WASHINGTON--Legislation creating catastrophic savings accounts,which would be comparable to Health Savings Accounts and wouldallow homeowners to put money aside tax-free to prepare for thefinancial impact of a major natural disaster, has been introducedin the House.

The legislation was introduced by two members of Congress fromFlorida, Democratic Rep. Debbie Wasserman Schultz and RepublicanRep. Tom Feeney. It is similar to legislation introduced in theSenate several weeks ago by Florida's two senators, Sen. BillNelson, D, and Mel Martinez, R.

"Addressing disaster relief for Florida's families is abipartisan issue, and I believe Catastrophe Savings Accounts are anexcellent vehicle to empower homeowners and encourage personalresponsibility and preparation," Rep. Feeney said.

CSAs are structured in the same manner as Health SavingsAccounts. Under the bill, a catastrophe tax-free savings accountcould be opened to cover current and future catastrophe-relatedexpenses.

The money could be withdrawn to cover qualified disasterexpenses tax-free. Qualified expenses will include: deductibles,uninsured losses, flood damage and structural upgrades for futurestorms. Upon retirement, the money could be removed from theaccount penalty-free.

The legislation has strong support in the insurance industry.According to officials at the National Association of MutualInsurance Companies, CSAs "would go a long way" to encouragehomeowners to prepare for catastrophes.

Justin Roth, a senior federal affairs director for NAMIC,explained that the current tax code "does not encourage eitherhomeowners or insurance companies to reserve money for futurenatural catastrophes."

He added, "We support Congressmen Feeney's and WassermanSchultz's effort to finally provide them that ability."

Rep. Schultz said the utility of the plan is that residents ofFlorida have recently experienced back-to-back record-settinghurricane seasons coupled with unexpected devastatingtornadoes.

"This legislation will put the power in the people's hands andencourage them to save and prepare for future disasters," she said."In addition to high insurance costs and lack of insuranceavailability, incredibly high deductibles have hurtFloridians."

Since the savings is tax-free, Floridians get equitable taxtreatment since they use pre-tax dollars to fix damaged property,Rep. Schultz explained.