[Congressional Record Volume 144, Number 50 (Wednesday, April 29, 1998)]
[Senate]
[Pages S3788-S3789]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. GRAMS (for himself, Mr. Coverdell, Mr. Frist, Mr. McCain, 
        Mr. Hutchinson, Mr. Smith of Oregon, Mr. Graham, and Mr. 
        D'Amato):
  S. 2004. A bill to amend the Internal Revenue Code of 1986 to 
authorize the Secretary of the Treasury to abate the accrual of 
interest on income tax underpayments by taxpayers located in 
Presidentially declared disaster areas if the Secretary extends the 
time for filing returns and payment of tax for such taxpayers; to the 
Committee on Finance.


                 The Disaster Victim Tax Extension Act

  Mr. GRAMS. Mr. President, I rise today to introduce legislation that 
would permanently exempt the interest payments owed by disaster victims 
to the Internal Revenue Service.
  Each year, our country is hit by a variety of natural disasters such 
as hurricanes, tornadoes, earthquakes, floods, and ice storms, all 
causing extreme hardship for hundreds of thousands of Americans.
  This year, 15 States have already been hit by deadly disasters.
  Starting on March 7, severe storms and flooding struck the State of 
Alabama, damaging nearly 1,200 homes, and the city of Elba in Coffee 
County was evacuated as a result of a levee failure. Three deaths were 
attributed to the floods and one person was reported missing.
  On February 9, 27 California counties were wracked by severe storms.
  During the period of January 28 through February 6, a series of 
severe winter storms hit communities in Sussex County of Delaware.
  Also in February, three southern Florida counties were victimized by 
tornadoes and other violent weather.
  In February, six counties in Georgia were struck by tornadoes. On 
March 20, amid flood recovery efforts, tornadoes and windstorms tore 
through northeast Georgia, adding to the overall devastation. Tornadoes 
again touched down in west Georgia, metro Atlanta, and southeast 
Georgia on April 9.
  In February, Atlantic and Cape May counties in southern New Jersey 
were hit by the coastal storm that lashed the area.
  On April 16, six Tennessee counties were ravaged by deadly tornadoes 
and other violent weather.
  And, Mr. President, on March 29, seven counties in my own State of 
Minnesota were hit by the deadly tornadoes, damaging thousands of homes 
and businesses along a 62-mile path carved through the communities of 
St. Peter, Comfrey, and Le Center. The storms claimed two lives.
  The estimated total dollar value of insured losses caused by the 
south-central Minnesota tornadoes has reached $175 million, exceeding 
insured losses incurred in my state during the floods of one year ago.
  The list goes on and on. But my point is: deadly natural disasters 
occur every year. Lives are lost, homes are demolished, property is 
destroyed, businesses are ruined, and crops are wiped out. The 
survivors of these disasters need our help to get their feet back on 
the ground.
  Federal disaster assistance has been effective. In fact, almost all 
of the major disaster sites have been subsequently designated as 
Presidentially declared disaster areas and are eligible to receive 
federal disaster assistance.
  However, there is one hurdle Congress still must remove. Residents in 
Presidentially declared disaster areas can often get an extension to 
file their income tax returns.
  However, interest owed cannot be exempted by the IRS. That requires 
Congressional action.
  In other words, we give them time, an extension to file their taxes, 
but at the same time we are saying, because you cannot because of 
circumstances beyond your control file, we are going to charge you 
interest on it. That is adding insult to injury.

[[Page S3789]]

  So many States, like Minnesota, immediately have granted exemptions 
for interest payments on State taxes when disaster areas are declared.
  Although Congress has granted such Federal waivers in the past, they 
must be done legislatively each time a disaster occurs, and appropriate 
vehicles are not always available. This creates one more uncertainty 
for victims of disaster.
  The legislation I am here to introduce today along with Senators 
Coverdell, Frist, McCain, Hutchinson, and Smith of Oregon, the bill 
called the Disaster Victim Tax Extension Act, would once and for all 
remove this barrier and it would give residents of Presidentially 
declared disaster areas an interest payment exemption on any Federal 
taxes owed.
  By the way, Mr. President, our legislation would be effective 
retroactively to tax year 1997.
  Mr. President, this may seem like a small matter, but for disaster 
survivors, every dollar counts. I urge my colleagues to support this 
legislation.
                                 ______