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S. 1058 (116th): Earthquake Mitigation and Tax Parity Act

Should grants to better prepare buildings and structures for earthquakes be subject to federal taxes?


State earthquake preparedness initiatives, such as the California Residential Mitigation Program, provide grants for homeowners to retrofit their properties to better withstand earthquakes.

California’s Earthquake Brace + Bolt program Executive Director Janiele Maffei estimates that 1.2 million California houses need their program’s retrofit.

However, such grants are subject to federal taxes.

What the legislation does

The Earthquake Mitigation Incentive and Tax Parity Act would remove federal taxes on grants that homeowners receive to retrofit their properties to better withstand earthquakes.

The House version was introduced on April 3 as bill number H.R. 2053 by Rep. Mike Thompson (D-CA5). The Senate version was introduced on April 3 as bill number S. 1058 by Sen. Kamala Harris.

What supporters say

Supporters argue the bill removes a current disincentive towards preparing towards natural disasters — something the government should be encouraging, not discouraging.

“Nearly five years ago, my constituents were rocked by the South-Napa Earthquake, which left more than 1,500 homes seriously damaged — many were shaken from their foundations,” Rep. Thompson said in a press release. Disasters in our district and across our nation are devastating and we must do everything we can right now to prepare and mitigate their harmful impacts.”

“[The bill] allows homeowners to more easily retrofit their homes to better withstand earthquakes. This saves the taxpayer money upfront, keeps people safer, and saves the government money when it comes time to clean up after a disaster,” Rep. Thompson continued. “These incentives have already been widely successful in California and I look forward to making this our policy nationwide.”

GovTrack Insider was unable to locate any explicit statements of opposition. However, Republicans’ 2017 tax reform law included such provisions as limits on state and local taxes, which hurt blue states far more than red states. Similarly, this bill primarily benefits such blue states as California.

Odds of passage

The House version has attracted one cosponsor, from across the aisle: fellow Californian Rep. Ken Calvert (R-CA42). It awaits a potential vote in the House Ways and Means Committee.

The Senate version currently only has California’s two Democratic senators as cosponsors. It awaits a potential vote in the Senate Finance Committee.

For an issue such as earthquakes which only affects a few states such as California, it may be difficult to attract support from across the country.

Previous versions introduced in 2017 in the Senate and in the House never received a vote.

Last updated Apr 15, 2019. View all GovTrack summaries.

The summary below was written by the Congressional Research Service, which is a nonpartisan division of the Library of Congress, and was published on Apr 8, 2019.

Earthquake Mitigation and Tax Parity Act

This bill modifies the requirements for calculating taxable income to exclude from gross income any earthquake loss mitigation received by a residential property owner or occupant under a state-based earthquake loss mitigation program.

"Earthquake loss mitigation" is any property or service that reduces seismic risks to a residential structure or its contents. The term includes any payment, reimbursement, loan, loan forgiveness, grant, credit, rebate, voucher, or other financial incentive for the property or service.

The bill applies to earthquake loss mitigation programs established by a state (including an agency, instrumentality, or political subdivision of the state) or by a state with a tax-exempt organization or public instrumentality of the state.