[StBernard] Update From State Representative Nita Rusich Hutter

[Westley Annis]

Update From State Representative Nita Rusich Hutter

November 28 , 2005 


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This is the first part of the 2005 Special Session Wrap Up.  If you have
questions regarding any of the legislation mentioned below, please call the
office at 225-342-7368.  Thank you.

Nita Hutter

 

STATE BUDGET

*          The focus of the 2005 First Extraordinary Session was to address
the issues raised by the effects of Hurricane Katrina and Rita.  The state
budget was cut by more than $600 million to offset the decline in state
revenue and fees brought about by the hurricanes.  Among programs cut were
the Rural and Urban Development funds, healthcare and education. Layoff of
state workers is probable and the state’s “Rainy Day Fund” will be tapped to
help offset the deficit. The House of Representatives voluntarily cut its
budget by $1 million.  House Bill 156 was approved by both Houses and sent
to the governor.

ETHICS

*          House Bill 9 requires an elected or appointed official to
disclose to the Board of Ethics receipt of anything of economic value valued
at more than $2,500 through a contract or subcontract related to a
gubernatorially declared disaster or emergency.  This includes whether
directly, through an immediate family member, or through a legal entity in
which he or his immediate family owns 10% or more.  The bill requires
reporting who the contract is awarded to, how much it is for and what type
of work being done.  Failure to report carries a fine of $100 day per day
for each day the report is not filed or is filed improperly.  It is not
incumbent upon the elected or appointed official to report any contract or
subcontract to an immediate family member.  The bill was approved and sent
to the Governor for consideration.

TAXES/TAX EXEMPTIONS

*          Current law phases in an exclusion of a portion of the sales and
use tax on manufacturing machinery and equipment.  House Bill 39 provides a
total exemption through June 30, 2007 for the replacement or repair of
eligible manufacturing machinery and equipment damaged or destroyed by
Hurricanes Katrina and Rita.  The bill has completed the legislative
process.

*          House Bill 40 gives industries a ½ cent break on the state sales
tax on natural gas for the period January 1, 2006 until December 31, 2008.
Further, paper and wood products manufacturing facilities will pay no state
sales tax on electricity and the tax on natural gas is capped at $6.20 per
MMBtu for the   period July 1, 2006 through December 31, 2008.  The bill has
completed the legislative process.

*          Under present law, the franchise tax is computed on the basis of
the previous calendar or fiscal year closing.  House Bill 41  states that
corporations that had at least 50% of their property located in or that
receive at least 50% of their revenues from the Hurricane Katrina or Rita
Federal Emergency Management Agency Individual Assistance Area and that have
borrowed capital that is in excess of the borrowed capital on that
corporation’s books on the calendar or fiscal year closing immediately prior
to August 28, 2005, will be considered to have incurred extraordinary debt
as a result of the declared disaster of 2005 and therefore may elect to
compute the borrowed capital portion of their franchise tax base either on
the basis of the previous calendar or fiscal year closing or on the basis of
the calendar or fiscal year closing immediately prior to August 28, 2005.
The bill has completed the legislative process.

*          House Bill 42 (SB 96) calls for a “holiday” from state sales tax
for consumers on December 16, 17 and 18, 2005.   The bill exempts only the
tax levied by the state and the Louisiana Tourism Promotion District.  Local
sales and use taxes are not affected.  The bill applies to all consumers and
businesses participating in recovery in the areas devastated by Hurricane
Katrina and Rita.  Motor vehicles are exempt.  The bill was approved by both
Houses and sent to the Governor for consideration.

BUILDING CODE

*          Senate Bill 44 (House Bill 76) establishes a statewide, mandatory
building code using the International Residential Code.  Under the bill the
state is divided into zones with the type of construction based on wind
speed.  The wind speeds vary from greater than 140 miles per hour in extreme
coastal parishes to 90 miles per hour in the northernmost parishes. 

            The bill creates the Louisiana State Uniform Construction Code
Council composed of 19 members appointed by the Governor and subject to
Senate confirmation.  The council and its members are subject to the Open
Meetings Law, the Public Records Law, and the Code of Government Ethics.
The primary function of the council is to review and adopt the state uniform
construction code, provide for training and education of code officials, and
to accept requests for amendments to the code, except the Louisiana State
Plumbing Code.  The code must be updated by the council every three years.
Inspections will be made by local officials, the fire marshal’s office and
third party inspectors.  Any person practicing as a building code
enforcement officer must be registered.  The state fire marshal is allowed
to establish contract agreements with municipalities or parishes in order to
provide permitting code enforcement.

            Local municipalities may impose stricter standards than the code
if the council approves.  Certain industrial facilities are exempt from the
code.  Private recreational structures, such as camps, are also exempt as
long as they are not a person’s primary residence.

INSURANCE/INSURERS 

*          Senate Bill 55 requires that all standard fire insurance policies
issued in the state on residential and commercial property have a form
inserted in the front of the policy stating which coverage are included in
the policy.  The form shall be developed and promulgated by the commissioner
of insurance.  The information shall include whether or not the insured has
coverage for flooding or mold and whether an increased deductible is
required for hurricane damage.  The disclosure shall also state that flood
insurance is available through the National Flood Insurance Program and that
excess flood insurance may be available by separate policy.

            The bill awaits gubernatorial action.

PROPERTY TAX DEFERMENT 

*        House Bill 44provides for a property tax deferment in a situation
where the property has been damaged in a gubernatorially-declared disaster
or emergency.  The proposed law provides that ad valorem tax assessment be
deferred or postponed as in present law, but makes the postponement
procedure available when land or other property, including buildings,
structures, or personal property, are damaged or destroyed during any
disaster or emergency declared by the governor.  A sworn statement that the
property has been damaged or destroyed or is overflowed must be filed in
triplicate no later than 30 days after the tax bill has been mailed.  One
copy of the statement shall be filed with the tax collector, one filed in
the office of the state auditor, and one filed in the office of the recorder
of mortgages of the parish in which the property is located.  House Bill 44,
which has completed the legislative process, awaits gubernatorial approval.

HOMESTEAD EXEMPTION 

*        House Bill 34, a proposed constitutional amendment, provides for
the continuation of the homestead exemption and for special assessments when
property is damaged due to a gubernatorially-declared disaster.  House Bill
46 is the enabling legislation to House Bill 34, which would implement the
proposed constitutional amendment if it is approved by voters in an April
29, 2006 election.

            Under House Bill 34, any homeowner who receives the homestead
exemption and whose homestead is damaged during a gubernatorially-declared
disaster which renders the homestead uninhabitable on or before December 31,
shall be able to claim the exemption by filing with their parish assessor an
annual affidavit of intent to return and reoccupy the homestead within a
period of five years from December 31 of the tax year in which the disaster
occurred.  No more than one homestead exemption per person would be allowed.
An owner who is entitled to the special assessment under this legislation
could keep the special assessment level of the restored homestead prior to
its damage or destruction, provided the homestead is occupied by the owner
within five years from December 31 of the year following the disaster.  The
assessed value of the land and buildings can not be increased above its
assessed value immediately prior to the damage or destruction.  If the
property owner receives a homestead exemption on another homestead during
the same five-year period, the owner would not be entitled to keep the
special assessment level, and the damaged homestead would be assessed in
that year at the percentage of fair market value.  House Bill 34 awaits the
governor’s signature.

PROPERTY/ASSESSMENT

*          House Bill 148 (Substitute for HB 64) changes the assessment
procedures for property damaged or destroyed by a disaster or emergency
declared by the governor.  Assessors in the parishes where the disaster
occurs or emergency is declared must take into consideration all damages to
the land or property and the depreciation of such land or property caused by
the disaster or emergency.  The property owners would get the lower assessed
value for the entire tax year.  A Senate amendment, which was concurred in,
provides for certain parishes to choose a pro-rata formula for taxation in
lieu of the full year reduced tax amount.  The assessments must be made
whether the time provided by law for filing assessment rolls has elapsed or
not.  If this occurs, the assessors shall prepare supplemental rolls of
damaged or destroyed property. The bill also specifies that the rolls for
2005 (2006 Orleans) shall be completed and filed before March 31, 2006
rather than November 15, 2005 as required by law.  The deadline for payment
of ad valorem taxes for 2005 (2006 Orleans) is extended and shall be paid no
later than 45 days after certification and approval of the tax rolls by the
Louisiana Tax Commission or December 31, 2005, or which whichever date is
later.  The bill awaits gubernatorial consideration.