[Congressional Record Volume 140, Number 11 (Tuesday, February 8, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: February 8, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
            INTRODUCTION OF DISASTER TAX RELIEF LEGISLATION

                                 ______


                         HON. HOWARD L. BERMAN

                             of california

                    in the house of representatives

                       Tuesday, February 8, 1994

  Mr. BERMAN. Mr. Speaker, I am today introducing legislation that 
would permit beleaguered disaster victims to deduct 100 percent of 
their casualty losses when calculating their Federal personal income 
taxes.
  After seeing the destruction caused by the Northridge earthquake and 
talking with hundreds of its victims, I realized that present tax law 
is clearly inadequate in disasters of this magnitude. The tax code 
acknowledges that it is appropriate to deduct uninsured property 
losses, but the deduction doesn't kick in until losses exceed 10 
percent of adjusted gross income.
  The bill I am introducing would particularly help middle-class 
taxpayers who suffer substantial damage, but who earn too much to 
qualify for Federal grants and now face tens of thousands of dollars in 
repair bills.
  When a household is not otherwise compensated for damage, they should 
at least be able to deduct it from their income taxes and keep more of 
their own money to get back on their feet.
  This legislation would apply only in cases of federally declared 
disasters. if an emergency is great enough to cause the President to 
declare a disaster and determine that assistance from the Federal 
Government is warranted, then stricken taxpayers surely deserve this 
break on their Federal income taxes.
  Every dollar these taxpayers have to send to Washington is a dollar 
not spent in their devastated local communities. They could spend that 
money putting contractors and builders to work--or they could use it in 
local stores to buy items to replace damaged possessions.
  It's both good economic policy and good sense to put every possible 
dollar to work to help ravaged areas like Los Angeles rebound from 
disaster. I will be working very hard to pass this important tax relief 
legislation.

                                H.R. --

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. ELIMINATION OF 10-PERCENT FLOOR FOR DISASTER 
                   LOSSES.

       (a) General Rule.--Subparagraph (A) of section 165(h)(2) of 
     the Internal Revenue Code of 1986 (relating to net casualty 
     loss allowed only to the extent it exceeds 10 percent of 
     adjusted gross income) is amended by striking clauses (i) and 
     (ii) and inserting the following:
       ``(i) the amount of the personal casualty gains for the 
     taxable year,
       ``(ii) the amount of the federally declared disaster losses 
     for the taxable year (or, if lesser, the net casualty loss), 
     plus
       ``(iii) the portion of the net casualty loss which is not 
     deductible under clause (ii) but only to the extent such 
     portion exceeds 10 percent of the adjusted gross income of 
     the individual.''
     ``For purposes of the preceding sentence the term `net 
     casualty loss' means the excess of personal casualty losses 
     for the taxable year over personal casualty gains.''
       (b) Federally Declared Disaster Loss Defined.--Paragraph 
     (3) of section 165(h) of such Code is amended by adding at 
     the end of the following new subparagraph:
       (C) Federally declared disaster loss.--The term `federally 
     declared disaster loss' means any personal casualty loss 
     attributable to a disaster occurring in an area subsequently 
     determined by the President of the United States to warrant 
     assistance by the Federal Government under the Disaster 
     Relief and Emergency Assistance Act.''
       (c) Clerical Amendments.--The heading for paragraph (2) of 
     section 165(h) of such Code is amended by striking ``Net 
     casualty loss'' and inserting ``Net nondisaster casualty 
     loss''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to losses attributable to disasters occurring on 
     or after January 17, 1994, including for purposes of 
     determining the portion of such losses allowable in taxable 
     years ending before such date pursuant to an election under 
     section 165(i) of the Internal Revenue Code of 1986.

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