WASHINGTON – U.S. Senators John Hickenlooper and Michael Bennet joined nine of their Senate colleagues in introducing the bipartisan Disaster Mitigation and Tax Parity Act of 2025 to prevent disaster mitigation funds from being taxed as part of gross income. These funds help communities prepare for and recover from natural disasters.
“Coloradans know the damage caused by wildfires and other natural disasters too well. This is a critical step we can take to keep our families and homes safe and give communities the resources they need to rebuild,” said Hickenlooper.
“This commonsense legislation takes a critical step toward empowering individuals and communities to better protect themselves from the devastating effects of natural disasters like Hurricane Helene,” said Tillis. “By excluding qualified catastrophe mitigation payments from income tax, we are incentivizing property owners to make the necessary improvements that reduce damage and save lives. This proactive approach to disaster preparedness not only helps families rebuild faster but strengthens our resilience in the face of future disasters.”
“The devastating fires in Southern California underscored the urgent need to empower homeowners to take proactive steps to keep their families and homes safe,” said Padilla. “As these disasters become more frequent and more extreme due to the climate crisis, we should incentivize — not penalize — taxpayers for protecting their homes. That’s why the Disaster Mitigation and Tax Parity Act would provide a tax exemption on payments from state-based programs for homeowner investments in critical disaster-related improvements.”
“Louisianans understand the impact of devastating storms, but with the help of state and local programs, we have tools to rebuild and return to wholeness,” said Cassidy. “If communities need tax relief, let’s give it to them!”
“We have seen how natural disasters have devastated communities around the country, and we must ensure we have the resources and programs in place to respond,” said Schiff. “Homeowners should not face additional taxes for wanting to protect their homes and our bipartisan legislation will provide the needed tax relief to help affected Americans recover from these disasters.”
The bill defines a “qualified catastrophe mitigation payment” as any amount received for making improvements to an individual’s property for the sole purpose of reducing the damage that would be done to such property by a windstorm, earthquake, flood, or wildfire.
Full text of the bill is available HERE.
###