SPECIAL RULES FOR LIVESTOCK SOLD ON ACCOUNT OF WEATHER-RELATED CONDITIONS.

SEC. 311. SPECIAL RULES FOR LIVESTOCK SOLD ON ACCOUNT OF WEATHER-RELATED CONDITIONS.(a) Replacement of Livestock With Other Farm Property.—Subsection (f) of section 1033 (relating to involuntary conversions) is amended—(1) by inserting “drought, flood, or other weather-related conditions, or” after “because of”,(2) by inserting “in the case of soil contamination or other environmental contamination” after “including real property”, and(3) by striking “Where There Has Been Environmental Contamination” in the heading and inserting “in Certain Cases”.118 STAT. 1467(b) Extension of Replacement Period of Involuntarily Converted Livestock.—Subsection (e) of section 1033 (relating to involuntary conversions) is amended—(1) by striking “Conditions.—For purposes” and inserting “Conditions.—“(1) In general.—For purposes”, and(2) by adding at the end the following new paragraph:“(2) Extension of replacement period.—“(A) In general.—In the case of drought, flood, or other weather-related conditions described in paragraph (1) which result in the area being designated as eligible for assistance by the Federal Government, subsection (a)(2)(B) shall be applied with respect to any converted property by substituting ‘4 years’ for ‘2 years’.“(B) Further extension by secretary.—The Secretary may extend on a regional basis the period for replacement under this section (after the application of subparagraph (A)) for such additional time as the Secretary determines appropriate if the weather-related conditions which resulted in such application continue for more than 3 years.”.(c) Income Inclusion Rules.—Section 451(e) (relating to special rule for proceeds from livestock sold on account of drought, flood, or other weather-related conditions) is amended by adding at the end the following new paragraph:“(3) Special election rules.—If section 1033(e)(2) applies to a sale or exchange of livestock described in paragraph (1), the election under paragraph (1) shall be deemed valid if made during the replacement period described in such section.”.(d) Effective Date.—The amendments made by this section shall apply to any taxable year with respect to which the due date (without regard to extensions) for the return is after December 31, 2002.