Louisiana Senate Bill SB624

Louisiana 2010 Regular Session

• Introduced: 3/29/10
• Refer: 3/29/10
• Report Pass: 5/17/10
• Engrossed: 5/20/10
• Refer: 5/24/10
• Report Pass: 6/14/10
• Enrolled: 6/21/10
• Chaptered: 7/8/10
• Passed: 7/8/10

Caption

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) (EN DECREASE GF RV See Note)

Impact

The bill impacts state laws by creating a framework for economic assistance tied to energy costs specifically for mega-projects. It establishes a mechanism where rebates are offered based on actual severance taxes paid on natural gas consumed directly or indirectly in the operation of these projects. The state will need to assess and verify the tax credits claimed to ensure that assistance does not harm existing competing businesses, thereby adding a layer of compliance and verification that may require additional resources from the Department of Economic Development and the Department of Revenue.

Summary

Senate Bill 624, known as the Louisiana Mega Project Energy Assistance Rebate, is designed to grant rebates on severance taxes paid for natural gas used in the operation of mega-project facilities. The bill grants the secretary of the Department of Economic Development the authority to enter into cooperative endeavor agreements to provide such assistance, contingent upon the approval of the Joint Legislative Committee on the Budget. The rebate aims to lower energy costs, which are a significant factor for the competitiveness of these large-scale projects and their capacity to either locate or expand within the state.

Sentiment

General sentiment on SB624 appears to be supportive among those involved in economic development and big businesses, as it seeks to reduce operational costs for significant investments in the state. However, concerns might arise regarding its potential impact on smaller businesses that could be adversely affected by the preferential treatment granted to large projects. The support would hinge on its perceived ability to enhance job creation and economic growth in Louisiana while balancing the interests of competing local enterprises.

Contention

Notable points of contention include the necessity of the assistance and the criteria for its approval. While proponents argue that lowering energy costs through this rebate will attract and retain mega-projects in Louisiana, detractors may raise concerns regarding fairness and the potential to create an uneven playing field in economic development. The bill requires careful monitoring to ensure that it achieves its objectives without adversely affecting existing businesses in the competitive landscape.