H.R. 4603 – Eminent Domain Relief for the Little Guy Act

Legislative Activity

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2 earlier actions

HouseIntro Referral Latest Action

Sponsor introductory remarks on measure. (CR E1152-1153)

June 18, 2004

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HouseIntro Referral

Introduced in House

June 17, 2004

HouseIntro Referral

Referred to the House Committee on Ways and Means.

Ways and Means Committee

June 17, 2004

HouseIntro Referral

Sponsor introductory remarks on measure. (CR E1152-1153)

June 18, 2004

Floor Debate

1 member

What members said about H.R. 4603 on the floor

1 Democrat

Rep. Bob FilnerD-CA-51 · Jun 18, 2004

Mr Speaker, I rise today to urge support of H.R. 4603, the Eminent Domain Relief for the Little Guy Act. I have introduced this bill to address a current law that makes the hardship of being forced…

Mr Speaker, I rise today to urge support of H.R. 4603, the Eminent Domain Relief for the Little Guy Act. I have introduced this bill to address a current law that makes the hardship of being forced to sell property to the government under eminent domain even more difficult.

The use of eminent domain is authorized in the Constitution and has been used throughout our Nation's history to acquire the property necessary to build roads, schools, military bases, and government buildings. However,

that these projects serve the greater good must seem little consolation to an owner whose property comes under threat of eminent domain. Eminent domain can derail a property owner's life plan, erasing years of hard work spent getting a business off of the ground or building a home.

The Constitution makes it clear that a property owner forced to sell under eminent domain is entitled to ``just compensation.'' While it is debatable whether any compensation can be truly just, it seems that, at the very least, the government owes a seller a fair price for their property and the opportunity to rethink their plan and to move on with their life.

Current tax law related to gain on sale of property under eminent domain denies sellers the opportunity to decide how they would like to move on with their life. It mandates that sellers must pay taxes on income from sale under eminent domain unless they reinvest their money in real estate within 3 years. So not only is the government forcing property owners to sell their property, it is also telling them what to do with the money from that sale.

The Eminent Domain Relief for the Little Guy Act will remedy this by removing the current requirement that a seller must reinvest in real estate. This will make sale of all real property by an individual or a small business under eminent domain tax exempt, meaning that the seller can use their income to start a business, invest in the stock market, save for retirement, or, if they choose, reinvest in real estate. Many will indeed choose to buy a new home or to move their business to a new location. But fairness dictates that this should be their decision.

I urge my colleagues to support H.R. 4603 and make sure the little guys and gals who are forced to sell under eminent domain are allowed the flexibility in spending their income that they need and deserve.

Bill Text

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Introduced in HouseIssued June 17, 2004

I

108th CONGRESS

2d Session

H. R. 4603

IN THE HOUSE OF REPRESENTATIVES

June 17, 2004

Mr. Filner introduced the following bill; which was referred to the Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to provide for the nonrecognition of gain on real property held by individuals or small businesses which is involuntarily converted as the result of the exercise of eminent domain, without regard to whether such property is replaced.

1.

Short title

This Act may be cited as the Eminent Domain Relief for the Little Guy Act.

2.

Nonrecognition treatment for real property held by individuals or small businesses which is involuntarily converted as a result of exercise of eminent domain

(a)

In general

Section 1033 of the Internal Revenue Code of 1986 (relating to involuntary conversions) is amended by adding at the end the following new subsection:

(k)

Condemnation of real property held by individuals and small businesses

(1)

In general

If real property held by the taxpayer is (as the result of its seizure, requisition, or condemnation, or threat or imminence thereof) compulsorily or involuntary converted, at the election of the taxpayer (in such form and manner as the Secretary may prescribe)—

(A)

no gain shall be recognized, and

(B)

subsections (a) and (b) shall not apply with respect to such conversion.

(2)

Not applicable to certain large businesses

Paragraph (1) shall not apply in the case of a partnership or corporation unless such partnership or corporation meets the gross receipts test of section 448(c) for the taxable year in which the disposition of the converted property occurs.

.

(b)

Effective date

The amendment made by this section shall apply to dispositions of converted property occurring after December 31, 2003.