Bob Ney: “I appreciate Chairman Baker's effort on crafting this piece of legislation and Chairman Mike Oxley's diligence in seeing…”

“I appreciate Chairman Baker's effort on crafting this piece of legislation and Chairman Mike Oxley's diligence in seeing this bill to the floor. H.R. 804, introduced on February 15, 2005, will prevent federal agencies that administer means-tested or income-tested benefits from considering NFIP mitigation grants as income. H.R. 804 is necessary due to an IRS ruling in July 2004 that such grants must be reported as income for tax purposes. This IRS ruling has caused significant uncertainty in the administration of the Bunning-Bereuter-Blumenauer Flood Insurance Reform Act of 2004. Anecdotal information has revealed that a significant number of homeowners have refused mitigation offers not only due to the fear of a potential tax liability, but also the potential for other unknown liabilities imposed by other federal government agencies. These penalties could include the loss of certain federal education, nutrition and health care benefits. H.R. 804 eliminates the potential for additional penalties by preventing federal government agencies (other than the IRS) from considering NFIP flood mitigation grants as income. The precedent for this exception is found in the Stafford Act, which explicitly states that any disaster or pre-disaster mitigation payments made to homeowners under that Act are not to be considered as income by any federal agency administering a means- or income-tested benefit. By incorporating this language in the National Flood Insurance Act, H.R.…”