Authorizes a state tax credit for premiums paid for flood insurance through the National Flood Insurance Program. (1/1/18) (OR -$354,800,000 GF RV See Note)
Impact
If enacted, SB 118 would create a refundable tax credit that would allow taxpayers to recover or reduce state income tax liabilities that arise from premiums paid for flood insurance. This measure would directly impact the income tax laws in Louisiana, enabling taxpayers who previously faced challenges affording flood insurance to receive financial assistance. The intent is to encourage a proactive approach to flood management by relieving financial barriers for residents and businesses, which in turn could have broader implications for community resilience against flooding events in the future.
Summary
Senate Bill 118, proposed by Senator Colomb, aims to provide a state tax credit to individuals and corporations for premiums paid on flood insurance through the National Flood Insurance Program. The bill is designed to alleviate the financial burden on taxpayers who invest in flood insurance, subsequently promoting greater participation in flood risk management initiatives. By allowing a refundable credit that offsets the state income tax, the legislation ties financial incentives to individuals' responsibilities in protecting their properties from flood damage. The effective date for this credit is set for January 1, 2018, which marks its applicability for all taxable periods starting from then.
Sentiment
The overall sentiment around SB 118 appears to be positive, largely supported by stakeholders who emphasize the need for increased access to flood insurance in light of frequent natural disasters. Advocates for the bill argue that facilitating a tax credit will not only help residents acquire necessary flood coverage but will also foster a more prepared populace as climate-related disasters become more common. While discussions highlight widespread support, there are cautionary notes regarding fiscal impacts and the long-term sustainability of tax credits related to insurance premiums.
Contention
Despite general support for SB 118, some contention exists primarily surrounding the potential fiscal implications for the state’s budget. Critics may argue that providing extensive tax credits could lead to significant revenue losses that could affect funding for other essential state services. Additionally, questions about whether the credit would be substantial enough to incentivize meaningful changes in flood insurance acquisition remain. Legislators may raise concerns about equitable access among low-income residents who might be disproportionately impacted by increased insurance costs contrasted with the benefits of the credit.
Provides an insurance premium discount for members of the Louisiana National Guard who have not been activated. (8/1/18) (EG -$1,100,000 GF RV See Note)