[Congressional Record (Bound Edition), Volume 157 (2011), Part 7]
[Senate]
[Pages 9252-9253]
[From the U.S. Government Publishing Office, www.gpo.gov]




                  SOUTHEASTERN DISASTER TAX RELIEF ACT

  Mr. INHOFE. Mr. President, I rise today to express my support for 
Senator Shelby's recently introduced bill, the Southeastern Disaster 
Tax Relief Act, of which I am an original cosponsor.
  As an Oklahoma native, I have seen and experienced just how 
devastating severe weather can be. Since 1950, there have been 
approximately 3,300 tornadoes that have killed nearly 500 people in 
Oklahoma alone. Scores more have been injured. According to the 
National Oceanic and Atmospheric Administration, tornadoes cause $1.1 
billion of damage on average per year, and this does not account for 
the unquantifiable cost of the loss of a loved one, a home, or a 
business.
  You may recall the F5 tornado that swept through Oklahoma on May 3, 
1999. This storm alone caused $1.9 billion in damages, killed 48 
people, and destroyed the town of Moore, OK. Survivors of this storm 
described being trapped under the debris of their homes, the panicked 
rescue effort to find neighbors, and the overwhelming sadness 
accompanied by loss. When I visited Tushka, OK, on April 15 of this 
year, following its devastating storms, I witnessed firsthand the same 
type of devastation.
  It is estimated that the damage caused by tornadoes in Oklahoma on 
May 24 of this year will cost between $200 and $300 million. In 
addition, the storms in Joplin, MO, may have caused an additional $3 
billion in losses. Clearly, these areas are in need of assistance, 
particularly since insurance payments will not remove out-of-pocket 
expenses families and businesses will have to pay as they rebuild their 
lives.
  Under the current Tax Code, there is some relief available to 
families and businesses that experience damage in hard hit areas. In 
addition to being able to deduct most losses from the disaster on their 
taxes, individuals who receive disaster mitigation assistance, such as 
a FEMA grant, do not have to report the assistance as income. 
Additionally, Congress has, in the past, passed a number of temporary 
provisions to provide additional relief to victims of severe natural 
disasters, such as the Heartland Relief Act, the Katrina Emergency Tax 
Relief Act, and the Gulf Opportunity Zone Act.
  Senator Shelby's Southeastern Disaster Tax Relief Act does the same 
thing and provides targeted, temporary tax relief to folks who have 
been hit by strong storms in recent months. The provisions of his bill 
have been selected from a number of the previous emergency tax relief 
acts enacted in past years. This is beneficial and worth mentioning 
because the IRS has already drafted guidance documents for all of the 
relief provisions, making it easier for taxpayers to take advantage

[[Page 9253]]

of the relief. We also know the provisions in this bill will actually 
help people recover. The relief has worked in the past, and it will 
work again today.
  Any individual or business located in a county that has been declared 
a major disaster area by the president is eligible for the relief 
provided by this bill if those counties are eligible for either 
``individual'' or ``individual and public'' assistance through FEMA.
  These assistance designations are allowed only to the hardest hit 
areas. In my State of Oklahoma, the qualifying counties include 
Canadian, Delaware, Grady, Kingfisher, Logan, McClain, and Atoka. These 
are the areas around Piedmont, Tushka, and Grove, Oklahoma. Public 
assistance funds are generally made available to States and localities 
to help pay for the removal of debris and to repair, replace, and 
restore disaster-damaged publicly owned facilities. Individual 
assistance, provided through FEMA and the SBA consists of grants and 
loans made directly to individuals. These grants are need-based, and 
can be issued to provide temporary housing or to help repair or replace 
a family's home if their insurance coverage falls short. In the most 
severe cases, additional assistance is provided.
  While it is good FEMA provides this assistance, many individuals and 
businesses will not qualify despite being hit hard by the storms. And 
while permanent tax provisions do help individuals and businesses 
account for their losses and insurance payments, they do little beyond 
that to help folks get back on their feet. This underscores the need 
for the Southeastern Disaster Tax Relief Act.
  Under the act, individuals would be allowed, among other things, to 
make early withdrawals from their tax-preferred retirement plans 
without having to pay tax penalties. Current tax law discourages early 
withdrawals by imposing a 10 percent tax penalty on most early 
withdrawals from accounts like Roth IRAs. This is fine under normal 
circumstances, but as individuals recover from disasters like this, 
they should be able to tap into their own resources without being 
penalized. This will likely help many families avoid going into debt or 
relying on government grants to repair their homes and property.
  Individuals will also be able to deduct an unlimited amount of cash 
charitable contributions to nonprofit entities when the donations are 
allocated toward disaster relief efforts in the affected areas. Current 
policy limits the amount of income that can be deducted from charitable 
giving. This bill would temporarily suspend this provision.
  Businesses will be allowed to immediately expense 50 percent of the 
cost of demolishing and/or cleaning up damaged property. This will 
allow them to recognize their losses more quickly than current policy, 
which requires them to capitalize cleanup costs into the construction 
or repair of their property.
  Small businesses will also be provided with a tax credit for 40 
percent of wages up to $23,400 paid to employees retained while a 
business is inoperable because of the storm. With unemployment hovering 
around 9 percent, this provision will help struggling employers retain 
and continue paying employees despite the fact that their business have 
been destroyed by the storm and remaining closed for business.
  Public utility companies in Oklahoma and other states will be allowed 
to carry back the disaster losses to their property for 5 years. This 
will allow them to quickly realize their losses from a tax perspective, 
and the consequent savings will be available for them to more swiftly 
rebuild their infrastructure so that service can be returned to their 
customers.
  Lastly, States will be allowed to float additional private activity 
bonds beyond the caps presently set by statute. The amount will be 
limited by the number of people whose primary residence is located in 
the areas affected by the disasters.
  The provisions I mentioned are only a sample of what is provided in 
this bill. I must underscore, however, that this bill is highly 
targeted and temporary. It is also deficit neutral. Most of the 
provisions in the bill only last for the next year or so; others expire 
at the end of 2013 and 2014. In total, this bill is expected to provide 
over $5 billion in tax relief.
  This bill has been designated an emergency--as I believe it should 
be. It is targeted, temporary relief in response to an unpredictable 
disaster. Usually we do not require ourselves to find immediate savings 
to offset the cost of emergency provisions, but in our present age of 
trillion dollar deficits, we need to offset deficits wherever possible. 
Senator Shelby has offset the cost of this bill by rescinding $12 
billion in unobligated appropriations that remain unexpired. This 
provision applies to all Departments except the Departments of Defense 
and Veterans Affairs.
  In short, this bill is a necessary and commonsense tax proposal to 
help tornado victims. It is also fully paid for, making it fiscally 
responsible. I urge swift consideration and passage of this act.

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