[Congressional Record Volume 143, Number 152 (Tuesday, November 4, 1997)]
[Senate]
[Page S11689]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. KERREY (for himself and Mr. Conrad):
  S. 1366. A bill to amend the Internal Revenue Code of 1986 to 
eliminate the 10 percent floor for deductible disaster losses; to the 
Committee on Finance.


                      disaster relief legislation

  Mr. KERREY. Mr. President, under current law, personal property 
damage is tax-deductible only to the extent that each loss is more than 
$100 and the total losses exceed 10 percent of income. Today, I am 
introducing legislation which would eliminate the 10-percent test for 
unreimbursed casualty losses resulting from a Presidentially declared 
disaster that occurs in 1997.
  Just over a week ago, Nebraska was hit by a massive winter storm that 
dumped up to 20 inches of snow and 2\1/2\ inches of rain on our State 
unusually early in the season. As a result, Nebraskans have suffered 
massive damages, the extent of which we are only beginning to discover 
as the process of digging out begins. More than 175,000 lost electrical 
power, and many of them are still waiting for it to be restored. 
Thousands still lack phone service. About 85 percent of trees--still 
heavy with fall leaves--were damaged in Omaha alone.
  Mr. President, changing this tax law won't shovel the snow, or 
restore all the phone and electrical service. But for the homeowner 
whose property was damaged by felled trees, or thousands of other 
Nebraskans who suffered losses in this storm, allowing them to deduct 
the full amount of those losses will provide a little breathing room as 
the long process of digging out--and rebuilding--begins. I hope we act 
on it soon.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1366

       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 DEDUCTIBLE 
                   DISASTER LOSSES.

       (a) General Rule.--Section 165(h)(2)(A) 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 new clauses:
       ``(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.--Section 
     165(h)(3) of such Code (defining personal casualty gain and 
     personal casualty loss) is amended--
       (1) by adding at the end the following new subparagraph:
       ``(C) Federally declared disaster loss.--
       ``(i) In general.--The term `federally declared disaster 
     loss' means any personal casualty loss attributable to a 
     disaster occurring during 1997 in an area subsequently 
     determined by the President of the United States to warrant 
     assistance by the Federal Government under the Robert T. 
     Stafford Disaster Relief and Emergency Assistance Act.
       ``(ii) Dollar limitation.--Such term shall not include 
     personal casualty losses to the extent such losses exceed 
     $10,000 for the taxable year.'', and
       (2) by striking ``of personal casualty gain and personal 
     casualty loss'' in the heading.
       (c) Conforming Amendment.--The heading for section 
     165(h)(2) 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 
     after December 31, 1996, 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.
                                 ______