Louisiana House Bill HB366

Louisiana 2011 Regular Session

• Introduced: 4/25/11
• Refer: 4/25/11

Caption

Provides for forgiveness of loans under the Local Debt Service Assistance Program (OR SEE FISC NOTE)

Impact

The primary impact of HB 366 is the cancellation of debts owed by political subdivisions, which includes principal, interest, and any applicable premiums linked to loans taken for repaying debts during the recovery period post-disasters. This legislative action serves to relieve the fiscal pressure on local government entities, allowing them to redirect funds toward essential services and recovery initiatives that may have been compromised due to their debt obligations.

Summary

House Bill 366 aims to provide significant relief for political subdivisions in Louisiana that were affected by Hurricanes Katrina and Rita. The legislation authorizes the state to forgive certain loans made to these political subdivisions under the Local Debt Service Assistance Program. This program was designed to assist local governments in managing their debt obligations resulting from the catastrophic damage caused by these natural disasters. By forgiving these debts, the state intends to alleviate financial burdens that have persisted in the aftermath of the hurricanes.

Sentiment

The sentiment surrounding House Bill 366 appears to be largely positive, particularly among local government officials and constituents affected by the hurricanes. Supporters see the bill as a necessary step towards recovery and rehabilitation for regions that suffered immense losses. However, there may be ongoing concerns about the implications of debt forgiveness, including the potential for setting a precedent for similar measures in the future, which could lead to debates on fiscal responsibility and accountability in public finance.

Contention

Notable points of contention may arise regarding the long-term financial implications of the bill. Critics may question whether forgiving such debts could lead to expectations of similar treatments in future disasters or financial crises. Additionally, there might be discussions around the criteria used to determine which political subdivisions qualify for this debt forgiveness, as well as the broader affect on the state’s financial health in terms of its responsibilities toward all local governments across Louisiana.