AB 1726: Natural disasters: catastrophe savings accounts: personal income tax.

This bill allows taxpayers to contribute to a catastrophe savings account, which is a savings account or money market account established to pay for qualified catastrophe expenses. Contributions to these accounts can be deducted from adjusted gross income for taxable years beginning on or after January 1, 2027, and before January 1, 2032. The account must meet certain requirements to qualify as a catastrophe savings account. If a taxpayer uses a distribution from the account to cover an expense other than a qualified catastrophe expense, they may be subject to a penalty. Interest earned on the account is excluded from gross income. The bill includes findings and reporting requirements to ensure the tax credit achieves its goals and objectives. It takes effect immediately as a tax levy.