Contact: Shana Stribling 202.224.0309
Wednesday, October 6, 2004

WASHINGTON, D.C. –– U.S. Senator Kit Bond announced that he introduced legislation to prevent the Internal Revenue Service (IRS) from taxing disaster funds. Currently the IRS is threatening to tax funds for thousands of communities victimized by natural disasters such as floods, tornados, and hurricanes.

“The IRS is an agency perpetually in search of your tax dollars, but I am stunned that they would even consider a tax on federal disaster mitigation aid," said Bond.

Congress has specifically exempted disaster-relief payments to individuals recovering from a hurricane, flood, tornado or other natural disaster from income taxes. But the IRS is now looking at taxing Federal Emergency Management Agency's (FEMA) disaster mitigation programs for communities - the Hazards Mitigation Grant Program, the Pre-Disaster Mitigation Program, and the Flood Mitigation Assistance Program. Designed to manage future emergencies, these programs have been essential to countless communities in flood-prone Missouri and throughout the nation.

With mitigation grant money, communities at risk for certain types of disasters – flooding and tornados in Missouri, and hurricanes in Florida – can take steps to prevent future suffering and devastation. For instance, the City of Union, Missouri, damaged heavily by a flash flood in May 2000, used FEMA mitigation grant money to buy 17 properties in residential areas with substantial damage. These properties are now deed-restricted for “open space” which will prevent future development and potential flash flood-related deaths, keeping homes and people will from in harm’s way.

“This makes no sense to tax specific government grants to prevent expensive disasters, especially when we went out of our way to ensure that disaster-relief payments to individuals recovering from a hurricane, flood, tornado or other natural disaster are not subject to income taxes.

A companion bill, H.R. 5206, has been introduced in the House of Representatives by Congressman Mark Foley of Florida.

Kit Bond is Missouri’s senior Senator and is now in his third term after having served the state previously during two terms as Governor.