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103D CONGRESS

2D SESSION H. R. 4144

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

of crops destroyed by casualty.

IN THE HOUSE OF REPRESENTATIVES

MARCH 24, 1994

Mr. MATSUI 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 CAS4 UALTY.

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 (F)

8 and by striking subparagraph (A) and inserting the follow9 ing new subparagraphs:
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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, this section and sec6 tion 263 shall not apply to—

7 ‘‘(i) preproductive or removal costs,

8 and

9 ‘‘(ii) 80 percent of a taxpayer’s special

10 replanting costs,

11 which are incurred for replanting plants bearing

12 the same type of crop (whether on the same

13 parcel of land on which such lost or damaged

14 plants were located or any other parcel of land

15 of the same acreage in the United States).

16 ‘‘(B) TREATMENT OF SPECIAL REPLANT17 ING COSTS.—Subsection (a) of this section and

18 section 263 shall apply to the remaining 20 per19 cent of a taxpayer’s special replanting costs.

20 ‘‘(C) PREPRODUCTIVE COSTS.—For pur21 poses of this subsection, the term ‘preproductive

22 costs’ means costs which are—

23 ‘‘(i) incurred during the preproductive

24 period, and
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1 ‘‘(ii) not treated as special replanting

2 costs as defined in subparagraph (D).

3 Such costs shall include cultivation, mainte4 nance, and development costs as well as admin5 istrative costs and interest; but shall not in6 clude any costs related to assets which are dis7 similar to those used on the original acreage

8 prior to the casualty.

9 ‘‘(D) SPECIAL REPLANTING COSTS.—For

10 purposes of this subsection, the term ‘special

11 replanting costs’ includes direct costs incurred

12 for—

13 ‘‘(i) plants and supporting structures,

14 ‘‘(ii) irrigation and drainage systems

15 destroyed during removal of the lost or

16 damaged plants, and

17 ‘‘(iii) land preparation and fumigation

18 costs,

19 but shall not include any assets which are dis20 similar to those used on the original acreage

21 prior to the casualty.

22 ‘‘(E) SPECIAL RULE FOR CERTAIN PLANT23 INGS.—Subparagraph (A) shall apply to that

24 portion of the costs (including the plants and

25 associated costs) attributable to replanting ad-
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1 ditional plants on acreage, only if such planted

2 acreage is the same size or smaller as that on

3 which the lost or destroyed plants were located.

4 For purposes of this rule, the term ‘additional

5 plant’ includes any plant which does not replace

6 a plant qualified under subparagraph (A).

7 ‘‘(F) LOSS LIMITATION RULE.—Any costs

8 otherwise eligible under subparagraph (A) shall

9 be reduced by any amounts deducted under sec10 tion 165 which relate to lost or damaged plants

11 and associated assets. The reduction for deduc12 tions previously taken under section 165 is lim13 ited to the most recent original planting of the

14 lost or damaged planted acreage before the cur15 rent casualty.’’

16 (b) CONFORMING AMENDMENT.—Section 165 of

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

18 subsection (n) and by inserting after subsection (l) the fol19 lowing new subsection:

20 ‘‘(m) LOSSES TO WHICH SECTION 263A(d)(2) DE21 DUCTIONS ARE TAKEN.—No deduction shall be allowed

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

23 costs of replanting are deducted under section

24 263A(d)(2)(A).’’
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1 (c) EFFECTIVE DATE.—The amendments in this sec2 tion shall take effect as if included in the amendments

3 made by section 803 of the Tax Reform Act of 1986.

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