Thompson proposes earthquake retrofit grants be tax free

After what happened in the aftermath of the 2014 South Napa Earthquake, Rep. Mike Thompson (D-St. Helena) introduced a bill to help people make their homes earthquake resistant, his office announced Thursday.

Thompson and Rep. Paul Cook (R-San Bernardino) introduced the Earthquake Mitigation Tax Incentive Act (H.R. 5610) to exclude earthquake mitigation incentives from being taxed at the federal level. California has already made these incentives tax free at the state level.

The California Earthquake Authority and the Governor’s Office of Emergency Services established the California Residential Mitigation Program to help residents strengthen their homes against earthquake damage. The mitigation program’s first effort, the Earthquake Brace + Bolt Program provides grants of up to $3,000 to help homeowners pay for code-compliant retrofits, which cost about $5,000.

A residential seismic retrofit makes a home more earthquake resistant by bolting the house to its foundation and adding bracing around the crawl space’s perimeter.

The new bill would make the incentive federally tax free, thereby maximizing the incentive’s value.

“After the South-Napa earthquake damaged more than 1,500 homes in 2014, we need to do everything possible to ensure that our homes are better prepared to withstand the next earthquake,” Thompson said. “By ensuring that homeowners can take advantage of seismic retrofits without being taxed, this bipartisan legislation will help encourage more homeowners to take preventive measures to strengthen their homes against earthquake damage.”

Cook added that H.R. 5610 brings federal tax law into sync with California law “to encourage residents in earthquake-prone regions to take preventative measures to safeguard their homes. Current federal law penalizes Californians with taxes, which leaves families and structures less safe. We have to change this, and these tax incentives are a step in the right direction.”

The incentive program was designed to help Californians make their homes safer, California Earthquake Authority CEO Glenn Pomeroy said.

“That’s why this legislation is so important, because people who do the right thing by taking advantage of this program shouldn’t be penalized with a tax,” he said. “California fixed the problem at the state level, and now it’s time for the federal government to do the same.”

Thompson represents California’s 5th Congressional District, which includes all or part of Solano, Napa, Contra Costa, Lake and Sonoma Counties.