HEATHER MILLER THE DAILY IBERIAN

U.S. Rep. Charlie Melancon, D-Napoleonville, is working with other representatives in Washington D.C. to pass a bill that will ease financial woes for disaster victims.

Under the four provisions of the Fair Disaster Tax Relief Act, disaster victims and businesses would be allowed “to write off and immediately recover demolition, clean up, repair and environmental remediation expenses,” according to a release from Melancon’s office.

Advertisement

The bill is written for any area of the country that the president declares a disaster, but Melancon said it stems from the amount of loss and mistakes made when hurricanes Katrina and Rita hit Louisiana in 2005.

“After Rita and Katrina, there were a number of tax relief bills passed, but when people spent the money they didn’t necessarily know they were going to get help,” said Robin Winchell, Melancon’s spokesperson. “We want to make sure people know they will get help.”

Erath Mayor George Dupuis said local residents are still suffering from damage caused by the 2005 storms.

“The people here definitely need the help,” he said. “Anything they can get, especially on the tax side, is a big help.”

The bill is cosponsored by 13 other representatives, including former presidential candidate U.S. Rep. Ron Paul, R-Texas. The co-sponsors represent nine states that are considered disaster-prone areas.

Winchell said disasters include floods, tornadoes, wildfires, hurricanes or man-made disasters. U.S. Rep. Timothy Bishop, D-New York, supports the bill because he had so many constituents affected by 9/11.

Under the current law, a taxpayer who writes off rebuilding expenses may be required to capitalize the costs, which can take up to 39 years to get the full amount back. The new law would allow people to immediately recover the expenses, according to the release.

Currently, taxpayers are allowed to carry losses from a storm back to two years, and are then promptly refunded on taxes they paid earlier in the year. The new law would allow victims to carry losses back to five years.

“The government gives tax breaks for disasters now, but sometimes it’s really unfair and not efficient,” Winchell said. “We’re trying to bring more consistency and more reliability to tax relief in the wake of disasters.”

Also under current law, states can issue tax exempt bonds to finance minimal interest loans to first-time buyers and to build low income rental housing.

The new law would provide tax exempt bonds to give loans to people trying to repair damages to already-owned homes.