U.S. Reps. Laurel Lee (R-FL) and Vern Buchanan (R-FL) on Jan. 15 proposed a bipartisan bill that aims to help families strengthen their homes against damage from a storm or natural disaster by establishing Residential Emergency Asset-accumulation Deferred Taxation Yield (READY) accounts.
Specifically, the READY Account Act, H.R. 440, which Rep. Buchanan and U.S. Rep. Jared Moskowitz (D-FL) cosponsored, would create a tax-free savings vehicle for Americans to better afford home mitigation and disaster response costs, according to a bill summary provided by Rep. Lee’s staff.
“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,” Rep. Lee said. “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.”
If enacted, H.R. 440 would enable taxpayers to establish a READY account, similar to a Health Savings Account (HSA), for at least 12 different mitigation measures used by the Federal Emergency Management Agency, such as strengthening the connection of the roof to the home; installing impact-resistant windows and doors; and elevating the structure or constructing floodwalls to mitigate against flooding, the summary says.
“Last year, Florida faced unprecedented devastation from back-to-back hurricanes, leaving families and communities struggling to rebuild,” said Rep. Buchanan. “By encouraging personal preparedness, this legislation not only helps protect lives and property but also strengthens our communities in the face of natural disasters.”
H.R. 440 also would create three tax benefits associated with the READY account: an annual tax deduction that would be allowed in the amount that the taxpayer pays to the account in that tax year; growth of the investment account that would be exempt from taxation; and any amount distributed out of the account for eligible mitigation measures would not be taxed at withdraw, the summary says.
Among other provisions, a taxpayer could annually contribute up to $4,500, and to be eligible for the tax benefits, the READY account must be used to save and pay for mitigation and recovery measures that benefit the taxpayer’s principal residence. To ensure that mitigation measures are truthfully and properly performed, an industry professional must certify that the applicable mitigation measure was performed, states the summary.
“Disaster preparedness saves lives, and it can help reduce recovery costs when disasters hit the homes of hardworking Florida families,” said Rep. Moskowitz. “For families in Florida and across the nation, this common-sense bill will lower sky-high insurance costs, help them stay ready, and keep their hard-earned money in their pockets.”
H.R. 440 is endorsed by Florida’s Chief Financial Officer Jimmy Patronis, 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.