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STATE OF OKLAHOMA
2nd Session of the 60th Legislature (2026)
SENATE BILL 1802 By: Rosino
AS INTRODUCED
An Act relating to catastrophe savings accounts;
defining terms; authorizing the establishment of a
catastrophe savings account; limiting accounts that
may be opened; prescribing deposit amounts in order
to claim deduction; authorizing income tax deduction
for certain deposits; exempting certain interest and
returns from taxable income; providing exemption for
certain distributions; authorizing the Oklahoma Tax
Commission to promulgate rules; providing for
codification; and providing an effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 2358.8 of Title 68, unless there
is created a duplication in numbering, reads as follows:
A. As used in this section:
1. “Catastrophe savings account” means a regular savings
account or money market account established by a taxpayer who is a
resident of this state, the exclusive purpose of which is to pay for
qualified catastrophe expenses;
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2. “Catastrophic event” means a windstorm, a tornado, an
earthquake, an ice storm, a flood, a hailstorm, and any other
weather event that causes damage to homes;
3. “Qualified catastrophe expenses” means a qualified
deductible paid for damage resulting from a catastrophic event and
expenses incurred, that are not covered by an insurance policy, in
repairing damage or replacing a structure damaged by a catastrophic
event for the primary residence of the taxpayer; and
4. “Qualified deductible” means the amount of money the insured
shall pay before the insurance provider starts paying for the
covered damaged expenses for the insured’s primary residence caused
by a catastrophic event. If the policy provides for more than one
deductible, the deductible with the highest amount shall be the
qualified deductible.
B. A taxpayer may establish one catastrophe savings account
pursuant to this section which shall be labeled as a catastrophe
savings account and shall specify that the purpose of the account is
to cover qualified catastrophe expenses. No more than one
catastrophe savings account shall be established pursuant to this
section for a primary residence.
C. In order to claim the deduction allowed by this section:
1. For a taxpayer with a qualified deductible of One Thousand
Dollars ($1,000.00) or less, the total amount that may be
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contributed to a catastrophe savings account shall be Two Thousand
Dollars ($2,000.00) or less;
2. For a taxpayer with a qualified deductible greater than One
Thousand Dollars ($1,000.00), the total amount that may be
contributed to a catastrophe savings account shall be the lesser of
twice the amount of the qualified deductible or Twenty-five Thousand
Dollars ($25,000.00); and
3. For a taxpayer with a self-insured primary residence or a
taxpayer who chooses not to obtain insurance on his or her primary
residence, the total amount that may be contributed to a catastrophe
savings account shall be Two Hundred Fifty Thousand Dollars
($250,000.00) or less. Provided, the amount contributed shall not
exceed the market value of the primary residence, as reported by the
applicable county assessor.
D. 1. For tax year 2027 and subsequent tax years, an
individual taxpayer shall be allowed a deduction from Oklahoma
adjusted gross income for amounts contributed to a catastrophe
savings account in compliance with this section.
2. For tax year 2027 and subsequent tax years, interest or
returns earned by a catastrophe savings account in compliance with
this section shall be exempt from taxable income.
3. For tax year 2027 and subsequent tax years, any distribution
from a catastrophe savings account in compliance with this section
that is used to cover qualified catastrophe expenses shall be exempt
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from taxable income. Provided, if the aggregate distributions from
such account during the tax year exceed the qualified catastrophe
expenses of the taxpayer during the tax year, such excess
distributions shall be considered taxable income.
E. The Oklahoma Tax Commission may promulgate any rules
necessary to effectuate the provisions of this section.
SECTION 2. This act shall become effective January 1, 2027.
60-2-2477 QD 1/14/2026 8:57:37 PM