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Natural Disaster Recovery: Prevention is Key
Featured in Sunshine State News.
As June 1 started the official 2015 hurricane season, we are reminded of the dark wreckage to our Sunshine State caused by Hurricanes Andrew, Charley, Jean, Frances, Ivan and Wilma. Although Florida has been blessed in not having suffered through a major hurricane in nearly a decade, we must not become complacent in our proactive defenses against these natural disasters. Hurricanes Katrina and Sandy should rattle us at our cores, knowing full well that hurricanes can fiercely gain speed and power before we have a chance to properly protect our families, homes and communities. Prevention is the key to this protection.
In order to help Floridians, and all Americans, better prepare for natural disasters and prevent their destruction, I proudly introduced HR 2230, the Disaster Savings Accounts (DSA) Act of 2015. This bill will allow individuals to proactively save pre-tax dollars for use toward disaster preparation and recovery expenses.
The DSA Act will establish a new tax-preferred savings account for the purpose of fortifying residential property (i.e., houses, condos or apartments) in preparation for an impending natural disaster and, in the aftermath, for rebuilding and damage expenses. The DSA would not only help in the recovery from hurricanes, but also from tornadoes, floods, sinkholes and other defined natural disasters. Homeowners and renters will be allowed to contribute up to $5,000 annually in pre-tax dollars to be used for DSA-qualified expenses, and any balance would roll over at the end of each year.
In addition to traditional expenses associated with disaster mitigation and repair of a residence, DSA accounts will allow homeowners and renters to utilize DSA funds for uninsured personal casualty losses for their homes. This process will help mitigate, and even prevent altogether, insurance premium increases in instances where available DSA funds for smaller-value damages would allow homeowners to avoid tapping into insurance coverage for damage repairs.
This legislation will provide individuals the ability to use saved funds for disaster prevention to purchase items that increase the safety of their homes, such as cemented-fortified walls, storm shutters and generators. This type of savings will help reduce federal costs to taxpayers because every $1 spent on mitigation can save up to $4 in future disaster recovery spending. Furthermore, the DSA Act incentivizes the private sector to build partnerships with individuals who proactively protect their homes by creating instalment programs for these purchased items.
We may be unable to fully predict when and how devastating natural disasters might strike, but the DSA Act's common-sense solution will give Americans the utilities and opportunities needed to prevent these disasters from harming their families and homes, while also giving them more control over their money.