Disaster Relief Bill Includes LIHTC Provisions
On July 11, a coalition of 15 Republicans and 15 Democrats introduced H.R. 5082. The bill is called the National Disaster Tax Relief Act of 2014. This bill would affect areas declared major disaster areas in 2012, 2013, and 2014. The bill was sent to the House Ways and Means Committee for discussion.
Its assistance measures include increasing the Low-Income Housing Credit allocation for states damaged by a natural disaster, based on the population of qualified disaster areas within the state.
The bill’s other measures include: allowing deductions for disaster cleanup expenses; allowing homeowners who lost their homes to qualify for financing under tax-exempt mortgage revenue bonds; providing an additional bonus depreciation allowance for capital expenditures on commercial and residential rental properties in disaster areas; waiving the 10 percent penalty tax that would otherwise apply on an early withdrawal from a retirement plan for disaster victims; allowing an exemption of up to $2,000 for individuals who provided free housing for those displaced by a disaster; permitting disaster victims to use the prior year's income for purposes of calculating the earned income and child tax credits; allowing states to issue tax-exempt Disaster Recovery Bonds for the acquisition, construction, reconstruction, and renovation of residential rental property, commercial property, docks, wharves, mass commuting facilities, and public utility properties; and allowing businesses to create a natural disaster fund, whereby they could set aside pretax dollars for natural disaster expenses, including insurance deductibles and coinsurance.