Bill > HB106

This bill expands the scope of Catastrophe Savings Accounts (CSAs), which are special savings accounts that allow Alabama taxpayers to set aside money for specific property-related expenses. The bill broadens the allowable uses of these accounts beyond just insurance deductibles to now include three types of "Qualified Catastrophe Expenses": (1) insurance deductibles for hurricane, flood, or windstorm damage, (2) the annual cost of a FORTIFIED endorsement (a special insurance designation for storm-resistant properties), and (3) mitigation actions that reduce risk from such events, such as reroofing or obtaining evaluation services for a FORTIFIED designation. The bill increases contribution limits, allowing taxpayers to contribute up to $15,000 in addition to their existing deductible-based limits. Distributions from the account remain tax-exempt if used for these qualified expenses, and the bill maintains existing provisions about tax treatment, including penalties for non-qualifying withdrawals. The changes will apply to tax years beginning on or after January 1, 2026, with the act becoming effective on October 1, 2025, and are designed to help Alabama residents better prepare for and recover from catastrophic weather events.

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