Bill > HB27

This bill expands the allowable expenses for Catastrophe Savings Accounts, which are special savings accounts established by Alabama taxpayers to cover potential losses from natural disasters like hurricanes and floods. Previously, these accounts were primarily for insurance deductibles and uninsured portions of losses related to windstorm events, which include windstorms, cyclones, hurricanes, tornadoes, high winds, and hail. Now, the definition of "Qualified Catastrophe Expenses" is broadened to include the annual cost of a FORTIFIED endorsement, which is an upgrade to a home's structure to make it more resistant to wind and hail damage, as well as the costs of mitigation actions that reduce the risk of damage from these events, such as reroofing or obtaining evaluations for a FORTIFIED designation. The bill also adjusts contribution limits, allowing individuals to contribute up to $2,000 plus an additional $15,000 for other Qualified Catastrophe Expenses if their deductible is $1,000 or less, or up to twice their deductible (capped at $15,000) plus an additional $15,000 for other Qualified Catastrophe Expenses if their deductible is over $1,000. For self-insured individuals, the limit remains $250,000, not exceeding the property's value. These changes are intended to encourage more comprehensive disaster preparedness and will apply to tax years beginning on or after January 1, 2027.

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