"Our legislation will ensure that folks get the assistance they need when disasters strike," said Sen. David Vitter, R-La.

WASHINGTON — Rep. Tom Reed, R-N.Y., and Sen. David Vitter, R-La., have introduced bipartisan disaster tax relief bills that include several bond provisions.

Among other things, the legislation, called the National Disaster Tax Relief Act of 2015, would create qualified disaster area recovery bonds, which could finance certain projects in areas affected by federally declared disasters occurring in the period from 2012 through 2015.

The bill in the House is H.R. 3110 and has been referred to the House Ways and Means Committee. It has 15 co-sponsors, including Rep. Bill Pascrell, D-N.J., who introduced a Hurricane Sandy tax relief bill in the last Congress.

The bill in the Senate, S. 1795, has been referred to the Senate Finance Committee. It has eight co-sponsors, including all of the senators from New York, New Jersey and West Virginia.

Reed and Vitter both said the bills, which were introduced earlier this month, would help their states.

According to a release from Vitter's office, the legislation would provide tax relief for disaster victims of the recent flooding of the Red River in Northwest Louisiana and 2012's Hurricane Isaac.

"Folks across Louisiana know all too well the damage that serious flooding can cause. Just this past month, communities along the Red River suffered severe damage as a result of recent flooding," Vitter said. "Our legislation will ensure that folks get the assistance they need when disasters strike."

In 2013, 11 counties in New York experienced flooding, and damage to roads and infrastructure totaled over $25 million, according to a release from Reed's office.

"We are fighting every day for neighbors impacted by floods and natural disasters," Reed said.

Versions of the National Disaster Tax Relief Act were introduced last year but weren't put to votes. A Senate Finance Committee subcommittee held a hearing on disaster tax relief last fall, and one of the witnesses questioned the effectiveness of disaster bonds.

The bills would create a new section of the Internal Revenue Code for qualified disaster area recovery bonds, which could be issued by states or other political subdivisions that are in areas affected by federally-declared disasters that occurred in 2012, 2013, 2014 or 2015.

The bonds would be treated as exempt-facility bonds, a type of private-activity bond. They wouldn't fall under state private-activity bond volume caps, but each state would be limited to no more than $10 billion of these bonds.

At least 95% of the net proceeds of a bond issue would have to be used for the acquisition, construction or renovation of residential rental property, nonresidential real property, docks and wharves, mass commuting facilities or public utility property that was damaged or destroyed by a federally-declared disaster.

Bonds used to current refund the disaster bonds wouldn't count toward the $10 billion as long as the average maturity date of the refunding bond issue wasn't later than the average maturity date of the original bonds, and as long as the amount of the refunding bonds wasn't more than the amount of the bonds being refunded.

Under versions of the National Disaster Tax Relief Act introduced last year, the bonds would have to be issued by a certain date. But the recently introduced bills wouldn't set an issuance deadline.

The bills also would allow one additional advance refunding for governmental bonds, or one advance refunding of PABs for airports and docks and wharves, if the issuer is in a state with a federally declared disaster area and the bonds being refunded were outstanding on the date the disaster occurred. Advance refundings would have to be done before Jan. 1, 2018. A maximum of $4.5 billion of these advance refunding bonds could be issued in each state.

Another section of the bills would allow certain mortgage revenue bond requirements to be relaxed for people whose homes were destroyed or damaged during disasters occurring from 2012 to 2015.

MRBs are private-activity bonds whose proceeds can be used to finance mortgage loans and provide rehabilitation loans. Normally, MRBs finance the mortgages of those who haven't owned a home for at least three years, and the purchase prices of the residences being bought have to be no more than 90% of the average area prices.

But the bills would allow proceeds of these bonds to be used by any person whose principal home was rendered unsafe or destroyed or who was relocated because of a disaster occurring in the period from 2012 to 2015, regardless of whether or not they were first-time homebuyers. The purchase price of homes bought by these people could exceed 110% of the average area purchase price. These MRB rules are relaxed for the two-year period beginning on the date that the disaster was declared.

Additionally, for those whose principal homes were damaged during a disaster in the four-year period, MRBs could be used to finance loans up to the cost of the rehabilitation or $150,000, whichever is smaller.

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