I
106TH CONGRESS
1ST SESSION
H. R. 1892
To amend the Internal Revenue Code of 1986 to provide assistance to
homeowners and small businesses to repair Formosan termite damage.
IN THE HOUSE OF REPRESENTATIVES
MAY 20, 1999
Mr. JEFFERSON (for himself, Mr. BAKER, Mr. TAUZIN, Mr. MCCRERY, Mr.
JOHN, Mr. COOKSEY, and Mrs. MEEK of Florida) introduced the fol-
lowing bill; which was referred to the Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to provide
assistance to homeowners and small businesses to repair
Formosan termite damage.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. DEDUCTION FOR INDIVIDUALS FOR LOSSES
CAUSED BY FORMOSAN TERMITE DAMAGE.
(a) INCLUSION OF FORMOSAN TERMITE DAMAGE AS
CASUALTY LOSS.—Section 165(c)(3) of the Internal Rev-
enue Code of 1986 (relating to limitation of deduction of
losses of individuals) is amended by inserting ‘‘Formosan
termite damage,’’ after ‘‘shipwreck,’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to taxable years beginning after
December 31, 1999.
SEC. 2. PROCEEDS OF MORTGAGE REVENUE BONDS AL-
LOWED FOR LOANS TO HOMEOWNERS TO RE-
PAIR FORMOSAN TERMITE DAMAGE.
(a) IN GENERAL.—Section 143(f) of the Internal
Revenue Code of 1986 (relating to income requirements)
is amended by adding at the end the following new para-
graph:
‘‘(7) EXCEPTION
FOR
QUALIFIED
HOME
IM-
PROVEMENT LOANS.—Paragraph (1) shall not apply
with respect to any qualified home improvement loan
used for the repair of Formosan termite damage.’’.
(b) AMOUNTS UP TO $10,000 USED FOR TERMITE
REPAIR NOT INCLUDED
IN CALCULATING LIMIT
FOR
HOME IMPROVEMENT LOAN.—Paragraph (4) of section
143(k) of such Code (defining qualified home improve-
ment loan) is amended by adding at the end the following
flush sentence: ‘‘In calculating the $15,000 amount, any
amount up to $10,000 used for the repair of Formosan
termite damage shall not be taken into account.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to bonds issued after the date of
the enactment of this Act.
SEC. 3. PROCEEDS OF SMALL ISSUE BONDS ALLOWED FOR
LOANS TO LANDLORDS AND SMALL BUSI-
NESSES TO REPAIR FORMOSAN TERMITE
DAMAGE.
(a) IN GENERAL.—Subparagraph (B) of section
144(a)(12) of the Internal Revenue Code of 1986 (relating
to bonds to finance manufacturing facilities and farm
property) is amended by striking ‘‘or’’ at the end of clause
(i), by striking the period and inserting ‘‘, or’’ at the end
of clause (ii), and by adding at the end the following new
clause:
‘‘(iii) any Formosan termite damage
repair loan.’’.
(b) DEFINITION OF FORMOSAN TERMITE DAMAGE
REPAIR LOAN.—Section 144(a)(12) of such Code is
amended by adding at the end the following new subpara-
graph:
‘‘(D) FORMOSAN
TERMITE
DAMAGE
RE-
PAIR LOAN.—For purposes of this paragraph—
‘‘(i) IN
GENERAL.—The term ‘For-
mosan termite damage repair loan’ means
the financing of repairs on or in connection
with residential rental property or property
used by a small business by the owner
thereof, for damage caused by Formosan
termites.
‘‘(ii) SMALL BUSINESSES COVERED.—
The term ‘small business’ means, for any
taxable year, any corporation or partner-
ship if the entity meets the $5,000,000
gross receipts test of section 448(c) for the
prior taxable year.’’.
(c) AMOUNTS USED IN FORMOSAN TERMITE REPAIR
NOT INCLUDED IN CALCULATING LIMIT ON AMOUNT OF
BOND.—Clause (i) of section 144(a)(4)(C) of such Code
(relating to certain capital expenditures not taken into ac-
count) is amended by inserting ‘‘Formosan termite dam-
age,’’ after ‘‘storm,’’.
(d) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to bonds issued after the date
of the enactment of this Act.
SEC. 4. EXCEPTION FROM VOLUME CAP FOR PRIVATE AC-
TIVITY BONDS USED TO REPAIR FORMOSAN
TERMITE DAMAGE.
(a) EXCEPTION
FROM
VOLUME
CAP.—Section
146(g) of the Internal Revenue Code of 1986 (relating to
exception for certain bonds) is amended by striking ‘‘and’’
at the end of paragraph (3), by striking the period at the
end of paragraph (4) and inserting a comma, and by add-
ing after paragraph (4) the following new paragraphs:
‘‘(5) any qualified mortgage bond if 95 percent
or more of the net proceeds of the bond are to be
used to provide home improvement loans for the re-
pair of Formosan termite damage, and
‘‘(6) any qualified small issue bond if 95 per-
cent or more of the net proceeds of the bond are to
be used to provide Formosan termite damage repair
loans (as defined in section 144(a)(12)(D)).’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to bonds issued after the date
of the enactment of this Act.
SEC. 5. EXEMPTION OF CERTAIN BONDS USED TO REPAIR
FORMOSAN TERMITE DAMAGE FROM RE-
STRICTIONS ON DEDUCTION BY FINANCIAL
INSTITUTIONS FOR INTEREST.
(a) 
IN
GENERAL.—Clause 
(ii) 
of 
section
265(b)(3)(B) of the Internal Revenue Code of 1986 (de-
fining qualified tax-exempt obligations) is amended by
striking ‘‘or’’ at the end of subclause (I), by redesignating
subclause (II) as subclause (IV), and by inserting after
subclause (I) the following new subclauses:
‘‘(II) any qualified mortgage
bond if 95 percent or more of the net
proceeds of the bond are to be used to
provide home improvement loans for