Existing law provides for the formation and regulation of state-organized banks and state-certified credit unions by the Department of Financial Protection and Innovation.
This bill, until January 1, 2030, would authorize a homeowner to establish one catastrophe savings account that, among other things, has the specified purpose of covering the amount of insurance deductibles and other uninsured portions of risks of loss from wildfire, flood, or earthquake. The bill would require distributions from a catastrophe savings account to be used to cover qualified catastrophe expenses, defined as expenses paid or incurred due to damage to or loss of a homeowner’s primary residence caused by a wildfire, flood, or earthquake that has been declared by the Governor to be an emergency. The bill would impose penalties on homeowners who use a distribution to
cover an expense other than a qualified catastrophe expense, unless specified exceptions apply. The bill would require the penalty to be determined and collected by the Commissioner of Financial Protection and Innovation, and deposited in the Financial Protection Fund.
The Personal Income Tax Law, in modified conformity with federal income tax laws, allows various deductions from gross income in calculating adjusted gross income.
This bill, for taxable years beginning on or after January 1, 2025, and before January 1, 2030, would allow a deduction from adjusted gross income for amounts contributed by an individual homeowner to a catastrophe savings account, in accordance with specified provisions.
The Personal Income Tax Law, in conformity with federal income tax law, generally defines “gross income” as income from whatever source derived, except as
specifically excluded, and provides various exclusions from gross income.
This bill, for taxable years beginning on or after January 1, 2025, and before January 1, 2030, would provide an exclusion from gross income for interest income earned by a catastrophe savings account.
Existing law requires any bill authorizing a new tax expenditure, as defined, to include tax credits, deductions, exclusions, or exemptions, to contain, among other things, specific goals, purposes, and objectives that the tax credit will achieve, detailed performance indicators, and data collection requirements.
This bill would include findings and reporting requirements in compliance with this requirement.
This bill would take effect immediately as a tax levy.