The House Ways and Means Committee amended and then approved House Bill 708 by Rep. Taylor Townsend, the panel's chairman, sending it to the full House for debate. In its amended form, Townsend's bill would grant a 57.5% state income tax deduction on homeowners insurance premiums after the credit for paying a special assessment to shore up the state-run insurer of last-resort agency is subtracted. As an example, if a homeowner's premiums total $3,000 and the credit for paying the assessment for Louisiana Citizens Property Insurance Corp. totals $500, the 57.5 percent deduction would be applied to the $2,500 difference.
In addition, the full Louisiana House gave 99-0 approval to House Bill 87 by Rep. Dan Morrish to redirect an estimated $100 million of the taxes collected on insurance premiums in the state -- now paid by insurance companies but usually passed along to policyholders -- away from the state treasury. In lieu of going to the treasury for general spending purposes, Morrish said, “the money would be used to pay off the bonds Citizens sold last year to shore up its finances to pay off claims in the aftermath of the two hurricanes.” He also stated that the tax generates about $150 million a year for the treasury for general spending, and his bill would set aside $80 million to $100 million to pay off the Citizens bonds. This also may eliminate the need for assessments to homeowners now charged to pay for the bonds.