119-s1323

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 1323 Introduced in Senate

    (IS) ]

<DOC>

119th CONGRESS
 1st Session
 S. 1323

 To amend the Internal Revenue Code of 1986 to provide a refundable 
 credit against tax for disaster mitigation expenditures.

_______________________________________________________________________

 IN THE SENATE OF THE UNITED STATES

 April 8, 2025

Mr. Schiff (for himself and Mr. Sheehy) 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 provide a refundable 
 credit against tax for disaster mitigation expenditures.

 Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

 This Act may be cited as the ``The Facilitating Increased 
Resilience, Environmental Weatherization And Lowered Liability

    (FIREWALL) Act''.

SEC. 2. REFUNDABLE PERSONAL CREDIT FOR DISASTER MITIGATION 
 EXPENDITURES.

    (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to refundable credits) 
is amended by inserting after 

section 36B the following new section:

``

SEC. 36C. DISASTER MITIGATION EXPENDITURES.

 ``

    (a) Allowance of Credit.--In the case of an individual, there 
shall be allowed as a credit against the tax imposed by this chapter 
for the taxable year an amount equal to 50 percent of the qualified 
disaster mitigation expenditures made by the taxpayer during such 
taxable year.
 ``

    (b) Maximum Credit.--
 ``

    (1) In general.--Subject to paragraphs

    (2) and

    (3) , the 
 credit allowed under subsection

    (a) to any taxpayer for any 
 taxable year shall not exceed the excess of--
 ``
        (A) $25,000 (or, in the case of a married 
 individual filing a separate return, 50 percent of such 
 amount), over
 ``
        (B) the amount of credit allowed to the taxpayer 
 under this section for all preceding taxable years.
 ``

    (2) Phaseout.--The amount under paragraph

    (1) for the 
 taxable year shall be reduced (but not below zero) by an amount 
 which bears the same ratio to the amount under such paragraph 
 as--
 ``
        (A) the excess (if any) of--
 ``
            (i) the taxpayer's adjusted gross income 
 for such taxable year, over
 ``
            (ii) $200,000, bears to
 ``
        (B) $100,000.
 ``

    (3) Limitation in the case of joint occupancy.--In the 
 case of any dwelling unit with respect to which qualified 
 disaster mitigation expenditures are made and which is jointly 
 occupied and used during any calendar year as a residence by 
 two or more individuals, the following rules shall apply:
 ``
        (A) Maximum expenditures.--The maximum amount of 
 such expenditures which may be taken into account under 
 subsection

    (a) by all such individuals with respect to 
 such dwelling unit during such calendar year shall be 
 $25,000.
 ``
        (B) Allocation of expenditures.--The expenditures 
 allocated to any individual for the taxable year in 
 which such calendar year ends shall be an amount equal 
 to the lesser of--
 ``
            (i) the amount of expenditures made by 
 such individual with respect to such dwelling 
 during such calendar year, or
 ``
            (ii) the maximum amount of such 
 expenditures set forth in subparagraph
        (A) multiplied by a fraction--
 ``
            (I) the numerator of which is the 
 amount of such expenditures with 
 respect to such dwelling made by such 
 individual during such calendar year, 
 and
 ``
            (II) the denominator of which is 
 the total expenditures made by all such 
 individuals with respect to such 
 dwelling during such calendar year.
 ``

    (4) Inflation adjustment.--
 ``
        (A) In general.--In the case of any taxable year 
 after 2025, the $25,000 dollar amounts under paragraphs

    (1)
        (A) and

    (3) , the $200,000 amount under paragraph

    (2)
        (A)
            (ii) , and the $100,000 amount under paragraph

    (2)
        (B) shall each be increased by an amount equal to--
 ``
            (i) such dollar amount, multiplied by
 ``
            (ii) the cost-of-living adjustment 
 determined under 

section 1

    (f)

    (3) for the 
 calendar year in which the taxable year begins, 
 determined by substituting `calendar year 2024' 
 for `calendar year 2016' in subparagraph
        (A)
            (ii) thereof.
 ``
        (B) Rounding.--If any reduction determined under 
 subparagraph
        (A) is not a multiple of $50, or any 
 increase under subparagraph
        (B) is not a multiple of 
 $50, such amount shall be rounded to the nearest 
 multiple of $50.
 ``
            (c) === Definitions. ===
-For purposes of this section--
 ``

    (1) Qualified disaster mitigation expenditure.--
 ``
        (A) In general.--The term `qualified disaster 
 mitigation expenditure' means an expenditure relating 
 to a qualified dwelling unit--
 ``
            (i) for property to--
 ``
            (I) improve the strength of a 
 roof deck attachment,
 ``
            (II) create a secondary water 
 barrier to prevent water intrusion or 
 mitigate against potential water 
 intrusion from wind-driven rain,
 ``
            (III) improve the durability, 
 impact resistance (not less than class 
 3 or 4 rating), or fire resistance (not 
 less than class A rating) of a roof 
 covering,
 ``
            (IV) brace gable-end walls,
 ``
            (V) reinforce the connection 
 between a roof and supporting wall,
 ``
            (VI) protect openings from 
 penetration by wind-borne debris,
 ``
            (VII) protect exterior doors and 
 garages from natural hazards,
 ``
            (VIII) complete measures 
 contained in the publication of the 
 Federal Emergency Management Agency 
 entitled `Wind Retrofit Guide for 
 Residential Buildings' (P-804),
 ``
            (IX) elevate the qualified 
 dwelling unit, as well as utilities, 
 machinery, or equipment, above the base 
 flood elevation or other applicable 
 minimum elevation requirement,
 ``
            (X) seal walls in the basement of 
 the qualified dwelling unit using 
 waterproofing compounds, or
 ``
            (XI) protect propane tanks or 
 other external fuel sources,
 ``
            (ii) to install--
 ``
            (I) check valves to prevent flood 
 water from backing up into drains,
 ``
            (II) flood vents, breakaway walls 
 or open lattice for homes located in V 
 zones,
 ``
            (III) a stormwater drainage 
 system or improve an existing system,
 ``
            (IV) natural or nature-based 
 features for flood control, including 
 living shorelines,
 ``
            (V) roof coverings, sheathing, 
 flashing, roof and attic vents, eaves, 
 or gutters that conform to ignition-
 resistant construction standards,
 ``
            (VI) wall components for wall 
 assemblies that conform to ignition-
 resistant construction standards,
 ``
            (VII) a wall-to-foundation anchor 
 or connector, or a shear transfer 
 anchor or connector,
 ``
            (VIII) wood structural panel 
 sheathing for strengthening cripple 
 walls,
 ``
            (IX) anchorage of the masonry 
 chimney to the framing,
 ``
            (X) prefabricated lateral 
 resisting systems,
 ``
            (XI) a standby generator system 
 consisting of a standby generator and 
 an automatic transfer switch,
 ``
            (XII) a storm shelter that meets 
 the design and construction standards 
 established by the International Code 
 Council and the National Storm Shelter 
 Association (ICC-500), or a safe room 
 that satisfies the criteria contained 
 in--
 ``

    (aa) the publication of 
 the Federal Emergency 
 Management Agency entitled 
 `Safe Rooms for Tornadoes and 
 Hurricanes' (P-361), or
 ``

    (bb) the publication of 
 the Federal Emergency 
 Management Agency entitled 
 `Taking Shelter from the Storm' 
 (P-320),
 ``
            (XIII) a lightning protection 
 system,
 ``
            (XIV) exterior walls, doors, 
 windows, or other exterior dwelling 
 unit elements that conform to ignition-
 resistant construction standards,
 ``
            (XV) exterior deck or fence 
 components that conform to ignition-
 resistant construction standards,
 ``
            (XVI) structure-specific water 
 hydration systems, including fire 
 mitigation systems such as interior and 
 exterior sprinkler systems,
 ``
            (XVII) water capture and delivery 
 systems to accommodate drought events 
 or to decrease water use, including the 
 design of such systems,
 ``
            (XVIII) flood openings for fully 
 enclosed areas below the lowest floor 
 of the dwelling unit,
 ``
            (XIX) lateral bracing for wall 
 elements, foundation elements, and 
 garage doors or other large openings to 
 resist seismic loads, or
 ``
            (XX) automatic shutoff valves for 
 water and gas lines, or
 ``
            (iii) for services or equipment to--
 ``
            (I) create buffers around the 
 qualified dwelling unit through the 
 removal or reduction of flammable 
 vegetation, including vertical 
 clearance of tree branches,
 ``
            (II) create buffers around the 
 dwelling unit through--
 ``

    (aa) the removal of 
 exterior deck or fence 
 components or ignition-prone 
 landscape features, or
 ``

    (bb) replacement of the 
 components or features 
 described in item

    (aa) with 
 components or features that 
 conform to ignition-resistant 
 construction standards,
 ``
            (III) perform fire maintenance 
 procedures identified by the Federal 
 Emergency Management Agency or the 
 United States Forest Service, including 
 fuel management techniques such as 
 creating fuel and fire breaks,
 ``
            (IV) gather and analyze water and 
 weather data to better understand the 
 local climate and drought history,
 ``
            (V) remove flammable vegetation 
 within 5 feet of a structure,
 ``
            (VI) determine the risk of 
 natural disasters which may occur in 
 the area in which the qualified 
 dwelling unit is located, or
 ``
            (VII) prevent smoke inhalation, 
 such as air filters or other equipment 
 designed to prevent smoke from entering 
 the dwelling unit,
 ``
            (iv) for property relating to satisfying 
 the standards required for receipt of a 
 FORTIFIED designation from the Insurance 
 Institute for Business and Home Safety, 
 provided that the qualified dwelling unit 
 receives such designation following 
 installation of such property, or
 ``
            (v) for any other hazard mitigation 
 activity which has been identified by the 
 Secretary, in consultation with the 
 Administrator of the Federal Emergency 
 Management Agency, for mitigation of a natural 
 hazard.
 ``
        (B) Exception.--The term `qualified disaster 
 mitigation expenditure' shall not include any 
 expenditure or portion thereof which is paid, funded, 
 or reimbursed by a Federal, State, or local government 
 entity, or any political subdivision, agency, or 
 instrumentality thereof.
 ``

    (2) Qualified dwelling unit.--The term `qualified 
 dwelling unit' means, with respect to any taxpayer, a dwelling 
 unit which is--
 ``
        (A) located in any State or territory--
 ``
            (i) in which a Federal natural disaster 
 declaration has been made within the preceding 
 10-year period with respect to a wildfire, 
 hurricane, windstorm or flood,
 ``
            (ii) which includes an area which, during 
 the taxable year or the period of the 10 
 taxable years preceding such taxable year, has 
 received hazard mitigation assistance through 
 the Federal Emergency Management Agency in 
 regard to any wildfire, hurricane, windstorm or 
 flood which, with respect to the expenditure 
 described in paragraph

    (1) which is made by the 
 taxpayer, is applicable to such expenditure, or
 ``
            (iii) which includes an area which, with 
 respect to any taxable year, has been 
 designated as a community disaster resilience 
 zone (as defined in 

section 206

    (a) of the 
 Robert T. Stafford Disaster Relief and 
 Emergency Assistance Act (42 U.S.C. 5136

    (a) )) 
 as the result of a wildfire, hurricane, 
 windstorm or flood, and
 ``
        (B) used as the principal residence (within the 
 meaning of 

section 121) of the taxpayer.
 ``
            (d) Other Rules.--
 ``

    (1) Documentation.--Any taxpayer claiming the credit 
 under this section shall provide the Secretary with adequate 
 documentation regarding the specific qualified disaster 
 mitigation expenditures made by the taxpayer during the taxable 
 year, as well as such other information or documentation as the 
 Secretary may require.
 ``

    (2) Denial of double benefit.--No deduction or other 
 credit shall be allowed for expenditures which have been taken 
 into account under this section, and the basis of any property 
 for which a credit is allowed under this section shall be 
 reduced by the amount of credit allowed.''.

    (b) Conforming Amendments.--

    (1) Section 6211

    (b)

    (4)
        (A) of the Internal Revenue Code of 
 1986 is amended by inserting ``, 36C'' after ``36B''.

    (2) Section 1324

    (b)

    (2) of title 31, United States Code, is 
 amended by inserting ``, 36C'' after ``36B''.

    (3) The table of sections for subpart C of part IV of 
 subchapter A of chapter 1 of such Code is amended by inserting 
 after the item relating to 

section 36B the following new item:

``

Sec. 36C. Disaster mitigation expenditures.''.
            (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2024.
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