Sens. Bennet, Cassidy Introduce New Tax Credit for Working Families, Small Businesses Preparing for Natural Disasters

WASHINGTON, May 26 -- Sen. Michael F. Bennet, D-Colorado, issued the following news release:

U.S. Senators Michael Bennet (D-Colo.) and Bill Cassidy, M.D. (R-La.) reintroduced the Shelter Act to help Americans protect their homes or businesses against natural disasters such as wildfires, hurricanes, tornados, floods, and drought. The Shelter Act would create a first-of-its-kind disaster mitigation tax credit for working families and small business owners in disaster-prone areas. President Joe Biden's American Jobs Plan calls for a tax credit for disaster mitigation in line with the Shelter Act.

"In Colorado we know that a devastating natural disaster isn't a matter of if, but when," said Bennet. "While Americans can receive federal tax relief following a disaster to help recoup their losses, there isn't an incentive to prepare for future threats. Our bill would change that by encouraging taxpayers to invest in measures that increase resilience and safeguard their homes and businesses, helping to defend properties and save lives."

"The best way to recover from a flood is never flooding at all," said Dr. Cassidy. "Every family or business owner can reduce their property's chance of flooding. This legislation empowers them to do so."

Despite hundreds of billions of taxpayer dollars spent on disaster recovery each year, there are currently no federal tax incentives to encourage families and businesses to plan ahead for disaster resilience and mitigation. The Shelter Act allows Americans to write off 25 percent of qualifying mitigation expenses, from strengthening the durability of a roof to elevating a housing unit to reduce potential flood damage. The tax credit has an annual limit of up to $5,000 per taxpayer. Eligible properties include homes or businesses in or adjacent to an area that the federal government has declared a disaster within the past 10 years. Taxpayers who rent a property in eligible areas can also receive the credit.

Earlier this month, Bennet visited Lyons, Colorado, where he discussed this proposal with small business owners and homeowners. He met with Connie and Neil Sullivan, owners of St. Vrain Market and Spirit Hound Distillery in Lyons, who are considering improvements to their businesses after Lyons was hit hard by floods in 2013. Bennet also stopped by the home of Ken Feldman and Gayle Gordon, who spent "between $2,000 to $2,500 to prepare their home for potential disaster." The Shelter Act would help with these costs.

The Shelter Act is supported by the following organizations and businesses: American Institute of Architects, The Home Depot, National Association of Home Builders, National Association of REALTORS, and National Institute of Building Sciences.

The bill text is available here (https://www.bennet.senate.gov/public/_cache/files/7/a/7a321cd1-f5d6-4fdd-8405-5df8c79bd599/D15D07A167A36DA35B81D02ECC58D50C.gai21580.pdf). A summary is available here (https://www.bennet.senate.gov/public/_cache/files/5/a/5a82138c-97a1-454e-8d16-94449e007530/565CE977E881EC582E5D563EA778203B.shelter-2021-one-pager.pdf). A letter of support from the National Association of REALTORS is available here (https://www.bennet.senate.gov/public/_cache/files/0/2/022019c8-37da-4b75-b072-1a96de90bc03/B82B3C3F28B1E3F2AF96D759FC86EC5E.nar-support-letter-to-senators-bennet-and-cassidy-re-disaster-mitigation-shelter-act.pdf).

Statements in Support of the Shelter Act:

"Last year, while fires burned in northern Colorado, many of our residents were evacuated, while others were in a pre-evacuation state for days on end. Neighbors just three miles south of us lost their homes. We were fortunate that our local and federal firefighting teams were largely able to prevent the loss of homes in Lyons. Residents were not so fortunate during the 2013 floods, which resulted in permanent property loss for housing for over 175 residents. The proximity, strength and speed with which the wildfires threatened our town forced many to face the wildfire risks that we knew existed, but for many of us, were disasters that only happened in other places. Many in the community are now asking how they can protect their families and property. It was great to visit with Senator Bennet in Lyons last month so he could see firsthand how his Shelter Act would support homeowners and business owners who want to safeguard against future wildfires or floods. It's a relief to see a bipartisan effort to tackle preventative measures instead of only providing extremely costly disaster response funding," said Joe Lampe, co-chair, Lyons Prepared.

"We know that wildfire mitigation works, and that the return on investment for property owners is greater than just about anything else they can do for their home. Removing technical and financial barriers for meaningful mitigation action is a sound investment on our collective future. However, individual out-of-pocket expenses for home retrofits and defensible space work can quickly add up to several thousand dollars. A federal tax credit of up to $5000 for real cost associated with wildfire mitigation work will be a game changer for most homeowners in our Wildland Urban Interface. I support the Shelter Act, and believe it will be a valuable tool in building fire adapted communities," said Eric Lovgren, Eagle County Wildfire Mitigation and Resilience Manager & REALFire Project Coordinator.

"As a community that is threatened annually by wildfires, advancing legislation like the SHELTER Act to help homeowners and businesses become more resilient is imperative to the people of Glenwood Springs," said Jonathan Godes, Mayor of Glenwood Springs.

As a community that survived a major flood in 2013 and was threatened by the 2020 Calwood fire, the town of Lyons and surrounding area recognize firsthand the importance of disaster preparedness. Wildfire mitigation on private and public properties located in the wildland-urban interface is a critical step in preparing for and surviving future wildfires. We support Senator Bennet's Shelter Act that would provide tax incentives to help home and business owners better prepare their properties for a natural disaster," said Roy Leggett, chair, Lyons Wildfire Protection Task Force and Kristen Westhoff, previous chair, Lyons Prepared.

"Pre-disaster mitigation planning is prudent government policy that saves taxpayer dollars. More importantly, it saves lives. The SHELTER Act provides critical government assistance to help vulnerable home and business owners make the upgrades needed to withstand the next natural disaster," said Sarah Dodge, Senior Vice-President of Advocacy & Relationships at the American Institute of Architects.

"NIBS has long studied mitigation, but the nation has invested far less in mitigation investments than seems to be warranted," Lakisha A. Woods, CAE, President and CEO of the National Institute of Building Sciences said. "We believe the Shelter Act aligns with the research and data outlined in our Natural Hazard Mitigation Saves study, which shows pre-disaster mitigation activities save up to $13 for every $1 invested on a national average."

"The National Association of REALTORS(R) thanks Senator Bennet and Senator Cassidy for their reintroduction of the SHELTER Act," said NAR President Charlie Oppler. "A changing global climate continues to demand innovation from our nation's real estate industry, and policies which encourage property owners to proactively address climate risks are today more critical than ever. NAR hopes to continue our work with Congress to lessen the financial burdens of increasingly prevalent and severe natural disasters."