Shelter Act to aid disaster mitigation costs

United States Senator Bill Cassidy (R-LA) introduced the Shelter Act, S. 1958, with bill sponsor U.S. Sen. Michael Bennet (D-CO) — a bipartisan, bicameral measure that would allow American families and business owners to write off 25 percent of qualifying disaster mitigation expenses. The bill would help Americans protect their homes or businesses against hurricanes, tornadoes, floods, drought, and wildfires in disaster-prone areas across the U.S.

“What’s better than a quick recovery after a flood is never flooding at all,” Sen. Cassidy said. “Investing in flood mitigation projects decreases the impact of storms and saves families from total devastation.”

If enacted, the bill would establish a tax credit with an annual limit of up to $5,000 per taxpayer, according to the bill’s text, which notes that eligible properties would include homes or businesses located in or adjacent to an area that the federal government has declared a disaster within the past 10 years. Taxpayers who rent a property in eligible areas also could receive the credit, according to a bill summary provided by the lawmakers.

The credit, establishing section 25E and 25T in the tax code, begins to phase down for households that earn more than $168,000 for joint filers and phases out entirely for households that earn more than $250,000. For businesses, the credit begins to phase down when a business earns $5 million and phases out completely when its revenue is more than $10 million.

The bill is in the first stage of the legislative process. It was introduced into Congress on June 25, 2019. U.S. Representatives Gus Bilirakis (R-FL) and Charlie Crist (D-FL) have also unveiled the same-named H.R. 3462 in their chamber. The bill has been referred to the Committee on Finance before it is possibly sent on to the House or Senate. A bill must be passed by both the House and Senate in identical form, and then be signed by the President, to become law.

The Mitigation Saves Study by the National Institute of Building Sciences (NIBS) was used as background for supporting the Shelter Act. International Code Council Chief Executive Officer Dominic Sims, CBO, serves on the NIBS board.