Rep. Laurel Lee Introduces Bipartisan Bill to Provide Tax-Free Savings Accounts for Disaster, Flood, Fire Mitigation and Response

 Washington, D.C. – Today, amidst the unprecedented California wildfires and following major Hurricanes Helene and Milton here in Florida, Congresswoman Laurel Lee (R-FL) and Congressman Jared Moskowitz (D-FL) introduced the Residential Emergency Asset Accumulation Deferred Taxation Yield (READY) Account Act, which would create a tax-free savings vehicle for millions of Americans to better afford home mitigation and disaster response costs. 

Specifically, 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 strengthening the connection of the roof to the home; installing impact-resistant windows and doors; and, elevating the structure or constructing floodwalls to mitigate against flooding. The READY Account Act is endorsed by Florida’s Chief Financial Officer Jimmy Patronis, the National Association of Insurance and Financial Advisors, the Florida Insurance Council, the American Property Casualty Insurance Association, and the National Association of Mutual Insurance Companies.

“In the midst of devastating California wildfires and after catastrophic hurricanes in Florida, the American people have seen the terrible destruction caused by severe weather events and how critical it is to prepare before disaster strikes. I am proud to introduce the READY Account Act to help American families invest in resilience and to mitigate the costs of disaster recovery projects,” said Congresswoman Laurel Lee. “This bill will create a tax-free savings account for investing in storm mitigation home improvements and disaster response costs, similar to a Health Savings Account. I always encourage my constituents to prepare before a disaster strikes, and a READY account will make it easier for families to strengthen their homes against damage from a storm or natural disaster.”

“Disaster preparedness saves lives, and it can help reduce recovery costs when disasters hit the homes of hardworking Florida families. As Florida’s former Emergency Management Director, I’m proud to lead the READY Account Act in the US House, because we should provide Florida families as many tools as possible to better prepare their homes for disaster and quickly recover when the worst happens. For families in Florida and across the nation, this commonsense bill will lower sky-high insurance costs, help them stay ready, and keep their hard-earned money in their pockets,”said Congressman Jared Moskowitz.

“Last year, Florida faced unprecedented devastation from back-to-back hurricanes, leaving families and communities struggling to rebuild. The READY Account Act is a common-sense solution that empowers Floridians to take proactive steps in preparing for future disasters by setting aside tax-free savings for mitigation and response. By encouraging personal preparedness, this legislation not only helps protect lives and property but also strengthens our communities in the face of natural disasters. I’m proud to support this critical measure to ensure families across the country have the tools they need to weather the storms ahead," said Congressman Vern Buchanan. 

“As we saw last year, hurricane season is unpredictable and can send deadly back-to-back storms Florida’s way with very little notice. Floridians must do what they can to be prepared, and that includes saving for storm mitigation upgrades and clean-up efforts. The READY Account Act encourages Americans to make those preparations by creating a tax-free “READY” account that operates like the popular Health Savings Account. This account will enable Florida families to save personal hurricane funds and act quickly after storms, ensuring they won’t have to wait on federal disaster assistance to begin recovery. I’m happy to join my colleague, Congresswoman Lee, and I appreciate her leadership on this critical legislation,” said Congressman Scott Franklin.

“Floridians know that during Hurricane Season preparedness saves lives, and being ready for storms can also help save your home from catastrophic damage. I am proud to partner with Representative Laurel Lee and CFO Patronis to announce the READY Account Act that will 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,” said Senator Rick Scott.

“Big thanks to Congresswoman Laurel Lee for her support of the READY Account Act and for ushering this legislation through the U.S. House of Representatives. This Act will incentivize tax savings for homeowners, provide relief to those impacted by disasters around the country, and empower homeowners to leverage the federal tax code to reduce financial burdens. With the My Safe Florida Home Program, we’ve had great success in helping residents reduce their insurance costs. The READY Account Act will give American consumers the chance to be fiscally prepared for future disasters and simultaneously lower their insurance costs,” said Florida Chief Financial Officer Jimmy Patronis.

“Strengthening homes can reduce the risk Americans face from extreme weather, and the more we can do to incentivize critical mitigation and hardening of our homes and communities the better. The READY Account Act offers homeowners powerful tools to better protect themselves, their families, and their property from severe storms and other natural disasters. NAMIC applauds Congresswoman Lee for her leadership in empowering homeowners as we encourage Americans to take necessary precautions in mitigating the risks their homes face,” said National Association of Mutual Insurance Companies.

"In our commitment to fortifying Florida's insurance landscape, the Ready Account Act presents a pivotal opportunity to enhance financial resilience for our citizens. By establishing a more robust, accessible savings framework, this legislation ensures policyholders are better prepared for unforeseen challenges. We strongly endorse this initiative as it represents a proactive approach to strengthening both individual and statewide economic security. This act aligns with our mission to protect and empower Floridians in safeguarding their financial future. The Florida Insurance Council applauds Congresswoman Laurel Lee for spearheading this important legislation,” said Florida Insurance Council.

 “The National Association of Insurance and Financial Advisors (NAIFA) recognizes that natural disasters take a significant financial and emotional toll on Americans every year. Accordingly, NAIFA applauds Rep. Lee’s introduction of the READY Account Act to encourage the adoption of tax-advantaged accounts – that are designed to help homeowners pay for disaster preparation and recovery efforts. The READY accounts can play an important role in incentivizing homeowners to save for home improvements, thereby leading to significant savings in federal disaster relief and mitigating instability in property insurance markets,” said National Association of Insurance and Financial Advisors. 

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.

Read the full text of the bill here.