110 HR 6762 IH: Homeowners Insurance and Mitigation U.S. House of Representatives 2008-07-31 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.

I 110th CONGRESS 2d Session H. R. 6762 IN THE HOUSE OF REPRESENTATIVES July 31, 2008 Mr. Thompson of Mississippi introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to provide a credit against tax for increased homeowners insurance premiums suffered by certain coastal homeowners subject to increased risk from hurricane events, and for homeowner mitigation expenditures for natural catastrophic events.

1.

Short title

This Act may be cited as the Homeowners Insurance and Mitigation Assistance Act of 2008.

2.

Nonrefundable personal credit for certain homeowners insurance premiums

(a)

In General

Subpart A of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 25D the following new section:

25E.

Certain homeowners insurance premiums

(a)

Allowance of Credit

In the case of an eligible individual, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to 50 percent of the taxpayer’s qualified homeowners insurance premium for such taxable year. (b)

Limitations

(1)

Maximum credit

The credit allowed under subsection (a) for any taxable year shall not exceed $500. (2)

Limitation based on adjusted gross income

The amount of the credit allowable under subsection (a) shall be reduced (but not below zero) by 2 percentage points for each percentage point (or fraction thereof) by which the taxpayer’s adjusted gross income exceeds the State median income for such a taxpayer for the preceding taxable year in the State in which the principal residence of such taxpayer is located. (3)

Limitation based on amount of tax

In the case of a taxable year to which section 26(a)(2) does not apply, the credit allowed under subsection (a) for any taxable year shall not exceed the excess of— (A)the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, over (B)the sum of the credits allowable under this subpart (other than this section and sections 23, 24, and 25B) and section 27 for the taxable year. (c)

Eligible Individual

For purposes of this section— (1)

In general

The term eligible individual means any taxpayer whose principal residence is— (A)substantially the same dwelling unit during the applicable period, and (B)located in either— (i)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 one or more hurricanes during 2004 or 2005, or (ii)a county— (I)located in a State which borders the Atlantic Ocean or the Gulf of Mexico, and (II)which is determined by the Secretary, in consultation with the National Association of Insurance Commissioners, to have experienced a higher than average increase in homeowners insurance premiums during 2004, 2005, 2006, or 2007 due to hurricane risk. (2)

Applicable period

The term applicable period means— (A)in the case of an area described in paragraph (1)(B)(i), the period beginning the day before the determination described in such paragraph and ending on the last day of the taxable year, and (B)in the case of an area described in paragraph (1)(B)(ii), the period beginning on September 1, 2005, and ending before the last day of the taxable year. (d)

Qualified Homeowners Insurance Premium

For purposes of this section— (1)

In general

The term qualified homeowners insurance premium for any taxable year means an amount equal to the qualifying percentage of the eligible individual’s homeowners insurance premium in effect on the first policy anniversary date (or, if greater, the second policy anniversary date) following the beginning of such individual’s applicable period. (2)

Qualifying percentage

The term qualifying percentage is equal to the excess (expressed in percentage points) of— (A)the eligible individual’s percentage increase in homeowners insurance premium between the last policy anniversary before the beginning of such individual’s applicable period and the policy anniversary date (as determined under paragraph (1)) following the beginning of such individual’s applicable period, over (B)the national average percentage increase in homeowners insurance premiums between the same dates as determined by the Secretary, in consultation with the National Association of Insurance Commissioners. (e)

Other Definitions

For purposes of this section— (1)

Principal residence

The term principal residence has the same meaning as when used in section 121. (2)

Homeowners insurance

The term homeowners insurance means any insurance covering a principal residence. (f)

Termination

This section shall not apply to taxable years beginning after December 31, 2009.

. (b)

Conforming Amendment

The table of sections for subpart A of part IV of subchapter A of chapter 1 of such Code is amended by inserting after the item relating to section 25D the following new item: Sec. 25E. Certain homeowners insurance premiums. . (c)

Effective Date

The amendments made by this section shall apply to taxable years beginning after December 31, 2008.

3.

Nonrefundable personal credit for hurricane, earthquake, and tornado mitigation property

(a)

In General

Subpart A of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 25E, as amended by section 2, the following new section:

25F.

Hurricane, earthquake, and tornado mitigation property

(a)

Allowance of Credit

In the case of an individual, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to 25 percent of the qualified hurricane, earthquake, and tornado mitigation property expenditures made by the taxpayer during such taxable year. (b)

Maximum Credit

The credit allowed under subsection (a) for any taxable year shall not exceed $5,000. (c)

Qualified Hurricane, Earthquake, and Tornado Mitigation Expenditure

For purposes of this section— (1)

In general

The term qualified hurricane, earthquake, and tornado mitigation property expenditure means an expenditure for property— (A)to improve the strength of a roof deck attachment, (B)to create a secondary water barrier to prevent water intrusion, (C)to improve the durability of a roof covering, (D)to brace gable-end walls, (E)to reinforce the connection between a roof and supporting wall, (F)to protect openings from penetration by windborne debris or by wind-driven rain, or (G)to protect exterior doors and garages, in a qualified dwelling unit located in a qualified State and owned by the taxpayer.(2)

Qualified dwelling unit

The term qualified dwelling unit means a dwelling unit that is assessed at a value that is less than $1,000,000 by the locality in which such dwelling unit is located and with respect to the taxable year for which the credit described in subsection (a) is allowed. (3)

Qualified state

The term qualified State means Alabama, Arkansas, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Missouri, Nebraska, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Ohio, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, or Virginia. (d)

Limitation

An expenditure shall be taken into account in determining the qualified hurricane, earthquake, and tornado mitigation property expenditures made by the taxpayer during the taxable year only if the onsite preparation, assembly, or original installation of the property with respect to which such expenditure is made has been completed in a manner that is deemed to be adequate by a State-certified inspector. (e)

Labor Costs

For purposes of this section, expenditures for labor costs properly allocable to the onsite preparation, assembly, or original installation of the property described in subsection (c) shall be taken into account in determining the qualified hurricane, earthquake, and tornado mitigation property expenditures made by the taxpayer during the taxable year. (f)

Inspection Costs

For purposes of this section, expenditures for inspection costs properly allocable to the inspection of the preparation, assembly, or installation of the property described in subsection (c) shall be taken into account in determining the qualified hurricane, earthquake, and tornado mitigation property expenditures made by the taxpayer during the taxable year.

. (b)

Conforming Amendment

The table of sections for subpart A of part IV of subchapter A of chapter 1 of such Code, as amended by section 2, is amended by inserting after the item relating to section 25E the following new item: Sec. 25F. Hurricane, earthquake, and tornado mitigation property. . (c)

Effective Date

The amendments made by this section shall apply to taxable years beginning after December 31, 2008.

4.

Business related credit for hurricane, earthquake, and tornado mitigation

(a)

In General

Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:

45Q.

Hurricane, earthquake, and tornado mitigation credit

(a)

General rule

For purposes of section 38, the hurricane, earthquake, and tornado mitigation credit determined under this section for any taxable year is an amount equal to 25 percent of the qualified hurricane, earthquake, and tornado mitigation property expenditures made by the taxpayer during the taxable year. (b)

Maximum credit

The amount of the credit determined under subsection (a) for any taxable year shall not exceed $5,000. (c)

Qualified hurricane, earthquake, and tornado mitigation expenditure

For purposes of this section— (1)

In general

The term qualified hurricane, earthquake, and tornado mitigation property expenditure means an expenditure for property— (A)to improve the strength of a roof deck attachment, (B)to create a secondary water barrier to prevent water intrusion, (C)to improve the durability of a roof covering, (D)to brace gable-end walls, (E)to reinforce the connection between a roof and supporting wall, (F)to protect openings from penetration by windborne debris or wind-driven rain, or (G)to protect exterior doors and garages, in a qualified place of business located in a qualified State and owned by the taxpayer.(2)

Qualified place of business

The term qualified place of business means a place of business that is assessed at a value that is less than $5,000,000 by the locality in which such business is located and with respect to the taxable year for which the credit described in subsection (a) is allowed. (3)

Qualified state

The term qualified State means Alabama, Arkansas, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Missouri, Nebraska, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, or Virginia. (d)

Limitation

An expenditure shall be taken into account in determining the qualified hurricane, earthquake, and tornado mitigation property expenditures made by the taxpayer during the taxable year only if the onsite preparation, assembly, or original installation of the property with respect to which such expenditure is made has been completed in a manner that is deemed to be adequate by a State-certified inspector. (e)

Labor Costs

For purposes of this section, expenditures for labor costs properly allocable to the onsite preparation, assembly, or original installation of the property described in subsection (c) shall be taken into account in determining the qualified hurricane, earthquake, and tornado mitigation property expenditures made by the taxpayer during the taxable year. (f)

Inspection Costs

For purposes of this section, expenditures for inspection costs properly allocable to the inspection of the preparation, assembly, or installation of the property described in subsection (c) shall be taken into account in determining the qualified hurricane, earthquake, and tornado mitigation property expenditures made by the taxpayer during the taxable year.

. (b)

Conforming Amendments

(1)Section 38(b) of such Code is amended by striking plus at the end of paragraph (32), by striking the period at the end of paragraph (33) and inserting , and, and by adding at the end the following new paragraph: (34)the hurricane, earthquake, and tornado mitigation credit determined under section 45Q(a). . (2)The table of sections for subpart D of part IV of subchapter A of chapter 1 of such Code is amended by adding at the end the following new item: Sec. 45Q. Hurricane, earthquake, and tornado mitigation credit. . (c)

Effective Date

The amendments made by this section shall apply to taxable years beginning after December 31, 2008.