II 

113TH CONGRESS 

2D SESSION S. 2233 

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

and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

APRIL 9, 2014 

Mr. SCHUMER (for himself, Mr. MENENDEZ, Mr. BENNET, Ms. LANDRIEU, 

Mr. UDALL of Colorado, Mrs. GILLIBRAND, Mr. ROCKEFELLER, and Mr. 

BOOKER) introduced the following bill; which was read twice and referred 

to the Committee on Finance 

A BILL 

To provide tax relief for major disaster areas declared in 

2012 and 2013 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’’. 

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

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—TAX RELIEF RELATING TO DISASTERS IN 2012 AND 

2013 


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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 and 2013. 

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

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

2012 and 2013 disasters. 

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

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

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

declared disasters in 2012 or 2013. 

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

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

or 2013 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 and 2013 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. 

1 TITLE I—TAX RELIEF RELATING 

2 TO DISASTERS IN 2012 AND 2013 

3 SEC. 101. EXPENSING OF QUALIFIED DISASTER EXPENSES. 

4 (a) IN GENERAL.—Section 198A(b)(2) of the Inter5 nal Revenue Code of 1986 is amended— 

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

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

8 beginning after December 31, 2007, and before Jan9 uary 1, 2010, or during the period beginning after 

10 December 31, 2011, and before January 1, 2014’’, 

11 and 


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

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

3 ‘‘during any such period’’. 

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

5 this section shall apply to amounts paid or incurred after 

6 December 31, 2011, in connection with disasters declared 

7 after such date. 

8 SEC. 102. INCREASED LIMITATION ON CHARITABLE CON9 TRIBUTIONS FOR DISASTER RELIEF. 

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

11 of the Internal Revenue Code of 1986 is amended by re12 designating subparagraphs (F) and (G) as subparagraphs 

13 (G) and (H), respectively, and by inserting after subpara14 graph (E) the following new subparagraph: 

15 ‘‘(F) QUALIFIED DISASTER CONTRIBU16 TIONS.— 

17 ‘‘(i) IN GENERAL.—Any qualified dis18 aster contribution shall be allowed to the 

19 extent that the aggregate of such contribu20 tions does not exceed the excess of 80 per21 cent of the taxpayer’s contribution base 

22 over the amount of all other charitable 

23 contributions allowable under this para24 graph. 


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1 ‘‘(ii) CARRYOVER.—If the aggregate 

2 amount of contributions described in clause 

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

4 such excess shall be treated (in a manner 

5 consistent with the rules of subsection 

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

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

8 succeeding years in order of time. 

9 ‘‘(iii) COORDINATION WITH OTHER

10 SUBPARAGRAPHS.—For purposes of apply11 ing this subsection and subsection (d)(1), 

12 contributions described in clause (i) shall 

13 not be treated as described in subpara14 graph (A) and such subparagraph shall be 

15 applied without regard to such contribu16 tions. 

17 ‘‘(iv) QUALIFIED DISASTER CON18 TRIBUTIONS.—For purposes of this sub19 paragraph, the term ‘qualified disaster 

20 contribution’ means any charitable con21 tribution if— 

22 ‘‘(I) such contribution is for re23 lief efforts related to a federally de24 clared disaster (as defined in section 

25 165(h)(3)(C)(i)), 


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1 ‘‘(II) such contribution is made 

2 during the period beginning on the 

3 applicable disaster date with respect 

4 to the disaster described in subclause 

5 (I) and ending on December 31, 

6 2014, and 

7 ‘‘(III) such contribution is made 

8 in cash to an organization described 

9 in subparagraph (A) (other than an 

10 organization described in section 

11 509(a)(3)). 

12 Such term shall not include a contribution 

13 if the contribution is for establishment of 

14 a new, or maintenance in an existing, 

15 donor advised fund (as defined in section 

16 4966(d)(2)). 

17 ‘‘(v) APPLICABLE DISASTER DATE.— 

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

19 ‘applicable disaster date’ means, with re20 spect to any federally declared disaster de21 scribed in clause (iv)(I), the date on which 

22 the disaster giving rise to the Presidential 

23 declaration described in section 

24 165(h)(3)(C)(i) occurred. 


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1 ‘‘(vi) SUBSTANTIATION REQUIRE2 MENT.—This paragraph shall not apply to 

3 any qualified disaster contribution unless 

4 the taxpayer obtains from such organiza5 tion to which the contribution was made a 

6 contemporaneous written acknowledgment 

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

8 that such contribution was used (or is to 

9 be used) for a purpose described in clause 

10 (iv)(III).’’. 

11 (b) CORPORATIONS.— 

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

13 170(b) of the Internal Revenue Code of 1986 is 

14 amended by redesignating subparagraph (C) as sub15 paragraph (D) and by inserting after subparagraph 

16 (B) the following new subparagraph: 

17 ‘‘(C) QUALIFIED DISASTER CONTRIBU18 TIONS.— 

19 ‘‘(i) IN GENERAL.—Any qualified dis20 aster contribution shall be allowed to the 

21 extent that the aggregate of such contribu22 tions does not exceed the excess of 20 per23 cent of the taxpayer’s taxable income over 

24 the amount of charitable contributions al25 lowed under subparagraph (A). 


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1 ‘‘(ii) CARRYOVER.—If the aggregate 

2 amount of contributions described in clause 

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

4 such excess shall be treated (in a manner 

5 consistent with the rules of subsection 

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

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

8 succeeding years in order of time. 

9 ‘‘(iii) QUALIFIED DISASTER CON10 TRIBUTION.—The term ‘qualified disaster 

11 contribution’ has the meaning given such 

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

13 ‘‘(iv) SUBSTANTIATION REQUIRE14 MENT.—This paragraph shall not apply to 

15 any qualified disaster contribution unless 

16 the taxpayer obtains from such organiza17 tion to which the contribution was made a 

18 contemporaneous written acknowledgment 

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

20 that such contribution was used (or is to 

21 be used) for a purpose described in para22 graph (1)(F)(iv)(III).’’. 

23 (2) CONFORMING AMENDMENTS.— 

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

25 of such Code is amended by striking ‘‘subparaVerDate Mar 15 2010 23:13 Apr 16, 2014 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S2233.IS S2233

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1 graph (B) applies’’ and inserting ‘‘subpara2 graphs (B) and (C) apply’’. 

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

4 of such Code is amended by striking ‘‘subpara5 graph (A)’’ and inserting ‘‘subparagraphs (A) 

6 and (C)’’. 

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

8 this section shall apply to disasters arising in taxable years 

9 ending after December 31, 2011. 

10 SEC. 103. LOSSES ATTRIBUTABLE TO DISASTERS IN 2012 

11 AND 2013. 

12 (a) WAIVER OF ADJUSTED GROSS INCOME LIMITA13 TION; INCREASE IN STANDARD DEDUCTION BY DISASTER

14 CASUALTY LOSS.—Subclause (I) of section 

15 165(h)(3)(B)(i) 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, 2014’’. 

21 (b) LOSS ALLOWED WHETHER OR NOT INDIVIDUAL

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

23 Revenue Code of 1986 is amended by inserting after para24 graph (21) the following new paragraph: 


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

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

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

4 165(h)(3)(C) of the Internal Revenue Code of 1986 is 

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

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

7 this section shall apply to disasters declared in taxable 

8 years beginning after December 31, 2011. 

9 (e) USE OF AMENDED INCOME TAX RETURNS TO

10 TAKE INTO ACCOUNT RECEIPT OF CERTAIN CASUALTY

11 LOSS GRANTS BY DISALLOWING PREVIOUSLY TAKEN

12 CASUALTY LOSS DEDUCTIONS.— 

13 (1) IN GENERAL.—Notwithstanding any other 

14 provision of the Internal Revenue Code of 1986, if 

15 a taxpayer— 

16 (A) claims a deduction for any taxable year 

17 with respect to a casualty loss to a principal 

18 residence (within the meaning of section 121 of 

19 such Code) resulting from any federally de20 clared disaster (as defined in section 

21 165(h)(3)(C) of such Code) occurring during 

22 the period beginning after December 31, 2011, 

23 and before January 1, 2014, and 


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1 (B) in a subsequent taxable year receives 

2 a grant under any Federal or State program as 

3 reimbursement for such loss, 

4 such taxpayer may elect to file an amended income 

5 tax return for the taxable year in which such deduc6 tion was allowed (and for any taxable year to which 

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

8 zero) the amount of such deduction by the amount 

9 of such reimbursement. 

10 (2) TIME OF FILING AMENDED RETURN.— 

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

12 only if any amended income tax returns with respect 

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

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

15 for the taxable year in which the taxpayer re16 ceives such grant, or 

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

18 of the enactment of this Act. 

19 (3) WAIVER OF PENALTIES AND INTEREST.— 

20 Any underpayment of tax resulting from the reduc21 tion under paragraph (1) of the amount otherwise 

22 allowable as a deduction shall not be subject to any 

23 penalty or interest under such Code if such tax is 

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

25 amended return to which such reduction relates. 


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1 SEC. 104. NET OPERATING LOSSES ATTRIBUTABLE TO DIS2 ASTERS IN 2012 AND 2013. 

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

4 172(j)(1)(A)(i) of the Internal Revenue Code of 1986 is 

5 amended by striking ‘‘before January 1, 2010’’ and insert6 ing ‘‘during the period beginning after December 31, 

7 2007, and before January 1, 2010, or during the period 

8 beginning after December 31, 2011, and before January 

9 1, 2014’’. 

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

11 this section shall apply to losses arising in taxable years 

12 beginning after December 31, 2011, in connection with 

13 disasters declared after such date. 

14 SEC. 105. WAIVER OF CERTAIN MORTGAGE REVENUE BOND 

15 REQUIREMENTS FOLLOWING 2012 AND 2013 

16 DISASTERS. 

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

18 Revenue Code of 1986 is amended— 

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

20 by section 709(a) of the Tax Extenders and Alter21 native Minimum Tax Relief Act of 2008, as para22 graph (13), and 

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

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

25 and inserting ‘‘during the period beginning after De26 cember 31, 2007, and before January 1, 2010, or 


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1 during the period beginning after December 31, 

2 2011, and before January 1, 2014’’. 

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

4 this section shall apply to disasters occurring after Decem5 ber 31, 2011. 

6 SEC. 106. INCREASED EXPENSING AND BONUS DEPRECIA7 TION FOR QUALIFIED DISASTER ASSISTANCE 

8 PROPERTY FOLLOWING 2012 AND 2013 DISAS9 TERS. 

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

11 168(n)(2)(A)(ii) of the Internal Revenue Code of 1986 is 

12 amended by striking ‘‘before January 1, 2010’’ and insert13 ing ‘‘during the period beginning after December 31, 

14 2007, and before January 1, 2010, or during the period 

15 beginning after December 31, 2011, and before January 

16 1, 2014’’. 

17 (b) REMOVAL OF EXCLUSION.—Section 

18 168(n)(2)(B)(i) of such Code is amended by inserting 

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

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

21 by striking subclause (III). 

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

23 this section shall apply to property placed in service after 

24 December 31, 2011, with respect to disasters declared 

25 after such date. 


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1 SEC. 107. INCREASE IN NEW MARKETS TAX CREDIT FOR IN2 VESTMENTS IN COMMUNITY DEVELOPMENT 

3 ENTITIES SERVING 2012 AND 2013 DISASTER 

4 AREAS. 

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

6 the Internal Revenue Code of 1986 is amended by adding 

7 at the end the following new paragraph: 

8 ‘‘(4) INCREASED SPECIAL ALLOCATION FOR

9 COMMUNITY DEVELOPMENT ENTITIES SERVING 2012

10 AND 2013 DISASTER AREAS.— 

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

12 calendar year which begins after 2012 and be13 fore 2016, the new markets tax credit limitation 

14 shall be increased by an amount equal to 

15 $500,000,000, to be allocated among qualified 

16 community development entities to make quali17 fied low-income community investments within 

18 any 2012 or 2013 federally declared disaster 

19 area. 

20 ‘‘(B) ALLOCATION OF INCREASE.—The 

21 amount of the increase in limitation under sub22 paragraph (A) shall be allocated by the Sec23 retary under paragraph (2) to qualified commu24 nity development entities and shall give priority 

25 to such entities with a record of having success26 fully provided capital or technical assistance to 


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1 businesses or communities within any 2011 or 

2 2012 federally declared disaster area or areas 

3 for which the allocation is requested. 

4 ‘‘(C) APPLICATION OF CARRYFORWARD.— 

5 Paragraph (3) shall be applied separately with 

6 respect to the amount of any increase under 

7 subparagraph (A). 

8 ‘‘(D) 2012 OR 2013 FEDERALLY DECLARED

9 DISASTER AREA.—For purposes of this para10 graph, the term ‘2012 or 2013 federally de11 clared disaster area’ means any disaster area 

12 resulting from any federally declared disaster 

13 occurring after December 31, 2011, and before 

14 January 1, 2014. For purposes of the preceding 

15 sentence, the terms ‘federally declared disaster’ 

16 and ‘disaster area’ have the meanings given 

17 such terms in section 165(h)(3).’’. 

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

19 this section shall apply to calendar years beginning after 

20 2012. 

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

22 IN CONNECTION WITH FEDERALLY DE23 CLARED DISASTERS IN 2012 OR 2013. 

24 (a) TAX-FAVORED WITHDRAWALS FROM RETIRE25 MENT PLANS.— 


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

2 72(t) of the Internal Revenue Code of 1986 is 

3 amended by adding at the end the following new 

4 subparagraph: 

5 ‘‘(H) DISTRIBUTIONS FROM RETIREMENT

6 PLANS IN CONNECTION WITH FEDERALLY DE7 CLARED DISASTERS DURING 2012 AND 2013.— 

8 Any qualified 2012 or 2013 disaster recovery 

9 distribution.’’. 

10 (2) QUALIFIED DISASTER RECOVERY DISTRIBU11 TION.—Section 72(t) of such Code is amended by 

12 adding at the end the following new paragraph: 

13 ‘‘(11) QUALIFIED 2012 OR 2013 DISASTER RE14 COVERY DISTRIBUTION.—For purposes of paragraph 

15 (2)(H)— 

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

17 subparagraph (B), the term ‘qualified disaster 

18 recovery distribution’ means, with respect to 

19 any federally declared disaster occurring during 

20 2012 or 2013, any distribution from an eligible 

21 retirement plan made on or after the applicable 

22 disaster date and before January 1, 2015, to an 

23 individual whose principal place of abode on the 

24 applicable disaster date, is located in the dis25 aster area and who has sustained an economic 


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1 loss by reason of such federally declared dis2 aster. 

3 ‘‘(B) DOLLAR LIMITATION.— 

4 ‘‘(i) IN GENERAL.—For purposes of 

5 this subsection, the aggregate amount of 

6 distributions received by an individual with 

7 respect to any federally declared disaster 

8 occurring during 2012 or 2013 shall not 

9 exceed $100,000. 

10 ‘‘(ii) TREATMENT OF PLAN DISTRIBU11 TIONS.—If a distribution to an individual 

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

13 qualified 2012 or 2013 disaster recovery 

14 distribution, a plan shall not be treated as 

15 violating any requirement of this title 

16 merely because the plan treats such dis17 tribution as a qualified 2012 or 2013 dis18 aster recovery distribution, unless the ag19 gregate amount of such distributions from 

20 all plans maintained by the employer (and 

21 any member of any controlled group which 

22 includes the employer) to such individual 

23 with respect to any federally declared dis24 aster occurring during 2012 or 2013 ex25 ceeds $100,000. 


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1 ‘‘(iii) CONTROLLED GROUP.—For pur2 poses of clause (ii), the term ‘controlled 

3 group’ means any group treated as a single 

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

5 (o) of section 414. 

6 ‘‘(C) AMOUNT DISTRIBUTED MAY BE RE7 PAID.— 

8 ‘‘(i) IN GENERAL.—Any individual 

9 who receives a qualified 2012 or 2013 dis10 aster recovery distribution may, at any 

11 time during the 3-year period beginning on 

12 the day after the date on which such dis13 tribution was received, make one or more 

14 contributions in an aggregate amount not 

15 to exceed the amount of such distribution 

16 to an eligible retirement plan of which such 

17 individual is a beneficiary and to which a 

18 rollover contribution of such distribution 

19 could be made under section 402(c), 

20 403(a)(4), 403(b)(8), 408(d)(3), or 

21 457(e)(16), as the case may be. 

22 ‘‘(ii) TREATMENT OF REPAYMENTS OF

23 DISTRIBUTIONS FROM ELIGIBLE RETIRE24 MENT PLANS OTHER THAN IRAS.—For 

25 purposes of this title, if a contribution is 


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1 made pursuant to clause (i) with respect to 

2 a qualified 2012 or 2013 disaster recovery 

3 distribution from an eligible retirement 

4 plan other than an individual retirement 

5 plan, then the taxpayer shall, to the extent 

6 of the amount of the contribution, be treat7 ed as having received the qualified 2012 or 

8 2013 disaster recovery distribution in an 

9 eligible rollover distribution (as defined in 

10 section 402(c)(4)) and as having trans11 ferred the amount to the eligible retire12 ment plan in a direct trustee to trustee 

13 transfer within 60 days of the distribution. 

14 ‘‘(iii) TREATMENT OF REPAYMENTS

15 FOR DISTRIBUTIONS FROM IRAS.—For 

16 purposes of this title, if a contribution is 

17 made pursuant to clause (i) with respect to 

18 a qualified 2012 or 2013 disaster recovery 

19 distribution from an individual retirement 

20 plan (as defined by section 7701(a)(37)), 

21 then, to the extent of the amount of the 

22 contribution, the qualified 2012 or 2013 

23 disaster recovery distribution shall be 

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1 ferred to the eligible retirement plan in a 

2 direct trustee to trustee transfer within 60 

3 days of the distribution. 

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

5 YEAR PERIOD.— 

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

7 qualified 2012 or 2013 disaster recovery 

8 distribution, unless the taxpayer elects not 

9 to have this paragraph apply for any tax10 able year, any amount required to be in11 cluded in gross income for such taxable 

12 year shall be so included ratably over the 

13 3-taxable-year period beginning with such 

14 taxable year. 

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

16 clause (i), rules similar to the rules of sub17 paragraph (E) of section 408A(d)(3) shall 

18 apply. 

19 ‘‘(E) OTHER DEFINITIONS.— 

20 ‘‘(i) FEDERALLY DECLARED DIS21 ASTER; DISASTER AREA.—The terms ‘fed22 erally declared disaster’ and ‘disaster area’ 

23 have the meanings given such terms under 

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


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1 ‘‘(ii) APPLICABLE DISASTER DATE.— 

2 The term ‘applicable disaster date’ means, 

3 with respect to any federally declared dis4 aster, the date on which such federally de5 clared disaster occurs. 

6 ‘‘(iii) ELIGIBLE RETIREMENT PLAN.— 

7 The term ‘eligible retirement plan’ shall 

8 have the meaning given such term by sec9 tion 402(c)(8)(B). 

10 ‘‘(F) SPECIAL RULES.— 

11 ‘‘(i) EXEMPTION OF DISTRIBUTIONS

12 FROM TRUSTEE TO TRUSTEE TRANSFER

13 AND WITHHOLDING RULES.—For purposes 

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

15 qualified 2012 or 2013 disaster recovery 

16 distributions shall not be treated as eligible 

17 rollover distributions. 

18 ‘‘(ii) QUALIFIED 2012 OR 2013 DIS19 ASTER RECOVERY DISTRIBUTIONS TREAT20 ED AS MEETING PLAN DISTRIBUTION RE21 QUIREMENTS.—For purposes of this title, 

22 a qualified 2012 or 2013 disaster recovery 

23 distribution shall be treated as meeting the 

24 requirements of sections 401(k)(2)(B)(i), 


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1 403(b)(7)(A)(ii), 403(b)(11), and 

2 457(d)(1)(A).’’. 

3 (3) EFFECTIVE DATE.—The amendments made 

4 by this subsection shall apply to distributions with 

5 respect to disaster declared after December 31, 

6 2011. 

7 (b) LOANS FROM QUALIFIED PLANS.— 

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

9 of the Internal Revenue Code of 1986 is amended by 

10 adding at the end the following new paragraph: 

11 ‘‘(6) INCREASE IN LIMIT ON LOANS NOT TREAT12 ED AS DISTRIBUTIONS WITH RESPECT TO 2012 AND

13 2013 DISASTERS.— 

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

15 loan from a qualified employer plan to a quali16 fied individual made during the applicable pe17 riod— 

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

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

20 for ‘$50,000’, and 

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

22 shall be applied by substituting ‘the 

23 present value of the nonforfeitable accrued 

24 benefit of the employee under the plan’ for 

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1 forfeitable accrued benefit of the employee 

2 under the plan’. 

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

4 of a qualified individual with an outstanding 

5 loan on or after the applicable disaster date 

6 from a qualified employer plan— 

7 ‘‘(i) if the due date pursuant to sub8 paragraph (B) or (C) of paragraph (2) for 

9 any repayment with respect to such loan 

10 occurs during the period beginning on the 

11 applicable disaster date and ending on De12 cember 31, 2013, such due date shall be 

13 delayed for 1 year, 

14 ‘‘(ii) any subsequent repayments with 

15 respect to any such loan shall be appro16 priately adjusted to reflect the delay in the 

17 due date under clause (i) and any interest 

18 accruing during such delay, and 

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

20 and the term of a loan under subpara21 graph (B) or (C) of paragraph (2), the pe22 riod described in clause (i) shall be dis23 regarded. 

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

25 paragraph— 


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1 ‘‘(i) QUALIFIED INDIVIDUAL.—The 

2 term ‘qualified individual’ means, with re3 spect to any federally declared disaster oc4 curring during 2012 or 2013, an individual 

5 whose principal place of abode on the ap6 plicable disaster date is located in the dis7 aster area and who has sustained an eco8 nomic loss by reason of such federally de9 clared disaster. 

10 ‘‘(ii) APPLICABLE PERIOD.—The ap11 plicable period is the period beginning on 

12 the applicable disaster date and ending on 

13 December 31, 2013. 

14 ‘‘(iii) FEDERALLY DECLARED DIS15 ASTER; DISASTER AREA.—The terms ‘fed16 erally declared disaster’ and ‘disaster area’ 

17 have the meanings given such terms under 

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

19 ‘‘(iv) APPLICABLE DISASTER DATE.— 

20 The term ‘applicable disaster date’ means, 

21 with respect to any federally declared dis22 aster, the date on which such federally de23 clared disaster occurs.’’. 


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1 (2) EFFECTIVE DATE.—The amendment made 

2 by this subsection shall apply to loans made with re3 spect to disaster declared after December 31, 2011. 

4 (c) PROVISIONS RELATING TO PLAN AMEND5 MENTS.— 

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

7 any amendment to any plan or annuity contract, 

8 such plan or contract shall be treated as being oper9 ated in accordance with the terms of the plan during 

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

11 (2) AMENDMENTS TO WHICH SUBSECTION AP12 PLIES.— 

13 (A) IN GENERAL.—This subsection shall 

14 apply to any amendment to any plan or annuity 

15 contract which is made— 

16 (i) pursuant to any provision of, or 

17 amendment made by, this section, or pur18 suant to any regulation issued by the Sec19 retary or the Secretary of Labor under any 

20 provision of, or amendment made by, this 

21 section, and 

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

23 first plan year beginning on or after Janu24 ary 1, 2014, or such later date as the Sec25 retary may prescribe. 


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1 In the case of a governmental plan (as defined 

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

3 by substituting the date which is 2 years after 

4 the date otherwise applied under clause (ii). 

5 (B) CONDITIONS.—This subsection shall 

6 not apply to any amendment unless— 

7 (i) during the period— 

8 (I) beginning on the date that 

9 the provisions of, and amendments 

10 made by, this section or the regulation 

11 described in subparagraph (A)(i) 

12 takes effect (or in the case of a plan 

13 or contract amendment not required 

14 by the provisions of, or amendments 

15 made by, this section or such regula16 tion, the effective date specified by the 

17 plan), and 

18 (II) ending on the date described 

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

20 the date the plan or contract amend21 ment is adopted), 

22 the plan or contract is operated as if such plan 

23 or contract amendment were in effect; and 

24 (ii) such plan or contract amendment 

25 applies retroactively for such period. 


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1 SEC. 109. ADDITIONAL EXEMPTION FOR HOUSING QUALI2 FIED DISASTER DISPLACED INDIVIDUALS. 

3 (a) IN GENERAL.—Section 151 of the Internal Rev4 enue Code of 1986 is amended by adding at the end the 

5 following new subsection: 

6 ‘‘(g) ADDITIONAL EXEMPTION FOR CERTAIN DIS7 ASTER-DISPLACED INDIVIDUALS.— 

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

9 year beginning in 2012 or 2013, there shall be al10 lowed an exemption of $500 for each qualified dis11 aster-displaced individual with respect to the tax12 payer for the taxable year. 

13 ‘‘(2) LIMITATIONS.— 

14 ‘‘(A) DOLLAR LIMITATION.—The exemp15 tion under paragraph (1) shall not exceed 

16 $2,000, reduced by the amount of the exemp17 tion under this subsection for all prior taxable 

18 years. 

19 ‘‘(B) INDIVIDUALS TAKEN INTO ACCOUNT

20 ONLY ONCE.—An individual shall not be taken 

21 into account under paragraph (1) if such indi22 vidual was taken into account under this sub23 section by the taxpayer for any prior taxable 

24 year. 

25 ‘‘(C) IDENTIFYING INFORMATION RE26 QUIRED.—An individual shall not be taken into 


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•S 2233 IS

1 account under paragraph (1) for a taxable year 

2 unless the taxpayer identification number of 

3 such individual is included on the return of the 

4 taxpayer for such taxable year. 

5 ‘‘(3) QUALIFIED DISASTER-DISPLACED INDI6 VIDUAL.— 

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

8 subsection, the term ‘qualified disaster-dis9 placed individual’ means, with respect to any 

10 taxpayer for any taxable year, any qualified in11 dividual if such individual is provided housing 

12 free of charge by the taxpayer in the principal 

13 residence of the taxpayer for a period of 60 

14 consecutive days which ends in such taxable 

15 year. Such term shall not include the spouse or 

16 any dependent of the taxpayer. 

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

18 ‘qualified individual’ means any individual 

19 who— 

20 ‘‘(i) who on the date of a federally de21 clared disaster occurring during 2012 or 

22 2013 maintained such individual’s prin23 cipal place of abode in the disaster area 

24 declared with respect to such disaster, and 


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1 ‘‘(ii) was displaced from such prin2 cipal place of abode by reason of the feder3 ally declared disaster. 

4 For purposes of the preceding sentence, the 

5 terms ‘federally declared disaster’ and ‘disaster 

6 area’ have the meanings given such terms in 

7 section 165(h)(3). 

8 ‘‘(4) COMPENSATION FOR HOUSING.—No de9 duction shall be allowed under this subsection if the 

10 taxpayer receives any rent or other amount (from 

11 any source) in connection with the providing of such 

12 housing.’’. 

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

14 this section shall apply to taxable years beginning after 

15 December 31, 2011. 

16 SEC. 110. EXCLUSIONS OF CERTAIN CANCELLATIONS OF IN17 DEBTEDNESS BY REASON OF 2012 OR 2013 

18 DISASTERS. 

19 (a) IN GENERAL.—Section 108 of the Internal Rev20 enue Code of 1986 is amended by adding at the end the 

21 following new subsection: 

22 ‘‘(j) DISCHARGE OF INDEBTEDNESS FOR INDIVID23 UALS AFFECTED BY 2012 AND 2013 DISASTERS.— 

24 ‘‘(1) IN GENERAL.—Except as provided in para25 graph (2), gross income shall not include any 


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1 amount which (but for this subsection) would be in2 cludible in gross income by reason of any discharge 

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

4 person described in paragraph (3) by an applicable 

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

6 applicable period. 

7 ‘‘(2) EXCEPTIONS FOR BUSINESS INDEBTED8 NESS.—Paragraph (1) shall not apply to any indebt9 edness incurred in connection with a trade or busi10 ness. 

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

12 is described in this paragraph if the principal place 

13 of abode of such person on the applicable disaster 

14 date was located in the disaster area with respect to 

15 any federally declared disaster occurring during 

16 2012 or 2013. 

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

18 this subsection, the term ‘applicable period’ means 

19 the period beginning on the applicable disaster date 

20 and ending on the date which is 14 months after 

21 such date. 

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

23 this subsection— 

24 ‘‘(A) FEDERALLY DECLARED DISASTER; 

25 DISASTER AREA.—The terms ‘federally declared 


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1 disaster’ and ‘disaster area’ have the meanings 

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

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

4 term ‘applicable disaster date’ means, with re5 spect to any federally declared disaster, the 

6 date on which such federally declared disaster 

7 occurs.’’. 

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

9 discharges made on or after December 31, 2011. 

10 SEC. 111. SPECIAL RULE FOR DETERMINING EARNED IN11 COME OF INDIVIDUALS AFFECTED BY FEDER12 ALLY DECLARED DISASTERS. 

13 (a) IN GENERAL.—Section 32 of the Internal Rev14 enue Code of 1986 is amended by adding at the end the 

15 following new subsection: 

16 ‘‘(n) SPECIAL RULE FOR DETERMINING EARNED IN17 COME OF TAXPAYERS AFFECTED BY FEDERALLY DE18 CLARED DISASTERS.— 

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

20 individual with respect to any federally declared dis21 aster occurring during 2012 or 2013, if the earned 

22 income of the taxpayer for the taxable year which in23 cludes the applicable disaster date is less than the 

24 earned income of the taxpayer for the preceding tax25 able year, the credit allowed under this section and 


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1 section 24(d) may, at the election of the taxpayer, 

2 be determined by substituting— 

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

4 taxable year, for 

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

6 year which includes the applicable date. 

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

8 this subsection, the term ‘qualified individual’ 

9 means, with respect to any federally declared dis10 aster occurring during 2012 or 2013, any individual 

11 whose principal place of abode on the applicable dis12 aster date, was located— 

13 ‘‘(A) in any portion of a disaster area de14 termined by the President to warrant individual 

15 or individual and public assistance under the 

16 Robert T. Stafford Disaster Relief and Emer17 gency Assistance Act by reason of the federally 

18 declared disaster, or 

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

20 not described in subparagraph (A) and such in21 dividual was displaced from such principal place 

22 of abode by reason of the federally declared dis23 aster. 

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

25 this paragraph— 


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1 ‘‘(A) FEDERALLY DECLARED DISASTER; 

2 DISASTER AREA.—The terms ‘federally declared 

3 disaster’ and ‘disaster area’ have the meanings 

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

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

6 term ‘applicable disaster date’ means, with re7 spect to any federally declared disaster, the 

8 date on which such federally declared disaster 

9 occurs. 

10 ‘‘(4) SPECIAL RULES.— 

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

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

13 a joint return for a taxable year which includes 

14 the disaster date— 

15 ‘‘(i) such paragraph shall apply if ei16 ther spouse is a qualified individual, and 

17 ‘‘(ii) the earned income of the tax18 payer for the preceding taxable year shall 

19 be the sum of the earned income of each 

20 spouse for such preceding taxable year. 

21 ‘‘(B) UNIFORM APPLICATION OF ELEC22 TION.—Any election made under paragraph (1) 

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

24 and this section. 


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1 ‘‘(C) ERRORS TREATED AS MATHEMATICAL

2 ERROR.—For purposes of section 6213, an in3 correct use on a return of earned income pursu4 ant to paragraph (1) shall be treated as a 

5 mathematical or clerical error. 

6 ‘‘(D) NO EFFECT ON DETERMINATION OF

7 GROSS INCOME, ETC.—Except as otherwise pro8 vided in this subsection, this title shall be ap9 plied without regard to any substitution under 

10 paragraph (1).’’. 

11 (b) CHILD TAX CREDIT.—Section 24(d) of the Inter12 nal Revenue Code of 1986 is amended by adding at the 

13 end the following new paragraph: 

14 ‘‘(5) SPECIAL RULE FOR DETERMINING

15 EARNED INCOME OF TAXPAYERS AFFECTED BY FED16 ERALLY DECLARED DISASTERS.—For election by 

17 qualified individuals with respect to certain federally 

18 declared disasters to substitute earned income from 

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

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

21 this section shall apply to taxable years beginning after 

22 December 31, 2011. 


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1 SEC. 112. INCREASE IN REHABILITATION CREDIT FOR 

2 BUILDINGS IN 2012 AND 2013 DISASTER 

3 AREAS. 

4 (a) IN GENERAL.—Section 47 of the Internal Rev5 enue Code of 1986 is amended by adding at the end the 

6 following new subsection: 

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

8 CONNECTION WITH CERTAIN DISASTERS.— 

9 ‘‘(1) IN GENERAL.—In the case of qualified re10 habilitation expenditures paid or incurred during the 

11 applicable period with respect to any qualified reha12 bilitated building or certified historic structure lo13 cated in a disaster area with respect to any federally 

14 declared disaster occurring in 2012 or 2013, sub15 section (a) shall be applied— 

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

17 percent’ in paragraph (1) thereof, and 

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

19 percent’ in paragraph (2) thereof. 

20 ‘‘(2) DEFINITIONS.—For purposes of this sub21 section— 

22 ‘‘(A) FEDERALLY DECLARED DISASTER; 

23 DISASTER AREA.—The terms ‘federally declared 

24 disaster’ and ‘disaster area’ have the meanings 

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


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1 ‘‘(B) APPLICABLE PERIOD.—The term ‘ap2 plicable period’ means the period beginning on 

3 the applicable disaster date and ending on De4 cember 31, 2014. 

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

6 term ‘applicable disaster date’ means, with re7 spect to any federally declared disaster, the 

8 date on which such federally declared disaster 

9 occurs.’’. 

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

11 this section shall apply to amounts paid or incurred after 

12 December 31, 2011. 

13 SEC. 113. ADVANCED REFUNDINGS OF CERTAIN TAX-EX14 EMPT BONDS. 

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

16 Revenue Code of 1986 is amended by redesignating para17 graph (7) as paragraph (8) and by inserting after para18 graph (6) the following new paragraph: 

19 ‘‘(7) SPECIAL RULE WITH RESPECT TO CER20 TAIN NATURAL DISASTERS.— 

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

22 bond described in subparagraph (C), one addi23 tional advance refunding after the date of the 

24 enactment of this paragraph and before JanuVerDate Mar 15 2010 23:13 Apr 16, 2014 Jkt 039200 PO 00000 Frm 00035 Fmt 6652 Sfmt 6201 E:\BILLS\S2233.IS S2233

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1 ary 1, 2017, shall be allowed under the rules of 

2 this subsection if— 

3 ‘‘(i) the Governor of the State des4 ignates the advance refunding bond for 

5 purposes of this subsection, and 

6 ‘‘(ii) the requirements of subpara7 graph (E) are met. 

8 ‘‘(B) CERTAIN PRIVATE ACTIVITY

9 BONDS.—With respect to a bond described in 

10 subparagraph (C) which is an exempt facility 

11 bond described in paragraph (1) or (2) of sec12 tion 142(a), one advance refunding after the 

13 date of the enactment of this paragraph and be14 fore January 1, 2017, shall be allowed under 

15 the applicable rules of this subsection (notwith16 standing paragraph (2) thereof) if the require17 ments of clauses (i) and (ii) of subparagraph 

18 (A) are met. 

19 ‘‘(C) BONDS DESCRIBED.—A bond is de20 scribed in this paragraph if, with respect to any 

21 federally declared disaster, such bond— 

22 ‘‘(i) was outstanding on the applicable 

23 disaster date, and 

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

25 or a political subdivision thereof. 


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1 ‘‘(D) AGGREGATE LIMIT.—The maximum 

2 aggregate face amount of bonds which may be 

3 designated under this subsection by the Gov4 ernor of a State shall not exceed 

5 $4,500,000,000. 

6 ‘‘(E) ADDITIONAL REQUIREMENTS.—The 

7 requirements of this subparagraph are met with 

8 respect to any advance refunding of a bond de9 scribed in subparagraph (C) if— 

10 ‘‘(i) no advance refundings of such 

11 bond would be allowed under this title on 

12 or after the applicable disaster date, 

13 ‘‘(ii) the advance refunding bond is 

14 the only other outstanding bond with re15 spect to the refunded bond, and 

16 ‘‘(iii) the requirements of section 148 

17 are met with respect to all bonds issued 

18 under this paragraph. 

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

20 subsection— 

21 ‘‘(i) FEDERALLY DECLARED DIS22 ASTER; DISASTER AREA.—The terms ‘fed23 erally declared disaster’ and ‘disaster area’ 

24 have the meanings given such terms under 

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


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1 ‘‘(ii) APPLICABLE DISASTER DATE.— 

2 The term ‘applicable disaster date’ means, 

3 with respect to any federally declared dis4 aster, the date on which such federally de5 clared disaster occurs. 

6 ‘‘(iii) APPLICABLE STATE.—The term 

7 ‘applicable State’ means, with respect to 

8 any federally declared disaster, any State 

9 in which a portion of the disaster area is 

10 located.’’. 

11 SEC. 114. QUALIFIED DISASTER AREA RECOVERY BONDS. 

12 (a) IN GENERAL.—Subpart A of part IV of sub13 chapter B of chapter 1 of the Internal Revenue Code of 

14 1986 is amended by inserting after section 146 the fol15 lowing new section: 

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

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

18 qualified disaster area recovery bond shall— 

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

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

21 ‘‘(b) QUALIFIED DISASTER AREA RECOVERY

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

23 disaster area recovery bond’ means any bond issued as 

24 part of an issue if— 


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•S 2233 IS

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

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

3 ‘‘(2) such bond is issued by a State or any po4 litical subdivision thereof any part of which is in a 

5 qualified disaster area, 

6 ‘‘(3) the Governor of the issuing State des7 ignates such bond for purposes of this section, and 

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

9 enactment of this section and before January 1, 

10 2016. 

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

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

13 face amount of bonds which may be designated 

14 under this section by any State shall not exceed 

15 $10,000,000,000. 

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

17 issued which are to be used for movable fixtures and 

18 equipment. 

19 ‘‘(3) TREATMENT OF CURRENT REFUNDING

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

21 (or series of bonds) issued to refund a qualified dis22 aster area recovery bond, if— 

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

24 of which the refunding bond is a part is not 


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•S 2233 IS

1 later than the average maturity date of the 

2 bonds to be refunded by such issue, 

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

4 does not exceed the outstanding amount of the 

5 refunded bond, and 

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

7 bond are used to redeem the refunded bond not 

8 later than 90 days after the date of the 

9 issuance of the refunding bond. 

10 For purposes of subparagraph (A), average maturity 

11 shall be determined in accordance with section 

12 147(b)(2)(A). 

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

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

15 cost of acquisition, construction, reconstruction, and ren16 ovation of— 

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

18 section 142(d)), 

19 ‘‘(2) nonresidential real property (including 

20 fixed improvements associated with such property), 

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

22 of section 142(a), or 

23 ‘‘(4) public utility property (as defined in sec24 tion 168(i)(10)), 


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•S 2233 IS

1 which is located in a qualified disaster area and was dam2 aged or destroyed by reason of the a federally declared 

3 disaster. 

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

5 qualified disaster area recovery bond, the following modi6 fications shall apply: 

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

8 existing property not permitted) shall be applied by 

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

10 it appears. 

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

12 from rebate for certain proceeds to be used to fi13 nance construction expenditures) shall apply to the 

14 available construction proceeds of bonds issued 

15 under this section. For purposes of the preceding 

16 sentence, the following spending requirements shall 

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

18 such section: 

19 ‘‘(A) 40 percent of such available construc20 tion proceeds are spent for the governmental 

21 purposes of the issue within the 2-year period 

22 beginning on the date the bonds are issued, 

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

24 for such purposes within the 3-year period be25 ginning on such date, 


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

2 for such purposes within the 4-year period be3 ginning on such date, and 

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

5 spent for such purposes within the 5-year pe6 riod beginning on such date. 

7 ‘‘(3) Repayments of principal on financing pro8 vided by the issue— 

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

10 and 

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

12 of the 1st semiannual period beginning after 

13 the date of the repayment to redeem bonds 

14 which are part of such issue. 

15 The requirement of subparagraph (B) shall be treat16 ed as met with respect to amounts received within 

17 5 years after the date of issuance of the issue (or, 

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

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

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

21 part of such issue. 

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

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

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

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


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•S 2233 IS

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

2 private activity bond (determined without regard to para3 graph (1)), if the issuer elects to so treat such portion. 

4 ‘‘(g) QUALIFIED DISASTER AREA; FEDERALLY DE5 CLARED DISASTER.— 

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

7 ‘qualified disaster area’ means any area determined 

8 to warrant individual or individual and public assist9 ance from the Federal Government under the Robert 

10 T. Stafford Disaster Relief and Emergency Assist11 ance Act by reason of a federally declared disaster 

12 occurring during the period beginning after Decem13 ber 31, 2011, and before January 1, 2014. 

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

15 term ‘federally declared disaster’ has the meaning 

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

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

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

19 of such Code is amended by inserting after the item relat20 ing to section 146 the following new item: 

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

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

22 this section shall apply to obligations issued after the date 

23 of the enactment of this Act. 


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1 SEC. 115. ADDITIONAL LOW-INCOME HOUSING CREDIT AL2 LOCATIONS. 

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

4 the Internal Revenue Code of 1986 (relating to limitation 

5 on aggregate credit allowable with respect to projects lo6 cated in a State) is amended by adding at the end the 

7 following new subparagraph: 

8 ‘‘(J) INCREASE IN STATE HOUSING CREDIT

9 FOR STATES DAMAGED BY NATURAL DISAS10 TERS.— 

11 ‘‘(i) IN GENERAL.—In the case of cal12 endar year 2014, the State housing credit 

13 ceiling of each State any portion of which 

14 includes any portion of a qualifying dis15 aster area shall be increased by so much of 

16 the aggregate housing credit dollar amount 

17 as does not exceed the applicable limitation 

18 allocated by the State housing credit agen19 cy of such State for such calendar year to 

20 buildings located in qualifying disaster 

21 areas. 

22 ‘‘(ii) APPLICABLE LIMITATION.—For 

23 purposes of clause (i), the applicable limi24 tation is the greater of— 


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•S 2233 IS

1 ‘‘(I) $8 multiplied by the popu2 lation of the qualifying disaster areas 

3 in such State, or 

4 ‘‘(II) 50 percent of the State 

5 housing credit ceiling (determined 

6 without regard to this subparagraph) 

7 for 2013. 

8 ‘‘(iii) APPLICABLE PERCENTAGE.— 

9 For purposes of this section, the applicable 

10 percentage with respect to any building to 

11 which amounts allocated under clause (i) 

12 shall be determined under subsection 

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

14 thereof shall be applied by substituting 

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

16 ‘‘(iv) ALLOCATIONS TREATED AS

17 MADE FIRST FROM ADDITIONAL ALLOCA18 TION AMOUNT FOR PURPOSES OF DETER19 MINING CARRYOVER.—For purposes of de20 termining the unused State housing credit 

21 ceiling under subparagraph (C) for any 

22 calendar year, any increase in the State 

23 housing credit ceiling under clause (i) shall 

24 be treated as an amount described in 

25 clause (ii) of such subparagraph. 


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1 ‘‘(v) QUALIFYING DISASTER AREA.— 

2 For purposes of this subparagraph, the 

3 term ‘qualifying federally declared disaster 

4 area’ means— 

5 ‘‘(I) each county which is deter6 mined to warrant individual or indi7 vidual and public assistance from the 

8 Federal Government under a quali9 fying natural disaster declaration de10 scribed in clause (vi)(I), and 

11 ‘‘(II) each county not described 

12 in subclause (I) which is included in 

13 the geographical area covered by a 

14 qualifying natural disaster declaration 

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

16 clause (vi). 

17 ‘‘(vi) QUALIFYING NATURAL DISASTER

18 DECLARATION.—For purposes of clause 

19 (v), the term ‘qualifying natural disaster 

20 declaration’ means— 

21 ‘‘(I) a federally declared disaster 

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

23 occurring during the period beginning 

24 after December 31, 2011, and before 

25 January 1, 2014, 


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1 ‘‘(II) a natural disaster declared 

2 by the Secretary of Agriculture in 

3 2011 due to damaging weather and 

4 other conditions relating to Hurricane 

5 Irene or Tropical Storm Lee under 

6 section 321(a) of the Consolidated 

7 Farm and Rural Development Act (7 

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

9 ‘‘(III) a major disaster or emer10 gency designated by the President in 

11 2011 due to damaging weather and 

12 other conditions relating to Hurricane 

13 Irene or Tropical Storm Lee under 

14 the Robert T. Stafford Disaster Relief 

15 and Emergency Assistance Act (42 

16 U.S.C. 5121 et seq.).’’. 

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

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

19 of this Act. 

20 SEC. 116. FACILITATION OF TRANSFER OF WATER LEASING 

21 AND WATER BY MUTUAL DITCH OR IRRIGA22 TION COMPANIES IN DISASTER AREAS. 

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

24 of the Internal Revenue Code of 1986 is amended by add25 ing at the end the following new subparagraph: 


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•S 2233 IS

1 ‘‘(I) TREATMENT OF MUTUAL DITCH OR

2 IRRIGATION COMPANIES IN CERTAIN DISASTER

3 AREAS.— 

4 ‘‘(i) IN GENERAL.—In the case of a 

5 qualified mutual ditch or irrigation com6 pany or like organization, subparagraph 

7 (A) shall be applied without taking into ac8 count any income received or accrued dur9 ing the applicable period— 

10 ‘‘(I) from the sale, lease, or ex11 change of fee or other interests in real 

12 property, including interests in water, 

13 ‘‘(II) from the sale or exchange 

14 of stock in a mutual ditch or irriga15 tion company or like organization or 

16 contract rights for the delivery or use 

17 of water, 

18 ‘‘(III) from the investment of 

19 proceeds from sales, leases, or ex20 changes under subclauses (I) and (II), 

21 or 

22 ‘‘(IV) from the United States, or 

23 a State or local government, resulting 

24 from the federally declared disaster. 


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1 except that any income received under sub2 clause (I), (II), (III), or (IV) which is dis3 tributed or expended for expenses (other 

4 than for operations, maintenance, and cap5 ital improvements) of the qualified mutual 

6 ditch or irrigation company or like organi7 zation shall be treated as nonmember in8 come in the year in which it is distributed 

9 or expended. 

10 ‘‘(ii) QUALIFIED MUTUAL DITCH OR

11 IRRIGATION COMPANY OR LIKE ORGANIZA12 TION.—For purposes of this paragraph— 

13 ‘‘(I) IN GENERAL.—The term 

14 ‘qualified mutual ditch or irrigation 

15 company or like organization’ means 

16 any mutual ditch or irrigation com17 pany or like organization that di18 verted, delivered, transported, stored, 

19 or used its water for agricultural irri20 gation purposes on its own or through 

21 its shareholders in a qualified disaster 

22 area during 2012 or 2013. 

23 ‘‘(II) QUALIFIED ASSET.—The 

24 term ‘qualified asset’ means any real 

25 property or tangible personal property 


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1 used in the mutual ditch or irrigation 

2 company’s (or like organization’s) sys3 tem. 

4 ‘‘(III) MULTIPLE AREAS.—Under 

5 regulations, if the qualified assets of 

6 any mutual ditch or irrigation com7 pany or like organization are located 

8 in more than 1 qualified disaster area, 

9 all such areas shall be treated as 1 

10 area and if more than 1 federally de11 clared disaster is involved, the date on 

12 which the last of such disasters oc13 curred shall be the date used for pur14 poses of this paragraph. 

15 ‘‘(iii) APPLICABLE PERIOD.—For pur16 poses of this paragraph, the term ‘applica17 ble period’ means the taxable year in which 

18 the federally declared disaster occurred 

19 and the 5 following taxable years. 

20 ‘‘(iv) OTHER DEFINITIONS.— 

21 ‘‘(I) QUALIFIED DISASTER

22 AREA.—The term ‘qualified disaster 

23 area’ means any area determined to 

24 warrant individual or individual and 

25 public assistance from the Federal 


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1 Government under the Robert T. 

2 Stafford Disaster Relief and Emer3 gency Assistance Act by reason of a 

4 federally declared disaster occurring 

5 during the period beginning on Janu6 ary 1, 2012, and ending on December 

7 31, 2013. 

8 ‘‘(II) FEDERALLY DECLARED

9 DISASTER.—The term ‘federally de10 clared disaster’ has the meaning given 

11 to such term under section 

12 165(h)(3)(C).’’. 

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

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

15 December 31, 2011. 

16 TITLE II—OTHER DISASTER TAX 

17 RELIEF PROVISIONS 

18 SEC. 201. EXCLUSION FOR DISASTER MITIGATION PAY19 MENTS RECEIVED FROM STATE AND LOCAL 

20 GOVERNMENTS. 

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

22 of the Internal Revenue Code of 1986 is amended by in23 serting ‘‘, or any other amount which is paid by a State 

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

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


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

2 this section shall apply to payments received after the date 

3 of the enactment of this Act. 

4 SEC. 202. NATURAL DISASTER FUNDS. 

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

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

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

8 the following new section: 

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

10 FUNDS. 

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

12 application of this section, there shall be allowed as a de13 duction for any taxable year the amount of payments 

14 made by the taxpayer to a natural disaster fund during 

15 such taxable year. 

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

17 disaster fund’ means a fund meeting the following require18 ments: 

19 ‘‘(1) DESIGNATION.—The taxpayer des20 ignates— 

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

22 the manner prescribed by the Secretary, and 

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

24 the fund applies. 


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

2 are segregated from other assets of the taxpayer. 

3 ‘‘(3) INVESTMENTS.— 

4 ‘‘(A) The assets of the fund are main5 tained in one or more qualified accounts and 

6 are invested only in— 

7 ‘‘(i) deposits with banks whose depos8 its are insured subject to applicable limits 

9 by the Federal Deposit Insurance Corpora10 tion, or 

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

12 which the fund would be permitted to in13 vest if it were a capital construction fund 

14 subject to the investment limitations of 

15 paragraphs (2) and (3) of section 

16 7518(b)(2). 

17 ‘‘(B) All investment earnings (including 

18 gains and losses) from investments of the fund 

19 become part of the fund. 

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

21 fund does not accept any deposits (or other 

22 amounts) other than cash payments with respect to 

23 which a deduction is allowable under subsection (a) 

24 and earnings (including gains and losses) from fund 

25 investments. 


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

2 maintained for the purposes of covering costs, ex3 penses, and losses (including business interruption 

4 losses) resulting from a Federally declared natural 

5 disaster to the extent such costs are not covered by 

6 insurance. 

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

8 fund does not exceed the lesser of— 

9 ‘‘(A) the sum of— 

10 ‘‘(i) 150 percent of the maximum de11 ductible, and 

12 ‘‘(ii) 100 percent of the maximum co13 insurance (to the extent not taken into ac14 count in clause (i)), 

15 that, in the case of a Federally declared natural 

16 disaster resulting in losses, the taxpayer could 

17 be expected to pay with respect to property and 

18 business interruption insurance maintained by 

19 the taxpayer for the line of business to which 

20 the fund applies and that would cover losses re21 sulting from a Federally declared natural dis22 aster, and 

23 ‘‘(B) the maximum loss under any insur24 ance coverage that the taxpayer could reasonVerDate Mar 15 2010 23:13 Apr 16, 2014 Jkt 039200 PO 00000 Frm 00054 Fmt 6652 Sfmt 6201 E:\BILLS\S2233.IS S2233

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1 ably expect to occur for the line of business in 

2 the case of a severe natural disaster. 

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

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

5 financial statements in accordance with generally ac6 cepted accounting principles and not as a current 

7 asset and the footnotes to the taxpayer’s financial 

8 statements include a short description of the fund 

9 and its purposes. 

10 ‘‘(8) INSURANCE.—The taxpayer property in11 surance maintained by the qualified taxpayer applies 

12 to 75 percent or more of the property used— 

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

14 business to which the fund relates, and 

15 ‘‘(B) in the United States. 

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

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

18 that— 

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

20 ‘‘(2) maintains property insurance with respect 

21 to such trade or business that insures against losses 

22 in natural disasters. 

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

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

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


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•S 2233 IS

1 a natural disaster fund ceases to meet the requirement 

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

3 deemed distributed in a nonqualified distribution at the 

4 time the fund ceases to meet such requirements. 

5 ‘‘(e) TAXATION OF FUND.— 

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

7 gains and losses) from the investment and reinvest8 ment of amounts held in the fund shall not be taken 

9 into account in determining the gross income of the 

10 taxpayer that owns the fund. 

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

12 disaster fund shall not be considered a separate tax13 payer for purposes of this subtitle. 

14 ‘‘(f) TAXATION OF DISTRIBUTIONS FROM THE

15 FUND.— 

16 ‘‘(1) QUALIFIED DISTRIBUTIONS.—For pur17 poses of this chapter, qualified distributions shall be 

18 treated in the same manner as proceeds from prop19 erty or business interruption insurance. 

20 ‘‘(2) NONQUALIFIED DISTRIBUTIONS.— 

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

22 taxable year for which there is a nonqualified 

23 distribution— 


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1 ‘‘(i) such nonqualified distributions 

2 shall be excluded from the gross income of 

3 the taxpayer, and 

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

5 (determined without regard to this sub6 section) shall be increased by the product 

7 of the amount of such nonqualified dis8 tribution and the highest rate of tax speci9 fied in section 1 (section 11 in the case of 

10 a corporation). 

11 ‘‘(B) TAX BENEFIT RULE; COORDINATION

12 WITH DEDUCTION FOR NET OPERATING

13 LOSSES.—Rules similar to the rules of subpara14 graphs (B) and (C) of section 7518(g)(6) shall 

15 apply for purposes of this paragraph. 

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

17 this chapter for any taxable year on any taxpayer 

18 that a owns natural disaster fund shall be increased 

19 by the greater of— 

20 ‘‘(A) 20 percent of the amount of any non21 qualified distributions from the fund in the tax22 able year, and 

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

24 underpayment rate established under section 

25 6621, on the nonqualified distribution from the 


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•S 2233 IS

1 time the amount is added to the fund to the 

2 time the amount is distributed. 

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

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

5 ‘‘(A) all investment earnings (including 

6 gains or losses) in taxable year shall be treated 

7 as added to the fund on the last day of the tax8 able year, and 

9 ‘‘(B) amounts distributed from the fund 

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

11 first-out basis. 

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

13 ‘‘(1) FEDERALLY DECLARED NATURAL DIS14 ASTER.—The term ‘Federally declared natural dis15 aster’ means a natural disaster that is determined 

16 by Presidential declaration under the Robert T. 

17 Stafford Disaster Relief and Emergency Assistance 

18 Act to warrant individual or individual and public 

19 assistance under such Act. 

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

21 ‘nonqualified distribution’ means a distribution from 

22 a natural disaster fund other than a qualified dis23 tribution. 

24 ‘‘(3) QUALIFIED ACCOUNT.—The term ‘quali25 fied account’ means an account with a bank (as deVerDate Mar 15 2010 23:13 Apr 16, 2014 Jkt 039200 PO 00000 Frm 00058 Fmt 6652 Sfmt 6201 E:\BILLS\S2233.IS S2233

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1 fined in section 581) or a brokerage account but 

2 only if the investments of such accounts are limited 

3 to those permitted by subsection (b)(3) and no in4 vestments are made in a related person (as defined 

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

6 ‘‘(4) QUALIFIED DISTRIBUTION.— 

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

8 distribution’ means with respect to natural dis9 aster fund an amount equal to the excess of— 

10 ‘‘(i) costs, expenses, and losses (in11 cluding losses of a type reimbursable by 

12 proceeds of business interruption insur13 ance) incurred by the taxpayer as a result 

14 of the Federally declared natural disaster 

15 with respect to the line or lines of business 

16 for which the fund was designated, over 

17 ‘‘(ii) the proceeds of property and 

18 business interruption insurance paid for 

19 the benefit of the taxpayer with respect to 

20 costs, expenses, and losses described in 

21 clause (i). 

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

23 natural disaster fund shall not be treated as a 

24 qualified distribution if such distribution is allo25 cated to a Federally declared natural disaster 


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•S 2233 IS

1 occurring more than 3 years before the date of 

2 such distribution. 

3 ‘‘(h) SPECIAL RULES.—For purposes of this sec4 tion— 

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

6 any deductible or coinsurance taken into account 

7 under subsection (b)(6) in determining the max8 imum balance for a natural disaster fund shall not 

9 be taken into account in determining the maximum 

10 balance for another natural disaster fund. 

11 ‘‘(2) EXCESS BALANCE.— 

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

13 natural disaster fund exceeds the maximum bal14 ance permitted by subsection (b)(6) by reason 

15 of investment earnings or a reduction in the 

16 maximum balance, the account shall not cease 

17 to be a natural disaster fund as the result of 

18 exceeding such limit if the excess is distributed 

19 within 120 days of the date that such excess 

20 first occurred. 

21 ‘‘(B) TREATMENT OF DISTRIBUTIONS OF

22 EXCESS BALANCE.—In the case of any distribu23 tion of the excess balance of a natural disaster 

24 fund within 120 days of the date that such ex25 cess first occurred— 


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•S 2233 IS

1 ‘‘(i) paragraphs (2) and (3) of sub2 section (f) shall not apply to the distribu3 tion of such excess if distributed within 

4 such period, and 

5 ‘‘(ii) the amount of such distribution 

6 shall be included in the gross income of the 

7 taxpayer in the year such distribution was 

8 made. 

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

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

11 in the maximum balance resulting from any ac12 tion of the taxpayer the primary purpose of 

13 which was to reduce the maximum balance to 

14 enable a distribution that would not be subject 

15 to the maximum tax rate calculation or the ad16 ditional tax. 

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

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

19 a natural disaster fund) from one person to another 

20 person shall not constitute a nonqualified distribu21 tion if— 

22 ‘‘(A) such transfer is part of a trans23 action— 

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


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1 ‘‘(ii) the transferee acquires substan2 tially all of the assets of the transferor 

3 used in the line or lines of business for 

4 which the fund was designated, 

5 ‘‘(iii) the transferee acquires substan6 tially all of the assets of the transferor 

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

8 business for which the fund was des9 ignated, or 

10 ‘‘(iv) the transferee acquires substan11 tially all of the transferor’s assets located 

12 in a geographical area and used in a line 

13 of business for which the fund was des14 ignated, and 

15 ‘‘(B) the transferee elects to treat the ac16 quired natural disaster fund (or portion there17 of) as a natural disaster fund for the line of 

18 business for which the transferor had previously 

19 designated the fund and as a continuation of 

20 the fund (or pro rata portion thereof) for pur21 poses of determining the additional tax imposed 

22 by subsection (f)(4). 

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

24 such regulations as may be necessary or appropriate to 

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


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

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

3 the Internal Revenue Code of 1986 is amended by insert4 ing after the item relating to section 468B the following 

5 new item: 

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

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

7 this section shall apply to taxable years beginning after 

8 December 31, 2013. 

Æ 


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