—</text>
<paragraph id="H6EFC05BBDCFF44B2A4882DBAFAE9EB40"><enum>(1)</enum><text display-inline="yes-display-inline">made during the period beginning on October
21, 2007, and ending on January 1, 2008, in cash to an organization described
in section 170(b)(1)(A) of such Code (other than an organization described in
section 509(a)(3) of such Code) for relief efforts related to the wildfires
which burned in California during October 2007, and</text>
</paragraph><paragraph id="H30F931CD95354294A9D23E0000EB26A4"><enum>(2)</enum><text>with respect to
which the taxpayer has elected the application of this section.</text>
</paragraph><continuation-text continuation-text-level="subsection">In the case
of a partnership or S corporation, the election under paragraph (2) shall be
made separately by each partner or shareholder.</continuation-text></subsection></section><section id="HE304323A3E634DF7BE8BCACDD8B7DA02"><enum>103.</enum><header>Exclusion of
certain cancellations of indebtedness related to California wildfires of
October 2007</header>
<subsection id="H4FC6F2262E6A40D4B93FD2A4DFA446F0"><enum>(a)</enum><header>In
general</header><text>For purposes of the Internal Revenue Code of 1986, gross
income shall not include any amount which (but for this section) would be
includible in gross income by reason of the discharge (in whole or in part) of
qualified nonbusiness debt of a qualified individual by an applicable entity
(as defined in section 6050P(c)).</text>
</subsection><subsection id="H7693AD7D6DBC4A8AA000A8E27B79ED3F"><enum>(b)</enum><header>Qualified
nonbusiness debt</header><text>For purposes of this section, the term
<quote>qualified nonbusiness debt</quote> means any indebtedness other than
indebtedness incurred in connection with a trade or business.</text>
</subsection><subsection id="HD3CFAE7D0C4A4B11B1FA00276BA54D0"><enum>(c)</enum><header>Qualified
individual</header><text display-inline="yes-display-inline">For purposes of
this section, the term <quote>qualified individual</quote> means any natural
person who was a resident (as of October 20, 2007) of, or who owned real
property (as of the date of such discharge) in, any area which is determined by
the President to warrant individual or individual and public assistance from
the Federal Government under the Robert T. Stafford Disaster Relief and
Emergency Assistance Act by reason of the wildfires which burned in California
during October 2007.</text>
</subsection><subsection id="H3F7BD15D690E470996ED61633E00A96B"><enum>(d)</enum><header>Exception for
real property outside disaster area</header><text>Subsection (a) shall not
apply to any discharge of indebtedness to the extent that real property
constituting security for such indebtedness is located outside of the area
described in subsection (c).</text>
</subsection><subsection id="H8250625918AE4F5B9847B9F36B901E3D"><enum>(e)</enum><header>Denial of double
benefit</header><text>The amount excluded from gross income under subsection
(a) shall be applied to reduce the tax attributes of the taxpayer as provided
in <external-xref legal-doc="usc" parsable-cite="usc/26/108">section 108(b)</external-xref> of the Internal Revenue Code of 1986.</text>
</subsection><subsection id="H612A937F32F54A9ABF00AF464638F1FF"><enum>(f)</enum><header>Application</header><text>This
section shall not apply to discharges after December 31, 2008.</text>
</subsection></section><section id="HE2ED1B14879249EA842FD73E676D56B"><enum>104.</enum><header>Special rules
related to California wildfires of October 2007 for mortgage revenue
bonds</header>
<subsection id="H4FAB2CC8C18544118EC516F7E8DA166C"><enum>(a)</enum><header>In
general</header><text>In the case of financing provided with respect to a
qualified California Wildfires of October 2007 recovery residence, subsection
(d) of <external-xref legal-doc="usc" parsable-cite="usc/26/143">section 143</external-xref> of the Internal Revenue Code of 1986 shall be applied as if
such residence were a targeted area residence.</text>
</subsection><subsection id="H9BD0950107D449C9843D21D3F2D6254"><enum>(b)</enum><header>Qualified
California wildfires of October 2007 recovery residence</header><text display-inline="yes-display-inline">For purposes of this section, the term
<quote>qualified California Wildfires of October 2007 recovery
residence</quote> means any residence if such residence is located in an area
which is determined by the President to warrant individual or individual and
public assistance from the Federal Government under the Robert T. Stafford
Disaster Relief and Emergency Assistance Act by reason of the wildfires which
burned in California during October 2007.</text>
</subsection><subsection id="HC0D2B5C1185D4575845442E4C7D6F1E1"><enum>(c)</enum><header>Application</header><text>Subsection
(a) shall not apply to financing provided after December 31, 2009.</text>
</subsection></section><section id="H68D69B40C7DA47D7BA110080EC2EC242"><enum>105.</enum><header>Suspension of
certain limitations on personal casualty losses related to California wildfires
of October 2007</header><text display-inline="no-display-inline">Paragraphs (1)
and (2)(A) of <external-xref legal-doc="usc" parsable-cite="usc/26/165">section 165(h)</external-xref> of the Internal Revenue Code of 1986 shall not
apply to losses described in section 165(c)(3) of such Code which are
attributable to the wildfires which burned in California during October 2007.
In the case of any other losses, section 165(h)(2)(A) of such Code shall be
applied without regard to the losses referred to in the preceding
sentence.</text>
</section><section id="HFA9259AE80F24F2A985712AE05EE1D00"><enum>106.</enum><header>Additional
exemption for housing displaced individuals of California wildfires of October
2007</header>
<subsection id="H6A92DB46860746198500D053911B707"><enum>(a)</enum><header>In
general</header><text>In the case of taxable years of a natural person
beginning in 2007 and 2008, for purposes of the Internal Revenue Code of 1986,
taxable income shall be reduced by $500 for each California Wildfires of
October 2007 displaced individual of the taxpayer for the taxable year.</text>
</subsection><subsection id="H2E3574FA18C14315AC4B22FCACE0F4EF"><enum>(b)</enum><header>Limitations</header>
<paragraph id="H084BA6A9331A45A2B960221816363ED5"><enum>(1)</enum><header>Dollar
limitation</header><text>The reduction under subsection (a) shall not exceed
$2,000, reduced by the amount of the reduction under this section for all
previous taxable years.</text>
</paragraph><paragraph id="H6878DA86968F43AAB9B709D7007BF96C"><enum>(2)</enum><header>Individuals
taken into account only once</header><text>An individual shall not be taken
into account under subsection (a) if such individual was taken into account
under such subsection by the taxpayer in any prior taxable year.</text>
</paragraph></subsection><subsection id="HE2F59231F6B3420E87279CD8FD4700BF"><enum>(c)</enum><header>California
wildfires of October 2007 displaced individual</header><text>For purposes of
this subsection, the term <quote>displaced individual from California Wildfires
of October 2007</quote> means, with respect to any taxpayer for any taxable
year, a natural person who—</text>
<paragraph id="HE95030C1026348B88B0706C2B414B6FB"><enum>(1)</enum><text display-inline="yes-display-inline">was (as of October 20, 2007) a resident of
any area which is determined by the President to warrant individual or
individual and public assistance from the Federal Government under the Robert
T. Stafford Disaster Relief and Emergency Assistance Act by reason of the
wildfires which burned in California during October 2007,</text>
</paragraph><paragraph id="H1214C64AC7314BE8B8F8DB3B027EB3E3"><enum>(2)</enum><text>is displaced from
the person’s residence located in the area described in paragraph (1),
and</text>
</paragraph><paragraph id="H460A793648914FF08EF163C1C0980047"><enum>(3)</enum><text>is provided
housing free of charge by the taxpayer in the principal residence of the
taxpayer for a period of 60 consecutive days which ends in such taxable
year.</text>
</paragraph><continuation-text continuation-text-level="subsection">Such term
shall not include the spouse or any dependent of the taxpayer.</continuation-text></subsection></section><section id="HA6AED507E25145F189852B9352D7FC40"><enum>107.</enum><header>Special rule
related to California wildfires of October 2007 for determining earned
income</header>
<subsection id="H2D3F437660EE4C8A89AD86C98E1DEEF1"><enum>(a)</enum><header>In
general</header><text>In the case of a qualified individual, if the earned
income of the taxpayer for the taxable year of such taxpayer which includes
October 21, 2007, is less than the earned income which is attributable to the
taxpayer for the preceding taxable year, the credits allowed under sections
24(d) and 32 of the Internal Revenue Code of 1986 may, at the election of the
taxpayer, be determined by substituting—</text>
<paragraph id="H3076BDC36B4F47C984B1654DD9AA72F"><enum>(1)</enum><text>such earned income
for the preceding taxable year, for</text>
</paragraph><paragraph id="H11569C45021846E8993816E4A1D2D970"><enum>(2)</enum><text>such earned income
for the taxable year which includes October 21, 2007.</text>
</paragraph></subsection><subsection id="H7338D7599CEA4118BA77C2DB32CC00AF"><enum>(b)</enum><header>Qualified
individual</header><text display-inline="yes-display-inline">For purposes of
this section, the term <quote>qualified individual</quote> means any individual
who was (as of October 21, 2007) a resident of any area which is determined by
the President to warrant individual or individual and public assistance from
the Federal Government under the Robert T. Stafford Disaster Relief and
Emergency Assistance Act by reason of the wildfires which burned in California
during October 2007.</text>
</subsection><subsection id="HC2CB0319210B43F19BD64BBE3B074238"><enum>(c)</enum><header>Earned
income</header><text>For purposes of this section, the term <quote>earned
income</quote> has the meaning given such term under section 32(c) of such
Code.</text>
</subsection><subsection id="HE6F7D3423D30478CA1697D14A4F0F082"><enum>(d)</enum><header>Special
rules</header>
<paragraph id="HCA638CA9DD8942F888FB006E3C578863"><enum>(1)</enum><header>Application to
joint returns</header><text>For purpose of subsection (a), in the case of a
joint return for a taxable year which includes October 21, 2007—</text>
<subparagraph id="H9EA0DAF7B56342EDB0B1D7D8048591C"><enum>(A)</enum><text>such subsection
shall apply if either spouse is a qualified individual,</text>
</subparagraph><subparagraph id="H4D7F94A90787467EA4519E11EFF31182"><enum>(B)</enum><text>the earned income
which is attributable to the taxpayer for the preceding taxable year shall be
the sum of the earned income which is attributable to each spouse for such
preceding taxable year, and</text>
</subparagraph><subparagraph id="H3DCDE1C7B2884EDBB3EDF227A63274A8"><enum>(C)</enum><text>the substitution
described in such subsection shall apply only with respect to earned income
which is attributable to a spouse who is a qualified individual.</text>
</subparagraph></paragraph><paragraph id="H839E72913506432C91DCE28738CA38AC"><enum>(2)</enum><header>Uniform
application of election</header><text>Any election made under subsection (a)
shall apply with respect to both section 24(d) and section 32 of such
Code.</text>
</paragraph><paragraph id="HFD18FDD12119443592A4FD2AC9E4D6"><enum>(3)</enum><header>Errors treated as
mathematical error</header><text>For purposes of section 6213 of such Code, an
incorrect use on a return of earned income pursuant to subsection (a) shall be
treated as a mathematical or clerical error.</text>
</paragraph><paragraph id="H2BD4F84BAD24447AB16D3F552C65096F"><enum>(4)</enum><header>No effect on
determination of gross income</header><text>For purposes of the Internal
Revenue Code of 1986, gross income shall be determined without regard to any
substitution under subsection (a).</text>
</paragraph></subsection></section><section id="H079BA37ADCFD48629F08DE2272CBB21"><enum>108.</enum><header>Secretarial
authority to make adjustments regarding taxpayer and dependency status related
to California wildfires of October 2007</header><text display-inline="no-display-inline">With respect to taxable years beginning in
2007 or 2008, the Secretary of the Treasury, or his delegate, may make such
adjustments in the application of the internal revenue laws as may be necessary
to ensure that taxpayers do not lose dependency exemptions or child credits or
experience a change of filing status by reason of temporary relocations after
the wildfires which burned in California during October 2007 or by reason of
the receipt of wildfire relief. Any adjustments made under the preceding
sentence shall ensure that an individual is not taken into account by more than
one taxpayer with respect to the same tax benefit.</text>
</section><enum>II</enum><header>Penalty free use
of retirement funds related to California wildfires of October 2007</header>
<section id="HB13208684B91461289B008A53EF2D4C4"><enum>201.</enum><header>Penalty free
withdrawals from retirement plans related to California wildfires of October
2007</header>
<subsection id="H4EBB692D65584565B4709EBB5EACF148"><enum>(a)</enum><header>In
general</header><text>Paragraph (2) of section 72(t) of the Internal Revenue
Code of 1986 (relating to 10-percent additional tax on early distributions from
qualified retirement plans) is amended by adding at the end the following new
subparagraph:</text>
<quoted-block id="H4FEF4078929D4442B46CEC8600BE633D" style="OLC">
<subparagraph id="H5033C363C9C0406585F3B65FF7164D77"><enum>(H)</enum><header>Distributions
from retirement plans upon Federal declaration of natural disaster</header>
<clause id="H3B626760852242828927F843E2DA6FD"><enum>(i)</enum><header>In
general</header><text>Any qualified disaster-relief distribution.</text>
</clause><clause id="H3C81024EC1A64000B34E4F103722B27F"><enum>(ii)</enum><header>Aggregate
limitation</header><text>The aggregate amount of payments or distributions
received by an individual which may be treated as qualified disaster-relief
distributions for any taxable year shall not exceed the excess (if any)
of—</text>
<subclause id="H6AAE35F79ACD4381A93694D26B18CECC"><enum>(I)</enum><text>$100,000,
over</text>
</subclause><subclause id="HC6FAE269AD6D4E43BC9EF64108B82700"><enum>(II)</enum><text>the aggregate
amounts treated as qualified disaster-relief distributions with respect to such
individual for all prior taxable years.</text>
</subclause></clause><clause id="HE05759C55CCC470B8B3C10FE5C4CF22"><enum>(iii)</enum><header>Amount
distributed may be repaid</header>
<subclause id="H3D1649B2AB4F478C95984DE8B9002273"><enum>(I)</enum><header>In
general</header><text>Any individual who receives a qualified disaster-relief
distribution may, at any time during the 3-year period beginning on the day
after the date on which such distribution was made, 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.</text>
</subclause><subclause id="H3F3F4D0A749D4B2C9CC878D8E77928C4"><enum>(II)</enum><header>Treatment of
repayments for distributions from eligible retirement plans other than
IRAs</header><text>For purposes of this title, if a contribution is made
pursuant to subclause (I) with respect to a qualified disaster-relief
distribution from an eligible retirement plan (as so defined) 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 qualified
disaster-relief 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.</text>
</subclause><subclause id="HAF85DC7FCEE34406A9F97DD79BCE7077"><enum>(III)</enum><header>Treatment of
repayments for distributions from IRAs</header><text>For purposes of this
title, if a contribution is made pursuant to subclause (I) with respect to a
qualified disaster-relief distribution from an individual retirement plan,
then, to the extent of the amount of the contribution, the qualified
disaster-relief 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.</text>
</subclause><subclause id="HFAC87CE4AAF64416A000B6D3DD37035E"><enum>(IV)</enum><header>Application to
governmental section 457 plans</header><text>In determining whether any
distribution is a qualified disaster-relief distribution for purposes of this
clause, an eligible deferred compensation plan (as defined in section 457(b))
maintained by an employer described in section 457(e)(1)(A) shall be treated as
a qualified retirement plan.</text>
</subclause></clause><clause id="HD665B971981D47759BC74BB36BB80FB"><enum>(iv)</enum><header>Qualified
disaster-relief distribution</header><text>For purposes of this subparagraph,
the term <quote>qualified disaster-relief distribution</quote> means any
distribution—</text>
<subclause id="HEE0DE42399834ADF995CD83956D01C71"><enum>(I)</enum><text display-inline="yes-display-inline">to an individual who has sustained a loss
as a result of a major disaster declared under section 401 of the Robert T.
Stafford Disaster Relief and Emergency Assistance Act by reason of the
wildfires which burned in California during October 2007 and who has a
principal place of abode immediately before the declaration in a qualified
disaster area, and</text>
</subclause><subclause id="H09675D7EFBD14028B4A2E6C5B302BBB4"><enum>(II)</enum><text>which is made
during the 1-year period beginning on the date such declaration is made.</text>
</subclause></clause><clause id="HA251D8A4E5ED4753950815E2EBEE63C0"><enum>(v)</enum><header>Qualified
disaster area</header><text display-inline="yes-display-inline">For purposes of
this subparagraph, the term <quote>qualified disaster area</quote> means any
area which is determined by the President to warrant individual or individual
and public assistance from the Federal Government under the Robert T. Stafford
Disaster Relief and Emergency Assistance Act by reason of the wildfires which
burned in California during October
2007.</text>
</clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H28CF2494C30D4D95BAE5F5CC9410A292"><enum>(b)</enum><header>Exemption of
distributions from trustee to trustee transfer and withholding
rules</header><text>Paragraph (4) of section 402(c) of such Code (relating to
eligible rollover distribution) is amended by striking <quote>and</quote> at
the end of subparagraph (B), by striking the period at the end of subparagraph
(C) and inserting <quote>, and</quote>, and by inserting at the end the
following new subparagraph:</text>
<quoted-block id="HDA5AD0BF38BB4884939800CCA903C661" style="OLC">
<subparagraph id="H44F8EA40882542B4A0A696AC12E23E58"><enum>(D)</enum><text>any qualified
disaster-relief distribution (within the meaning of section
72(t)(2)(G)).</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H18ED0EFE4A4F4102864B2916A8F8001E"><enum>(c)</enum><header>Conforming
amendments</header>
<paragraph id="HDFBFD216DE114453BAF8376B00B99B3B"><enum>(1)</enum><text>Section
401(k)(2)(B)(i) of such Code is amended by striking <quote>or</quote> at the
end of subclause (IV), by striking <quote>and</quote> at the end of subclause
(V) and inserting <quote>or</quote>, and by inserting after subclause (V) the
following new subclause:</text>
<quoted-block id="H8DB7389579A44B57BC9FD4C8B3001894" style="OLC">
<subparagraph id="H02456475CB404C77B5055576AC6D4E8"><enum>(VI)</enum><text>the date on which
a period referred to in section 72(t)(2)(H)(iii)(II) begins (but only to the
extent provided in section 72(t)(2)(H)),
and</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="H4732562AA0B94D0D89154C33F9C0C1F2"><enum>(2)</enum><text>Section
403(b)(7)(A)(ii) of such Code is amended by inserting <quote>sustains a loss as
a result of a major disaster declared under section 401 of the Robert T.
Stafford Disaster Relief and Emergency Assistance Act by reason of California
Wildfires of October 2007 (but only to the extent provided in section
72(t)(2)(H)),</quote> before <quote>or</quote>.</text>
</paragraph><paragraph id="H713F00B462DD48C294CDE7F71154B3E2"><enum>(3)</enum><text>Section 403(b)(11)
of such Code is amended by striking <quote>or</quote> at the end of
subparagraph (B), by striking the period at the end of subparagraph (C) and
inserting <quote>, or</quote>, and by inserting after subparagraph (C) the
following new subparagraph:</text>
<quoted-block id="HB28888E4332040BDB2D229D21EFD1EA" style="OLC">
<subparagraph id="HBAE2390D2F35410AB4785261A89C131D"><enum>(D)</enum><text>for distributions
to which section 72(t)(2)(H)
applies.</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection commented="no" id="HDB06B02FAB5D4ED49F7CC909FD48A859"><enum>(d)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to
distributions received after October 21, 2007.</text>
</subsection></section><section id="HA04E1702A1B74F0AB970ACEBC157EB81"><enum>202.</enum><header>Income
averaging for disaster-relief distributions related to California wildfires of
October 2007</header>
<subsection id="H3D403D114949494883E5E816FE42B3C4"><enum>(a)</enum><header>In
general</header><text>In the case of any qualified disaster-relief distribution
(within the meaning of section 72(t)(2)(G) of the Internal Revenue Code of
1986) from a qualified retirement plan (as defined in section 4974(c) of such
Code) to a qualified individual, unless the taxpayer elects not to have this
section 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.</text>
</subsection><subsection id="H3976C39A97B94EED9B915F421698BA64"><enum>(b)</enum><header>Special
rules</header>
<paragraph id="H8E9A355E00C84AA582AB4141D303DF7"><enum>(1)</enum><header>Application to
governmental section 457 plans</header><text>In determining whether any
distribution is a qualified disaster-relief distribution (as so defined) for
purposes of this section, an eligible deferred compensation plan (as defined in
section 457(b) of such Code) maintained by an employer described in section
457(e)(1)(A) of such Code shall be treated as a qualified retirement plan (as
so defined).</text>
</paragraph><paragraph id="H34991ED38FD244B7848E4600C7E8D11C"><enum>(2)</enum><header>Certain rules to
apply</header><text>Rules similar to the rules of subparagraph (E) of section
408A(d)(3) of such Code shall apply for purposes of this section.</text>
</paragraph></subsection><subsection id="H71D6D242B3C2404C00E5A132AD557CFD"><enum>(c)</enum><header>Qualified
individual</header><text display-inline="yes-display-inline">For purposes of
this section, the term <quote>qualified individual</quote> means an individual
who has sustained a loss as a result of the major disaster declared under
section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance
Act (<external-xref legal-doc="usc" parsable-cite="usc/42/5170">42 U.S.C. 5170</external-xref>) by reason of the wildfires which burned in California
during October 2007 and who has a principal place of abode immediately before
the declaration in a California wildfires of October 2007 disaster area.</text>
</subsection><subsection id="HB093973657C542908F1924F3D284002D"><enum>(d)</enum><header>California
wildfires of October 2007 disaster area</header><text display-inline="yes-display-inline">For purposes of this section, the term
<quote>California wildfires of October 2007 disaster area</quote> means any
area which is determined by the President to warrant individual or individual
and public assistance from the Federal Government under the Robert T. Stafford
Disaster Relief and Emergency Assistance Act by reason of the wildfires which
burned in California during October 2007.</text>
</subsection></section><section id="H411DF740F5124F80BAF256891BDC305F"><enum>203.</enum><header>Recontributions
of withdrawals for home purchases cancelled due to California wildfires of
October 2007</header>
<subsection id="H5A1E9313B68D4586A0110028C7C435D"><enum>(a)</enum><header>Recontributions</header>
<paragraph id="HD961AC40180243499FF91C54AD92F48D"><enum>(1)</enum><header>In
general</header><text>Any individual who received a qualified distribution may,
at any time during the 6-month period beginning on the day after the disaster
declaration date, make one or more contributions in an aggregate amount not to
exceed the amount of such qualified distribution to an eligible retirement plan
(as defined in <external-xref legal-doc="usc" parsable-cite="usc/26/402">section 402(c)(8)(B)</external-xref> of the Internal Revenue Code of 1986) 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) of such Code, as the case may be.</text>
</paragraph><paragraph id="H7AF5A30B164049769E0036CB538C3B34"><enum>(2)</enum><header>Treatment of
repayments</header>
<subparagraph id="H4DB59B6CA2AC433C82A7616021A6A832"><enum>(A)</enum><header>Treatment of
repayments for distributions from eligible retirement plans other than
IRAs</header><text>For purposes of the Internal Revenue Code of 1986, if a
contribution is made pursuant to paragraph (1) with respect to a qualified
distribution from an eligible retirement plan (as so defined) other than an
individual retirement plan (as defined in section 7701(a)(37) of such Code),
then the taxpayer shall, to the extent of the amount of the contribution, be
treated as having received the qualified distribution in an eligible rollover
distribution (as defined in section 402(c)(4) of such Code) and as having
transferred the amount to the eligible retirement plan in a direct trustee to
trustee transfer within 60 days of the distribution.</text>
</subparagraph><subparagraph id="HC35CF7092F514CCF92748F675827E89"><enum>(B)</enum><header>Treatment of
repayments for distributions from IRAs</header><text>For purposes of the
Internal Revenue Code of 1986, if a contribution is made pursuant to paragraph
(1) with respect to a qualified distribution from an individual retirement plan
(as so defined), then, to the extent of the amount of the contribution, the
qualified distribution shall be treated as a distribution described in section
408(d)(3) of such Code and as having been transferred to the eligible
retirement plan (as so defined) in a direct trustee to trustee transfer within
60 days of the distribution.</text>
</subparagraph></paragraph></subsection><subsection id="H40A2C30D4CB6490D84C5A112153855C"><enum>(b)</enum><header>Definitions</header><text>For
purposes of this section—</text>
<paragraph id="HC2D7E4039B734D5EABF6837DE6A88294"><enum>(1)</enum><header>Qualified
distribution</header><text>The term <quote>qualified distribution</quote> means
any distribution—</text>
<subparagraph id="HEB965206E2C9425DA4D900009F3455F2"><enum>(A)</enum><text>described in
section 401(k)(2)(B)(i)(IV), 403(b)(7)(A)(ii), 403(b)(11)(B),
457(d)(1)(A)(iii), or 72(t)(2)(F) of the Internal Revenue Code of 1986,</text>
</subparagraph><subparagraph id="HF7BF5B3A7B404CD6AFFE7E9E46C99826"><enum>(B)</enum><text>received after
February 28, 2007, and before October 21, 2007, and</text>
</subparagraph><subparagraph id="HA13954D9B627484FB15DCDEEB2CF2CA3"><enum>(C)</enum><text>which was to be
used to purchase or construct a principal residence in a California wildfires
of October 2007 disaster area, but which was not so purchased or
constructed.</text>
</subparagraph></paragraph><paragraph id="H7DE0D076FF30437482B03F5822825C8"><enum>(2)</enum><header>Disaster
declaration date</header><text display-inline="yes-display-inline">The term
<quote>disaster declaration date</quote> means the date on which the President
designated the area as a disaster area by reason of the wildfires which burned
in California during October 2007.</text>
</paragraph><paragraph id="H5401026A7B714A41A0FEAB3630E30085"><enum>(3)</enum><header> California
wildfires of October 2007 disaster area</header><text display-inline="yes-display-inline">The term <quote>California wildfires of
October 2007 disaster area</quote> means any area which is determined by the
President to warrant individual or individual and public assistance from the
Federal Government under the Robert T. Stafford Disaster Relief and Emergency
Assistance Act by reason of the wildfires which burned in California during
October 2007.</text>
</paragraph></subsection></section><section id="HCE9D99CE71624571ABD799B0DAFCE7F6"><enum>204.</enum><header>Loans from
qualified plans in connection with California wildfires of October
2007</header>
<subsection id="HAB2DAD1E08444F6AB47B2129622C4BCF"><enum>(a)</enum><header>Increase in
limit on loans not treated as distributions</header><text>In the case of any
loan from a qualified employer plan (as defined under section 72(p)(4) of the
Internal Revenue Code of 1986) to a qualified individual (as defined in section
202(c)) made after the date of enactment of this Act and before the date which
is 1 year after the disaster declaration date (as defined in section
203(b)(2))—</text>
<paragraph id="HAD00F5AB8EEC44788ED108DEDE05C380"><enum>(1)</enum><text>clause (i) of
section 72(p)(2)(A) of such Code shall be applied by substituting
<quote>$200,000</quote> for <quote>$100,000</quote>, and</text>
</paragraph><paragraph id="H0BC457C58A8743CDB93632C891935D9D"><enum>(2)</enum><text>clause (ii) of
such section shall be applied by substituting <quote>the present value of the
nonforfeitable accrued benefit of the employee under the plan</quote> for
<quote>one-half of the present value of the nonforfeitable accrued benefit of
the employee under the plan</quote>.</text>
</paragraph></subsection><subsection id="H43DB61B42874466F90E613F6886BA4B9"><enum>(b)</enum><header>Delay of
repayment</header><text>In the case of a qualified individual (as defined in
section 202(c)) with an outstanding loan on or after October 20, 2007, from a
qualified employer plan (as defined in section 72(p)(4) of the Internal Revenue
Code of 1986)—</text>
<paragraph id="HB795E52B13444BC3A81697B04DFB618B"><enum>(1)</enum><text>if the due date
pursuant to subparagraph (B) or (C) of section 72(p)(2) of such Code for any
repayment with respect to such loan occurs during the period beginning after
October 21, 2007, and ending before November 30, 2008, such due date shall be
delayed for 1 year,</text>
</paragraph><paragraph id="H34C3B12849D24EE8BAC6F4D7B5360010"><enum>(2)</enum><text>any subsequent
repayments with respect to any such loan shall be appropriately adjusted to
reflect the delay in the due date under paragraph (1) and any interest accruing
during such delay, and</text>
</paragraph><paragraph id="H5D9EC8B14A97444BB259BDE15BA2FFCF"><enum>(3)</enum><text>in determining the
5-year period and the term of a loan under subparagraph (B) or (C) of section
72(p)(2) of such Code, such period shall be disregarded.</text>
</paragraph></subsection></section><section id="HFBF9D3119D8549F596F5025BA57532B8"><enum>205.</enum><header>Provisions
relating to plan amendments</header>
<subsection id="HC9260D25410849EBB0D6790134F7C62"><enum>(a)</enum><header>In
general</header><text>If this section applies to any plan or contract
amendment—</text>
<paragraph id="HE840D529313146989D46039F5BE2DF6D"><enum>(1)</enum><text>such plan or
contract shall be treated as being operated in accordance with the terms of the
plan during the period described in subsection (b)(2)(A), and</text>
</paragraph><paragraph id="H5EBFCFCE03DD4032A60619293438E36C"><enum>(2)</enum><text>except as provided
by the Secretary of the Treasury, such plan shall not fail to meet the
requirements of <external-xref legal-doc="usc" parsable-cite="usc/26/411">section 411(d)(6)</external-xref> of the Internal Revenue Code of 1986 and
section 204(g) of the Employee Retirement Income Security Act of 1974 by reason
of such amendment.</text>
</paragraph></subsection><subsection id="H3DD1710C40864683949D8162DAACB8A"><enum>(b)</enum><header>Amendments to
which section applies</header>
<paragraph id="HA4037A2ADFFE47B9983EF2D9002E00CE"><enum>(1)</enum><header>In
general</header><text>This section shall apply to any amendment to any plan or
annuity contract which is made—</text>
<subparagraph id="HBB043D7C07884E978BF007B7DABE731"><enum>(A)</enum><text>pursuant to any
amendment made by this title, or pursuant to any regulation issued by the
Secretary of the Treasury or the Secretary of Labor under this title,
and</text>
</subparagraph><subparagraph id="H8C54D642DC2346E5BBB1CB81C100868D"><enum>(B)</enum><text>on or before the
last day of the first plan year beginning on or after January 1, 2009, or such
later date as the Secretary of the Treasury may prescribe.</text>
</subparagraph><continuation-text continuation-text-level="paragraph">In the case
of a governmental plan (as defined in section 414(d) of the Internal Revenue
Code of 1986), subparagraph (B) shall be applied by substituting the date which
is 2 years after the date otherwise applied under subparagraph (B).</continuation-text></paragraph><paragraph id="HFAFED8D8B2664E31B09141882F54A6FB"><enum>(2)</enum><header>Conditions</header><text>This
section shall not apply to any amendment unless—</text>
<subparagraph id="H4CF666CECE6F4FE786006CB2EAE23B5E"><enum>(A)</enum><text>during the
period—</text>
<clause id="H3FA2E3B110E448BEBBB276EA19F98562"><enum>(i)</enum><text>beginning on the
date the legislative or regulatory amendment described in paragraph (1)(A)
takes effect (or in the case of a plan or contract amendment not required by
such legislative or regulatory amendment, the effective date specified by the
plan), and</text>
</clause><clause id="H8C6574B11298490BB4B34384E1330000"><enum>(ii)</enum><text>ending on the
date described in paragraph (1)(B) (or, if earlier, the date the plan or
contract amendment is adopted),</text>
</clause><continuation-text continuation-text-level="subparagraph">the plan
or contract is operated as if such plan or contract amendment were in effect;
and</continuation-text></subparagraph><subparagraph id="HEB61845A3FEB4BC397CD3E045EE542E9"><enum>(B)</enum><text>such plan or
contract amendment applies retroactively for such period.</text>
</subparagraph></paragraph></subsection></section>