I

106TH CONGRESS

1ST SESSION H. R. 1892

To amend the Internal Revenue Code of 1986 to provide assistance to

homeowners and small businesses to repair Formosan termite damage.

IN THE HOUSE OF REPRESENTATIVES

MAY 20, 1999

Mr. JEFFERSON (for himself, Mr. BAKER, Mr. TAUZIN, Mr. MCCRERY, Mr.

JOHN, Mr. COOKSEY, and Mrs. MEEK of Florida) introduced the following bill; which was referred to the Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to provide

assistance to homeowners and small businesses to repair

Formosan termite damage.

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

3 SECTION 1. DEDUCTION FOR INDIVIDUALS FOR LOSSES

4 CAUSED BY FORMOSAN TERMITE DAMAGE.

5 (a) INCLUSION OF FORMOSAN TERMITE DAMAGE AS

6 CASUALTY LOSS.—Section 165(c)(3) of the Internal Rev7 enue Code of 1986 (relating to limitation of deduction of

8 losses of individuals) is amended by inserting ‘‘Formosan

9 termite damage,’’ after ‘‘shipwreck,’’.
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1 (b) EFFECTIVE DATE.—The amendment made by

2 subsection (a) shall apply to taxable years beginning after

3 December 31, 1999.

4 SEC. 2. PROCEEDS OF MORTGAGE REVENUE BONDS AL5 LOWED FOR LOANS TO HOMEOWNERS TO RE6 PAIR FORMOSAN TERMITE DAMAGE.

7 (a) IN GENERAL.—Section 143(f) of the Internal

8 Revenue Code of 1986 (relating to income requirements)

9 is amended by adding at the end the following new para10 graph:

11 ‘‘(7) EXCEPTION FOR QUALIFIED HOME IM12 PROVEMENT LOANS.—Paragraph (1) shall not apply

13 with respect to any qualified home improvement loan

14 used for the repair of Formosan termite damage.’’.

15 (b) AMOUNTS UP TO $10,000 USED FOR TERMITE

16 REPAIR NOT INCLUDED IN CALCULATING LIMIT FOR

17 HOME IMPROVEMENT LOAN.—Paragraph (4) of section

18 143(k) of such Code (defining qualified home improve19 ment loan) is amended by adding at the end the following

20 flush sentence: ‘‘In calculating the $15,000 amount, any

21 amount up to $10,000 used for the repair of Formosan

22 termite damage shall not be taken into account.’’.

23 (c) EFFECTIVE DATE.—The amendments made by

24 this section shall apply to bonds issued after the date of

25 the enactment of this Act.
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1 SEC. 3. PROCEEDS OF SMALL ISSUE BONDS ALLOWED FOR

2 LOANS TO LANDLORDS AND SMALL BUSI3 NESSES TO REPAIR FORMOSAN TERMITE

4 DAMAGE.

5 (a) IN GENERAL.—Subparagraph (B) of section

6 144(a)(12) of the Internal Revenue Code of 1986 (relating

7 to bonds to finance manufacturing facilities and farm

8 property) is amended by striking ‘‘or’’ at the end of clause

9 (i), by striking the period and inserting ‘‘, or’’ at the end

10 of clause (ii), and by adding at the end the following new

11 clause:

12 ‘‘(iii) any Formosan termite damage

13 repair loan.’’.

14 (b) DEFINITION OF FORMOSAN TERMITE DAMAGE

15 REPAIR LOAN.—Section 144(a)(12) of such Code is

16 amended by adding at the end the following new subpara17 graph:

18 ‘‘(D) FORMOSAN TERMITE DAMAGE RE19 PAIR LOAN.—For purposes of this paragraph—

20 ‘‘(i) IN GENERAL.—The term ‘For21 mosan termite damage repair loan’ means

22 the financing of repairs on or in connection

23 with residential rental property or property

24 used by a small business by the owner

25 thereof, for damage caused by Formosan

26 termites.
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1 ‘‘(ii) SMALL BUSINESSES COVERED.—

2 The term ‘small business’ means, for any

3 taxable year, any corporation or partner4 ship if the entity meets the $5,000,000

5 gross receipts test of section 448(c) for the

6 prior taxable year.’’.

7 (c) AMOUNTS USED IN FORMOSAN TERMITE REPAIR

8 NOT INCLUDED IN CALCULATING LIMIT ON AMOUNT OF

9 BOND.—Clause (i) of section 144(a)(4)(C) of such Code

10 (relating to certain capital expenditures not taken into ac11 count) is amended by inserting ‘‘Formosan termite dam12 age,’’ after ‘‘storm,’’.

13 (d) EFFECTIVE DATE.—The amendment made by

14 subsection (a) shall apply to bonds issued after the date

15 of the enactment of this Act.

16 SEC. 4. EXCEPTION FROM VOLUME CAP FOR PRIVATE AC17 TIVITY BONDS USED TO REPAIR FORMOSAN

18 TERMITE DAMAGE.

19 (a) EXCEPTION FROM VOLUME CAP.—Section

20 146(g) of the Internal Revenue Code of 1986 (relating to

21 exception for certain bonds) is amended by striking ‘‘and’’

22 at the end of paragraph (3), by striking the period at the

23 end of paragraph (4) and inserting a comma, and by add24 ing after paragraph (4) the following new paragraphs:
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1 ‘‘(5) any qualified mortgage bond if 95 percent

2 or more of the net proceeds of the bond are to be

3 used to provide home improvement loans for the re4 pair of Formosan termite damage, and

5 ‘‘(6) any qualified small issue bond if 95 per6 cent or more of the net proceeds of the bond are to

7 be used to provide Formosan termite damage repair

8 loans (as defined in section 144(a)(12)(D)).’’.

9 (b) EFFECTIVE DATE.—The amendment made by

10 subsection (a) shall apply to bonds issued after the date

11 of the enactment of this Act.

12 SEC. 5. EXEMPTION OF CERTAIN BONDS USED TO REPAIR

13 FORMOSAN TERMITE DAMAGE FROM RE14 STRICTIONS ON DEDUCTION BY FINANCIAL

15 INSTITUTIONS FOR INTEREST.

16 (a) IN GENERAL.—Clause (ii) of section

17 265(b)(3)(B) of the Internal Revenue Code of 1986 (de18 fining qualified tax-exempt obligations) is amended by

19 striking ‘‘or’’ at the end of subclause (I), by redesignating

20 subclause (II) as subclause (IV), and by inserting after

21 subclause (I) the following new subclauses:

22 ‘‘(II) any qualified mortgage

23 bond if 95 percent or more of the net

24 proceeds of the bond are to be used to

25 provide home improvement loans for
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1 the repair of Formosan termite dam2 age,

3 ‘‘(III) any qualified small issue

4 bond if 95 percent or more of the net

5 proceeds of the bond are to be used to

6 provide Formosan termite damage re7 pair loans (as defined in section

8 144(a)(12)(D)), or’’.

9 (b) EFFECTIVE DATE.—The amendment made by

10 subsection (a) shall apply to bonds issued after the date

11 of the enactment of this Act.

Æ