[Congressional Record Volume 164, Number 28 (Tuesday, February 13, 2018)]
[House]
[Pages H1077-H1078]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      A SAFE HARBOR FOR HOMEOWNERS

  The SPEAKER pro tempore. The Chair recognizes the gentleman from 
Connecticut (Mr. Courtney) for 5 minutes.
  Mr. COURTNEY. Mr. Speaker, last Tuesday, the IRS and the Department 
of the Treasury issued a ruling which was good news for folks who live 
in north central and eastern Connecticut as well as western 
Massachusetts. In a nutshell, what the IRS did was extend a property 
casualty loss deduction for homeowners who had foundations built over 
the last 20 years from material from a quarry which contained a metal 
substance called pyrrhotite which, when exposed to moisture over time, 
spiderweb cracks and, in fact, the houses are subject to full collapse.
  I have here a photograph which shows, again, a contractor who was 
repairing one of the foundations of an affected home which shows, 
again, how fragile the concrete foundation becomes as a result of this 
condition.
  Last year, the IRS issued a ruling that said that homeowners who make 
the repairs--which can cost up to $150,000 to $200,000 because, again, 
you have to lift the house, pull out the old

[[Page H1078]]

foundation, pour a new foundation, and relower the house on top of it--
would at least be able to get a deduction under an IRS deduction 
provision that goes back decades, the property casualty loss provision, 
which was good news.
  Unfortunately, in the tax bill which was signed into law by President 
Trump in December, one of its most boneheaded provisions actually 
narrowed the scope of the property casualty loss to only those property 
cases which happened in an area that has been declared a federally 
declared disaster, which, again, because this, so far, FEMA has ruled 
is as a result of a manmade product, concrete, does not qualify for 
that FEMA designation.
  Thankfully, we have some outstanding people at the IRS, Assistant 
Secretary of the Treasury David Kautter, who, again, looked at the tax 
bill that was signed into law and basically issued the ruling on 
Tuesday that allows, at least for the next 3 years, homeowners to claim 
this deduction, again, using an amended return for 2017, as a way of 
getting the full benefit before the tax bill steps in in 2020 and 
eliminates this avenue of relief.
  This was a provision which never belonged in the tax bill. It affects 
a much broader cross section of Americans, not just folks from homes 
with crumbling foundations who are not in declared disaster areas.
  I know that members on the House Ways and Means Committee, 
particularly Congressman Richie Neal, are very focused in terms of 
trying to fix this really harmful provision that provides almost zero 
tax savings to the Federal budget but causes huge harm to homeowners 
like the ones in Connecticut and western Massachusetts.
  Again, Congressman Neal, Congressman Larson, and I have been working 
with the IRS over the last 19 months to get this safe harbor for 
homeowners to be able to get the benefit of this provision.
  I want to thank the folks at IRS and Treasury for their ruling on 
Tuesday that at least allowed another 3-year window for people who are 
totally innocent victims who, because of the way insurance policies are 
structured, cannot, in most instances, get property casualty loss 
coverage for this type of loss to at least be able to soften the blow 
with this deduction.
  Mr. Speaker, included in the bipartisan budget agreement which passed 
at 5 o'clock in the morning last Friday was a provision that did not 
receive a great deal of attention but actually will provide a great 
deal of relief, particularly for America's seniors. In particular, it 
reduced and narrowed the size of the doughnut hole for seniors who use 
the Medicare part D prescription drug program.
  As many may recall, in 2003, when the Medicare prescription drug 
benefit was first created, it had a doughnut hole that basically said 
that seniors who signed up for Medicare part D after $2,000 of benefits 
for prescription drugs covered under the law would then have to pay a 
full 100 percent deductible until their prescription drug costs reached 
$5,000. It was like buying a car, making a monthly payment, and then 
after 2,000 miles having to get out and walk for the next 3,000 miles 
until you again hit the trigger for the doughnut hole to kick back in 
for coverage.
  When we passed the Affordable Care Act in 2010, we started the 
process of narrowing that doughnut hole, again, by 50 percent in year 
1. It was again up to 35 percent in 2017, and the bill that passed on 
Friday night will actually do the final step to eliminate the doughnut 
hole entirely in 2019.
  The really impressive part of that provision is that narrowing is not 
going to be paid for by the taxpayer. The pharmaceutical companies are 
the ones who will have to bear the brunt of narrowing that cost so that 
seniors will again have huge savings in the scope of thousands of 
dollars because of that provision.
  Again, this is an example of where the bipartisan work that was done 
on that budget bill actually resulted in a very concrete, tangible 
benefit for America's seniors. I think that will be welcome news for 
those who are bearing the high cost of prescription drugs.

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