Text of H.R. 3823: Disaster Tax Relief and Airport and Airway Extension Act of 2017 (Passed Congress version)

One Hundred Fifteenth Congress of the United States of America

At the First Session

Begun and held at the City of Washington on Tuesday, the third day of January, two thousand and seventeen

H. R. 3823

AN ACT

To amend title 49, United States Code, to extend authorizations for the airport improvement program, to amend the Internal Revenue Code of 1986 to extend the funding and expenditure authority of the Airport and Airway Trust Fund, to provide disaster tax relief, and for other purposes.

(a)

This Act may be cited as the Disaster Tax Relief and Airport and Airway Extension Act of 2017.

(b)

The table of contents for this Act is as follows:

Sec. 1. Short title; table of contents.

Title I—Federal Aviation Programs

Sec. 101. Extension of airport improvement program.

Sec. 102. Extension of expiring authorities.

Sec. 103. Federal Aviation Administration operations.

Sec. 104. Small community air service.

Sec. 105. Air navigation facilities and equipment.

Sec. 106. Research, engineering, and development.

Sec. 107. Funding for aviation programs.

Title II—Aviation Revenue Provisions

Sec. 201. Expenditure authority from Airport and Airway Trust Fund.

Sec. 202. Extension of taxes funding Airport and Airway Trust Fund.

Title III—Expiring Health Provisions

Sec. 301. Extension of certain public health programs.

Sec. 302. Extension of Medicare Patient IVIG Access Demonstration Project.

Sec. 303. Funds from the Medicare Improvement Fund.

Title IV—Development of Private Flood Insurance Market

Sec. 401. Private flood insurance.

Title V—Tax Relief for Hurricanes Harvey, Irma, and Maria

Sec. 501. Definitions.

Sec. 502. Special disaster-related rules for use of retirement funds.

Sec. 503. Disaster-related employment relief.

Sec. 504. Additional disaster-related tax relief provisions.

Sec. 505. Budgetary effects.

101.

(a)

(1)

Section 48103(a) of title 49, United States Code, is amended by striking the period at the end and inserting and $1,670,410,959 for the period beginning on October 1, 2017, and ending on March 31, 2018..

(2)

Subject to limitations specified in advance in appropriations Acts, sums made available pursuant to the amendment made by paragraph (1) may be obligated at any time through September 30, 2018, and shall remain available until expended.

(3)

For purposes of calculating funding apportionments and meeting other requirements under sections 47114, 47115, 47116, and 47117 of title 49, United States Code, for the period beginning on October 1, 2017, and ending on March 31, 2018, the Administrator of the Federal Aviation Administration shall—

(A)

first calculate such funding apportionments on an annualized basis as if the total amount available under section 48103 of such title for fiscal year 2018 were $3,350,000,000; and

(B)

then reduce by 50 percent—

(i)

all funding apportionments calculated under subparagraph (A); and

(ii)

amounts available pursuant to sections 47117(b) and 47117(f)(2) of such title.

(b)

Section 47104(c) of title 49, United States Code, is amended in the matter preceding paragraph (1) by striking September 30, 2017, and inserting March 31, 2018,.

102.

(a)

Section 47107(r)(3) of title 49, United States Code, is amended by striking October 1, 2017 and inserting April 1, 2018.

(b)

Section 47114(c)(1)(F) of title 49, United States Code, is amended—

(1)

in the subparagraph heading by striking for fiscal year 2017; and

(2)

in the matter preceding clause (i) by striking for fiscal year 2017 an amount and inserting for each of fiscal years 2017 and 2018 an amount.

(c)

Section 47115(j) of title 49, United States Code, is amended by inserting and for the period beginning on October 1, 2017, and ending on March 31, 2018 after fiscal years 2012 through 2017.

(d)

Section 47124(b)(3)(E) of title 49, United States Code, is amended by inserting and not more than $5,160,822 for the period beginning on October 1, 2017, and ending on March 31, 2018, after fiscal years 2012 through 2017.

(e)

Section 47141(f) of title 49, United States Code, is amended by striking September 30, 2017 and inserting March 31, 2018.

(f)

Section 186(d) of the Vision 100—Century of Aviation Reauthorization Act (117 Stat. 2518) is amended by inserting and for the period beginning on October 1, 2017, and ending on March 31, 2018, after fiscal years 2012 through 2017.

(g)

Section 409(d) of the Vision 100—Century of Aviation Reauthorization Act (49 U.S.C. 41731 note) is amended by striking September 30, 2017 and inserting March 31, 2018.

(h)

Section 140(c)(1) of the FAA Modernization and Reform Act of 2012 (126 Stat. 28) is amended by striking 2017 and inserting 2018.

(i)

Section 411(h) of the FAA Modernization and Reform Act of 2012 (49 U.S.C. 42301 prec. note) is amended by striking September 30, 2017 and inserting March 31, 2018.

(j)

Section 822(k) of the FAA Modernization and Reform Act of 2012 (49 U.S.C. 47141 note) is amended by striking September 30, 2017 and inserting March 31, 2018.

(k)

Section 2306(b) of the FAA Extension, Safety, and Security Act of 2016 (130 Stat. 641) is amended by striking October 1, 2017 and inserting April 1, 2018.

103.

Section 106(k) of title 49, United States Code, is amended—

(1)

in paragraph (1)—

(A)

in subparagraph (D) by striking and at the end;

(B)

in subparagraph (E) by striking the period at the end and inserting ; and; and

(C)

by inserting after subparagraph (E) the following:

(F)

$4,999,191,956 for the period beginning on October 1, 2017, and ending on March 31, 2018.

; and

(2)

in paragraph (3) by inserting and for the period beginning on October 1, 2017, and ending on March 31, 2018 after fiscal years 2012 through 2017.

104.

(a)

Section 41742(a)(2) of title 49, United States Code, is amended by striking and $175,000,000 for each of fiscal years 2016 and 2017 and inserting $175,000,000 for each of fiscal years 2016 and 2017, and $74,794,521 for the period beginning on October 1, 2017, and ending on March 31, 2018,.

(b)

Section 41743(e)(2) of title 49, United States Code, is amended by inserting and $4,986,301 for the period beginning on October 1, 2017, and ending on March 31, 2018, after fiscal years 2012 through 2017.

105.

Section 48101(a) of title 49, United States Code, is amended by adding at the end the following:

(6)

$1,423,589,041 for the period beginning on October 1, 2017, and ending on March 31, 2018.

106.

Section 48102(a) of title 49, United States Code, is amended—

(1)

in paragraph (8) by striking and at the end;

(2)

in paragraph (9) by striking the period at the end and inserting ; and; and

(3)

by adding at the end the following:

(10)

$88,008,219 for the period beginning on October 1, 2017 and ending on March 31, 2018.

107.

(a)

Section 48114 of title 49, United States Code, is amended—

(1)

in subsection (a)(2) by striking 2017 and inserting 2018; and

(2)

in subsection (c)(2) by striking 2017 and inserting 2018.

(b)

The budget authority authorized in this title, including the amendments made by this title, shall be deemed to satisfy the requirements of subsections (a)(1)(B) and (a)(2) of section 48114 of title 49, United States Code, for the period beginning on October 1, 2017, and ending on March 31, 2018.

201.

(a)

Section 9502(d)(1) of the Internal Revenue Code of 1986 is amended—

(1)

in the matter preceding subparagraph (A) by striking October 1, 2017 and inserting April 1, 2018; and

(2)

in subparagraph (A) by striking the semicolon at the end and inserting or the Disaster Tax Relief and Airport and Airway Extension Act of 2017;.

(b)

Section 9502(e)(2) of such Code is amended by striking October 1, 2017 and inserting April 1, 2018.

202.

(a)

Section 4081(d)(2)(B) of the Internal Revenue Code of 1986 is amended by striking September 30, 2017 and inserting March 31, 2018.

(b)

(1)

Section 4261(k)(1)(A)(ii) of such Code is amended by striking September 30, 2017 and inserting March 31, 2018.

(2)

Section 4271(d)(1)(A)(ii) of such Code is amended by striking September 30, 2017 and inserting March 31, 2018.

(c)

(1)

Section 4083(b) of such Code is amended by striking October 1, 2017 and inserting April 1, 2018.

(2)

Section 4261(j) of such Code is amended by striking September 30, 2017 and inserting March 31, 2018.

III

301.

(a)

Section 340H(g) of the Public Health Service Act (42 U.S.C. 256h(g)) is amended—

(1)

by striking and $60,000,000 and inserting , $60,000,000; and

(2)

by inserting , and $15,000,000 for the first quarter of fiscal year 2018 before the period at the end.

(b)

Section 330C(c)(2) of the Public Health Service Act (42 U.S.C. 254c–3(c)(2)) is amended—

(1)

in subparagraph (B), by striking and at the end;

(2)

in subparagraph (C), by striking the period at the end and inserting ; and; and

(3)

by adding at the end the following new subparagraph:

(D)

$37,500,000 for the first quarter of fiscal year 2018.

(c)

Part D of the Public Health Service Act is amended by redesignating—

(1)

the second subpart XI (42 U.S.C. 256i; relating to a community-based collaborative care network program) as subpart XII; and

(2)

the second section 340H (42 U.S.C. 256i) as section 340I.

302.

Section 101(b) of the Medicare IVIG Access and Strengthening Medicare and Repaying Taxpayers Act of 2012 (42 U.S.C. 1395l note) is amended—

(1)

in paragraph (1), by inserting after for a period of 3 years the following:

and, subject to the availability of funds under subsection (g)—

(A)

if the date of enactment of the Disaster Tax Relief and Airport and Airway Extension Act of 2017 is on or before September 30, 2017, for the period beginning on October 1, 2017, and ending on December 31, 2020; and

(B)

if the date of enactment of such Act is after September 30, 2017, for the period beginning on the date of enactment of such Act and ending on December 31, 2020

; and

(2)

in paragraph (2), by adding at the end the following new sentences: Subject to the preceding sentence, a Medicare beneficiary enrolled in the demonstration project on September 30, 2017, shall be automatically enrolled during the period beginning on the date of the enactment of the Disaster Tax Relief and Airport and Airway Extension Act of 2017 and ending on December 31, 2020, without submission of another application..

303.

Section 1898(b)(1) of the Social Security Act (42 U.S.C. 1395iii(b)(1)) is amended by striking during and after fiscal year 2021, $270,000,000 and inserting during and after fiscal year 2021, $220,000,000.

501.

(a)

For purposes of this title—

(1)

The term Hurricane Harvey disaster zone means that portion of the Hurricane Harvey disaster area determined by the President to warrant individual or individual and public assistance from the Federal Government under the Robert T. Stafford Disaster Relief and Emergency Assistance Act by reason of Hurricane Harvey.

(2)

The term Hurricane Harvey disaster area means an area with respect to which a major disaster has been declared by the President before September 21, 2017, under section 401 of such Act by reason of Hurricane Harvey.

(b)

For purposes of this title—

(1)

The term Hurricane Irma disaster zone means that portion of the Hurricane Irma disaster area determined by the President to warrant individual or individual and public assistance from the Federal Government under such Act by reason of Hurricane Irma.

(2)

The term Hurricane Irma disaster area means an area with respect to which a major disaster has been declared by the President before September 21, 2017, under section 401 of such Act by reason of Hurricane Irma.

(c)

For purposes of this title—

(1)

The term Hurricane Maria disaster zone means that portion of the Hurricane Maria disaster area determined by the President to warrant individual or individual and public assistance from the Federal Government under such Act by reason of Hurricane Maria.

(2)

The term Hurricane Maria disaster area means an area with respect to which a major disaster has been declared by the President before September 21, 2017, under section 401 of such Act by reason of Hurricane Maria.

502.

(a)

(1)

Section 72(t) of the Internal Revenue Code of 1986 shall not apply to any qualified hurricane distribution.

(2)

(A)

For purposes of this subsection, the aggregate amount of distributions received by an individual which may be treated as qualified hurricane distributions for any taxable year shall not exceed the excess (if any) of—

(i)

$100,000, over

(ii)

the aggregate amounts treated as qualified hurricane distributions received by such individual for all prior taxable years.

(B)

If a distribution to an individual would (without regard to subparagraph (A)) be a qualified hurricane distribution, a plan shall not be treated as violating any requirement of the Internal Revenue Code of 1986 merely because the plan treats such distribution as a qualified hurricane distribution, unless the aggregate amount of such distributions from all plans maintained by the employer (and any member of any controlled group which includes the employer) to such individual exceeds $100,000.

(C)

For purposes of subparagraph (B), the term controlled group means any group treated as a single employer under subsection (b), (c), (m), or (o) of section 414 of the Internal Revenue Code of 1986.

(3)

(A)

Any individual who receives a qualified hurricane distribution may, at any time during the 3-year period beginning on the day after the date on which such distribution was received, make one or more contributions in an aggregate amount not to exceed the amount of such distribution to an eligible retirement plan of which such individual is a beneficiary and to which a rollover contribution of such distribution could be made under section 402(c), 403(a)(4), 403(b)(8), 408(d)(3), or 457(e)(16), of the Internal Revenue Code of 1986, as the case may be.

(B)

For purposes of the Internal Revenue Code of 1986, if a contribution is made pursuant to subparagraph (A) with respect to a qualified hurricane distribution from an eligible retirement plan other than an individual retirement plan, then the taxpayer shall, to the extent of the amount of the contribution, be treated as having received the qualified hurricane distribution in an eligible rollover distribution (as defined in section 402(c)(4) of such Code) and as having transferred the amount to the eligible retirement plan in a direct trustee to trustee transfer within 60 days of the distribution.

(C)

For purposes of the Internal Revenue Code of 1986, if a contribution is made pursuant to subparagraph (A) with respect to a qualified hurricane distribution from an individual retirement plan (as defined by section 7701(a)(37) of such Code), then, to the extent of the amount of the contribution, the qualified hurricane distribution shall be treated as a distribution described in section 408(d)(3) of such Code and as having been transferred to the eligible retirement plan in a direct trustee to trustee transfer within 60 days of the distribution.

(4)

For purposes of this subsection—

(A)

Except as provided in paragraph (2), the term qualified hurricane distribution means—

(i)

any distribution from an eligible retirement plan made on or after August 23, 2017, and before January 1, 2019, to an individual whose principal place of abode on August 23, 2017, is located in the Hurricane Harvey disaster area and who has sustained an economic loss by reason of Hurricane Harvey,

(ii)

any distribution (which is not described in clause (i)) from an eligible retirement plan made on or after September 4, 2017, and before January 1, 2019, to an individual whose principal place of abode on September 4, 2017, is located in the Hurricane Irma disaster area and who has sustained an economic loss by reason of Hurricane Irma, and

(iii)

any distribution (which is not described in clause (i) or (ii)) from an eligible retirement plan made on or after September 16, 2017, and before January 1, 2019, to an individual whose principal place of abode on September 16, 2017, is located in the Hurricane Maria disaster area and who has sustained an economic loss by reason of Hurricane Maria.

(B)

The term eligible retirement plan shall have the meaning given such term by section 402(c)(8)(B) of the Internal Revenue Code of 1986.

(5)

(A)

In the case of any qualified hurricane distribution, unless the taxpayer elects not to have this paragraph apply for any taxable year, any amount required to be included in gross income for such taxable year shall be so included ratably over the 3-taxable-year period beginning with such taxable year.

(B)

For purposes of subparagraph (A), rules similar to the rules of subparagraph (E) of section 408A(d)(3) of the Internal Revenue Code of 1986 shall apply.

(6)

(A)

For purposes of sections 401(a)(31), 402(f), and 3405 of the Internal Revenue Code of 1986, qualified hurricane distributions shall not be treated as eligible rollover distributions.

(B)

For purposes the Internal Revenue Code of 1986, a qualified hurricane distribution shall be treated as meeting the requirements of sections 401(k)(2)(B)(i), 403(b)(7)(A)(ii), 403(b)(11), and 457(d)(1)(A) of such Code.

(b)

(1)

(A)

Any individual who received a qualified distribution may, during the period beginning on August 23, 2017, and ending on February 28, 2018, make one or more contributions in an aggregate amount not to exceed the amount of such qualified distribution to an eligible retirement plan (as defined in section 402(c)(8)(B) of the Internal Revenue Code of 1986) of which such individual is a beneficiary and to which a rollover contribution of such distribution could be made under section 402(c), 403(a)(4), 403(b)(8), or 408(d)(3), of such Code, as the case may be.

(B)

Rules similar to the rules of subparagraphs (B) and (C) of subsection (a)(3) shall apply for purposes of this subsection.

(2)

For purposes of this subsection, the term qualified distribution means any distribution—

(A)

described in section 401(k)(2)(B)(i)(IV), 403(b)(7)(A)(ii) (but only to the extent such distribution relates to financial hardship), 403(b)(11)(B), or 72(t)(2)(F), of the Internal Revenue Code of 1986,

(B)

received after February 28, 2017, and before September 21, 2017, and

(C)

which was to be used to purchase or construct a principal residence in the Hurricane Harvey disaster area, the Hurricane Irma disaster area, or the Hurricane Maria disaster area, but which was not so purchased or constructed on account of Hurricane Harvey, Hurricane Irma, or Hurricane Maria.

(c)

(1)

In the case of any loan from a qualified employer plan (as defined under section 72(p)(4) of the Internal Revenue Code of 1986) to a qualified individual made during the period beginning on the date of the enactment of this Act and ending on December 31, 2018—

(A)

clause (i) of section 72(p)(2)(A) of such Code shall be applied by substituting $100,000 for $50,000, and

(B)

clause (ii) of such section shall be applied by substituting the present value of the nonforfeitable accrued benefit of the employee under the plan for one-half of the present value of the nonforfeitable accrued benefit of the employee under the plan.

(2)

In the case of a qualified individual with an outstanding loan on or after the qualified beginning date from a qualified employer plan (as defined in section 72(p)(4) of the Internal Revenue Code of 1986)—

(A)

if the due date pursuant to subparagraph (B) or (C) of section 72(p)(2) of such Code for any repayment with respect to such loan occurs during the period beginning on the qualified beginning date and ending on December 31, 2018, such due date shall be delayed for 1 year,

(B)

any subsequent repayments with respect to any such loan shall be appropriately adjusted to reflect the delay in the due date under paragraph (1) and any interest accruing during such delay, and

(C)

in determining the 5-year period and the term of a loan under subparagraph (B) or (C) of section 72(p)(2) of such Code, the period described in subparagraph (A) shall be disregarded.

(3)

For purposes of this subsection—

(A)

The term qualified individual means any qualified Hurricane Harvey individual, any qualified Hurricane Irma individual, and any qualified Hurricane Maria individual.

(B)

The term qualified Hurricane Harvey individual means an individual whose principal place of abode on August 23, 2017, is located in the Hurricane Harvey disaster area and who has sustained an economic loss by reason of Hurricane Harvey.

(C)

The term qualified Hurricane Irma individual means an individual (other than a qualified Hurricane Harvey individual) whose principal place of abode on September 4, 2017, is located in the Hurricane Irma disaster area and who has sustained an economic loss by reason of Hurricane Irma.

(D)

The term qualified Hurricane Maria individual means an individual (other than a qualified Hurricane Harvey individual or a qualified Hurricane Irma individual) whose principal place of abode on September 16, 2017, is located in the Hurricane Maria disaster area and who has sustained an economic loss by reason of Hurricane Maria.

(4)

For purposes of this subsection, the qualified beginning date is—

(A)

in the case of any qualified Hurricane Harvey individual, August 23, 2017,

(B)

in the case of any qualified Hurricane Irma individual, September 4, 2017, and

(C)

in the case of any qualified Hurricane Maria individual, September 16, 2017.

(d)

(1)

If this subsection applies to any amendment to any plan or annuity contract, such plan or contract shall be treated as being operated in accordance with the terms of the plan during the period described in paragraph (2)(B)(i).

(2)

(A)

This subsection shall apply to any amendment to any plan or annuity contract which is made—

(i)

pursuant to any provision of this section, or pursuant to any regulation issued by the Secretary or the Secretary of Labor under any provision of this section, and

(ii)

on or before the last day of the first plan year beginning on or after January 1, 2019, or such later date as the Secretary may prescribe.

In the case of a governmental plan (as defined in section 414(d) of the Internal Revenue Code of 1986), clause (ii) shall be applied by substituting the date which is 2 years after the date otherwise applied under clause (ii).

(B)

This subsection shall not apply to any amendment unless—

(i)

during the period—

(I)

beginning on the date that this section or the regulation described in subparagraph (A)(i) takes effect (or in the case of a plan or contract amendment not required by this section or such regulation, the effective date specified by the plan), and

(II)

ending on the date described in subparagraph (A)(ii) (or, if earlier, the date the plan or contract amendment is adopted),

the plan or contract is operated as if such plan or contract amendment were in effect, and

(ii)

such plan or contract amendment applies retroactively for such period.

503.

(a)

(1)

For purposes of section 38 of the Internal Revenue Code of 1986, in the case of an eligible employer, the Hurricane Harvey employee retention credit shall be treated as a credit listed in subsection (b) of such section. For purposes of this subsection, the Hurricane Harvey employee retention credit for any taxable year is an amount equal to 40 percent of the qualified wages with respect to each eligible employee of such employer for such taxable year. For purposes of the preceding sentence, the amount of qualified wages which may be taken into account with respect to any individual shall not exceed $6,000.

(2)

For purposes of this subsection—

(A)

The term eligible employer means any employer—

(i)

which conducted an active trade or business on August 23, 2017, in the Hurricane Harvey disaster zone, and

(ii)

with respect to whom the trade or business described in clause (i) is inoperable on any day after August 23, 2017, and before January 1, 2018, as a result of damage sustained by reason of Hurricane Harvey.

(B)

The term eligible employee means with respect to an eligible employer an employee whose principal place of employment on August 23, 2017, with such eligible employer was in the Hurricane Harvey disaster zone.

(C)

The term qualified wages means wages (as defined in section 51(c)(1) of the Internal Revenue Code of 1986, but without regard to section 3306(b)(2)(B) of such Code) paid or incurred by an eligible employer with respect to an eligible employee on any day after August 23, 2017, and before January 1, 2018, which occurs during the period—

(i)

beginning on the date on which the trade or business described in subparagraph (A) first became inoperable at the principal place of employment of the employee immediately before Hurricane Harvey, and

(ii)

ending on the date on which such trade or business has resumed significant operations at such principal place of employment.

Such term shall include wages paid without regard to whether the employee performs no services, performs services at a different place of employment than such principal place of employment, or performs services at such principal place of employment before significant operations have resumed.

(3)

For purposes of this subsection, rules similar to the rules of sections 51(i)(1) and 52, of the Internal Revenue Code of 1986, shall apply.

(4)

An employee shall not be treated as an eligible employee for purposes of this subsection for any period with respect to any employer if such employer is allowed a credit under section 51 of the Internal Revenue Code of 1986 with respect to such employee for such period.

(b)

(1)

For purposes of section 38 of the Internal Revenue Code of 1986, in the case of an eligible employer, the Hurricane Irma employee retention credit shall be treated as a credit listed in subsection (b) of such section. For purposes of this subsection, the Hurricane Irma employee retention credit for any taxable year is an amount equal to 40 percent of the qualified wages with respect to each eligible employee of such employer for such taxable year. For purposes of the preceding sentence, the amount of qualified wages which may be taken into account with respect to any individual shall not exceed $6,000.

(2)

For purposes of this subsection—

(A)

The term eligible employer means any employer—

(i)

which conducted an active trade or business on September 4, 2017, in the Hurricane Irma disaster zone, and

(ii)

with respect to whom the trade or business described in clause (i) is inoperable on any day after September 4, 2017, and before January 1, 2018, as a result of damage sustained by reason of Hurricane Irma.

(B)

The term eligible employee means with respect to an eligible employer an employee whose principal place of employment on September 4, 2017, with such eligible employer was in the Hurricane Irma disaster zone.

(C)

The term qualified wages means wages (as defined in section 51(c)(1) of the Internal Revenue Code of 1986, but without regard to section 3306(b)(2)(B) of such Code) paid or incurred by an eligible employer with respect to an eligible employee on any day after September 4, 2017, and before January 1, 2018, which occurs during the period—

(i)

beginning on the date on which the trade or business described in subparagraph (A) first became inoperable at the principal place of employment of the employee immediately before Hurricane Irma, and

(ii)

ending on the date on which such trade or business has resumed significant operations at such principal place of employment.

(3)

For purposes of this subsection, rules similar to the rules of sections 51(i)(1) and 52, of the Internal Revenue Code of 1986, shall apply.

(4)

An employee shall not be treated as an eligible employee for purposes of this subsection for any period with respect to any employer if such employer is allowed a credit under subsection (a), or section 51 of the Internal Revenue Code of 1986, with respect to such employee for such period.

(c)

(1)

For purposes of section 38 of the Internal Revenue Code of 1986, in the case of an eligible employer, the Hurricane Maria employee retention credit shall be treated as a credit listed in subsection (b) of such section. For purposes of this subsection, the Hurricane Maria employee retention credit for any taxable year is an amount equal to 40 percent of the qualified wages with respect to each eligible employee of such employer for such taxable year. For purposes of the preceding sentence, the amount of qualified wages which may be taken into account with respect to any individual shall not exceed $6,000.

(2)

For purposes of this subsection—

(A)

The term eligible employer means any employer—

(i)

which conducted an active trade or business on September 16, 2017, in the Hurricane Maria disaster zone, and

(ii)

with respect to whom the trade or business described in clause (i) is inoperable on any day after September 16, 2017, and before January 1, 2018, as a result of damage sustained by reason of Hurricane Maria.

(B)

The term eligible employee means with respect to an eligible employer an employee whose principal place of employment on September 16, 2017, with such eligible employer was in the Hurricane Maria disaster zone.

(C)

The term qualified wages means wages (as defined in section 51(c)(1) of the Internal Revenue Code of 1986, but without regard to section 3306(b)(2)(B) of such Code) paid or incurred by an eligible employer with respect to an eligible employee on any day after September 16, 2017, and before January 1, 2018, which occurs during the period—

(i)

beginning on the date on which the trade or business described in subparagraph (A) first became inoperable at the principal place of employment of the employee immediately before Hurricane Maria, and

(ii)

ending on the date on which such trade or business has resumed significant operations at such principal place of employment.

(3)

For purposes of this subsection, rules similar to the rules of sections 51(i)(1) and 52, of the Internal Revenue Code of 1986, shall apply.

(4)

An employee shall not be treated as an eligible employee for purposes of this subsection for any period with respect to any employer if such employer is allowed a credit under subsection (a) or (b), or section 51 of the Internal Revenue Code of 1986, with respect to such employee for such period.

504.

(a)

(1)

Except as otherwise provided in paragraph (2), subsection (b) of section 170 of the Internal Revenue Code of 1986 shall not apply to qualified contributions and such contributions shall not be taken into account for purposes of applying subsections (b) and (d) of such section to other contributions.

(2)

For purposes of section 170 of the Internal Revenue Code of 1986—

(A)

In the case of an individual—

(i)

Any qualified contribution shall be allowed only to the extent that the aggregate of such contributions does not exceed the excess of the taxpayer's contribution base (as defined in subparagraph (G) of section 170(b)(1) of such Code) over the amount of all other charitable contributions allowed under section 170(b)(1) of such Code.

(ii)

If the aggregate amount of qualified contributions made in the contribution year (within the meaning of section 170(d)(1) of such Code) exceeds the limitation of clause (i), such excess shall be added to the excess described in the portion of subparagraph (A) of such section which precedes clause (i) thereof for purposes of applying such section.

(B)

In the case of a corporation—

(i)

Any qualified contribution shall be allowed only to the extent that the aggregate of such contributions does not exceed the excess of the taxpayer's taxable income (as determined under paragraph (2) of section 170(b) of such Code) over the amount of all other charitable contributions allowed under such paragraph.

(ii)

Rules similar to the rules of subparagraph (A)(ii) shall apply for purposes of this subparagraph.

(3)

So much of any deduction allowed under section 170 of the Internal Revenue Code of 1986 as does not exceed the qualified contributions paid during the taxable year shall not be treated as an itemized deduction for purposes of section 68 of such Code.

(4)

(A)

For purposes of this subsection, the term qualified contribution means any charitable contribution (as defined in section 170(c) of the Internal Revenue Code of 1986) if—

(i)

such contribution—

(I)

is paid during the period beginning on August 23, 2017, and ending on December 31, 2017, in cash to an organization described in section 170(b)(1)(A) of such Code, and

(II)

is made for relief efforts in the Hurricane Harvey disaster area, the Hurricane Irma disaster area, or the Hurricane Maria disaster area,

(ii)

the taxpayer obtains from such organization contemporaneous written acknowledgment (within the meaning of section 170(f)(8) of such Code) that such contribution was used (or is to be used) for relief efforts described in clause (i)(II), and

(iii)

the taxpayer has elected the application of this subsection with respect to such contribution.

(B)

Such term shall not include a contribution by a donor if the contribution is—

(i)

to an organization described in section 509(a)(3) of the Internal Revenue Code of 1986, or

(ii)

for the establishment of a new, or maintenance of an existing, donor advised fund (as defined in section 4966(d)(2) of such Code).

(C)

In the case of a partnership or S corporation, the election under subparagraph (A)(iii) shall be made separately by each partner or shareholder.

(b)

(1)

If an individual has a net disaster loss for any taxable year—

(A)

the amount determined under section 165(h)(2)(A)(ii) of the Internal Revenue Code of 1986 shall be equal to the sum of—

(i)

such net disaster loss, and

(ii)

so much of the excess referred to in the matter preceding clause (i) of section 165(h)(2)(A) of such Code (reduced by the amount in clause (i) of this subparagraph) as exceeds 10 percent of the adjusted gross income of the individual,

(B)

section 165(h)(1) of such Code shall be applied by substituting $500 for $500 ($100 for taxable years beginning after December 31, 2009),

(C)

the standard deduction determined under section 63(c) of such Code shall be increased by the net disaster loss, and

(D)

section 56(b)(1)(E) of such Code shall not apply to so much of the standard deduction as is attributable to the increase under subparagraph (C) of this paragraph.

(2)

For purposes of this subsection, the term net disaster loss means the excess of qualified disaster-related personal casualty losses over personal casualty gains (as defined in section 165(h)(3)(A) of the Internal Revenue Code of 1986).

(3)

For purposes of this subsection, the term qualified disaster-related personal casualty losses means losses described in section 165(c)(3) of the Internal Revenue Code of 1986—

(A)

which arise in the Hurricane Harvey disaster area on or after August 23, 2017, and which are attributable to Hurricane Harvey,

(B)

which arise in the Hurricane Irma disaster area on or after September 4, 2017, and which are attributable to Hurricane Irma, or

(C)

which arise in the Hurricane Maria disaster area on or after September 16, 2017, and which are attributable to Hurricane Maria.

(c)

(1)

In the case of a qualified individual, if the earned income of the taxpayer for the taxable year which includes the applicable date is less than the earned income of the taxpayer for the preceding taxable year, the credits allowed under sections 24(d) and 32 of the Internal Revenue Code of 1986 may, at the election of the taxpayer, be determined by substituting—

(A)

such earned income for the preceding taxable year, for

(B)

such earned income for the taxable year which includes the applicable date.

In the case of a resident of Puerto Rico determining the credit allowed under section 24(d)(1)(B)(ii) of such Code, the preceding sentence shall be applied by substituting social security taxes (as defined in section 24(d)(2)(A) of the Internal Revenue Code of 1986) for earned income each place it appears.

(2)

For purposes of this subsection—

(A)

The term qualified individual means any qualified Hurricane Harvey individual, any qualified Hurricane Irma individual, and any qualified Hurricane Maria individual.

(B)

The term qualified Hurricane Harvey individual means any individual whose principal place of abode on August 23, 2017, was located—

(i)

in the Hurricane Harvey disaster zone, or

(ii)

in the Hurricane Harvey disaster area (but outside the Hurricane Harvey disaster zone) and such individual was displaced from such principal place of abode by reason of Hurricane Harvey.

(C)

The term qualified Hurricane Irma individual means any individual (other than a qualified Hurricane Harvey individual) whose principal place of abode on September 4, 2017, was located—

(i)

in the Hurricane Irma disaster zone, or

(ii)

in the Hurricane Irma disaster area (but outside the Hurricane Irma disaster zone) and such individual was displaced from such principal place of abode by reason of Hurricane Irma.

(D)

The term qualified Hurricane Maria individual means any individual (other than a qualified Hurricane Harvey individual or a qualified Hurricane Irma individual) whose principal place of abode on September 16, 2017, was located—

(i)

in the Hurricane Maria disaster zone, or

(ii)

in the Hurricane Maria disaster area (but outside the Hurricane Maria disaster zone) and such individual was displaced from such principal place of abode by reason of Hurricane Maria.

(3)

For purposes of this subsection, the term applicable date means—

(A)

in the case of a qualified Hurricane Harvey individual, August 23, 2017,

(B)

in the case of a qualified Hurricane Irma individual, September 4, 2017, and

(C)

in the case of a qualified Hurricane Maria individual, September 16, 2017.

(4)

For purposes of this subsection, the term earned income has the meaning given such term under section 32(c) of the Internal Revenue Code of 1986.

(5)

(A)

For purposes of paragraph (1), in the case of a joint return for a taxable year which includes the applicable date—

(i)

such paragraph shall apply if either spouse is a qualified individual, and

(ii)

the earned income of the taxpayer for the preceding taxable year shall be the sum of the earned income of each spouse for such preceding taxable year.

(B)

Any election made under paragraph (1) shall apply with respect to both sections 24(d) and 32, of the Internal Revenue Code of 1986.

(C)

For purposes of section 6213 of the Internal Revenue Code of 1986, an incorrect use on a return of earned income pursuant to paragraph (1) shall be treated as a mathematical or clerical error.

(D)

Except as otherwise provided in this subsection, the Internal Revenue Code of 1986 shall be applied without regard to any substitution under paragraph (1).

(d)

(1)

(A)

The Secretary of the Treasury shall pay to the United States Virgin Islands amounts equal to the loss in revenues to the United States Virgin Islands by reason of the provisions of this title. Such amounts shall be determined by the Secretary of the Treasury based on information provided by the government of the United States Virgin Islands.

(B)

The Secretary of the Treasury shall pay to Puerto Rico amounts estimated by the Secretary of the Treasury as being equal to the aggregate benefits that would have been provided to residents of Puerto Rico by reason of the provisions of this title if a mirror code tax system had been in effect in Puerto Rico. The preceding sentence shall not apply with respect to Puerto Rico unless Puerto Rico has a plan, which has been approved by the Secretary of the Treasury, under which Puerto Rico will promptly distribute such payments to its residents.

(2)

(A)

For purposes of this subsection, the term mirror code tax system means, with respect to any possession of the United States, the income tax system of such possession if the income tax liability of the residents of such possession under such system is determined by reference to the income tax laws of the United States as if such possession were the United States.

(B)

For purposes of section 1324 of title 31, United States Code, the payments under this subsection shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section.

(C)

In the case of any person with respect to whom a tax benefit is taken into account with respect to the taxes imposed by any possession of the United States by reason of this title, the Internal Revenue Code of 1986 shall be applied with respect to such person without regard to the provisions of this title which provide such benefit.

505.

(a)

This title is designated as an emergency requirement pursuant to section 4(g) of the Statutory Pay-As-You-Go Act of 2010 (2 U.S.C. 933(g)).

(b)

In the Senate, this title is designated as an emergency requirement pursuant to section 403(a) of S. Con. Res. 13 (111th Congress), the concurrent resolution on the budget for fiscal year 2010.

Speaker of the House of Representatives.

Vice President of the United States and President of the Senate.

H.R. 3823 (115^th): Disaster Tax Relief and Airport and Airway Extension Act of 2017

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H.R. 3823 (115th): Disaster Tax Relief and Airport and Airway Extension Act of 2017

This bill has 5 versions. Select a version to view: Sep 25, 2017: Introduced Sep 28, 2017: Passed the Senate with an Amendment Sep 28, 2017: Passed the House Sep 28, 2017: Received by the Senate Sep 29, 2017: Passed Congress

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H.R. 3823 (115^th): Disaster Tax Relief and Airport and Airway Extension Act of 2017

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