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This bill would give tax relief to people affected by the Texas Panhandle wildfires in 2024. It says certain payments made to victims for losses, repairs, living costs, lower property value, closing costs, or other hardship from the fires would be treated as disaster relief payments and would not be counted as taxable income. The bill also changes tax rules so ranchers and livestock owners who had to sell or replace animals because of the fires can get the same kind of tax treatment already available for losses caused by floods.
- It applies to payments tied to five named wildfires in the Texas Panhandle that started in late February and early March 2024.
- The tax break covers payments from government agencies, Xcel Energy, and Xcel’s insurers, agents, subsidiaries, or related people.
- For livestock owners, the bill would let fire-related sales or replacements of livestock qualify for special tax rules, including more time to replace animals when needed.
- The livestock tax changes would apply to tax years beginning after December 31, 2023, while the disaster payment rule would apply to money received on or after February 26, 2024.
Official Summaries
Wildfire Victim Tax Relief and Recovery Act
This bill allows farmers to defer taxes on gain from the sale or exchange of livestock because of a fire. (Conditions apply.) The bill also allows individuals to exclude from gross income (for tax purposes) certain disaster relief payments received in connection with specific Texas wildfires.
Currently, farmers may defer gain on the sale or exchange of livestock (other than poultry) held for draft, breeding, or dairy purposes due to drought, flood, or other weather-related conditions for two years (four years if attributable to a federally-declared disaster). Otherwise, under current law, gain on the sale of livestock (including poultry) due to such weather-related conditions attributable to a federally-declared disaster may be deferred for one year. (Conditions apply.)
The bill adds fire to the list of circumstances for which the gain on the sale or exchange of livestock may be deferred, thus allowing farmers to defer such gains for up to four years (depending on the type of livestock and whether the sale is attributable to a federally-declared disaster).
The bill also allows individuals to exclude from gross income payments received from federal, state, or local government agencies or Xcel Energy (or any subsidiary, insurer, or agent of Xcel Energy) as compensation for unreimbursed losses, damages, and certain expenses attributable to the
- Smokehouse Creek, 687 Reamer, and Roughneck Fires (Hutchinson County, Texas, February and March 2024);
- Windy Deuce Fire (Moore County, Texas, February 2024); and
- Grape Vine Creek Fire (Gray County, Texas, February 2024).
Current Full Text
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 496 Introduced in Senate (IS)]
<DOC>
119th CONGRESS
1st Session
S. 496
To exclude certain amounts relating to compensating victims of the
Texas Panhandle fires, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
February 10, 2025
Mr. Cruz introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To exclude certain amounts relating to compensating victims of the
Texas Panhandle fires, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Wildfire Victim Tax Relief and
Recovery Act''.
SEC. 2. TEXAS PANHANDLE FIRE DISASTER RELIEF PAYMENTS.
(a) In General.--Texas Panhandle fire payments shall be treated as
qualified disaster relief payments for purposes of section 139(b) of
the Internal Revenue Code of 1986.
(b) Texas Panhandle Fire Payments.--For purposes of this section,
the term ``Texas Panhandle fire payment'' means any amount received by
or on behalf of an individual as compensation for loss, damages,
expenses, loss in real property value, closing costs with respect to
real property (including realtor commissions), or inconvenience
(including access to real property) resulting from any Texas Panhandle
fire if such amount was provided by--
(1) a Federal, State, or local government agency,
(2) Xcel Energy, or
(3) any subsidiary, insurer, or agent of Xcel Energy or any
related person.
(c) Texas Panhandle Fire.--For purposes of this section, the term
``Texas Panhandle fire'' means any of the following wildfires:
(1) The Smokehouse Creek Fire that ignited in Hutchinson
County, Texas, on February 26, 2024.
(2) The Windy Deuce Fire that ignited in Moore County,
Texas, on February 26, 2024.
(3) The Grape Vine Creek Fire that ignited in Gray County,
Texas, on February 26, 2024.
(4) The 687 Reamer Fire that ignited in Hutchinson County,
Texas, on February 27, 2024.
(5) The Roughneck Fire that ignited in Hutchinson County,
Texas, on March 3, 2024.
(d) Effective Date.--This section shall apply to amounts received
on or after February 26, 2024.
SEC. 3. INVOLUNTARY CONVERSIONS OF LIVESTOCK.
(a) Livestock Sold on Account of Fire.--
(1) In general.--Section 1033(e)(1) of the Internal Revenue
Code of 1986 is amended by inserting ``fire,'' after
``flood,''.
(2) Extension of replacement period.--Section 1033(e)(2) of
such Code is amended by inserting ``fire,'' after ``flood,''.
(3) Conforming amendment.--The heading for section 1033(e)
of such Code is amended by inserting ``Fire,'' after
``Flood,''.
(b) Replacement of Livestock With Other Property.--Section 1033(f)
of the Internal Revenue Code of 1986 is amended by inserting ``fire,''
after ``flood,''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2023.
SEC. 4. PROCEEDS FROM LIVESTOCK SOLD ON ACCOUNT OF FIRE.
(a) In General.--Section 451(g) of the Internal Revenue Code of
1986 is amended by inserting ``fire,'' after ``flood''.
(b) Conforming Amendment.--The heading for section 451(g) of such
Code is amended by inserting ``Fire,'' after ``Flood,''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2023.
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