[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5915 Introduced in House (IH)]
111th CONGRESS
2d Session
H. R. 5915
To amend the Internal Revenue Code of 1986 to create Catastrophe
Savings Accounts.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 28, 2010
Mr. Rooney (for himself, Mr. Paul, Ms. Ros-Lehtinen, and Mr. Lincoln
Diaz-Balart of Florida) introduced the following bill; which was
referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to create Catastrophe
Savings Accounts.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Catastrophe Savings Accounts Act of
2010''.
SEC. 2. CATASTROPHE SAVINGS ACCOUNTS.
(a) In General.--Subchapter F of chapter 1 of the Internal Revenue
Code of 1986 (relating to exempt organizations) is amended by adding at
the end the following new part:
``PART IX--CATASTROPHE SAVINGS ACCOUNTS
``SEC. 530A. CATASTROPHE SAVINGS ACCOUNTS.
``(a) General Rule.--A Catastrophe Savings Account shall be exempt
from taxation under this subtitle. Notwithstanding the preceding
sentence, such account shall be subject to the taxes imposed by section
511 (relating to imposition of tax on unrelated business income of
charitable organizations).
``(b) Catastrophe Savings Account.--For purposes of this section,
the term `Catastrophe Savings Account' means a trust created or
organized in the United States for the exclusive benefit of an
individual or his beneficiaries and which is designated (in such manner
as the Secretary shall prescribe) at the time of the establishment of
the trust as a Catastrophe Savings Account, but only if the written
governing instrument creating the trust meets the following
requirements:
``(1) Except in the case of a qualified rollover
contribution--
``(A) no contribution will be accepted unless it is
in cash, and
``(B) contributions will not be accepted in excess
of the account balance limit specified in subsection
(c).
``(2) The trustee is a bank (as defined in section 408(n))
or another person who demonstrates to the satisfaction of the
Secretary that the manner in which that person will administer
the trust will be consistent with the requirements of this
section.
``(3) The interest of an individual in the balance of his
account is nonforfeitable.
``(4) The assets of the trust shall not be commingled with
other property except in a common trust fund or common
investment fund.
``(c) Account Balance Limit.--The aggregate account balance for all
Catastrophe Savings Accounts maintained for the benefit of an
individual (including qualified rollover contributions) shall not
exceed--
``(1) in the case of an individual whose qualified
deductible is not more than $1,000, $2,000, and
``(2) in the case of an individual whose qualified
deductible is more than $1,000, the amount equal to the lesser
of--
``(A) $15,000, or
``(B) twice the amount of the individual's
qualified deductible.
``(d) Definitions.--For purposes of this section--
``(1) Qualified catastrophe expenses.--The term `qualified
catastrophe expenses' means expenses paid or incurred by reason
of a major disaster that has been declared by the President
under section 401 of the Robert T. Stafford Disaster Relief and
Emergency Assistance Act.
``(2) Qualified deductible.--With respect to an individual,
the term `qualified deductible' means the annual deductible for
the individual's homeowners' insurance policy.
``(3) Qualified rollover contribution.--The term `qualified
rollover contribution' means a contribution to a Catastrophe
Savings Account--
``(A) from another such account of the same
beneficiary, but only if such amount is contributed not
later than the 60th day after the distribution from
such other account, and
``(B) from a Catastrophe Savings Account of a
spouse of the beneficiary of the account to which the
contribution is made, but only if such amount is
contributed not later than the 60th day after the
distribution from such other account.
``(e) Tax Treatment of Distributions.--
``(1) In general.--Any distribution from a Catastrophe
Savings Account shall be includible in the gross income of the
distributee in the manner as provided in section 72.
``(2) Distributions for qualified catastrophe expenses.--
``(A) In general.--No amount shall be includible in
gross income under paragraph (1) if the qualified
catastrophe expenses of the distributee during the
taxable year are not less than the aggregate
distributions during the taxable year.
``(B) Distributions in excess of expenses.--If such
aggregate distributions exceed such expenses during the
taxable year, the amount otherwise includible in gross
income under paragraph (1) shall be reduced by the
amount which bears the same ratio to the amount which
would be includible in gross income under paragraph (1)
(without regard to this subparagraph) as the qualified
catastrophe expenses bear to such aggregate
distributions.
``(3) Additional tax for distributions not used for
qualified catastrophe expenses.--The tax imposed by this
chapter for any taxable year on any taxpayer who receives a
payment or distribution from a Catastrophe Savings Account
which is includible in gross income shall be increased by 10
percent of the amount which is so includible.
``(4) Retirement distributions.--No amount shall be
includible in gross income under paragraph (1) (or subject to
an additional tax under paragraph (3)) if the payment or
distribution is made on or after the date on which the
distributee attains age 62.
``(f) Tax Treatment of Accounts.--Rules similar to the rules of
paragraphs (2) and (4) of section 408(e) shall apply to any Catastrophe
Savings Account.''.
(b) Tax on Excess Contributions.--
(1) In general.--Subsection (a) of section 4973 of the
Internal Revenue Code of 1986 (relating to tax on excess
contributions to certain tax-favored accounts and annuities) is
amended by striking ``or'' at the end of paragraph (4), by
inserting ``or'' at the end of paragraph (5), and by inserting
after paragraph (5) the following new paragraph:
``(6) a Catastrophe Savings Account (as defined in section
530A),''.
(2) Excess contribution.--Section 4973 of such Code is
amended by adding at the end the following new subsection:
``(h) Excess Contributions to Catastrophe Savings Accounts.--For
purposes of this section, in the case of Catastrophe Savings Accounts
(within the meaning of section 530A), the term `excess contributions'
means the amount by which the aggregate account balance for all
Catastrophe Savings Accounts maintained for the benefit of an
individual exceeds the account balance limit defined in section
530A(c)(1).''.
(c) Conforming Amendment.--The table of parts for subchapter F of
chapter 1 of the Internal Revenue Code of 1986 is amended by adding at
the end the following new item:
``Part IX. Catastrophe Savings Accounts''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2010.
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