I 

113TH CONGRESS 

2D SESSION H. R. 5082 

To provide tax relief for major disaster areas declared in 2012, 2013, and 

2014, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 11, 2014 

Mr. REED (for himself, Mr. GARDNER, Mr. GIBSON, Mr. COLE, Mr. GRIFFIN

of Arkansas, Mr. HARPER, Mr. RUNYAN, Mrs. CAPITO, Mr. 

MCALLISTER, Mr. KING of New York, Mr. CASSIDY, Mr. GERLACH, Mr. 

FITZPATRICK, Mr. SCHOCK, Mr. PASCRELL, Mr. BUTTERFIELD, Ms. 

DELBENE, Mr. POLIS, Mr. PALLONE, Mr. CROWLEY, Mr. HOLT, Mr. 

LARSON of Connecticut, Mr. RANGEL, Mr. RICHMOND, Mr. ISRAEL, Mr. 

BISHOP of New York, Mr. LARSEN of Washington, Mr. SIRES, Mrs. 

MCCARTHY of New York, and Mr. RODNEY DAVIS of Illinois) introduced 

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

Means 

A BILL 

To provide tax relief for major disaster areas declared in 

2012, 2013, and 2014, and for other purposes. 

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; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘National Disaster Tax Relief Act of 2014’’. 


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1 (b) TABLE OF CONTENTS.—The table of contents for 

2 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—TAX RELIEF RELATING TO DISASTERS IN 2012, 2013, 

AND 2014 

Sec. 101. Expensing of qualified disaster expenses. 

Sec. 102. Increased limitation on charitable contributions for disaster relief. 

Sec. 103. Losses attributable to disasters in 2012, 2013, and 2014. 

Sec. 104. Net operating losses attributable to disasters in 2012, 2013, and 

2014. 

Sec. 105. Waiver of certain mortgage revenue bond requirements following 

2012, 2013, and 2014 disasters. 

Sec. 106. Increased expensing and bonus depreciation for qualified disaster assistance property following 2012, 2013, and 2014 disasters. 

Sec. 107. Increase in new markets tax credit for investments in community development entities serving 2012, 2013, and 2014 disaster 

areas. 

Sec. 108. Special rules for use of retirement funds in connection with federally 

declared disasters in 2012, 2013, or 2014. 

Sec. 109. Additional exemption for housing qualified disaster displaced individuals. 

Sec. 110. Exclusions of certain cancellations of indebtedness by reason of 2012, 

2013, or 2014 disasters. 

Sec. 111. Special rule for determining earned income of individuals affected by 

federally declared disasters. 

Sec. 112. Increase in rehabilitation credit for buildings in 2012, 2013, and 

2014 disaster areas. 

Sec. 113. Advanced refundings of certain tax-exempt bonds. 

Sec. 114. Qualified disaster area recovery bonds. 

Sec. 115. Additional low-income housing credit allocations. 

Sec. 116. Facilitation of transfer of water leasing and water by mutual ditch 

or irrigation companies in disaster areas. 

TITLE II—OTHER DISASTER TAX RELIEF PROVISIONS 

Sec. 201. Exclusion for disaster mitigation payments received from State and 

local governments. 

Sec. 202. Natural disaster funds. 

3 TITLE I—TAX RELIEF RELATING 

4 TO DISASTERS IN 2012, 2013, 

5 AND 2014 

6 SEC. 101. EXPENSING OF QUALIFIED DISASTER EXPENSES. 

7 (a) IN GENERAL.—Section 198A(b)(2) of the Inter8 nal Revenue Code of 1986 is amended— 


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1 (1) by striking ‘‘before January 1, 2010’’ in 

2 subparagraph (A) and inserting ‘‘during the period 

3 beginning after December 31, 2007, and before Jan4 uary 1, 2010, or during the period beginning after 

5 December 31, 2011, and before January 1, 2015’’, 

6 and 

7 (2) by striking ‘‘before such date’’ each place it 

8 appears in subparagraphs (B) and (C) and inserting 

9 ‘‘during any such period’’. 

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

11 this section shall apply to amounts paid or incurred after 

12 December 31, 2011, in connection with disasters declared 

13 after such date. 

14 SEC. 102. INCREASED LIMITATION ON CHARITABLE CON15 TRIBUTIONS FOR DISASTER RELIEF. 

16 (a) INDIVIDUALS.—Paragraph (1) of section 170(b) 

17 of the Internal Revenue Code of 1986 is amended by re18 designating subparagraphs (F) and (G) as subparagraphs 

19 (G) and (H), respectively, and by inserting after subpara20 graph (E) the following new subparagraph: 

21 ‘‘(F) QUALIFIED DISASTER CONTRIBU22 TIONS.— 

23 ‘‘(i) IN GENERAL.—Any qualified dis24 aster contribution shall be allowed to the 

25 extent that the aggregate of such contribuVerDate Mar 15 2010 00:40 Jul 17, 2014 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H5082.IH H5082

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1 tions does not exceed the excess of 80 per2 cent of the taxpayer’s contribution base 

3 over the amount of all other charitable 

4 contributions allowable under this para5 graph. 

6 ‘‘(ii) CARRYOVER.—If the aggregate 

7 amount of contributions described in clause 

8 (i) exceeds the limitation under clause (i), 

9 such excess shall be treated (in a manner 

10 consistent with the rules of subsection 

11 (d)(1)) as a charitable contribution to 

12 which clause (i) applies in each of the 5 

13 succeeding years in order of time. 

14 ‘‘(iii) COORDINATION WITH OTHER

15 SUBPARAGRAPHS.—For purposes of apply16 ing this subsection and subsection (d)(1), 

17 contributions described in clause (i) shall 

18 not be treated as described in subpara19 graph (A) and such subparagraph shall be 

20 applied without regard to such contribu21 tions. 

22 ‘‘(iv) QUALIFIED DISASTER CON23 TRIBUTIONS.—For purposes of this sub24 paragraph, the term ‘qualified disaster 


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1 contribution’ means any charitable con2 tribution if— 

3 ‘‘(I) such contribution is for re4 lief efforts related to a federally de5 clared disaster (as defined in section 

6 165(h)(3)(C)(i)), 

7 ‘‘(II) such contribution is made 

8 during the period beginning on the 

9 applicable disaster date with respect 

10 to the disaster described in subclause 

11 (I) and ending on December 31, 

12 2014, and 

13 ‘‘(III) such contribution is made 

14 in cash to an organization described 

15 in subparagraph (A) (other than an 

16 organization described in section 

17 509(a)(3)). 

18 Such term shall not include a contribution 

19 if the contribution is for establishment of 

20 a new, or maintenance in an existing, 

21 donor advised fund (as defined in section 

22 4966(d)(2)). 

23 ‘‘(v) APPLICABLE DISASTER DATE.— 

24 For purposes of clause (iv)(II), the term 

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1 spect to any federally declared disaster de2 scribed in clause (iv)(I), the date on which 

3 the disaster giving rise to the Presidential 

4 declaration described in section 

5 165(h)(3)(C)(i) occurred. 

6 ‘‘(vi) SUBSTANTIATION REQUIRE7 MENT.—This paragraph shall not apply to 

8 any qualified disaster contribution unless 

9 the taxpayer obtains from such organiza10 tion to which the contribution was made a 

11 contemporaneous written acknowledgment 

12 (within the meaning of subsection (f)(8)) 

13 that such contribution was used (or is to 

14 be used) for a purpose described in clause 

15 (iv)(III).’’. 

16 (b) CORPORATIONS.— 

17 (1) IN GENERAL.—Paragraph (2) of section 

18 170(b) of the Internal Revenue Code of 1986 is 

19 amended by redesignating subparagraph (C) as sub20 paragraph (D) and by inserting after subparagraph 

21 (B) the following new subparagraph: 

22 ‘‘(C) QUALIFIED DISASTER CONTRIBU23 TIONS.— 

24 ‘‘(i) IN GENERAL.—Any qualified dis25 aster contribution shall be allowed to the 


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1 extent that the aggregate of such contribu2 tions does not exceed the excess of 20 per3 cent of the taxpayer’s taxable income over 

4 the amount of charitable contributions al5 lowed under subparagraph (A). 

6 ‘‘(ii) CARRYOVER.—If the aggregate 

7 amount of contributions described in clause 

8 (i) exceeds the limitation under clause (i), 

9 such excess shall be treated (in a manner 

10 consistent with the rules of subsection 

11 (d)(1)) as a charitable contribution to 

12 which clause (i) applies in each of the 5 

13 succeeding years in order of time. 

14 ‘‘(iii) QUALIFIED DISASTER CON15 TRIBUTION.—The term ‘qualified disaster 

16 contribution’ has the meaning given such 

17 term under paragraph (2)(F)(iv). 

18 ‘‘(iv) SUBSTANTIATION REQUIRE19 MENT.—This paragraph shall not apply to 

20 any qualified disaster contribution unless 

21 the taxpayer obtains from such organiza22 tion to which the contribution was made a 

23 contemporaneous written acknowledgment 

24 (within the meaning of subsection (f)(8)) 

25 that such contribution was used (or is to 


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1 be used) for a purpose described in para2 graph (1)(F)(iv)(III).’’. 

3 (2) CONFORMING AMENDMENTS.— 

4 (A) Subparagraph (A) of section 170(b)(2) 

5 of such Code is amended by striking ‘‘subpara6 graph (B) applies’’ and inserting ‘‘subpara7 graphs (B) and (C) apply’’. 

8 (B) Subparagraph (B) of section 170(b)(2) 

9 of such Code is amended by striking ‘‘subpara10 graph (A)’’ and inserting ‘‘subparagraphs (A) 

11 and (C)’’. 

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

13 this section shall apply to disasters arising in taxable years 

14 ending after December 31, 2011. 

15 SEC. 103. LOSSES ATTRIBUTABLE TO DISASTERS IN 2012, 

16 2013, AND 2014. 

17 (a) WAIVER OF ADJUSTED GROSS INCOME LIMITA18 TION; INCREASE IN STANDARD DEDUCTION BY DISASTER

19 CASUALTY LOSS.—Subclause (I) of section 

20 165(h)(3)(B)(i) of the Internal Revenue Code of 1986 is 

21 amended by striking ‘‘before January 1, 2010’’ and insert22 ing ‘‘during the period beginning after December 31, 

23 2007, and before January 1, 2010, or during the period 

24 beginning after December 31, 2011, and before January 

25 1, 2015’’. 


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1 (b) LOSS ALLOWED WHETHER OR NOT INDIVIDUAL

2 ITEMIZED DEDUCTIONS.—Section 62(a) of the Internal 

3 Revenue Code of 1986 is amended by inserting after para4 graph (21) the following new paragraph: 

5 ‘‘(22) DISASTER CASUALTY LOSSES.—Any net 

6 disaster loss (as defined in section 165(h)(3)(B)).’’. 

7 (c) TECHNICAL AMENDMENT.—Clause (i) of section 

8 165(h)(3)(C) of the Internal Revenue Code of 1986 is 

9 amended by inserting ‘‘major’’ after ‘‘means any’’. 

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

11 this section shall apply to disasters declared in taxable 

12 years beginning after December 31, 2011. 

13 (e) USE OF AMENDED INCOME TAX RETURNS TO

14 TAKE INTO ACCOUNT RECEIPT OF CERTAIN CASUALTY

15 LOSS GRANTS BY DISALLOWING PREVIOUSLY TAKEN

16 CASUALTY LOSS DEDUCTIONS.— 

17 (1) IN GENERAL.—Notwithstanding any other 

18 provision of the Internal Revenue Code of 1986, if 

19 a taxpayer— 

20 (A) claims a deduction for any taxable year 

21 with respect to a casualty loss to a principal 

22 residence (within the meaning of section 121 of 

23 such Code) resulting from any federally de24 clared disaster (as defined in section 

25 165(h)(3)(C) of such Code) occurring during 


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1 the period beginning after December 31, 2011, 

2 and before January 1, 2015, and 

3 (B) in a subsequent taxable year receives 

4 a grant under any Federal or State program as 

5 reimbursement for such loss, 

6 such taxpayer may elect to file an amended income 

7 tax return for the taxable year in which such deduc8 tion was allowed (and for any taxable year to which 

9 such deduction is carried) and reduce (but not below 

10 zero) the amount of such deduction by the amount 

11 of such reimbursement. 

12 (2) TIME OF FILING AMENDED RETURN.— 

13 Paragraph (1) shall apply with respect to any grant 

14 only if any amended income tax returns with respect 

15 to such grant are filed not later than the later of— 

16 (A) the due date for filing the tax return 

17 for the taxable year in which the taxpayer re18 ceives such grant, or 

19 (B) the date which is 1 year after the date 

20 of the enactment of this Act. 

21 (3) WAIVER OF PENALTIES AND INTEREST.— 

22 Any underpayment of tax resulting from the reduc23 tion under paragraph (1) of the amount otherwise 

24 allowable as a deduction shall not be subject to any 

25 penalty or interest under such Code if such tax is 


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1 paid not later than 1 year after the filing of the 

2 amended return to which such reduction relates. 

3 SEC. 104. NET OPERATING LOSSES ATTRIBUTABLE TO DIS4 ASTERS IN 2012, 2013, AND 2014. 

5 (a) IN GENERAL.—Subclause (I) of section 

6 172(j)(1)(A)(i) of the Internal Revenue Code of 1986 is 

7 amended by striking ‘‘before January 1, 2010’’ and insert8 ing ‘‘during the period beginning after December 31, 

9 2007, and before January 1, 2010, or during the period 

10 beginning after December 31, 2011, and before January 

11 1, 2015’’. 

12 (b) EFFECTIVE DATE.—The amendments made by 

13 this section shall apply to losses arising in taxable years 

14 beginning after December 31, 2011, in connection with 

15 disasters declared after such date. 

16 SEC. 105. WAIVER OF CERTAIN MORTGAGE REVENUE BOND 

17 REQUIREMENTS FOLLOWING 2012, 2013, AND 

18 2014 DISASTERS. 

19 (a) IN GENERAL.—Section 143(k) of the Internal 

20 Revenue Code of 1986 is amended— 

21 (1) by redesignating paragraph (12), as added 

22 by section 709(a) of the Tax Extenders and Alter23 native Minimum Tax Relief Act of 2008, as para24 graph (13), and 


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1 (2) by striking ‘‘before January 1, 2010’’ in 

2 subparagraphs (A)(i) and (B)(i) of such paragraph 

3 and inserting ‘‘during the period beginning after De4 cember 31, 2007, and before January 1, 2010, or 

5 during the period beginning after December 31, 

6 2011, and before January 1, 2015’’. 

7 (b) EFFECTIVE DATE.—The amendments made by 

8 this section shall apply to disasters occurring after Decem9 ber 31, 2011. 

10 SEC. 106. INCREASED EXPENSING AND BONUS DEPRECIA11 TION FOR QUALIFIED DISASTER ASSISTANCE 

12 PROPERTY FOLLOWING 2012, 2013, AND 2014 

13 DISASTERS. 

14 (a) IN GENERAL.—Subclause (I) of section 

15 168(n)(2)(A)(ii) of the Internal Revenue Code of 1986 is 

16 amended by striking ‘‘before January 1, 2010’’ and insert17 ing ‘‘during the period beginning after December 31, 

18 2007, and before January 1, 2010, or during the period 

19 beginning after December 31, 2011, and before January 

20 1, 2015’’. 

21 (b) REMOVAL OF EXCLUSION.—Section 

22 168(n)(2)(B)(i) of such Code is amended by inserting 

23 ‘‘and’’ at the end of subclause (I), by striking ‘‘, and’’ 

24 at the end of subclause (II) and inserting a period, and 

25 by striking subclause (III). 


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

2 this section shall apply to property placed in service after 

3 December 31, 2011, with respect to disasters declared 

4 after such date. 

5 SEC. 107. INCREASE IN NEW MARKETS TAX CREDIT FOR IN6 VESTMENTS IN COMMUNITY DEVELOPMENT 

7 ENTITIES SERVING 2012, 2013, AND 2014 DIS8 ASTER AREAS. 

9 (a) IN GENERAL.—Subsection (f) of section 45D of 

10 the Internal Revenue Code of 1986 is amended by adding 

11 at the end the following new paragraph: 

12 ‘‘(4) INCREASED SPECIAL ALLOCATION FOR

13 COMMUNITY DEVELOPMENT ENTITIES SERVING 2012, 

14 2013, AND 2014 DISASTER AREAS.— 

15 ‘‘(A) IN GENERAL.—In the case of each 

16 calendar year which begins after 2012 and be17 fore 2016, the new markets tax credit limitation 

18 shall be increased by an amount equal to 

19 $500,000,000, to be allocated among qualified 

20 community development entities to make quali21 fied low-income community investments within 

22 any 2012, 2013, or 2014 federally declared dis23 aster area. 

24 ‘‘(B) ALLOCATION OF INCREASE.—The 

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1 paragraph (A) shall be allocated by the Sec2 retary under paragraph (2) to qualified commu3 nity development entities and shall give priority 

4 to such entities with a record of having success5 fully provided capital or technical assistance to 

6 businesses or communities within any 2011 or 

7 2012 federally declared disaster area or areas 

8 for which the allocation is requested. 

9 ‘‘(C) APPLICATION OF CARRYFORWARD.— 

10 Paragraph (3) shall be applied separately with 

11 respect to the amount of any increase under 

12 subparagraph (A). 

13 ‘‘(D) 2012, 2013, OR 2014 FEDERALLY DE14 CLARED DISASTER AREA.—For purposes of this 

15 paragraph, the term ‘2012, 2013, or 2014 fed16 erally declared disaster area’ means any dis17 aster area resulting from any federally declared 

18 disaster occurring after December 31, 2011, 

19 and before January 1, 2015. For purposes of 

20 the preceding sentence, the terms ‘federally de21 clared disaster’ and ‘disaster area’ have the 

22 meanings given such terms in section 

23 165(h)(3).’’. 


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

2 this section shall apply to calendar years beginning after 

3 2012. 

4 SEC. 108. SPECIAL RULES FOR USE OF RETIREMENT FUNDS 

5 IN CONNECTION WITH FEDERALLY DE6 CLARED DISASTERS IN 2012, 2013, OR 2014. 

7 (a) TAX-FAVORED WITHDRAWALS FROM RETIRE8 MENT PLANS.— 

9 (1) IN GENERAL.—Paragraph (2) of section 

10 72(t) of the Internal Revenue Code of 1986 is 

11 amended by adding at the end the following new 

12 subparagraph: 

13 ‘‘(H) DISTRIBUTIONS FROM RETIREMENT

14 PLANS IN CONNECTION WITH FEDERALLY DE15 CLARED DISASTERS DURING 2012, 2013, AND

16 2014.—Any qualified 2012, 2013, or 2014 dis17 aster recovery distribution.’’. 

18 (2) QUALIFIED DISASTER RECOVERY DISTRIBU19 TION.—Section 72(t) of such Code is amended by 

20 adding at the end the following new paragraph: 

21 ‘‘(11) QUALIFIED 2012, 2013, OR 2014 DISASTER

22 RECOVERY DISTRIBUTION.—For purposes of para23 graph (2)(H)— 

24 ‘‘(A) IN GENERAL.—Except as provided in 

25 subparagraph (B), the term ‘qualified disaster 


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1 recovery distribution’ means, with respect to 

2 any federally declared disaster occurring during 

3 2012, 2013, or 2014, any distribution from an 

4 eligible retirement plan made on or after the 

5 applicable disaster date and before January 1, 

6 2015, to an individual whose principal place of 

7 abode on the applicable disaster date, is located 

8 in the disaster area and who has sustained an 

9 economic loss by reason of such federally de10 clared disaster. 

11 ‘‘(B) DOLLAR LIMITATION.— 

12 ‘‘(i) IN GENERAL.—For purposes of 

13 this subsection, the aggregate amount of 

14 distributions received by an individual with 

15 respect to any federally declared disaster 

16 occurring during 2012, 2013, or 2014 

17 shall not exceed $100,000. 

18 ‘‘(ii) TREATMENT OF PLAN DISTRIBU19 TIONS.—If a distribution to an individual 

20 would (without regard to clause (i)) be a 

21 qualified 2012, 2013, or 2014 disaster re22 covery distribution, a plan shall not be 

23 treated as violating any requirement of this 

24 title merely because the plan treats such 

25 distribution as a qualified 2012, 2013, or 


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1 2014 disaster recovery distribution, unless 

2 the aggregate amount of such distributions 

3 from all plans maintained by the employer 

4 (and any member of any controlled group 

5 which includes the employer) to such indi6 vidual with respect to any federally de7 clared disaster occurring during 2012, 

8 2013, or 2014 exceeds $100,000. 

9 ‘‘(iii) CONTROLLED GROUP.—For pur10 poses of clause (ii), the term ‘controlled 

11 group’ means any group treated as a single 

12 employer under subsection (b), (c), (m), or 

13 (o) of section 414. 

14 ‘‘(C) AMOUNT DISTRIBUTED MAY BE RE15 PAID.— 

16 ‘‘(i) IN GENERAL.—Any individual 

17 who receives a qualified 2012, 2013, or 

18 2014 disaster recovery distribution may, at 

19 any time during the 3-year period begin20 ning on the day after the date on which 

21 such distribution was received, make one 

22 or more contributions in an aggregate 

23 amount not to exceed the amount of such 

24 distribution to an eligible retirement plan 

25 of which such individual is a beneficiary 


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1 and to which a rollover contribution of 

2 such distribution could be made under sec3 tion 402(c), 403(a)(4), 403(b)(8), 

4 408(d)(3), or 457(e)(16), as the case may 

5 be. 

6 ‘‘(ii) TREATMENT OF REPAYMENTS OF

7 DISTRIBUTIONS FROM ELIGIBLE RETIRE8 MENT PLANS OTHER THAN IRAS.—For 

9 purposes of this title, if a contribution is 

10 made pursuant to clause (i) with respect to 

11 a qualified 2012, 2013, or 2014 disaster 

12 recovery distribution from an eligible re13 tirement plan other than an individual re14 tirement plan, then the taxpayer shall, to 

15 the extent of the amount of the contribu16 tion, be treated as having received the 

17 qualified 2012, 2013, or 2014 disaster re18 covery distribution in an eligible rollover 

19 distribution (as defined in section 

20 402(c)(4)) and as having transferred the 

21 amount to the eligible retirement plan in a 

22 direct trustee to trustee transfer within 60 

23 days of the distribution. 

24 ‘‘(iii) TREATMENT OF REPAYMENTS

25 FOR DISTRIBUTIONS FROM IRAS.—For 


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1 purposes of this title, if a contribution is 

2 made pursuant to clause (i) with respect to 

3 a qualified 2012, 2013, or 2014 disaster 

4 recovery distribution from an individual re5 tirement plan (as defined by section 

6 7701(a)(37)), then, to the extent of the 

7 amount of the contribution, the qualified 

8 2012, 2013, or 2014 disaster recovery dis9 tribution shall be treated as a distribution 

10 described in section 408(d)(3) and as hav11 ing been transferred to the eligible retire12 ment plan in a direct trustee to trustee 

13 transfer within 60 days of the distribution. 

14 ‘‘(D) INCOME INCLUSION SPREAD OVER 3- 

15 YEAR PERIOD.— 

16 ‘‘(i) IN GENERAL.—In the case of any 

17 qualified 2012, 2013, or 2014 disaster re18 covery distribution, unless the taxpayer 

19 elects not to have this paragraph apply for 

20 any taxable year, any amount required to 

21 be included in gross income for such tax22 able year shall be so included ratably over 

23 the 3-taxable-year period beginning with 

24 such taxable year. 


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1 ‘‘(ii) SPECIAL RULE.—For purposes of 

2 clause (i), rules similar to the rules of sub3 paragraph (E) of section 408A(d)(3) shall 

4 apply. 

5 ‘‘(E) OTHER DEFINITIONS.— 

6 ‘‘(i) FEDERALLY DECLARED DIS7 ASTER; DISASTER AREA.—The terms ‘fed8 erally declared disaster’ and ‘disaster area’ 

9 have the meanings given such terms under 

10 section 165(h)(3)(C). 

11 ‘‘(ii) APPLICABLE DISASTER DATE.— 

12 The term ‘applicable disaster date’ means, 

13 with respect to any federally declared dis14 aster, the date on which such federally de15 clared disaster occurs. 

16 ‘‘(iii) ELIGIBLE RETIREMENT PLAN.— 

17 The term ‘eligible retirement plan’ shall 

18 have the meaning given such term by sec19 tion 402(c)(8)(B). 

20 ‘‘(F) SPECIAL RULES.— 

21 ‘‘(i) EXEMPTION OF DISTRIBUTIONS

22 FROM TRUSTEE TO TRUSTEE TRANSFER

23 AND WITHHOLDING RULES.—For purposes 

24 of sections 401(a)(31), 402(f), and 3405, 

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1 covery distributions shall not be treated as 

2 eligible rollover distributions. 

3 ‘‘(ii) QUALIFIED 2012, 2013, OR 2014

4 DISASTER RECOVERY DISTRIBUTIONS

5 TREATED AS MEETING PLAN DISTRIBU6 TION REQUIREMENTS.—For purposes of 

7 this title, a qualified 2012, 2013, or 2014 

8 disaster recovery distribution shall be 

9 treated as meeting the requirements of sec10 tions 401(k)(2)(B)(i), 403(b)(7)(A)(ii), 

11 403(b)(11), and 457(d)(1)(A).’’. 

12 (3) EFFECTIVE DATE.—The amendments made 

13 by this subsection shall apply to distributions with 

14 respect to disaster declared after December 31, 

15 2011. 

16 (b) LOANS FROM QUALIFIED PLANS.— 

17 (1) IN GENERAL.—Subsection (p) of section 72 

18 of the Internal Revenue Code of 1986 is amended by 

19 adding at the end the following new paragraph: 

20 ‘‘(6) INCREASE IN LIMIT ON LOANS NOT TREAT21 ED AS DISTRIBUTIONS WITH RESPECT TO 2012, 2013, 

22 AND 2014 DISASTERS.— 

23 ‘‘(A) IN GENERAL.—In the case of any 

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1 fied individual made during the applicable pe2 riod— 

3 ‘‘(i) clause (i) of paragraph (2)(A) 

4 shall be applied by substituting ‘$100,000’ 

5 for ‘$50,000’, and 

6 ‘‘(ii) clause (ii) of such paragraph 

7 shall be applied by substituting ‘the 

8 present value of the nonforfeitable accrued 

9 benefit of the employee under the plan’ for 

10 ‘one-half of the present value of the non11 forfeitable accrued benefit of the employee 

12 under the plan’. 

13 ‘‘(B) DELAY OF REPAYMENT.—In the case 

14 of a qualified individual with an outstanding 

15 loan on or after the applicable disaster date 

16 from a qualified employer plan— 

17 ‘‘(i) if the due date pursuant to sub18 paragraph (B) or (C) of paragraph (2) for 

19 any repayment with respect to such loan 

20 occurs during the period beginning on the 

21 applicable disaster date and ending on De22 cember 31, 2014, such due date shall be 

23 delayed for 1 year, 

24 ‘‘(ii) any subsequent repayments with 

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1 priately adjusted to reflect the delay in the 

2 due date under clause (i) and any interest 

3 accruing during such delay, and 

4 ‘‘(iii) in determining the 5-year period 

5 and the term of a loan under subpara6 graph (B) or (C) of paragraph (2), the pe7 riod described in clause (i) shall be dis8 regarded. 

9 ‘‘(C) DEFINITIONS.—For purposes of this 

10 paragraph— 

11 ‘‘(i) QUALIFIED INDIVIDUAL.—The 

12 term ‘qualified individual’ means, with re13 spect to any federally declared disaster oc14 curring during 2012, 2013, or 2014, an in15 dividual whose principal place of abode on 

16 the applicable disaster date is located in 

17 the disaster area and who has sustained an 

18 economic loss by reason of such federally 

19 declared disaster. 

20 ‘‘(ii) APPLICABLE PERIOD.—The ap21 plicable period is the period beginning on 

22 the applicable disaster date and ending on 

23 December 31, 2014. 

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1 erally declared disaster’ and ‘disaster area’ 

2 have the meanings given such terms under 

3 section 165(h)(3)(C). 

4 ‘‘(iv) APPLICABLE DISASTER DATE.— 

5 The term ‘applicable disaster date’ means, 

6 with respect to any federally declared dis7 aster, the date on which such federally de8 clared disaster occurs.’’. 

9 (2) EFFECTIVE DATE.—The amendment made 

10 by this subsection shall apply to loans made with re11 spect to disaster declared after December 31, 2011. 

12 (c) PROVISIONS RELATING TO PLAN AMEND13 MENTS.— 

14 (1) IN GENERAL.—If this subsection applies to 

15 any amendment to any plan or annuity contract, 

16 such plan or contract shall be treated as being oper17 ated in accordance with the terms of the plan during 

18 the period described in paragraph (2)(B)(i). 

19 (2) AMENDMENTS TO WHICH SUBSECTION AP20 PLIES.— 

21 (A) IN GENERAL.—This subsection shall 

22 apply to any amendment to any plan or annuity 

23 contract which is made— 

24 (i) pursuant to any provision of, or 

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1 suant to any regulation issued by the Sec2 retary or the Secretary of Labor under any 

3 provision of, or amendment made by, this 

4 section, and 

5 (ii) on or before the last day of the 

6 first plan year beginning on or after Janu7 ary 1, 2015, or such later date as the Sec8 retary may prescribe. 

9 In the case of a governmental plan (as defined 

10 in section 414(d)), clause (ii) shall be applied 

11 by substituting the date which is 2 years after 

12 the date otherwise applied under clause (ii). 

13 (B) CONDITIONS.—This subsection shall 

14 not apply to any amendment unless— 

15 (i) during the period— 

16 (I) beginning on the date that 

17 the provisions of, and amendments 

18 made by, this section or the regulation 

19 described in subparagraph (A)(i) 

20 takes effect (or in the case of a plan 

21 or contract amendment not required 

22 by the provisions of, or amendments 

23 made by, this section or such regula24 tion, the effective date specified by the 

25 plan), and 


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1 (II) ending on the date described 

2 in subparagraph (A)(ii) (or, if earlier, 

3 the date the plan or contract amend4 ment is adopted), 

5 the plan or contract is operated as if such 

6 plan or contract amendment were in effect; 

7 and 

8 (ii) such plan or contract amendment 

9 applies retroactively for such period. 

10 SEC. 109. ADDITIONAL EXEMPTION FOR HOUSING QUALI11 FIED DISASTER DISPLACED INDIVIDUALS. 

12 (a) IN GENERAL.—Section 151 of the Internal Rev13 enue Code of 1986 is amended by adding at the end the 

14 following new subsection: 

15 ‘‘(g) ADDITIONAL EXEMPTION FOR CERTAIN DIS16 ASTER-DISPLACED INDIVIDUALS.— 

17 ‘‘(1) IN GENERAL.—In the case of any taxable 

18 year beginning in 2012, 2013, or 2014, there shall 

19 be allowed an exemption of $500 for each qualified 

20 disaster-displaced individual with respect to the tax21 payer for the taxable year. 

22 ‘‘(2) LIMITATIONS.— 

23 ‘‘(A) DOLLAR LIMITATION.—The exemp24 tion under paragraph (1) shall not exceed 

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1 tion under this subsection for all prior taxable 

2 years. 

3 ‘‘(B) INDIVIDUALS TAKEN INTO ACCOUNT

4 ONLY ONCE.—An individual shall not be taken 

5 into account under paragraph (1) if such indi6 vidual was taken into account under this sub7 section by the taxpayer for any prior taxable 

8 year. 

9 ‘‘(C) IDENTIFYING INFORMATION RE10 QUIRED.—An individual shall not be taken into 

11 account under paragraph (1) for a taxable year 

12 unless the taxpayer identification number of 

13 such individual is included on the return of the 

14 taxpayer for such taxable year. 

15 ‘‘(3) QUALIFIED DISASTER-DISPLACED INDI16 VIDUAL.— 

17 ‘‘(A) IN GENERAL.—For purposes of this 

18 subsection, the term ‘qualified disaster-dis19 placed individual’ means, with respect to any 

20 taxpayer for any taxable year, any qualified in21 dividual if such individual is provided housing 

22 free of charge by the taxpayer in the principal 

23 residence of the taxpayer for a period of 60 

24 consecutive days which ends in such taxable 


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1 year. Such term shall not include the spouse or 

2 any dependent of the taxpayer. 

3 ‘‘(B) QUALIFIED INDIVIDUAL.—The term 

4 ‘qualified individual’ means any individual 

5 who— 

6 ‘‘(i) on the date of a federally declared 

7 disaster occurring during 2012, 2013, or 

8 2014 maintained such individual’s prin9 cipal place of abode in the disaster area 

10 declared with respect to such disaster, and 

11 ‘‘(ii) was displaced from such prin12 cipal place of abode by reason of the feder13 ally declared disaster. 

14 For purposes of the preceding sentence, the 

15 terms ‘federally declared disaster’ and ‘disaster 

16 area’ have the meanings given such terms in 

17 section 165(h)(3). 

18 ‘‘(4) COMPENSATION FOR HOUSING.—No de19 duction shall be allowed under this subsection if the 

20 taxpayer receives any rent or other amount (from 

21 any source) in connection with the providing of such 

22 housing.’’. 

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

24 this section shall apply to taxable years beginning after 

25 December 31, 2011. 


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1 SEC. 110. EXCLUSIONS OF CERTAIN CANCELLATIONS OF IN2 DEBTEDNESS BY REASON OF 2012, 2013, OR 

3 2014 DISASTERS. 

4 (a) IN GENERAL.—Section 108 of the Internal Rev5 enue Code of 1986 is amended by adding at the end the 

6 following new subsection: 

7 ‘‘(j) DISCHARGE OF INDEBTEDNESS FOR INDIVID8 UALS AFFECTED BY 2012, 2013, AND 2014 DISASTERS.— 

9 ‘‘(1) IN GENERAL.—Except as provided in para10 graph (2), gross income shall not include any 

11 amount which (but for this subsection) would be in12 cludible in gross income by reason of any discharge 

13 (in whole or in part) of indebtedness of a natural 

14 person described in paragraph (3) by an applicable 

15 entity (as defined in section 6050P(c)(1)) during the 

16 applicable period. 

17 ‘‘(2) EXCEPTIONS FOR BUSINESS INDEBTED18 NESS.—Paragraph (1) shall not apply to any indebt19 edness incurred in connection with a trade or busi20 ness. 

21 ‘‘(3) PERSONS DESCRIBED.—A natural person 

22 is described in this paragraph if the principal place 

23 of abode of such person on the applicable disaster 

24 date was located in the disaster area with respect to 

25 any federally declared disaster occurring during 

26 2012, 2013, or 2014. 


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1 ‘‘(4) APPLICABLE PERIOD.—For purposes of 

2 this subsection, the term ‘applicable period’ means 

3 the period beginning on the applicable disaster date 

4 and ending on the date which is 14 months after 

5 such date. 

6 ‘‘(5) OTHER DEFINITIONS.—For purposes of 

7 this subsection— 

8 ‘‘(A) FEDERALLY DECLARED DISASTER; 

9 DISASTER AREA.—The terms ‘federally declared 

10 disaster’ and ‘disaster area’ have the meanings 

11 given such terms under section 165(h)(3)(C). 

12 ‘‘(B) APPLICABLE DISASTER DATE.—The 

13 term ‘applicable disaster date’ means, with re14 spect to any federally declared disaster, the 

15 date on which such federally declared disaster 

16 occurs.’’. 

17 (b) EFFECTIVE DATE.—This section shall apply to 

18 discharges made on or after December 31, 2011. 

19 SEC. 111. SPECIAL RULE FOR DETERMINING EARNED IN20 COME OF INDIVIDUALS AFFECTED BY FEDER21 ALLY DECLARED DISASTERS. 

22 (a) IN GENERAL.—Section 32 of the Internal Rev23 enue Code of 1986 is amended by adding at the end the 

24 following new subsection: 


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1 ‘‘(n) SPECIAL RULE FOR DETERMINING EARNED IN2 COME OF TAXPAYERS AFFECTED BY FEDERALLY DE3 CLARED DISASTERS.— 

4 ‘‘(1) IN GENERAL.—In the case of a qualified 

5 individual with respect to any federally declared dis6 aster occurring during 2012, 2013, or 2014, if the 

7 earned income of the taxpayer for the taxable year 

8 which includes the applicable disaster date is less 

9 than the earned income of the taxpayer for the pre10 ceding taxable year, the credit allowed under this 

11 section and section 24(d) may, at the election of the 

12 taxpayer, be determined by substituting— 

13 ‘‘(A) such earned income for the preceding 

14 taxable year, for 

15 ‘‘(B) such earned income for the taxable 

16 year which includes the applicable date. 

17 ‘‘(2) QUALIFIED INDIVIDUAL.—For purposes of 

18 this subsection, the term ‘qualified individual’ 

19 means, with respect to any federally declared dis20 aster occurring during 2012, 2013, or 2014, any in21 dividual whose principal place of abode on the appli22 cable disaster date, was located— 

23 ‘‘(A) in any portion of a disaster area de24 termined by the President to warrant individual 

25 or individual and public assistance under the 


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1 Robert T. Stafford Disaster Relief and Emer2 gency Assistance Act by reason of the federally 

3 declared disaster, or 

4 ‘‘(B) in any portion of the disaster area 

5 not described in subparagraph (A) and such in6 dividual was displaced from such principal place 

7 of abode by reason of the federally declared dis8 aster. 

9 ‘‘(3) OTHER DEFINITIONS.—For purposes of 

10 this paragraph— 

11 ‘‘(A) FEDERALLY DECLARED DISASTER; 

12 DISASTER AREA.—The terms ‘federally declared 

13 disaster’ and ‘disaster area’ have the meanings 

14 given such terms under section 165(h)(3)(C). 

15 ‘‘(B) APPLICABLE DISASTER DATE.—The 

16 term ‘applicable disaster date’ means, with re17 spect to any federally declared disaster, the 

18 date on which such federally declared disaster 

19 occurs. 

20 ‘‘(4) SPECIAL RULES.— 

21 ‘‘(A) APPLICATION TO JOINT RETURNS.— 

22 For purposes of paragraph (1), in the case of 

23 a joint return for a taxable year which includes 

24 the disaster date— 


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1 ‘‘(i) such paragraph shall apply if ei2 ther spouse is a qualified individual, and 

3 ‘‘(ii) the earned income of the tax4 payer for the preceding taxable year shall 

5 be the sum of the earned income of each 

6 spouse for such preceding taxable year. 

7 ‘‘(B) UNIFORM APPLICATION OF ELEC8 TION.—Any election made under paragraph (1) 

9 shall apply with respect to both sections 24(d) 

10 and this section. 

11 ‘‘(C) ERRORS TREATED AS MATHEMATICAL

12 ERROR.—For purposes of section 6213, an in13 correct use on a return of earned income pursu14 ant to paragraph (1) shall be treated as a 

15 mathematical or clerical error. 

16 ‘‘(D) NO EFFECT ON DETERMINATION OF

17 GROSS INCOME, ETC.—Except as otherwise pro18 vided in this subsection, this title shall be ap19 plied without regard to any substitution under 

20 paragraph (1).’’. 

21 (b) CHILD TAX CREDIT.—Section 24(d) of the Inter22 nal Revenue Code of 1986 is amended by adding at the 

23 end the following new paragraph: 

24 ‘‘(5) SPECIAL RULE FOR DETERMINING

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1 ERALLY DECLARED DISASTERS.—For election by 

2 qualified individuals with respect to certain federally 

3 declared disasters to substitute earned income from 

4 the preceding taxable year, see section 32(n).’’. 

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

6 this section shall apply to taxable years beginning after 

7 December 31, 2011. 

8 SEC. 112. INCREASE IN REHABILITATION CREDIT FOR 

9 BUILDINGS IN 2012, 2013, AND 2014 DISASTER 

10 AREAS. 

11 (a) IN GENERAL.—Section 47 of the Internal Rev12 enue Code of 1986 is amended by adding at the end the 

13 following new subsection: 

14 ‘‘(e) SPECIAL RULE FOR EXPENDITURES MADE IN

15 CONNECTION WITH CERTAIN DISASTERS.— 

16 ‘‘(1) IN GENERAL.—In the case of qualified re17 habilitation expenditures paid or incurred during the 

18 applicable period with respect to any qualified reha19 bilitated building or certified historic structure lo20 cated in a disaster area with respect to any federally 

21 declared disaster occurring in 2012, 2013, or 2014, 

22 subsection (a) shall be applied— 

23 ‘‘(A) by substituting ‘13 percent’ for ‘10 

24 percent’ in paragraph (1) thereof, and 


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1 ‘‘(B) by substituting ‘26 percent’ for ‘20 

2 percent’ in paragraph (2) thereof. 

3 ‘‘(2) DEFINITIONS.—For purposes of this sub4 section— 

5 ‘‘(A) FEDERALLY DECLARED DISASTER; 

6 DISASTER AREA.—The terms ‘federally declared 

7 disaster’ and ‘disaster area’ have the meanings 

8 given such terms under section 165(h)(3)(C). 

9 ‘‘(B) APPLICABLE PERIOD.—The term ‘ap10 plicable period’ means the period beginning on 

11 the applicable disaster date and ending on De12 cember 31, 2014. 

13 ‘‘(C) APPLICABLE DISASTER DATE.—The 

14 term ‘applicable disaster date’ means, with re15 spect to any federally declared disaster, the 

16 date on which such federally declared disaster 

17 occurs.’’. 

18 (b) EFFECTIVE DATE.—The amendments made by 

19 this section shall apply to amounts paid or incurred after 

20 December 31, 2011. 

21 SEC. 113. ADVANCED REFUNDINGS OF CERTAIN TAX-EX22 EMPT BONDS. 

23 (a) IN GENERAL.—Section 149(d) of the Internal 

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1 graph (7) as paragraph (8) and by inserting after para2 graph (6) the following new paragraph: 

3 ‘‘(7) SPECIAL RULE WITH RESPECT TO CER4 TAIN NATURAL DISASTERS.— 

5 ‘‘(A) IN GENERAL.—With respect to a 

6 bond described in subparagraph (C), one addi7 tional advance refunding after the date of the 

8 enactment of this paragraph and before Janu9 ary 1, 2017, shall be allowed under the rules of 

10 this subsection if— 

11 ‘‘(i) the Governor of the State des12 ignates the advance refunding bond for 

13 purposes of this subsection, and 

14 ‘‘(ii) the requirements of subpara15 graph (E) are met. 

16 ‘‘(B) CERTAIN PRIVATE ACTIVITY

17 BONDS.—With respect to a bond described in 

18 subparagraph (C) which is an exempt facility 

19 bond described in paragraph (1) or (2) of sec20 tion 142(a), one advance refunding after the 

21 date of the enactment of this paragraph and be22 fore January 1, 2017, shall be allowed under 

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1 ments of clauses (i) and (ii) of subparagraph 

2 (A) are met. 

3 ‘‘(C) BONDS DESCRIBED.—A bond is de4 scribed in this paragraph if, with respect to any 

5 federally declared disaster, such bond— 

6 ‘‘(i) was outstanding on the applicable 

7 disaster date, and 

8 ‘‘(ii) is issued by an applicable State 

9 or a political subdivision thereof. 

10 ‘‘(D) AGGREGATE LIMIT.—The maximum 

11 aggregate face amount of bonds which may be 

12 designated under this subsection by the Gov13 ernor of a State shall not exceed 

14 $4,500,000,000. 

15 ‘‘(E) ADDITIONAL REQUIREMENTS.—The 

16 requirements of this subparagraph are met with 

17 respect to any advance refunding of a bond de18 scribed in subparagraph (C) if— 

19 ‘‘(i) no advance refundings of such 

20 bond would be allowed under this title on 

21 or after the applicable disaster date, 

22 ‘‘(ii) the advance refunding bond is 

23 the only other outstanding bond with re24 spect to the refunded bond, and 


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1 ‘‘(iii) the requirements of section 148 

2 are met with respect to all bonds issued 

3 under this paragraph. 

4 ‘‘(F) DEFINITIONS.—For purposes of this 

5 subsection— 

6 ‘‘(i) FEDERALLY DECLARED DIS7 ASTER; DISASTER AREA.—The terms ‘fed8 erally declared disaster’ and ‘disaster area’ 

9 have the meanings given such terms under 

10 section 165(h)(3)(C). 

11 ‘‘(ii) APPLICABLE DISASTER DATE.— 

12 The term ‘applicable disaster date’ means, 

13 with respect to any federally declared dis14 aster, the date on which such federally de15 clared disaster occurs. 

16 ‘‘(iii) APPLICABLE STATE.—The term 

17 ‘applicable State’ means, with respect to 

18 any federally declared disaster, any State 

19 in which a portion of the disaster area is 

20 located.’’. 

21 SEC. 114. QUALIFIED DISASTER AREA RECOVERY BONDS. 

22 (a) IN GENERAL.—Subpart A of part IV of sub23 chapter B of chapter 1 of the Internal Revenue Code of 

24 1986 is amended by inserting after section 146 the fol25 lowing new section: 


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1 ‘‘SEC. 146A. QUALIFIED DISASTER AREA RECOVERY BONDS. 

2 ‘‘(a) IN GENERAL.—For purposes of this title, any 

3 qualified disaster area recovery bond shall— 

4 ‘‘(1) be treated as an exempt facility bond, and 

5 ‘‘(2) not be subject to section 146. 

6 ‘‘(b) QUALIFIED DISASTER AREA RECOVERY

7 BOND.—For purposes of this section, the term ‘qualified 

8 disaster area recovery bond’ means any bond issued as 

9 part of an issue if— 

10 ‘‘(1) 95 percent or more of the net proceeds of 

11 such issue are to be used for qualified project costs, 

12 ‘‘(2) such bond is issued by a State or any po13 litical subdivision thereof any part of which is in a 

14 qualified disaster area, 

15 ‘‘(3) the Governor of the issuing State des16 ignates such bond for purposes of this section, and 

17 ‘‘(4) such bond is issued after the date of the 

18 enactment of this section and before January 1, 

19 2016. 

20 ‘‘(c) LIMITATION ON AMOUNT OF BONDS.— 

21 ‘‘(1) IN GENERAL.—The maximum aggregate 

22 face amount of bonds which may be designated 

23 under this section by any State shall not exceed 

24 $10,000,000,000. 


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1 ‘‘(2) MOVABLE PROPERTY.—No bonds shall be 

2 issued which are to be used for movable fixtures and 

3 equipment. 

4 ‘‘(3) TREATMENT OF CURRENT REFUNDING

5 BONDS.—Paragraph (1) shall not apply to any bond 

6 (or series of bonds) issued to refund a qualified dis7 aster area recovery bond, if— 

8 ‘‘(A) the average maturity date of the issue 

9 of which the refunding bond is a part is not 

10 later than the average maturity date of the 

11 bonds to be refunded by such issue, 

12 ‘‘(B) the amount of the refunding bond 

13 does not exceed the outstanding amount of the 

14 refunded bond, and 

15 ‘‘(C) the net proceeds of the refunding 

16 bond are used to redeem the refunded bond not 

17 later than 90 days after the date of the 

18 issuance of the refunding bond. 

19 For purposes of subparagraph (A), average maturity 

20 shall be determined in accordance with section 

21 147(b)(2)(A). 

22 ‘‘(d) QUALIFIED PROJECT COSTS.—For purposes of 

23 this section, the term ‘qualified project costs’ means the 

24 cost of acquisition, construction, reconstruction, and ren25 ovation of— 


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1 ‘‘(1) residential rental property (as defined in 

2 section 142(d)), 

3 ‘‘(2) nonresidential real property (including 

4 fixed improvements associated with such property), 

5 ‘‘(3) a facility described in paragraph (2) or (3) 

6 of section 142(a), or 

7 ‘‘(4) public utility property (as defined in sec8 tion 168(i)(10)), 

9 which is located in a qualified disaster area and was dam10 aged or destroyed by reason of a federally declared dis11 aster. 

12 ‘‘(e) SPECIAL RULES.—In applying this title to any 

13 qualified disaster area recovery bond, the following modi14 fications shall apply: 

15 ‘‘(1) Section 147(d) (relating to acquisition of 

16 existing property not permitted) shall be applied by 

17 substituting ‘50 percent’ for ‘15 percent’ each place 

18 it appears. 

19 ‘‘(2) Section 148(f)(4)(C) (relating to exception 

20 from rebate for certain proceeds to be used to fi21 nance construction expenditures) shall apply to the 

22 available construction proceeds of bonds issued 

23 under this section. For purposes of the preceding 

24 sentence, the following spending requirements shall 


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1 apply in lieu of the requirements in clause (ii) of 

2 such section: 

3 ‘‘(A) 40 percent of such available construc4 tion proceeds are spent for the governmental 

5 purposes of the issue within the 2-year period 

6 beginning on the date the bonds are issued, 

7 ‘‘(B) 60 percent of such proceeds are spent 

8 for such purposes within the 3-year period be9 ginning on such date, 

10 ‘‘(C) 80 percent of such proceeds are spent 

11 for such purposes within the 4-year period be12 ginning on such date, and 

13 ‘‘(D) 100 percent of such proceeds are 

14 spent for such purposes within the 5-year pe15 riod beginning on such date. 

16 ‘‘(3) Repayments of principal on financing pro17 vided by the issue— 

18 ‘‘(A) may not be used to provide financing, 

19 and 

20 ‘‘(B) must be used not later than the close 

21 of the 1st semiannual period beginning after 

22 the date of the repayment to redeem bonds 

23 which are part of such issue. 

24 The requirement of subparagraph (B) shall be treat25 ed as met with respect to amounts received within 


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1 5 years after the date of issuance of the issue (or, 

2 in the case of a refunding bond, the date of issuance 

3 of the original bond) if such amounts are used by 

4 the close of such 5 years to redeem bonds which are 

5 part of such issue. 

6 ‘‘(4) Section 57(a)(5) shall not apply. 

7 ‘‘(f) SEPARATE ISSUE TREATMENT OF PORTIONS OF

8 AN ISSUE.—This section shall not apply to the portion of 

9 an issue which (if issued as a separate issue) would be 

10 treated as a qualified bond or as a bond that is not a 

11 private activity bond (determined without regard to para12 graph (1)), if the issuer elects to so treat such portion. 

13 ‘‘(g) QUALIFIED DISASTER AREA; FEDERALLY DE14 CLARED DISASTER.— 

15 ‘‘(1) QUALIFIED DISASTER AREA.—The term 

16 ‘qualified disaster area’ means any area determined 

17 to warrant individual or individual and public assist18 ance from the Federal Government under the Robert 

19 T. Stafford Disaster Relief and Emergency Assist20 ance Act by reason of a federally declared disaster 

21 occurring during the period beginning after Decem22 ber 31, 2011, and before January 1, 2015. 

23 ‘‘(2) FEDERALLY DECLARED DISASTER.—The 

24 term ‘federally declared disaster’ has the meaning 

25 given to such term under section 165(h)(3)(C).’’. 


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1 (b) CLERICAL AMENDMENT.—The table of sections 

2 for subpart A of part IV of subchapter B of chapter 1 

3 of such Code is amended by inserting after the item relat4 ing to section 146 the following new item: 

‘‘Sec. 146A. Qualified disaster area recovery bonds.’’. 

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

6 this section shall apply to obligations issued after the date 

7 of the enactment of this Act. 

8 SEC. 115. ADDITIONAL LOW-INCOME HOUSING CREDIT AL9 LOCATIONS. 

10 (a) IN GENERAL.—Paragraph (3) of section 42(h) of 

11 the Internal Revenue Code of 1986 (relating to limitation 

12 on aggregate credit allowable with respect to projects lo13 cated in a State) is amended by adding at the end the 

14 following new subparagraph: 

15 ‘‘(J) INCREASE IN STATE HOUSING CREDIT

16 FOR STATES DAMAGED BY NATURAL DISAS17 TERS.— 

18 ‘‘(i) IN GENERAL.—In the case of cal19 endar year 2014, the State housing credit 

20 ceiling of each State any portion of which 

21 includes any portion of a qualifying dis22 aster area shall be increased by so much of 

23 the aggregate housing credit dollar amount 

24 as does not exceed the applicable limitation 

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1 cy of such State for such calendar year to 

2 buildings located in qualifying disaster 

3 areas. 

4 ‘‘(ii) APPLICABLE LIMITATION.—For 

5 purposes of clause (i), the applicable limi6 tation is the greater of— 

7 ‘‘(I) $8 multiplied by the popu8 lation of the qualifying disaster areas 

9 in such State, or 

10 ‘‘(II) 50 percent of the State 

11 housing credit ceiling (determined 

12 without regard to this subparagraph) 

13 for 2013. 

14 ‘‘(iii) APPLICABLE PERCENTAGE.— 

15 For purposes of this section, the applicable 

16 percentage with respect to any building to 

17 which amounts allocated under clause (i) 

18 shall be determined under subsection 

19 (b)(2), except that subparagraph (A) 

20 thereof shall be applied by substituting 

21 ‘January 1, 2015’ for ‘January 1, 2014’. 

22 ‘‘(iv) ALLOCATIONS TREATED AS

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1 termining the unused State housing credit 

2 ceiling under subparagraph (C) for any 

3 calendar year, any increase in the State 

4 housing credit ceiling under clause (i) shall 

5 be treated as an amount described in 

6 clause (ii) of such subparagraph. 

7 ‘‘(v) QUALIFYING DISASTER AREA.— 

8 For purposes of this subparagraph, the 

9 term ‘qualifying federally declared disaster 

10 area’ means— 

11 ‘‘(I) each county which is deter12 mined to warrant individual or indi13 vidual and public assistance from the 

14 Federal Government under a quali15 fying natural disaster declaration de16 scribed in clause (vi)(I), and 

17 ‘‘(II) each county not described 

18 in subclause (I) which is included in 

19 the geographical area covered by a 

20 qualifying natural disaster declaration 

21 described in subclause (II) or (III) of 

22 clause (vi). 

23 ‘‘(vi) QUALIFYING NATURAL DISASTER

24 DECLARATION.—For purposes of clause 


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1 (v), the term ‘qualifying natural disaster 

2 declaration’ means— 

3 ‘‘(I) a federally declared disaster 

4 (as defined in section 165(h)(3)(C)) 

5 occurring during the period beginning 

6 after December 31, 2011, and before 

7 January 1, 2015, 

8 ‘‘(II) a natural disaster declared 

9 by the Secretary of Agriculture in 

10 2011 due to damaging weather and 

11 other conditions relating to Hurricane 

12 Irene or Tropical Storm Lee under 

13 section 321(a) of the Consolidated 

14 Farm and Rural Development Act (7 

15 U.S.C. 1961(a)), or 

16 ‘‘(III) a major disaster or emer17 gency designated by the President in 

18 2011 due to damaging weather and 

19 other conditions relating to Hurricane 

20 Irene or Tropical Storm Lee under 

21 the Robert T. Stafford Disaster Relief 

22 and Emergency Assistance Act (42 

23 U.S.C. 5121 et seq.).’’. 


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

2 this section shall take effect on the date of the enactment 

3 of this Act. 

4 SEC. 116. FACILITATION OF TRANSFER OF WATER LEASING 

5 AND WATER BY MUTUAL DITCH OR IRRIGA6 TION COMPANIES IN DISASTER AREAS. 

7 (a) IN GENERAL.—Paragraph (12) of section 501(c) 

8 of the Internal Revenue Code of 1986 is amended by add9 ing at the end the following new subparagraph: 

10 ‘‘(I) TREATMENT OF MUTUAL DITCH OR

11 IRRIGATION COMPANIES IN CERTAIN DISASTER

12 AREAS.— 

13 ‘‘(i) IN GENERAL.—In the case of a 

14 qualified mutual ditch or irrigation com15 pany or like organization, subparagraph 

16 (A) shall be applied without taking into ac17 count any income received or accrued dur18 ing the applicable period— 

19 ‘‘(I) from the sale, lease, or ex20 change of fee or other interests in real 

21 property, including interests in water, 

22 ‘‘(II) from the sale or exchange 

23 of stock in a mutual ditch or irriga24 tion company or like organization or 


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1 contract rights for the delivery or use 

2 of water, 

3 ‘‘(III) from the investment of 

4 proceeds from sales, leases, or ex5 changes under subclauses (I) and (II), 

6 or 

7 ‘‘(IV) from the United States, or 

8 a State or local government, resulting 

9 from the federally declared disaster, 

10 except that any income received under sub11 clause (I), (II), (III), or (IV) which is dis12 tributed or expended for expenses (other 

13 than for operations, maintenance, and cap14 ital improvements) of the qualified mutual 

15 ditch or irrigation company or like organi16 zation shall be treated as nonmember in17 come in the year in which it is distributed 

18 or expended. 

19 ‘‘(ii) QUALIFIED MUTUAL DITCH OR

20 IRRIGATION COMPANY OR LIKE ORGANIZA21 TION.—For purposes of this paragraph— 

22 ‘‘(I) IN GENERAL.—The term 

23 ‘qualified mutual ditch or irrigation 

24 company or like organization’ means 

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1 pany or like organization that di2 verted, delivered, transported, stored, 

3 or used its water for agricultural irri4 gation purposes on its own or through 

5 its shareholders in a qualified disaster 

6 area during 2012, 2013, or 2014. 

7 ‘‘(II) QUALIFIED ASSET.—The 

8 term ‘qualified asset’ means any real 

9 property or tangible personal property 

10 used in the mutual ditch or irrigation 

11 company’s (or like organization’s) sys12 tem. 

13 ‘‘(III) MULTIPLE AREAS.—Under 

14 regulations, if the qualified assets of 

15 any mutual ditch or irrigation com16 pany or like organization are located 

17 in more than 1 qualified disaster area, 

18 all such areas shall be treated as 1 

19 area and if more than 1 federally de20 clared disaster is involved, the date on 

21 which the last of such disasters oc22 curred shall be the date used for pur23 poses of this paragraph. 

24 ‘‘(iii) APPLICABLE PERIOD.—For pur25 poses of this paragraph, the term ‘applicaVerDate Mar 15 2010 00:40 Jul 17, 2014 Jkt 039200 PO 00000 Frm 00050 Fmt 6652 Sfmt 6201 E:\BILLS\H5082.IH H5082

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1 ble period’ means the taxable year in which 

2 the federally declared disaster occurred 

3 and the 5 following taxable years. 

4 ‘‘(iv) OTHER DEFINITIONS.— 

5 ‘‘(I) QUALIFIED DISASTER

6 AREA.—The term ‘qualified disaster 

7 area’ means any area determined to 

8 warrant individual or individual and 

9 public assistance from the Federal 

10 Government under the Robert T. 

11 Stafford Disaster Relief and Emer12 gency Assistance Act by reason of a 

13 federally declared disaster occurring 

14 during the period beginning on Janu15 ary 1, 2012, and ending on December 

16 31, 2014. 

17 ‘‘(II) FEDERALLY DECLARED

18 DISASTER.—The term ‘federally de19 clared disaster’ has the meaning given 

20 to such term under section 

21 165(h)(3)(C).’’. 

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

23 subsection (a) shall apply to taxable years ending after 

24 December 31, 2011. 


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1 TITLE II—OTHER DISASTER TAX 

2 RELIEF PROVISIONS 

3 SEC. 201. EXCLUSION FOR DISASTER MITIGATION PAY4 MENTS RECEIVED FROM STATE AND LOCAL 

5 GOVERNMENTS. 

6 (a) IN GENERAL.—Paragraph (2) of section 139(g) 

7 of the Internal Revenue Code of 1986 is amended by in8 serting ‘‘, or any other amount which is paid by a State 

9 or local government or agency or instrumentality thereof,’’ 

10 after ‘‘(as in effect on such date)’’. 

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

12 this section shall apply to payments received after the date 

13 of the enactment of this Act. 

14 SEC. 202. NATURAL DISASTER FUNDS. 

15 (a) NATURAL DISASTER FUND.—Subpart C of part 

16 II of subchapter E of chapter 1 of the Internal Revenue 

17 Code of 1986 is amended by inserting after section 468B 

18 the following new section: 

19 ‘‘SEC. 468C. SPECIAL RULES FOR NATURAL DISASTER 

20 FUNDS. 

21 ‘‘(a) IN GENERAL.—If a qualified taxpayer elects the 

22 application of this section, there shall be allowed as a de23 duction for any taxable year the amount of payments 

24 made by the taxpayer to a natural disaster fund during 

25 such taxable year. 


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1 ‘‘(b) NATURAL DISASTER FUND.—The term ‘natural 

2 disaster fund’ means a fund meeting the following require3 ments: 

4 ‘‘(1) DESIGNATION.—The taxpayer des5 ignates— 

6 ‘‘(A) the fund as a natural disaster fund in 

7 the manner prescribed by the Secretary, and 

8 ‘‘(B) the line or lines of business to which 

9 the fund applies. 

10 ‘‘(2) SEGREGATION.—The assets of the fund 

11 are segregated from other assets of the taxpayer. 

12 ‘‘(3) INVESTMENTS.— 

13 ‘‘(A) The assets of the fund are main14 tained in one or more qualified accounts and 

15 are invested only in— 

16 ‘‘(i) deposits with banks whose depos17 its are insured subject to applicable limits 

18 by the Federal Deposit Insurance Corpora19 tion, or 

20 ‘‘(ii) in stock or other securities in 

21 which the fund would be permitted to in22 vest if it were a capital construction fund 

23 subject to the investment limitations of 

24 paragraphs (2) and (3) of section 

25 7518(b)(2). 


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1 ‘‘(B) All investment earnings (including 

2 gains and losses) from investments of the fund 

3 become part of the fund. 

4 ‘‘(4) CONTRIBUTIONS TO THE FUND.—The 

5 fund does not accept any deposits (or other 

6 amounts) other than cash payments with respect to 

7 which a deduction is allowable under subsection (a) 

8 and earnings (including gains and losses) from fund 

9 investments. 

10 ‘‘(5) PURPOSE.—The fund is established and 

11 maintained for the purposes of covering costs, ex12 penses, and losses (including business interruption 

13 losses) resulting from a Federally declared natural 

14 disaster to the extent such costs are not covered by 

15 insurance. 

16 ‘‘(6) MAXIMUM BALANCE.—The balance of the 

17 fund does not exceed the lesser of— 

18 ‘‘(A) the sum of— 

19 ‘‘(i) 150 percent of the maximum de20 ductible, and 

21 ‘‘(ii) 100 percent of the maximum co22 insurance (to the extent not taken into ac23 count in clause (i)), 

24 that, in the case of a Federally declared natural 

25 disaster resulting in losses, the taxpayer could 


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1 be expected to pay with respect to property and 

2 business interruption insurance maintained by 

3 the taxpayer for the line of business to which 

4 the fund applies and that would cover losses re5 sulting from a Federally declared natural dis6 aster, and 

7 ‘‘(B) the maximum loss under any insur8 ance coverage that the taxpayer could reason9 ably expect to occur for the line of business in 

10 the case of a severe natural disaster. 

11 ‘‘(7) FINANCIAL STATEMENTS.—The fund or 

12 the balance of the fund is recorded in the taxpayer’s 

13 financial statements in accordance with generally ac14 cepted accounting principles and not as a current 

15 asset and the footnotes to the taxpayer’s financial 

16 statements include a short description of the fund 

17 and its purposes. 

18 ‘‘(8) INSURANCE.—The taxpayer property in19 surance maintained by the qualified taxpayer applies 

20 to 75 percent or more of the property used— 

21 ‘‘(A) in the qualified taxpayer’s line of 

22 business to which the fund relates, and 

23 ‘‘(B) in the United States. 


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1 ‘‘(c) QUALIFIED TAXPAYER.—For purposes of this 

2 section, the term ‘qualified taxpayer’ means any taxpayer 

3 that— 

4 ‘‘(1) actively conducts a trade or business, and 

5 ‘‘(2) maintains property insurance with respect 

6 to such trade or business that insures against losses 

7 in natural disasters. 

8 ‘‘(d) FAILURE TO MEET REQUIREMENTS.—If a fund 

9 that was a natural disaster fund ceases to meet any of 

10 the requirements of subsection (b) or a taxpayer who has 

11 a natural disaster fund ceases to meet the requirement 

12 of subsection (c), the entire balance of the fund shall be 

13 deemed distributed in a nonqualified distribution at the 

14 time the fund ceases to meet such requirements. 

15 ‘‘(e) TAXATION OF FUND.— 

16 ‘‘(1) IN GENERAL.—The earnings (including 

17 gains and losses) from the investment and reinvest18 ment of amounts held in the fund shall not be taken 

19 into account in determining the gross income of the 

20 taxpayer that owns the fund. 

21 ‘‘(2) NOT A SEPARATE TAXPAYER.—A natural 

22 disaster fund shall not be considered a separate tax23 payer for purposes of this subtitle. 

24 ‘‘(f) TAXATION OF DISTRIBUTIONS FROM THE

25 FUND.— 


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1 ‘‘(1) QUALIFIED DISTRIBUTIONS.—For pur2 poses of this chapter, qualified distributions shall be 

3 treated in the same manner as proceeds from prop4 erty or business interruption insurance. 

5 ‘‘(2) NONQUALIFIED DISTRIBUTIONS.— 

6 ‘‘(A) IN GENERAL.—In the case of any 

7 taxable year for which there is a nonqualified 

8 distribution— 

9 ‘‘(i) such nonqualified distributions 

10 shall be excluded from the gross income of 

11 the taxpayer, and 

12 ‘‘(ii) the tax imposed by this chapter 

13 (determined without regard to this sub14 section) shall be increased by the product 

15 of the amount of such nonqualified dis16 tribution and the highest rate of tax speci17 fied in section 1 (section 11 in the case of 

18 a corporation). 

19 ‘‘(B) TAX BENEFIT RULE; COORDINATION

20 WITH DEDUCTION FOR NET OPERATING

21 LOSSES.—Rules similar to the rules of subpara22 graphs (B) and (C) of section 7518(g)(6) shall 

23 apply for purposes of this paragraph. 

24 ‘‘(3) ADDITIONAL TAX.—The tax imposed by 

25 this chapter for any taxable year on any taxpayer 


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1 that a owns natural disaster fund shall be increased 

2 by the greater of— 

3 ‘‘(A) 20 percent of the amount of any non4 qualified distributions from the fund in the tax5 able year, and 

6 ‘‘(B) an amount equal to interest, at the 

7 underpayment rate established under section 

8 6621, on the nonqualified distribution from the 

9 time the amount is added to the fund to the 

10 time the amount is distributed. 

11 ‘‘(4) INTEREST CALCULATION.—For purposes 

12 of calculating interest under paragraph (3)(B)— 

13 ‘‘(A) all investment earnings (including 

14 gains or losses) in taxable year shall be treated 

15 as added to the fund on the last day of the tax16 able year, and 

17 ‘‘(B) amounts distributed from the fund 

18 shall be treated as distributed on a first-in, 

19 first-out basis. 

20 ‘‘(g) DEFINITIONS.—For purposes of this section— 

21 ‘‘(1) FEDERALLY DECLARED NATURAL DIS22 ASTER.—The term ‘Federally declared natural dis23 aster’ means a natural disaster that is determined 

24 by Presidential declaration under the Robert T. 

25 Stafford Disaster Relief and Emergency Assistance 


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1 Act to warrant individual or individual and public 

2 assistance under such Act. 

3 ‘‘(2) NONQUALIFIED DISTRIBUTION.—The term 

4 ‘nonqualified distribution’ means a distribution from 

5 a natural disaster fund other than a qualified dis6 tribution. 

7 ‘‘(3) QUALIFIED ACCOUNT.—The term ‘quali8 fied account’ means an account with a bank (as de9 fined in section 581) or a brokerage account but 

10 only if the investments of such accounts are limited 

11 to those permitted by subsection (b)(3) and no in12 vestments are made in a related person (as defined 

13 in section 465(b)(3)(C)) to the taxpayer. 

14 ‘‘(4) QUALIFIED DISTRIBUTION.— 

15 ‘‘(A) IN GENERAL.—The term ‘qualified 

16 distribution’ means with respect to natural dis17 aster fund an amount equal to the excess of— 

18 ‘‘(i) costs, expenses, and losses (in19 cluding losses of a type reimbursable by 

20 proceeds of business interruption insur21 ance) incurred by the taxpayer as a result 

22 of the Federally declared natural disaster 

23 with respect to the line or lines of business 

24 for which the fund was designated, over 


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1 ‘‘(ii) the proceeds of property and 

2 business interruption insurance paid for 

3 the benefit of the taxpayer with respect to 

4 costs, expenses, and losses described in 

5 clause (i). 

6 ‘‘(B) LIMITATION.—A distribution from a 

7 natural disaster fund shall not be treated as a 

8 qualified distribution if such distribution is allo9 cated to a Federally declared natural disaster 

10 occurring more than 3 years before the date of 

11 such distribution. 

12 ‘‘(h) SPECIAL RULES.—For purposes of this sec13 tion— 

14 ‘‘(1) NO DOUBLE COUNTING.—Any portion of 

15 any deductible or coinsurance taken into account 

16 under subsection (b)(6) in determining the max17 imum balance for a natural disaster fund shall not 

18 be taken into account in determining the maximum 

19 balance for another natural disaster fund. 

20 ‘‘(2) EXCESS BALANCE.— 

21 ‘‘(A) IN GENERAL.—If the balance of a 

22 natural disaster fund exceeds the maximum bal23 ance permitted by subsection (b)(6) by reason 

24 of investment earnings or a reduction in the 

25 maximum balance, the account shall not cease 


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1 to be a natural disaster fund as the result of 

2 exceeding such limit if the excess is distributed 

3 within 120 days of the date that such excess 

4 first occurred. 

5 ‘‘(B) TREATMENT OF DISTRIBUTIONS OF

6 EXCESS BALANCE.—In the case of any distribu7 tion of the excess balance of a natural disaster 

8 fund within 120 days of the date that such ex9 cess first occurred— 

10 ‘‘(i) paragraphs (2) and (3) of sub11 section (f) shall not apply to the distribu12 tion of such excess if distributed within 

13 such period, and 

14 ‘‘(ii) the amount of such distribution 

15 shall be included in the gross income of the 

16 taxpayer in the year such distribution was 

17 made. 

18 ‘‘(C) ANTI-ABUSE RULE.—Subparagraph 

19 (B) shall not apply in the case of any reduction 

20 in the maximum balance resulting from any ac21 tion of the taxpayer the primary purpose of 

22 which was to reduce the maximum balance to 

23 enable a distribution that would not be subject 

24 to the maximum tax rate calculation or the ad25 ditional tax. 


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1 ‘‘(3) CERTAIN ASSET ACQUISITIONS.—The 

2 transfer of a natural disaster fund (or the portion of 

3 a natural disaster fund) from one person to another 

4 person shall not constitute a nonqualified distribu5 tion if— 

6 ‘‘(A) such transfer is part of a trans7 action— 

8 ‘‘(i) to which section 381 applies, 

9 ‘‘(ii) the transferee acquires substan10 tially all of the assets of the transferor 

11 used in the line or lines of business for 

12 which the fund was designated, 

13 ‘‘(iii) the transferee acquires substan14 tially all of the assets of the transferor 

15 used in one, but not all, of the lines of 

16 business for which the fund was des17 ignated, or 

18 ‘‘(iv) the transferee acquires substan19 tially all of the transferor’s assets located 

20 in a geographical area and used in a line 

21 of business for which the fund was des22 ignated, and 

23 ‘‘(B) the transferee elects to treat the ac24 quired natural disaster fund (or portion there25 of) as a natural disaster fund for the line of 


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1 business for which the transferor had previously 

2 designated the fund and as a continuation of 

3 the fund (or pro rata portion thereof) for pur4 poses of determining the additional tax imposed 

5 by subsection (f)(4). 

6 ‘‘(i) REGULATIONS.—The Secretary shall prescribe 

7 such regulations as may be necessary or appropriate to 

8 carry out the provisions of this section.’’. 

9 (b) CLERICAL AMENDMENT.—The table of sections 

10 for subpart C of part II of subchapter E of chapter 1 of 

11 the Internal Revenue Code of 1986 is amended by insert12 ing after the item relating to section 468B the following 

13 new item: 

‘‘Sec. 468C. Special rules for natural disaster funds.’’. 

14 (c) EFFECTIVE DATE.—The amendment made by 

15 this section shall apply to taxable years beginning after 

16 December 31, 2014. 

Æ 


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