Sen. Rick Scott Announces READY Account Act to Provide Tax-Free Savings Accounts for Disaster Mitigation and Response

WASHINGTON, D.C. - Today, following Major Hurricanes Helene and Milton, Senator Rick Scott announced the Residential Emergency Asset Accumulation Deferred Taxation Yield (READY) Account Act to create a tax-free savings vehicle for home mitigation and disaster response costs. This legislation would enable taxpayers to establish a READY account, similar to a Health Savings Account (HSA), for at least 12 different mitigation measures used by the Federal Emergency Management Agency (FEMA), such as various measures to strengthen the connection of the roof to the home; installing impact-resistant windows and doors; and, elevating the home or constructing floodwalls to mitigate against flooding. This tax-advantaged account would help millions of Floridians better afford disaster mitigation and protect their homes. The READY Account Act is endorsed by the State of Florida's Chief Financial Officer Jimmy Patronis.

Senator Rick Scott said, "Floridians know that during Hurricane Season preparedness saves lives, and being ready for storms can also help save your home from catastrophic damage. While I continue to fight every day to make sure FEMA is showing up for Florida families and getting them all of the federal assistance available for them to recover, there is more than can be done to make sure Floridians are able to take personal action that protects their home and makes recovery from the next storm less burdensome. Today, I am proud to partner with CFO Patronis to announce the READY Account Act to give homeowners a triple tax advantage when saving for disaster mitigation and recovery projects, and build on work done at the state level in Florida through the My Safe Florida Home program. We know that there is a significant return on investment for families that take action to strengthen their homes and protect against hurricane damage, including a reduction in insurance costs, and the READY Account Act will make it easier to save for mitigation and recovery projects through a tax-free account. I urge my colleagues to support this good bill that helps families across the country establish tax-free disaster savings accounts and be better prepared for hurricanes and other natural disasters."

Florida CFO Jimmy Patronis said, "I want to thank Senator Scott for building on our policy proposal to accomplish tax savings for homeowners that only the federal government can. READY accounts leverage the federal tax code to give homeowners a triple tax advantage when saving up funds to harden their homes against storms. Upgrading a home to the latest building codes saves $11 for every $1 invested and we've had great success with the My Safe Florida Home Program in reducing insurance costs. Florida is once again leading the way so that all Americans can benefit from lower insurance bills and fewer headaches the next time mother nature throws you a curveball."

The READY Account Act:

• Amends the Internal Revenue Code (26 U.S.C.) to enable taxpayers to establish a Residential Emergency Asset Accumulation Deferred Taxation Yield Account ("READY account"), similar to an HSA (26 U.S.C. 223).
• Creates 3 tax benefits associated with the READY account:
  • An annual tax deduction is allowed in the amount that the taxpayer pays to the account in that tax year;
  • Growth of the investment account would be exempt from taxation; and
  • Any amount distributed out of the account for eligible mitigation measures would not be taxed at withdraw.
  • Annually, a taxpayer may contribute up to $4,500.
  • To be eligible for the tax benefits, the READY account must be used to save and pay for mitigation and recovery measures that benefit the taxpayer's principle residence.
  • The bill lists 12 mitigation measures that taxpayers can choose from. The measures are derived from FEMA guidance, some examples include:
    • Various measures to strengthen the connection of the roof to the home;
    • Installing impact-resistant windows and doors;
    • Elevating the home or constructing floodwalls to mitigate against flooding.
    • The assets in the account could also be used to pay for any deductible for an insurance policy insuring the taxpayer's residential home.
    • To ensure that mitigation measures are truthfully and properly performed, an industry professional must certify that the applicable mitigation measure was performed.

Senator Scott encourages all Floridians to visit his website at www.rickscott.senate.gov/contact/caseworkfor information or help with federal agencies like FEMA and the SBA, following Hurricanes Milton and Helene. Find more on state response efforts from the Florida Division of Emergency Management at floridadisaster.org or @FLSERT.

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