[Congressional Record Volume 145, Number 165 (Friday, November 19, 1999)]
[Senate]
[Page S15098]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. TORRICELLI:
  S. 1985. A bill to amend the Internal Revenue Code of 1986 to lower 
the adjusted gross income threshold for deductible disaster casualty 
losses to 5 percent, to make such deduction an above-the-line 
deduction, and to allow an election to take such deduction for the 
preceding or succeeding year; to the Committee on Finance.
 Mr. TORRICELLI. Mr. President, I rise today to introduce the 
Disaster Victims Tax Relief Act. This legislation will help mitigate 
the losses that hundreds of thousands of Americans incur each year as a 
result of natural disasters, and helps clear the path towards full 
recovery.
  My home state of New Jersey is not known as a place which suffers 
tropical storms or hurricanes with great frequency. However, this past 
September, many of my constituent witnessed nature's fury first hand. 
Hurricane Floyd, one of the largest storms in recent history, battered 
much of New Jersey, along with the several other Eastern states, with 
winds in excess of 140 miles per hour and flash downpours which caused 
extensive flooding. To date, the flooding caused by this disaster has 
inflicted more than $500 million in damages in New Jersey alone, and it 
is estimated that this figure may exceed more than $1 billion when the 
final costs are calculated. In terms of economic damages, New Jersey 
was the second most heavily damaged state as a result of Floyd.
  Natural disasters, such as the one we recently witnessed, too often 
cause people to lose their homes and the businesses that were made 
successful through a lifetime of hard work. This pain is exacerbated by 
the fact that they are still required to meet a heavy tax burden for 
that year. It is unreasonable to expect these unfortunate Americans to 
meet their full tax responsibilities after suffering a cataclysmic 
disaster such as a hurricane such as a hurricane or flood. While our 
current tax code includes a provision that addresses this situation, 
qualification requirements ensure that the overwhelming majority of 
victims cannot utilize the provision to their benefit.
  Under current law, an individual may deduct uninsured damages or 
``casualty losses'' incurred from a natural disaster so long as those 
losses exceed 10 percent of their adjusted gross income (AGI). 
Unfortunately, many victims of disasters have found that this threshold 
is too high for them to qualify. Compounding this situation is the fact 
that only the small percentage of taxpayers who itemize their 
deductions are effectively eligible to claim their disaster losses as a 
deduction. This is troubling because 75 percent of taxpayers who do not 
itemize, comprised mostly of lower and middle class families who need 
this benefit most, cannot participate.
  The bill I introduce today is straight forward. First it would reduce 
the current AGI threshold from 10 percent to 5 percent. Second, it 
would make the deductions available an ``above the line'' deduction. 
These two provisions would enable the majority of American taxpayers, 
who do not itemize their returns, to benefit. Third, my bill would 
institute a 2-year ``carry back or forward'' provision which would 
allow people who incur casualty losses to claim the deductions on 
either the previous year's return, or they can defer and claim the 
losses either the following year or the year after. Finally this bill 
is narrowly tailored to provide relief to those people who need it 
most; those who live in a federally declared disaster area. This will 
help avoid abuse of the provision.
  Mr. President, people who have emerged from earthquakes, tornadoes, 
hurricanes and floods are confronted with the daunting task of 
rebuilding their lives in the face of overwhelming economic loss and 
the emotional trauma of losing everything they own. Their tax burden 
should not be one of the obstacles that they must overcome in order to 
embark on the road to recovery. This bill will help ensure that this is 
not the case. I would urge my colleagues in the Senate to fully support 
this legislation.
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