I
104TH CONGRESS
1ST SESSION
H. R. 1569
To amend the Internal Revenue Code of 1986 with respect to the treatment
of crops destroyed by casualty.
IN THE HOUSE OF REPRESENTATIVES
MAY 3, 1995
Mr. MATSUI 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 (F)
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, this section and sec-
tion 263 shall not apply to—
‘‘(i) preproductive or removal costs,
and
‘‘(ii) 80 percent of a taxpayer’s special
replanting costs,
which are incurred for replanting 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).
‘‘(B) TREATMENT OF SPECIAL REPLANT-
ING COSTS.—Subsection (a) of this section and
section 263 shall apply to the remaining 20 per-
cent of a taxpayer’s special replanting costs.
‘‘(C) PREPRODUCTIVE
COSTS.—For pur-
poses of this subsection, the term ‘preproductive
costs’ means costs which are—
‘‘(i) incurred during the preproductive
period, and
‘‘(ii) not treated as special replanting
costs as defined in subparagraph (D).
Such costs shall include cultivation, mainte-
nance, and development costs as well as admin-
istrative costs and interest; but shall not in-
clude any costs related to assets which are dis-
similar to those used on the original acreage
prior to the casualty.
‘‘(D) SPECIAL
REPLANTING
COSTS.—For
purposes of this subsection, the term ‘special
replanting costs’ includes direct costs incurred
for—
‘‘(i) plants and supporting structures,
‘‘(ii) irrigation and drainage systems
destroyed during removal of the lost or
damaged plants, and
‘‘(iii) land preparation and fumigation
costs,
but shall not include any assets which are dis-
similar to those used on the original acreage
prior to the casualty.
‘‘(E) SPECIAL RULE FOR CERTAIN PLANT-
INGS.—Subparagraph (A) shall apply to that
portion of the costs (including the plants and
associated costs) attributable to replanting ad-
ditional plants on acreage, only if such planted
acreage is the same size or smaller as that on
which the lost or destroyed plants were located.
For purposes of this rule, the term ‘additional
plant’ includes any plant which does not replace
a plant qualified under subparagraph (A).
‘‘(F) LOSS LIMITATION RULE.—Any costs
otherwise eligible under subparagraph (A) shall
be reduced by any amounts deducted under sec-
tion 165 which relate to lost or damaged plants
and associated assets. The reduction for deduc-
tions previously taken under section 165 is lim-
ited to the most recent original planting of the
lost or damaged planted acreage before the cur-
rent casualty.’’
(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 take effect as if included in the amendments
made by section 803 of the Tax Reform Act of 1986.
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