I 

108TH CONGRESS 

1ST SESSION H. R. 3043

To amend the Internal Revenue Code of 1986 with respect to the treatment 

of crops destroyed by casualty. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 9, 2003

Mr. CALVERT (for himself, Mr. THOMPSON of California, Mr. ENGLISH, Mr. 

MCHUGH, Mr. RADANOVICH, Mr. REYNOLDS, Mr. POMBO, Ms. ESHOO, 

Mr. GOODE, Mr. MCINNIS, and Mr. HOUGHTON) introduced the following 

bill; which was referred to the Committee on Ways and Means 

A BILL

To amend the Internal Revenue Code of 1986 with respect 

to the treatment of crops destroyed by casualty.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. TREATMENT OF CROPS DESTROYED BY

4 CASUALTY. 

5 (a) GENERAL RULE.—Paragraph (2) of section 

6 263A(d) of the Internal Revenue Code of 1986 is amended 

7 by redesignating subparagraph (B) as subparagraph (G) 

8 and by striking subparagraph (A) and inserting the fol9 lowing new subparagraphs: 
2

•HR 3043 IH 

1 ‘‘(A) IN GENERAL.—If plants bearing an 

2 edible crop for human consumption were lost or 

3 damaged (while in the hands of the taxpayer) 

4 by reason of freezing temperatures, disease, 

5 drought, pests, or casualty and the taxpayer re6 plants plants bearing the same type of crop 

7 (whether on the same parcel of land on which 

8 such lost or damaged plants were located or any 

9 other parcel of land of the same acreage in the 

10 United States), this section and section 263 

11 shall not apply to—

12 ‘‘(i) the costs of the taxpayer of such 

13 replanting (other than special replanting 

14 costs), 

15 ‘‘(ii) 80 percent of the taxpayer’s spe16 cial replanting costs of such replanting, 

17 ‘‘(iii) the costs of the taxpayer to re18 move such plants, and 

19 ‘‘(iv) the preproductive costs of the 

20 taxpayer of such replanting. 

21 ‘‘(B) SPECIAL REPLANTING COSTS.—For 

22 purposes of this subsection, the term ‘special 

23 replanting costs’ means direct costs incurred 

24 for—
3

•HR 3043 IH 

1 ‘‘(i) plants (including qualified addi2 tional plants) and supporting structures, 

3 ‘‘(ii) replacing irrigation and drainage 

4 systems, and 

5 ‘‘(iii) land preparation and fumiga6 tion. 

7 For purposes of the preceding sentence, the 

8 term ‘qualified additional plants’ means plants 

9 (other than replacement plants) which bear the 

10 same type of crop as the lost or damaged plants 

11 referred to in subparagraph (A) and which are 

12 planted on the same parcel of land as the re13 placement plants. 

14 ‘‘(C) PREPRODUCTIVE COSTS.—For pur15 poses of this subsection, the term ‘preproductive 

16 costs’ means costs incurred during the 

17 preproductive period which are attributable 

18 to—

19 ‘‘(i) the cultivation, maintenance, and 

20 development of the replantings, 

21 ‘‘(ii) the administration of the activi22 ties referred to in clause (i), and 

23 ‘‘(iii) interest on financing such activi24 ties. 
4

•HR 3043 IH 

1 Such term shall not include special replanting 

2 costs. 

3 ‘‘(D) EXCLUSION OF NONREPLACEMENT

4 ASSETS.—In no event shall subparagraph (A) 

5 apply to costs incurred for any asset which is 

6 not substantially equivalent for commercial pur7 poses to an asset used on the parcel of land on 

8 which the lost or damaged plants were located. 

9 ‘‘(E) REDUCTION FOR LOSSES OR COM10 PENSATORY PAYMENTS OR ALLOWANCES.—Any 

11 costs otherwise eligible for the treatment under 

12 subparagraph (A) with respect to any parcel 

13 shall be reduced by—

14 ‘‘(i) the amount of the deduction (if 

15 any) allowed to the taxpayer under section 

16 165, and 

17 ‘‘(ii) the amount of any compensatory 

18 payment of allowance provided by the 

19 United States, a State, or a political sub20 division of a State, 

21 that relates to the most recent prior loss or 

22 damage to plants located on such parcel. 

23 ‘‘(F) COORDINATION WITH ELECTION

24 UNDER PARAGRAPH (3).—The provisions of this 
5

•HR 3043 IH 

1 paragraph shall apply notwithstanding that an 

2 election is made under paragraph (3).’’

3 (b) CONFORMING AMENDMENT.—Section 165 of 

4 such Code is amended by redesignating subsection (m) as 

5 subsection (n) and by inserting after subsection (l) the fol6 lowing new subsection: 

7 ‘‘(m) LOSSES TO WHICH SECTION 263A(d)(2) DE8 DUCTIONS ARE TAKEN.—No deduction shall be allowed 

9 under this section with respect to any loss for which the 

10 costs of replanting are deducted under section 

11 263A(d)(2)(A).’’

12 (c) EFFECTIVE DATE.—The amendments in this sec13 tion shall apply to costs incurred after December 31, 

14 2002, in taxable years ending after such date.

Æ