Sponsors (61)
The bill increases resilience by combining direct mitigation grants, tax exclusions, and a sizable tax credit to leave more money with homeowners, farmers, and businesses for hazard reduction, but it also reduces federal revenue, creates administrative and compliance burdens, and leaves gaps—by cap, eligibility, and fairness—that limit and complicate who actually benefits.
Homeowners and businesses can claim a 30% tax credit for qualifying disaster-mitigation work, substantially lowering the after-tax cost of hardening homes and commercial buildings.
Homeowners who receive state or federal catastrophe-mitigation grants can exclude those payments from taxable income, leaving more grant money available to pay for hazard-reduction improvements.
The bill provides up to $10,000 (CPI-indexed) in pre-disaster mitigation grants for homeowners in designated high-risk areas, giving many households direct financial help to reduce property damage risk.
The combination of tax exclusions and credits will modestly reduce federal revenues, which could increase deficits or put pressure on other federal spending priorities.
State, local, Tribal administrators and the IRS face increased administrative and compliance burdens (updating guidance, processing rules, tracking reimbursements and allocations), which could raise implementation costs and delay delivery of benefits.
The $10,000 per-property grant cap may be insufficient for high-cost mitigation (e.g., seismic retrofit, major elevation projects), leaving homeowners responsible for substantial remaining costs.
Based on analysis of 5 sections of legislative text.
Creates a FEMA-administered household mitigation grant program, excludes certain disaster/mitigation payments from taxable income, and adds a 30% mitigation tax credit plus ag payment exclusions.
Introduced February 6, 2025 by Michael Thompson · Last progress February 6, 2025
Creates a new federal Individual Household Disaster Mitigation Program administered by FEMA and the Federal Insurance Office to make grants to States and Indian tribal governments for pre-disaster mitigation on individual homes in high-risk disaster areas, with per-household grants capped at $10,000 (indexed) and income eligibility limits. It defines qualifying mitigation activities (flood, wildfire, seismic, wind, structural measures), requires state/tribal plans and mitigation standards, and sets up advisory and review requirements. Changes the tax code to exclude from gross income amounts received under the new mitigation grant program and certain State catastrophe mitigation payments and specified USDA disaster/assistance payments; and creates a new federal tax credit equal to 30% of qualifying disaster mitigation expenditures for property owners or lessees, with rules on interactions with State payments, business credits, basis reduction, and other tax adjustments.