Bills of Congress by U.S. Congress

S.1141 - Disaster Reforestation Act (119th Congress)

Summary

The Disaster Reforestation Act (S.1141) 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. It allows for a deduction based on the appraised value of the timber before the loss, incentivizing reforestation efforts. The bill also outlines appraisal methods and reforestation requirements to qualify for the deduction.

Expected Effects

The act will likely encourage timber owners to reforest damaged areas by providing a more favorable tax deduction for losses. This could lead to increased timber production in the long term and promote environmental restoration. It also provides a framework for appraisal and verification of timber losses.

Potential Benefits

  • Provides tax relief for timber owners who experience losses due to natural disasters or theft.
  • Encourages reforestation efforts, leading to environmental benefits such as improved air and water quality.
  • Supports the timber industry by making it more financially viable to recover from losses.
  • Establishes clear guidelines for appraising timber losses, ensuring fair and consistent application of the tax deduction.
  • Includes pre-merchantable timber in the definition of uncut timber, broadening the scope of the deduction.

Potential Disadvantages

  • May create opportunities for tax fraud if appraisals are not carefully scrutinized.
  • The reforestation requirement could be burdensome for some timber owners, especially those with limited resources.
  • The 5-year reforestation timeframe may not be sufficient in all cases, depending on the type of timber and the severity of the damage.
  • Potential administrative costs associated with implementing and enforcing the new tax rules.
  • The exclusion of timber not held for sale could limit the benefits for some landowners.

Constitutional Alignment

The bill aligns with the General Welfare Clause of the Constitution, as it aims to promote economic recovery and environmental sustainability through tax incentives. 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 the tax code to address specific economic and environmental concerns.

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).