| 3 | 3 | | By: Representatives Lumsden of the 12 |
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| 4 | 4 | | th |
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| 5 | 5 | | , Blackmon of the 146 |
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| 6 | 6 | | th |
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| 7 | 7 | | , Williams of the 148 |
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| 8 | 8 | | th |
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| 9 | 9 | | , |
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| 10 | 10 | | Burchett of the 176 |
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| 11 | 11 | | th |
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| 12 | 12 | | , Hatchett of the 155 |
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| 13 | 13 | | th |
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| 14 | 14 | | , and others |
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| 15 | 15 | | A BILL TO BE ENTITLED |
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| 16 | 16 | | AN ACT |
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| 17 | 17 | | To amend Article 2 of Chapter 7 of Title 48 of the Official Code of Georgia Annotated, |
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| 18 | 18 | | 1 |
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| 19 | 19 | | relating to income tax imposition, rate, computation, exemptions, and credits, so as to2 |
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| 20 | 20 | | provide for tax advantaged catastrophe savings accounts; to establish limits for contributions3 |
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| 21 | 21 | | to and withdrawals from such accounts; to provide for tax treatment of contributions, interest,4 |
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| 22 | 22 | | and withdrawals; to provide for definitions; to provide for rules and regulations; to provide5 |
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| 23 | 23 | | for related matters; to provide for an effective date and applicability; to repeal conflicting6 |
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| 24 | 24 | | laws; and for other purposes.7 |
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| 25 | 25 | | BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:8 |
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| 26 | 26 | | SECTION 1.9 |
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| 27 | 27 | | Article 2 of Chapter 7 of Title 48 of the Official Code of Georgia Annotated, relating to10 |
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| 28 | 28 | | income tax imposition, rate, computation, exemptions, and credits, is amended by adding a11 |
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| 29 | 29 | | new Code section to read as follows:12 |
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| 30 | 30 | | "48-7-28.5. |
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| 31 | 31 | | 13 |
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| 32 | 32 | | (a) As used in this Code section, the term:14 |
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| 33 | 33 | | (1) 'Catastrophe savings account' means a regular savings account or money market15 |
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| 34 | 34 | | account established by a resident taxpayer to pay for qualified catastrophe expenses.16 |
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| 37 | 37 | | (2) 'Catastrophic event' means windstorms, cyclones, earthquakes, hurricanes, ice storms,17 |
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| 38 | 38 | | tornadoes, high winds, floods, hail storms, and any other weather events or occurrences,18 |
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| 39 | 39 | | provided that such event or occurrence has been declared as a disaster or emergency by19 |
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| 40 | 40 | | the Governor.20 |
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| 41 | 41 | | (3) 'Qualified catastrophe expenses' means:21 |
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| 42 | 42 | | (A) A qualified deductible paid for damage resulting from a catastrophic event; and22 |
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| 43 | 43 | | (B) Expenses incurred in repairing or replacing damage to a taxpayer's primary23 |
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| 44 | 44 | | residence as a result of a catastrophic event that are not covered by a homeowner's24 |
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| 45 | 45 | | insurance policy.25 |
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| 46 | 46 | | (4) 'Qualified deductible' means the deductible for the homeowner's insurance policy of26 |
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| 47 | 47 | | the taxpayer covering catastrophic event damage for his or her primary residence. If such27 |
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| 48 | 48 | | policy provides for more than one deductible, the deductible with the highest amount28 |
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| 49 | 49 | | shall constitute the qualified deductible.29 |
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| 50 | 50 | | (b) A taxpayer may establish one catastrophe savings account pursuant to this Code30 |
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| 51 | 51 | | section which shall be labeled as a catastrophe savings account and shall specify that the31 |
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| 52 | 52 | | purpose of the account is to cover qualified catastrophe expenses. No more than one32 |
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| 53 | 53 | | catastrophe savings account pursuant to this Code section shall be established for a primary33 |
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| 54 | 54 | | residence.34 |
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| 55 | 55 | | (c)(1) For a taxpayer whose qualified deductible is $1,000.00 or less, the total amount35 |
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| 56 | 56 | | that may be contributed to a catastrophe savings account shall not exceed $2,000.00.36 |
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| 57 | 57 | | (2) For a taxpayer whose qualified deductible is greater than $1,000.00, the total amount37 |
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| 58 | 58 | | that may be contributed to a catastrophe savings account shall not exceed the lesser of38 |
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| 59 | 59 | | twice the amount of the taxpayer's qualified deductible or $25,000.00.39 |
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| 60 | 60 | | (3) For a self-insured taxpayer who chooses not to obtain insurance on his or her primary40 |
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| 61 | 61 | | residence, the total amount that may be contributed to a catastrophe savings account shall41 |
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| 62 | 62 | | not exceed $250,000.00; provided, however, that in no case shall the amount contributed42 |
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| 65 | 65 | | to the catastrophe savings account exceed the fair market value of the taxpayer's primary43 |
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| 66 | 66 | | residence.44 |
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| 67 | 67 | | (d)(1) An individual taxpayer shall be allowed a deduction from the tax imposed45 |
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| 68 | 68 | | pursuant to this article for amounts contributed to a catastrophe savings account in46 |
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| 69 | 69 | | accordance with this Code section.47 |
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| 70 | 70 | | (2) All interest income earned by a catastrophe savings account in compliance with this48 |
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| 71 | 71 | | Code section shall be exempt from the tax imposed pursuant this article.49 |
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| 72 | 72 | | (3) A distribution from a catastrophe savings account shall be included in the income of50 |
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| 73 | 73 | | the taxpayer unless the amount of the distribution is used to cover qualified catastrophe51 |
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| 74 | 74 | | expenses; provided, however, that no such amount shall be included in the income of the52 |
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| 75 | 75 | | taxpayer if the qualified catastrophe expenses of the taxpayer during the taxable year are53 |
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| 76 | 76 | | equal to or greater than the aggregate distributions from such account during the taxable54 |
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| 77 | 77 | | year. If the aggregate distributions during the taxable year from such account exceed the55 |
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| 78 | 78 | | qualified catastrophe expenses of the taxpayer during the taxable year, the amount56 |
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| 79 | 79 | | otherwise included in the taxpayer's income shall be reduced by the amount of the57 |
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| 80 | 80 | | distributions for qualified catastrophe expenses and the amount of interest income earned58 |
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| 81 | 81 | | by the catastrophe savings account.59 |
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| 82 | 82 | | (e)(1) If a taxpayer contributes in excess of the limits provided in this Code section and60 |
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| 83 | 83 | | claimed a deduction pursuant to subsection (d) of this Code section, the taxpayer shall61 |
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| 84 | 84 | | withdraw the amount of the excess contributions and include that amount in the income62 |
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| 85 | 85 | | of the taxpayer in the year of withdrawal.63 |
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| 86 | 86 | | (2) If a taxpayer who owns a catastrophe savings account dies, his or her account shall64 |
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| 87 | 87 | | be included in the income of the person who receives the account, unless that person is65 |
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| 88 | 88 | | the surviving spouse of the taxpayer. Upon the death of such a surviving spouse, the66 |
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| 89 | 89 | | amount in the account shall be included in the income of the person who receives the67 |
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| 90 | 90 | | account.68 |
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