SHELTER Act
This bill allows a tax credit to individuals and businesses for disaster mitigation expenditures. The allowable amount of such credit is 25% of the mitigation expenditures, up to $5,000 in any taxable year.
[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3925 Introduced in House (IH)]
<DOC>
117th CONGRESS
1st Session
H. R. 3925
To amend the Internal Revenue Code of 1986 to provide a credit against
tax for disaster mitigation expenditures.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 16, 2021
Mr. Bilirakis (for himself and Mr. Crist) 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 Representatives 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 DISASTER MITIGATION
EXPENDITURES.
(a) In General.--Subpart A of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 is amended by inserting after
section 25D the following new section:
``SEC. 25E. 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 25 percent of the qualified
disaster mitigation expenditures made by the taxpayer during such
taxable year.
``(b) Maximum Credit.--
``(1) In general.--Subject to paragraph (2), the credit
allowed under subsection (a) for any taxable year shall not
exceed $5,000.
``(2) Phaseout.--
``(A) In general.--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--
``(i) the amount (not less than zero) equal
to the adjusted gross income of the taxpayer
for such taxable year minus $84,200, bears to
``(ii) $40,800.
``(B) Joint return.--For purposes of determining
the amount of any reduction under subparagraph (A) for
any taxable year, if a joint return was filed for such
taxable year, each of the dollar amounts under such
subparagraph shall be doubled.
``(C) Inflation adjustment.--In the case of any
taxable year after 2022, 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
determined under section 1(f)(3) for the
calendar year in which the taxable year begins,
determined by substituting `calendar year 2021'
for `calendar year 2016' in subparagraph
(A)(ii) thereof.
``(D) Rounding.--If any reduction determined under
subparagraph (A) or (B) is not a multiple of $50, or
any increase under subparagraph (C) 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) replace flammable vegetation
with less flammable species, or
``(VI) determine the risk of
natural disasters which may occur in
the area in which the qualified
dwelling unit is located, or
``(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.
``(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 a dwelling unit which is--
``(A) located--
``(i) in the United States or in a
territory of the United States, and
``(ii) in an area--
``(I) in which a Federal disaster
declaration has been made within the
preceding 10-year period, or
``(II) which is adjacent to an area
described in subclause (I), and
``(B) used as a residence by the taxpayer.
``(d) Limitation.--
``(1) In general.--In the case of an expenditure described
in clause (i) or (ii) of subsection (c)(1)(A), such expenditure
shall be taken into account in determining the qualified
disaster mitigation 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 completed in a manner that is
deemed to be in compliance with the latest published editions
of relevant consensus-based codes, specifications, and
standards or any more restrictive Federal, State, or local
floodplain management standards and consistent with floodplain
management regulations for the local jurisdiction in which the
qualified dwelling unit is located.
``(2) Latest published editions.--The term `latest
published editions' means, with respect to relevant 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 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.
``(f) Inspection Costs.--For purposes of this section, expenditures
for the cost of any inspection required under subsection (d) which is
properly allocable to the inspection 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) 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.''.
(b) Conforming Amendment.--The table of sections 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 25D the following new
item:
``Sec. 25E. Disaster mitigation expenditures.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2021.
SEC. 3. BUSINESS-RELATED CREDIT FOR DISASTER MITIGATION.
(a) In General.--Subpart D of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 is amended by inserting after
section 45T the following new section:
``SEC. 45U. DISASTER MITIGATION CREDIT.
``(a) General Rule.--For purposes of section 38, the disaster
mitigation credit determined under this section 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 subsection (a) for any taxable year
shall not exceed $5,000.
``(2) Phaseout.--
``(A) In general.--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--
``(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 2022, 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
determined under section 1(f)(3) for the
calendar year in which the taxable year begins,
determined by substituting `calendar year 2021'
for `calendar year 2016' in subparagraph
(A)(ii) thereof.
``(C) 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) Qualified Disaster Mitigation Expenditure.--For purposes of
this section, the term `qualified disaster mitigation expenditure' has
the same meaning given such term under paragraph (1) of section 25E(c),
except that `place of business' shall be substituted for `qualified
dwelling unit' each place it appears in such paragraph.
``(d) Special Rules.--Rules similar to the rules of subsections (d)
through (g) of section 25E shall apply for purposes of this section.''.
(b) Conforming Amendments.--
(1) Section 38(b) of such Code is amended by striking
``plus'' at the end of paragraph (32), by striking the period
at the end of paragraph (33) and inserting ``, plus'', and by
adding at the end the following new paragraph:
``(34) the disaster mitigation credit determined under
section 45U(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 section 45T the following new item:
``Sec. 45U. Disaster mitigation credit.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2021.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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