Natural disasters: catastrophe savings accounts: personal income tax.
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Majority
Fiscal committee
No
Appropriation
No
Current location
Appropriations
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Progress
Where this bill stands in the legislative process.
- Introduced
- Passed Assembly
- Passed Senate
- To Governor
- Became Law
Overview
This bill creates a system for homeowners to establish ‘catastrophe savings accounts’ to cover insurance deductibles and uninsured losses from wildfires, floods, or earthquakes. It allows homeowners to deduct contributions to these accounts from their adjusted gross income, similar to federal tax rules, and provides an exclusion for interest earned. The bill includes penalties for using account funds for non-qualified expenses and establishes reporting requirements to assess the program’s effectiveness.
Key provisions
- Establishes ‘catastrophe savings accounts’ for homeowners to cover wildfire, flood, or earthquake-related expenses.
- Allows homeowners to deduct contributions to these accounts from their adjusted gross income.
- Provides an exclusion for interest earned on these accounts until December 1, 2030.
- Imposes a penalty on homeowners who use account funds for expenses other than qualified catastrophe expenses.
- Defines ‘catastrophe savings account’ and ‘qualified catastrophe expenses’.
- Requires the Franchise Tax Board to report on the program’s impact annually.
- Sets a sunset date for the provisions of the bill (December 1, 2030).
- Includes provisions conforming to federal tax law.
Who is affected
- Homeowners in California
- Insurance policyholders
- The California Department of Financial Protection and Innovation
- The Franchise Tax Board
Bill text
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