Disaster Resiliency and Coverage Act of 2025

Bill Number

H.R. 1105

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Emergency Management

Status

Introduced

Latest Action

2025-02-06: Referred to the Subcommittee on Economic Development, Public Buildings, and Emergency Management.

Last Updated

2026-07-10T08:06:00Z

AI-Generated Summary

Purpose of the Legislation

The Disaster Resiliency and Coverage Act of 2025 aims to enhance disaster preparedness by creating a federal grant program to help individual households in high-risk areas make their homes more resistant to natural disasters like floods, wildfires, hurricanes, and earthquakes. It also provides tax benefits to encourage these improvements and similar state-level efforts, ultimately seeking to reduce future disaster damage, lower insurance costs, and promote community resilience.

Key Provisions

• Establishment of the Individual Household Disaster Mitigation Program (Section 2):
• Requires the President, through the Federal Emergency Management Agency (FEMA), to create a grant program providing funds to states and Indian tribal governments for pre-disaster mitigation activities on at-risk residential homes.
• Eligible activities include reinforcing roofs, installing flood vents or storm shelters, creating fire buffers by removing flammable vegetation, elevating homes above flood levels, and other measures to protect against wind, water, fire, and seismic hazards (detailed in a comprehensive list of "qualifying mitigation activities").
• States and tribes must submit plans assessing insurance availability, risk factors, and criteria for distributing funds, prioritizing lower-income households and areas in "Community Disaster Resilience Zones" (high-risk zones designated for focused recovery efforts).
• Grants are capped at $10,000 per household (adjusted annually for inflation), with eligibility limited to households with adjusted gross income (AGI) under $250,000 ($500,000 for joint filers; AGI is total income minus certain deductions, as defined in tax law).
• FEMA must establish multi-tiered standards for mitigation work, drawing from expert sources like the Insurance Institute for Business and Home Safety, and provide technical assistance.
• Creates a 50-member Hazard Mitigation Advisory Committee with diverse representatives (e.g., insurers, consumer advocates, emergency managers, environmental groups) to advise on emerging mitigation technologies and update eligible activities.
• Requires states to issue guidance on insurance incentives, such as discounts for mitigated homes.

• Tax Treatment for Federal Grants (Section 2(b)):
• Excludes grants received under the program from gross income for tax purposes, meaning recipients do not pay federal taxes on these funds.

• Exclusion for State-Based Mitigation Programs (Section 3):
• Excludes payments from state or local programs for home hazard mitigation from gross income, effective for tax years after December 31, 2025.
• These payments must be solely for improving residences against disasters and do not increase the property's tax basis (the value used to calculate future taxes or gains).

• Exclusion for Certain Agricultural Assistance (Section 4):
• Expands tax exclusions for "qualified disaster relief payments" to include specific federal agricultural aids, such as those for wildfires, hurricanes, crop losses, and food assistance programs, effective for tax years after December 31, 2025.

• New Tax Credit for Mitigation Expenditures (Section 5):
• Introduces a 30% non-refundable tax credit (up to the tax owed) for qualifying mitigation costs on owned or leased real property, such as homes or farms.
• If a state reimburses part of the cost, the credit percentage adjusts based on the individual's share of the expense.
• Business-related expenditures become part of the general business credit; personal ones are treated as a personal tax credit.
• Reduces the property's tax basis by the credit amount to prevent double benefits, and disallows credits for expenses related to sold timber (except excess over gains).
• Applies to expenditures after enactment.

Significant Changes to Existing Law

• Amendments to the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5131 et seq.):
• Adds a new Section 207, introducing the first federal program specifically for individual household-level pre-disaster mitigation grants, shifting focus from post-disaster relief to proactive measures.
• Requires periodic (every 5 years) updates to high-risk area designations using scientific data and past disaster declarations, with mandatory consultations involving states, tribes, and experts.

• Amendments to the Internal Revenue Code (IRC):
• Expands Section 139 to exclude new categories of disaster-related payments (federal grants, state mitigation funds, agricultural aids) from taxable income, broadening relief beyond existing post-disaster aid.
• Adds Section 28, creating a dedicated tax credit for mitigation spending, integrated into business and personal credit systems; this is a novel incentive not previously available for such activities.
• Includes conforming changes to Sections 38 (general business credit) and 1016 (basis adjustments) to align with the new provisions.

These changes do not preempt state insurance regulations or mandate data collection beyond what's already available.

Potential Impacts

• On Government Agencies:
• FEMA and the President gain new responsibilities for program administration, risk assessments, standard-setting, and committee oversight, potentially increasing workload and requiring coordination with the Federal Insurance Office.
• The IRS must process expanded exclusions and a new credit, which could add to administrative costs but simplify tax filing for recipients.
• States and tribes receive funding streams but must develop plans and evaluate applications, possibly straining resources in high-risk areas.

• On Citizens:
• Homeowners in eligible high-risk areas (e.g., floodplains, wildfire zones) can access up to $10,000 in non-taxable grants plus a 30% tax credit, making disaster-proofing more affordable, especially for lower-income families.
• Could reduce future personal losses from disasters and lower insurance premiums through incentives, benefiting millions in disaster-prone regions like California, Florida, and the Gulf Coast.
• Agricultural producers gain tax-free aid for disaster-impacted operations, aiding recovery in rural areas.

• On International Relations:
• No direct impacts; the bill focuses on domestic disaster policy and does not address foreign aid, trade, or global standards.

Overall, the legislation promotes long-term cost savings by reducing federal disaster response spending (estimated at billions annually) through prevention.

Main Stakeholders Affected

• Homeowners and Residents: Primary beneficiaries, particularly in high-risk areas, gaining financial support for home improvements.
• States and Indian Tribal Governments: Recipients of grants, responsible for program implementation and insurance assessments.
• Insurance Industry: Insurers, reinsurers, brokers, and state regulators benefit from potential market stabilization and incentives for discounts on mitigated properties; required to consult on program design.
• Federal Agencies: FEMA (program lead), IRS (tax administration), and the Department of Agriculture (agricultural aid expansions).
• Consumer, Environmental, and Industry Groups: Advisory committee members, including advocates, builders, realtors, firefighters, and researchers, influencing standards and activities.
• Agricultural Sector: Farmers and producers eligible for expanded tax exclusions on disaster aid.

Notable Legal, Constitutional, or Political Implications

• Legal Implications: Reinforces federal-state partnerships under the Stafford Act without overriding state insurance authority (a key "rules of construction" clause preserves McCarran-Ferguson Act principles, which protect state regulation of insurance). Tax provisions align with IRC norms, avoiding double benefits via basis reductions. Potential for litigation if grant distributions are seen as unequal, but income caps and plan requirements provide equity safeguards.
• Constitutional Implications: No apparent challenges; uses Congress's spending power (Article I) to incentivize state actions and tax authority (Sixteenth Amendment) for credits/exclusions. Consultations with tribes uphold federal trust responsibilities.
• Political Implications: Bipartisan sponsorship (119 cosponsors from both parties, focused on disaster-vulnerable states) signals broad support for resilience amid rising climate risks. Could set precedent for future preventive spending, but funding source (not specified) may spark debates on budget priorities. Emphasizes science-based decisions, potentially bridging partisan divides on environmental policy.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Thompson, Mike [D-CA-4]

Cosponsors (62)

Rep. LaMalfa, Doug [R-CA-1], Rep. Kim, Young [R-CA-40], Rep. Obernolte, Jay [R-CA-23], Rep. Valadao, David G. [R-CA-22], Rep. Barragán, Nanette Diaz [D-CA-44], Rep. Brownley, Julia [D-CA-26], Rep. Carbajal, Salud O. [D-CA-24], Rep. Carter, Troy A. [D-LA-2], Rep. Case, Ed [D-HI-1], Rep. Castor, Kathy [D-FL-14], Rep. Chu, Judy [D-CA-28], Rep. Cisneros, Gilbert Ray, Jr. [D-CA-31], Rep. Costa, Jim [D-CA-21], Rep. Fields, Cleo [D-LA-6], Rep. Frankel, Lois [D-FL-22], Rep. Frost, Maxwell [D-FL-10], Rep. Garamendi, John [D-CA-8], Rep. Goldman, Daniel S. [D-NY-10], Rep. Harder, Josh [D-CA-9], Rep. Huffman, Jared [D-CA-2], Rep. Jacobs, Sara [D-CA-51], Rep. Kamlager-Dove, Sydney [D-CA-37], Rep. Khanna, Ro [D-CA-17], Rep. Levin, Mike [D-CA-49], Rep. Lieu, Ted [D-CA-36], Rep. Matsui, Doris O. [D-CA-7], Rep. McIver, LaMonica [D-NJ-10], Rep. Moskowitz, Jared [D-FL-23], Rep. Mullin, Kevin [D-CA-15], Rep. Neguse, Joe [D-CO-2], Del. Norton, Eleanor Holmes [D-DC-At Large], Rep. Panetta, Jimmy [D-CA-19], Rep. Pettersen, Brittany [D-CO-7], Rep. Ruiz, Raul [D-CA-25], Rep. Schrier, Kim [D-WA-8], Rep. Takano, Mark [D-CA-39], Rep. Tlaib, Rashida [D-MI-12], Rep. Tokuda, Jill N. [D-HI-2], Rep. Torres, Norma J. [D-CA-35], Rep. Vasquez, Gabe [D-NM-2], Rep. Whitesides, George [D-CA-27], Rep. Friedman, Laura [D-CA-30], Rep. Garcia, Robert [D-CA-42], Rep. Min, Dave [D-CA-47], Rep. DeSaulnier, Mark [D-CA-10], Rep. Sánchez, Linda T. [D-CA-38], Rep. Sewell, Terri A. [D-AL-7], Rep. Craig, Angie [D-MN-2], Rep. Bera, Ami [D-CA-6], Rep. Velázquez, Nydia M. [D-NY-7] and 12 more

Recent Actions

• 2025-02-06: Referred to the Subcommittee on Economic Development, Public Buildings, and Emergency Management.
• 2025-02-06: Referred to the Committee on Ways and Means, and in addition to the Committee on Transportation and Infrastructure, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
• 2025-02-06: Referred to the Committee on Ways and Means, and in addition to the Committee on Transportation and Infrastructure, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
• 2025-02-06: Introduced in House
• 2025-02-06: Introduced in House

Bill Versions

• Disaster Resiliency and Coverage Act of 2025 — issued 2025-02-06 — PDF (23 pages)