II
119THCONGRESS
1
STSESSION S. 1323
To amend the Internal Revenue Code of 1986 to provide a refundable credit
against tax for disaster mitigation expenditures.
IN THE SENATE OF THE UNITED STATES
APRIL8, 2025
Mr. S
CHIFF(for himself and Mr. SHEEHY) 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 provide
a refundable credit against tax for disaster mitigation
expenditures.
Be it enacted by the Senate and House of Representa-1
tives of the United States of America in Congress assembled, 2
SECTION 1. SHORT TITLE. 3
This Act may be cited as the ‘‘The Facilitating In-4
creased Resilience, Environmental Weatherization And 5
Lowered Liability (FIREWALL) Act’’. 6
SEC. 2. REFUNDABLE PERSONAL CREDIT FOR DISASTER 7
MITIGATION EXPENDITURES. 8
(a) I
NGENERAL.—Subpart C of part IV of sub-9
chapter A of chapter 1 of the Internal Revenue Code of 10
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1986 (relating to refundable credits) is amended by insert-1
ing after section 36B the following new section: 2
‘‘SEC. 36C. DISASTER MITIGATION EXPENDITURES. 3
‘‘(a) A
LLOWANCE OFCREDIT.—In the case of an in-4
dividual, there shall be allowed as a credit against the tax 5
imposed by this chapter for the taxable year an amount 6
equal to 50 percent of the qualified disaster mitigation ex-7
penditures made by the taxpayer during such taxable year. 8
‘‘(b) M
AXIMUMCREDIT.— 9
‘‘(1) I
N GENERAL.—Subject to paragraphs (2) 10
and (3), the credit allowed under subsection (a) to 11
any taxpayer for any taxable year shall not exceed 12
the excess of— 13
‘‘(A) $25,000 (or, in the case of a married 14
individual filing a separate return, 50 percent 15
of such amount), over 16
‘‘(B) the amount of credit allowed to the 17
taxpayer under this section for all preceding 18
taxable years. 19
‘‘(2) P
HASEOUT.—The amount under para-20
graph (1) for the taxable year shall be reduced (but 21
not below zero) by an amount which bears the same 22
ratio to the amount under such paragraph as— 23
‘‘(A) the excess (if any) of— 24
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‘‘(i) the taxpayer’s adjusted gross in-1
come for such taxable year, over 2
‘‘(ii) $200,000, bears to 3
‘‘(B) $100,000. 4
‘‘(3) L
IMITATION IN THE CASE OF JOINT OCCU -5
PANCY.—In the case of any dwelling unit with re-6
spect to which qualified disaster mitigation expendi-7
tures are made and which is jointly occupied and 8
used during any calendar year as a residence by two 9
or more individuals, the following rules shall apply: 10
‘‘(A) M
AXIMUM EXPENDITURES .—The 11
maximum amount of such expenditures which 12
may be taken into account under subsection (a) 13
by all such individuals with respect to such 14
dwelling unit during such calendar year shall be 15
$25,000. 16
‘‘(B) A
LLOCATION OF EXPENDITURES .— 17
The expenditures allocated to any individual for 18
the taxable year in which such calendar year 19
ends shall be an amount equal to the lesser 20
of— 21
‘‘(i) the amount of expenditures made 22
by such individual with respect to such 23
dwelling during such calendar year, or 24
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‘‘(ii) the maximum amount of such ex-1
penditures set forth in subparagraph (A) 2
multiplied by a fraction— 3
‘‘(I) the numerator of which is 4
the amount of such expenditures with 5
respect to such dwelling made by such 6
individual during such calendar year, 7
and 8
‘‘(II) the denominator of which is 9
the total expenditures made by all 10
such individuals with respect to such 11
dwelling during such calendar year. 12
‘‘(4) I
NFLATION ADJUSTMENT .— 13
‘‘(A) I
N GENERAL.—In the case of any 14
taxable year after 2025, the $25,000 dollar 15
amounts under paragraphs (1)(A) and (3), the 16
$200,000 amount under paragraph (2)(A)(ii), 17
and the $100,000 amount under paragraph (2) 18
(B) shall each be increased by an amount equal 19
to— 20
‘‘(i) such dollar amount, multiplied by 21
‘‘(ii) the cost-of-living adjustment de-22
termined under section 1(f)(3) for the cal-23
endar year in which the taxable year be-24
gins, determined by substituting ‘calendar 25
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year 2024’ for ‘calendar year 2016’ in sub-1
paragraph (A)(ii) thereof. 2
‘‘(B) R
OUNDING.—If any reduction deter-3
mined under subparagraph (A) is not a multiple 4
of $50, or any increase under subparagraph (B) 5
is not a multiple of $50, such amount shall be 6
rounded to the nearest multiple of $50. 7
‘‘(c) D
EFINITIONS.—For purposes of this section— 8
‘‘(1) Q
UALIFIED DISASTER MITIGATION EX -9
PENDITURE.— 10
‘‘(A) I
N GENERAL.—The term ‘qualified 11
disaster mitigation expenditure’ means an ex-12
penditure relating to a qualified dwelling unit— 13
‘‘(i) for property to— 14
‘‘(I) improve the strength of a 15
roof deck attachment, 16
‘‘(II) create a secondary water 17
barrier to prevent water intrusion or 18
mitigate against potential water intru-19
sion from wind-driven rain, 20
‘‘(III) improve the durability, im-21
pact resistance (not less than class 3 22
or 4 rating), or fire resistance (not 23
less than class A rating) of a roof cov-24
ering, 25
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‘‘(IV) brace gable-end walls, 1
‘‘(V) reinforce the connection be-2
tween a roof and supporting wall, 3
‘‘(VI) protect openings from pen-4
etration by wind-borne debris, 5
‘‘(VII) protect exterior doors and 6
garages from natural hazards, 7
‘‘(VIII) complete measures con-8
tained in the publication of the Fed-9
eral Emergency Management Agency 10
entitled ‘Wind Retrofit Guide for Res-11
idential Buildings’ (P–804), 12
‘‘(IX) elevate the qualified dwell-13
ing unit, as well as utilities, machin-14
ery, or equipment, above the base 15
flood elevation or other applicable 16
minimum elevation requirement, 17
‘‘(X) seal walls in the basement 18
of the qualified dwelling unit using 19
waterproofing compounds, or 20
‘‘(XI) protect propane tanks or 21
other external fuel sources, 22
‘‘(ii) to install— 23
‘‘(I) check valves to prevent flood 24
water from backing up into drains, 25
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‘‘(II) flood vents, breakaway 1
walls or open lattice for homes located 2
in V zones, 3
‘‘(III) a stormwater drainage sys-4
tem or improve an existing system, 5
‘‘(IV) natural or nature-based 6
features for flood control, including 7
living shorelines, 8
‘‘(V) roof coverings, sheathing, 9
flashing, roof and attic vents, eaves, 10
or gutters that conform to ignition-re-11
sistant construction standards, 12
‘‘(VI) wall components for wall 13
assemblies that conform to ignition-re-14
sistant construction standards, 15
‘‘(VII) a wall-to-foundation an-16
chor or connector, or a shear transfer 17
anchor or connector, 18
‘‘(VIII) wood structural panel 19
sheathing for strengthening cripple 20
walls, 21
‘‘(IX) anchorage of the masonry 22
chimney to the framing, 23
‘‘(X) prefabricated lateral resist-24
ing systems, 25
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‘‘(XI) a standby generator sys-1
tem consisting of a standby generator 2
and an automatic transfer switch, 3
‘‘(XII) a storm shelter that meets 4
the design and construction standards 5
established by the International Code 6
Council and the National Storm Shel-7
ter Association (ICC–500), or a safe 8
room that satisfies the criteria con-9
tained in— 10
‘‘(aa) the publication of the 11
Federal Emergency Management 12
Agency entitled ‘Safe Rooms for 13
Tornadoes and Hurricanes’ (P– 14
361), or 15
‘‘(bb) the publication of the 16
Federal Emergency Management 17
Agency entitled ‘Taking Shelter 18
from the Storm’ (P–320), 19
‘‘(XIII) a lightning protection 20
system, 21
‘‘(XIV) exterior walls, doors, win-22
dows, or other exterior dwelling unit 23
elements that conform to ignition-re-24
sistant construction standards, 25
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‘‘(XV) exterior deck or fence 1
components that conform to ignition- 2
resistant construction standards, 3
‘‘(XVI) structure-specific water 4
hydration systems, including fire miti-5
gation systems such as interior and 6
exterior sprinkler systems, 7
‘‘(XVII) water capture and deliv-8
ery systems to accommodate drought 9
events or to decrease water use, in-10
cluding the design of such systems, 11
‘‘(XVIII) flood openings for fully 12
enclosed areas below the lowest floor 13
of the dwelling unit, 14
‘‘(XIX) lateral bracing for wall 15
elements, foundation elements, and 16
garage doors or other large openings 17
to resist seismic loads, or 18
‘‘(XX) automatic shutoff valves 19
for water and gas lines, or 20
‘‘(iii) for services or equipment to— 21
‘‘(I) create buffers around the 22
qualified dwelling unit through the re-23
moval or reduction of flammable vege-24
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tation, including vertical clearance of 1
tree branches, 2
‘‘(II) create buffers around the 3
dwelling unit through— 4
‘‘(aa) the removal of exterior 5
deck or fence components or igni-6
tion-prone landscape features, or 7
‘‘(bb) replacement of the 8
components or features described 9
in item (aa) with components or 10
features that conform to ignition- 11
resistant construction standards, 12
‘‘(III) perform fire maintenance 13
procedures identified by the Federal 14
Emergency Management Agency or 15
the United States Forest Service, in-16
cluding fuel management techniques 17
such as creating fuel and fire breaks, 18
‘‘(IV) gather and analyze water 19
and weather data to better under-20
stand the local climate and drought 21
history, 22
‘‘(V) remove flammable vegeta-23
tion within 5 feet of a structure, 24
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‘‘(VI) determine the risk of nat-1
ural disasters which may occur in the 2
area in which the qualified dwelling 3
unit is located, or 4
‘‘(VII) prevent smoke inhalation, 5
such as air filters or other equipment 6
designed to prevent smoke from enter-7
ing the dwelling unit, 8
‘‘(iv) for property relating to satis-9
fying the standards required for receipt of 10
a FORTIFIED designation from the In-11
surance Institute for Business and Home 12
Safety, provided that the qualified dwelling 13
unit receives such designation following in-14
stallation of such property, or 15
‘‘(v) for any other hazard mitigation 16
activity which has been identified by the 17
Secretary, in consultation with the Admin-18
istrator of the Federal Emergency Man-19
agement Agency, for mitigation of a nat-20
ural hazard. 21
‘‘(B) E
XCEPTION.—The term ‘qualified 22
disaster mitigation expenditure’ shall not in-23
clude any expenditure or portion thereof which 24
is paid, funded, or reimbursed by a Federal, 25
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State, or local government entity, or any polit-1
ical subdivision, agency, or instrumentality 2
thereof. 3
‘‘(2) Q
UALIFIED DWELLING UNIT .—The term 4
‘qualified dwelling unit’ means, with respect to any 5
taxpayer, a dwelling unit which is— 6
‘‘(A) located in any State or territory— 7
‘‘(i) in which a Federal natural dis-8
aster declaration has been made within the 9
preceding 10-year period with respect to a 10
wildfire, hurricane, windstorm or flood, 11
‘‘(ii) which includes an area which, 12
during the taxable year or the period of 13
the 10 taxable years preceding such tax-14
able year, has received hazard mitigation 15
assistance through the Federal Emergency 16
Management Agency in regard to any wild-17
fire, hurricane, windstorm or flood which, 18
with respect to the expenditure described 19
in paragraph (1) which is made by the tax-20
payer, is applicable to such expenditure, or 21
‘‘(iii) which includes an area which, 22
with respect to any taxable year, has been 23
designated as a community disaster resil-24
ience zone (as defined in section 206(a) of 25
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the Robert T. Stafford Disaster Relief and 1
Emergency Assistance Act (42 U.S.C. 2
5136(a))) as the result of a wildfire, hurri-3
cane, windstorm or flood, and 4
‘‘(B) used as the principal residence (with-5
in the meaning of section 121) of the taxpayer. 6
‘‘(d) O
THERRULES.— 7
‘‘(1) D
OCUMENTATION.—Any taxpayer claiming 8
the credit under this section shall provide the Sec-9
retary with adequate documentation regarding the 10
specific qualified disaster mitigation expenditures 11
made by the taxpayer during the taxable year, as 12
well as such other information or documentation as 13
the Secretary may require. 14
‘‘(2) D
ENIAL OF DOUBLE BENEFIT .—No deduc-15
tion or other credit shall be allowed for expenditures 16
which have been taken into account under this sec-17
tion, and the basis of any property for which a cred-18
it is allowed under this section shall be reduced by 19
the amount of credit allowed.’’. 20
(b) C
ONFORMINGAMENDMENTS.— 21
(1) Section 6211(b)(4)(A) of the Internal Rev-22
enue Code of 1986 is amended by inserting ‘‘, 36C’’ 23
after ‘‘36B’’. 24
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(2) Section 1324(b)(2) of title 31, United 1
States Code, is amended by inserting ‘‘, 36C’’ after 2
‘‘36B’’. 3
(3) The table of sections for subpart C of part 4
IV of subchapter A of chapter 1 of such Code is 5
amended by inserting after the item relating to sec-6
tion 36B the following new item: 7
‘‘Sec. 36C. Disaster mitigation expenditures.’’.
(c) EFFECTIVEDATE.—The amendments made by 8
this section shall apply to taxable years beginning after 9
December 31, 2024. 10
Æ
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