A Bill for an Act
Page 1, Line 101Concerning homeowner natural disaster mitigation.
Bill Summary
(Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://leg.colorado.gov.)
The bill adds individuals and homeowners' associations as eligible recipients of assistance from the natural disaster mitigation enterprise fund. The bill also provides that natural disaster mitigation includes installation of "impact-resistant roofing materials" and other "property-specific mitigation action" and provides definitions of the same.
Additionally, the bill creates an income tax deduction for contributions to a catastrophe savings account (CSA), which is a savings account that a homeowner may use to cover the amount of insurance deductibles for claims stemming from hail, wildfire, or a catastrophic wind event, uninsured losses related to the same, and property-specific mitigation actions. The bill also exempts interest earned by CSAs from income tax.
Page 2, Line 1Be it enacted by the General Assembly of the State of Colorado:
Page 2, Line 2SECTION 1. In Colorado Revised Statutes, 24-33.5-1619,
Page 2, Line 3amend (2)(b), (3)(a), and (7)(b) introductory portion; and add (2)(f.5),
Page 2, Line 4(2)(h), and (3)(c)(III.5) as follows:
Page 2, Line 524-33.5-1619. Natural disaster mitigation enterprise - fund -
Page 2, Line 6goals - grant program - gifts, grants, or donations - legislative
Page 2, Line 7declaration - definitions - repeal.
Page 2, Line 8(2) Definitions. As used in this section, unless the context
Page 2, Line 9otherwise requires:
Page 2, Line 10(b) "Eligible entity" means:
Page 2, Line 11(I) A governing subdivision of the state, including counties,
Page 2, Line 12municipalities, school districts, and special districts, that implements or
Page 2, Line 13intends to implement natural disaster mitigation measures, or that is
Page 2, Line 14applying for a federal grant that both requires matching funds and is
Page 2, Line 15dedicated to assisting in the implementation of pre-disaster natural
Page 2, Line 16disaster mitigation measures; or
Page 2, Line 17(II) A homeowners' association or an individual
Page 2, Line 18homeowner that implements or intends to implement natural
Page 2, Line 19disaster mitigation measures.
Page 2, Line 20(f.5) "Impact-resistant roofing material" means a roofing
Page 2, Line 21material that has been tested and certified through the
Page 2, Line 22Underwriters Laboratories 2218 Standard for Impact
Page 2, Line 23Resistance of Prepared Roof Covering Materials as a class four
Page 3, Line 1material and designed for hail resistance.
Page 3, Line 2(h) "Property-specific mitigation action" means a
Page 3, Line 3science-based mitigation action as demonstrated by the
Page 3, Line 4"Wildfire Prepared Home" designation from the Insurance
Page 3, Line 5Institute for Business and Home Safety or by a similar
Page 3, Line 6mitigation program that includes a verification and
Page 3, Line 7certification process.
Page 3, Line 8(3) Enterprise.
Page 3, Line 9(a) There is hereby created in the department the natural disaster
Page 3, Line 10mitigation enterprise. The enterprise is and operates as a
Page 3, Line 11government-owned business within the department for the business
Page 3, Line 12purpose of collecting the fee charged to certain insurers, and utilizing the
Page 3, Line 13fee revenue to administer the grant program and to provide local
Page 3, Line 14governments, homeowners' associations, and individual
Page 3, Line 15homeowners technical assistance on natural disaster mitigation. The
Page 3, Line 16enterprise exercises its powers and performs its duties and functions
Page 3, Line 17under the department as if transferred to the department by a type 2
Page 3, Line 18transfer, as defined in the "Administrative Organization Act of 1968",
Page 3, Line 19article 1 of this title 24.
Page 3, Line 20(c) The enterprise's primary powers and duties are to:
Page 3, Line 21(III.5) Provide grants to homeowners' associations and
Page 3, Line 22individual homeowners to install impact-resistant roofing and
Page 3, Line 23complete property-specific mitigation actions.
Page 3, Line 24(7) Grant program.
Page 3, Line 25(b) The purpose of the grant program is to achieve the goals
Page 3, Line 26specified in subsection (6) of this section by assisting entities that are
Page 3, Line 27implementing disaster mitigation measures, or that have applied for
Page 4, Line 1federal grants that both require matching funds and are dedicated to
Page 4, Line 2assisting in the implementation of pre-disaster natural disaster mitigation
Page 4, Line 3measures. The board may not award grants for renewable energy
Page 4, Line 4generation projects, resources, or technologies. The board may award
Page 4, Line 5grants for projects that include slope stabilization, watershed restoration,
Page 4, Line 6fuels mitigation, drought mitigation, impact-resistant roofing
Page 4, Line 7materials installation, property-specific mitigation actions, and
Page 4, Line 8similar activities that directly reduce risks to communities, lives, and
Page 4, Line 9property. The board shall establish criteria to evaluate and prioritize
Page 4, Line 10applications for grants, based on:
Page 4, Line 11SECTION 2. In Colorado Revised Statutes, 39-22-104, add
Page 4, Line 12(4)(ff) as follows:
Page 4, Line 1339-22-104. Income tax imposed on individuals, estates, and
Page 4, Line 14trusts - single rate - report - tax preference performance statement
Page 4, Line 15- legislative declaration - definitions - repeal.
Page 4, Line 16(4) There shall be subtracted from federal taxable income:
Page 4, Line 17(ff) (I) For income tax years commencing on or after
Page 4, Line 18January 1, 2027, but prior to January 1, 2037, an amount equal to
Page 4, Line 19the amount that a taxpayer contributed to a catastrophe
Page 4, Line 20savings account during the income tax year, not to exceed fifty
Page 4, Line 21thousand dollars.
Page 4, Line 22(II) In accordance with section 39-21-304 (1), which
Page 4, Line 23requires each bill that creates a new tax expenditure to include
Page 4, Line 24a tax preference performance statement as part of a statutory
Page 4, Line 25legislative declaration, the general assembly finds and
Page 4, Line 26declares that:
Page 4, Line 27(A) The purpose of the income tax subtraction created in
Page 5, Line 1this subsection (4)(ff) is to provide tax relief for certain
Page 5, Line 2individuals, specifically taxpayers who invest in natural
Page 5, Line 3disaster mitigation; and
Page 5, Line 4(B) The general assembly and the state auditor shall
Page 5, Line 5measure the effectiveness of the subtraction in achieving the
Page 5, Line 6purpose specified in this subsection (4)(ff) based on the number
Page 5, Line 7and aggregate amount of subtractions claimed.
Page 5, Line 8(III) A catastrophe savings account is not subject to
Page 5, Line 9attachment, levy, garnishment, or legal process in the state.
Page 5, Line 10(IV) Interest income earned by a catastrophe savings
Page 5, Line 11account shall be exempt from taxation.
Page 5, Line 12(V) As used in this subsection (4)(ff), unless the context
Page 5, Line 13otherwise requires:
Page 5, Line 14(A) "Catastrophe savings account" means a regular
Page 5, Line 15savings account or money market account established by: a
Page 5, Line 16taxpayer who is an insurance policyholder for residential
Page 5, Line 17property in Colorado to cover an insurance deductible under an
Page 5, Line 18insurance policy for the taxpayer's legal residence that covers
Page 5, Line 19roof replacement with impact-resistant roofing materials,
Page 5, Line 20property-specific mitigation action, hail, wildfire, or other
Page 5, Line 21catastrophic wind event damage; by a taxpayer to cover
Page 5, Line 22self-insured losses for the taxpayer's legal residence from hail,
Page 5, Line 23wildfire, or other catastrophic wind event; or a taxpayer to pay
Page 5, Line 24a qualified catastrophe expense. A taxpayer may establish only
Page 5, Line 25one catastrophe savings account. The sole purpose of the
Page 5, Line 26account, including earned interest, is to cover the amount of
Page 5, Line 27insurance deductibles and other uninsured portions of risks of
Page 6, Line 1loss from hail, wildfire, or a catastrophic wind event or a
Page 6, Line 2qualified catastrophe expense.
Page 6, Line 3(B) "FORTIFIED" means a homebuilding standard program
Page 6, Line 4from the Insurance Institute for Business and Home Safety or a
Page 6, Line 5similar entity that researches building materials specifically
Page 6, Line 6designed to prevent damage from natural disasters, including
Page 6, Line 7but not limited to high winds, hurricanes, hailstorms, and severe
Page 6, Line 8thunderstorms.
Page 6, Line 9(C) "Impact-resistant roofing materials" means a roofing
Page 6, Line 10material that has been tested and certified through the
Page 6, Line 11Underwriters Laboratories 2218 Standard for Impact
Page 6, Line 12Resistance of Prepared Roof Covering Materials as a class four
Page 6, Line 13material and designed for hail resistance.
Page 6, Line 14(D) "Legal residence" means the residence of an individual
Page 6, Line 15that is the principal or primary home or place of abode of the
Page 6, Line 16individual and is the place in which the individual's habitation is
Page 6, Line 17fixed. A legal residence must be a permanent building or part of
Page 6, Line 18a building and may include a house or condominium. A vacant
Page 6, Line 19lot or business address is not a legal residence.
Page 6, Line 20(E) "Property-specific mitigation action" means a
Page 6, Line 21science-based mitigation action as demonstrated by the
Page 6, Line 22"Wildfire Prepared Home" designation from the Insurance
Page 6, Line 23Institute for Business and Home Safety or by a similar
Page 6, Line 24mitigation program that includes a verification and
Page 6, Line 25certification process.
Page 6, Line 26(F) "Qualified catastrophe expenses" means expenses paid
Page 6, Line 27or incurred by reason of preparation for or roof replacement
Page 7, Line 1and repairs related to damage caused by hail, wildfire, or a
Page 7, Line 2catastrophic wind event, including the annual cost of a
Page 7, Line 3FORTIFIED endorsement to supplement an insurance policy; the
Page 7, Line 4cost of mitigation actions that would reduce the risk of
Page 7, Line 5wildfire, hail damage, or other catastrophic wind event damage;
Page 7, Line 6obtaining evaluation services to qualify for a FORTIFIED
Page 7, Line 7designation; or the cost of completing a property-specific
Page 7, Line 8mitigation action under the "Wildfire Prepared Home" program
Page 7, Line 9or a similar mitigation program that includes a verification and
Page 7, Line 10certification process.
Page 7, Line 11(VI) This subsection (4)(ff) is repealed, effective January
Page 7, Line 121, 2042.
Page 7, Line 13SECTION 3. Act subject to petition - effective date. This act
Page 7, Line 14takes effect at 12:01 a.m. on the day following the expiration of the
Page 7, Line 15ninety-day period after final adjournment of the general assembly (August
Page 7, Line 1612, 2026, if adjournment sine die is on May 13, 2026); except that, if a
Page 7, Line 17referendum petition is filed pursuant to section 1 (3) of article V of the
Page 7, Line 18state constitution against this act or an item, section, or part of this act
Page 7, Line 19within such period, then the act, item, section, or part will not take effect
Page 7, Line 20unless approved by the people at the general election to be held in
Page 7, Line 21November 2026 and, in such case, will take effect on the date of the
Page 7, Line 22official declaration of the vote thereon by the governor.