II

106TH CONGRESS

2D SESSION S. 2446

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

homeowners and small businesses to repair Formosan termite damage.

IN THE SENATE OF THE UNITED STATES

APRIL 13, 2000

Ms. LANDRIEU 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

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) CONFORMING AMENDMENT.—Section 165(h)(3)

2 of the Internal Revenue Code of 1986 (defining personal

3 casualty gain) is amended by inserting ‘‘Formosan termite

4 damage,’’ after ‘‘shipwreck,’’.

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

6 this section shall apply to taxable years beginning after

7 December 31, 1999.

8 SEC. 2. PROCEEDS OF MORTGAGE REVENUE BONDS AL9 LOWED FOR LOANS TO HOMEOWNERS TO RE10 PAIR FORMOSAN TERMITE DAMAGE.

11 (a) EXCEPTION FROM INCOME REQUIREMENTS.—

12 Section 143(f) of the Internal Revenue Code of 1986 (re13 lating to income requirements) is amended by adding at

14 the end the following new paragraph:

15 ‘‘(7) EXCEPTION FOR QUALIFIED HOME IM16 PROVEMENT LOANS.—Paragraph (1) shall not apply

17 with respect to any qualified home improvement loan

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

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

20 REPAIR NOT INCLUDED IN CALCULATING LIMIT FOR

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

22 143(k) of the Internal Revenue Code of 1986 (defining

23 qualified home improvement loan) is amended by adding

24 at the end the following flush sentence: ‘‘In calculating

25 the $15,000 amount, any amount up to $10,000 used for
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1 the repair of Formosan termite damage shall not be taken

2 into account.’’.

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

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

5 the enactment of this Act.

6 SEC. 3. PROCEEDS OF SMALL ISSUE BONDS ALLOWED FOR

7 LOANS TO LANDLORDS AND SMALL BUSI8 NESSES TO REPAIR FORMOSAN TERMITE

9 DAMAGE.

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

11 144(a)(12) of the Internal Revenue Code of 1986 (relating

12 to bonds to finance manufacturing facilities and farm

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

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

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

16 clause:

17 ‘‘(iii) any Formosan termite damage

18 repair loan.’’.

19 (b) DEFINITION OF FORMOSAN TERMITE DAMAGE

20 REPAIR LOAN.—Section 144(a)(12) of the Internal Rev21 enue Code of 1986 is amended by adding at the end the

22 following new subparagraph:

23 ‘‘(D) FORMOSAN TERMITE DAMAGE RE24 PAIR LOAN.—For purposes of this paragraph—
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1 ‘‘(i) IN GENERAL.—The term ‘For2 mosan termite damage repair loan’ means

3 the financing of repairs on or in connection

4 with residential rental property or property

5 used by a small business by the owner

6 thereof, for damage caused by Formosan

7 termites.

8 ‘‘(ii) SMALL BUSINESSES COVERED.—

9 The term ‘small business’ means, for any

10 taxable year, any corporation or partner11 ship if the entity meets the $5,000,000

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

13 prior taxable year.’’.

14 (c) AMOUNTS USED IN FORMOSAN TERMITE REPAIR

15 NOT INCLUDED IN CALCULATING LIMIT ON AMOUNT OF

16 BOND.—Clause (i) of section 144(a)(4)(C) of the Internal

17 Revenue Code of 1986 (relating to certain capital expendi18 tures not taken into account) is amended by inserting

19 ‘‘Formosan termite damage,’’ after ‘‘storm,’’.

20 (d) CONFORMING AMENDMENT.—The heading in sec21 tion 144(a)(12)(B) of the Internal Revenue Code of 1986

22 is amended by striking ‘‘AND FARM PROPERTY’’ and in23 serting ‘‘FARM PROPERTY, AND FORMOSAN TERMITE RE24 PAIR’’.
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1 (e) EFFECTIVE DATE.—The amendment made by

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

3 of the enactment of this Act.

4 SEC. 4. EXCEPTION FROM VOLUME CAP FOR PRIVATE AC5 TIVITY BONDS USED TO REPAIR FORMOSAN

6 TERMITE DAMAGE.

7 (a) EXCEPTION FROM VOLUME CAP.—Section

8 146(g) of the Internal Revenue Code of 1986 (relating to

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

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

11 end of paragraph (4) and inserting a comma, and by add12 ing after paragraph (4) the following new paragraphs:

13 ‘‘(5) any qualified mortgage bond if 95 percent

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

15 used to provide home improvement loans for the re16 pair of Formosan termite damage, and

17 ‘‘(6) any qualified small issue bond if 95 per18 cent or more of the net proceeds of the bond are to

19 be used to provide Formosan termite damage repair

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

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

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

23 of the enactment of this Act.
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1 SEC. 5. EXEMPTION OF CERTAIN BONDS USED TO REPAIR

2 FORMOSAN TERMITE DAMAGE FROM RE3 STRICTIONS ON DEDUCTION BY FINANCIAL

4 INSTITUTIONS FOR INTEREST.

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

6 265(b)(3)(B) of the Internal Revenue Code of 1986 (de7 fining qualified tax-exempt obligations) is amended by

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

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

10 subclause (I) the following new subclauses:

11 ‘‘(II) any qualified mortgage

12 bond if 95 percent or more of the net

13 proceeds of the bond are to be used to

14 provide home improvement loans for

15 the repair of Formosan termite dam16 age,

17 ‘‘(III) any qualified small issue

18 bond if 95 percent or more of the net

19 proceeds of the bond are to be used to

20 provide Formosan termite damage re21 pair loans (as defined in section

22 144(a)(12)(D)), or’’.

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

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

25 of the enactment of this Act.

Æ