Doug Lamalfa Federal Disaster Tax Relief Certainty Act

Floor Speech

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Mr. PANETTA. Mr. Speaker, I thank Mr. Thompson and Mr. Steube for allowing me to speak on this topic. I support the Doug LaMalfa Federal Disaster Tax Relief Certainty Act.

I am a proud cosponsor, co-lead of this bill with Representatives Greg Steube and Mike Thompson, a bill that would build on the Federal Disaster Tax Relief Act which we passed last Congress, thanks to the leadership of Representative Steube, a bill that would ensure that those impacted by disasters nationwide have continued access to tax relief.

This is one of those bills, as you are going to hear from Representative Steube, from Mr. Thompson, and from Ms. Tokuda, that is not a partisan topic when it comes to providing proper tax relief for our constituents who have been affected by natural disasters, disasters that don't just affect red States or blue States. They affect all American States. That is why this bill is so important.

It would extend the provisions of the Federal Disaster Tax Relief Act through 2026 to, one, ensure that those affected by fires and natural disasters can claim the personal casualty loss deduction to help in the recovery. Two, would exempt fire settlements from taxation to avoid devastating tax bills on wildfire victims.

Unfortunately, after most natural disasters, there are limitations in the tax code that make it very difficult for survivors to claim the casualty loss deduction for uninsured losses.

Specifically, losses must be attributable to a federally declared disaster and exceed 10 percent of adjusted gross income. That prevents many from qualifying for tax relief. In fact, the tax code ends up penalizing fire victims by treating settlements from fires as income for tax purposes. That can trigger a bill, as we have heard, as large as 37 percent of the settlement.

Now, the Federal Disaster Tax Relief Act that was signed into law last Congress addresses those issues by ensuring that those who received settlements for certain wildfires, including payments from the Fire Victim Trust, do not have to pay taxes on those payments.

It also designates certain federally declared disasters as qualified disasters for the purposes of determining personal casualty losses. That ensures that families who incurred uninsured losses due to a natural disaster, be it damage to their home or property, can declare that loss and lower their tax bill.

If we do not pass this bill, the thousands of people who survived the 2025 Los Angeles fires, who received settlements, risk a devastating tax bill and face limitations recouping uninsured losses.

That is why Congress is acting in a bipartisan way to prevent the tax code from penalizing constituents who are trying to rebuild after such disasters.

Mr. Speaker, I urge my colleagues to support this commonsense bill to extend the Federal Disaster Tax Relief Act, to help families all across America, from Hawaii to California to Florida and those in between, who are struck by natural disasters and get the necessary tax relief to recover, rebuild, and move forward with their lives.

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