I
104TH CONGRESS
2D SESSION
H. R. 3749
To amend the Internal Revenue Code of 1986 with respect to the treatment
of crops destroyed by casualty.
IN THE HOUSE OF REPRESENTATIVES
JUNE 27, 1996
Mr. THOMAS (for himself, Mr. RIGGS, and Mr. HERGER) introduced the
following bill; which was referred to the Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 with respect
to the treatment of crops destroyed by casualty.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. TREATMENT OF CROPS DESTROYED BY CAS-
UALTY.
(a) GENERAL RULE.—Paragraph (2) of section
263A(d) of the Internal Revenue Code of 1986 is amended
by redesignating subparagraph (B) as subparagraph (G)
and by striking subparagraph (A) and inserting the follow-
ing new subparagraphs:
‘‘(A) IN GENERAL.—If plants bearing an
edible crop for human consumption were lost or
damaged (while in the hands of the taxpayer)
by reason of freezing temperatures, disease,
drought, pests, or casualty and the taxpayer re-
plants plants bearing the same type of crop
(whether on the same parcel of land on which
such lost or damaged plants were located or any
other parcel of land of the same acreage in the
United States), this section and section 263
shall not apply to—
‘‘(i) the costs of the taxpayer of such
replanting (other than special replanting
costs),
‘‘(ii) 80 percent of the taxpayer’s spe-
cial replanting costs of such replanting,
‘‘(iii) the costs of the taxpayer to re-
move such plants, and
‘‘(iv) the preproductive costs of the
taxpayer of such replanting.
‘‘(B) SPECIAL
REPLANTING
COSTS.—For
purposes of this subsection, the term ‘special
replanting costs’ means direct costs incurred
for—
‘‘(i) plants (including qualified addi-
tional plants) and supporting structures,
‘‘(ii) replacing irrigation and drainage
systems destroyed during removal of the
lost or damaged plants, and
‘‘(iii) land preparation and fumiga-
tion.
For purposes of the preceding sentence, the
term ‘qualified additional plants’ means plants
(other than replacement plants) which bear the
same type of crop as the lost or damaged plants
referred to in subparagraph (A) and which are
planted on the same parcel of land as the re-
placement plants.
‘‘(C) PREPRODUCTIVE
COSTS.—For pur-
poses of this subsection, the term ‘preproductive
costs’ 
means 
costs 
incurred 
during 
the
preproductive period which are attributable
to—
‘‘(i) the cultivation, maintenance, and
development of the replantings,
‘‘(ii) the administration of the activi-
ties referred to in clause (i), and
‘‘(iii) interest on financing such activi-
ties.
Such term shall not include special replanting
costs.
‘‘(D) EXCLUSION
OF
NONREPLACEMENT
ASSETS.—In no event shall subparagraph (A)
apply to costs incurred for any asset which is
not substantially equivalent for commercial pur-
poses to an asset used on the parcel of land on
which the lost or damaged plants were located.
‘‘(E) LOSS LIMITATION RULE.—Any costs
otherwise eligible for the treatment under sub-
paragraph (A) with respect to any parcel shall
be reduced by the deduction (if any) allowed to
the taxpayer under section 165 which relates to
the most recent prior loss or damage to plants
located on such parcel.
‘‘(F) 
COORDINATION
WITH
ELECTION
UNDER PARAGRAPH (3).—The provisions of this
paragraph shall apply notwithstanding that an
election is made under paragraph (3).’’
(b) CONFORMING
AMENDMENT.—Section 165 of
such Code is amended by redesignating subsection (m) as
subsection (n) and by inserting after subsection (l) the fol-
lowing new subsection:
‘‘(m) LOSSES TO WHICH SECTION 263A(d)(2) DE-
DUCTIONS ARE TAKEN.—No deduction shall be allowed
under this section with respect to any loss for which the
costs 
of 
replanting 
are 
deducted 
under 
section
263A(d)(2)(A).’’
(c) EFFECTIVE DATE.—The amendments in this sec-
tion shall apply to costs incurred after December 31,
1995, in taxable years ending after such date.
Æ