A bill to restore income averaging for farmers who have suffered a natural disaster in the preceding taxable year.

Repeals specified provisions of the Tax Reform Act of 1986 that eliminated income averaging. Provides that the Internal Revenue Code of 1986 (IRC) shall be applied and administered as if such provisions had not been enacted.

Amends the IRC to permit qualified farmers to use income averaging. Defines "qualified farmer" as a person: (1) actively engaged in the trade or business of farming; (2) whose gross income for the three preceding taxable years is at least 50 percent attributable to farming; (3) whose farming business or trade has been substantially affected in the first preceding taxable year by a natural disaster in the United States or by a major disaster or emergency so designated by the President; and (4) whose farming enterprise has sustained, as a result of such disasters, at least a 30 percent loss of normal per acre or per animal production, based on specified criteria.