U.S. Sen. Michael Bennet, D-Colo., has reintroduced the Shelter Act, which would provide tax credits to small businesses and families investing in natural disaster mitigation.
The bipartisan bill introduced with Sen. Bill Cassidy, R-La., mirrors tax credit proposals in President Joe Biden’s American Jobs Plan. The bill is supported by the American Institute of Architects, The Home Depot and other organizations.
“In Colorado, we know that a devastating natural disaster isn’t a matter of if, but when,” Bennet wrote in a news release. “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.”
Last year, wildfires surged across Colorado. La Plata County and other regions in the state have established restrictions and burn bans ahead of wildfire season.
The proposed legislation, originally introduced by Bennet, Cassidy and others in June 2019, would allow Americans to write off 25% of qualifying mitigation expenses. This includes strengthening roof durability and fulfilling fire maintenance procedures identified by the Federal Emergency Management Agency and the U.S. Forest Service.
Homes or businesses in or adjacent to an area where the federal government has deemed a disaster in the last decade are eligible. Taxpayers who rent properties in disaster-declared areas are also eligible. Up to $5,000 per taxpayer annually is available.
The credit established in the tax code would phase down for households earning more than $168,000 and phase out entirely for households earning over $250,000. For businesses, the credit phases down when businesses earn $5 million and phases out completely when revenue is more than $10 million.
“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,” said Eric Lovgren, Eagle County wildfire mitigation and resilience manager and REALFire project coordinator, in a news release for the legislation. “A federal tax credit of up to $5,000 for real cost associated with wildfire mitigation work will be a game changer for most homeowners in our Wildland Urban Interface.”
Kaela Roeder is an intern for The Durango Herald and The Journal in Cortez and a 2021 graduate of American University in Washington, D.C.