article: SECTION 1. SHORT TITLE; AMENDMENTS OF 1986 CODE. (a) Short Title.--This Act may be cited as the ``Natural Disaster Tax Relief Act of 1993''. (b) Amendment of 1986 Code.--Except as otherwise expressly provided, whenever in this Act an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986. SEC. 2. DISTRIBUTIONS FROM CERTAIN PLANS MAY BE USED WITHOUT PENALTY TO REPLACE HOMES. (a) In General.--No additional tax shall be imposed under section 72(t) of the Internal Revenue Code of 1986 on any distribution described in subsection (b) to the extent such distribution is used, within 60 days of the distribution, to pay qualified acquisition costs with respect to a principal residence of an eligible individual. (b) Distributions.--Subsection (a) shall apply to distributions-- (1) from an individual retirement plan, or (2) from amounts attributable to employer contributions made pursuant to elective deferrals described in subparagraph (A) or (C) of section 402(g)(3) of the Internal Revenue Code of 1986 or section 501(c)(18)(D)(iii) of such Code. (c) Definitions and Special Rules.-- (1) Eligible individual.--The term ``eligible individual'' means an individual-- (A) who receives a distribution described in subsection (b), or who is the spouse, child, or grandchild of such individual, and (B) whose principal residence was destroyed or substantially damaged by Hurricane Andrew, Hurricane Iniki, or Typhoon Omar. (2) Qualified acquisition costs.--The term ``qualified acquisition costs'' means the costs of acquiring, constructing, or reconstructing a residence. Such term includes any usual or reasonable settlement, financing, or other closing costs. (3) Principal residence.--The term ``principal residence'' has the same meaning as when used in section 1034 of such Code. (4) Distributions allowed.--A distribution to which subsection (a) applies shall be treated as a distribution allowed under section 401(k)(2)(B)(i) or 403(b)(11) of such Code. (5) Transition.--In the case of any distribution before the date of the enactment of this Act, qualified acquisition costs paid within 90 days of such date shall be treated as paid within 60 days of the distribution. (d) Effective Date.--This section shall apply to distributions after July 31, 1992. SEC. 3. SPECIAL RULE FOR INCLUSION OF CROP PROCEEDS OF CERTAIN DISASTER VICTIMS. (a) In General.--If, for the taxpayer's taxable year which includes the designation date described in subsection (b), the taxpayer has income derived from the sale or exchange of crops grown in a qualified disaster area, the taxpayer may elect to include such income for the taxable year following the taxable year in which such sale or exchange occurs. (b) Qualified Disaster Area.--For purposes of subsection (a), the term ``qualified disaster area'' means an area designated by the President of the United States to warrant assistance by the Federal Government under the Robert T. Stafford Disaster Relief and Emergency Assistance Act by reason of Hurricane Andrew, Hurricane Iniki, or Typhoon Omar. (c) Limitation.--Subsection (a) shall apply only to a taxpayer whose principal trade or business is farming (within the meaning of section 6420(c)(3) of the Internal Revenue Code of 1986). (d) Special Rules for Self-Employment Tax.--If, for any taxable year, a taxpayer includes in gross income any amounts which, but for subsection (a), would have been included in gross income for the preceding taxable year, then the applicable contribution base for purposes of section 1402(b) of such Code for the taxable year of inclusion shall be increased by the lesser of-- (1) the applicable contribution base for the preceding taxable year, reduced by the self-employment income of the taxpayer for the preceding taxable year, or (2) the amounts so included in gross income for the taxable year of inclusion. (e) Effective Date.--The provisions of this section shall apply to taxable years ending after December 31, 1991. SEC. 4. MODIFICATION OF INVOLUNTARY CONVERSION RULES FOR CERTAIN DISASTER-RELATED CONVERSIONS. (a) In General.--Section 1033 (relating to involuntary conversions) is amended by redesignating subsection (h) as subsection (i) and by inserting after subsection (g) the following new subsection: ``(h) Special Rules for Principal Residences Damaged by Presidentially Declared Disasters.-- ``(1) In general.--If the taxpayer's principal residence or any of its contents is compulsorily or involuntarily converted as a result of a Presidentially declared disaster-- ``(A) Treatment of insurance proceeds.-- ``(i) Exclusion for unscheduled personal property.--No gain shall be recognized by reason of the receipt of any insurance proceeds for personal property which was part of such contents and which was not scheduled property for purposes of such insurance. ``(ii) Other proceeds treated as common fund.--In case of any insurance proceeds (not described in clause (i)) for such residence or contents-- ``(I) such proceeds shall be treated as received for the conversion of a single item of property, and ``(II) any property which is similar or related in service or use to the residence so converted (or contents thereof) shall be treated for purposes of subsection (a)(2) as property similar or related in service or use to such single item of property. ``(B) Extension of replacement period.--Subsection (a)(2)(B) shall be applied with respect to any property so converted by substituting `4 years' for `2 years'. ``(2) Presidentially declared disaster.--For purposes of this subsection, the term `Presidentially declared disaster' means any disaster which, with respect to the area in which the residence is located, resulted in a subsequent determination by the President that such area warrants assistance by the Federal Government under the Robert T. Stafford Disaster Relief and Emergency Assistance Act. ``(3) Principal residence.--For purposes of this subsection, the term `principal residence' has the same meaning as when used in section 1034, except that no ownership requirement shall be imposed.''. (b) Effective Date.--The amendment made by subsection (a) shall apply to property compulsorily or involuntarily converted as a result of disasters for which the determination referred to in section 1033(h)(2) of the Internal Revenue Code of 1986 (as added by this section) is made on or after September 1, 1991, and to taxable years ending on or after such date. SEC. 5. APPLICATION OF LOW-INCOME HOUSING CREDITS AND MORTGAGE REVENUE BONDS TO NATURAL DISASTER AREAS. (a) Low-Income Housing Credits.-- (1) Waiver of 24-month completion requirement.--In the case of any qualified building located in a qualified disaster area with respect to which a low-income housing allocation is made before the occurrence of the natural disaster, the Secretary may extend the period described in section 42(h)(1)(E)(i) of the Internal Revenue Code of 1986 to not later than the close of the fourth calendar year following the calendar year in which the allocation is made. (2) Waiver of written income verification requirement.-- (A) In general.--With respect to any occupant of a low-income unit in any qualified low-income building located in a qualified disaster area or any such occupant in any other qualified low-income building who immediately prior to such occupation resided in a qualified disaster area, the Secretary may waive the requirements of paragraphs (1) and (2) of section 42(l) of such Code regarding occupant income information until such information is reasonably obtainable. (B) Discovery of ineligibility.--If upon receipt of occupant income information the income of any occupant of a low-income unit in the building is determined to exceed the income limitation under section 42(g) of such Code, such unit shall continue to be treated as a low-income unit if no subsequently available residential rental unit in the building is occupied by a new resident whose income exceeds such income limitation and such occupant vacates the unit upon the later of the lease termination or 30 days after receipt of such information by the Secretary. (3) Waiver of tenant income limitations.--With respect to any tenant occupying a unit in a qualified low-income housing project located in a qualified disaster area who relocates to any other unit of a qualified low-income housing project, the Secretary may waive the income limitation of subparagraph (A) or (B) of section 42(g)(1) of such Code if the income of such tenant does not exceed 140 percent of such income limitation. (4) Waiver of 6-month residence requirement.--With respect to any unit in a building located in a qualified disaster area or any unit occupied by individuals who immediately prior to such occupation resided in a qualified disaster area, the Secretary may waive the requirement of clause (i) of section 42(i)(3)(B) of such Code and allow the use of such unit on a transient basis. (5) Waiver on 10-year rule for existing buildings.--The Secretary may waive the requirement of subparagraph (B)(ii) of section 42(d)(2) of such Code with respect to any building located in a qualified disaster area. (6) Waiver of the national pool allocation.--The Secretary may modify the formula described in the penultimate sentence of section 42(h)(3)(D)(iii) of such Code for any calendar year with respect to the allocation to any qualified State in which is located a qualified disaster area to increase such allocation to take into account the effects of such disaster. (7) Effective date.--This subsection shall take effect on July 1, 1992. (b) Waiver of Dollar Limitation for Home Improvement Loans for Residences in Qualified Disaster Areas.--The $15,000 limitation specified in the last sentence of section 143(k)(4) of such Code shall not apply to any loan for residences located in a qualified disaster area if such loan is made on or after June 30, 1992, and before January 1, 1994. (c) Qualified Disaster Area.--For purposes of this section, the term ``qualified disaster area'' means an area designated by the President of the United States to warrant assistance by the Federal Government under the Robert T. Stafford Disaster Relief and Emergency Assistance Act by reason of Hurricane Andrew, Hurricane Iniki, or Typhoon Omar.
summary: Natural Disaster Tax Relief Act of 1993 - Amends the Internal Revenue Code to allow penalty-free distributions from individual retirement plans to pay acquisition costs to replace a principal residence that was destroyed or substantially damaged by the disasters Hurricane Andrew, Hurricane Iniki, or Typhoon Omar. Allows a farmer who has income derived from the sale or exchange of crops grown in such disaster areas, to elect to defer such income for the next taxable year. Provides a special rule for the self-employment tax. Requires the nonrecognition of gain of insurance proceeds for the contents of principal residences compulsorily or involuntarily converted as a result of a presidentially-declared disaster. Allows insurance proceeds from personal property and real property to be lumped together into one common fund. Extends the time to replace a principal residence so converted from two years to four years. Waives certain requirements with respect to low-income housing in areas damaged by the disasters Hurricane Andrew, Hurricane Iniki, or Typhoon Omar. Waives the dollar limitation for home improvement loans through mortgage revenue bonds for residences in such disaster areas.