Bennet, Cassidy Introduce New Tax Credit for Working Families, Small Businesses Preparing for Natural Disasters

Press Release

Today, U.S. Senators Michael Bennet (D-Colo.) and Bill Cassidy, M.D. (R-La.) reintroduced the Shelter Act to help Americans protect their homes or businesses against natural disasters such as wildfires, hurricanes, tornados, floods, and drought. The Shelter Act would create a first-of-its-kind disaster mitigation tax credit for working families and small business owners in disaster-prone areas. President Joe Biden's American Jobs Plan calls for a tax credit for disaster mitigation in line with the Shelter Act.

"In Colorado we know that a devastating natural disaster isn't a matter of if, but when," said Bennet. "While Americans can receive federal tax relief following a disaster to help recoup their losses, there isn't an incentive to prepare for future threats. Our bill would change that by encouraging taxpayers to invest in measures that increase resilience and safeguard their homes and businesses, helping to defend properties and save lives."

"The best way to recover from a flood is never flooding at all," said Dr. Cassidy. "Every family or business owner can reduce their property's chance of flooding. This legislation empowers them to do so."

Despite hundreds of billions of taxpayer dollars spent on disaster recovery each year, there are currently no federal tax incentives to encourage families and businesses to plan ahead for disaster resilience and mitigation. The Shelter Act allows Americans to write off 25 percent of qualifying mitigation expenses, from strengthening the durability of a roof to elevating a housing unit to reduce potential flood damage. The tax credit has an annual limit of up to $5,000 per taxpayer. Eligible properties include homes or businesses in or adjacent to an area that the federal government has declared a disaster within the past 10 years. Taxpayers who rent a property in eligible areas can also receive the credit.

Earlier this month, Bennet visited Lyons, Colorado, where he discussed this proposal with small business owners and homeowners. He met with Connie and Neil Sullivan, owners of St. Vrain Market and Spirit Hound Distillery in Lyons, who are considering improvements to their businesses after Lyons was hit hard by floods in 2013. Bennet also stopped by the home of Ken Feldman and Gayle Gordon, who spent "between $2,000 to $2,500 to prepare their home for potential disaster." The Shelter Act would help with these costs.

The Shelter Act is supported by the following organizations and businesses: American Institute of Architects, The Home Depot, National Association of Home Builders, National Association of REALTORS, and National Institute of Building Sciences.

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