,,ii #aaith ,,congress #ast ,session ,s4 #cdig ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,december #af1 #bjbe,mr4 ,bennet 7for himself and ,mr4 ,cassidy7 introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to provide a credit against tax for disaster mitigation expenditures4 #a4 ,short title ,this ,act may be cited as the ,shelter ,act4 #b4 ,nonrefundable personal credit for disaster mitigation expenditures 7a7 ,in general ,subpart ,a of part ,,iv of subchapter ,a of chapter #a of the ,internal ,revenue ,code of #aihf1 as amended by section #gjdaa of ,public ,law #aai-ba1 is amended by inserting after section #be;,f the following new section3 #be;,g4 ,disaster mitigation expenditures 7a7 ,allowance of credit 7#a7 ,in general ,in the case of an individual1 there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to #be percent of the qualified disaster mitigation expenditures made by the taxpayer during such taxable year4 7#b7 ,annual limitation ,subject to subsection 7b71 the credit allowed to a taxpayer under paragraph 7#a7 for any taxable year shall not exceed #c1gej 7or1 in the case of a joint return1 #g1ejj74 7#c7 ,cumulative limitation per qualified dwelling unit ,subject to subsection 7b71 the credit allowed under paragraph 7#a7 with respect to a qualified dwelling unit of the taxpayer for any taxable year shall not exceed the excess 7if any7 of #ae1jjj over the aggregate credits allowed under such paragraph with respect to such qualified dwelling unit for all prior taxable years ending after ,december #ca1 #bjbe4 7b7 ,income phaseout 7#a7 ,in general ,the amount of the credit allowed under subsection 7a77#a7 for the taxable year shall be reduced 7but not below zero7 by an amount which bears the same ratio to the amount under such subsection as-- 7,a7 the amount 7not less than zero7 equal to the adjusted gross income of the taxpayer for such taxable year minus #ajj1jjj1 bears to 7,b7 #ej1jjj4 7#b7 ,inflation adjustment ,in the case of any taxable year after #bjbf1 each of the dollar amounts under paragraph 7#a7 shall be increased by an amount equal to-- 7,a7 such dollar amount1 multiplied by 7,b7 the cost-of-living adjustment determined under section #a7;f77#c7 for the calendar year in which the taxable year begins1 determined by substituting calendar year #bjbe for calendar year #bjaf in subparagraph 7,a77ii7 thereof4 7#c7 ,rounding ,if any reduction determined under paragraph 7#a7 is not a multiple of #ej1 or any increase under paragraph 7#b7 is not a multiple of #ej1 such amount shall be rounded to the nearest multiple of #ej4 7#d7 ,joint return ,if a joint return is filed by the taxpayer for the taxable year1 for purposes of determining the amount of any reduction under paragraph 7#a7 for such taxable year1 the dollar amounts under such paragraph 7after application of paragraphs 7#b7 and 7#c77 shall be doubled4 7c7 ,definitions ,for purposes of this section-- 7#a7 ,qualified disaster mitigation expenditure 7,a7 ,in general ,subject to subparagraphs 7,b7 and 7,c71 the term qualified disaster mitigation expenditure means an expenditure relating to a qualified dwelling unit-- 7i7 for property to-- 7,i7 improve the strength of a roof deck attachment1 7,,ii7 create a secondary water barrier to prevent water intrusion or mitigate against potential water intrusion from wind-driven rain1 7,,iii7 improve the durability1 impact resistance 7not less than class #c or #d rating71 or fire resistance 7not less than class ,a rating7 of a roof covering1 7,,iv7 brace gable-end walls1 7,v7 reinforce the connection between a roof and supporting wall1 7,,vi7 protect openings from penetration by wind-borne debris1 7,,vii7 protect exterior doors and garages from natural hazards1 7,,viii7 complete measures contained in the publication of the ,federal ,emergency ,management ,agency entitled ,wind ,retrofit ,guide for ,residential ,buildings 7,p-#hjd71 7,,ix7 elevate the qualified dwelling unit1 as well as utilities1 machinery1 or equipment1 above the base flood elevation or other applicable minimum elevation requirement1 7,x7 seal walls in the basement of the qualified dwelling unit using waterproofing compounds1 or 7,,xi7 protect propane tanks or other external fuel sources1 7ii7 to install-- 7,i7 check valves to prevent flood water from backing up into drains1 7,,ii7 flood vents1 breakaway walls or open lattice for homes located in ,v zones1 7,,iii7 a stormwater drainage system or improve an existing system1 7,,iv7 natural or nature-based features for flood control1 including living shorelines1 7,v7 roof coverings1 sheathing1 flashing1 roof and attic vents1 eaves1 or gutters that conform to ignition-resistant construction standards1 7,,vi7 wall components for wall assemblies that conform to ignition-resistant construction standards1 7,,vii7 a wall-to-foundation anchor or connector1 or a shear transfer anchor or connector1 7,,viii7 wood structural panel sheathing for strengthening cripple walls1 7,,ix7 anchorage of the masonry chimney to the framing1 7,x7 prefabricated lateral resisting systems1 7,,xi7 a standby generator system consisting of a standby generator and an automatic transfer switch1 7,,xii7 a storm shelter that meets the design and construction standards established by the ,international ,code ,council and the ,national ,storm ,shelter ,association 7,,icc-#ejj71 or a safe room that satisfies the criteria contained in-- 7aa7 the publication of the ,federal ,emergency ,management ,agency entitled ,safe ,rooms for ,tornadoes and ,hurricanes 7,p-#cfa71 or 7bb7 the publication of the ,federal ,emergency ,management ,agency entitled ,taking ,shelter from the ,storm 7,p-#cbj71 7,,xiii7 a lightning protection system1 7,,xiv7 exterior walls1 doors1 windows1 or other exterior dwelling unit elements that conform to ignition-resistant construction standards1 7,,xv7 exterior deck or fence components that conform to ignition-resistant construction standards1 7,,xvi7 structure-specific water hydration systems1 including fire mitigation systems such as interior and exterior sprinkler systems1 7,,xvii7 water capture and delivery systems to accommodate drought events or to decrease water use1 including the design of such systems1 7,,xviii7 flood openings for fully enclosed areas below the lowest floor of the dwelling unit1 7,,xix7 lateral bracing for wall elements1 foundation elements1 and garage doors or other large openings to resist seismic loads1 or 7,,xx7 automatic shutoff valves for water and gas lines1 or 7iii7 for services or equipment to-- 7,i7 create buffers around the qualified dwelling unit through the removal or reduction of flammable vegetation1 including vertical clearance of tree branches1 7,,ii7 create buffers around the dwelling unit through-- 7aa7 the removal of exterior deck or fence components or ignition-prone landscape features1 or 7bb7 replacement of the components or features described in item 7aa7 with components or features that conform to ignition-resistant construction standards1 7,,iii7 perform fire maintenance procedures identified by the ,federal ,emergency ,management ,agency or the ,united ,states ,forest ,service1 including fuel management techniques such as creating fuel and fire breaks1 7,,iv7 replace flammable vegetation with less flammable species1 or 7,v7 prevent smoke inhalation1 such as air filters or other equipment designed to prevent smoke from entering the dwelling unit1 7iv7 for property relating to satisfying the standards required for receipt of a ,,fortified designation or a ,wildfire ,prepared designation from the ,insurance ,institute for ,business and ,home ,safety1 or any third-party verified certification demonstrating compliance with nationally recognized and consensus-based hazard mitigation or resilience standards1 provided that the qualified dwelling unit receives such designation or certifications following installation of such property1 or 7v7 for any other hazard mitigation activity which has been identified by the ,secretary1 in consultation with the ,administrator of the ,federal ,emergency ,management ,agency1 for mitigation of a natural hazard or compliance with other consensus-based resiliency standards4 7,b7 ,hazard-specific applicability 7i7 ,in general ,subject to clause 7ii71 the term qualified disaster mitigation expenditure shall only apply to expenditures relating to a qualified dwelling unit which are described in subparagraph 7,a7 if such expenditures address a hazard type identified in the applicable ,state or tribal ,standard ,state ,mitigation ,plans or ,enhanced ,state ,mitigation ,plans1 as prepared under section #bja4d or #bja4e of title #dd1 ,code of ,federal ,regulations 7as in effect on the date of enactment of this section74 7ii7 ,negative lists ,the ,secretary1 in consultation with the ,administrator of the ,federal ,emergency ,management ,agency1 may publish a list of inapplicable expenditures which are region-specific in order to prohibit the application of subsection 7a7 for expenditures relating to hazards which are not relevant to the location of the qualified dwelling unit4 7,c7 ,exception ,the term qualified disaster mitigation expenditure shall not include any expenditure or portion thereof which is paid1 funded1 or reimbursed by a ,federal1 ,state1 or local government entity1 or any political subdivision1 agency1 or instrumentality thereof4 7#b7 ,qualified dwelling unit ,the term qualified dwelling unit means a dwelling unit which is located-- 7,a7 in the ,united ,states or in a territory of the ,united ,states1 and 7,b7 in an area-- 7i7 which1 during the taxable year or the period of the #e taxable years preceding such taxable year1 has received hazard mitigation assistance through the ,federal ,emergency ,management ,agency in regard to any natural disaster which1 with respect to the expenditure described in paragraph 7#a7 which is made by the taxpayer1 is applicable to such expenditure1 and 7ii7 7,i7 in which a ,federal natural disaster declaration has been made within the preceding #e-year period1 7,,ii7 which is adjacent to an area described in subclause 7,i71 or 7,,iii7 which1 with respect to any taxable year1 has been designated as a community disaster resilience zone 7as defined in section #bjf7;a7 of the ,robert ,t4 ,stafford ,disaster ,relief and ,emergency ,assistance ,act 7#db ,u4,s4,c4 #eacf7;a7774 7d7 ,limitation 7#a7 ,in general ,in the case of an expenditure described in clause 7i7 or 7ii7 of subsection 7c77#a77;,a71 such expenditure shall be taken into account in determining the qualified disaster mitigation expenditures made by the taxpayer during the taxable year only if the onsite preparation1 assembly1 or original installation of the property with respect to which such expenditure is made has been completed in a manner that is deemed to be in compliance with the latest published editions of relevant consensus-based codes1 specifications1 and standards or any more restrictive ,federal1 ,state1 or local floodplain management standards and consistent with floodplain management regulations for the local jurisdiction in which the qualified dwelling unit is located4 7#b7 ,latest published editions ,the term latest published editions means1 with respect to relevant consensus-based codes1 specifications1 and standards1 either of the #b most recently published editions4 7e7 ,labor costs ,for purposes of this section1 expenditures for labor costs properly allocable to the onsite preparation1 assembly1 or original installation of the property described in clause 7i7 or 7ii7 of subsection 7c77#a77;,a7 shall be taken into account in determining the qualified disaster mitigation expenditures made by the taxpayer during the taxable year4 7f7 ,inspection costs ,for purposes of this section1 expenditures for the cost of any inspection required under subsection 7d7 which is properly allocable to the inspection of the preparation1 assembly1 or installation of the property described in clause 7i7 or 7ii7 of subsection 7c77#a77;,a7 shall be taken into account in determining the qualified disaster mitigation expenditures made by the taxpayer during the taxable year4 7g7 ,carryforward of unused credit 7#a7 ,in general ,if the credit allowable under subsection 7a77#a7 for any taxable year exceeds the applicable tax limit for such taxable year1 such excess shall be a carryover to each of the #e succeeding taxable years and1 subject to the limitations of paragraph 7#b71 shall be added to the credit allowable by subsection 7a77#a7 for such succeeding taxable year4 7#b7 ,limitation ,the amount of the unused credit which may be taken into account under paragraph 7#a7 for any taxable year shall not exceed the amount 7if any7 by which the applicable tax limit for such taxable year exceeds the sum of-- 7,a7 the credit allowable under subsection 7a77#a7 for such taxable year determined without regard to this subsection1 and 7,b7 the amounts which1 by reason of this subsection1 are carried to such taxable year and are attributable to taxable years before the unused credit year4 7#c7 ,applicable tax limit ,for purposes of this subsection1 the term applicable tax limit means the limitation imposed by section #bf7;a7 for the taxable year reduced by the sum of the credits allowable under this subpart 7other than this section74 7h7 ,documentation ,any taxpayer claiming the credit under this section shall provide the ,secretary with adequate documentation regarding the specific qualified disaster mitigation expenditures made by the taxpayer during the taxable year1 as well as such other information or documentation as the ,secretary may require4 4 7b7 ,conforming amendment ,the table of sections for subpart ,a of part ,,iv of subchapter ,a of chapter #a of such ,code is amended by inserting after the item relating to section #be;,f the following new item3 ,sec4 #be;,g4 ,disaster mitigation expenditures4 4 7c7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjbe4 #c4 ,business-related credit for disaster mitigation 7a7 ,in general ,subpart ,d of part ,,iv of subchapter ,a of chapter #a of the ,internal ,revenue ,code of #aihf is amended by inserting after section #de;,,aa the following new section3 #de;,,bb4 ,disaster mitigation credit 7a7 ,general rule ,for purposes of section #ch1 the disaster mitigation credit determined under this section for any taxable year is an amount equal to #be percent of the qualified disaster mitigation expenditures made by the taxpayer during the taxable year4 7b7 ,maximum credit 7#a7 ,in general ,subject to paragraph 7#b71 the amount of the credit determined under subsection 7a7 for any taxable year shall not exceed #e1jjj4 7#b7 ,phaseout 7,a7 ,in general ,the amount under paragraph 7#a7 for the taxable year shall be reduced 7but not below zero7 by an amount which bears the same ratio to the amount under such paragraph as-- 7i7 the amount 7not less than zero7 equal to the average gross receipts of the taxpayer over the #c preceding taxable years minus #e1jjj1jjj1 bears to 7ii7 #e1jjj1jjj4 7,b7 ,inflation adjustment ,in the case of any taxable year after #bjbf1 each of the dollar amounts under subparagraph 7,a7 shall be increased by an amount equal to-- 7i7 such dollar amount1 multiplied by 7ii7 the cost-of-living adjustment determined under section #a7;f77#c7 for the calendar year in which the taxable year begins1 determined by substituting calendar year #bjbe for calendar year #bjaf in subparagraph 7,a77ii7 thereof4 7,c7 ,rounding ,if any reduction determined under subparagraph 7,a7 is not a multiple of #ej1 or any increase under subparagraph 7,b7 is not a multiple of #ej1 such amount shall be rounded to the nearest multiple of #ej4 7c7 ,qualified disaster mitigation expenditure 7#a7 ,in general ,for purposes of this section1 the term qualified disaster mitigation expenditure has the same meaning given such term under paragraph 7#a7 of section #be;,g7c71 except that place of business shall be substituted for qualified dwelling unit each place it appears in such paragraph4 7#b7 ,place of business ,for purposes of this section1 an expenditure shall not be treated as a qualified disaster mitigation expenditure 7as defined in paragraph 7#a77 unless the taxpayer's place of business is located-- 7,a7 in the ,united ,states or in a territory of the ,united ,states1 and 7,b7 in an area-- 7i7 in which a ,federal natural disaster declaration has been made within the preceding #e-year period1 7ii7 which is adjacent to an area described in clause 7i71 7iii7 which1 during the taxable year or the period of the #e taxable years preceding such taxable year1 has received hazard mitigation assistance through the ,federal ,emergency ,management ,agency in regard to any natural disaster which1 with respect to the expenditure described in section #be;,g7c77#a7 which is made by the taxpayer1 is applicable to such expenditure1 or 7iv7 which1 with respect to any taxable year1 has been designated as a community disaster resilience zone 7as defined in section #bjf7;a7 of the ,robert ,t4 ,stafford ,disaster ,relief and ,emergency ,assistance ,act 7#db ,u4,s4,c4 #eacf7;a7774 7d7 ,special rules ,rules similar to the rules of subsections 7d7 through 7g7 of section #be;,g shall apply for purposes of this section4 7e7 ,no double benefit ,no credit shall be determined under this section with respect to any expenditures for which a credit was allowed under section #be;,g4 4 7b7 ,conforming amendments 7#a7 ,section #ch7;b7 of such ,code is amended by striking plus at the end of paragraph 7#dj71 by striking the period at the end of paragraph 7#da7 and inserting 1 plus1 and by adding at the end the following new paragraph3 7#db7 the disaster mitigation credit determined under section #de;,,bb7a74 4 7#b7 ,the table of sections for subpart ,d of part ,,iv of subchapter ,a of chapter #a of such ,code is amended by inserting after the item relating to section #de;,,aa the following new item3 ,sec4 #de;,,bb4 ,disaster mitigation credit4 4 7c7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjbe4