II
119THCONGRESS
1
STSESSION S. 336
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
JANUARY30, 2025
Mr. T
ILLIS(for himself, Mr. PADILLA, Mr. CASSIDY, Mr. SCHIFF, Mr. KEN-
NEDY, Mr. HICKENLOOPER, Mr. BUDD, Ms. KLOBUCHAR, Mr. WICKER,
Mr. B
ENNET, and Mr. MERKLEY) 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 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 ‘‘Disaster Mitigation 4
and Tax Parity Act of 2025’’. 5
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SEC. 2. EXCLUSION OF AMOUNTS RECEIVED FROM STATE- 1
BASED CATASTROPHE LOSS MITIGATION 2
PROGRAMS. 3
(a) I
NGENERAL.—Section 139 of the Internal Rev-4
enue Code of 1986 is amended by redesignating subsection 5
(h) as subsection (i) and by inserting after subsection (g) 6
the following new subsection: 7
‘‘(h) S
TATE-BASEDCATASTROPHELOSSMITIGATION 8
P
ROGRAMS.— 9
‘‘(1) I
N GENERAL.—Gross income shall not in-10
clude any amount received by or paid for the benefit 11
of an individual as a qualified catastrophe mitigation 12
payment under a program established by— 13
‘‘(A) a State or any political subdivision or 14
public instrumentality thereof, 15
‘‘(B) a joint powers authority, or 16
‘‘(C) an entity created by State law to en-17
sure the availability of an adequate market of 18
last resort for essential property insurance or 19
basic property insurance, over which a State 20
agency or State department of insurance has 21
regulatory oversight, 22
for the purpose of making such payments. 23
‘‘(2) Q
UALIFIED CATASTROPHE MITIGATION 24
PAYMENT.—For purposes of this section, the term 25
‘qualified catastrophe mitigation payment’ means 26
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•S 336 IS
any amount (other than the amount of any qualified 1
disaster mitigation payment) which is received by or 2
paid for the benefit of the owner of any property to 3
make improvements to such property for the sole 4
purpose of reducing the damage that would be done 5
to such property by a windstorm, earthquake, flood, 6
or wildfire. 7
‘‘(3) N
O INCREASE IN BASIS.—Rules similar to 8
the rules of subsection (g)(3) shall apply in the case 9
of this subsection.’’. 10
(b) C
ONFORMINGAMENDMENTS.— 11
(1) Section 139(d) of the Internal Revenue 12
Code of 1986 is amended by striking ‘‘and qualified’’ 13
and inserting ‘‘, qualified catastrophe mitigation 14
payments, and qualified’’. 15
(2) Section 139(i) of such Code (as redesig-16
nated by subsection (a)) is amended by striking ‘‘or 17
qualified’’ and inserting ‘‘, qualified catastrophe 18
mitigation payment, or qualified’’. 19
(c) E
FFECTIVEDATE.— 20
(1) I
N GENERAL.—The amendments made by 21
this section shall apply to taxable years beginning 22
after December 31, 2021. 23
(2) R
ETROACTIVE APPLICABILITY .—The Sec-24
retary of the Treasury, or the Secretary’s delegate, 25
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shall provide an opportunity for individuals to claim 1
the exclusion from gross income under section 2
139(h) of the Internal Revenue Code of 1986, as 3
added by this section, including by amended return. 4
Æ
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