I 
118TH CONGRESS 
1ST SESSION H. R. 4305 
To amend the Internal Revenue Code of 1986 to provide a credit against 
tax for disaster mitigation expenditures. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 22, 2023 
Ms. SALAZAR (for herself, Ms. PETTERSEN, Mr. GIMENEZ, Mr. PETERS, and 
Mr. STEUBE) introduced the following bill; which was referred to the 
Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to provide 
a credit against tax for disaster mitigation expenditures. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Shelter Act’’. 
SEC. 2. NONREFUNDABLE PERSONAL CREDIT FOR DIS-
ASTER MITIGATION EXPENDITURES. 
(a) IN GENERAL.—Subpart A of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by inserting after section 25E the fol-
lowing new section: 
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‘‘SEC. 25F. DISASTER MITIGATION EXPENDITURES. 
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in-
dividual, there shall be allowed as a credit against the tax 
imposed by this chapter for the taxable year an amount 
equal to 25 percent of the qualified disaster mitigation ex-
penditures 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) for 
any taxable year shall not exceed $2,500. 
‘‘(2) PHASEOUT.— 
‘‘(A) IN
GENERAL.—The amount under 
paragraph (1) for the taxable year shall be re-
duced (but not below zero) by an amount which 
bears the same ratio to the amount under such 
paragraph as— 
‘‘(i) the amount (not less than zero) 
equal to the adjusted gross income of the 
taxpayer for such taxable year minus 
$100,000, bears to 
‘‘(ii) $50,000. 
‘‘(B) INFLATION
ADJUSTMENT.—In the 
case of any taxable year after 2024, each of the 
dollar amounts under subparagraph (A) shall 
be increased by an amount equal to— 
‘‘(i) such dollar amount, multiplied by 
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‘‘(ii) the cost-of-living adjustment de-
termined under section 1(f)(3) for the cal-
endar year in which the taxable year be-
gins, determined by substituting ‘calendar 
year 2023’ for ‘calendar year 2016’ in sub-
paragraph (A)(ii) thereof. 
‘‘(C) ROUNDING.—If any reduction deter-
mined 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. 
‘‘(3) JOINT RETURN.—If a joint return is filed 
by the taxpayer for any taxable year— 
‘‘(A) for purposes of determining the 
amount of any credit allowed under subsection 
(a) for such taxable year, the dollar amount 
under paragraph (1) shall be doubled, and 
‘‘(B) for purposes of determining the 
amount of any reduction under paragraph 
(2)(A) for any taxable year, the dollar amounts 
under such paragraph (after application of sub-
paragraphs (B) and (C) of paragraph (2)) shall 
be doubled. 
‘‘(c) DEFINITIONS.—For purposes of this section— 
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‘‘(1) QUALIFIED
DISASTER
MITIGATION
EX-
PENDITURE.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
disaster mitigation expenditure’ means an ex-
penditure 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 intru-
sion from wind-driven rain, 
‘‘(III) improve the durability, im-
pact resistance (not less than class 3 
or 4 rating), or fire resistance (not 
less than class A rating) of a roof cov-
ering, 
‘‘(IV) brace gable-end walls, 
‘‘(V) reinforce the connection be-
tween a roof and supporting wall, 
‘‘(VI) protect openings from pen-
etration by wind-borne debris, 
‘‘(VII) protect exterior doors and 
garages from natural hazards, 
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‘‘(VIII) complete measures con-
tained in the publication of the Fed-
eral Emergency Management Agency 
entitled ‘Wind Retrofit Guide for Res-
idential Buildings’ (P–804), 
‘‘(IX) elevate the qualified dwell-
ing unit, as well as utilities, machin-
ery, 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 sys-
tem or improve an existing system, 
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‘‘(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-re-
sistant construction standards, 
‘‘(VI) wall components for wall 
assemblies that conform to ignition-re-
sistant construction standards, 
‘‘(VII) a wall-to-foundation an-
chor 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 resist-
ing systems, 
‘‘(XI) a standby generator sys-
tem consisting of a standby generator 
and an automatic transfer switch, 
‘‘(XII) a storm shelter that meets 
the design and construction standards 
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established by the International Code 
Council and the National Storm Shel-
ter Association (ICC–500), or a safe 
room that satisfies the criteria con-
tained 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, win-
dows, or other exterior dwelling unit 
elements that conform to ignition-re-
sistant construction standards, 
‘‘(XV) exterior deck or fence 
components that conform to ignition- 
resistant construction standards, 
‘‘(XVI) structure-specific water 
hydration systems, including fire miti-
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‘‘(aa) the removal of exterior 
deck or fence components or igni-
tion-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, in-
cluding fuel management techniques 
such as creating fuel and fire breaks, 
‘‘(IV) gather and analyze water 
and weather data to better under-
stand the local climate and drought 
history, 
‘‘(V) replace flammable vegeta-
tion with less flammable species, 
‘‘(VI) determine the risk of nat-
ural disasters which may occur in the 
area in which the qualified dwelling 
unit is located, or 
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‘‘(VII) prevent smoke inhalation, 
such as air filters or other equipment 
designed to prevent smoke from enter-
ing the dwelling unit, 
‘‘(iv) for property relating to satis-
fying the standards required for receipt of 
a FORTIFIED designation from the In-
surance Institute for Business and Home 
Safety, provided that the qualified dwelling 
unit receives such designation following in-
stallation of such property, or 
‘‘(v) for any other hazard mitigation 
activity which has been identified by the 
Secretary, in consultation with the Admin-
istrator of the Federal Emergency Man-
agement Agency, for mitigation of a nat-
ural hazard. 
‘‘(B) EXCEPTION.—The term ‘qualified 
disaster mitigation expenditure’ shall not in-
clude any expenditure or portion thereof which 
is paid, funded, or reimbursed by a Federal, 
State, or local government entity, or any polit-
ical subdivision, agency, or instrumentality 
thereof. 
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‘‘(2) QUALIFIED DWELLING UNIT.—The term 
‘qualified dwelling unit’ means a dwelling unit which 
is— 
‘‘(A) located— 
‘‘(i) in the United States or in a terri-
tory of the United States, and 
‘‘(ii) in an area— 
‘‘(I) in which a Federal natural 
disaster declaration has been made 
within the preceding 5-year period, 
‘‘(II) which is adjacent to an 
area described in subclause (I), 
‘‘(III) which, during the taxable 
year or the period of the 5 taxable 
years preceding such taxable year, has 
received hazard mitigation assistance 
through the Federal Emergency Man-
agement Agency in regard to any nat-
ural disaster which, with respect to 
the expenditure described in para-
graph (1) which is made by the tax-
payer, is applicable to such expendi-
ture, or 
‘‘(IV) which, with respect to any 
taxable year, has been designated as a 
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community disaster resilience zone (as 
defined in section 206(a) of the Rob-
ert T. Stafford Disaster Relief and 
Emergency Assistance Act (42 U.S.C. 
5136(a))), and 
‘‘(B) used as a residence by the taxpayer. 
‘‘(d) LIMITATION.— 
‘‘(1) IN GENERAL.—In the case of an expendi-
ture described in clause (i) or (ii) of subsection 
(c)(1)(A), such expenditure shall be taken into ac-
count in determining the qualified disaster mitiga-
tion expenditures made by the taxpayer during the 
taxable year only if the onsite preparation, assembly, 
or original installation of the property with respect 
to which such expenditure is made has been com-
pleted in a manner that is deemed to be in compli-
ance with the latest published editions of relevant 
consensus-based codes, specifications, and standards 
or any more restrictive Federal, State, or local flood-
plain management standards and consistent with 
floodplain management regulations for the local ju-
risdiction in which the qualified dwelling unit is lo-
cated. 
‘‘(2) LATEST PUBLISHED EDITIONS.—The term 
‘latest published editions’ means, with respect to rel-
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evant consensus-based codes, specifications, and 
standards, either of the 2 most recently published 
editions. 
‘‘(e) LABOR COSTS.—For purposes of this section, 
expenditures for labor costs properly allocable to the onsite 
preparation, assembly, or original installation of the prop-
erty described in clause (i) or (ii) of subsection (c)(1)(A) 
shall be taken into account in determining the qualified 
disaster mitigation expenditures made by the taxpayer 
during the taxable year. 
‘‘(f) INSPECTION COSTS.—For purposes of this sec-
tion, expenditures for the cost of any inspection required 
under subsection (d) which is properly allocable to the in-
spection of the preparation, assembly, or installation of 
the property described in clause (i) or (ii) of subsection 
(c)(1)(A) shall be taken into account in determining the 
qualified disaster mitigation expenditures made by the 
taxpayer during the taxable year. 
‘‘(g) CARRYFORWARD OF UNUSED CREDIT.— 
‘‘(1) IN
GENERAL.—If the credit allowable 
under subsection (a) for any taxable year exceeds 
the applicable tax limit for such taxable year, such 
excess shall be a carryover to each of the 5 suc-
ceeding taxable years and, subject to the limitations 
of paragraph (2), shall be added to the credit allow-
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able by subsection (a) for such succeeding taxable 
year. 
‘‘(2) LIMITATION.—The amount of the unused 
credit which may be taken into account under para-
graph (1) for any taxable year shall not exceed the 
amount (if any) by which the applicable tax limit for 
such taxable year exceeds the sum of— 
‘‘(A) the credit allowable under subsection 
(a) for such taxable year determined without re-
gard to this subsection, and 
‘‘(B) the amounts which, by reason of this 
subsection, are carried to such taxable year and 
are attributable to taxable years before the un-
used credit year. 
‘‘(3) APPLICABLE TAX LIMIT.—For purposes of 
this subsection, the term ‘applicable tax limit’ means 
the limitation imposed by section 26(a) for the tax-
able year reduced by the sum of the credits allowable 
under this subpart (other than this section). 
‘‘(h) 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.’’. 
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(b) CONFORMING AMENDMENT.—The table of sec-
tions for subpart A of part IV of subchapter A of chapter 
1 of such Code is amended by inserting after the item 
relating to section 25E the following new item: 
‘‘Sec. 25F. Disaster mitigation expenditures.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2023. 
SEC. 3. BUSINESS-RELATED CREDIT FOR DISASTER MITIGA-
TION. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by inserting after section 45AA the fol-
lowing new section: 
‘‘SEC. 45BB. DISASTER MITIGATION CREDIT. 
‘‘(a) GENERAL RULE.—For purposes of section 38, 
the disaster mitigation credit determined under this sec-
tion for any taxable year is an amount equal to 25 percent 
of the qualified disaster mitigation expenditures made by 
the taxpayer during the taxable year. 
‘‘(b) MAXIMUM CREDIT.— 
‘‘(1) IN GENERAL.—Subject to paragraph (2), 
the amount of the credit determined under sub-
section (a) for any taxable year shall not exceed 
$5,000. 
‘‘(2) PHASEOUT.— 
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‘‘(A) IN
GENERAL.—The amount under 
paragraph (1) for the taxable year shall be re-
duced (but not below zero) by an amount which 
bears the same ratio to the amount under such 
paragraph as— 
‘‘(i) the amount (not less than zero) 
equal to the average gross receipts of the 
taxpayer over the 3 preceding taxable 
years minus $5,000,000, bears to 
‘‘(ii) $5,000,000. 
‘‘(B) INFLATION
ADJUSTMENT.—In the 
case of any taxable year after 2024, each of the 
dollar amounts under subparagraph (A) shall 
be increased by an amount equal to— 
‘‘(i) such dollar amount, multiplied by 
‘‘(ii) the cost-of-living adjustment de-
termined under section 1(f)(3) for the cal-
endar year in which the taxable year be-
gins, determined by substituting ‘calendar 
year 2023’ for ‘calendar year 2016’ in sub-
paragraph (A)(ii) thereof. 
‘‘(C) ROUNDING.—If any reduction deter-
mined under subparagraph (A) is not a multiple 
of $50, or any increase under subparagraph (B) 
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is not a multiple of $50, such amount shall be 
rounded to the nearest multiple of $50. 
‘‘(c) QUALIFIED DISASTER MITIGATION EXPENDI-
TURE.— 
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the term ‘qualified disaster mitigation expendi-
ture’ has the same meaning given such term under 
paragraph (1) of section 25F(c), except that ‘place 
of business’ shall be substituted for ‘qualified dwell-
ing unit’ each place it appears in such paragraph. 
‘‘(2) PLACE
OF
BUSINESS.—For purposes of 
this section, an expenditure shall not be treated as 
a qualified disaster mitigation expenditure (as de-
fined in paragraph (1)) unless the taxpayer’s place 
of business is located— 
‘‘(A) in the United States or in a territory 
of the United States, and 
‘‘(B) in an area— 
‘‘(i) in which a Federal natural dis-
aster declaration has been made within the 
preceding 5-year period, 
‘‘(ii) which is adjacent to an area de-
scribed in clause (i), 
‘‘(iii) which, during the taxable year 
or the period of the 5 taxable years pre-
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ceding such taxable year, has received haz-
ard mitigation assistance through the Fed-
eral Emergency Management Agency in re-
gard to any natural disaster which, with 
respect to the expenditure described in sec-
tion 25F(c)(1) which is made by the tax-
payer, is applicable to such expenditure, or 
‘‘(iv) which, with respect to any tax-
able year, has been designated as a com-
munity 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))). 
‘‘(d) SPECIAL RULES.—Rules similar to the rules of 
subsections (d) through (g) of section 25F shall apply for 
purposes of this section. 
‘‘(e) NO DOUBLE BENEFIT.—No credit shall be de-
termined under this section with respect to any expendi-
tures for which a credit was allowed under section 25F.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 38(b) of such Code is amended by 
striking ‘‘plus’’ at the end of paragraph (40), by 
striking the period at the end of paragraph (41) and 
inserting ‘‘, plus’’, and by adding at the end the fol-
lowing new paragraph: 
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‘‘(42) the disaster mitigation credit determined 
under section 45BB(a).’’. 
(2) The table of sections for subpart D of part 
IV of subchapter A of chapter 1 of such Code is 
amended by inserting after the item relating to sec-
tion 45AA the following new item: 
‘‘Sec. 45BB. Disaster mitigation credit.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2023. 
Æ 
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