Daily Real Estate News  |  September 26, 2005  |   Katrina: Bush Signs Bills Addressing Insurance President George W. Bush has signed two bills addressing property issues to help victims of Hurricane Katrina rebuild their lives. H.R. 804, introduced by Rep. Baker (R-La.), amends the National Flood Insurance Act to declare that flood assistance won't be considered a source of income when determining eligibility, or benefit levels, for federal income assistance programs such as Social Security, Medicaid or food stamps. The second bill, H.R. 3669, sponsored by Rep. Ney (R-Ohio), Rep. Waters (D-Calif.), Rep. Baker (R-La.) and Rep. Brown-Waite (R-Fla.), temporarily increases the National Flood Insurance Program's (NFIP) borrowing authority to pay claims. This increase will help facilitate flood claims to victims of Katrina. In other legislative action, lawmakers in both houses have sent to President Bush a series of tax provisions intended to provide relief to individuals and small businesses displaced and harmed by Hurricane Katrina. Almost all the provisions are temporary and nearly all apply only within the hurricane disaster zone. The bill eliminates tax on any amounts of debt that are forgiven through December 31, 2006. Individuals are permitted penalty-free withdrawals from IRA and similar retirement accounts and, unlike current law, are provided a mechanism to restore the withdrawn funds to their accounts. Individuals who provide rent-free housing within their own principal residence for displaced persons for 60 days or more will be permitted to reduce their taxable income by $500 per person, up to a total of $2000. Casualty loss deduction limitations are set aside, and those who qualify to treat their losses as involuntary conversions will have five years, rather than two, to re-invest in new property, so long as the new property is located within the disaster zone. —NAR