In light of disasters across the country over the past year, U.S. Reps. Laurel Lee (R-FL) and Jared Moskowitz (F-FL) introduced legislation on Jan. 16 that would allow individuals to create tax-free savings accounts to help with disaster mitigation response.
The legislation, the Residential Emergency Asset Accumulation Deferred Taxation Yield (READY) Account (READY) Act, would allow taxpayers to establish accounts similar to a Health Savings Account for use in at least 12 different mitigation measures like strengthening the connection of the roof to the home; installing impact-resistant windows and doors; and elevating the home or constructing floodwalls to mitigate against flooding.
“In the midst of devastating California wildfires and after catastrophic hurricanes in Florida, the American people have seen the terrible destruction caused by severe weather events and how critical it is to prepare before disaster strikes. I am proud to introduce the READY Account Act to help American families invest in resilience and to mitigate the costs of disaster recovery projects,” Lee said. “I always encourage my constituents to prepare before a disaster strikes, and a READY account will make it easier for families to strengthen their homes against damage from a storm or natural disaster.”
The legislation would amend the IRS Code to allow taxpayers to establish the account and create three tax benefits – an annual tax deduction for the amount paid into the account that year, and tax exemption for any growth in the account, and tax exemption for any amount withdrawn for mitigation efforts. Taxpayers would be able to contribute up to $4,500 per year and the account must be used to save and pay for either mitigation or recovery measures on the taxpayers primary residence.
The legislation is endorsed by Jimmy Patronis, Florida’s Chief Financial Officer; the National Association of Insurance and Financial Advisors; the Florida Insurance Council; the American Property Casualty Insurance Association; and the National Association of Mutual Insurance Companies.
“Disaster preparedness saves lives, and it can help reduce recovery costs when disasters hit the homes of hardworking Florida families,” Moskowitz said. “For families in Florida and across the nation, this commonsense bill will lower sky-high insurance costs, help them stay ready, and keep their hard-earned money in their pockets.”