Thompson, Cook Introduce Tax Incentives to Help Homeowners Prepare for Earthquakes
Washington – Today, Reps. Mike Thompson (CA-05) and Paul Cook (CA-08) introduced the Earthquake Mitigation Incentive and Tax Parity Act of 2017 to exclude incentives for residential seismic retrofits from federal taxation. These earthquake mitigation measures are already tax-free at the state level in California.
“The South-Napa earthquake damaged more than 1,500 homes in 2014, making it clear we need to do more to help residents prepare for disasters,” said Thompson. “These tax incentives will encourage homeowners to make the necessary retrofits to protect their homes—reducing damage from earthquakes, saving lives, and saving the government money in the long run. California has already seen the value of these retrofits, which is why they are exempt from state taxes. It is time for the federal government to follow suit.”
“This legislation would bring federal tax law into sync with California law to encourage residents in earthquake-prone regions to take preventative measures to safeguard their homes,” said Cook. “Current federal law penalizes Californians with taxes, which leaves families and structures less safe. We need to eliminate these tax penalties and this bill is a step in the right direction.”
The California Earthquake Authority (CEA) and the Governor’s Office of Emergency Services established the California Residential Mitigation Program to help residents protect their homes from earthquake damage. Their Earthquake Brace + Bolt program provides homeowners up to $3,000 toward a retrofit, which costs between $3,000 and $5,000 on average.
“Californians who take the steps to retrofit their older house by registering and qualifying for an Earthquake Brace + Bolt grant, and then doing the work to strengthen their house before the next damaging earthquake, should not be penalized by being taxed on their incentive grant,” said Glenn Pomeroy, CEO of CEA.
As a senior member of the Committee on Ways and Means, Thompson introduced this bill to bring federal tax law into step with state policy. Currently, the federal government taxes residents on grants they receive too safeguard their homes from earthquakes. Thompson’s proposal would eliminate those taxes, giving homeowners greater incentives to take steps to protect their homes before a disaster.