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HOUSE OF REPRESENTATIVES - FLOOR VERSION
STATE OF OKLAHOMA
1st Session of the 60th Legislature (2025)
COMMITTEE SUBSTITUTE
FOR
HOUSE BILL NO. 1834 By: Hefner of the House
and
Frix of the Senate
COMMITTEE SUBSTITUTE
[ revenue – taxation – account – definitions –
deduction – income – contributions – amounts –
limitations – tax – death – Oklahoma Tax Commission
– notice – codification – effective date ]
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 2387 of Title 68, unless there
is created a duplication in numbering, reads as follows:
This act shall be known and may be cited as the "Inhofe Disaster
Savings Account Act".
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SECTION 2. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 2388 of Title 68, unless there
is created a duplication in numbering, reads as follows:
As used in the Inhofe Disaster Savings Account Act:
1. "Disaster Savings Account" means a regular savings account
or money market account established by an insurance policyholder for
residential property in this state to cover an insurance deductible
under an insurance policy for the taxpayer's primary res idence that
covers hurricanes, rising floodwaters, tornadoes, hail, or other
catastrophic windstorm event damage, or by an individual to cover
self-insured losses for the taxpayer's primary residence from
hurricanes, rising floodwaters, tornadoes, hail, or other
catastrophic windstorm event. The account may also cover costs
incurred in proactively protecting the taxpayer's primary residence
from hurricanes, rising floodwaters, tornadoes, hail, or other
catastrophic windstorm event damage. The account must be labeled as
a Disaster Savings Account to qualify as a Disaster Savings Account
as defined in this paragraph. A taxpayer shall establish only one
Disaster Savings Account and shall specify that the purpose of the
account is to cover the amount of insur ance deductible and other
uninsured portions of risks of loss from hurricanes, rising
floodwaters, tornadoes, hail, or other catastrophic windstorm event
and costs incurred in proactively protecting the taxpayer's primary
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residence from hurricanes, rising floodwaters, tornadoes, hail, or
other catastrophic windstorm event damage;
2. "Qualified deductible" means the deductible for the
individual's homeowner's policy for a taxpayer's primary residence;
and
3. "Qualified disaster expenses" means expenses pai d or
incurred by reason of a major disaster that has been declared by the
President of the United States or the Governor of the State of
Oklahoma to be an emergency by executive order.
SECTION 3. NEW LAW A new section of law to be c odified
in the Oklahoma Statutes as Section 2389 of Title 68, unless there
is created a duplication in numbering, reads as follows:
A. For taxable years beginning on or after January 1, 2026, an
individual is allowed a deduction from Oklahoma taxable inco me for
amounts contributed to a Disaster Savings Account in accordance with
subsection C of this section. All interest income earned by the
Disaster Savings Account is exempt from the tax imposed pursuant to
Section 2355 of Title 68 of the Oklahoma Statut es.
B. A Disaster Savings Account is not subject to attachment,
levy, garnishment, or legal process in this state.
C. The total amount that may be contributed to a Disaster
Savings Account must not exceed:
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1. In the case of an individual whose qualified deductible is
less than or equal to One Thousand Dollars ($1,000.00), Two Thousand
Dollars ($2,000.00);
2. In the case of an individual whose qualified deductible is
greater than One Thousand Dollars ($1,000.00), the amount equal to
the lesser of Fifteen Thousand Dollars ($15,000.00) or twice the
amount of the taxpayer's qualified deductible; and
3. In the case of a self -insured individual who chooses not to
obtain insurance on his or her primary residence, Three Hundred
Fifty Thousand Dollars ($350,000. 00), but shall not exceed the value
of the individual taxpayer's primary residence. The amount
prescribed by this paragraph shall be adjusted annually to reflect
an increase of five percent (5%). Each five -percent increase shall
be applied to the amount as previously adjusted pursuant to the
provisions of this paragraph.
If a taxpayer contributes in excess of the limits as provided
for in this subsection, the taxpayer shall withdraw the amount of
excess contributions from the individual's Disaster Savings Account.
The excess amount shall be withdrawn from the Disaster Savings
Account not later than the due date of the income tax return for the
applicable income tax year, including any extension. The amount of
excess contributions withdrawn under this sub section shall be
subject to the tax imposed pursuant to Section 2355 of Title 68 of
the Oklahoma Statutes, but shall not be subject to the additional
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two and one-half percent (2.5%) rate increase as prescribed by
subsection B of Section 4 of this act.
SECTION 4. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 2390 of Title 68, unless there
is created a duplication in numbering, reads as follows:
A. A distribution from a Disaster Savings Account must b e
included in the income of the taxpayer unless the amount of the
distribution is used to cover qualified disaster expenses. No
amount is included in income if the qualified disaster expenses of
the taxpayer during the taxable year are equal to or greater than
the aggregate distributions during the taxable year. If aggregate
distributions exceed the qualified disaster expenses during the
taxable year, the amount otherwise included in income must be
reduced by the amount of the distributions for qualified disaster
expenses.
B. The tax paid pursuant to Section 2355 of Title 68 of the
Oklahoma Statutes attributable to a taxable distribution must be
increased by two and one -half percent (2.5%) of the amount which is
includable in income. This additional tax does not apply if the:
1. Taxpayer no longer owns a residence; or
2. Distribution is from an account conforming with Section 3 of
this act and is made on or after the date on which the taxpayer
attains the age of seventy (70).
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C. If a taxpayer who owns a Disaster Savings Account dies, his
or her account shall be included in the income of the person who
receives the account, unless that person is the surviving spouse of
the taxpayer. Upon death of the surviving spouse, the account is
included in the inco me of the person who receives the account. The
additional tax in subsection B of this section does not apply to
distribution on death of the taxpayer or the surviving spouse.
D. The Oklahoma Tax Commission shall promulgate rules necessary
to implement and administer this act. The Oklahoma Tax Commission
shall provide written notice to the Oklahoma Insurance Department
upon the promulgation of any rules or changes to rules related to
this act.
SECTION 5. This act shall become effective No vember 1, 2025.
COMMITTEE REPORT BY: COMMITTEE ON APPROPRIATIONS AND BUDGET, dated
03/05/2025 - DO PASS, As Amended and Coauthored.