[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 3322 Introduced in Senate (IS)]
110th CONGRESS
2d Session
S. 3322
To provide tax relief for the victims of severe storms, tornados, and
flooding in the Midwest, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
July 23, 2008
Mr. Grassley (for himself, Mr. Harkin, Mr. Roberts, Mr. Durbin, Mr.
Coleman, Mr. Bond, Mr. Brownback, Mr. Bayh, Mrs. McCaskill, Ms.
Klobuchar, Mr. Obama, and Mr. Lugar) introduced the following bill;
which was read twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To provide tax relief for the victims of severe storms, tornados, and
flooding in the Midwest, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Midwestern Disaster Tax Relief Act
of 2008''.
SEC. 2. TEMPORARY TAX RELIEF FOR AREAS DAMAGED BY 2008 MIDWESTERN
SEVERE STORMS, TORNADOS, AND FLOODING.
(a) In General.--Subject to the modifications described in this
section, the following provisions of or relating to the Internal
Revenue Code of 1986 shall apply to any Midwestern disaster area in
addition to the areas to which such provisions otherwise apply:
(1) Go zone benefits.--
(A) Section 1400N (relating to tax benefits) other
than subsections (b), (i), (j), (m), and (o) thereof.
(B) Section 1400O (relating to education tax
benefits).
(C) Section 1400P (relating to housing tax
benefits).
(D) Section 1400Q (relating to special rules for
use of retirement funds).
(E) Section 1400R(a) (relating to employee
retention credit for employers).
(F) Section 1400S (relating to additional tax
relief) other than subsection (d) thereof.
(G) Section 1400T (relating to special rules for
mortgage revenue bonds).
(2) Other benefits included in katrina emergency tax relief
act of 2005.--Sections 302, 303, 304, 401, and 405 of the
Katrina Emergency Tax Relief Act of 2005.
(b) Use of Amended Income Tax Returns To Take Into Account Receipt
of Certain Casualty Loss Grants by Disallowing Previously Taken
Casualty Loss Deductions.--
(1) In general.--Notwithstanding any other provision of the
Internal Revenue Code of 1986, if a taxpayer claims a deduction
for any taxable year with respect to a casualty loss to a
principal residence (within the meaning of section 121 of such
Code) resulting from the severe storms, tornados, or flooding
giving rise to any Presidential declaration described in
subsection (c)(1)(A) and in a subsequent taxable year receives
a grant under any Federal or State program as reimbursement for
such loss, such taxpayer may elect to file an amended income
tax return for the taxable year in which such deduction was
allowed (and for any taxable year to which such deduction is
carried) and reduce (but not below zero) the amount of such
deduction by the amount of such reimbursement.
(2) Time of filing amended return.--Paragraph (1) shall
apply with respect to any grant only if any amended income tax
returns with respect to such grant are filed not later than the
later of--
(A) the due date for filing the tax return for the
taxable year in which the taxpayer receives such grant,
or
(B) the date which is 1 year after the date of the
enactment of this Act.
(3) Waiver of penalties and interest.--Any underpayment of
tax resulting from the reduction under paragraph (1) of the
amount otherwise allowable as a deduction shall not be subject
to any penalty or interest under such Code if such tax is paid
not later than 1 year after the filing of the amended return to
which such reduction relates.
(c) Midwestern Disaster Area.--
(1) In general.--For purposes of this section and for
applying the substitutions described in subsections (e) and
(f), the term ``Midwestern disaster area'' means an area--
(A) with respect to which a major disaster has been
declared by the President on or after May 20, 2008, and
before August 1, 2008, under section 401 of the Robert
T. Stafford Disaster Relief and Emergency Assistance
Act by reason of severe storms, tornados, or flooding
occurring in any of the States of Arkansas, Illinois,
Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri,
Nebraska, and Wisconsin, and
(B) determined by the President to warrant
individual or individual and public assistance from the
Federal Government under such Act with respect to
damages attributable to such severe storms, tornados,
or flooding.
(2) Certain benefits available to areas eligible only for
public assistance.--For purposes of applying this section to
benefits under the following provisions, paragraph (1) shall be
applied without regard to subparagraph (B):
(A) Sections 1400Q, 1400S(b), and 1400S(d) of the
Internal Revenue Code of 1986.
(B) Sections 302, 401, and 405 of the Katrina
Emergency Tax Relief Act of 2005.
(d) References.--
(1) Area.--Any reference in such provisions to the
Hurricane Katrina disaster area or the Gulf Opportunity Zone
shall be treated as a reference to any Midwestern disaster area
and any reference to the Hurricane Katrina disaster area or the
Gulf Opportunity Zone within a State shall be treated as a
reference to all Midwestern disaster areas within the State.
(2) Items attributable to disaster.--Any reference in such
provisions to any loss, damage, or other item attributable to
Hurricane Katrina shall be treated as a reference to any loss,
damage, or other item attributable to the severe storms,
tornados, or flooding giving rise to any Presidential
declaration described in subsection (c)(1)(A).
(3) Applicable disaster date.--For purposes of applying the
substitutions described in subsections (e) and (f), the term
``applicable disaster date'' means, with respect to any
Midwestern disaster area, the date on which the severe storms,
tornados, or flooding giving rise to the Presidential
declaration described in subsection (c)(1)(A) occurred.
(e) Modifications to 1986 Code.--The following provisions of the
Internal Revenue Code of 1986 shall be applied with the following
modifications:
(1) Tax-exempt bond financing.--Section 1400N(a)--
(A) by substituting ``qualified Midwestern disaster
area bond'' for ``qualified Gulf Opportunity Zone
Bond'' each place it appears, except that in
determining whether a bond is a qualified Midwestern
disaster area bond--
(i) paragraph (2)(A)(i) shall be applied by
only treating costs as qualified project costs
if--
(I) in the case of a project
involving a private business use (as
defined in section 141(b)(6)), either
the person using the property suffered
a loss in a trade or business
attributable to the severe storms,
tornados, or flooding giving rise to
any Presidential declaration described
in subsection (c)(1)(A) or is a person
designated for purposes of this section
by the Governor of the State in which
the project is located as a person
carrying on a trade or business
replacing a trade or business with
respect to which another person
suffered such a loss, and
(II) in the case of a project
relating to public utility property,
the project involves repair or
reconstruction of public utility
property damaged by such severe storms,
tornados, or flooding, and
(ii) paragraph (2)(A)(ii) shall be applied
by treating an issue as a qualified mortgage
issue only if 95 percent or more of the net
proceeds (as defined in section 150(a)(3)) of
the issue are to be used to provide financing
for mortgagors who suffered damages to their
principal residences attributable to such
severe storms, tornados, or flooding.
(B) by substituting ``any State in which a
Midwestern disaster area is located'' for ``the State
of Alabama, Louisiana, or Mississippi'' in paragraph
(2)(B),
(C) by substituting ``designated for purposes of
this section (on the basis of providing assistance to
areas in the order in which such assistance is most
needed)'' for ``designated for purposes of this
section'' in paragraph (2)(C),
(D) by substituting ``January 1, 2013'' for
``January 1, 2011'' in paragraph (2)(D),
(E) in paragraph (3)(A)--
(i) by substituting ``$1,000'' for
``$2,500'', and
(ii) by substituting ``before the earliest
applicable disaster date for Midwestern
disaster areas within the State'' for ``before
August 28, 2005'',
(F) by substituting ``qualified Midwestern disaster
area repair or construction'' for ``qualified GO Zone
repair or construction'' each place it appears, and
(G) by substituting ``after the date of the
enactment of the Housing and Economic Recovery Act of
2008 and before January 1, 2013'' for ``after the date
of the enactment of this paragraph and before January
1, 2011'' in paragraph (7)(C).
(2) Low-income housing credit.--Section 1400N(c)--
(A) only with respect to calendar years 2009, 2010,
and 2011,
(B) by substituting ``Disaster Recovery Assistance
housing amount'' for ``Gulf Opportunity housing
amount'',
(C) in paragraph (1)(B)--
(i) by substituting ``$4.00'' for
``$18.00'', and
(ii) by substituting ``before the earliest
applicable disaster date for Midwestern
disaster areas within the State'' for ``before
August 28, 2005'' , and
(D) determined without regard to paragraphs (2),
(3), (4), (5), and (6) thereof.
(3) Special allowance for certain property acquired on or
after the applicable disaster date.--Section 1400N(d)--
(A) by substituting ``qualified Disaster Recovery
Assistance property'' for ``qualified Gulf Opportunity
Zone property'' each place it appears, except that a
taxpayer shall be allowed additional bonus depreciation
and expensing under such subsection or section 1400N(e)
with respect to such property only if--
(i) the taxpayer suffered an economic loss
attributable to the severe storms, tornados, or
flooding giving rise to any Presidential
declaration described in subsection (c)(1)(A),
and
(ii) such property--
(I) rehabilitates property damaged,
or replaces property destroyed or
condemned, as a result of such severe
storms, tornados, or flooding, except
that, for purposes of this clause,
property shall be treated as replacing
property destroyed or condemned if, as
part of an integrated plan, such
property replaces property which is
included in a continuous area which
includes real property destroyed or
condemned, and
(II) is similar in nature to, and
located in the same county as, the
property being rehabilitated or
replaced,
(B) by substituting ``the applicable disaster
date'' for ``August 28, 2005'' each place it appears,
(C) by substituting ``December 31, 2011'' for
``December 31, 2007'' in paragraph (2)(A)(v),
(D) by substituting ``December 31, 2012'' for
``December 31, 2008'' in paragraph (2)(A)(v),
(E) by substituting ``the day before the applicable
disaster date'' for ``August 27, 2005'' in paragraph
(3)(A),
(F) determined without regard to paragraph (6)
thereof, and
(G) by not including as qualified Disaster Recovery
Assistance property any property to which section
168(k) applies.
(4) Increase in expensing under section 179.--Section
1400N(e), by substituting ``qualified section 179 Disaster
Recovery Assistance property'' for ``qualified section 179 Gulf
Opportunity Zone property'' each place it appears.
(5) Expensing for certain demolition and clean-up costs.--
Section 1400N(f)--
(A) by substituting ``qualified Disaster Recovery
Assistance clean-up cost'' for ``qualified Gulf
Opportunity Zone clean-up cost'' each place it appears,
(B) by substituting ``beginning on the applicable
disaster date and ending on December 31, 2010'' for
``beginning on August 28, 2005, and ending on December
31, 2007'' in paragraph (2), and
(C) by treating costs as qualified Disaster
Recovery Assistance clean-up costs only if the removal
of debris or demolition of any structure was necessary
due to damage attributable to the severe storms,
tornados, or flooding giving rise to any Presidential
declaration described in subsection (c)(1)(A).
(6) Extension of expensing for environmental remediation
costs.--Section 1400N(g)--
(A) by substituting ``the applicable disaster
date'' for ``August 28, 2005'' each place it appears,
(B) by substituting ``January 1, 2011'' for
``January 1, 2008'' in paragraph (1),
(C) by substituting ``December 31, 2010'' for
``December 31, 2007'' in paragraph (1), and
(D) by treating a site as a qualified contaminated
site only if the release (or threat of release) or
disposal of a hazardous substance at the site was
attributable to the severe storms, tornados, or
flooding giving rise to any Presidential declaration
described in subsection (c)(1)(A).
(7) Increase in rehabilitation credit.--Section 1400N(h)--
(A) by substituting ``the applicable disaster
date'' for ``August 28, 2005'',
(B) by substituting ``January 1, 2011'' for
``January 1, 2008'' in paragraph (1), and
(C) by only applying such subsection to qualified
rehabilitation expenditures with respect to any
building or structure which was damaged or destroyed as
a result of the severe storms, tornados, or flooding
giving rise to any Presidential declaration described
in subsection (c)(1)(A).
(8) Treatment of net operating losses attributable to
disaster losses.--Section 1400N(k)--
(A) by substituting ``qualified Disaster Recovery
Assistance loss'' for ``qualified Gulf Opportunity Zone
loss'' each place it appears,
(B) by substituting ``after the day before the
applicable disaster date, and before January 1, 2011''
for ``after August 27, 2005, and before January 1,
2008'' each place it appears,
(C) by substituting ``the applicable disaster
date'' for ``August 28, 2005'' in paragraph
(2)(B)(ii)(I),
(D) by substituting ``qualified Disaster Recovery
Assistance property'' for ``qualified Gulf Opportunity
Zone property'' in paragraph (2)(B)(iv), and
(E) by substituting ``qualified Disaster Recovery
Assistance casualty loss'' for ``qualified Gulf
Opportunity Zone casualty loss'' each place it appears.
(9) Credit to holders of tax credit bonds.--Section
1400N(l)--
(A) by substituting ``Midwestern tax credit bond''
for ``Gulf tax credit bond'' each place it appears,
(B) by substituting ``any State in which a
Midwestern disaster area is located'' for ``the State
of Alabama, Louisiana, or Mississippi'' in paragraph
(4)(A)(i),
(C) by substituting ``after December 31, 2008 and
before January 1, 2010'' for ``after December 31, 2005,
and before January 1, 2007'',
(D) by substituting ``shall not exceed $100,000,000
for any State with an aggregate population located in
all Midwestern disaster areas within the State of at
least 2,000,000, $50,000,000 for any State with an
aggregate population located in all Midwestern disaster
areas within the State of at least 1,000,000 but less
than 2,000,000, and zero for any other State. The
population of a State within any area shall be
determined on the basis of the most recent census
estimate of resident population released by the Bureau
of Census before the earliest applicable disaster date
for Midwestern disaster areas within the State.'' for
``shall not exceed'' and all that follows in paragraph
(4)(C), and
(E) by substituting ``the earliest applicable
disaster date for Midwestern disaster areas within the
State'' for ``August 28, 2005'' in paragraph (5)(A).
(10) Education tax benefits.--Section 1400O, by
substituting ``2008 or 2009'' for ``2005 or 2006''.
(11) Housing tax benefits.--Section 1400P, by substituting
``the applicable disaster date'' for ``August 28, 2005'' in
subsection (c)(1).
(12) Special rules for use of retirement funds.--Section
1400Q--
(A) by substituting ``qualified Disaster Recovery
Assistance distribution'' for ``qualified hurricane
distribution'' each place it appears,
(B) by substituting ``on or after the applicable
disaster date and before January 1, 2010'' for ``on or
after August 25, 2005, and before January 1, 2007'' in
subsection (a)(4)(A)(i),
(C) by substituting ``the applicable disaster
date'' for ``August 28, 2005'' in subsections
(a)(4)(A)(i) and (c)(3)(B),
(D) by disregarding clauses (ii) and (iii) of
subsection (a)(4)(A) thereof,
(E) by substituting ``qualified storm damage
distribution'' for ``qualified Katrina distribution''
each place it appears,
(F) by substituting ``after the date which is 6
months before the applicable disaster date and before
the date which is the day after the applicable disaster
date'' for ``after February 28, 2005, and before August
29, 2005'' in subsection (b)(2)(B)(ii),
(G) by substituting ``the Midwestern disaster area,
but not so purchased or constructed on account of
severe storms, tornados, or flooding giving rise to the
designation of the area as a disaster area'' for ``the
Hurricane Katrina disaster area, but not so purchased
or constructed on account of Hurricane Katrina'' in
subsection (b)(2)(B)(iii),
(H) by substituting ``beginning on the applicable
disaster date and ending on the date which is 5 months
after the date of the enactment of the Housing and
Economic Recovery Act of 2008'' for ``beginning on
August 25, 2005, and ending on February 28, 2006'' in
subsection (b)(3)(A),
(I) by substituting ``qualified storm damage
individual'' for ``qualified Hurricane Katrina
individual'' each place it appears,
(J) by substituting ``December 31, 2009'' for
``December 31, 2006'' in subsection (c)(2)(A),
(K) by substituting ``beginning on the date of the
enactment of the Housing and Economic Recovery Act of
2008 and ending on December 31, 2009'' for ``beginning
on September 24, 2005, and ending on December 31,
2006'' in subsection (c)(4)(A)(i),
(L) by substituting ``the applicable disaster
date'' for ``August 25, 2005'' in subsection
(c)(4)(A)(ii), and
(M) by substituting ``January 1, 2010'' for
``January 1, 2007'' in subsection (d)(2)(A)(ii).
(13) Employee retention credit for employers affected by
severe storms, tornados, and flooding.--Section 1400R(a)--
(A) by substituting ``the applicable disaster
date'' for ``August 28, 2005'' each place it appears,
(B) by substituting ``January 1, 2009'' for
``January 1, 2006'' both places it appears, and
(C) only with respect to eligible employers who
employed an average of not more than 200 employees on
business days during the taxable year before the
applicable disaster date.
(14) Temporary suspension of limitations on charitable
contributions.--Section 1400S(a), by substituting the following
paragraph for paragraph (4) thereof:
``(4) Qualified contributions.--
``(A) In general.--For purposes of this subsection,
the term `qualified contribution' means any charitable
contribution (as defined in section 170(c)) if--
``(i) such contribution--
``(I) is paid during the period
beginning on the earliest applicable
disaster date for all States and ending
on December 31, 2008, in cash to an
organization described in section
170(b)(1)(A), and
``(II) is made for relief efforts
in 1 or more Midwestern disaster areas,
``(ii) the taxpayer obtains from such
organization contemporaneous written
acknowledgment (within the meaning of section
170(f)(8)) that such contribution was used (or
is to be used) for relief efforts in 1 or more
Midwestern disaster areas, and
``(iii) the taxpayer has elected the
application of this subsection with respect to
such contribution.
``(B) Exception.--Such term shall not include a
contribution by a donor if the contribution is--
``(i) to an organization described in
section 509(a)(3), or
``(ii) for establishment of a new, or
maintenance of an existing, donor advised fund
(as defined in section 4966(d)(2)).
``(C) Application of election to partnerships and s
corporations.--In the case of a partnership or S
corporation, the election under subparagraph (A)(iii)
shall be made separately by each partner or
shareholder.''.
(15) Suspension of certain limitations on personal casualty
losses.--Section 1400S(b)(1), by substituting ``the applicable
disaster date'' for ``August 25, 2005''.
(16) Special rule for determining earned income.--Section
1400S(d)--
(A) by treating an individual as a qualified
individual if such individual's principal place of
abode on the applicable disaster date was located in a
Midwestern disaster area,
(B) by treating the applicable disaster date with
respect to any such individual as the applicable date
for purposes of such subsection, and
(C) by treating an area as described in paragraph
(2)(B)(ii) thereof if the area is a Midwestern disaster
area only by reason of subsection (b)(2) of this
section (relating to areas eligible only for public
assistance).
(17) Adjustments regarding taxpayer and dependency
status.--Section 1400S(e), by substituting ``2008 or 2009'' for
``2005 or 2006''.
(f) Modifications to Katrina Emergency Tax Relief Act of 2005.--The
following provisions of the Katrina Emergency Tax Relief Act of 2005
shall be applied with the following modifications:
(1) Additional exemption for housing displaced
individual.--Section 302--
(A) by substituting ``2008 or 2009'' for ``2005 or
2006'' in subsection (a) thereof,
(B) by substituting ``Midwestern displaced
individual'' for ``Hurricane Katrina displaced
individual'' each place it appears, and
(C) by treating an area as a core disaster area for
purposes of applying subsection (c) thereof if the area
is a Midwestern disaster area without regard to
subsection (b)(2) of this section (relating to areas
eligible only for public assistance).
(2) Increase in standard mileage rate.--Section 303, by
substituting ``beginning on the applicable disaster date and
ending on December 31, 2008'' for ``beginning on August 25,
2005, and ending on December 31, 2006''.
(3) Mileage reimbursements for charitable volunteers.--
Section 304--
(A) by substituting ``beginning on the applicable
disaster date and ending on December 31, 2008'' for
``beginning on August 25, 2005, and ending on December
31, 2006'' in subsection (a), and
(B) by substituting ``the applicable disaster
date'' for ``August 25, 2005'' in subsection (a).
(4) Exclusion of certain cancellation of indebtedness
income.--Section 401--
(A) by treating an individual whose principal place
of abode on the applicable disaster date was in a
Midwestern disaster area (determined without regard to
subsection (b)(2) of this section) as an individual
described in subsection (b)(1) thereof, and by treating
an individual whose principal place of abode on the
applicable disaster date was in a Midwestern disaster
area solely by reason of subsection (b)(2) of this
section as an individual described in subsection (b)(2)
thereof,
(B) by substituting ``the applicable disaster
date'' for ``August 28, 2005'' both places it appears,
and
(C) by substituting ``January 1, 2010'' for
``January 1, 2007'' in subsection (e).
(5) Extension of replacement period for nonrecognition of
gain.--Section 405, by substituting ``on or after the
applicable disaster date'' for ``on or after August 25, 2005''.
SEC. 3. ENHANCED CHARITABLE DEDUCTIONS FOR CONTRIBUTIONS OF FOOD
INVENTORY.
(a) Increased Amount of Deduction.--
(1) In general.--Clause (iv) of section 170(e)(3)(C)
(relating to termination) of the Internal Revenue Code of 1986
is amended by striking ``December 31, 2007'' and inserting
``December 31, 2009''.
(2) Effective date.--The amendment made by this subsection
shall apply to contributions made after December 31, 2007.
(b) Temporary Suspension of Limitations on Charitable
Contributions.--
(1) In general.--Section 170(b) of such Code is amended by
adding at the end the following new paragraph:
``(3) Temporary suspension of limitations on charitable
contributions.--In the case of a qualified farmer or rancher
(as defined in paragraph (1)(E)(v)), any charitable
contribution of food--
``(A) to which subsection (e)(3)(C) applies
(without regard to clause (ii) thereof), and
``(B) which is made during the period beginning on
the date of the enactment of this paragraph and before
January 1, 2009,
shall be treated for purposes of paragraph (1)(E) or (2)(B),
whichever is applicable, as if it were a qualified conservation
contribution which is made by a qualified farmer or rancher and
which otherwise meets the requirements of such paragraph.''.
(2) Effective date.--The amendment made by this subsection
shall apply to taxable years ending after the date of the
enactment of this Act.
SEC. 4. EXTENSION OF ENHANCED CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF
BOOK INVENTORY.
(a) Extension.--Clause (iv) of section 170(e)(3)(D) of the Internal
Revenue Code of 1986 (relating to termination) of the Internal Revenue
Code of 1986 is amended by striking ``December 31, 2007'' and inserting
``December 31, 2009''.
(b) Clerical Amendment.--Clause (iii) of section 170(e)(3)(D) of
such Code (relating to certification by donee) is amended by inserting
``of books'' after ``to any contribution''.
(c) Effective Date.--The amendments made by this section shall
apply to contributions made after December 31, 2007.
SEC. 5. REPORTING REQUIREMENTS RELATING TO DISASTER RELIEF
CONTRIBUTIONS.
(a) In General.--Section 6033(b) of the Internal Revenue Code of
1986 (relating to returns of certain organizations described in section
501(c)(3)) is amended by striking ``and'' at the end of paragraph (13),
by redesignating paragraph (14) as paragraph (15), and by adding after
paragraph (13) the following new paragraph:
``(14) such information as the Secretary may require with
respect to disaster relief activities, including the amount and
use of qualified contributions to which section 1400S(a)
applies, and''.
(b) Effective Date.--The amendments made by this section shall
apply to returns the due date for which (determined without regard to
any extension) occurs after December 31, 2008.
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