Support Earthquake Mitigation Incentive and Tax Parity Act
Dear Member of Congress,
I write to encourage you to support the Earthquake Mitigation Incentive and Tax Parity Act recently introduced by Reps. Mike Thompson (D-CA) and Ken Calvert (R-CA) in the House of Representatives and Sens. Kamala Harris (D-CA) and Dianne Feinstein (D-CA) in the Senate. If enacted, the bill would help homeowners to mitigate the harms posed by earthquakes.
In recent years, the California Earthquake Authority has
instituted a pilot program that provides small grants to eligible residents who
retrofit their homes to guard against potential earthquake damage. Roughly 7,500
Golden State homes have been retrofitted under this program to date. California
is currently the only state in the country with an earthquake-mitigation
program.
Regrettably, a ruling from the IRS deems these grants to be
taxable income of the recipients, even though similar grants provided by the
federal government under the Stafford Act are excluded from income. This bill
would rectify this disparate tax treatment.
California is the epicenter of earthquake risk in the United
States. It is estimated that more than 1 million homes in the state are
earthquake-prone areas. By eliminating federal income taxes on state-based
mitigation grants, homeowners will be more likely to retrofit their homes to
withstand damage from potential earthquakes. According to Federal Emergency
Management Agency data, every $1 spent on mitigation efforts saves $4 in
post-disaster recovery costs.
The R Street Institute is proud to endorse this bipartisan,
bicameral common-sense legislation that will help residents of California
ensure their homes can withstand potential earthquake damage. We urge your
support.
