I 

113TH CONGRESS 

2D SESSION H. R. 3989 

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 and to repair 

or replace property damaged or destroyed in a disaster. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 4, 2014 

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 and to repair or 

replace property damaged or destroyed in 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 


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1 if such individual occupied any residence in the United 

2 States at any time during the taxable year. 

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

4 this section— 

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

6 account’ means a trust created or organized in the 

7 United States as a disaster savings account exclu8 sively for the purpose of paying the qualified dis9 aster expenses of the account beneficiary, but only 

10 if the written governing instrument creating the 

11 trust meets the following requirements: 

12 ‘‘(A) Except in the case of a rollover con13 tribution described in subsection (f)(5), no con14 tribution will be accepted— 

15 ‘‘(i) unless it is in cash, or 

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

17 when added to previous contributions to 

18 the trust for the calendar year, exceeds the 

19 dollar limitation in effect under subsection 

20 (b). 

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

22 section 408(n)), an insurance company (as de23 fined in section 816), or another person who 

24 demonstrates to the satisfaction of the Sec25 retary that the manner in which such person 


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1 will administer the trust will be consistent with 

2 the requirements of this section. 

3 ‘‘(C) No part of the trust assets will be in4 vested in life insurance contracts. 

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

6 commingled with other property except in a 

7 common trust fund or common investment 

8 fund. 

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

10 balance in his account is nonforfeitable. 

11 ‘‘(2) QUALIFIED DISASTER EXPENSES.—The 

12 term ‘qualified disaster expenses’ means— 

13 ‘‘(A) disaster mitigation expenses, and 

14 ‘‘(B) disaster recovery expenses. 

15 ‘‘(3) DISASTER MITIGATION EXPENSES.—The 

16 term ‘disaster mitigation expenses’ means expenses 

17 for any of the following with respect to the residence 

18 referred to in subsection (c): 

19 ‘‘(A) Safe rooms. 

20 ‘‘(B) Opening protection, including impact 

21 and wind resistant windows, exterior doors, and 

22 garage doors. 

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

24 floor-to-wall connections for wind or seismic ac25 tivity. 


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

2 high wind resistance. 

3 ‘‘(E) Cripple and shear walls to resist seis4 mic activity. 

5 ‘‘(F) Flood resistant building materials. 

6 ‘‘(G) Elevating structures and utilities 

7 above base flood elevation. 

8 ‘‘(H) Fire resistant exterior wall assem9 blies/systems. 

10 ‘‘(I) Lightning protection systems. 

11 ‘‘(J) Whole home standby generators. 

12 ‘‘(K) Any activity specified by the Sec13 retary as appropriate to mitigate the risks of 

14 future hazards (including earthquake, flood, 

15 hail, hurricane, lightning, power outage, tor16 nado, and wildfire) and other natural disasters. 

17 ‘‘(4) DISASTER RECOVERY EXPENSES.—The 

18 term ‘disaster recovery expenses’ means with respect 

19 to the residence referred to in subsection (c) any ex20 pense incurred to replace or repair disaster-related 

21 uninsured personal casualty personal losses totaling 

22 $3,000 or greater. 

23 ‘‘(5) DISASTER-RELATED UNINSURED PER24 SONAL CASUALTY LOSS.—The term ‘disaster-related 

25 uninsured personal casualty loss’ means a personal 


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1 casualty loss (as defined in section 165(h)(4)(B), de2 termined without regard to the second sentence 

3 thereof) attributable to a State or federally declared 

4 disaster for which a deduction is allowable under 

5 section 165 (without regard to subsection (h)(1)). 

6 ‘‘(6) FEDERALLY DECLARED DISASTER.—The 

7 term ‘federally declared disaster’ has the meaning 

8 given such term by section 165(h)(3)(C). 

9 ‘‘(7) ACCOUNT BENEFICIARY.—The term ‘ac10 count beneficiary’ means the individual on whose be11 half the disaster savings account was established. 

12 ‘‘(e) TREATMENT OF ACCOUNT.— 

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

14 is exempt from taxation under this subtitle unless 

15 such account has ceased to be a disaster savings ac16 count. Notwithstanding the preceding sentence, any 

17 such account is subject to the taxes imposed by sec18 tion 511 (relating to imposition of tax on unrelated 

19 business income of charitable, etc. organizations). 

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

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

22 408(e) shall apply to disaster savings accounts, and 

23 any amount treated as distributed under such rules 

24 shall be treated as not used to pay disaster mitiga25 tion expenses. 


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

2 ‘‘(1) AMOUNTS USED FOR DISASTER MITIGA3 TION EXPENSES.—Any amount paid or distributed 

4 out of a disaster savings account which is used ex5 clusively to pay qualified disaster expenses of any 

6 account beneficiary shall not be includible in gross 

7 income. 

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

9 DISASTER MITIGATION EXPENSES.—Any amount 

10 paid or distributed out of a disaster savings account 

11 which is not used exclusively to pay the qualified dis12 aster expenses of the account beneficiary shall be in13 cluded in the gross income of such beneficiary. 

14 ‘‘(3) EXCESS CONTRIBUTIONS RETURNED BE15 FORE DUE DATE OF RETURN.— 

16 ‘‘(A) IN GENERAL.—If any excess con17 tribution is contributed for a taxable year to 

18 any disaster savings account of an individual, 

19 paragraph (2) shall not apply to distributions 

20 from the disaster savings accounts of such indi21 vidual (to the extent such distributions do not 

22 exceed the aggregate excess contributions to all 

23 such accounts of such individual for such year) 

24 if— 


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1 ‘‘(i) such distribution is received by 

2 the individual on or before the last day 

3 prescribed by law (including extensions of 

4 time) for filing such individual’s return for 

5 such taxable year, and 

6 ‘‘(ii) such distribution is accompanied 

7 by the amount of net income attributable 

8 to such excess contribution. 

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

10 included in the gross income of the individual 

11 for the taxable year in which it is received. 

12 ‘‘(B) EXCESS CONTRIBUTION.—For pur13 poses of subparagraph (A), the term ‘excess 

14 contribution’ means any contribution (other 

15 than a rollover contribution described in para16 graph (5)) which is not deductible under this 

17 section. 

18 ‘‘(4) ADDITIONAL TAX ON DISTRIBUTIONS NOT

19 USED FOR DISASTER MITIGATION EXPENSES.— 

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

21 this chapter on the account beneficiary for any 

22 taxable year in which there is a payment or dis23 tribution from a disaster savings account of 

24 such beneficiary which is includible in gross inVerDate Mar 15 2010 21:08 Feb 04, 2014 Jkt 039200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H3989.IH H3989

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1 come under paragraph (2) shall be increased by 

2 20 percent of the amount which is so includible. 

3 ‘‘(B) EXCEPTION FOR DISABILITY OR

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

5 the payment or distribution is made after the 

6 account beneficiary becomes disabled within the 

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

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

9 described in this paragraph as a rollover contribu10 tion if it meets the requirements of subparagraphs 

11 (A) and (B). 

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

13 not apply to any amount paid or distributed 

14 from a disaster savings account to the account 

15 beneficiary to the extent the amount received is 

16 paid into a disaster savings account for the ben17 efit of such beneficiary not later than the 60th 

18 day after the day on which the beneficiary re19 ceives the payment or distribution. 

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

21 not apply to any amount described in subpara22 graph (A) received by an individual from a dis23 aster savings account if, at any time during the 

24 1-year period ending on the day of such receipt, 

25 such individual received any other amount deVerDate Mar 15 2010 21:08 Feb 04, 2014 Jkt 039200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H3989.IH H3989

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1 scribed in subparagraph (A) from a disaster 

2 savings account which was not includible in the 

3 individual’s gross income because of the appli4 cation of this paragraph. 

5 ‘‘(g) COST-OF-LIVING ADJUSTMENT.— 

6 ‘‘(1) IN GENERAL.—The $5,000 amount in sub7 section (b) shall be increased by an amount equal 

8 to— 

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

10 ‘‘(B) the cost-of-living adjustment deter11 mined under section 1(f)(3) for the calendar 

12 year in which such taxable year begins deter13 mined by substituting ‘calendar year 2012’ for 

14 ‘calendar year 1992’ in subparagraph (B) 

15 thereof. 

16 ‘‘(2) ROUNDING.—If any increase under para17 graph (1) is not a multiple of $50, such increase 

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

19 ‘‘(h) SPECIAL RULES.— 

20 ‘‘(1) DENIAL OF DEDUCTION TO DEPEND21 ENTS.—No deduction shall be allowed under this 

22 section to any individual with respect to whom a de23 duction under section 151 is allowable to another 

24 taxpayer for a taxable year beginning in the calVerDate Mar 15 2010 21:08 Feb 04, 2014 Jkt 039200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H3989.IH H3989

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1 endar year in which such individual’s taxable year 

2 begins. 

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

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

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

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

7 taxable year covering a period of less than 12 

8 months. 

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

10 to the following rules shall apply for purposes of this 

11 section: 

12 ‘‘(A) Section 219(d)(2) (relating to no de13 duction for rollovers). 

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

15 when contributions deemed made). 

16 ‘‘(C) Section 219(f)(5) (relating to em17 ployer payments). 

18 ‘‘(D) Section 408(g) (relating to commu19 nity property laws). 

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

21 accounts). 

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

23 of account incident to divorce). 

24 ‘‘(G) Section 224(f)(8) (relating to treat25 ment after death of account beneficiary). 


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1 ‘‘(4) COORDINATION WITH CASUALTY LOSS DE2 DUCTION.—No deduction shall be allowed under sec3 tion 165 for a loss for which a disaster recovery ex4 pense payment is made from a disaster savings ac5 count. 

6 ‘‘(i) REPORTS.—The Secretary may require the trust7 ee of a disaster savings account to make such reports re8 garding such account to the Secretary and to the account 

9 beneficiary with respect to contributions, distributions, the 

10 return of excess contributions, and such other matters as 

11 the Secretary determines appropriate.’’. 

12 (b) DEDUCTION ALLOWED WHETHER OR NOT INDI13 VIDUAL ITEMIZES OTHER DEDUCTIONS.—Subsection (a) 

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

15 paragraph (21) the following new paragraph: 

16 ‘‘(22) DISASTER SAVINGS ACCOUNTS.—The de17 duction allowed by section 224.’’. 

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

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

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

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

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

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

24 following new paragraph: 


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

2 meaning of section 224(d)),’’, and 

3 (2) by adding at the end the following new sub4 section: 

5 ‘‘(h) EXCESS CONTRIBUTIONS TO DISASTER SAVINGS

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

7 disaster savings accounts (within the meaning of section 

8 224(d)), the term ‘excess contributions’ means the sum 

9 of— 

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

11 taxable year to the accounts (other than a rollover 

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

13 not allowable as a deduction under section 224 for 

14 such year, and 

15 ‘‘(2) the amount determined under this sub16 section for the preceding taxable year, reduced by 

17 the sum of— 

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

19 which were included in gross income under sec20 tion 224(f)(2), and 

21 ‘‘(B) the excess (if any) of— 

22 ‘‘(i) the maximum amount allowable 

23 as a deduction under section 224(b) for 

24 the taxable year, over 


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1 ‘‘(ii) the amount contributed to the 

2 accounts for the taxable year. 

3 For purposes of this subsection, any contribu4 tion which is distributed out of the disaster sav5 ings account in a distribution to which section 

6 224(f)(3) applies shall be treated as an amount 

7 not contributed.’’. 

8 (d) FAILURE TO PROVIDE REPORTS ON DISASTER

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

10 of such Code (relating to reports) is amended by redesig11 nating subparagraphs (D) and (E) as subparagraphs (E) 

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

13 (C) the following new subparagraph: 

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

15 savings accounts),’’. 

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

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

18 is amended by striking the last item and inserting the fol19 lowing: 

‘‘Sec. 224. Disaster savings accounts. 

‘‘Sec. 225. Cross reference.’’. 

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

21 this section shall apply to taxable years beginning after 

22 the date of the enactment of this Act. 

Æ 


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