H. R. 2100
To amend the Internal Revenue Code of 1986 to create Catastrophe
IN THE HOUSE OF REPRESENTATIVES
June 2, 2011
Mr. ROONEY (for himself and Mr. WEST) introduced the following bill; which
was referred to the Committee on Ways and Means
To amend the Internal Revenue Code of 1986 to create Catastrophe
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 2011'.
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--
`(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'
`(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
`(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
`Part IX. Catastrophe Savings Accounts'.
(d) Effective Date- The amendments made by this section shall apply to taxable
years beginning after December 31, 2011.