,i #aacth ,,congress #b;d ,session ,h4 ,r4 #cihi ,,in ,,the ,,house ,,of ,,representatives ,february #d1 #bjad,mr4 ,ross introduced the following bill2 which was referred to the ,committee on ,ways and ,means ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to allow individuals a deduction for amounts contributed to disaster savings accounts to help defray the cost of preparing their homes to withstand a disaster and to repair or replace property damaged or destroyed in a disaster4 #a4 ,short title ,this ,act may be cited as the ,disaster ,savings ,accounts ,act of #bjac4 #b4 ,deduction for contributions to disaster savings accounts 7a7 ,in general ,part ,,vii of subchapter ,b of chapter #a of the ,internal ,revenue ,code of #aihf 7relating to additional itemized deductions for individuals7 is amended by redesignating section #bbd as section #bbe and by inserting after section #bbc the following new section3 #bbd4 ,disaster savings accounts 7a7 ,deduction allowed ,in the case of an eligible individual1 there shall be allowed as a deduction for the taxable year an amount equal to the aggregate amount paid during such taxable year by or on behalf of such individual to a disaster savings account of such individual4 7b7 ,limitation 7#a7 ,in general ,the amount allowed as a deduction under subsection 7a7 to an individual for the taxable year shall not exceed #e1jjj4 7#b7 ,partial year of eligibility ,in the case of an individual who is an eligible individual for only a portion of the taxable year1 the limitation under paragraph 7#a7 shall be the same proportion of #e1jjj as such portion bears to the entire taxable year4 7c7 ,eligible individual ,for purposes of this section1 the term eligible individual means any individual if such individual occupied any residence in the ,united ,states at any time during the taxable year4 7d7 ,disaster savings account ,for purposes of this section-- 7#a7 ,in general ,the term disaster savings account means a trust created or organized in the ,united ,states as a disaster savings account exclusively for the purpose of paying the qualified disaster expenses of the account beneficiary1 but only if the written governing instrument creating the trust meets the following requirements3 7,a7 ,except in the case of a rollover contribution described in subsection 7f77#e71 no contribution will be accepted-- 7i7 unless it is in cash1 or 7ii7 to the extent such contribution1 when added to previous contributions to the trust for the calendar year1 exceeds the dollar limitation in effect under subsection 7b74 7,b7 ,the trustee is a bank 7as defined in section #djh7n771 an insurance company 7as defined in section #haf71 or another person who demonstrates to the satisfaction of the ,secretary that the manner in which such person will administer the trust will be consistent with the requirements of this section4 7,c7 ,no part of the trust assets will be invested in life insurance contracts4 7,d7 ,the assets of the trust will not be commingled with other property except in a common trust fund or common investment fund4 7,e7 ,the interest of an individual in the balance in his account is nonforfeitable4 7#b7 ,qualified disaster expenses ,the term qualified disaster expenses means-- 7,a7 disaster mitigation expenses1 and 7,b7 disaster recovery expenses4 7#c7 ,disaster mitigation expenses ,the term disaster mitigation expenses means expenses for any of the following with respect to the residence referred to in subsection 7c73 7,a7 ,safe rooms4 7,b7 ,opening protection1 including impact and wind resistant windows1 exterior doors1 and garage doors4 7,c7 ,reinforcement of roof-to-wall and floor-to-wall connections for wind or seismic activity4 7,d7 ,roof covering for impact1 fire1 or high wind resistance4 7,e7 ,cripple and shear walls to resist seismic activity4 7,f7 ,flood resistant building materials4 7,g7 ,elevating structures and utilities above base flood elevation4 7,h7 ,fire resistant exterior wall assemblies_/systems4 7,i7 ,lightning protection systems4 7,j7 ,whole home standby generators4 7,k7 ,any activity specified by the ,secretary as appropriate to mitigate the risks of future hazards 7including earthquake1 flood1 hail1 hurricane1 lightning1 power outage1 tornado1 and wildfire7 and other natural disasters4 7#d7 ,disaster recovery expenses ,the term disaster recovery expenses means with respect to the residence referred to in subsection 7c7 any expense incurred to replace or repair disaster-related uninsured personal casualty personal losses totaling #c1jjj or greater4 7#e7 ,disaster-related uninsured personal casualty loss ,the term disaster-related uninsured personal casualty loss means a personal casualty loss 7as defined in section #afe7;h77#d77;,b71 determined without regard to the second sentence thereof7 attributable to a ,state or federally declared disaster for which a deduction is allowable under section #afe 7without regard to subsection 7h77#a774 7#f7 ,federally declared disaster ,the term federally declared disaster has the meaning given such term by section #afe7;h77#c77;,c74 7#g7 ,account beneficiary ,the term account beneficiary means the individual on whose behalf the disaster savings account was established4 7e7 ,treatment of account 7#a7 ,in general ,a disaster savings account is exempt from taxation under this subtitle unless such account has ceased to be a disaster savings account4 ,notwithstanding the preceding sentence1 any such account is subject to the taxes imposed by section #eaa 7relating to imposition of tax on unrelated business income of charitable1 etc4 organizations74 7#b7 ,account terminations ,rules similar to the rules of paragraphs 7#b7 and 7#d7 of section #djh7;e7 shall apply to disaster savings accounts1 and any amount treated as distributed under such rules shall be treated as not used to pay disaster mitigation expenses4 7f7 ,tax treatment of distributions 7#a7 ,amounts used for disaster mitigation expenses ,any amount paid or distributed out of a disaster savings account which is used exclusively to pay qualified disaster expenses of any account beneficiary shall not be includible in gross income4 7#b7 ,inclusion of amounts not used for disaster mitigation expenses ,any amount paid or distributed out of a disaster savings account which is not used exclusively to pay the qualified disaster expenses of the account beneficiary shall be included in the gross income of such beneficiary4 7#c7 ,excess contributions returned before due date of return 7,a7 ,in general ,if any excess contribution is contributed for a taxable year to any disaster savings account of an individual1 paragraph 7#b7 shall not apply to distributions from the disaster savings accounts of such individual 7to the extent such distributions do not exceed the aggregate excess contributions to all such accounts of such individual for such year7 if-- 7i7 such distribution is received by the individual on or before the last day prescribed by law 7including extensions of time7 for filing such individual's return for such taxable year1 and 7ii7 such distribution is accompanied by the amount of net income attributable to such excess contribution4 ,any net income described in clause 7ii7 shall be included in the gross income of the individual for the taxable year in which it is received4 7,b7 ,excess contribution ,for purposes of subparagraph 7,a71 the term excess contribution means any contribution 7other than a rollover contribution described in paragraph 7#e77 which is not deductible under this section4 7#d7 ,additional tax on distributions not used for disaster mitigation expenses 7,a7 ,in general ,the tax imposed by this chapter on the account beneficiary for any taxable year in which there is a payment or distribution from a disaster savings account of such beneficiary which is includible in gross income under paragraph 7#b7 shall be increased by #bj percent of the amount which is so includible4 7,b7 ,exception for disability or death ,subparagraph 7,a7 shall not apply if the payment or distribution is made after the account beneficiary becomes disabled within the meaning of section #gb7m77#g7 or dies4 7#e7 ,rollover contribution ,an amount is described in this paragraph as a rollover contribution if it meets the requirements of subparagraphs 7,a7 and 7,b74 7,a7 ,in general ,paragraph 7#b7 shall not apply to any amount paid or distributed from a disaster savings account to the account beneficiary to the extent the amount received is paid into a disaster savings account for the benefit of such beneficiary not later than the #fjth day after the day on which the beneficiary receives the payment or distribution4 7,b7 ,limitation ,this paragraph shall not apply to any amount described in subparagraph 7,a7 received by an individual from a disaster savings account if1 at any time during the #a-year period ending on the day of such receipt1 such individual received any other amount described in subparagraph 7,a7 from a disaster savings account which was not includible in the individual's gross income because of the application of this paragraph4 7g7 ,cost-of-,living adjustment 7#a7 ,in general ,the #e1jjj amount in subsection 7b7 shall be increased by an amount equal to-- 7,a7 such dollar amount1 multiplied by 7,b7 the cost-of-living adjustment determined under section #a7;f77#c7 for the calendar year in which such taxable year begins determined by substituting calendar year #bjab for calendar year #aiib in subparagraph 7,b7 thereof4 7#b7 ,rounding ,if any increase under paragraph 7#a7 is not a multiple of #ej1 such increase shall be rounded to the nearest multiple of #ej4 7h7 ,special rules 7#a7 ,denial of deduction to dependents ,no deduction shall be allowed under this section to any individual with respect to whom a deduction under section #aea is allowable to another taxpayer for a taxable year beginning in the calendar year in which such individual's taxable year begins4 7#b7 ,taxable year must be full taxable year ,except in the case of a taxable year closed by reason of the death of the taxpayer1 no deduction shall be allowed under this section in the case of a taxable year covering a period of less than #ab months4 7#c7 ,certain rules to apply ,rules similar to the following rules shall apply for purposes of this section3 7,a7 ,section #bai7;d77#b7 7relating to no deduction for rollovers74 7,b7 ,section #bai7;f77#c7 7relating to time when contributions deemed made74 7,c7 ,section #bai7;f77#e7 7relating to employer payments74 7,d7 ,section #djh7;g7 7relating to community property laws74 7,e7 ,section #djh7;h7 7relating to custodial accounts74 7,f7 ,section #bbd7;f77#g7 7relating to transfer of account incident to divorce74 7,g7 ,section #bbd7;f77#h7 7relating to treatment after death of account beneficiary74 7#d7 ,coordination with casualty loss deduction ,no deduction shall be allowed under section #afe for a loss for which a disaster recovery expense payment is made from a disaster savings account4 7i7 ,reports ,the ,secretary may require the trustee of a disaster savings account to make such reports regarding such account to the ,secretary and to the account beneficiary with respect to contributions1 distributions1 the return of excess contributions1 and such other matters as the ,secretary determines appropriate4 4 7b7 ,deduction allowed whether or not individual itemizes other deductions ,subsection 7a7 of section #fb of such ,code is amended by inserting after paragraph 7#ba7 the following new paragraph3 7#bb7 ,disaster savings accounts ,the deduction allowed by section #bbd4 4 7c7 ,tax on excess contributions ,section #digc of such ,code 7relating to tax on excess contributions to certain tax-favored accounts and annuities7 is amended-- 7#a7 by striking or at the end of subsection 7a77#d71 by inserting or at the end of subsection 7a77#e71 and by inserting after subsection 7a77#e7 the following new paragraph3 7#f7 a disaster savings account 7within the meaning of section #bbd7;d771 1 and 7#b7 by adding at the end the following new subsection3 7h7 ,excess contributions to disaster savings accounts ,for purposes of this section1 in the case of disaster savings accounts 7within the meaning of section #bbd7;d771 the term excess contributions means the sum of-- 7#a7 the aggregate amount contributed for the taxable year to the accounts 7other than a rollover contribution described in section #bbd7;f77#e77 which is not allowable as a deduction under section #bbd for such year1 and 7#b7 the amount determined under this subsection for the preceding taxable year1 reduced by the sum of-- 7,a7 the distributions out of the accounts which were included in gross income under section #bbd7;f77#b71 and 7,b7 the excess 7if any7 of-- 7i7 the maximum amount allowable as a deduction under section #bbd7;b7 for the taxable year1 over 7ii7 the amount contributed to the accounts for the taxable year4 ,for purposes of this subsection1 any contribution which is distributed out of the disaster savings account in a distribution to which section #bbd7;f77#c7 applies shall be treated as an amount not contributed4 4 7d7 ,failure ,to provide reports on disaster savings accounts ,paragraph 7#b7 of section #ffic7;a7 of such ,code 7relating to reports7 is amended by redesignating subparagraphs 7,d7 and 7,e7 as subparagraphs 7,e7 and 7,f71 respectively1 and by inserting after subparagraph 7,c7 the following new subparagraph3 7,d7 section #bbd7;i7 7relating to disaster savings accounts71 4 7e7 ,clerical amendment ,the table of sections for part ,,vii of subchapter ,b of chapter #a of such ,code is amended by striking the last item and inserting the following3 ,sec4 #bbd4 ,disaster savings accounts4,sec4 #bbe4 ,cross reference4 4 7f7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after the date of the enactment of this ,act4