Sponsor
Morgan Luttrell
Representative · R-TX
Representative · R-TX
The bill increases resilience of critical local services in flood- and hurricane-prone areas by subsidizing generator installations, improving safety and continuity of care, at the cost of reduced federal revenue and added tax-treatment and designation complexities for businesses.
Hospitals, nursing homes, grocery stores, and gas stations in designated high-risk flood or hurricane areas receive a 30% tax credit that lowers their net cost to install backup generators.
Patients, residents, and other users of critical facilities in disaster-prone areas are more likely to have maintained power during floods/hurricanes, improving health and safety outcomes and continuity of essential services.
Local communities and governments face lower emergency-response burdens because the tax credit encourages private-sector investment in community resilience (lessening potential strain on FEMA and other public resources).
Taxpayers broadly bear reduced federal revenue because the credit effectively subsidizes private businesses' generator purchases.
Small businesses and health systems that claim the credit cannot also deduct the same generator expenses and must reduce the property's tax basis, which can limit other tax benefits over time.
Small businesses and health systems may face uncertainty or delays because designation authority for eligible areas and critical businesses is concentrated in Treasury (with FEMA consultation).
Based on analysis of 2 sections of legislative text.
Creates a 30% tax credit for purchase and installation of electric generators for designated critical businesses in Treasury/FEMA-designated high-risk flood or hurricane areas.
Official title: To amend the amend the Internal Revenue Code of 1986 to provide critical businesses with a tax credit for electric generators placed in service in certain high risk disaster areas.
Introduced May 21, 2025 by Morgan Luttrell · Last progress May 21, 2025
Creates a new 30% business tax credit for the cost (including installation) of electric generators placed in service to prepare for floods or hurricanes in areas the Treasury Secretary, after consulting FEMA, designates as high risk. The credit applies to businesses the Treasury (after FEMA consultation) designates as “critical” following a flood or hurricane — explicitly including hospitals, nursing homes, grocery stores, and gas stations — and applies to amounts paid or incurred after enactment. The credit reduces allowable deductions or other credits for the same expenses and requires a corresponding reduction in tax basis.