1. Short title This Act may be cited as the Earthquake Mitigation Incentive and Tax Parity Act of 2017 . 2. Exclusion of earthquake loss mitigation received under State-based earthquake loss mitigation programs (a) In general Part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 139F the following new section: 139G. State-based earthquake loss mitigation programs (a) In general Gross income shall not include any earthquake loss mitigation received by a residential property owner or occupant under a State-based earthquake loss mitigation program. (b) Earthquake loss mitigation For purposes of this section— (1) In general The term earthquake loss mitigation means any property or service that reduces seismic risks to a residential structure or its contents. (2) Treatment of reimbursements, etc Such term shall include any payment, reimbursement, loan, loan forgiveness, grant, credit, rebate, voucher, or other financial incentive for any property or service described in paragraph (1). (3) Seismic The term seismic has the meaning given such term by section 4(3) of the Earthquake Hazards Reduction Act of 1977 ( 42 U.S.C. 7703(3) ). (c) Earthquake loss mitigation program For purposes of this section, the term earthquake loss mitigation program means any program which provides residential property owners or occupants with earthquake loss mitigation and which is established by a State, or agency, instrumentality, or political subdivision thereof, by itself or together with— (1) an organization described in section 501(c) and exempt from tax under section 501(a), (2) an organization determined to be exempt from State taxes pursuant to the laws of the relevant State, or (3) a public instrumentality of a State pursuant to a joint exercise of powers. (d) Special rules (1) No increase in basis Notwithstanding any other provision of this subtitle, no increase in the basis or adjusted basis of any property shall result from any amount excluded under this subsection with