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Committee hears bill to create pretax catastrophe savings accounts for homeowners
Summary
The Assembly Revenue and Taxation Committee heard Assembly Bill 232, which would let homeowners deposit pretax dollars into accounts to pay qualified disaster expenses; the measure was sent to the committee's suspense file for later action.
Assemblymember Calderon introduced Assembly Bill 232 on behalf of homeowners, saying the bill would allow California residents to set aside pretax dollars in a catastrophe savings account for wildfire, flood and earthquake expenses and that interest on those accounts would be tax exempt.
The measure would permit withdrawals for qualified expenses including home hardening and insurance deductibles after a wildfire, flood or earthquake declared a state of emergency, Calderon said. "This bill seeks to provide Californians a new tool to protect their homes and accelerate their recovery," she said.
Josephine Figueroa, deputy commissioner and legislative director for the California Department of Insurance, told the committee the department supports the bill and called it "an essential financial tool to prepare for climate driven disasters." Figueroa said the bill would align qualifying mitigation measures with the department's wildfire-regulation framework developed with Cal Fire and the Governor's Office of Emergency Services.
Chris Schultz of the California Bankers Association compared the proposed accounts to health savings accounts and said the modest tax incentive provides a marketing hook to encourage homeowners to save for higher deductibles or home-hardening work. "One way for homeowners to deal with rising insurance costs is to harden their home," Schultz said.
Committee members asked no substantive follow-up questions during the hearing. Chair Gibson announced that AB 232 is a suspense candidate and will be referred to the committee's suspense file for later consideration. No vote on the merits was taken at this hearing.
The bill's presentation included agency witnesses from the Department of Insurance and the California Bankers Association; no formal amendments or votes were recorded at the hearing.
