113 S2634 IS: National Disaster Tax Relief Act of 2014
U.S. Senate
2014-07-22
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.
Short title; table of
contents
(a)
This Act may be cited
as the National Disaster Tax Relief Act of 2014
.
(b)
The table of contents for this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I—Tax relief relating to disasters in 2012, 2013, and 2014
Sec. 101. Expensing of qualified disaster expenses.
Sec. 102. Increased limitation on charitable contributions for disaster relief.
Sec. 103. Losses attributable to disasters in 2012, 2013, and 2014.
Sec. 104. Net operating losses attributable to disasters in 2012, 2013, and 2014.
Sec. 105. Waiver of certain mortgage revenue bond requirements following 2012, 2013, and 2014
disasters.
Sec. 106. Increased expensing and bonus depreciation for qualified disaster assistance property
following 2012, 2013, and 2014 disasters.
Sec. 107. Increase in new markets tax credit for investments in community development entities
serving 2012, 2013, and 2014 disaster areas.
Sec. 108. Special rules for use of retirement funds in connection with federally declared disasters
in 2012, 2013, or 2014.
Sec. 109. Additional exemption for housing qualified disaster displaced individuals.
Sec. 110. Exclusions of certain cancellations of indebtedness by reason of 2012, 2013, or 2014
disasters.
Sec. 111. Special rule for determining earned income of individuals affected by federally declared
disasters.
Sec. 112. Increase in rehabilitation credit for buildings in 2012, 2013, and 2014 disaster areas.
Sec. 113. Advanced refundings of certain tax-exempt bonds.
Sec. 114. Qualified disaster area recovery bonds.
Sec. 115. Additional low-income housing credit allocations.
Sec. 116. Facilitation of transfer of water leasing and water by mutual ditch or irrigation
companies in disaster areas.
TITLE II—Other disaster tax relief provisions
Sec. 201. Exclusion for disaster mitigation payments received from State and local governments.
Sec. 202. Natural disaster funds.
<enum>I</enum>
<header>Tax
relief relating to disasters in 2012, 2013, and 2014</header>
<section id="id1AAEB3979D26444B83464DF5046C8880">
<enum>101.</enum>
<header>Expensing of
qualified disaster expenses</header>
<subsection id="id939992EF7868484EBE3DA5ACBB0A7611">
<enum>(a)</enum>
<header>In
general</header>
<text><external-xref legal-doc="usc" parsable-cite="usc/26/198A">Section 198A(b)(2)</external-xref> of the Internal Revenue Code of 1986
is amended—</text>
<paragraph id="id0019AD0A6AA242D8BE6261AC0782C562">
<enum>(1)</enum>
<text>by striking
<quote>before January 1, 2010</quote> in subparagraph (A) and inserting
<quote>during the period beginning after December 31, 2007, and before January
1, 2010, or during the period beginning after December 31, 2011, and
before
January 1, 2015</quote>, and</text>
</paragraph><paragraph id="idC366585EACE3414099F11C51914A3D24">
<enum>(2)</enum>
<text>by striking
<quote>before such date</quote> each place it appears in subparagraphs (B) and
(C) and inserting <quote>during any such period</quote>.</text>
</paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="idD7CE32E2ACAD4A17B33BFF827F9D164F">
<enum>(b)</enum>
<header>Effective
date</header>
<text>The amendment made by this section shall apply to amounts
paid or incurred after December 31, 2011, in connection with disasters
declared
after such date.</text>
</subsection></section><section id="H3E405620D5FC4CD9859F134B0769F8CA">
<enum>102.</enum>
<header>Increased
limitation on charitable contributions for disaster relief</header>
<subsection id="id8CEACB7516524C15AAC12BF40E0F12F4">
<enum>(a)</enum>
<header>Individuals</header>
<text display-inline="yes-display-inline">Paragraph (1) of section 170(b) of the
Internal Revenue Code of 1986 is amended by redesignating subparagraphs
(F) and
(G) as subparagraphs (G) and (H), respectively, and by inserting after
subparagraph (E) the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="HE3E864BE255B440C9F3048587EA80050" style="OLC">
<subparagraph id="HCE2568B47E3343B9B16744D8DAF864E2">
<enum>(F)</enum>
<header>Qualified
disaster contributions</header>
<clause id="H3776246286ED49D19EDAD0D387B09379">
<enum>(i)</enum>
<header>In
general</header>
<text display-inline="yes-display-inline">Any qualified
disaster contribution shall be allowed to the extent that the
aggregate of such
contributions does not exceed the excess of 80 percent of the
taxpayer's
contribution base over the amount of all other charitable
contributions
allowable under this paragraph.</text>
</clause><clause id="idC0380CC425B54ED58F9CFBE22A855EE2">
<enum>(ii)</enum>
<header>Carryover</header>
<text>If
the aggregate amount of contributions described in clause (i)
exceeds the
limitation under clause (i), such excess shall be treated (in a
manner
consistent with the rules of subsection (d)(1)) as a charitable
contribution to
which clause (i) applies in each of the 5 succeeding years in order
of
time.</text>
</clause><clause id="idBC2AA2695C834D17AB097D14E8909DAB">
<enum>(iii)</enum>
<header>Coordination
with other subparagraphs</header>
<text>For purposes of applying this subsection
and subsection (d)(1), contributions described in clause (i) shall
not be
treated as described in subparagraph (A) and such subparagraph
shall be
applied without regard to such contributions.</text>
</clause><clause id="HD96E8E83B0CF4C68A79FAEA46512D534">
<enum>(iv)</enum>
<header>Qualified
disaster contributions</header>
<text display-inline="yes-display-inline">For
purposes of this subparagraph, the term <term>qualified disaster
contribution</term> means any charitable contribution if—</text>
<subclause id="idA087523398D648798FDDF5BFC6500D7A">
<enum>(I)</enum>
<text>such contribution
is for relief efforts related to a federally declared disaster (as
defined in
section 165(h)(3)(C)(i)),</text>
</subclause><subclause id="H2F11A49DAFE24E19AC56ED77F3997DD">
<enum>(II)</enum>
<text display-inline="yes-display-inline">such contribution is made during the period
beginning on the applicable disaster date with respect to the
disaster
described in subclause (I) and ending on December 31,
2014, and</text>
</subclause><subclause id="idC62FAB0A4EC04100A87A7DBADE9C9B1F">
<enum>(III)</enum>
<text display-inline="yes-display-inline">such contribution is made in cash to an
organization described in subparagraph (A) (other than an
organization
described in section 509(a)(3)).</text>
</subclause><continuation-text continuation-text-level="clause">Such term
shall not include a contribution if the contribution is for
establishment of a
new, or maintenance in an existing, donor advised fund (as defined
in section
4966(d)(2)).</continuation-text></clause><clause commented="no" display-inline="no-display-inline" id="id9FB8B4A679134EF9B0CD66E0CA7AA699">
<enum>(v)</enum>
<header display-inline="yes-display-inline">Applicable disaster date</header>
<text display-inline="yes-display-inline">For purposes of clause (iv)(II), the term
<term>applicable disaster date</term> means, with respect to any federally
declared disaster described in clause (iv)(I), the date on which
the disaster
giving rise to the Presidential declaration described in section
165(h)(3)(C)(i) occurred.</text>
</clause><clause id="HBE82DFD19F81423292D318F1C46398F6">
<enum>(vi)</enum>
<header>Substantiation
requirement</header>
<text display-inline="yes-display-inline">This paragraph
shall not apply to any qualified disaster contribution unless the
taxpayer
obtains from such organization to which the contribution was made a
contemporaneous written acknowledgment (within the meaning of
subsection
(f)(8)) that such contribution was used (or is to be used) for a
purpose
described in clause
(iv)(III).</text>
</clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="id444DE46FCAA744BB92B798FC594A3D89">
<enum>(b)</enum>
<header>Corporations</header>
<paragraph id="id4E5FE77DF7894CABA18407B4D7E4F82A">
<enum>(1)</enum>
<header>In
general</header>
<text>Paragraph (2) of section 170(b) of the Internal Revenue
Code of 1986 is amended by redesignating subparagraph (C) as subparagraph
(D)
and by inserting after subparagraph (B) the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="id5904A398019D4BEAB8FF878806115B89" style="OLC">
<subparagraph id="id9A093AD85C5143E1AF10D933072961C1">
<enum>(C)</enum>
<header>Qualified
disaster contributions</header>
<clause id="id44A85E0A9F0F47DBBF249887CCFB7989">
<enum>(i)</enum>
<header>In
general</header>
<text>Any qualified disaster contribution shall be allowed to
the extent that the aggregate of such contributions does not exceed
the excess
of 20 percent of the taxpayer's taxable income over the amount of
charitable
contributions allowed under subparagraph (A).</text>
</clause><clause id="idE424A709B0D44A078D9E93D51EE740E4">
<enum>(ii)</enum>
<header>Carryover</header>
<text>If
the aggregate amount of contributions described in clause (i)
exceeds the
limitation under clause (i), such excess shall be treated (in a
manner
consistent with the rules of subsection (d)(1)) as a charitable
contribution to
which clause (i) applies in each of the 5 succeeding years in order
of
time.</text>
</clause><clause id="idC15498A2F2694FAD97B56AEBB41EA521">
<enum>(iii)</enum>
<header>Qualified
disaster contribution</header>
<text>The term <term>qualified disaster
contribution</term> has the meaning given such term under paragraph
(2)(F)(iv).</text>
</clause><clause id="id7E48778295D24306BA611F2A5000C4C1">
<enum>(iv)</enum>
<header>Substantiation
requirement</header>
<text display-inline="yes-display-inline">This paragraph
shall not apply to any qualified disaster contribution unless the
taxpayer
obtains from such organization to which the contribution was made a
contemporaneous written acknowledgment (within the meaning of
subsection
(f)(8)) that such contribution was used (or is to be used) for a
purpose
described in paragraph
(1)(F)(iv)(III).</text>
</clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="id8C5D0AA96CD24F3FB9B2B4258EE50D14">
<enum>(2)</enum>
<header>Conforming
amendments</header>
<subparagraph id="id347F0E97F4104FBB9A010084CC7307EA">
<enum>(A)</enum>
<text>Subparagraph (A)
of section 170(b)(2) of such Code is amended by striking <quote>subparagraph
(B) applies</quote> and inserting <quote>subparagraphs (B) and (C)
apply</quote>.</text>
</subparagraph><subparagraph id="id6DEC6311DF87467D9C70FA8C7E7C70C1">
<enum>(B)</enum>
<text>Subparagraph (B)
of section 170(b)(2) of such Code is amended by striking <quote>subparagraph
(A)</quote> and inserting <quote>subparagraphs (A) and (C)</quote>.</text>
</subparagraph></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="HD0383368D96C40C7892B2EA3407351AB">
<enum>(c)</enum>
<header>Effective
date</header>
<text>The amendments made by this section shall apply to disasters
arising in taxable years ending after December 31, 2011.</text>
</subsection></section><section id="id7A5F2788EF174F2BB9BD7A6FF501558F">
<enum>103.</enum>
<header>Losses
attributable to disasters in 2012, 2013, and 2014</header>
<subsection id="idE03FC26C8C0F48DE99EF09C50AB8DB95">
<enum>(a)</enum>
<header>Waiver of
adjusted gross income limitation; increase in standard deduction by
disaster
casualty loss</header>
<text>Subclause (I) of section 165(h)(3)(B)(i) of the
Internal Revenue Code of 1986 is amended by striking <quote>before January 1,
2010</quote> and inserting <quote>during the period beginning after December
31, 2007, and before January 1, 2010, or during the period beginning after
December 31, 2011, and before January 1, 2015</quote>.</text>
</subsection><subsection id="idC4E8E7803DA74948A9DD416EE6861AF2">
<enum>(b)</enum>
<header>Loss allowed
whether or not individual itemized deductions</header>
<text>Section 62(a) of
the Internal Revenue Code of 1986 is amended by inserting after paragraph
(21)
the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="id4A7E9F9584724E149E9675D5CD117384" style="OLC">
<paragraph id="id11D40C8AAD624EED938BDF2D55A6AC02">
<enum>(22)</enum>
<header>Disaster
casualty losses</header>
<text>Any net disaster loss (as defined in section
165(h)(3)(B)).</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="idF5F4CBEE52FB4D09BD45FEEC519506A4">
<enum>(c)</enum>
<header>Technical
amendment</header>
<text>Clause (i) of section 165(h)(3)(C) of the Internal
Revenue Code of 1986 is amended by inserting <quote>major</quote> after
<quote>means any</quote>.</text>
</subsection><subsection id="idA34897A535F44F0983ED42943F324A34">
<enum>(d)</enum>
<header>Effective
date</header>
<text>The amendments made by this section shall apply to disasters
declared in taxable years beginning after December 31, 2011.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="idF724DA653F3B4B74AFB829606766F5D2">
<enum>(e)</enum>
<header display-inline="yes-display-inline">Use of amended income tax returns To take
into account receipt of certain casualty loss grants by disallowing
previously
taken casualty loss deductions</header>
<paragraph commented="no" display-inline="no-display-inline" id="id70DE57E109B44FCEBF7B7A07638B1FDE">
<enum>(1)</enum>
<header display-inline="yes-display-inline">In general</header>
<text display-inline="yes-display-inline">Notwithstanding any other provision of the
Internal Revenue Code of 1986, if a taxpayer—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="id2CC5B67DBFD8479C9396220B91D75D6B">
<enum>(A)</enum>
<text display-inline="yes-display-inline">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 any federally declared
disaster (as defined in section 165(h)(3)(C) of such Code) occurring
during the period beginning after
December 31, 2011, and before January 1, 2015, and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id313EE43D50254585ABC4197030285CA2">
<enum>(B)</enum>
<text display-inline="yes-display-inline">in a
subsequent taxable year receives a grant under any Federal or State
program as
reimbursement for such loss,</text>
</subparagraph><continuation-text continuation-text-level="paragraph">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.</continuation-text></paragraph><paragraph commented="no" display-inline="no-display-inline" id="id72574BC28C9E4014B41039BFEC778FF9">
<enum>(2)</enum>
<header display-inline="yes-display-inline">Time of filing amended return</header>
<text display-inline="yes-display-inline">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—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="idC303A85A2D6D42B4A9978DB52F74AB28">
<enum>(A)</enum>
<text display-inline="yes-display-inline">the due date for filing the tax return for
the taxable year in which the taxpayer receives such grant, or</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id84F51BC3BE5046A5B3A9CF6EB71E67F2">
<enum>(B)</enum>
<text display-inline="yes-display-inline">the date which is 1 year after the date of
the enactment of this Act.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="idF0B087632C2041048D908E240E7736BB">
<enum>(3)</enum>
<header display-inline="yes-display-inline">Waiver of penalties and
interest</header>
<text display-inline="yes-display-inline">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.</text>
</paragraph></subsection></section><section id="id4A4D4EE672B6464991BB5A19F6C3463C">
<enum>104.</enum>
<header>Net operating
losses attributable to disasters in 2012, 2013, and 2014</header>
<subsection id="id4BF188A84ED5490DB1C92DC555ED1DC2">
<enum>(a)</enum>
<header>In
general</header>
<text>Subclause (I) of section 172(j)(1)(A)(i) of the Internal
Revenue Code of 1986 is amended by striking <quote>before January 1,
2010</quote> and inserting <quote>during the period beginning after December
31, 2007, and before January 1, 2010, or during the period beginning after
December 31, 2011, and before January 1, 2015</quote>.</text>
</subsection><subsection id="idEBB936ACD00E45AD9BFE54051D2CC7B7">
<enum>(b)</enum>
<header>Effective
date</header>
<text>The amendments made by this section shall apply to losses
arising in taxable years beginning after December 31, 2011, in connection
with
disasters declared after such date.</text>
</subsection></section><section id="idC9E0D4C5817B43FB8446B9DBA9CAEB9D">
<enum>105.</enum>
<header>Waiver of
certain mortgage revenue bond requirements following 2012, 2013, and 2014
disasters</header>
<subsection id="idB92F1FB99C294FC0A4F09C4633EE316B">
<enum>(a)</enum>
<header>In
general</header>
<text><external-xref legal-doc="usc" parsable-cite="usc/26/143">Section 143(k)</external-xref> of the Internal Revenue Code of 1986 is
amended—</text>
<paragraph id="idDBDB578F65F543248DF8A7CE6CCE463D">
<enum>(1)</enum>
<text>by redesignating
paragraph (12), as added by section 709(a) of the Tax Extenders and
Alternative
Minimum Tax Relief Act of 2008, as paragraph (13), and</text>
</paragraph><paragraph id="idDC60A59B3D3C430FA333DDA18C158A07">
<enum>(2)</enum>
<text>by striking
<quote>before January 1, 2010</quote> in subparagraphs (A)(i) and (B)(i) of
such paragraph and inserting <quote>during the period beginning after December
31, 2007, and before January 1, 2010, or during the period beginning after
December 31, 2011, and before January 1, 2015</quote>.</text>
</paragraph></subsection><subsection id="idF124B19A0C384630835244070FD74ED1">
<enum>(b)</enum>
<header>Effective
date</header>
<text>The amendments made by this section shall apply to disasters
occurring after December 31, 2011.</text>
</subsection></section><section commented="no" id="idF4979F8252BD4320A60B629887500E7B">
<enum>106.</enum>
<header>Increased
expensing and bonus depreciation for qualified disaster assistance
property
following 2012, 2013, and 2014 disasters</header>
<subsection commented="no" id="idBB682429D1D644789AFDD0D0DF1BF820">
<enum>(a)</enum>
<header>In
general</header>
<text>Subclause (I) of section 168(n)(2)(A)(ii) of the Internal
Revenue Code of 1986 is amended by striking <quote>before January 1,
2010</quote> and inserting <quote>during the period beginning after December
31, 2007, and before January 1, 2010, or during the period beginning after
December 31, 2011, and before January 1, 2015</quote>.</text>
</subsection><subsection commented="no" id="idCBE026EC785E41C2ACD8CD142F246D33">
<enum>(b)</enum>
<header>Removal of
exclusion</header>
<text>Section 168(n)(2)(B)(i) of such Code is amended by
inserting <quote>and</quote> at the end of subclause (I), by striking <quote>,
and</quote> at the end of subclause (II) and inserting a period, and by
striking subclause (III).</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="idE90FEDD28C0B49D3B41F82E735EE75B4">
<enum>(c)</enum>
<header>Effective
date</header>
<text>The amendments made by this section shall apply to property
placed in service after December 31, 2011, with respect to disasters
declared
after such date.</text>
</subsection></section><section id="id95E2F94CF3EE4251824CAC50BB76501F">
<enum>107.</enum>
<header>Increase in
new markets tax credit for investments in community development entities
serving 2012, 2013, and 2014 disaster areas</header>
<subsection id="idD6F1A336C7ED409A925522586E791FBB">
<enum>(a)</enum>
<header>In
general</header>
<text>Subsection (f) of section 45D of the Internal Revenue
Code of 1986 is amended by adding at the end the following new
paragraph:</text>
<quoted-block display-inline="no-display-inline" id="idD5C06D0477E0423B8755BCA5ECABD0D3" style="OLC">
<paragraph id="id42A60494517D40CBB485233BE6B7E492">
<enum>(4)</enum>
<header>Increased
special allocation for community development entities serving 2012,
2013,
and 2014
disaster areas</header>
<subparagraph id="idAF747D2F4DD941B8AF37E12ACED55B63">
<enum>(A)</enum>
<header>In
general</header>
<text>In the case of each calendar year which begins after 2012
and before 2017, the new markets tax credit limitation shall be
increased by an
amount equal to $500,000,000, to be allocated among qualified
community
development entities to make qualified low-income community
investments within
any 2012, 2013, or 2014 federally declared disaster area.</text>
</subparagraph><subparagraph id="id144E941E205C474ABAB9505FF36FEAB7">
<enum>(B)</enum>
<header>Allocation of
increase</header>
<text>The amount of the increase in limitation under
subparagraph (A) shall be allocated by the Secretary under
paragraph (2) to
qualified community development entities and shall give priority to
such
entities with a record of having successfully provided capital or
technical
assistance to businesses or communities within any 2012, 2013, or
2014
federally
declared disaster area or areas for which the allocation is
requested.</text>
</subparagraph><subparagraph id="idA10C3F1AE06B4899BBF2592ABA26183E">
<enum>(C)</enum>
<header>Application of
carryforward</header>
<text>Paragraph (3) shall be applied separately with
respect to the amount of any increase under subparagraph (A).</text>
</subparagraph><subparagraph commented="no" id="idA796A3FD9FD14426A5F419569DCA3918">
<enum>(D)</enum>
<header>2012, 2013, or 2014
federally declared disaster area</header>
<text>For purposes of this paragraph,
the term <term>2012, 2013, or 2014 federally declared disaster area</term> means any
disaster area resulting from any federally declared disaster
occurring after
December 31, 2011, and before January 1, 2015. For purposes of the
preceding
sentence, the terms <term>federally declared disaster</term> and <term>disaster
area</term> have the meanings given such terms in section
165(h)(3).</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id3A38F85048B84F9EA01E4BD6B3912E76">
<enum>(b)</enum>
<header>Effective
date</header>
<text>The amendments made by this section shall apply to calendar
years beginning after 2012.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="id7C37E8EEF3F94970A20DDF9D2404EB4E">
<enum>108.</enum>
<header>Special rules
for use of retirement funds in connection with federally declared
disasters in
2012, 2013, or 2014</header>
<subsection id="P59B20DA79D6A4A81A2EDB70893A900F9">
<enum>(a)</enum>
<header>Tax-Favored
withdrawals from retirement plans</header>
<paragraph id="id5BC3307BA2CC4382980E25DC9705194C">
<enum>(1)</enum>
<header>In
general</header>
<text>Paragraph (2) of section 72(t) of the Internal Revenue
Code of 1986 is amended by adding at the end the following new
subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="id2DD115B2464B49859831D5A0B1919E52" style="OLC">
<subparagraph id="id374A813CDD384964B730F0DB135EAF29">
<enum>(H)</enum>
<header>Distributions
from retirement plans in connection with federally declared
disasters during
2012, 2013, and 2014</header>
<text>Any qualified 2012, 2013, or 2014 disaster recovery
distribution.</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="id603E8A56DC6248F0B114A0F10E67075E">
<enum>(2)</enum>
<header>Qualified
disaster recovery distribution</header>
<text>Section 72(t) of such Code is
amended by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="id21282558E9BB41578F24B15A7927B7F5" style="OLC">
<paragraph id="id614C4E5F0F214ACF9A95C3AF4A6FF60C">
<enum>(11)</enum>
<header>Qualified 2012, 2013,
or 2014 disaster recovery distribution</header>
<text>For purposes of paragraph
(2)(H)—</text>
<subparagraph id="id3F1747FA00EE4C01B3B2797CE2C44699">
<enum>(A)</enum>
<header>In
general</header>
<text>Except as provided in subparagraph (B), the term
<term>qualified 2012, 2013, or 2014 disaster recovery distribution</term> means, with respect to
any federally declared disaster occurring during 2012, 2013, or
2014, any
distribution
from an eligible retirement plan made on or after the applicable
disaster date
and before January 1, 2016, to an individual
whose principal place of abode on the applicable disaster date, is
located in
the disaster area and who has sustained an economic loss by reason
of such
federally declared disaster.</text>
</subparagraph><subparagraph id="PE85FA2421C424F16A3723217AF76D4FC">
<enum>(B)</enum>
<header>Dollar
limitation</header>
<clause id="P33E837610458414FA0F400C9F3860106">
<enum>(i)</enum>
<header>In
general</header>
<text>For purposes of this subsection, the aggregate amount of
distributions received by an individual with respect to any
federally declared disaster occurring during 2012, 2013,
or 2014 shall not exceed
$100,000.</text>
</clause><clause id="P41E57BC4F8B748929460FAB99EF17AD5">
<enum>(ii)</enum>
<header>Treatment of
plan distributions</header>
<text>If a distribution to an individual would
(without regard to clause (i)) be a qualified 2012, 2013, or 2014
disaster
recovery
distribution, a plan shall not be treated as violating any
requirement of this
title merely because the plan treats such distribution as a
qualified 2012, 2013, or
2014 disaster recovery distribution, unless the aggregate amount of
such
distributions from all plans maintained by the employer (and any
member of any
controlled group which includes the employer) to such individual
with respect to any federally declared disaster occurring during 2012,
2013,
or 2014 exceeds
$100,000.</text>
</clause><clause id="P6A7BE3EDE3EB49AB9BC7CD4F99D9C782">
<enum>(iii)</enum>
<header>Controlled
group</header>
<text>For purposes of clause (ii), the term <term>controlled
group</term> means any group treated as a single employer under subsection (b),
(c), (m), or (o) of section 414.</text>
</clause></subparagraph><subparagraph id="P7CBD8443873747F8B041589DC124A213">
<enum>(C)</enum>
<header>Amount
distributed may be repaid</header>
<clause id="PEDFE2D495D5341538B666033F87462B6">
<enum>(i)</enum>
<header>In
general</header>
<text>Any individual who receives a qualified 2012, 2013, or 2014
disaster recovery distribution may, at any time during the 3-year
period
beginning on the day after the date on which such distribution was
received,
make one or more contributions in an aggregate amount not to exceed
the amount
of such distribution to an eligible retirement plan 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),
as the case may be.</text>
</clause><clause id="P526C3B98C8BD4707BCFDFA0949766144">
<enum>(ii)</enum>
<header>Treatment of
repayments of distributions from eligible retirement plans other
than
iras</header>
<text>For purposes of this title, if a contribution is made
pursuant to clause (i) with respect to a qualified 2012, 2013, or
2014
disaster
recovery distribution from an eligible retirement plan 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 2012,
2013, or
2014 disaster
recovery 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>
</clause><clause id="P1C9A2ED481894465B54DC31BD374B361">
<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 clause (i) with
respect to a
qualified 2012, 2013, or 2014 disaster recovery distribution from
an
individual
retirement plan (as defined by section 7701(a)(37)), then, to the
extent of the
amount of the contribution, the qualified 2012, 2013, or 2014
disaster
recovery
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>
</clause></subparagraph><subparagraph id="P85A95E41B6364A168D1FA354395C4D35">
<enum>(D)</enum>
<header>Income inclusion
spread over 3-year period</header>
<clause id="P594938FB303347BA83EF2681852253D1">
<enum>(i)</enum>
<header>In
general</header>
<text>In the case of any qualified 2012, 2013, or 2014 disaster
recovery distribution, unless the taxpayer elects not to have this
paragraph
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>
</clause><clause commented="no" display-inline="no-display-inline" id="P7FD14A8D979247BFB797E415E6041078">
<enum>(ii)</enum>
<header>Special
rule</header>
<text>For purposes of clause (i), rules similar to the rules of
subparagraph (E) of section 408A(d)(3) shall apply.</text>
</clause></subparagraph><subparagraph id="P4A2433994C6047A7BAA1B7382E6D74F4">
<enum>(E)</enum>
<header>Other
definitions</header>
<clause id="id1042668CD6D743E6ACAD1970A4C31EED">
<enum>(i)</enum>
<header>Federally
declared disaster; disaster area</header>
<text>The terms <term>federally
declared disaster</term> and <term>disaster area</term> have the meanings given
such terms under section 165(h)(3)(C).</text>
</clause><clause id="id00696BCF262247F79BF73F0E52798D73">
<enum>(ii)</enum>
<header>Applicable
disaster date</header>
<text>The term <term>applicable disaster date</term>
means, with respect to any federally declared disaster, the date on
which such
federally declared disaster occurs.</text>
</clause><clause id="PCAB7EDF67F814B74B7A0D50A12255CA4">
<enum>(iii)</enum>
<header>Eligible
retirement plan</header>
<text>The term <term>eligible retirement plan</term>
shall have the meaning given such term by section 402(c)(8)(B).</text>
</clause></subparagraph><subparagraph id="P82F1F83C56D84B39A860BE0E75016844">
<enum>(F)</enum>
<header>Special
rules</header>
<clause id="P91E762C62BAC4754939A968F1404EC44">
<enum>(i)</enum>
<header>Exemption of
distributions from trustee to trustee transfer and withholding
rules</header>
<text>For purposes of sections 401(a)(31), 402(f), and 3405,
qualified 2012 or 2013 disaster recovery distributions shall not be
treated as
eligible rollover distributions.</text>
</clause><clause id="PE918AF93A6224571A1820D945F36CB27">
<enum>(ii)</enum>
<header>Qualified 2012, 2013,
or 2014 disaster recovery distributions treated as meeting plan
distribution
requirements</header>
<text>For purposes of this title, a qualified 2012, 2013, or 2014
disaster recovery distribution shall be treated as meeting the
requirements of
sections 401(k)(2)(B)(i), 403(b)(7)(A)(ii), 403(b)(11), and
457(d)(1)(A).</text>
</clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="id2627C1E015CE441CBC49579E38A0B093">
<enum>(3)</enum>
<header>Effective
date</header>
<text>The amendments made by this subsection shall apply to
distributions with respect to disaster declared after December 31, 2011.</text>
</paragraph></subsection><subsection id="P3FCC7670CD5B4EB193ADE176C1B71753">
<enum>(b)</enum>
<header>Loans from
qualified plans</header>
<paragraph id="idF573E5EC84D040DE99806EC7F92C4804">
<enum>(1)</enum>
<header>In
general</header>
<text>Subsection (p) of section 72 of the Internal Revenue Code
of 1986 is amended by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="id8CE4870C501041B9B664776C5FEE7673" style="OLC">
<paragraph id="PF53ABAE2FB7749A1B1B4E09ADEA90D59">
<enum>(6)</enum>
<header>Increase in
limit on loans not treated as distributions with respect to 2012,
2013,
and 2014
disasters</header>
<subparagraph id="id676AC08A031A4E74B0CC62D8F053108A">
<enum>(A)</enum>
<header>In
general</header>
<text>In the case of any loan from a qualified employer plan to
a qualified individual made during the applicable period—</text>
<clause id="P7139AEAD5C024159BD25A655851B59BA">
<enum>(i)</enum>
<text>clause (i) of
paragraph (2)(A) shall be applied by substituting <quote>$100,000</quote> for
<quote>$50,000</quote>, and</text>
</clause><clause id="P9A64D56C7DFE448E93474117B81C748B">
<enum>(ii)</enum>
<text>clause (ii) of
such paragraph 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>
</clause></subparagraph><subparagraph id="P79AF90412BB345B5B77F227A6DF3555B">
<enum>(B)</enum>
<header>Delay of
repayment</header>
<text>In the case of a qualified individual with an
outstanding loan on or after the applicable disaster date from a
qualified
employer plan—</text>
<clause id="PFA7EADC61A8B4815A4404053B3087B92">
<enum>(i)</enum>
<text>if
the due date pursuant to subparagraph (B) or (C) of paragraph (2)
for any
repayment with respect to such loan occurs during the period
beginning on the
applicable disaster date and ending on December 31,
2014, such due date shall be delayed for 1 year,</text>
</clause><clause id="PD10F71344B4B423484290886D0FE6B26">
<enum>(ii)</enum>
<text>any subsequent
repayments with respect to any such loan shall be appropriately
adjusted to
reflect the delay in the due date under clause (i) and any interest
accruing
during such delay, and</text>
</clause><clause id="P6834848590F14C7CB7F4618933D47743">
<enum>(iii)</enum>
<text>in determining
the 5-year period and the term of a loan under subparagraph (B) or
(C) of
paragraph (2), the period described in clause (i) shall be
disregarded.</text>
</clause></subparagraph><subparagraph id="idAF763A447F734B2E87683CA5AE96B1CE">
<enum>(C)</enum>
<header>Definitions</header>
<text>For
purposes of this paragraph—</text>
<clause id="PBF6104DFF9E34DDFB6780447D33AE0AF">
<enum>(i)</enum>
<header>Qualified
individual</header>
<text>The term <term>qualified individual</term> means, with
respect to any federally declared disaster occurring during 2012,
2013, or
2014, an
individual whose principal place of abode on the applicable
disaster date is
located in the disaster area and who has sustained an economic loss
by reason
of such federally declared disaster.</text>
</clause><clause id="PDD73AAADB19845E7A2202D8B4F430EDC">
<enum>(ii)</enum>
<header>Applicable
period</header>
<text>The applicable period is the period beginning on the
applicable disaster date and ending on December 31,
2014.</text>
</clause><clause id="idD1D193DD54D54433BEFCE714A4165309">
<enum>(iii)</enum>
<header>Federally
declared disaster; disaster area</header>
<text>The terms <term>federally
declared disaster</term> and <term>disaster area</term> have the meanings given
such terms under section 165(h)(3)(C).</text>
</clause><clause id="id3963DC4AA3394B908EF1CC0C4A855226">
<enum>(iv)</enum>
<header>Applicable
disaster date</header>
<text>The term <term>applicable disaster date</term>
means, with respect to any federally declared disaster, the date on
which such
federally declared disaster
occurs.</text>
</clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="id4798464A8425491BB801509530C1F9E7">
<enum>(2)</enum>
<header>Effective
date</header>
<text>The amendment made by this subsection shall apply to loans
made with respect to disaster declared after December 31, 2011.</text>
</paragraph></subsection><subsection id="PD8AB782063FE44D79A0A0679C3548F51">
<enum>(c)</enum>
<header>Provisions
relating to plan amendments</header>
<paragraph id="P6CAA29CD75B6409EBAA03531730F3FFE">
<enum>(1)</enum>
<header>In
general</header>
<text>If this subsection applies to any amendment to any plan
or annuity contract, such plan or contract shall be treated as being
operated
in accordance with the terms of the plan during the period described in
paragraph (2)(B)(i).</text>
</paragraph><paragraph id="PFD08529D796B43F79F5B9CCF9355E4D6">
<enum>(2)</enum>
<header>Amendments to
which subsection applies</header>
<subparagraph id="P94EDE66E6C214C39AFAD5CA8001E962F">
<enum>(A)</enum>
<header>In
general</header>
<text>This subsection shall apply to any amendment to any plan
or annuity contract which is made—</text>
<clause id="PEABBDD6DD3F34DEEB258AB93E01E8468">
<enum>(i)</enum>
<text>pursuant to any
provision of, or amendment made by, this section, or pursuant to any
regulation
issued by the Secretary or the Secretary of Labor under any provision of,
or
amendment made by, this section, and</text>
</clause><clause id="PB7FA8E234DA745FC90717CE0AC4073E7">
<enum>(ii)</enum>
<text>on
or before the last day of the first plan year beginning on or after
January 1,
2015, or such later date as the Secretary may prescribe.</text>
</clause><continuation-text continuation-text-level="subparagraph">In the
case of a governmental plan (as defined in section 414(d)), clause (ii)
shall
be applied by substituting the date which is 2 years after the date
otherwise
applied under clause (ii).</continuation-text></subparagraph><subparagraph id="PFC602AB10A9441D283C898C6E2600BB7">
<enum>(B)</enum>
<header>Conditions</header>
<text>This
subsection shall not apply to any amendment unless—</text>
<clause id="P6D83C7639AEE404BB6AAA68A9C2BA474">
<enum>(i)</enum>
<text>during the
period—</text>
<subclause id="P657429A749E9470E8DEFE81C264EE1E6">
<enum>(I)</enum>
<text>beginning on the
date that the provisions of, and amendments made by, this section or the
regulation described in subparagraph (A)(i) takes effect (or in the case
of a
plan or contract amendment not required by the provisions of, or
amendments
made by, this section or such regulation, the effective date specified by
the
plan), and</text>
</subclause><subclause id="PD1F5D75FCDF946F38D6C24C9088BBADF">
<enum>(II)</enum>
<text>ending on the
date described in subparagraph (A)(ii) (or, if earlier, the date the plan
or
contract amendment is adopted),</text>
</subclause><continuation-text continuation-text-level="clause">the plan
or contract is operated as if such plan or contract amendment were in
effect;
and</continuation-text></clause><clause id="PB4D71CC3A3834D568BAE4E2938B64617">
<enum>(ii)</enum>
<text>such plan or
contract amendment applies retroactively for such period.</text>
</clause></subparagraph></paragraph></subsection></section><section id="IDE0BAAC82812E4DB98F6D89A258372D6D">
<enum>109.</enum>
<header>Additional
exemption for housing qualified disaster displaced individuals</header>
<subsection id="idCFA8151519694A629B89291AD5615560">
<enum>(a)</enum>
<header>In
general</header>
<text><external-xref legal-doc="usc" parsable-cite="usc/26/151">Section 151</external-xref> of the Internal Revenue Code of 1986 is
amended by adding at the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="id328FF052CF6B4C03BEAAC2900BBFF905" style="OLC">
<subsection id="id724897A92E0F4E0BA4227DB535D6B809">
<enum>(g)</enum>
<header>Additional
exemption for certain disaster-Displaced individuals</header>
<paragraph id="id34096D670D1643D3BAC5A2790484F9DD">
<enum>(1)</enum>
<header>In
general</header>
<text>In the case of any taxable year beginning in
2012, 2013, or 2014, there shall be allowed an
exemption of $500 for each qualified disaster-displaced individual
with respect
to the taxpayer for the taxable year.</text>
</paragraph><paragraph id="id835C05007CB14A51BB438AF5783BB956">
<enum>(2)</enum>
<header>Limitations</header>
<subparagraph id="idEAF8B2A9EC0E48FF8638CA1B47959555">
<enum>(A)</enum>
<header>Dollar
limitation</header>
<text>The exemption under paragraph (1) shall not exceed
$2,000, reduced by the amount of the exemption under this
subsection for all
prior taxable years.</text>
</subparagraph><subparagraph id="idB2D5C8ABD45A4A5D878322D77E0D8BE1">
<enum>(B)</enum>
<header>Individuals
taken into account only once</header>
<text>An individual shall not be taken
into account under paragraph (1) if such individual was taken into
account
under this subsection by the taxpayer for any prior taxable year.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idA2506A70740D481C905ECD5FAC4C6FD0">
<enum>(C)</enum>
<header>Identifying
information required</header>
<text>An individual shall not be taken into
account under paragraph (1) for a taxable year unless the taxpayer
identification number of such individual is included on the return
of the
taxpayer for such taxable year.</text>
</subparagraph></paragraph><paragraph id="idCD05543D46EB4EBE8A2F49F8E91E2CEB">
<enum>(3)</enum>
<header>Qualified
disaster-displaced individual</header>
<subparagraph id="id46B29C3297DB4904868E0418ECC44647">
<enum>(A)</enum>
<header>In
general</header>
<text>For purposes of this subsection, the term <term>qualified
disaster-displaced individual</term> means, with respect to any taxpayer for
any taxable year, any qualified individual if such individual 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.
Such term shall not include the spouse or any dependent of the
taxpayer.</text>
</subparagraph><subparagraph id="id4DB010F4C38A4084BA1C010A0BA349B1">
<enum>(B)</enum>
<header>Qualified
individual</header>
<text display-inline="yes-display-inline">The term
<term>qualified individual</term> means any individual who—</text>
<clause id="id724049A6FB1147E89062DA5563209E69">
<enum>(i)</enum>
<text display-inline="yes-display-inline">on the date of a federally declared
disaster occurring during 2012, 2013, or 2014 maintained such
individual's
principal
place of abode in the disaster area declared with respect to such
disaster,
and</text>
</clause><clause id="idC8F8ACDDA1E14029A697BA5909A03CB6">
<enum>(ii)</enum>
<text display-inline="yes-display-inline">was displaced from such principal place of
abode by reason of the federally declared disaster.</text>
</clause><continuation-text continuation-text-level="subparagraph">For
purposes of the preceding sentence, the terms <term>federally declared
disaster</term> and <term>disaster area</term> have the meanings given such
terms in section 165(h)(3).</continuation-text></subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="id50D795E731C944988A5DB72E576E5F11">
<enum>(4)</enum>
<header>Compensation
for housing</header>
<text>No deduction shall be allowed under this subsection
if the taxpayer receives any rent or other amount (from any source)
in
connection with the providing of such
housing.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="id5094BAEFC2B441FB9FC214D0E2D7AFDC">
<enum>(b)</enum>
<header>Effective
date</header>
<text>The amendment made by this section shall apply to taxable
years beginning after December 31,
2011.</text>
</subsection></section><section id="ID994D83B87044418C97355806D49A5605">
<enum>110.</enum>
<header>Exclusions of
certain cancellations of indebtedness by reason of 2012, 2013, or 2014
disasters</header>
<subsection id="id015346B147954A0BB7574971E83C90C2">
<enum>(a)</enum>
<header>In
general</header>
<text><external-xref legal-doc="usc" parsable-cite="usc/26/108">Section 108</external-xref> of the Internal Revenue Code of 1986 is
amended by adding at the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="id4D541E5EA6B04897A4D6B05A058932EB" style="OLC">
<subsection id="id33FAEC16AC1D4BE0A73F6241EDF5789B">
<enum>(j)</enum>
<header>Discharge of
indebtedness for individuals affected by 2012, 2013, and 2014
disasters</header>
<paragraph id="ID9E99A038CC164D308ECF1CA9AFCDD6CF">
<enum>(1)</enum>
<header>In
general</header>
<text>Except as provided in paragraph (2), gross income shall
not include any amount which (but for this subsection) would be
includible in
gross income by reason of any discharge (in whole or in part) of
indebtedness
of a natural person described in paragraph (3) by an applicable
entity (as
defined in section 6050P(c)(1)) during the applicable period.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id079F0A9B4D164FDE972244DE4D073DB8">
<enum>(2)</enum>
<header display-inline="yes-display-inline">Exceptions for business
indebtedness</header>
<text display-inline="yes-display-inline">Paragraph (1)
shall not apply to any indebtedness incurred in connection with a
trade or
business.</text>
</paragraph><paragraph id="IDAAB86E3C5C04459995FFC9A51CC5DE90">
<enum>(3)</enum>
<header>Persons
described</header>
<text>A natural person is described in this paragraph if the
principal place of abode of such person on the applicable disaster
date was
located in the disaster area with respect to any federally declared
disaster
occurring during 2012, 2013, or 2014.</text>
</paragraph><paragraph id="idB05A32B1BDCB44C38D22E00AF5228D19">
<enum>(4)</enum>
<header>Applicable
period</header>
<text>For purposes of this subsection, the term <term>applicable
period</term> means the period beginning on the applicable disaster date and
ending on the date which is 14 months after such
date.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="id03BD6A58E1C54809B31B5E099C4A1491">
<enum>(5)</enum>
<header>Other
definitions</header>
<text>For purposes of this subsection—</text>
<subparagraph id="id16463C05DCEC48EA827CBCFB5AC6D4E1">
<enum>(A)</enum>
<header>Federally
declared disaster; disaster area</header>
<text>The terms <term>federally
declared disaster</term> and <term>disaster area</term> have the meanings given
such terms under section 165(h)(3)(C).</text>
</subparagraph><subparagraph id="id17DB99C52BDE41BEB70722B0EB45FBE1">
<enum>(B)</enum>
<header>Applicable
disaster date</header>
<text>The term <term>applicable disaster date</term>
means, with respect to any federally declared disaster, the date on
which such
federally declared disaster
occurs.</text>
</subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="ID64D85F1ADECA49829CFA7197551DF4BB">
<enum>(b)</enum>
<header>Effective
date</header>
<text>This section shall apply to discharges made on or after
December 31, 2011.</text>
</subsection></section><section id="id4F7D623459CC4D948B2A269298F77C41">
<enum>111.</enum>
<header>Special rule
for determining earned income of individuals affected by federally
declared
disasters</header>
<subsection id="id6257B337484A4237BE5D384C4DA79CD4">
<enum>(a)</enum>
<header>In
general</header>
<text><external-xref legal-doc="usc" parsable-cite="usc/26/32">Section 32</external-xref> of the Internal Revenue Code of 1986 is
amended by adding at the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="idE6DB642E457A4DD59D8C563C1D7405D5" style="OLC">
<subsection id="id31029F3D4A4E4C7EADAEE372B74BF7ED">
<enum>(n)</enum>
<header>Special rule
for determining earned income of taxpayers affected by federally
declared
disasters</header>
<paragraph id="IDa739590b61d247cf86fa7a7142e13ef5">
<enum>(1)</enum>
<header>In
general</header>
<text>In the case of a qualified individual with respect to any
federally declared disaster occurring during 2012, 2013, or 2014,
if the
earned income
of the taxpayer for the taxable year which includes the applicable
disaster
date is less than the earned income of the taxpayer for the
preceding taxable
year, the credit allowed under this section and section 24(d) may,
at the
election of the taxpayer, be determined by substituting—</text>
<subparagraph id="IDfcbbbb81371f49a79ba0dd15336680d7">
<enum>(A)</enum>
<text>such earned
income for the preceding taxable year, for</text>
</subparagraph><subparagraph id="ID34674ff509b74aa9ad2ba9c1dc0979e6">
<enum>(B)</enum>
<text>such earned
income for the taxable year which includes the applicable date.</text>
</subparagraph></paragraph><paragraph id="ID435573f713e5466d93658b7696833f19">
<enum>(2)</enum>
<header>Qualified
individual</header>
<text>For purposes of this subsection, the term
<term>qualified individual</term> means, with respect to any federally declared
disaster occurring during 2012, 2013, or 2014, any individual
whose
principal place of
abode on the applicable disaster date, was located—</text>
<subparagraph commented="no" id="IDe7b036b6a30b4b47b4a30412b8f1852e">
<enum>(A)</enum>
<text>in any portion of
a disaster area determined by the President to warrant individual
or individual
and public assistance under the Robert T. Stafford Disaster Relief
and
Emergency Assistance Act by reason of the federally declared
disaster,
or</text>
</subparagraph><subparagraph commented="no" id="ID628baf65063044e3a21781eafbb1855c">
<enum>(B)</enum>
<text>in any portion of
the disaster area not described in subparagraph (A) and such
individual was
displaced from such principal place of abode by reason of the
federally
declared disaster.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="idBFFF05EC231142449F098DDC370CFB62">
<enum>(3)</enum>
<header>Other
definitions</header>
<text>For purposes of this paragraph—</text>
<subparagraph id="idEA402DEFDA944D5A9187A9FC37DF7723">
<enum>(A)</enum>
<header>Federally
declared disaster; disaster area</header>
<text>The terms <term>federally
declared disaster</term> and <term>disaster area</term> have the meanings given
such terms under section 165(h)(3)(C).</text>
</subparagraph><subparagraph id="id68D95FA443054F6B8557367D6AA26C36">
<enum>(B)</enum>
<header>Applicable
disaster date</header>
<text>The term <term>applicable disaster date</term>
means, with respect to any federally declared disaster, the date on
which such
federally declared disaster occurs.</text>
</subparagraph></paragraph><paragraph id="IDe42beb0404344e318bb3e91b4039ff1a">
<enum>(4)</enum>
<header>Special
rules</header>
<subparagraph id="ID95257051c90647e0a8bc023332323f07">
<enum>(A)</enum>
<header>Application to
joint returns</header>
<text>For purposes of paragraph (1), in the case of a
joint return for a taxable year which includes the disaster date—</text>
<clause id="IDbbca0abf6636458a8cb55cfba013167c">
<enum>(i)</enum>
<text>such paragraph
shall apply if either spouse is a qualified individual, and</text>
</clause><clause id="ID1ad8df329c14485c9998af0663b0e01b">
<enum>(ii)</enum>
<text>the earned
income of the taxpayer for the preceding taxable year shall be the
sum of the
earned income of each spouse for such preceding taxable year.</text>
</clause></subparagraph><subparagraph id="ID09bbcb2e573c46c680805c7ef3e8c3f1">
<enum>(B)</enum>
<header>Uniform
application of election</header>
<text>Any election made under paragraph (1)
shall apply with respect to both sections 24(d) and this section.</text>
</subparagraph><subparagraph id="IDe0cd2ef0f94942dc9b1bd51437788aba">
<enum>(C)</enum>
<header>Errors treated
as mathematical error</header>
<text>For purposes of section 6213, an incorrect
use on a return of earned income pursuant to paragraph (1) shall be
treated as
a mathematical or clerical error.</text>
</subparagraph><subparagraph id="ID6f8b96c08ef54018a39c0c9bff1b1c41">
<enum>(D)</enum>
<header>No effect on
determination of gross income, etc</header>
<text>Except as otherwise provided
in this subsection, this title shall be applied without regard to
any
substitution under paragraph
(1).</text>
</subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="id102A2A72C4824617AF44C0A75B355E04">
<enum>(b)</enum>
<header>Child tax
credit</header>
<text><external-xref legal-doc="usc" parsable-cite="usc/26/24">Section 24(d)</external-xref> of the Internal Revenue Code of 1986 is amended by
adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="id28D9B72C863348E0BF1C58C97A581B17" style="OLC">
<paragraph id="idEEB6D4AAD5824C5EA7F2D3EB714826DA">
<enum>(5)</enum>
<header>Special rule
for determining earned income of taxpayers affected by federally
declared
disasters</header>
<text>For election by qualified individuals with respect to
certain federally declared disasters to substitute earned income
from the
preceding taxable year, see section
32(n).</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id6DC2C368CD7044288582D7CEAADC3087">
<enum>(c)</enum>
<header>Effective
date</header>
<text>The amendments made by this section shall apply to taxable
years beginning after December 31, 2011.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="id11A04EB29C80409182DBFE265E9CFFFF">
<enum>112.</enum>
<header>Increase in
rehabilitation credit for buildings in 2012, 2013, and 2014 disaster
areas</header>
<subsection commented="no" display-inline="no-display-inline" id="id682363FE0D334C44B8A0486ABA2C04BD">
<enum>(a)</enum>
<header>In
general</header>
<text><external-xref legal-doc="usc" parsable-cite="usc/26/47">Section 47</external-xref> of the Internal Revenue Code of 1986 is
amended by adding at the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="id98521AB7FA1E41C99D54409B7DB1FA82" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="id220BAB4C2889435FBE0DC938F958A6BC">
<enum>(e)</enum>
<header>Special rule
for expenditures made in connection with certain disasters</header>
<paragraph commented="no" display-inline="no-display-inline" id="idC731588D5AB84D2C853166AA3F0DBC9F">
<enum>(1)</enum>
<header>In
general</header>
<text>In the case of qualified rehabilitation expenditures paid
or incurred during the applicable period with respect to any
qualified
rehabilitated building or certified historic structure located in a
disaster
area with respect to any federally declared disaster occurring in
2012, 2013, or 2014,
subsection (a) shall be applied—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="idC927C1E4A16944CF96D305E770BD2705">
<enum>(A)</enum>
<text>by substituting
<quote>13 percent</quote> for <quote>10 percent</quote> in paragraph (1)
thereof, and</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id939B2DDB31B54633AA3F04F40E7CB7B7">
<enum>(B)</enum>
<text>by substituting
<quote>26 percent</quote> for <quote>20 percent</quote> in paragraph (2)
thereof.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="id9AEAD7F2FEE049B5967E31DD7B9CDD95">
<enum>(2)</enum>
<header>Definitions</header>
<text>For
purposes of this subsection—</text>
<subparagraph id="idBBEEAA4D60FC43E3BA992726C694090A">
<enum>(A)</enum>
<header>Federally
declared disaster; disaster area</header>
<text>The terms <term>federally
declared disaster</term> and <term>disaster area</term> have the meanings given
such terms under section 165(h)(3)(C).</text>
</subparagraph><subparagraph id="id4A1FA1447AC04CDFB7F2444310E8DF65">
<enum>(B)</enum>
<header>Applicable
period</header>
<text>The term <term>applicable period</term> means the period
beginning on the applicable disaster date and ending on
December 31, 2015.</text>
</subparagraph><subparagraph id="id54537B1FBB64447F804659B58E9AC9C7">
<enum>(C)</enum>
<header>Applicable
disaster date</header>
<text>The term <term>applicable disaster date</term>
means, with respect to any federally declared disaster, the date on
which such
federally declared disaster
occurs.</text>
</subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id0C2A57FAC3634A5590D04BB42F90049F">
<enum>(b)</enum>
<header>Effective
date</header>
<text>The amendments made by this section shall apply to amounts
paid or incurred after December 31, 2011.</text>
</subsection></section><section commented="no" display-inline="no-display-inline" id="id082F01A9A14C4F7097E84D29BFDE396B">
<enum>113.</enum>
<header>Advanced
refundings of certain tax-exempt bonds</header>
<subsection commented="no" display-inline="no-display-inline" id="idD7A1B415A007485FB94AE476E977F4FE">
<enum>(a)</enum>
<header>In
general</header>
<text display-inline="yes-display-inline">Section 149(d) of the
Internal Revenue Code of 1986 is amended by redesignating paragraph (7) as
paragraph (8) and by inserting after paragraph (6) the following new
paragraph:</text>
<quoted-block display-inline="no-display-inline" id="id7581D00A6B1843D687A2EFB2302FC7FD" style="OLC">
<paragraph commented="no" display-inline="no-display-inline" id="idAA1E28F0A269425ABB20823A2366CFF6">
<enum>(7)</enum>
<header>Special rule
with respect to certain natural disasters</header>
<subparagraph id="id45a9380881bb46d881770db38799022d">
<enum>(A)</enum>
<header>In
general</header>
<text>With respect to a bond described in subparagraph (C), one
additional advance refunding after the date of the enactment of
this paragraph and before January 1, 2018, shall be allowed under the
rules of this subsection
if—</text>
<clause id="idb010059a19054bbbbd4131e60acd56da">
<enum>(i)</enum>
<text>the Governor of
the State designates the advance refunding bond for purposes of
this
subsection, and</text>
</clause><clause id="idcc6ff50f76704e6e856ae138b0005bc1">
<enum>(ii)</enum>
<text>the requirements
of subparagraph (E) are met.</text>
</clause></subparagraph><subparagraph id="idc2a1a4fa84c141cabfc9674ffa05d182">
<enum>(B)</enum>
<header>Certain private
activity bonds</header>
<text>With respect to a bond described in subparagraph
(C) which is an exempt facility bond described in paragraph (1) or
(2) of
section 142(a), one advance refunding after the date of the
enactment of this paragraph and before January 1, 2018, shall be allowed
under the applicable rules of this
subsection (notwithstanding paragraph (2) thereof) if the
requirements of
clauses (i) and (ii) of subparagraph (A) are met.</text>
</subparagraph><subparagraph id="idb17d49db45d54a3b867bbb23229cb727">
<enum>(C)</enum>
<header>Bonds
described</header>
<text>A bond is described in this paragraph if, with respect
to any federally declared disaster, such bond—</text>
<clause id="id3FF8294AE5334E91B9C6FAB522BACCD4">
<enum>(i)</enum>
<text>was outstanding
on the applicable disaster date, and</text>
</clause><clause id="id7723BD88B4104BA789DE4AE922F6D604">
<enum>(ii)</enum>
<text>is issued by an
applicable State or a political subdivision thereof.</text>
</clause></subparagraph><subparagraph id="id9dc722a820ac463c93c16e4da716bdf0">
<enum>(D)</enum>
<header>Aggregate
limit</header>
<text>The maximum aggregate face amount of bonds which may be
designated under this subsection by the Governor of a State shall
not exceed
$4,500,000,000.</text>
</subparagraph><subparagraph id="id888b5ae6ba01475b9ac0c5c432d3d347">
<enum>(E)</enum>
<header>Additional
requirements</header>
<text>The requirements of this subparagraph are met with
respect to any advance refunding of a bond described in
subparagraph (C)
if—</text>
<clause id="id1f99eba7f17b4beba11529d6b498a2fd">
<enum>(i)</enum>
<text>no advance
refundings of such bond would be allowed under this title on or
after the
applicable disaster date,</text>
</clause><clause id="id72980191d14b4ca8a0d5a149ae6b5a24">
<enum>(ii)</enum>
<text>the advance
refunding bond is the only other outstanding bond with respect to
the refunded
bond, and</text>
</clause><clause id="id40ab8145dd1b4a6287ce82984a22e94a">
<enum>(iii)</enum>
<text>the
requirements of section 148 are met with respect to all bonds
issued under this
paragraph.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="id7CAD83C3FD7E4017866772F57922425F">
<enum>(F)</enum>
<header>Definitions</header>
<text>For
purposes of this subsection—</text>
<clause id="id0D3B9C91182A4A86B1E762B094A384C0">
<enum>(i)</enum>
<header>Federally
declared disaster; disaster area</header>
<text>The terms <term>federally
declared disaster</term> and <term>disaster area</term> have the meanings given
such terms under section 165(h)(3)(C).</text>
</clause><clause id="idCEDDFCE211824279A30869C8656F4B8C">
<enum>(ii)</enum>
<header>Applicable
disaster date</header>
<text>The term <term>applicable disaster date</term>
means, with respect to any federally declared disaster, the date on
which such
federally declared disaster occurs.</text>
</clause><clause id="id2CD65A2C8A614A27A97B0A6CF06A8173">
<enum>(iii)</enum>
<header>Applicable
State</header>
<text>The term <term>applicable State</term> means, with respect
to any federally declared disaster, any State in which a portion of
the
disaster area is located.</text>
</clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection></section><section commented="no" id="H3643EAE038704984BE8BB64339EB4559">
<enum>114.</enum>
<header>Qualified disaster area recovery bonds</header>
<subsection id="H71B5E9892B254A9F8EF8914EC393C9B6">
<enum>(a)</enum>
<header>In
general</header>
<text display-inline="yes-display-inline">Subpart A of part IV
of subchapter B of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/1">chapter 1</external-xref> of the Internal Revenue Code of 1986 is
amended by inserting after section 146 the
following new section:</text>
<quoted-block display-inline="no-display-inline" id="HC017316CD1BE401DA2D9A67AD4A2E774" style="OLC">
<section id="id346DE10096A944F8B0F7A86EBAAA3D4A">
<enum>146A.</enum>
<header>Qualified disaster area recovery bonds</header>
<subsection id="HCB3B944B6F934533B0E32176F0C0948A">
<enum>(a)</enum>
<header>In
general</header>
<text>For purposes of this title, any qualified disaster area recovery bond shall—</text>
<paragraph id="HAE87D6673AF54CDF8A6CC227033D0F3A">
<enum>(1)</enum>
<text>be treated as an
exempt facility bond, and</text>
</paragraph><paragraph id="H1D0176F6DA7042A298AA9F30F25034A4">
<enum>(2)</enum>
<text>not be subject to
section 146.</text>
</paragraph></subsection><subsection id="H9FED58E766E44C6C9C5A623FE0C1CA48">
<enum>(b)</enum>
<header>Qualified
disaster area recovery bond</header>
<text>For purposes of this section, the term
<term>qualified disaster area recovery bond</term> means any bond issued as part of an
issue if—</text>
<paragraph id="H739E5429A6574909BF1C3516B4F50FC2">
<enum>(1)</enum>
<text>95 percent or more
of the net proceeds of such issue are to be used for qualified
project
costs,</text>
</paragraph><paragraph id="H0553F42938364201BFA0EBCD476929A4">
<enum>(2)</enum>
<text>such bond is
issued by a State or any political subdivision thereof any part of
which is in
a qualified disaster area,</text>
</paragraph><paragraph id="HEFD5EAFCADA6472891D2BC78799BBEEF">
<enum>(3)</enum>
<text>the Governor of
the issuing State designates such bond for purposes of this
section, and</text>
</paragraph><paragraph id="H1A8A3E39C52141FFB9616FD39F90ED67">
<enum>(4)</enum>
<text>such bond is
issued after the date of the enactment of this section and before
January 1,
2017.</text>
</paragraph></subsection><subsection commented="no" id="HD40E3D3D3D324267BB9E1D71513A1EE3">
<enum>(c)</enum>
<header>Limitation on
amount of bonds</header>
<paragraph commented="no" id="HD88E62E2741F46DCB4A1525F6167B741">
<enum>(1)</enum>
<header>In
general</header>
<text>The maximum aggregate face amount of bonds which may be
designated under this section by any State shall not exceed
$10,000,000,000.</text>
</paragraph><paragraph commented="no" id="H56AF5864B2F443289F52CD2EEBBB6385">
<enum>(2)</enum>
<header>Movable
property</header>
<text display-inline="yes-display-inline">No bonds shall be
issued which are to be used for movable fixtures and equipment.</text>
</paragraph><paragraph commented="no" id="H083094E1E51B4EECAB6785EC70130B87">
<enum>(3)</enum>
<header>Treatment of
current refunding bonds</header>
<text>Paragraph (1) shall not apply to any bond
(or series of bonds) issued to refund a qualified disaster area
recovery bond,
if—</text>
<subparagraph commented="no" id="HE07C7556385444B0A49C176C548624E7">
<enum>(A)</enum>
<text>the average
maturity date of the issue of which the refunding bond is a part is
not later
than the average maturity date of the bonds to be refunded by such
issue,</text>
</subparagraph><subparagraph commented="no" id="HBFC4577A7FFC4824AA790DE24F069ACE">
<enum>(B)</enum>
<text>the amount of the
refunding bond does not exceed the outstanding amount of the
refunded bond,
and</text>
</subparagraph><subparagraph commented="no" id="H0AF28536AB154023B414AA8F3B0669DC">
<enum>(C)</enum>
<text>the net proceeds
of the refunding bond are used to redeem the refunded bond not
later than 90
days after the date of the issuance of the refunding bond.</text>
</subparagraph><continuation-text commented="no" continuation-text-level="paragraph">For purposes of subparagraph (A),
average maturity shall be determined in accordance with section
147(b)(2)(A).</continuation-text></paragraph></subsection><subsection id="H27291F8C64C841339A8351522CB34CEE">
<enum>(d)</enum>
<header>Qualified
project costs</header>
<text>For purposes of this section, the term
<term>qualified project costs</term> means the cost of acquisition,
construction, reconstruction, and renovation of—</text>
<paragraph commented="no" id="H61E075D88B7A492A87FBE7F814A4E90E">
<enum>(1)</enum>
<text display-inline="yes-display-inline">residential rental property (as defined in
section 142(d)),</text>
</paragraph><paragraph id="HB152843F2CAE49949A55AADB53E92E37">
<enum>(2)</enum>
<text display-inline="yes-display-inline">nonresidential real property (including
fixed improvements associated with such property),</text>
</paragraph><paragraph id="HD9C4DF0151504F35A8C093E9AF1C0852">
<enum>(3)</enum>
<text>a facility
described in paragraph (2) or (3) of section 142(a), or</text>
</paragraph><paragraph id="HF599110D42BF43C587F908BE5110DC04">
<enum>(4)</enum>
<text display-inline="yes-display-inline">public utility property (as defined in
section 168(i)(10)),</text>
</paragraph><continuation-text continuation-text-level="subsection">which is
located in a qualified disaster area and was damaged or destroyed
by
reason of a federally declared disaster.</continuation-text></subsection><subsection id="H85A44407D688484BA86CD2A82F73D95C">
<enum>(e)</enum>
<header>Special
rules</header>
<text>In applying this title to any qualified disaster area recovery bond, the following modifications
shall apply:</text>
<paragraph id="H9A6CAFFEBC024B5E91FF48D9C9665922">
<enum>(1)</enum>
<text>Section 147(d)
(relating to acquisition of existing property not permitted) shall
be applied
by substituting <quote>50 percent</quote> for <quote>15 percent</quote> each
place it appears.</text>
</paragraph><paragraph id="H3898F19F036546E2A81000CCAAB9A061">
<enum>(2)</enum>
<text>Section
148(f)(4)(C) (relating to exception from rebate for certain
proceeds to be used
to finance construction expenditures) shall apply to the available
construction
proceeds of bonds issued under this section. For purposes of the
preceding
sentence, the following spending requirements shall apply in lieu
of the
requirements in clause (ii) of such section:</text>
<subparagraph id="H693C81286DCB427AB275CEFEE3005634">
<enum>(A)</enum>
<text>40 percent of such
available construction proceeds are spent for the governmental
purposes of the
issue within the 2-year period beginning on the date the bonds are
issued,</text>
</subparagraph><subparagraph id="HFAA05B8BC478439EA8AD797F15C2B795">
<enum>(B)</enum>
<text display-inline="yes-display-inline">60 percent of such proceeds are spent for
such purposes within the 3-year period beginning on such date,</text>
</subparagraph><subparagraph id="HF51FC987D6034C00867C6915DFFEF233">
<enum>(C)</enum>
<text display-inline="yes-display-inline">80 percent of such proceeds are spent for
such purposes within the 4-year period beginning on such date, and</text>
</subparagraph><subparagraph id="H93B9BC956A144643853DD773AA2B83D7">
<enum>(D)</enum>
<text display-inline="yes-display-inline">100 percent of such proceeds are spent for
such purposes within the 5-year period beginning on such date.</text>
</subparagraph></paragraph><paragraph id="H4A8CB0B8828E48589A1FE03CDDA6F693">
<enum>(3)</enum>
<text>Repayments of
principal on financing provided by the issue—</text>
<subparagraph id="H87A19AF7F2C144A393ADC15F679FE6D4">
<enum>(A)</enum>
<text>may not be used to
provide financing, and</text>
</subparagraph><subparagraph id="H6909BD54D5AD4D36A75F24B82EE4E015">
<enum>(B)</enum>
<text>must be used not
later than the close of the 1st semiannual period beginning after
the date of
the repayment to redeem bonds which are part of such issue.</text>
</subparagraph><continuation-text continuation-text-level="paragraph">The
requirement of subparagraph (B) shall be treated as met with
respect to amounts
received within 5 years after the date of issuance of the issue
(or, in the
case of a refunding bond, the date of issuance of the original
bond) if such
amounts are used by the close of such 5 years to redeem bonds which
are part of
such issue.</continuation-text></paragraph><paragraph id="H1626CD9F46C84AAA89E17D492AA01CF8">
<enum>(4)</enum>
<text>Section 57(a)(5)
shall not apply.</text>
</paragraph></subsection><subsection id="H86FF0F05207B4E739D3E3DEBC8953258">
<enum>(f)</enum>
<header>Separate issue
treatment of portions of an issue</header>
<text>This section shall not apply to
the portion of an issue which (if issued as a separate issue) would
be treated
as a qualified bond or as a bond that is not a private activity
bond
(determined without regard to paragraph (1)), if the issuer elects
to so treat
such portion.</text>
</subsection><subsection id="H6732F5DF9A814E73B2AB050F5AEDD297">
<enum>(g)</enum>
<header>Qualified disaster area; federally declared disaster</header>
<paragraph id="id1E9A34C6BC1748B7A529BBE09BCC053C">
<enum>(1)</enum>
<header>Qualified disaster area</header>
<text display-inline="yes-display-inline">The term <term>qualified disaster area</term> means any area determined 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 a federally declared disaster
occurring during the period beginning after December 31, 2011, and before
January 1, 2015.</text>
</paragraph><paragraph id="idB13EE6E6A391456D804EACB40CFD4F68">
<enum>(2)</enum>
<header>Federally declared disaster</header>
<text display-inline="yes-display-inline">The term <term>federally declared disaster</term> has the meaning given to such term under section
165(h)(3)(C).</text>
</paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H1B44EBD948F846158171B89AD1234B0A">
<enum>(b)</enum>
<header>Clerical
amendment</header>
<text>The table of sections for subpart A of part IV of
subchapter B of chapter 1 of such Code is amended by inserting after the
item relating to
section 146 the following new item:</text>
<quoted-block id="id1fd54345-6378-4f12-abd7-36ffed7ea38d" style="OLC">
<toc>
<toc-entry idref="id346DE10096A944F8B0F7A86EBAAA3D4A" level="section">Sec. 146A. Qualified disaster area recovery bonds.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="H9BAD190FD54F4119BE0272B835160EFC">
<enum>(c)</enum>
<header>Effective
date</header>
<text>The amendments made by this section shall apply to
obligations issued after the date of the enactment of this Act.</text>
</subsection></section><section commented="no" id="HFC4263B4389D4318A979EE9EE7F9EF19">
<enum>115.</enum>
<header>Additional
low-income housing credit allocations</header>
<subsection commented="no" id="H38D49F48D0904408AF65393B65B7BCC0">
<enum>(a)</enum>
<header>In
general</header>
<text>Paragraph (3) of <external-xref legal-doc="usc" parsable-cite="usc/26/42">section 42(h)</external-xref> of the Internal Revenue Code of 1986 (relating to limitation on
aggregate credit allowable with respect to projects located in a State) is
amended by adding at the end the following new subparagraph:</text>
<quoted-block id="H880A9144234F43DC98941DD9076A6EB6" style="OLC">
<subparagraph commented="no" id="HEAE850057C0047E7B06D0BB4E1180658">
<enum>(J)</enum>
<header>Increase in
State housing credit for States damaged by natural disasters</header>
<clause commented="no" id="H22095E675BF947FCBE4298597AD6C9AE">
<enum>(i)</enum>
<header>In
general</header>
<text>In the case of calendar year 2015, the State housing
credit ceiling of each State any portion of which includes any
portion of a qualifying disaster area shall be increased by so much of the
aggregate
housing credit dollar amount as does not exceed the applicable
limitation
allocated by the State housing credit agency of such State for such
calendar
year to buildings located in qualifying disaster areas.</text>
</clause><clause commented="no" id="H6494A357FCF44BD4BD616E75E3394683">
<enum>(ii)</enum>
<header>Applicable
limitation</header>
<text>For purposes of clause (i), the applicable limitation
is the greater of—</text>
<subclause commented="no" id="H514CC6DA761C47C2AD32DBFFD70F7C3E">
<enum>(I)</enum>
<text>$8 multiplied by
the population of the qualifying disaster areas in such State, or</text>
</subclause><subclause commented="no" id="HFCEC891F72864567A4F44D43BDC033E9">
<enum>(II)</enum>
<text>50 percent of the
State housing credit ceiling (determined without regard to this
subparagraph)
for 2014.</text>
</subclause></clause><clause commented="no" id="HF71B0805882F4683A4A9D0B88C9875C3">
<enum>(iii)</enum>
<header>Applicable
percentage</header>
<text>For purposes of this section, the applicable
percentage with respect to any building to which amounts allocated
under clause
(i) shall be determined under subsection (b)(2), except that
subparagraph (A)
thereof shall be applied by substituting <quote>January 1, 2015</quote> for
<quote>January 1, 2014</quote>.</text>
</clause><clause commented="no" id="HE7802DDF38A8444F9B3F58C04BA53CF7">
<enum>(iv)</enum>
<header>Allocations
treated as made first from additional allocation amount for
purposes of
determining carryover</header>
<text>For purposes of determining the unused
State housing credit ceiling under subparagraph (C) for any
calendar year, any
increase in the State housing credit ceiling under clause (i) shall
be treated
as an amount described in clause (ii) of such subparagraph.</text>
</clause><clause commented="no" id="HB7572A586896413E9D4C8F5A58102A84">
<enum>(v)</enum>
<header>Qualifying disaster area</header>
<text>For purposes of this subparagraph, the term <term>qualifying federally declared disaster area</term> means—</text>
<subclause commented="no" id="id83387f0fcf034df7b3d5826477dccc06">
<enum>(I)</enum>
<text>each county which is determined to warrant individual or individual and public assistance from the
Federal Government under a qualifying natural disaster declaration
described in clause (vi)(I), and</text>
</subclause><subclause commented="no" id="id0cbc3a4a9c754cfca0d3f602680a0c9e">
<enum>(II)</enum>
<text>each county not described in subclause (I) which is included in the geographical area covered by a
qualifying natural disaster declaration described in subclause (II) or
(III) of clause (vi).</text>
</subclause></clause><clause commented="no" id="id716332ab1b2f47408c63f3ec1981a551">
<enum>(vi)</enum>
<header>Qualifying natural disaster declaration</header>
<text>For purposes of clause (v), the term <term>qualifying natural disaster declaration</term> means—</text>
<subclause commented="no" id="id7002bd15f0604478a9bbc14ab9fc7269">
<enum>(I)</enum>
<text>a federally declared disaster (as defined in section 165(h)(3)(C)) occurring during the period
beginning after December 31, 2011, and before January 1, 2015,</text>
</subclause><subclause commented="no" id="id90d6ce1f8e1b46cfbba66aa20bc4be99">
<enum>(II)</enum>
<text>a natural disaster declared by the Secretary of Agriculture in 2011 due to damaging weather and
other conditions relating to Hurricane Irene or Tropical Storm Lee under
section 321(a) of the Consolidated Farm and Rural Development Act (7
U.S.C. 1961(a)), or</text>
</subclause><subclause commented="no" id="id3b363779ae744e07bc67ea887918a4c1">
<enum>(III)</enum>
<text>a major disaster or emergency designated by the President in 2011 due to damaging weather and other
conditions relating to Hurricane Irene or Tropical Storm Lee under the
Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C.
5121 et seq.).</text>
</subclause></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="H091BDD4CD3914C7D9CFF8A76C8D9231B">
<enum>(b)</enum>
<header>Effective
date</header>
<text>The amendment made by this section shall take effect on the
date of the enactment of this Act.</text>
</subsection></section><section commented="no" id="id5957870CCCA94B33ABFFFCC8B90EC198">
<enum>116.</enum>
<header>Facilitation of transfer of water
leasing and water by mutual ditch or irrigation companies in disaster
areas</header>
<subsection commented="no" id="H3DEC90019EF34F08BF5218CFD2C5C33E">
<enum>(a)</enum>
<header>In
general</header>
<text>Paragraph (12) of section 501(c) of the Internal Revenue
Code of 1986 is amended by adding at the end the following new
subparagraph:</text>
<quoted-block id="H2EEF3CB77ADD4BB5A2A0D58BB5D6F5E6" style="OLC">
<subparagraph commented="no" id="H8350207D21364282940A692FAEF2E5E3">
<enum>(I)</enum>
<header>Treatment of
mutual ditch or irrigation companies in certain disaster areas</header>
<clause commented="no" id="H87B75919D5364A4AA8DD85780AD7E120">
<enum>(i)</enum>
<header>In
general</header>
<text>In the case of a qualified mutual ditch or irrigation company or
like organization, subparagraph (A) shall be applied without taking
into
account any income received or accrued during the applicable
period—</text>
<subclause commented="no" id="HE23689130849475CA48A30A5AED8EFD4">
<enum>(I)</enum>
<text>from the sale,
lease, or exchange of fee or other interests in real property,
including
interests in water,</text>
</subclause><subclause commented="no" id="HCF3431B5D5744AFBBC6D8F7898D34422">
<enum>(II)</enum>
<text>from the sale or
exchange of stock in a mutual ditch or irrigation company or like
organization
or contract rights for the delivery or use of water,</text>
</subclause><subclause commented="no" id="HE722D51073A849B79EE56D9A0974D68E">
<enum>(III)</enum>
<text>from the
investment of proceeds from sales, leases, or exchanges under
subclauses (I)
and (II), or</text>
</subclause><subclause commented="no" id="idC8FCAFF0A7AD4C80B096FE67A3C41EFA">
<enum>(IV)</enum>
<text>from the United States, or a State or local government, resulting from the federally declared
disaster,</text>
</subclause><continuation-text commented="no" continuation-text-level="clause">except that
any income received under subclause (I), (II), (III), or (IV) which
is
distributed or
expended for expenses (other than for operations, maintenance, and
capital
improvements) of the qualified mutual ditch or irrigation company
or like
organization
shall be treated as nonmember income in the year in which it is
distributed or
expended.</continuation-text></clause><clause commented="no" id="H4D976FD653EC41A9BDEB6B2ABEAA9EEA">
<enum>(ii)</enum>
<header>Qualified mutual ditch or irrigation company or like organization</header>
<text>For purposes of this paragraph—</text>
<subclause commented="no" id="id01AABDD3E77A43C1BB3A1F8FBB4A82CC">
<enum>(I)</enum>
<header>In general</header>
<text>The term <term>qualified mutual ditch or irrigation company or like organization</term> means any mutual ditch or irrigation company or like organization to a mutual ditch or irrigation
company that diverted, delivered,
transported, stored, or used its water for agricultural irrigation
purposes on its own or through its shareholders in a qualified disaster
area during 2012, 2013, or 2014.</text>
</subclause><subclause commented="no" id="id3F28D25EC47F4190AB9431C3E644CFB6">
<enum>(II)</enum>
<header>Qualified asset</header>
<text>The term <term>qualified asset</term> means any real property or tangible personal property used in the mutual ditch or irrigation
company's (or like organization's) system.</text>
</subclause><subclause commented="no" id="idE7D1DE28642E4B27AABC10B93F4395EC">
<enum>(III)</enum>
<header>Multiple areas</header>
<text>Under regulations, if the qualified assets of any mutual ditch or irrigation company or like
organization are located in more than 1 qualified disaster area, all such
areas shall be treated as 1 area and if more than 1 federally declared
disaster is involved, the date on which the last of such disasters
occurred shall be the date used for purposes of this paragraph.</text>
</subclause></clause><clause commented="no" id="id105FD60BA3C04D8A9E4BAAA31230C4E9">
<enum>(iii)</enum>
<header>Applicable period</header>
<text>For purposes of this paragraph, the term <term>applicable period</term> means the taxable year in which the federally declared disaster occurred and the 5 following
taxable
years.</text>
</clause><clause commented="no" id="idD9C136C9C4114AB0998A6E094ED6BE28">
<enum>(iv)</enum>
<header>Other definitions</header>
<subclause id="id686932D052A5467BBA0CCC9E0B23CC9F">
<enum>(I)</enum>
<header>Qualified disaster area</header>
<text display-inline="yes-display-inline">The term <term>qualified disaster area</term> means any area determined 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 a federally declared disaster
occurring during the period beginning on January 1, 2012, and ending on
December 31, 2014.</text>
</subclause><subclause id="id4E95CAEA7917415D8BBC1D81D7AFE526">
<enum>(II)</enum>
<header>Federally declared disaster</header>
<text display-inline="yes-display-inline">The term <term>federally declared disaster</term> has the meaning given to such term under section
165(h)(3)(C).</text>
</subclause></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="HF198D3DF87DB43F78E5CD2419797B9D3">
<enum>(b)</enum>
<header>Effective
date</header>
<text>The amendment made by subsection (a) shall apply to taxable
years ending after December 31, 2011.</text>
</subsection></section>
<enum>II</enum>
<header>Other disaster
tax relief provisions</header>
<section id="id17E43D222D2E4E078F7F63E5EBB904C2">
<enum>201.</enum>
<header>Exclusion for
disaster mitigation payments received from State and local governments</header>
<subsection commented="no" id="id97FCDF7FD8034651B9FDEE741CF6AC25">
<enum>(a)</enum>
<header>In
general</header>
<text display-inline="yes-display-inline">Paragraph (2) of
<external-xref legal-doc="usc" parsable-cite="usc/26/139">section 139(g)</external-xref> of the Internal Revenue Code of 1986 is amended by
inserting
<quote>, or any other amount which is paid by a State or local government or
agency or instrumentality thereof,</quote> after <quote>(as in effect on such
date)</quote>.</text>
</subsection><subsection commented="no" display-inline="no-display-inline" id="id08864902E81C4F34917C565E65C9AED3">
<enum>(b)</enum>
<header>Effective
date</header>
<text>The amendment made by this section shall apply to payments
received after the date of the enactment of this Act.</text>
</subsection></section><section id="id7d6d60edee8745ae9c1a018ab46505ff">
<enum>202.</enum>
<header>Natural
disaster funds</header>
<subsection id="id3f7d6af385f0426693b81e88997f0dac">
<enum>(a)</enum>
<header>Natural
disaster fund</header>
<text>Subpart C of part II of subchapter E of chapter 1
of the Internal Revenue Code of 1986 is amended by inserting after section
468B
the following new section:</text>
<quoted-block display-inline="no-display-inline" id="ideac400104d4e4659a905da9fc0613507" style="OLC">
<section id="idb33eb0f55c934ffd83ebdd4c86fa8a85">
<enum>468C.</enum>
<header>Special rules
for natural disaster funds</header>
<subsection id="id4d751d7d328a4e5bb527ef98ad305af7">
<enum>(a)</enum>
<header>In
general</header>
<text>If a qualified taxpayer elects the application of this section,
there shall be allowed as a deduction for any taxable year the
amount of
payments made by the taxpayer to a natural disaster fund during
such taxable
year.</text>
</subsection><subsection id="id9cc1c774096447b99703b8df3e9e1c25">
<enum>(b)</enum>
<header>Natural
disaster fund</header>
<text>The term <term>natural disaster fund</term> means a
fund meeting the following requirements:</text>
<paragraph id="idb75ca3d0751c43eda283b8c4f25ed36a">
<enum>(1)</enum>
<header>Designation</header>
<text>The
taxpayer designates—</text>
<subparagraph id="id664272f5dd69437493b39805858e1c67">
<enum>(A)</enum>
<text>the fund as a
natural disaster fund in the manner prescribed by the Secretary,
and</text>
</subparagraph><subparagraph id="id48a4246984d34d53a247a96120175d66">
<enum>(B)</enum>
<text>the line or lines
of business to which the fund applies.</text>
</subparagraph></paragraph><paragraph id="idb51b36db05a94ab7b4216b3ea5de8b3d">
<enum>(2)</enum>
<header>Segregation</header>
<text>The
assets of the fund are segregated from other assets of the
taxpayer.</text>
</paragraph><paragraph id="id71ebfc86ca414420b4100285cf6cf749">
<enum>(3)</enum>
<header>Investments</header>
<subparagraph id="id4f670590d6664bd69ea9386f64abf987">
<enum>(A)</enum>
<text>The assets of the
fund are maintained in one or more qualified accounts and are
invested only
in—</text>
<clause id="idf0873dfab62041fab13bc6f63e0883e0">
<enum>(i)</enum>
<text>deposits with
banks whose deposits are insured subject to applicable limits by
the Federal
Deposit Insurance Corporation, or</text>
</clause><clause id="id3e64f03dd17b4f76b249c0c3fc7500e2">
<enum>(ii)</enum>
<text>in stock or
other securities in which the fund would be permitted to invest if
it were a
capital construction fund subject to the investment limitations of
paragraphs
(2) and (3) of section 7518(b)(2).</text>
</clause></subparagraph><subparagraph id="id212ee66ce2554fb5befe44646b42ca84">
<enum>(B)</enum>
<text>All investment
earnings (including gains and losses) from investments of the fund
become part
of the fund.</text>
</subparagraph></paragraph><paragraph id="id2a88b62455954a1285eb90b9b42cef6b">
<enum>(4)</enum>
<header>Contributions
to the fund</header>
<text>The fund does not accept any deposits (or other
amounts) other than cash payments with respect to which a deduction
is
allowable under subsection (a) and earnings (including gains and
losses) from
fund investments.</text>
</paragraph><paragraph id="idf1b6b722bf5943509a04a52e938f84ea">
<enum>(5)</enum>
<header>Purpose</header>
<text>The
fund is established and maintained for the purposes of covering
costs, expenses,
and losses (including business interruption losses) resulting from
a Federally
declared natural disaster to the extent such costs are not covered
by
insurance.</text>
</paragraph><paragraph id="id34ec7290d07144d6b18a00b03284e9c3">
<enum>(6)</enum>
<header>Maximum
balance</header>
<text>The balance of the fund does not exceed the lesser
of—</text>
<subparagraph id="idd7c98eaf1be94b72bfdbe57467c67e20">
<enum>(A)</enum>
<text>the sum
of—</text>
<clause id="id1051181280b7403a9d2109f894c0575c">
<enum>(i)</enum>
<text>150 percent of
the maximum deductible, and</text>
</clause><clause id="id82d49b6962a34b5a8e16703823585f43">
<enum>(ii)</enum>
<text>100 percent of
the maximum co-insurance (to the extent not taken into account in
clause
(i)),</text>
</clause><continuation-text continuation-text-level="subparagraph">that,
in the case of a Federally declared natural disaster resulting in
losses, the
taxpayer could be expected to pay with respect to property and
business
interruption insurance maintained by the taxpayer for the line of
business to
which the fund applies and that would cover losses resulting from a
Federally
declared natural disaster, and</continuation-text></subparagraph><subparagraph id="id930f8e7e540840f480ba817e0ff83d2a">
<enum>(B)</enum>
<text>the maximum loss
under any insurance coverage that the taxpayer could reasonably
expect
to occur for the line of business in the case of a severe natural
disaster.</text>
</subparagraph></paragraph><paragraph id="idcce937f124514c8194aece509459322d">
<enum>(7)</enum>
<header>Financial
statements</header>
<text>The fund or the balance of the fund is recorded in the
taxpayer’s financial statements in accordance with generally
accepted
accounting principles and not as a current asset and the footnotes
to the
taxpayer’s financial statements include a short description of the
fund and its
purposes.</text>
</paragraph><paragraph id="id5a4e4cffbfc942e2a2604ba284cdb764">
<enum>(8)</enum>
<header>Insurance</header>
<text>The
taxpayer property insurance maintained by the qualified taxpayer
applies to 75 percent or more of the property used—</text>
<subparagraph id="id67B2B28A009F470B8D3315F65FB874E2">
<enum>(A)</enum>
<text>in the qualified taxpayer’s line of business to which the fund
relates, and</text>
</subparagraph><subparagraph id="id7F947A9FDC6E425A885D891BE00BE2AA">
<enum>(B)</enum>
<text>in the United States.</text>
</subparagraph></paragraph></subsection><subsection id="id4F76D49100A446CBA612444772D1B92B">
<enum>(c)</enum>
<header>Qualified taxpayer</header>
<text>For purposes of this section, the term <term>qualified taxpayer</term> means any taxpayer that—</text>
<paragraph id="idCB233037077F4943B8396F54077723E1">
<enum>(1)</enum>
<text>actively conducts a trade or business, and</text>
</paragraph><paragraph id="id5FF12E384E4B4C7BAE978A43761B62E7">
<enum>(2)</enum>
<text>maintains property insurance with respect to such trade or business that insures against losses in
natural disasters.</text>
</paragraph></subsection><subsection id="id90f8d5afc8114d09a7669a5188bcd6da">
<enum>(d)</enum>
<header>Failure To meet
requirements</header>
<text>If a fund that was a natural disaster fund ceases to
meet any of the requirements of subsection (b) or a taxpayer who
has a natural disaster fund ceases to meet the requirement of subsection
(c), the entire balance of the fund
shall be deemed distributed in a nonqualified distribution at the
time the fund
ceases to meet such requirements.</text>
</subsection><subsection id="id50ef131d6a86488599a2d28aae5bdf1f">
<enum>(e)</enum>
<header>Taxation of
fund</header>
<paragraph id="id3513a54fd81f472e96d82c58dc86aa1d">
<enum>(1)</enum>
<header>In
general</header>
<text>The earnings (including gains and losses) from the
investment and reinvestment of amounts held in the fund shall not
be taken into
account in determining the gross income of the taxpayer that owns
the
fund.</text>
</paragraph><paragraph id="id41a356952d7e4f7c9f5a45a276c2bb2e">
<enum>(2)</enum>
<header>Not a separate
taxpayer</header>
<text>A natural disaster fund shall not be considered a
separate taxpayer for purposes of this subtitle.</text>
</paragraph></subsection><subsection id="id47158eaec4c742cb997f8c59ef8af240">
<enum>(f)</enum>
<header>Taxation of
distributions from the fund</header>
<paragraph id="id0d088a4731b745c98b779574c690c4a2">
<enum>(1)</enum>
<header>Qualified
distributions</header>
<text>For purposes of this chapter, qualified
distributions shall be treated in the same manner as proceeds from
property or
business interruption insurance.</text>
</paragraph><paragraph id="id78e4ad9ff4c346a19bbb24c73879384f">
<enum>(2)</enum>
<header>Nonqualified
distributions</header>
<subparagraph id="idE717ED998B714ADCB6B84C5B98C1144A">
<enum>(A)</enum>
<header>In general</header>
<text>In the case of any taxable year for which there is a nonqualified distribution—</text>
<clause id="id0863941BFC5147D3AB27344D852BD370">
<enum>(i)</enum>
<text>such nonqualified distributions shall be excluded from the
gross income of the taxpayer, and</text>
</clause><clause id="idE0B7D89C28C9436FA28DDD4067A23B0D">
<enum>(ii)</enum>
<text>the tax imposed by this chapter (determined without regard to this subsection) shall be increased
by the product of the amount of such nonqualified distribution and the
highest rate of tax specified in section 1 (section 11 in the case of a
corporation).</text>
</clause></subparagraph><subparagraph id="id406B2DB27DDE4C9AA34D03EB24BC1D83">
<enum>(B)</enum>
<header>Tax benefit rule; coordination with deduction for net operating losses</header>
<text>Rules similar to the rules of subparagraphs (B) and (C) of section 7518(g)(6) shall apply for
purposes of this paragraph.</text>
</subparagraph></paragraph><paragraph id="idda0ac25cf1b34e6a9fa7ac29061b32a2">
<enum>(3)</enum>
<header>Additional
tax</header>
<text>The tax imposed by this chapter for any taxable year on any
taxpayer that a owns natural disaster fund shall be increased by
the greater
of—</text>
<subparagraph id="id97ba690a0dbf4c03b9a797aa9b858997">
<enum>(A)</enum>
<text>20 percent of the
amount of any non-qualified distributions from the fund in the
taxable year,
and</text>
</subparagraph><subparagraph id="idb3bf600d1d694c32beac8ab3ef43107b">
<enum>(B)</enum>
<text>an amount equal
to interest, at the underpayment rate established under section
6621, on the
nonqualified distribution from the time the amount is added to the
fund to the
time the amount is distributed.</text>
</subparagraph></paragraph><paragraph id="id98aa95aeb4af49c4ba68676ed569c0cc">
<enum>(4)</enum>
<header>Interest
calculation</header>
<text>For purposes of calculating interest under paragraph
(3)(B)—</text>
<subparagraph id="ide6cdcdfff0464d6c9cd151a484b87576">
<enum>(A)</enum>
<text>all investment
earnings (including gains or losses) in taxable year shall be
treated as added
to the fund on the last day of the taxable year, and</text>
</subparagraph><subparagraph id="id7326b6430a3e463aa68d4314701f1a25">
<enum>(B)</enum>
<text>amounts
distributed from the fund shall be treated as distributed on a
first-in, first-out basis.</text>
</subparagraph></paragraph></subsection><subsection id="idc5ed040dc05d45be91238e2dfb8692b0">
<enum>(g)</enum>
<header>Definitions</header>
<text>For
purposes of this section—</text>
<paragraph id="id10d0a7a40be241e6a775996703a0b8c6">
<enum>(1)</enum>
<header>Federally
declared natural disaster</header>
<text>The term <term>Federally declared
natural disaster</term> means a natural disaster that is determined by
Presidential declaration under the Robert T. Stafford Disaster
Relief and
Emergency Assistance Act to warrant individual or individual and
public assistance under such Act.</text>
</paragraph><paragraph id="id95e43c7afba4422e815ee22f6c73b597">
<enum>(2)</enum>
<header>Nonqualified
distribution</header>
<text>The term <term>nonqualified distribution</term>
means a distribution from a natural disaster fund other than a
qualified
distribution.</text>
</paragraph><paragraph id="idd1d4046ea41345e69687d3676d62a37a">
<enum>(3)</enum>
<header>Qualified
account</header>
<text>The term <term>qualified account</term> means an account
with a bank (as defined in section 581) or a brokerage account but
only if the
investments of such accounts are limited to those permitted by
subsection
(b)(3) and no investments are made in a related person (as defined
in section
465(b)(3)(C)) to the taxpayer.</text>
</paragraph><paragraph id="id3d10b12448fe4cf5ba2fa4abdec0d4a2">
<enum>(4)</enum>
<header>Qualified
distribution</header>
<subparagraph id="id76DF1B060FC04B19A8794A9DFABEB7D9">
<enum>(A)</enum>
<header>In general</header>
<text>The term <term>qualified distribution</term> means
with respect to natural disaster fund an amount equal to the excess
of—</text>
<clause id="iddedf3eb6dfab41c5a8e900a9a2f802e9">
<enum>(i)</enum>
<text>costs, expenses,
and losses (including losses of a type reimbursable by proceeds of
business
interruption insurance) incurred by the taxpayer as a result of the
Federally
declared natural disaster with respect to the line or lines of
business for
which the fund was designated, over</text>
</clause><clause id="ida89e8b6c98784043890b54a0ff122c74">
<enum>(ii)</enum>
<text>the proceeds of
property and business interruption insurance paid for the benefit
of the
taxpayer with respect to costs, expenses, and losses described in
clause (i).</text>
</clause></subparagraph><subparagraph id="id8d496d0dd09e4eaca840ac007b648e9b">
<enum>(B)</enum>
<header>Limitation</header>
<text>A distribution from a natural disaster fund shall not be treated as a qualified distribution if
such distribution is allocated to a Federally declared natural disaster
occurring more than 3 years before the date of such distribution.</text>
</subparagraph></paragraph></subsection><subsection id="id45859354fdd042179b6bedc8390f3798">
<enum>(h)</enum>
<header>Special
rules</header>
<text>For purposes of this section—</text>
<paragraph id="id9e5207c96d434f7e92dfc1fbcf4d21a6">
<enum>(1)</enum>
<header>No double
counting</header>
<text>Any portion of any deductible or coinsurance taken into
account under subsection (b)(6) in determining the maximum balance
for a
natural disaster fund shall not be taken into account in
determining the
maximum balance for another natural disaster fund.</text>
</paragraph><paragraph id="idd001bf7537d54019a94773ace414fd93">
<enum>(2)</enum>
<header>Excess
balance</header>
<subparagraph id="id41e7831fa1cc40528cc2371dc2d0aeae">
<enum>(A)</enum>
<header>In
general</header>
<text>If the balance of a natural disaster fund exceeds the
maximum balance permitted by subsection (b)(6) by reason of
investment earnings
or a reduction in the maximum balance, the account shall
not cease to be a natural disaster fund as the result of exceeding
such limit
if the excess is distributed within 120 days of the date that such
excess first
occurred.</text>
</subparagraph><subparagraph id="idE1DC33A106D34D688A33AF1D58319309">
<enum>(B)</enum>
<header>Treatment of distributions of excess balance</header>
<text>In the case of any distribution of the excess balance of a natural disaster fund within 120 days of
the date that such excess first occurred—</text>
<clause id="id0f3f8d22b5f54c41923355d183c3fb39">
<enum>(i)</enum>
<text>paragraphs (2) and (3) of subsection (f) shall not apply to the distribution of
such excess if distributed within such period, and</text>
</clause><clause id="id92DCC28EEEA5496C8EFB2AC1956BBC0B">
<enum>(ii)</enum>
<text>the amount of such distribution shall be included in the gross income of the taxpayer in the year
such distribution was made.</text>
</clause></subparagraph><subparagraph id="idb26027aeebeb401f99bd175198a41504">
<enum>(C)</enum>
<header>Anti-abuse
rule</header>
<text>Subparagraph (B) shall not apply in the case of any
reduction in the maximum balance resulting from any action of the
taxpayer the
primary purpose of which was to reduce the maximum balance to
enable a
distribution that would not be subject to the maximum tax rate
calculation or
the additional tax.</text>
</subparagraph></paragraph><paragraph id="idfbce3fe5e83442339038eef42c801869">
<enum>(3)</enum>
<header>Certain asset
acquisitions</header>
<text>The transfer of a natural disaster fund (or the
portion of a natural disaster fund) from one person to another
person shall not
constitute a nonqualified distribution if—</text>
<subparagraph id="id4da5a9c1b91b401f8a56740b4a53e0ad">
<enum>(A)</enum>
<text>such transfer is
part of a transaction—</text>
<clause id="idf62e89cc34dc4ae19412fb888ba79390">
<enum>(i)</enum>
<text>to which section
381 applies,</text>
</clause><clause id="id0dc3e755157a48b8a46f06b8839cf31d">
<enum>(ii)</enum>
<text>the transferee
acquires substantially all of the assets of the transferor used in
the line or
lines of business for which the fund was designated,</text>
</clause><clause id="id45d402fd3e284eafac3ae2622b617846">
<enum>(iii)</enum>
<text>the transferee
acquires substantially all of the assets of the transferor used in
one, but not
all, of the lines of business for which the fund was designated, or</text>
</clause><clause id="idb6e5656c4e954fb5a580fa829c7720de">
<enum>(iv)</enum>
<text>the transferee
acquires substantially all of the transferor’s assets located in a
geographical
area and used in a line of business for which the fund was
designated,
and</text>
</clause></subparagraph><subparagraph id="id88767458d6d24e708a629c91c7fb890c">
<enum>(B)</enum>
<text>the transferee
elects to treat the acquired natural disaster fund (or portion
thereof) as a
natural disaster fund for the line of business for which the
transferor had
previously designated the fund and as a continuation of the fund
(or pro rata
portion thereof) for purposes of determining the additional tax
imposed by
subsection (f)(4).</text>
</subparagraph></paragraph></subsection><subsection id="id9d2cf86fab0349369ff511bfbc875968">
<enum>(i)</enum>
<header>Regulations</header>
<text>The
Secretary shall prescribe such regulations as may be necessary or
appropriate
to carry out the provisions of this
section.</text>
</subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="id78aa41e9d1f241e3856a18496e27fc47">
<enum>(b)</enum>
<header>Clerical
amendment</header>
<text>The table of sections for subpart C of part II of
subchapter E of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/1">chapter 1</external-xref> of the Internal Revenue Code of 1986 is amended
by
inserting after the item relating to section 468B the following new
item:</text>
<quoted-block display-inline="no-display-inline" id="id85810FADABF045D5897307A231BB35B3" style="OLC">
<toc>
<toc-entry bold="off" level="section">Sec. 468C. Special rules for
natural disaster
funds.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="idad4de29f37fc43038208bdd0ed551a99">
<enum>(c)</enum>
<header>Effective
date</header>
<text>The amendment made by this section shall apply to taxable
years beginning after December 31, 2013.</text>
</subsection></section>