Senator Thom Tillis from North Carolina is proposing a new law that would remove income taxes on money given to people through state programs designed to help prevent damage from natural disasters. This proposal has gained support from both Republicans and Democrats, including Insurance Commissioner Mike Causey, who is the only Republican holding that position in North Carolina.
The bill, called the Disaster Mitigation and Tax Parity Act of 2025 (Senate Bill 336), has been sent to the Senate Finance Committee, which is led by Republican Senator Mike Crapo from Idaho.
The reason for this proposal is the serious damage caused by recent natural disasters. For example, Hurricane Helene caused $53 billion in damages in North Carolina, destroying homes, communities, and taking 104 lives. Across seven states, the storm resulted in 233 deaths. Wildfires in California earlier this year killed 29 people, forced 250,000 people to evacuate, and damaged over 18,000 buildings.
Senator Tillis believes that by making catastrophe mitigation grants tax-free, more homeowners will be encouraged to make their properties safer. He says this approach will help families rebuild quickly after disasters and make communities stronger against future disasters. Insurance Commissioner Causey agrees, explaining that these grants could improve the insurance market, making it more stable and affordable for homeowners.
The North Carolina Insurance Association supports the idea too. CEO Gina Hardy explained that if these grants aren’t taxed, homeowners can use the money to improve their homes, making them more resistant to damage from storms and other disasters.
The bill defines a “qualified catastrophe mitigation payment” as any payment made to improve a property in ways that reduce damage from disasters like hurricanes, earthquakes, floods, or wildfires.
This proposal has broad support. Democratic Senator Adam Schiff and Republican Senator Bill Cassidy are co-sponsoring the bill, along with several other senators, including Ted Budd from North Carolina, John Kennedy from Louisiana, and John Hickenlooper from Colorado. The goal is to help homeowners protect their homes without facing additional taxes and to ensure that disaster recovery efforts are more effective.
By supporting this legislation, lawmakers hope to make it easier for Americans to recover and rebuild after disasters, reducing the financial strain they face.
