I 

113TH CONGRESS 

1ST SESSION H. R. 3298 

To amend the Internal Revenue Code of 1986 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. 

IN THE HOUSE OF REPRESENTATIVES 

OCTOBER 16, 2013 

Mr. ROSS introduced the following bill; which was referred to the Committee 

on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Disaster Savings Ac5 counts Act of 2013’’. 


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1 SEC. 2. DEDUCTION FOR CONTRIBUTIONS TO DISASTER 

2 SAVINGS ACCOUNTS. 

3 (a) IN GENERAL.—Part VII of subchapter B of chap4 ter 1 of the Internal Revenue Code of 1986 (relating to 

5 additional itemized deductions for individuals) is amended 

6 by redesignating section 224 as section 225 and by insert7 ing after section 223 the following new section: 

8 ‘‘SEC. 224. DISASTER SAVINGS ACCOUNTS. 

9 ‘‘(a) DEDUCTION ALLOWED.—In the case of an eligi10 ble individual, there shall be allowed as a deduction for 

11 the taxable year an amount equal to the aggregate amount 

12 paid during such taxable year by or on behalf of such indi13 vidual to a disaster savings account of such individual. 

14 ‘‘(b) LIMITATION.— 

15 ‘‘(1) IN GENERAL.—The amount allowed as a 

16 deduction under subsection (a) to an individual for 

17 the taxable year shall not exceed $5,000. 

18 ‘‘(2) PARTIAL YEAR OF ELIGIBILITY.—In the 

19 case of an individual who is an eligible individual for 

20 only a portion of the taxable year, the limitation 

21 under paragraph (1) shall be the same proportion of 

22 $5,000 as such portion bears to the entire taxable 

23 year. 

24 ‘‘(c) ELIGIBLE INDIVIDUAL.—For purposes of this 

25 section, the term ‘eligible individual’ means any individual 

26 if— 


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1 ‘‘(1) such individual owned and used any resi2 dence in the United States at any time during the 

3 taxable year, and 

4 ‘‘(2) while so owned and used, such residence 

5 was insured under a policy of a type normally re6 quired by a lender holding a mortgage on the resi7 dence. 

8 ‘‘(d) DISASTER SAVINGS ACCOUNT.—For purposes of 

9 this section— 

10 ‘‘(1) IN GENERAL.—The term ‘disaster savings 

11 account’ means a trust created or organized in the 

12 United States as a disaster savings account exclu13 sively for the purpose of paying the disaster mitiga14 tion expenses of the account beneficiary, but only if 

15 the written governing instrument creating the trust 

16 meets the following requirements: 

17 ‘‘(A) Except in the case of a rollover con18 tribution described in subsection (f)(5), no con19 tribution will be accepted— 

20 ‘‘(i) unless it is in cash, or 

21 ‘‘(ii) to the extent such contribution, 

22 when added to previous contributions to 

23 the trust for the calendar year, exceeds the 

24 dollar limitation in effect under subsection 

25 (b). 


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1 ‘‘(B) The trustee is a bank (as defined in 

2 section 408(n)), an insurance company (as de3 fined in section 816), or another person who 

4 demonstrates to the satisfaction of the Sec5 retary that the manner in which such person 

6 will administer the trust will be consistent with 

7 the requirements of this section. 

8 ‘‘(C) No part of the trust assets will be in9 vested in life insurance contracts. 

10 ‘‘(D) The assets of the trust will not be 

11 commingled with other property except in a 

12 common trust fund or common investment 

13 fund. 

14 ‘‘(E) The interest of an individual in the 

15 balance in his account is nonforfeitable. 

16 ‘‘(2) DISASTER MITIGATION EXPENSES.—The 

17 term ‘disaster mitigation expenses’ means expenses 

18 for any of the following with respect to the residence 

19 referred to in subsection (c): 

20 ‘‘(A) Safe rooms. 

21 ‘‘(B) Opening protection, including impact 

22 and wind resistant windows, exterior doors, and 

23 garage doors. 


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1 ‘‘(C) Reinforcement of roof-to-wall and 

2 floor-to-wall connections for wind or seismic ac3 tivity. 

4 ‘‘(D) Roof covering for impact, fire, or 

5 high wind resistance. 

6 ‘‘(E) Cripple and shear walls to resist seis7 mic activity. 

8 ‘‘(F) Flood resistant building materials. 

9 ‘‘(G) Elevating structures and utilities 

10 above base flood elevation. 

11 ‘‘(H) Fire resistant exterior wall assem12 blies/systems. 

13 ‘‘(I) Lightning protection systems. 

14 ‘‘(J) Whole home standby generators. 

15 ‘‘(K) Any activity specified by the Sec16 retary as appropriate to mitigate the risks of 

17 future hazards (including earthquake, flood, 

18 hail, hurricane, lightning, power outage, tor19 nado and wildfire) and other natural disasters. 

20 ‘‘(3) ACCOUNT BENEFICIARY.—The term ‘ac21 count beneficiary’ means the individual on whose be22 half the disaster savings account was established. 

23 ‘‘(e) TREATMENT OF ACCOUNT.— 

24 ‘‘(1) IN GENERAL.—A disaster savings account 

25 is exempt from taxation under this subtitle unless 


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1 such account has ceased to be a disaster savings ac2 count. Notwithstanding the preceding sentence, any 

3 such account is subject to the taxes imposed by sec4 tion 511 (relating to imposition of tax on unrelated 

5 business income of charitable, etc., organizations). 

6 ‘‘(2) ACCOUNT TERMINATIONS.—Rules similar 

7 to the rules of paragraphs (2) and (4) of section 

8 408(e) shall apply to disaster savings accounts, and 

9 any amount treated as distributed under such rules 

10 shall be treated as not used to pay disaster mitiga11 tion expenses. 

12 ‘‘(f) TAX TREATMENT OF DISTRIBUTIONS.— 

13 ‘‘(1) AMOUNTS USED FOR DISASTER MITIGA14 TION EXPENSES.—Any amount paid or distributed 

15 out of a disaster savings account which is used ex16 clusively to pay disaster mitigation expenses of any 

17 account beneficiary shall not be includible in gross 

18 income. 

19 ‘‘(2) INCLUSION OF AMOUNTS NOT USED FOR

20 DISASTER MITIGATION EXPENSES.—Any amount 

21 paid or distributed out of a disaster savings account 

22 which is not used exclusively to pay the disaster 

23 mitigation expenses of the account beneficiary shall 

24 be included in the gross income of such beneficiary. 


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1 ‘‘(3) EXCESS CONTRIBUTIONS RETURNED BE2 FORE DUE DATE OF RETURN.— 

3 ‘‘(A) IN GENERAL.—If any excess con4 tribution is contributed for a taxable year to 

5 any disaster savings account of an individual, 

6 paragraph (2) shall not apply to distributions 

7 from the disaster savings accounts of such indi8 vidual (to the extent such distributions do not 

9 exceed the aggregate excess contributions to all 

10 such accounts of such individual for such year) 

11 if— 

12 ‘‘(i) such distribution is received by 

13 the individual on or before the last day 

14 prescribed by law (including extensions of 

15 time) for filing such individual’s return for 

16 such taxable year, and 

17 ‘‘(ii) such distribution is accompanied 

18 by the amount of net income attributable 

19 to such excess contribution. 

20 Any net income described in clause (ii) shall be 

21 included in the gross income of the individual 

22 for the taxable year in which it is received. 

23 ‘‘(B) EXCESS CONTRIBUTION.—For pur24 poses of subparagraph (A), the term ‘excess 

25 contribution’ means any contribution (other 


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1 than a rollover contribution described in para2 graph (5)) which is not deductible under this 

3 section. 

4 ‘‘(4) ADDITIONAL TAX ON DISTRIBUTIONS NOT

5 USED FOR DISASTER MITIGATION EXPENSES.— 

6 ‘‘(A) IN GENERAL.—The tax imposed by 

7 this chapter on the account beneficiary for any 

8 taxable year in which there is a payment or dis9 tribution from a disaster savings account of 

10 such beneficiary which is includible in gross in11 come under paragraph (2) shall be increased by 

12 20 percent of the amount which is so includible. 

13 ‘‘(B) EXCEPTION FOR DISABILITY OR

14 DEATH.—Subparagraph (A) shall not apply if 

15 the payment or distribution is made after the 

16 account beneficiary becomes disabled within the 

17 meaning of section 72(m)(7) or dies. 

18 ‘‘(5) ROLLOVER CONTRIBUTION.—An amount is 

19 described in this paragraph as a rollover contribu20 tion if it meets the requirements of subparagraphs 

21 (A) and (B). 

22 ‘‘(A) IN GENERAL.—Paragraph (2) shall 

23 not apply to any amount paid or distributed 

24 from a disaster savings account to the account 

25 beneficiary to the extent the amount received is 


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1 paid into a disaster savings account for the ben2 efit of such beneficiary not later than the 60th 

3 day after the day on which the beneficiary re4 ceives the payment or distribution. 

5 ‘‘(B) LIMITATION.—This paragraph shall 

6 not apply to any amount described in subpara7 graph (A) received by an individual from a dis8 aster savings account if, at any time during the 

9 1-year period ending on the day of such receipt, 

10 such individual received any other amount de11 scribed in subparagraph (A) from a disaster 

12 savings account which was not includible in the 

13 individual’s gross income because of the appli14 cation of this paragraph. 

15 ‘‘(g) COST-OF-LIVING ADJUSTMENT.— 

16 ‘‘(1) IN GENERAL.—The $5,000 amount in sub17 section (b) shall be increased by an amount equal 

18 to— 

19 ‘‘(A) such dollar amount, multiplied by 

20 ‘‘(B) the cost-of-living adjustment deter21 mined under section 1(f)(3) for the calendar 

22 year in which such taxable year begins deter23 mined by substituting ‘calendar year 2012’ for 

24 ‘calendar year 1992’ in subparagraph (B) 

25 thereof. 


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1 ‘‘(2) ROUNDING.—If any increase under para2 graph (1) is not a multiple of $50, such increase 

3 shall be rounded to the nearest multiple of $50. 

4 ‘‘(h) SPECIAL RULES.— 

5 ‘‘(1) DENIAL OF DEDUCTION TO DEPEND6 ENTS.—No deduction shall be allowed under this 

7 section to any individual with respect to whom a de8 duction under section 151 is allowable to another 

9 taxpayer for a taxable year beginning in the cal10 endar year in which such individual’s taxable year 

11 begins. 

12 ‘‘(2) TAXABLE YEAR MUST BE FULL TAXABLE

13 YEAR.—Except in the case of a taxable year closed 

14 by reason of the death of the taxpayer, no deduction 

15 shall be allowed under this section in the case of a 

16 taxable year covering a period of less than 12 

17 months. 

18 ‘‘(3) CERTAIN RULES TO APPLY.—Rules similar 

19 to the following rules shall apply for purposes of this 

20 section: 

21 ‘‘(A) Section 219(d)(2) (relating to no de22 duction for rollovers). 

23 ‘‘(B) Section 219(f)(3) (relating to time 

24 when contributions deemed made). 


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1 ‘‘(C) Section 219(f)(5) (relating to em2 ployer payments). 

3 ‘‘(D) Section 408(g) (relating to commu4 nity property laws). 

5 ‘‘(E) Section 408(h) (relating to custodial 

6 accounts). 

7 ‘‘(F) Section 224(f)(7) (relating to transfer 

8 of account incident to divorce). 

9 ‘‘(G) Section 224(f)(8) (relating to treat10 ment after death of account beneficiary). 

11 ‘‘(i) REPORTS.—The Secretary may require the trust12 ee of a disaster savings account to make such reports re13 garding such account to the Secretary and to the account 

14 beneficiary with respect to contributions, distributions, the 

15 return of excess contributions, and such other matters as 

16 the Secretary determines appropriate.’’. 

17 (b) DEDUCTION ALLOWED WHETHER OR NOT INDI18 VIDUAL ITEMIZES OTHER DEDUCTIONS.—Subsection (a) 

19 of section 62 of such Code is amended by inserting after 

20 paragraph (21) the following new paragraph: 

21 ‘‘(22) DISASTER SAVINGS ACCOUNTS.—The de22 duction allowed by section 224.’’. 

23 (c) TAX ON EXCESS CONTRIBUTIONS.—Section 4973 

24 of such Code (relating to tax on excess contributions to 

25 certain tax-favored accounts and annuities) is amended— 


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1 (1) by striking ‘‘or’’ at the end of subsection 

2 (a)(4), by inserting ‘‘or’’ at the end of subsection 

3 (a)(5), and by inserting after subsection (a)(5) the 

4 following new paragraph: 

5 ‘‘(6) a disaster savings account (within the 

6 meaning of section 224(d)),’’, and 

7 (2) by adding at the end the following new sub8 section: 

9 ‘‘(h) EXCESS CONTRIBUTIONS TO DISASTER SAVINGS

10 ACCOUNTS.—For purposes of this section, in the case of 

11 disaster savings accounts (within the meaning of section 

12 224(d)), the term ‘excess contributions’ means the sum 

13 of— 

14 ‘‘(1) the aggregate amount contributed for the 

15 taxable year to the accounts (other than a rollover 

16 contribution described in section 224(f)(5)) which is 

17 not allowable as a deduction under section 224 for 

18 such year, and 

19 ‘‘(2) the amount determined under this sub20 section for the preceding taxable year, reduced by 

21 the sum of— 

22 ‘‘(A) the distributions out of the accounts 

23 which were included in gross income under sec24 tion 224(f)(2), and 

25 ‘‘(B) the excess (if any) of— 


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1 ‘‘(i) the maximum amount allowable 

2 as a deduction under section 224(b) for 

3 the taxable year, over 

4 ‘‘(ii) the amount contributed to the 

5 accounts for the taxable year. 

6 For purposes of this subsection, any contribu7 tion which is distributed out of the disaster sav8 ings account in a distribution to which section 

9 224(f)(3) applies shall be treated as an amount 

10 not contributed.’’. 

11 (d) FAILURE TO PROVIDE REPORTS ON DISASTER

12 SAVINGS ACCOUNTS.—Paragraph (2) of section 6693(a) 

13 of such Code (relating to reports) is amended by redesig14 nating subparagraphs (D) and (E) as subparagraphs (E) 

15 and (F), respectively, and by inserting after subparagraph 

16 (C) the following new subparagraph: 

17 ‘‘(D) section 224(i) (relating to disaster 

18 savings accounts),’’. 

19 (e) CLERICAL AMENDMENT.—The table of sections 

20 for part VII of subchapter B of chapter 1 of such Code 

21 is amended by striking the last item and inserting the fol22 lowing: 

‘‘Sec. 224. Disaster savings accounts.’’ 

‘‘Sec. 225. Cross reference.’’. 


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1 (f) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to taxable years beginning after 

3 the date of the enactment of this Act. 

Æ 


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