SEC. 2. EXCLUSION OF AMOUNTS RECEIVED FROM STATE- 
BASED EARTHQUAKE LOSS MITIGATION PRO-
GRAMS. 
(a) IN GENERAL.—Part III of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 is amended 
by inserting after section 139F the following new section: 
‘‘SEC. 139G. STATE-BASED EARTHQUAKE LOSS MITIGATION 
PROGRAMS. 
‘‘(a) IN GENERAL.—Gross income shall not include 
any amount received as a qualified earthquake mitigation 
payment. 
‘‘(b) QUALIFIED EARTHQUAKE MITIGATION PAY-
MENT.—For purposes of this section— 
‘‘(1) QUALIFIED
EARTHQUAKE
MITIGATION 
PAYMENT.—The term ‘qualified earthquake mitiga-
tion payment’ means any amount which is received 
as a loan, loan forgiveness, grant, credit, rebate, 
voucher, or other financial incentive pursuant to an 
earthquake loss mitigation program established by a 
State, or agency, instrumentality, or political sub-
division thereof, by a residential property owner or 
occupant to assist with expenses paid, or obligations 
incurred, for earthquake loss mitigation. 
‘‘(2) EARTHQUAKE
LOSS
MITIGATION
PRO-
GRAM.—The term ‘earthquake loss mitigation pro-
gram’ includes a program established by a State, or 
VerDate Sep 11 2014 
23:11 Jun 29, 2016
Jkt 059200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H5610.IH
H5610
srobinson on DSK5SPTVN1PROD with BILLS
agency, instrumentality, or political subdivision 
thereof, by itself or together with— 
‘‘(A) an organization described in section 
501(c) and exempt from tax under section 
501(a), 
‘‘(B) an organization determined to be ex-
empt from State taxes pursuant to the laws of 
the relevant State, or 
‘‘(C) a public instrumentality of a State 
pursuant to a joint exercise of powers. 
‘‘(3) EARTHQUAKE
LOSS
MITIGATION.—The 
term ‘earthquake loss mitigation’ means an activity 
that reduces seismic risks to a residential structure 
or its contents. 
‘‘(4) 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)). 
‘‘(5) NO INCREASE IN BASIS.—Notwithstanding 
any other provision of this subtitle, no increase in 
the basis or adjusted basis of any property shall re-
sult from any amount excluded under this subsection 
with respect to such property. 
‘‘(c) DENIAL
OF
DOUBLE
BENEFIT.—Notwith-
standing any other provision of this subtitle, no deduction 
VerDate Sep 11 2014 
23:11 Jun 29, 2016
Jkt 059200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H5610.IH
H5610
srobinson on DSK5SPTVN1PROD with BILLS
or credit shall be allowed for, or by reason of, any expendi-
ture to the extent of the amount excluded under sub-
section (a) for any qualified earthquake mitigation pay-
ment which was provided with respect to such expendi-
ture.’’. 
(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 
139F the following new item: 
‘‘Sec. 139G. State-based earthquake loss mitigation programs.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2015. 
Æ 
VerDate Sep 11 2014 
23:11 Jun 29, 2016
Jkt 059200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6301
E:\BILLS\H5610.IH
H5610
srobinson on DSK5SPTVN1PROD with BILLS