U.S. Representative

U.S. Rep. Dennis Ross (FL-15) introduced H.R. 3298, the Disaster Savings Accounts Act of 2013. This bill will allow individuals to set aside up to $5,000 annually in a tax-free account to use for disaster mitigation expenses.

“Natural disasters affect Floridians and Americans all across the country. While we don’t know very far in advance where or when exactly a disaster will strike, we can plan ahead for its arrival. Whether it’s a tornado, blizzard, earthquake, wildfire, or hurricane, people should have the ability to set aside some of their money each year for disaster mitigation to purchase items that increase the safety of their home, like cement-fortified walls, storm shutters, or generators. This legislation will incentivize people to plan ahead for their safety and reduce the need for taxpayer-funded government intervention in the event of a natural disaster.”


Background:

• Click here for the bill text of H.R. 3298
• The Disaster Savings Accounts Act of 2013 creates a new section (Section 224) within the Internal Revenue Code of 1986 detailing Disaster Savings Accounts and the permitted use of tax-deferred dollars.
• SEC. 224 (New section of Internal Revenue Code) – Disaster Savings Accounts:
  • Permits eligible individuals to set aside up to $5,000 annually in a tax-deferred account to use for disaster mitigation expenses.
  • Allows the DSA to be established under the management of a “Trustee”, which can be a bank, insurance company, or other entity that can demonstrate proper management and distribution of funds as detailed by this act.
  • An eligible individual is one who owns property, upon which a structure sits that is also insured by a policy traditionally required by the mortgage-holding lender.
  • Examples of hazards include earthquakes, floods, hail, hurricanes, lightening, power outages, tornadoes, wildfires and any other natural disasters.
  • Remaining DSA funds may roll over into the following year.
  • Includes a 20 percent penalty tax on funds withdrawn from a DSA and used for purposes other than disaster mitigation expenses.