Bills
| 3.23.22

Tax Relief for Hurricane Victims, Reauthorizing the FAA and Expiring Healthcare Programs (H.R. 3823)

Do you support or oppose this bill?

What is H.R. 3823?

(Updated October 5, 2018)

This bill was enacted on September 29, 2017

This bill would provide temporary tax relief to the victims of Hurricanes Harvey, Irma, and Maria while also reauthorizing the Federal Aviation Administration (FAA) and several healthcare programs that are currently set to expire at the end of September 2017.

The following targeted tax relief would be available to the victims and communities impacted by Hurricanes Harvey, Irma, and Maria in affected states and territories:

  • Deduction for Personal Casualty Losses: The current requirement that personal casualty losses exceed 10 percent of adjusted gross income to qualify for a deduction would be eliminated, as would the requirement for taxpayers to itemize their deductions to access it.

  • Penalty-Free Access to Retirement Funds: An exception to the 10 percent early retirement plan withdrawal penalty would be granted for qualified hurricane relief distributions. Withdrawals made to purchase homes that have been cancelled because of the disasters could be re-contributed, and flexibility would be extended to loans from retirement plans for hurricane relief.

  • Encouraging Charitable Giving: Limitations on the deduction for charitable contributions would be temporarily suspended for qualified contributions related to hurricane relief before December 31, 2017.

  • Disaster-Related Employment Relief: A tax credit for 40 percent of wages (up to $6,000 per employee) paid by a disaster-affected employer to an employee  from a core disaster area would be provided.

  • Earned Income Tax Credit and Child Tax Credit: For 2017, taxpayers would be allowed to refer to earned income from the immediately preceding year for purposes of determining the Earned Income Tax Credit and Child Tax Credit.

The Federal Aviation Administration (FAA) would be reauthorized through March 31, 2018 with $4.99 billion in funding available for the period. Included in that funding would be $1.4 billion for air navigation facilities and equipment; $88 million for research, engineering and development; $74.7 million for the Small Community Air Service; and $4.9 million for airports not receiving sufficient service. Taxes that provide revenue to the Airport and Airway Trust Fund would also be extended through March 31, 2018.

The healthcare programs that would be reauthorized by this bill include:

  • Payments to teaching health centers with graduate medical education programs: $60 million and $15 million for the first quarter of FY2018.

  • Special Diabetes Program for Indians: $37.5 million for the first quarter of FY2018.

  • Medicare Patient Intravenuous Immune Globin (IVIG) Demonstration Project: Extended through the end of December 2020.

  • Funding for the Medicare Improvement Fund would be reduced from $270 million to $220 million during and after FY2021.

The National Flood Insurance Program would be reformed by allowing private insurance plans to be purchased and satisfy the requirement to purchase flood insurance for homes and other properties that have been identified by the Federal Emergency Management Agency (FEMA) as having a flood risk.

Argument in favor

Many Americans are suffering in the aftermath of Hurricanes Harvey, Irma, and Maria and the least the federal government can do is offer them much needed tax relief. The FAA & several healthcare programs also need reauthorizing before the end of September.

Argument opposed

The main components of this bill — disaster tax relief, reauthorizing the FAA & healthcare programs, and reforming flood insurance — should be debated on their merits individually and not cobbled together as a must-pass Frankenstein bill.

Impact

People affected by Hurricanes Harvey, Irma, and Maria; people buying flood insurance; air travelers; the FAA; the NFIP; FEMA; and the IRS.

Cost of H.R. 3823

A CBO cost estimate is unavailable.

Additional Info

In-Depth: Sponsoring Rep. Kevin Brady (R-TX) introduced this bill to provide tax relief for people and businesses affected by Hurricanes Harvey, Irma, and Maria while also reauthorizing the FAA and certain expiring healthcare programs:

“My bill specifically helps hurricane victims keep more of their paycheck, deduct more of the cost of their expensive property damage, and have more affordable and immediate access to money they have saved for their retirement. The legislation will also encourage even more Americans to donate generously to help those in need. Taken together, these tax relief measures will help more people be able to bear the tremendous expense of recovering from these destructive hurricanes.”

Lead cosponsor Carlos Curbelo (R-FL) added:

“Over the last two weeks, I have been on the ground in the Florida Keys and South Dade helping our neighbors rebuild their lives while learning more about what they need to make this process easier. By providing American businesses in the affected areas with a tax credit for wages, we can get these communities back to work as soon as possible. The bill will also ensure hurricane victims keep more of their paycheck, deduct more of the costs from the extensive property damage, and immediate access – without penalties – to their retirement savings for initial recovery.  Lastly, it would temporarily suspend limitations on charitable donations to hurricane recovery efforts, further incentivizing private sector support.”

House Democrats blocked this bill when it was voted on by the House under suspension of the rules — a process that fast-tracks debate for relatively uncontroversial bills that get the backing of at least two-thirds of all members voting. They withheld their support because congressional Republicans haven’t yet allowed a vote on the Dream Act, and also because of concerns about the sufficiency of the disaster relief and allowing private flood insurance plans. House Minority Whip Steny Hoyer (D-MD) said:

“While many of us could support these proposals as part of an overall package that is balanced, we should not acquiesce in this one-sided process that omits Democratic priorities key to advancing the work of making opportunity more broadly available to the American people.”

This legislation has the support of two cosponsors, both of whom are Republicans.


Media:

Summary by Eric Revell

(Photo Credit: Karl Spencer / iStock)