H.R.262 - Disaster Reforestation Act (119th Congress)
Summary
H.R. 262, the Disaster Reforestation Act, aims to amend the Internal Revenue Code of 1986, providing a special rule for casualty losses of uncut timber due to events like fire, storm, or theft. The bill allows for a deduction based on the appraised value of the timber before the loss, incentivizing reforestation efforts. It also includes provisions for appraisal methods, delays in appraisal completion, and a reforestation requirement within five years of the loss.
Expected Effects
The act will likely encourage landowners to reforest damaged areas by providing a more favorable tax deduction for timber losses. This could lead to increased timber production in the long term and promote environmental restoration after natural disasters. The bill also clarifies appraisal methods and timelines, potentially reducing disputes over loss valuation.
Potential Benefits
- Incentivizes Reforestation: Provides a tax benefit for reforestation after disasters.
- Supports Timber Industry: Helps timber businesses recover from losses.
- Promotes Environmental Restoration: Encourages replanting of forests.
- Clarifies Appraisal Process: Establishes clear guidelines for timber loss appraisals.
- Includes Pre-Merchantable Timber: Expands the scope of eligible timber losses.
Potential Disadvantages
- Potential for Abuse: The appraisal process could be subject to inflated valuations.
- Compliance Burden: Taxpayers must comply with reforestation requirements to maintain the deduction.
- Limited Scope: The bill only addresses timber losses and doesn't cover other types of disaster damage.
- Complexity: The appraisal and amended return processes add complexity to tax filings.
- Delayed Benefit: The reforestation requirement means the full benefit is realized only after several years.
Constitutional Alignment
The bill aligns with the General Welfare Clause of the Constitution, as it aims to promote economic recovery and environmental restoration following natural disasters. Congress has the power to lay and collect taxes, duties, imposts, and excises, to pay the debts and provide for the common defense and general welfare of the United States (Article I, Section 8, Clause 1). The bill falls under this power as it modifies tax laws to incentivize reforestation.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).