SLS 13RS-32 ORIGINAL
Page 1 of 8
Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
Regular Session, 2013
SENATE BILL NO. 12
BY SENATOR MURRAY
TAX/INCOME/PERSONAL. Grants a refundable individual income tax credit for up to
$600 of deposits made in a tax year to Wind and Hail Deductible Savings Accounts which
provide reimbursement to the account holder for damages or losses not covered because of
a deductible. (gov sig)
AN ACT1
To enact R.S. 47:297.13, relative to individual income tax; to grant a credit for deposits2
made to certain savings accounts for the purpose of paying certain damages or losses3
incurred from certain weather events; to provide for policies and procedures for4
administering such account; and to provide for related matters.5
Be it enacted by the Legislature of Louisiana:6
Section 1. R.S. 47:297.13 is hereby enacted to read as follows: 7
§297.13. Tax credit; Wind and Hail Deductible Savings Account 8
A.(1) There shall be allowed a limited, refundable individual income tax9
credit for up to six hundred dollars of deposits made in a tax year by an account10
holder to Wind and Hail Deductible Savings Accounts which a taxpayer has11
contracted for with an account administrator as provided for in this Section12
until the balance in the accounts, including any earnings on the accounts13
deposited to the credit of the accounts, reach the limit provided for in14
Paragraph (3) of this Subsection.15
(2) Such an account may be established by any taxpayer for his qualified16
residence or the qualified residence of an eligible family member. However, only17 SB NO. 12
SLS 13RS-32 ORIGINAL
Page 2 of 8
Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
one Wind and Hail Deductible Savings Account may be created for any1
qualified residence.2
(3) The credit for deposits to such an account shall not exceed an amount3
equal to the Wind and Hail Deductible in the insurance policy covering the4
qualified residence for which the account is opened. However, if the account5
balance falls below such amount by reason of distributions for the payment of6
eligible unreimbursed damages, further credit for deposits is allowed until the7
account balance equals the amount provided for in this Paragraph.8
B. For purposes of this Section, the following words and phrases shall9
have the respective meanings ascribed to them in this Subsection:10
(1)(a) "Account administrator" shall mean a state or national bank,11
savings and loan association, credit union as those terms are defined in R.S. 6:2,12
or a savings bank chartered pursuant to the Louisiana Savings Bank Act of13
1990 (26 U.S.C.A. §21), which are approved by the department for the purposes14
of establishing and maintaining Wind and Hail Deductible Savings Accounts.15
(b) Account administrator shall also mean a person or entity determined16
by the secretary of the Department of Revenue to be qualified to be an17
administrator of the accounts provided for in this Section.18
(2) "Department" means the Department of Revenue.19
(3) "Eligible family member" means any person in the following20
relationship to an account holder:21
(a) A child or a descendant of such child.22
(b) A brother, sister, stepbrother, or stepsister.23
(c) A father, mother, or an ancestor of either.24
(d) A stepfather or stepmother.25
(e) A son or daughter of a brother or sister of an account holder.26
(f) A brother or sister of an account holder.27
(g) A son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-28
in-law, or sister-in-law.29 SB NO. 12
SLS 13RS-32 ORIGINAL
Page 3 of 8
Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
(4) "Eligible unreimbursed damages" shall mean documented,1
unreimbursed expenses paid to repair damages or losses to a qualified residence2
for which a Wind and Hail Deductible Savings Account has been created which3
are incurred as a result of a hurricane, a named storm, or otherwise by wind4
and hail, which damages or losses are not covered because of a Wind and Hail5
Deductible.6
(5) "Qualified residence" means a residence or dwelling in the state7
which is covered by an insurance policy which covers the residence or dwelling8
from damages and loss up to a wind and hail deductible amount, or a policy9
specifically designed to cover the residence or dwelling from damages and loss10
from a hurricane, named storm, or from wind and hail up to a wind and hail11
deductible amount.12
(6) "Wind and Hail Deductible" means a separate hurricane, named13
storm, or wind and hail deductible in an insurance policy insuring a qualified14
residence expressed as a percentage of the insured value of the property or as15
a specific dollar amount.16
(7) "Wind and Hail Deductible Savings Account" or "account" means17
an account established pursuant to this Section for a particular qualified18
residence.19
C.(1) In order to be eligible for the tax credit provided for in this Section,20
the Wind and Hail Deductible Savings Account shall be established by an21
account administrator who shall be approved by the Department of Revenue,22
and the contract for which shall limit access to such account to the account23
administrator who shall administer such account in accord with the provisions24
of this Section and any rules and regulations promulgated pursuant to25
Subsection E of this Section.26
(2) The account administrator shall obtain such information from the27
account holder as reasonably required by rules and regulations of the28
department to determine that the residence covered by the account is and29 SB NO. 12
SLS 13RS-32 ORIGINAL
Page 4 of 8
Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
remains a qualified residence for the tax year and that the balance in the1
account does not exceed the limit provided for in Paragraph (A)(3) of this2
Section.3
(3)(a) An account administrator shall use the funds held in a Wind and4
Hail Deductible Savings Account solely for the purpose of investing such funds5
and for reimbursing the account holder for the payment of eligible6
unreimbursed damages or for other distributions from the account as provided7
in Subsection D of this Section.8
D.(1) After the deduction of reasonable charges by the account9
administrator for management of the account, net earnings on investment of the10
funds in a Wind and Hail Deductible Savings Account shall be distributed by11
the account administrator as follows:12
(a) They shall be deposited into the account until the balance in the13
account reaches the limit provided for in Paragraph (A)(3) of this Section.14
(b)(i) After the account reaches such limit, the net earnings shall be15
distributed to another Wind and Hail Deductible Savings Account established16
by the account holder. Such deposit shall not be considered taxable income of17
the account holder and shall not be eligible for the credit provided for in this18
Section.19
(ii) If there is no other such account, the net earnings shall be distributed20
to the department in an amount which equals the proportion of the balance of21
money in the account consisting of deposits for which a credit under this Section22
was claimed bears to the total. The remainder of the net earnings, if any, shall23
be distributed to the account holder and shall be considered taxable income of24
the account holder.25
(2) Funds deposited in the Wind and Hail Deductible Savings Account26
may be distributed by the account administrator solely as follows:27
(a)(i) To reimburse the account holder for the payment of eligible28
unreimbursed damages, according to documentation of such eligible29 SB NO. 12
SLS 13RS-32 ORIGINAL
Page 5 of 8
Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
unreimbursed damages paid by the account holder during a tax year.1
(ii) Such reimbursement distributions shall not be considered taxable2
income of the account holder.3
(b)(i) To distribute to the Department of Revenue the amount of funds4
in the account which are derived from deposits for which a tax credit was5
claimed as provided in this Section, and the remainder of such funds, if any, to6
the account holder, or to the heirs and assigns of the account holder, when the7
account holder is deceased or when the account is terminated. The account may8
be terminated by the account holder or the account administrator, and shall be9
terminated upon the loss of qualification for the credit of the residence or10
dwelling for which the account was established.11
(ii) None of the money distributed as provided for in Item (i) of this12
Subparagraph shall be considered as taxable income of the account holder or13
the heirs and assigns of the account holder.14
E. Any excess of the credit allowed in a taxable period over the15
individual income tax liability for that taxable period against which the credit16
can be applied shall constitute an overpayment, as defined in R.S. 47:1621(A),17
and the secretary shall make a refund of such overpayment from the current18
collections of the taxes imposed by Chapter 1 of Subtitle II of this Title, as19
amended. The right to a refund of any such overpayment shall not be subject20
to the requirements of R.S. 47:1621(B).21
F. The commissioner of insurance and the secretary of the Department22
of Revenue shall issue joint rules for the purpose of implementing the provisions23
of this Section in accordance with the Administrative Procedure Act, but24
oversight of such rules shall be with the Senate Committee on Revenue and25
Fiscal Affairs and the House Committee on Ways and Means.26
Section 2. This Act shall become effective upon signature by the governor or, if not27
signed by the governor, upon expiration of the time for bills to become law without signature28
by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If29 SB NO. 12
SLS 13RS-32 ORIGINAL
Page 6 of 8
Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
vetoed by the governor and subsequently approved by the legislature, this Act shall become1
effective on the day following such approval.2
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Riley Boudreaux.
DIGEST
Proposed law grants a refundable individual income tax credit for up to $600 of deposits
made in a tax year by an account holder to a Wind and Hail Deductible Savings Account
until the balance in the account, including any earnings on the account deposited to the credit
of the account, reaches an amount equal to the "Wind and Hail Deductible" in the insurance
policy covering the "qualified residence" for which the account is opened. The money in the
account is to be used for reimbursing the account holder for the payment of "eligible
unreimbursed damages" to a "qualified residence".
"Eligible unreimbursed damages" is defined as documented, unreimbursed expenses paid
to repair damages or losses to a "qualified residence" for which a Wind and Hail Deductible
Savings Account has been created which are incurred as a result of a hurricane, a named
storm, or otherwise by wind and hail, which damages or losses are not covered because of
a "Wind and Hail Deductible".
"Qualified residence" is defined as a residence or dwelling in the state which is covered by
an insurance policy which covers the residence or dwelling from damages and loss up to a
wind and hail deductible amount or a policy specifically designed to cover the residence or
dwelling from damages and loss from a hurricane, named storm, or from wind and hail up
to a wind and hail deductible amount.
"Wind and Hail Deductible" is defined as a separate hurricane, named storm, or wind and
hail deductible in an insurance policy insuring a qualified residence expressed as a
percentage of the insured value of the property or as a specific dollar amount.
An account may be established by any taxpayer for his qualified residence or the qualified
residence of an "eligible family member". However, only one Wind and Hail Deductible
Savings Account may be created for any qualified residence.
"Eligible family member" means any person in the following relationship to an account
holder:
(1)A child or a descendant of such child.
(2)A brother, sister, stepbrother, or stepsister.
(3)A father, mother, or an ancestor of either.
(4)A stepfather or stepmother.
(5)A son or daughter of a brother or sister of an account holder.
(6)A brother or sister of an account holder.
(7)A son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or
sister-in-law.
Proposed law provides that, in order to be eligible for the tax credit, a Wind and Hail SB NO. 12
SLS 13RS-32 ORIGINAL
Page 7 of 8
Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
Deductible Savings Account must be established by an "account administrator" who must
be approved by the Department of Revenue [DOR].
"Account administrator" is defined as a state or national bank, savings and loan association,
credit union as those terms are defined in R.S. 6:2, or a savings bank chartered pursuant to
the Louisiana Savings Bank Act of 1990 (26 U.S.C.A. §21), which are approved by the DOR
for the purposes of establishing and maintaining Wind and Hail Deductible Savings
Accounts. "Account administrator" also means a person or entity determined by the secretary
of DOR to be qualified to be an administrator of such accounts.
The contract for the account must limit access to the account to the account administrator
who must administer it in accord with the proposed law and any rules and regulations
promulgated pursuant to it. The account administrator must obtain such information from
the account holder as is reasonably required by rules and regulations of the department to
determine that the residence covered by the account is and remains a qualified residence for
the tax year and that the balance in the account does not exceed the limit. An account
administrator must use the funds held in an account solely for the purpose of investing such
funds and for reimbursing the account holder for the payment of eligible unreimbursed
damages or for other distributions from the account set out below.
Proposed law provides that, after the deduction of reasonable charges by the account
administrator for management of the account, net earnings on investment of the funds in an
Wind and Hail Deductible Savings Account are to be distributed by the account
administrator as follows:
(1)They must be deposited into the account until the balance in the account reaches the
limit.
(2)After the account reaches the limit, the net earnings are distributed to another
account established by the account holder. The deposit is not considered taxable
income of the account holder and is not eligible for the credit.
(3)If there is no other such account, the net earnings must be distributed to the DOR in
an amount which equals the proportion of money in the account consisting of
deposits for which a credit was claimed bears to the total. The remainder of the net
earnings, if any, must be distributed to the account holder and is considered taxable
income of the account holder.
Proposed law funds deposited in the Wind and Hail Deductible Savings Account are
authorized to be distributed by the account administrator solely as follows:
(1)To reimburse the account holder for the payment of "eligible unreimbursed
damages", according to documentation of such eligible unreimbursed damages paid
by the account holder during a tax year. Such reimbursement distributions are not
considered taxable income of the account holder.
(2)To distribute to the DOR the amount of funds in the account which are derived from
deposits for which a tax credit was claimed, and the remainder of such funds, if any,
to the account holder, or to the heirs and assigns of the account holder, when the
account holder is deceased or when the account is terminated. The account may be
terminated by the account holder or the account administrator, and must be
terminated upon the loss of qualification for the credit of the residence or dwelling
for which the account was established. The money distributed is not considered to
be taxable income of the account holder or the heirs and assigns of the account
holder.
Proposed law provides that any excess of the credit over tax liability constitutes an
overpayment and the secretary of DOR must make a refund of the overpayment from the SB NO. 12
SLS 13RS-32 ORIGINAL
Page 8 of 8
Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
current collections of the income taxes.
Proposed law requires the commissioner of insurance and the secretary of DOR to issue joint
rules in accordance with the APA, but oversight of such rules is with the Senate Committee
on Revenue and Fiscal Affairs and the House Committee on Ways and Means.
Effective upon signature of the governor or lapse of time for gubernatorial action.
(Adds R.S. 47:297.13)