Bill > SB73

This bill modifies Alabama's existing law on Catastrophe Savings Accounts (CSAs) by expanding the allowable expenses that can be covered. Previously, these accounts were primarily designed to cover insurance deductibles for hurricane, flood, or windstorm damage, but the bill now permits CSA funds to be used for additional purposes such as paying for FORTIFIED endorsements (a specific type of insurance coverage that provides enhanced protection for properties) and implementing mitigation actions to reduce potential damage from natural disasters. The bill increases contribution limits, allowing individuals to contribute up to $15,000 in addition to their existing deductible-based contribution limits. The legislation also clarifies the tax treatment of these accounts, maintaining the existing provisions that provide state income tax deductions for contributions and tax exemptions for account earnings. The expanded provisions aim to give Alabama residents more financial flexibility in preparing for and recovering from catastrophic weather events by allowing them to save and use funds for a broader range of property protection and disaster preparedness expenses. The changes will take effect on October 1, 2025, giving taxpayers and financial institutions time to adapt to the new rules.

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