Amendment #719 to H4000

Flood Insurance Fund

Representatives Straus of Mattapoisett, Vieira of Falmouth, Fernandes of Milford, Schmid of Westport, Khan of Newton, Gifford of Wareham, Chan of Quincy, Cabral of New Bedford, Madden of Nantucket, Peisch of Wellesley, Cantwell of Marshfield, Fiola of Fall River and Devers of Lawrence move that the bill be amended by inserting at the end thereof, the following new section:-

SECTION XX. Chapter 183 of the General Laws, as appearing in the 2012 Official Edition, is hereby amended by adding the following new section:-

Section xx. (a) A purchaser or owner of residential property required to purchase flood insurance who wishes to further protect the residential property from flood damage at a level that exceeds the minimum amount of flood insurance coverage required by law may, in addition to or in lieu of purchasing or paying for additional flood insurance, deposit funds into a flood protection savings account with a financial institution, as defined in section 1 of chapter 140E, to be used in accordance with this section. Such account may contain a principal amount of no more than $100,000.

(b) A financial institution, as defined in section 1 of chapter 140E, shall allow a purchaser or owner of residential property to establish a flood protection savings account pursuant to this section. The financial institution shall allow the purchaser or owner to use, access or direct the use of the funds, which shall include the account’s principal and accrued interest, if any, for certain qualifying expenses, which shall include the  costs of reconstruction, repairs, damages or any such losses incurred by the purchaser or owner in the event of a flood or storm damage; provided, however, that the purchaser or owner may use, access or direct the use of the fund for other non-qualifying expenses, subject to subsection (c); and provided further, that the funds shall revert to the purchaser or owner upon the sale or transfer of the residential property for which such funds have been deposited.

(c) (1) Amounts up to $5,000 paid into a flood protection savings account pursuant to this section during a taxable year shall be allowed as a deduction pursuant to section 3 of chapter 62.

(2) All interest or income derived from funds deposited into a flood protection savings account established pursuant to this section shall be deductible from taxable income pursuant to section 3 of chapter 62.

(3) Any amount paid or distributed out of a flood protection savings account for a qualifying expense shall be exempt from taxation pursuant to said chapter 62.

(4) Any amount paid or distributed out of a flood protection savings account, which is used for a non-qualifying expense, shall be subject to taxation pursuant to said chapter 62.

(d) The commissioner of banks may, in conjunction with the commissioner of revenue, promulgate rules and regulations as may be necessary to carry out the provisions of this section.