Title: Disaster Mitigation and Tax Parity Act of 2022
Policy area: Taxation

Summary:
Disaster Mitigation and Tax Parity Act of 2022
This bill excludes from gross income, for income tax purposes, any qualified catastrophe mitigation payment made under a state-based catastrophe loss mitigation program. A qualified catastrophe mitigation payment means any amount received for making improvements to an individual's residence for the sole purpose of reducing the damage that would be done to such residence by a windstorm, earthquake, wildfire, or flooding.
This tax exclusion is retroactive to taxable years beginning after 2020, including by amended return.

[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 5176 Introduced in Senate (IS)]

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117th CONGRESS
  2d Session
                                S. 5176

To amend the Internal Revenue Code of 1986 to exclude from gross income 
amounts received from State-based catastrophe loss mitigation programs.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            December 1, 2022

 Mr. Cassidy (for himself and Mrs. Feinstein) 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 exclude from gross income 
amounts received from State-based catastrophe loss mitigation programs.

    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 ``Disaster Mitigation and Tax Parity 
Act of 2022''.

SEC. 2. EXCLUSION OF AMOUNTS RECEIVED FROM STATE-BASED CATASTROPHE LOSS 
              MITIGATION PROGRAMS.

    (a) In General.--Section 139 of the Internal Revenue Code of 1986 
is amended by redesignating subsection (h) as subsection (i) and by 
inserting after subsection (g) the following new subsection:
    ``(h) State-Based Catastrophe Loss Mitigation Programs.--
            ``(1) In general.--Gross income shall not include any 
        amount received by an individual as a qualified catastrophe 
        mitigation payment under a program established by--
                    ``(A) a State,
                    ``(B) a political subdivision or instrumentality 
                thereof, or
                    ``(C) an entity established under State charter,
        for the purpose of making such payments.
            ``(2) Qualified catastrophe mitigation payment.--For 
        purposes of this section, the term `qualified catastrophe 
        mitigation payment' means any amount which is received by an 
        individual to make improvements to such individual's residence 
        for the sole purpose of reducing the damage that would be done 
        to such residence by a windstorm, earthquake, wildfire, or 
        flooding.
            ``(3) No increase in basis.--Rules similar to the rules of 
        subsection (g)(3) shall apply in the case of this 
        subsection.''.
    (b) Conforming Amendments.--
            (1) Section 139(d) is amended by striking ``and qualified'' 
        and inserting ``, qualified catastrophe mitigation payments, 
        and qualified''.
            (2) Section 139(i) (as redesignated by subsection (a)) is 
        amended by striking ``or qualified'' and inserting ``, 
        qualified catastrophe mitigation payment, or qualified''.
    (c) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to taxable years beginning after December 31, 2020.
            (2) Retroactive applicability.--The exclusion under section 
        139(h) of the Internal Revenue Code of 1986, as added by this 
        section, may be claimed for taxable years beginning after 
        December 31, 2020, including by amended return.
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