Homeowner Natural Disaster Mitigation

Second Regular Session
Seventy-fifth General Assembly
STATE OF COLORADO
INTRODUCED

LLS NO. 26-0507.02 Sam Anderson x4218 SENATE BILL 26-049
Senate Committees House Committees
Finance
A BILL FOR AN ACT
CONCERNING HOMEOWNER NATURAL DISASTER MITIGATION.101
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
SENATE SPONSORSHIP
Snyder and Frizell,
HOUSE SPONSORSHIP
Camacho,
Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
Capital letters or bold & italic numbers indicate new material to be added to existing law.
Dashes through the words or numbers indicate deletions from existing law.
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.
Be it enacted by the General Assembly of the State of Colorado:1
SECTION 1. In Colorado Revised Statutes, 24-33.5-1619,2
amend (2)(b), (3)(a), and (7)(b) introductory portion; and add (2)(f.5),3
(2)(h), and (3)(c)(III.5) as follows:4
24-33.5-1619. Natural disaster mitigation enterprise - fund -5
goals - grant program - gifts, grants, or donations - legislative6
declaration - definitions - repeal.7
(2) Definitions. As used in this section, unless the context8
otherwise requires:9
(b) "Eligible entity" means:10
(I) A governing subdivision of the state, including counties,11
municipalities, school districts, and special districts, that implements or12
intends to implement natural disaster mitigation measures, or that is13
applying for a federal grant that both requires matching funds and is14
dedicated to assisting in the implementation of pre-disaster natural15
disaster mitigation measures; OR16
(II) A HOMEOWNERS ' ASSOCIATION OR AN INDIVIDUAL17
HOMEOWNER THAT IMPLEMENTS OR INTENDS TO IMPLEMENT NATURAL18
DISASTER MITIGATION MEASURES.19
(f.5) "IMPACT-RESISTANT ROOFING MATERIAL" MEANS A ROOFING20
MATERIAL THAT HAS BEEN TESTED AND CERTIFIED THROUGH THE21
UNDERWRITERS LABORATORIES 2218 STANDARD FOR IMPACT22
RESISTANCE OF PREPARED ROOF COVERING MATERIALS AS A CLASS FOUR23
SB26-049-2-
MATERIAL AND DESIGNED FOR HAIL RESISTANCE.1
(h) "P ROPERTY-SPECIFIC MITIGATION ACTION " MEANS A2
SCIENCE-BASED MITIGATION ACTION AS DEMONSTRATED BY THE3
"WILDFIRE PREPARED HOME" DESIGNATION FROM THE INSURANCE4
INSTITUTE FOR BUSINESS AND HOME SAFETY OR BY A SIMILAR5
MITIGATION PROGRAM THAT INCLUDES A VERIFICATION AND6
CERTIFICATION PROCESS.7
(3) Enterprise.8
(a) There is hereby created in the department the natural disaster9
mitigation enterprise. The enterprise is and operates as a10
government-owned business within the department for the business11
purpose of collecting the fee charged to certain insurers, and utilizing the12
fee revenue to administer the grant program and to provide local13
governments, HOMEOWNERS ' ASSOCIATIONS , AND INDIVIDUAL14
HOMEOWNERS technical assistance on natural disaster mitigation. The15
enterprise exercises its powers and performs its duties and functions16
under the department as if transferred to the department by a type 217
transfer, as defined in the "Administrative Organization Act of 1968",18
article 1 of this title 24.19
(c) The enterprise's primary powers and duties are to:20
(III.5) P ROVIDE GRANTS TO HOMEOWNERS ' ASSOCIATIONS AND21
INDIVIDUAL HOMEOWNERS TO INSTALL IMPACT-RESISTANT ROOFING AND22
COMPLETE PROPERTY-SPECIFIC MITIGATION ACTIONS.23
(7) Grant program.24
(b) The purpose of the grant program is to achieve the goals25
specified in subsection (6) of this section by assisting entities that are26
implementing disaster mitigation measures, or that have applied for27
SB26-049-3-
federal grants that both require matching funds and are dedicated to1
assisting in the implementation of pre-disaster natural disaster mitigation2
measures. The board may not award grants for renewable energy3
generation projects, resources, or technologies. The board may award4
grants for projects that include slope stabilization, watershed restoration,5
fuels mitigation, drought mitigation, IMPACT-RESISTANT ROOFING6
MATERIALS INSTALLATION, PROPERTY-SPECIFIC MITIGATION ACTIONS, and7
similar activities that directly reduce risks to communities, lives, and8
property. The board shall establish criteria to evaluate and prioritize9
applications for grants, based on:10
SECTION 2. In Colorado Revised Statutes, 39-22-104, add11
(4)(ff) as follows:12
39-22-104. Income tax imposed on individuals, estates, and13
trusts - single rate - report - tax preference performance statement14
- legislative declaration - definitions - repeal.15
(4) There shall be subtracted from federal taxable income:16
(ff) (I) F OR INCOME TAX YEARS COMMENCING ON OR AFTER17
JANUARY 1, 2027, BUT PRIOR TO JANUARY 1, 2037, AN AMOUNT EQUAL TO18
THE AMOUNT THAT A TAXPAYER CONTRIBUTED TO A CATASTROPHE19
SAVINGS ACCOUNT DURING THE INCOME TAX YEAR, NOT TO EXCEED FIFTY20
THOUSAND DOLLARS.21
(II) I N ACCORDANCE WITH SECTION 39-21-304 (1), WHICH22
REQUIRES EACH BILL THAT CREATES A NEW TAX EXPENDITURE TO INCLUDE23
A TAX PREFERENCE PERFORMANCE STATEMENT AS PART OF A STATUTORY24
LEGISLATIVE DECLARATION , THE GENERAL ASSEMBLY FINDS AND25
DECLARES THAT:26
(A) THE PURPOSE OF THE INCOME TAX SUBTRACTION CREATED IN27
SB26-049-4-
THIS SUBSECTION (4)(ff) IS TO PROVIDE TAX RELIEF FOR CERTAIN1
INDIVIDUALS, SPECIFICALLY TAXPAYERS WHO INVEST IN NATURAL2
DISASTER MITIGATION; AND3
(B) T HE GENERAL ASSEMBLY AND THE STATE AUDITOR SHALL4
MEASURE THE EFFECTIVENESS OF THE SUBTRACTION IN ACHIEVING THE5
PURPOSE SPECIFIED IN THIS SUBSECTION (4)(ff) BASED ON THE NUMBER6
AND AGGREGATE AMOUNT OF SUBTRACTIONS CLAIMED.7
(III) A CATASTROPHE SAVINGS ACCOUNT IS NOT SUBJECT TO8
ATTACHMENT, LEVY, GARNISHMENT, OR LEGAL PROCESS IN THE STATE.9
(IV) I NTEREST INCOME EARNED BY A CATASTROPHE SAVINGS10
ACCOUNT SHALL BE EXEMPT FROM TAXATION.11
(V) AS USED IN THIS SUBSECTION (4)(ff), UNLESS THE CONTEXT12
OTHERWISE REQUIRES:13
(A) "C ATASTROPHE SAVINGS ACCOUNT " MEANS A REGULAR14
SAVINGS ACCOUNT OR MONEY MARKET ACCOUNT ESTABLISHED BY : A15
TAXPAYER WHO IS AN INSURANCE POLICYHOLDER FOR RESIDENTIAL16
PROPERTY IN COLORADO TO COVER AN INSURANCE DEDUCTIBLE UNDER AN17
INSURANCE POLICY FOR THE TAXPAYER'S LEGAL RESIDENCE THAT COVERS18
ROOF REPLACEMENT WITH IMPACT -RESISTANT ROOFING MATERIALS ,19
PROPERTY-SPECIFIC MITIGATION ACTION , HAIL , WILDFIRE , OR OTHER20
CATASTROPHIC WIND EVENT DAMAGE ; BY A TAXPAYER TO COVER21
SELF-INSURED LOSSES FOR THE TAXPAYER'S LEGAL RESIDENCE FROM HAIL,22
WILDFIRE, OR OTHER CATASTROPHIC WIND EVENT; OR A TAXPAYER TO PAY23
A QUALIFIED CATASTROPHE EXPENSE. A TAXPAYER MAY ESTABLISH ONLY24
ONE CATASTROPHE SAVINGS ACCOUNT . THE SOLE PURPOSE OF THE25
ACCOUNT, INCLUDING EARNED INTEREST , IS TO COVER THE AMOUNT OF26
INSURANCE DEDUCTIBLES AND OTHER UNINSURED PORTIONS OF RISKS OF27
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LOSS FROM HAIL , WILDFIRE , OR A CATASTROPHIC WIND EVENT OR A1
QUALIFIED CATASTROPHE EXPENSE.2
(B) "FORTIFIED" MEANS A HOMEBUILDING STANDARD PROGRAM3
FROM THE INSURANCE INSTITUTE FOR BUSINESS AND HOME SAFETY OR A4
SIMILAR ENTITY THAT RESEARCHES BUILDING MATERIALS SPECIFICALLY5
DESIGNED TO PREVENT DAMAGE FROM NATURAL DISASTERS , INCLUDING6
BUT NOT LIMITED TO HIGH WINDS, HURRICANES, HAILSTORMS, AND SEVERE7
THUNDERSTORMS.8
(C) "IMPACT-RESISTANT ROOFING MATERIALS" MEANS A ROOFING9
MATERIAL THAT HAS BEEN TESTED AND CERTIFIED THROUGH THE10
UNDERWRITERS LABORATORIES 2218 STANDARD FOR IMPACT11
RESISTANCE OF PREPARED ROOF COVERING MATERIALS AS A CLASS FOUR12
MATERIAL AND DESIGNED FOR HAIL RESISTANCE.13
(D) "LEGAL RESIDENCE" MEANS THE RESIDENCE OF AN INDIVIDUAL14
THAT IS THE PRINCIPAL OR PRIMAR Y HOME OR PLACE OF ABODE OF THE15
INDIVIDUAL AND IS THE PLACE IN WHICH THE INDIVIDUAL'S HABITATION IS16
FIXED. A LEGAL RESIDENCE MUST BE A PERMANENT BUILDING OR PART OF17
A BUILDING AND MAY INCLUDE A HOUSE OR CONDOMINIUM . A VACANT18
LOT OR BUSINESS ADDRESS IS NOT A LEGAL RESIDENCE.19
(E) "P ROPERTY-SPECIFIC MITIGATION ACTION " MEANS A20
SCIENCE-BASED MITIGATION ACTION AS DEMONSTRATED BY THE21
"WILDFIRE PREPARED HOME" DESIGNATION FROM THE INSURANCE22
INSTITUTE FOR BUSINESS AND HOME SAFETY OR BY A SIMILAR23
MITIGATION PROGRAM THAT INCLUDES A VERIFICATION AND24
CERTIFICATION PROCESS.25
(F) "QUALIFIED CATASTROPHE EXPENSES" MEANS EXPENSES PAID26
OR INCURRED BY REASON OF PREPARATION FOR OR ROOF REPLACEMENT27
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AND REPAIRS RELATED TO DAMAGE CAUSED BY HAIL , WILDFIRE, OR A1
CATASTROPHIC WIND EVENT , INCLUDING THE ANNUAL COST OF A2
FORTIFIED ENDORSEMENT TO SUPPLEMENT AN INSURANCE POLICY; THE3
COST OF MITIGATION ACTIONS THAT WOULD REDUCE THE RISK OF4
WILDFIRE, HAIL DAMAGE, OR OTHER CATASTROPHIC WIND EVENT DAMAGE;5
OBTAINING EVALUATION SERVICES TO QUALIFY FOR A FORTIFIED6
DESIGNATION; OR THE COST OF COMPLETING A PROPERTY -SPECIFIC7
MITIGATION ACTION UNDER THE "WILDFIRE PREPARED HOME" PROGRAM8
OR A SIMILAR MITIGATION PROGRAM THAT INCLUDES A VERIFICATION AND9
CERTIFICATION PROCESS.10
(VI) THIS SUBSECTION (4)(ff) IS REPEALED, EFFECTIVE JANUARY11
1, 2042.12
SECTION 3. Act subject to petition - effective date. This act13
takes effect at 12:01 a.m. on the day following the expiration of the14
ninety-day period after final adjournment of the general assembly (August15
12, 2026, if adjournment sine die is on May 13, 2026); ex cept that, if a16
referendum petition is filed pursuant to section 1 (3) of article V of the17
state constitution against this act or an item, section, or part of this act18
within such period, then the act, item, section, or part will not take effect19
unless approved by the people at the general election to be held in20
November 2026 a nd, in such cas e, will take effect on the date of the21
official declaration of the vote thereon by the governor.22
SB26-049-7-