II 

110TH CONGRESS 

2D SESSION S. 3427 

To amend the Internal Revenue Code of 1986 to provide a credit for hurricane 

mitigation expenditures, and to provide a credit for the increased insurance premiums of certain homeowners as a result of hurricane events. 

IN THE SENATE OF THE UNITED STATES 

AUGUST 1, 2008 

Mr. WICKER (for himself, Mr. COCHRAN, Mr. MARTINEZ, and Mr. VITTER) 

introduced the following bill; which was read twice and referred to the 

Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

a credit for hurricane mitigation expenditures, and to 

provide a credit for the increased insurance premiums 

of certain homeowners as a result of hurricane events. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Costal Homeowners 

5 Assistance Act’’. 

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1 SEC. 2. NONREFUNDABLE PERSONAL CREDIT FOR HURRI2 CANE MITIGATION PROPERTY. 

3 (a) IN GENERAL.—Subpart A of part IV of sub4 chapter A of chapter 1 of the Internal Revenue Code of 

5 1986 is amended by inserting after section 25D the fol6 lowing new section: 

7 ‘‘SEC. 25E. HURRICANE MITIGATION PROPERTY. 

8 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an eli9 gible individual, there shall be allowed as a credit against 

10 the tax imposed by this chapter an amount equal to 25 

11 percent of the qualified hurricane mitigation property ex12 penditures made by the taxpayer during the taxable year. 

13 ‘‘(b) LIMITATIONS.— 

14 ‘‘(1) MAXIMUM CREDIT.—The credit allowed 

15 under subsection (a) shall not exceed the excess (if 

16 any) of $5,000 over the aggregate credits allowed 

17 under this section with respect to such taxpayer for 

18 all prior taxable years. 

19 ‘‘(2) LIMITATION BASED ON AMOUNT OF

20 TAX.—In the case of a taxable year to which section 

21 26(a)(2) does not apply, the credit allowed under 

22 subsection (a) for any taxable year shall not exceed 

23 the excess of— 

24 ‘‘(A) the sum of the regular tax liability 

25 (as defined in section 26(b)) plus the tax im26 posed by section 55, over 

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1 ‘‘(B) the sum of the credits allowable 

2 under this subpart (other than this section and 

3 section 23) for the taxable year. 

4 ‘‘(c) ELIGIBLE INDIVIDUAL.—For purposes of this 

5 section, the term ‘eligible individual’ means any taxpayer 

6 whose principal residence is a qualified dwelling unit lo7 cated in— 

8 ‘‘(1) an area determined by the President to 

9 warrant individual or individual and public assist10 ance from the Federal Government under the Robert 

11 T. Stafford Disaster Relief and Emergency Assist12 ance Act by reason of 1 or more hurricanes during 

13 2004 or 2005, or 

14 ‘‘(2) a county located in a State which borders 

15 the Atlantic Ocean or the Gulf of Mexico. 

16 ‘‘(d) QUALIFIED HURRICANE MITIGATION PROPERTY

17 EXPENDITURES.—For purposes of this section— 

18 ‘‘(1) IN GENERAL.—The term ‘qualified hurri19 cane mitigation property expenditures’ means an ex20 penditure for property— 

21 ‘‘(A) to improve the strength of a roof 

22 deck attachment, 

23 ‘‘(B) to create a secondary water barrier to 

24 prevent water intrusion, 

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1 ‘‘(C) to improve the durability of a roof 

2 covering, 

3 ‘‘(D) to brace gable-end walls, 

4 ‘‘(E) to reinforce the connection between a 

5 roof and supporting wall, 

6 ‘‘(F) to protect openings from penetration 

7 by windborne debris, 

8 ‘‘(G) to protect exterior doors and garages, 

9 or 

10 ‘‘(H) to achieve such other mitigation pur11 poses as prescribed in regulations by the Sec12 retary after consultation with the Administrator 

13 of the Federal Emergency Management Agency, 

14 in the principal residence of the taxpayer. 

15 ‘‘(2) LIMITATION.—An expenditure shall be 

16 taken into account in determining the qualified hur17 ricane mitigation property expenditures made by the 

18 taxpayer during the taxable year only if the onsite 

19 preparation, assembly, or original installation of the 

20 property with respect to which such expenditure is 

21 made has been completed in a manner that is 

22 deemed to be adequate by a State-certified inspector. 

23 ‘‘(3) LABOR COSTS.—Expenditures for labor 

24 costs properly allocable to the onsite preparation, as25 sembly, or original installation of the property demstockstill on PROD1PC66 with BILLS

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1 scribed in paragraph (1) shall be taken into account 

2 in determining the qualified hurricane mitigation 

3 property expenditures made by the taxpayer during 

4 the taxable year. 

5 ‘‘(4) INSPECTION COSTS.—Expenditures for in6 spection costs properly allocable to the inspection of 

7 the preparation, assembly, or installation of the 

8 property described in paragraph (1) shall be taken 

9 into account in determining the qualified hurricane 

10 mitigation property expenditures made by the tax11 payer during the taxable year. 

12 ‘‘(e) OTHER DEFINITIONS.—For purposes of this 

13 section— 

14 ‘‘(1) PRINCIPAL RESIDENCE.—The term ‘prin15 cipal residence’ has the same meaning as when used 

16 in section 121. 

17 ‘‘(2) QUALIFIED DWELLING UNIT.—The term 

18 ‘qualified dwelling unit’ means a dwelling unit that 

19 is assessed at a value that is less than $1,000,000 

20 by the locality in which such dwelling unit is located 

21 and with respect to the taxable year for which the 

22 credit described in subsection (a) is allowed.’’. 

23 (b) CONFORMING AMENDMENTS.— 

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1 (1) Section 24(b)(3)(B) of the Internal Revenue 

2 Code of 1986 is amended by striking ‘‘and 25B’’ 

3 and inserting ‘‘, 25B, and 25E’’. 

4 (2) Section 25(e)(1)(C)(ii) of such Code is 

5 amended by inserting ‘‘25E,’’ after ‘‘25D,’’. 

6 (3) Section 25B(g)(2) of such Code is amended 

7 by striking ‘‘section 23’’ and inserting ‘‘sections 23 

8 and 25E’’. 

9 (4) Section 25D(c)(2) of such Code is amended 

10 by striking ‘‘and 25B’’ and inserting ‘‘25B, and 

11 25E’’. 

12 (5) Section 26(a)(1) of such Code is amended 

13 by striking ‘‘and 25B’’ and inserting ‘‘25B, and 

14 25E’’. 

15 (6) Section 904(i) of such Code is amended by 

16 striking ‘‘and 25B’’ and inserting ‘‘25B, and 25E’’. 

17 (7) Section 1400C(d)(2) of such Code is 

18 amended by striking ‘‘and 25D’’ and inserting 

19 ‘‘25D, and 25E’’. 

20 (c) CLERICAL AMENDMENT.—The table of sections 

21 for subpart A of part IV of subchapter A of chapter 1 

22 of the Internal Revenue Code of 1986 is amended by in23 serting after the item relating to section 25D the following 

24 new item: 

‘‘Sec. 25E. Hurricane mitigation property.’’. 

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1 (d) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to taxable years beginning after 

3 December 31, 2007. 

4 SEC. 3. CREDIT FOR HOME INSURANCE PREMIUM IN5 CREASES. 

6 (a) ALLOWANCE OF CREDIT.—In the case of an eligi7 ble individual, there shall be allowed as a credit against 

8 the tax imposed by chapter 1 of the Internal Revenue Code 

9 of 1986 for the first taxable year after the date of the 

10 enactment of this section an amount equal to 50 percent 

11 of the qualified homeowners insurance premium increases. 

12 (b) MAXIMUM CREDIT.—The credit allowed under 

13 subsection (a) shall not exceed $5,000. 

14 (c) ELIGIBLE INDIVIDUAL.—For purposes of this sec15 tion, the term ‘‘eligible individual’’ means any taxpayer— 

16 (1) whose principal residence, as of the last day 

17 of the taxable year, is a qualified dwelling unit lo18 cated in— 

19 (A) an area determined by the President to 

20 warrant individual or individual and public as21 sistance from the Federal Government under 

22 the Robert T. Stafford Disaster Relief and 

23 Emergency Assistance Act by reason of 1 or 

24 more hurricanes during 2004 or 2005, or 

25 (B) a county— 

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1 (i) located in a State which borders 

2 the Atlantic Ocean or the Gulf of Mexico, 

3 and 

4 (ii) which is determined by the Sec5 retary to have experienced a higher than 

6 average increase in premiums for home7 owners insurance during 2004, 2005, or 

8 2006 due to hurricane risk, and 

9 (2) whose principal residence, as of the applica10 ble date, was located— 

11 (A) in an area or county described in para12 graph (1), and 

13 (B) within 100 miles of such taxpayer’s 

14 principal residence as of the last day of the tax15 able year. 

16 (d) QUALIFIED HOMEOWNERS INSURANCE PREMIUM

17 INCREASE.—For purposes of this section— 

18 (1) IN GENERAL.—The term ‘‘qualified home19 owners insurance premium increase’’ means, with re20 spect to any eligible individual, the amount equal to 

21 the qualifying percentage of the premium for home22 owners insurance in effect on the third policy anni23 versary date following the applicable date. 

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1 (2) QUALIFYING PERCENTAGE.—The term 

2 ‘‘qualifying percentage’’ means the amount equal to 

3 the excess (expressed in percentage points) of— 

4 (A) the increase in the premium for home5 owners insurance of the eligible individual be6 tween the date of the last policy anniversary be7 fore the applicable date and the third policy an8 niversary date following the applicable date, 

9 over 

10 (B) a 100 percent increase in the premium 

11 for such homeowners insurance between the 

12 same dates. 

13 (e) OTHER DEFINITIONS.—For purposes of this sec14 tion— 

15 (1) APPLICABLE DATE.—The term ‘‘applicable 

16 date’’ means— 

17 (A) with respect to any individual whose 

18 principal residence is located in an area de19 scribed in subsection (c)(1)(A), the day before 

20 the determination described in such subsection, 

21 and 

22 (B) with respect to any individual whose 

23 principal residence is located in a county de24 scribed in subsection (c)(1)(B), September 1, 

25 2005. 

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1 (2) HOMEOWNERS INSURANCE.—The term 

2 ‘‘homeowners insurance’’ means any insurance cov3 ering a principal residence. Such term includes cov4 erage of a principal residence with respect to wind 

5 damage through a State-run wind pool. 

6 (3) PRINCIPAL RESIDENCE.—The term ‘‘prin7 cipal residence’’ has the same meaning as when used 

8 in section 121 of the Internal Revenue Code of 

9 1986. 

10 (4) QUALIFIED DWELLING UNIT.—The term 

11 ‘‘qualified dwelling unit’’ means a dwelling unit that 

12 is assessed at a value that is less than $1,000,000 

13 by the locality in which such dwelling unit is located 

14 and with respect to the taxable year for which the 

15 credit described in subsection (a) is allowed. 

16 (f) CREDIT TREATED AS PERSONAL NONREFUND17 ABLE CREDIT.— 

18 (1) IN GENERAL.—The credit allowed under 

19 this section shall be treated as a credit allowed 

20 under subpart A of part IV of subchapter A of chap21 ter 1 of the Internal Revenue Code of 1986. 

22 (2) LIMITATION BASED ON AMOUNT OF TAX.— 

23 In the case of a taxable year to which section 

24 26(a)(2) of such Code does not apply, the credit almstockstill on PROD1PC66 with BILLS

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1 lowed under this section for any taxable year shall 

2 not exceed the excess of— 

3 (A) the sum of the regular tax liability (as 

4 defined in section 26(b) of such Code) plus the 

5 tax imposed by section 55 of such Code, over 

6 (B) the sum of the credits allowable under 

7 such subpart A (other than this section and 

8 section 23 of such Code) for the taxable year. 

9 (3) CARRYFORWARD OF UNUSED CREDIT.—If 

10 the credit allowable under subsection (a) exceeds the 

11 limitation imposed under section 26(a) of the Inter12 nal Revenue Code of 1986 for the taxable year re13 duced by the sum of the credits allowable under sub14 part A of part IV of subchapter A of chapter 1 of 

15 such Code, or, if applicable, the limitation under 

16 paragraph (2), such excess shall be carried to the 

17 succeeding taxable year and allowable as a credit 

18 under such subpart for such succeeding taxable year. 

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