Yuba-Sutter Times

On March 5, 2025, a bipartisan group of U.S. representatives introduced the Disaster Mitigation and Tax Parity Act in Washington, D.C. The bill, proposed by Congressman Doug LaMalfa (R-Richvale), Congressman Mike Thompson (D-CA), Congressman Greg Murphy, M.D. (R-NC), and Congressman Jimmy Panetta (D-CA), aims to exempt federal taxes on rebates given to homeowners for disaster mitigation efforts.

Congressman Doug LaMalfa emphasized the need to address the current tax disparities between federal and state disaster assistance programs. “Homeowners shouldn’t be hit with unexpected federal taxes just because they received rebates through state and local programs,” he stated. He highlighted the unfair tax burden that affects homeowners during difficult times.

California's vulnerability to climate-related disasters was underscored by Congressman Mike Thompson. He expressed pride in reintroducing legislation with Rep. LaMalfa to provide federal tax exemptions for these crucial programs, enhancing community resilience against natural disasters.

Congressman Greg Murphy pointed out that catastrophe mitigation payments should not be considered taxable income, especially in hurricane-prone regions like Eastern North Carolina. "Adequate preparation for storms is a valuable investment and should be strongly incentivized," he remarked.

The issue of unexpected tax burdens on survivors of natural disasters was raised by Congressman Jimmy Panetta. “The Disaster Mitigation and Tax Parity Act fixes this by ensuring state-based disaster grants receive the same federal tax exemption as FEMA assistance,” he said.

States such as California and North Carolina offer rebates for homeowners who undertake protective measures against natural disasters. However, when these rebates are sourced from state or local entities, they become subject to federal taxation—a discrepancy not applied to energy conservation improvements.

Congressman Doug LaMalfa serves as Chairman of the Congressional Western Caucus and represents California’s First Congressional District.