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Regular Session, 2010
SENATE BILL NO. 624
BY SENATOR MARIONNEAUX
ECONOMIC DEVELOPMENT. Authorizes the secretary of the Department of Economic
Development to grant a Louisiana Mega Project Energy Assistance Rebate of severance
taxes that were paid on natural gas consumed or used directly in the operation of the mega-
project facility or consumed indirectly in the manufacture or creation of energy sold to the
mega-project facility for its operation. (7/1/10)
AN ACT1
To enact R.S. 51:2366, relative to economic development; to provide for the Louisiana2
Mega Project Energy Assistance Rebate; to provide for the businesses eligible for3
such rebate; to provide for the amount of such rebate; to provide certain authority to4
the secretary of the Department of Economic Development and the Department of5
Revenue; and to provide for a penalty for failure to file certain reports; and to6
provide for related matters.7
Be it enacted by the Legislature of Louisiana:8
Section 1. R.S. 51:2366 is hereby enacted to read as follows: 9
ยง2366. Louisiana Mega Project Energy Assistance Rebate10
A. In addition to the funding for an economic development mega-project11
provided for in R.S. 51:2365 or as a separate incentive, the secretary of the12
Department of Economic Development with the concurrence of the governor13
may enter into a cooperative endeavor agreement to grant a mega project as14
defined in R.S. 51:2365(F) the Louisiana Mega Project Energy Assistance15
Rebate as provided for in this Section, subject to approval of the cooperative16
endeavor agreement by the Joint Legislative Committee on the Budget.17 SB NO. 624
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B. The assistance may be granted if the secretary determines that the1
consumption of energy will be a major cost component of the operation of a2
mega fund project and assistance in moderating the cost of such energy will be3
a major factor in inducing a mega fund project to locate, expand, or remain in4
the state. Also, the assistance may only be granted if the secretary of the5
Department of Economic Development certifies to the governor and the Joint6
Legislative Committee on the Budget that the grant of the energy assistance7
rebate shall not harm any business located in the state which may be a8
competitor of the business to be undertaken by the mega fund project.9
C. The Louisiana Mega Project Energy Assistance Rebate to the mega10
project shall be granted in the form of a rebate of severance taxes that were11
paid on any natural gas consumed or used directly in the operation of the mega-12
project facility or consumed indirectly in the manufacture or creation of energy13
sold to the mega-project facility for its operation, determined as follows:14
(1) Prior to implementation of the energy assistance rebate, the15
Department of Revenue, at the request of the secretary of the Department of16
Economic Development, shall consult with the operators of the mega-project17
facility and the following businesses:18
(a) The suppliers of natural gas for operation of the mega-project19
facility.20
(b) The utilities or other suppliers of energy which themselves use or21
consume natural gas for the production of energy which they are expected to22
sell to the mega-project facility for its operation.23
(c) Any business or series of businesses back to the ultimate severance24
tax payer, which are expected to sell natural gas to the businesses in25
Subparagraphs (a) and (b) of this Paragraph.26
(2)(a) Based upon such consultation, the Department of Revenue shall27
require periodic reports from any such supplier or utility provided for in28
Paragraph (1) of this Subsection which will enable the department to make a29 SB NO. 624
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best estimate of the amount of natural gas which is consumed or used directly1
in the operation of the mega-project facility or consumed indirectly in the2
manufacture or creation of energy sold to the mega-project facility for its3
operation which bears a Louisiana severance tax and the amount of the4
severance tax paid.5
(b) If the department finds that a supplier or utility not involved in such6
consultation is in the chain of supply of natural gas to the mega-project facility7
or the utilities or other suppliers as provided in Paragraph (1) of this8
Subsection, that supplier or utility may also be required to file the reports9
provided for in this Paragraph.10
(3) Based upon the reports, the secretary of the Department of Economic11
Development may award the Louisiana Mega Project Energy Assistance Rebate12
in the amounts of severance tax that were paid on natural gas for energy13
consumed or used in the mega-project facility operations as determined by the14
Department of Revenue at such times as provided for in the cooperative15
endeavor agreement.16
D.(1) The secretary of the Department of Economic Development may17
promulgate such rules and regulations for the implementation of this Section18
in the manner provided for in the Administrative Procedure Act.19
(2)(a) The Department of Revenue may promulgate such rules and20
regulations for the implementation of the consultation and the reports required21
by the department in order to make the determination of the amount of rebate22
which may be granted, all in the manner provided for in the Administrative23
Procedure Act.24
(b) In addition, in preparing such report, the department shall have any25
authority provided to it for examination and investigation pursuant to Part II26
of Chapter 18 of Subtitle II of Title 47 of the Louisiana Revised Statutes of 1950,27
(R.S. 47:1541 et seq.).28
(c) Failure to file the periodic reports by any supplier or utility required29 SB NO. 624
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to do so by the department as provided for in Paragraph (C)(1) of this Section1
shall make the supplier or utility subject to the same penalty provided for2
failure to file the severance tax report provided for in R.S. 47:642(A).3
Section 2. This Act shall become effective on July 1, 2010; if vetoed by the governor4
and subsequently approved by the legislature, this Act shall become effective on July1, 2010,5
or on the day following such approval by the legislature, whichever is later.6
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Riley Boudreaux.
DIGEST
Present law allows for funding of all or a portion of economic development mega-projects
upon recommendation by the secretary of the Department of Economic Development [DED]
and concurrence by the governor. "Mega-project" is defined as a project which will provide
the following:
1. Either 500 new direct jobs to the state or a minimum initial investment of $500
million by the private sector or the U.S. government through the creation of a new
facility or the expansion of an existing facility.
2. A substantial return on the investment by the state as measured by projected tax
revenues.
3. A project for a military or federal installation which is important to the Louisiana
economy and that may be subject to base realignment and closure, or for the
purchase of land for a mega project.
4. A project resulting in re-creating or saving at least 500 direct jobs in the state,
through the transfer of ownership of a facility that has been closed or a facility that
is at risk of closure due to conditions arising out of or relating to a proceeding under
Title 11 of the United States Code.
Proposed law authorizes the secretary of DED, with the concurrence of the governor, to enter
into a cooperative endeavor agreement to grant a mega project as defined above the
Louisiana Mega Project Energy Assistance Rebate, subject to approval of the cooperative
endeavor agreement by the Joint Legislative Committee on the Budget. The assistance may
be granted if the secretary determines that the consumption of energy will be a major cost
component of the operation of a mega-fund project and assistance in moderating the cost
of such energy will be a major factor in inducing a mega-fund project to locate, expand, or
remain in the state. Also, the assistance may only be granted if the secretary of DED certifies
to the governor and the Joint Legislative Committee on the Budget that the grant of the
energy assistance rebate will not harm any business located in the state which may be a
competitor of the business to be undertaken by the mega-fund project.
The rebate is in the form of a rebate of severance taxes that were paid on any natural gas
consumed or used directly in the operation of the mega-project facility or consumed
indirectly in the manufacture or creation of energy sold to the mega-project facility for its
operation, determined as follows:
1. Prior to implementation of the energy assistance rebate, the Department of Revenue
(DOR), at the request of the secretary of DED, must consult with the operators of the SB NO. 624
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
mega-project facility and the following businesses:
(a) The suppliers of natural gas for operation of the mega-project facility.
(b) The utilities or other suppliers of energy which themselves use or
consume natural gas for the production of energy which they are
expected to sell to the mega-project facility for its operation.
(c) Any business or series of businesses back to the ultimate severance
tax payer, which are expected to sell natural gas to the businesses
above.
Based upon such consultation, the DOR must require periodic reports from any such supplier
or utility which will enable it to make a best estimate of the amount of natural gas which is
consumed or used directly in the operation of the mega-project facility or consumed
indirectly in the manufacture or creation of energy sold to the mega-project facility for its
operation which bears a Louisiana severance tax and the amount of the severance tax paid.
Based upon the reports, the secretary of DED may award the rebate in the amounts of
severance tax that were paid on natural gas for energy consumed or used in the mega-project
facility operations as determined by DOR at such times as provided for in the cooperative
endeavor agreement.
Proposed law authorizes the secretary of DED to promulgate rules and regulations for the
implementation of the proposed law in the manner provided for in the Administrative
Procedure Act (APA).
The Department of Revenue is authorized to promulgate rules and regulations for the
implementation of the consultation and the reports required by the department in order to
make the determination of the amount of rebate all in the manner provided for in the APA.
In addition, in preparing such report, the department is authorized to use the same authority
provided to it for tax examinations and investigations.
Failure to file the periodic reports by any supplier or utility required to do so by the
department makes the supplier or utility subject to the same penalty provided for failure to
file the severance tax report provided for in R.S. 47:642(A) that is a specific penalty of $250
dollars for each reporting period.
Effective July 1, 2010.
(Adds R.S. 51:2366)