S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   10678
 
                           I N  A S S E M B L Y
 
                              August 28, 2024
                                ___________
 
 Introduced  by  COMMITTEE ON RULES -- (at request of M. of A. Hunter) --
   read once and referred to the Committee on Ways and Means
 
 AN ACT to amend the tax law, in  relation  to  establishing  catastrophe
   savings accounts
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:

   Section 1. Article 22 of the tax law is amended by adding a  new  part
 VII to read as follows:
                   PART VII--CATASTROPHE SAVINGS ACCOUNTS
   SECTION 710. DEFINITIONS.
           711. CATASTROPHE SAVINGS ACCOUNTS.
   §  710.  DEFINITIONS.  AS USED IN THIS PART, THE FOLLOWING TERMS SHALL
 HAVE THE FOLLOWING DEFINITIONS:
   (A) "CATASTROPHE SAVINGS ACCOUNT" MEANS A REGULAR SAVINGS  ACCOUNT  OR
 MONEY  MARKET ACCOUNT ESTABLISHED BY AN INSURANCE POLICYHOLDER FOR RESI-
 DENTIAL REAL PROPERTY IN THIS STATE TO  COVER  AN  INSURANCE  DEDUCTIBLE
 UNDER  AN  INSURANCE  POLICY  FOR  THE TAXPAYER'S PRIMARY RESIDENCE THAT
 COVERS HURRICANE, RISING FLOODWATERS, OR  OTHER  CATASTROPHIC  WINDSTORM
 EVENT  DAMAGE  OR  BY AN INDIVIDUAL TO COVER SELF-INSURED LOSSES FOR THE
 TAXPAYER'S PRIMARY RESIDENCE FROM A HURRICANE,  RISING  FLOODWATERS,  OR
 OTHER CATASTROPHIC WINDSTORM EVENT.
   (B) "QUALIFIED CATASTROPHE EXPENSES" MEAN EXPENSES PAID OR INCURRED BY
 REASON  OF A MAJOR DISASTER THAT HAS BEEN DECLARED BY THE GOVERNOR TO BE
 A STATE DISASTER EMERGENCY PURSUANT TO THE PROVISIONS OF  SECTION  TWEN-
 TY-EIGHT OF THE EXECUTIVE LAW.
   (C)  "QUALIFIED  DEDUCTIBLE" MEANS THE DEDUCTIBLE FOR THE INDIVIDUAL'S
 HOMEOWNER'S POLICY FOR A TAXPAYER'S PRIMARY RESIDENCE.
   § 711. CATASTROPHE SAVINGS ACCOUNTS.  (A)(1)  AN  INDIVIDUAL  TAXPAYER
 SHALL BE ALLOWED A DEDUCTION FROM THE TAX IMPOSED PURSUANT TO THIS ARTI-
 CLE FOR AMOUNTS CONTRIBUTED TO A CATASTROPHE SAVINGS ACCOUNT PURSUANT TO
 PARAGRAPH THREE OF SUBSECTION (B) OF THIS SECTION; AND
   (2)  ALL  INTEREST  INCOME  EARNED BY SUCH CATASTROPHE SAVINGS ACCOUNT
 SHALL BE EXEMPT FROM THE TAX IMPOSED PURSUANT TO THIS ARTICLE.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD15979-01-4
              

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   (B)(1) AN ACCOUNT MUST BE LABELED AS A CATASTROPHE SAVINGS ACCOUNT  IN
 ORDER  TO  QUALIFY  AS  A CATASTROPHE SAVINGS ACCOUNT AS DEFINED IN THIS
 ARTICLE. A TAXPAYER SHALL ESTABLISH ONLY ONE CATASTROPHE SAVINGS ACCOUNT
 AND SHALL SPECIFY THAT THE PURPOSE OF THE ACCOUNT IS TO COVER THE AMOUNT
 OF  INSURANCE  DEDUCTIBLES AND OTHER UNINSURED PORTIONS OF RISKS OF LOSS
 FROM HURRICANE,  RISING  FLOODWATER,  OR  OTHER  CATASTROPHIC  WINDSTORM
 EVENT.
   (2)  A CATASTROPHE SAVINGS ACCOUNT SHALL NOT BE SUBJECT TO ATTACHMENT,
 LEVY, GARNISHMENT, OR LEGAL PROCESS IN THE STATE.
   (3) THE TOTAL AMOUNT THAT MAY BE CONTRIBUTED TO A CATASTROPHE  SAVINGS
 ACCOUNT SHALL NOT EXCEED:
   (A)  IN  THE  CASE  OF AN INDIVIDUAL WHOSE QUALIFIED DEDUCTIBLE IS NOT
 MORE THAN ONE THOUSAND DOLLARS, TWO THOUSAND DOLLARS;
   (B) IN THE CASE OF AN INDIVIDUAL WHOSE QUALIFIED  DEDUCTIBLE  IS  MORE
 THAN  ONE  THOUSAND  DOLLARS,  THE AMOUNT EQUAL TO THE LESSER OF FIFTEEN
 THOUSAND DOLLARS OR TWICE THE AMOUNT OF THE TAXPAYER'S QUALIFIED DEDUCT-
 IBLE; OR
   (C) IN THE CASE OF A SELF-INSURED INDIVIDUAL WHO CHOOSES NOT TO OBTAIN
 INSURANCE ON THEIR PRIMARY RESIDENCE TWO HUNDRED FIFTY THOUSAND DOLLARS,
 BUT IN NO EVENT SHALL EXCEED THE  VALUE  OF  THE  INDIVIDUAL  TAXPAYER'S
 PRIMARY RESIDENCE.
   (4)  IF  A  TAXPAYER  CONTRIBUTES  IN EXCESS OF THE LIMITS PROVIDED IN
 PARAGRAPH THREE OF THIS SUBSECTION, SUCH  TAXPAYER  SHALL  WITHDRAW  THE
 AMOUNT  OF  THE  EXCESS  CONTRIBUTIONS  AND INCLUDE SUCH AMOUNT IN THEIR
 INCOME FOR PURPOSES OF THIS ARTICLE IN THE YEAR OF WITHDRAWAL.
   (C) A  DISTRIBUTION  FROM  A  CATASTROPHE  SAVINGS  ACCOUNT  SHALL  BE
 INCLUDED  IN  THE  INCOME  OF  THE  DISTRIBUTEE UNLESS THE AMOUNT OF THE
 DISTRIBUTION IS USED TO COVER QUALIFIED CATASTROPHE EXPENSES.
   (D) NO AMOUNT IS INCLUDED IN INCOME, PURSUANT  TO  SUBSECTION  (C)  OF
 THIS  SECTION,  IF THE QUALIFIED CATASTROPHE EXPENSES OF THE DISTRIBUTEE
 DURING THE TAXABLE YEAR ARE EQUAL  TO  OR  GREATER  THAN  THE  AGGREGATE
 DISTRIBUTIONS DURING THE TAXABLE YEAR.
   (E)  IF  AGGREGATE  DISTRIBUTIONS  EXCEED  THE  QUALIFIED  CATASTROPHE
 EXPENSES DURING THE TAXABLE  YEAR,  THE  AMOUNT  OTHERWISE  INCLUDED  IN
 INCOME SHALL BE REDUCED BY THE AMOUNT OF THE DISTRIBUTIONS FOR QUALIFIED
 CATASTROPHE EXPENSES.
   (F)(1)  THE  TAX  IMPOSED  PURSUANT  TO THIS ARTICLE ATTRIBUTABLE TO A
 TAXABLE DISTRIBUTION SHALL BE INCREASED BY TWO AND ONE-HALF  PERCENT  OF
 THE AMOUNT WHICH IS INCLUDABLE IN INCOME.
   (2) SUCH ADDITIONAL TAX SHALL NOT APPLY IF:
   (A)  THE TAXPAYER NO LONGER OWNS A PRIMARY RESIDENCE WITHIN THE STATE;
 OR
   (B) THE DISTRIBUTION IS FROM AN ACCOUNT CONFORMING  WITH  SUBPARAGRAPH
 (C)  OF PARAGRAPH THREE OF SUBSECTION (B) OF THIS SECTION AND IS MADE ON
 OR AFTER THE DATE ON WHICH THE DISTRIBUTEE ATTAINS THE AGE OF SEVENTY.
   (G)(1)  NO  AMOUNT  IS  INCLUDABLE  IN  TAXABLE  INCOME,  PURSUANT  TO
 SUBSECTION  (C)  OF THIS SECTION, IF THE DISTRIBUTION IS FROM AN ACCOUNT
 CONFORMING WITH SUBPARAGRAPH (A) OR (B) OF PARAGRAPH THREE OF SUBSECTION
 (B) OF THIS SECTION AND IS MADE ON  OR  AFTER  THE  DATE  ON  WHICH  THE
 DISTRIBUTEE ATTAINS THE AGE OF SEVENTY.
   (2)  IF  A  TAXPAYER  RECEIVES  A  NONTAXABLE  DISTRIBUTION UNDER THIS
 SUBSECTION, SUCH TAXPAYER SHALL NOT  MAKE  FURTHER  CONTRIBUTIONS  TO  A
 CATASTROPHE SAVINGS ACCOUNT.
   (H)  IN  THE  EVENT  OF  DEATH OF THE TAXPAYER THAT OWNS A CATASTROPHE
 SAVINGS ACCOUNT, SUCH ACCOUNT SHALL BE INCLUDED IN INCOME OF THE  PERSON
 WHO  RECEIVES THE ACCOUNT, UNLESS SUCH PERSON IS THE SURVIVING SPOUSE OF
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 THE TAXPAYER. UPON THE DEATH OF SUCH SURVIVING SPOUSE, THE ACCOUNT SHALL
 BE INCLUDED IN THE INCOME OF THE PERSON WHO RECEIVES  THE  ACCOUNT.  THE
 ADDITIONAL  TAX IN SUBSECTION (F) OF THIS SECTION SHALL NOT APPLY IN THE
 EVENT OF A DISTRIBUTION ON DEATH.
   §  2. This act shall take effect on the first of January next succeed-
 ing the date on which it shall have become a law.