II 110th CONGRESS 1st Session S. 2327 IN THE SENATE OF THE UNITED STATES November 8, 2007 Mr. Reid (for Mr. Dodd) 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 a credit against tax for increased homeowners insurance premiums suffered by certain coastal homeowners or resulting from hurricane events.

1.

Short title

This Act may be cited as the Homeowners Insurance Assistance Act of 2007.

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 $250. (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 1 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, or 2006 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, 2007.

. (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, 2006.