Bipartisan legislation introduced to ease rebuilding costs for disaster survivors

SACRAMENTO – Senators Megan Dahle (R-Bieber) and Ben Allen (D-Pacific Palisades) introduced SB 1343 to provide a tax credit for purchases to rebuild property that was damaged or destroyed by a natural disaster.

“Over one year since the horrific LA Fires tore through our community, thousands of residents remain displaced and are struggling to cover the costs to rebuild,” said Senator Allen. “We know this is not a unique circumstance following a disaster. This tax credit would offer needed financial relief to provide disaster survivors with a more stable pathway to a successful recovery effort.”

The 2025 LA Fires combined to be the costliest natural disaster in state history. Many property owners that remain displaced by the disaster were un- or underinsured, or otherwise face insurance challenges that significantly hinder their individual recovery efforts. Insurance payments often do not cover the full cost of rebuilding, and the financial undertaking is leaving many survivors unsure of how or whether they will be able to return to their community in the end.

SB 1343 would ease these financial stresses by providing an income tax credit, up to $10,000, to recoup sales tax costs for construction materials or furniture purchased to rebuild a home within three years of a disaster. The tax credit would apply to Californians rebuilding a primary residence and nonprofit housing developers. If passed, residents can claim the credit when filing taxes in 2027 for rebuilding costs incurred over the previous three years.

“This goes beyond helping Los Angeles residents rebuild,” said Senator Dahle. “This tax relief would provide concrete financial help to all Californians rebuilding after any disaster. Unfortunately, we know we have not seen the last wildfire burning into communities in the North State. This legislation will help prepare for the worst by cutting rebuilding costs and speeding recovery.”

Construction materials eligible for the tax credit would include items such as tools and hardware, roofing shingles and paper, gutters, downspouts, vents, doors, windows, sheetrock, drywall, insulation, paint and paint materials, cleaning and disinfecting materials, and flooring. It would apply to these construction items that are less than $500 per unit.

Eligible furniture items, beyond those commonly found in a home, would also include appliances such as water heaters, dishwashers, washer and dryer units, refrigerators and freezers, stoves, ovens, cooktops, microwaves, vacuums, and fans. It would apply to these items that are less than $3,500 each.

“From early on, the Palisades Recovery Coalition has been advocating for a policy like this — informed by what we see on the ground every day. A tax credit on rebuilding materials that puts a portion of the sales tax residents are paying back into the hands of fire survivors serves as a reinvestment into communities recovering from the fire,” said Maryam Zar, Founder and President of the Palisades Recovery Coalition. “Families are absorbing extraordinary costs to come home. Returning some of that burden to them in a structured, targeted way is a practical step that supports real recovery.

“Through working with contractors, nonprofits, and public officials, we have a clear line of sight into what is working here and where the financial strain is most acute. This measure reflects the lived experiences of rebuilding and the feedback we are hearing in real time. We appreciate Senator Ben Allen and Senator Megan Dahle’s leadership in advancing this bill and their willingness to engage with the community’s perspective as recovery continues,” Zar added.

SB 1343 will be heard in its respective policy committee for a vote in the coming weeks.