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


The text of the bill below is as of Apr 8, 2019 (Introduced). The bill was not enacted into law.

Summary of this bill

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

Context

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 ...


II

116th CONGRESS

1st Session

S. 1058

IN THE SENATE OF THE UNITED STATES

April 8, 2019

(for herself and Mrs. Feinstein) introduced the following bill; which was read twice and referred to the Committee on Finance

A BILL

To amend the Internal Revenue Code of 1986 to exclude from gross income earthquake loss mitigation received under State-based earthquake loss mitigation programs.

1.

Short title

This Act may be cited as the Earthquake Mitigation and Tax Parity Act.

2.

Exclusion of earthquake loss mitigation received under State-based earthquake loss mitigation programs

(a)

In general

Part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 139G the following new section:

139H.

State-based earthquake loss mitigation programs

(a)

In general

Gross income shall not include any earthquake loss mitigation received by a residential property owner or occupant under a State-based earthquake loss mitigation program.

(b)

Earthquake loss mitigation

For purposes of this section—

(1)

In general

The term earthquake loss mitigation means any property or service that reduces seismic risks to a residential structure or its contents.

(2)

Treatment of reimbursements, etc

Such term shall include any payment, reimbursement, loan, loan forgiveness, grant, credit, rebate, voucher, or other financial incentive for any property or service described in paragraph (1).

(3)

Seismic

The term seismic has the meaning given such term by section 4(3) of the Earthquake Hazards Reduction Act of 1977 (42 U.S.C. 7703(3)).

(c)

Earthquake loss mitigation program

For purposes of this section, the term earthquake loss mitigation program means any program which provides residential property owners or occupants with earthquake loss mitigation and which is established by a State, or agency, instrumentality, or political subdivision thereof, by itself or together with—

(1)

an organization described in section 501(c) and exempt from tax under section 501(a),

(2)

an organization determined to be exempt from State taxes pursuant to the laws of the relevant State, or

(3)

a public instrumentality of a State pursuant to a joint exercise of powers.

(d)

Special rules

(1)

No increase in basis

Notwithstanding any other provision of this subtitle, no increase in the basis or adjusted basis of any property shall result from any amount excluded under this subsection with respect to such property.

(2)

Denial of double benefit

Notwithstanding any other provision of this subtitle, no deduction or credit shall be allowed for, or by reason of, any expenditure to the extent of the amount excluded under subsection (a) for any qualified earthquake mitigation which was provided with respect to such expenditure.

.

(b)

Clerical amendment

The table of sections for part III of subchapter B of chapter 1 of such Code is amended by inserting after the item relating to section 139G the following new item:

Sec. 139H. State-based earthquake loss mitigation programs.

.

(c)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2018.