Disaster Mitigation and Tax Parity Act of 2023

II 118TH CONGRESS 1ST SESSION S. 1953 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 JUNE 13, 2023 Mrs. FEINSTEIN (for herself, Mr. PADILLA, Mr. CASSIDY, Mr. TILLIS, Mr. KENNEDY, Mr. HICKENLOOPER, Mr. BENNET, and Mr. MERKLEY) intro- duced the following bill; which was read twice and referred to the Com- mittee 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 2023’’. 5 VerDate Sep 11 2014 02:58 Jul 06, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1953.IS S1953 pbinns on DSKJLVW7X2PROD with $$_JOB 2 •S 1953 IS SEC. 2. EXCLUSION OF AMOUNTS RECEIVED FROM STATE- 1 BASED CATASTROPHE LOSS MITIGATION 2 PROGRAMS. 3 (a) IN GENERAL.—Section 139 of the Internal Rev- 4 enue Code of 1986 is amended by redesignating subsection 5 (h) as subsection (i) and by inserting after subsection (g) 6 the following new subsection: 7 ‘‘(h) STATE-BASED CATASTROPHE LOSS MITIGATION 8 PROGRAMS.— 9 ‘‘(1) IN GENERAL.—Gross income shall not in- 10 clude any amount received by or paid for the benefit 11 of an individual as a qualified catastrophe mitigation 12 payment under a program established by— 13 ‘‘(A) a State or any political subdivision or 14 public instrumentality thereof, 15 ‘‘(B) a joint powers authority, or 16 ‘‘(C) an entity created by State law to en- 17 sure the availability of an adequate market of 18 last resort for essential property insurance or 19 basic property insurance, over which a State 20 agency or State department of insurance has 21 regulatory oversight, 22 for the purpose of making such payments. 23 ‘‘(2) QUALIFIED CATASTROPHE MITIGATION 24 PAYMENT.—For purposes of this section, the term 25 ‘qualified catastrophe mitigation payment’ means 26 VerDate Sep 11 2014 02:58 Jul 06, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1953.IS S1953 pbinns on DSKJLVW7X2PROD with $$_JOB 3 •S 1953 IS any amount which is received by or paid for the ben- 1 efit of the owner of any property to make improve- 2 ments to such property for the sole purpose of re- 3 ducing the damage that would be done to such prop- 4 erty by a windstorm, earthquake, or wildfire. 5 ‘‘(3) NO INCREASE IN BASIS.—Rules similar to 6 the rules of subsection (g)(3) shall apply in the case 7 of this subsection.’’. 8 (b) CONFORMING AMENDMENTS.— 9 (1) Section 139(d) of the Internal Revenue 10 Code of 1986 is amended by striking ‘‘and qualified’’ 11 and inserting ‘‘, qualified catastrophe mitigation 12 payments, and qualified’’. 13 (2) Section 139(i) of such Code (as redesig- 14 nated by subsection (a)) is amended by striking ‘‘or 15 qualified’’ and inserting ‘‘, qualified catastrophe 16 mitigation payment, or qualified’’. 17 (c) EFFECTIVE DATE.— 18 (1) IN GENERAL.—The amendments made by 19 this section shall apply to taxable years beginning 20 after December 31, 2020. 21 (2) RETROACTIVE APPLICABILITY.—The Sec- 22 retary of the Treasury, or the Secretary’s delegate, 23 shall provide an opportunity for individuals to claim 24 the exclusion from gross income under section 25 VerDate Sep 11 2014 02:58 Jul 06, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1953.IS S1953 pbinns on DSKJLVW7X2PROD with $$_JOB 4 •S 1953 IS 139(h) of the Internal Revenue Code of 1986, as 1 added by this section, including by amended return. 2 Æ VerDate Sep 11 2014 02:58 Jul 06, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6301 E:\BILLS\S1953.IS S1953 pbinns on DSKJLVW7X2PROD with $$_JOB