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Regular Session, 2011
SENATE BILL NO. 259
BY SENATOR MARIONNEAUX
TAX/TAXATION. Creates a state commission (SCORE) to submit a written plan by
January 6, 2012, to reduce and eliminate state income taxes, recommend budget reduction
actions, and reduce or eliminate tax benefits; provides that if a concurrent resolution
containing the plan is adopted, then the phase-out of income tax over 10 calendar years
begins and the governor and the commissioner of administration are directed to take certain
budget reduction actions and submit budget reduction legislation. (See Act)
AN ACT1
To enact R.S. 47:32(D), relative to income taxes; to phase out the taxes on personal and2
corporate income; to provide for the related matter of insuring that the phase-out of3
income tax revenue is offset with a reduction of expenditures by requiring the4
governor and the commissioner of administration to present to the legislature a5
program by a certain date to implement or propose the implementation of certain6
budget-cutting actions by administrative action, adoption of rules and regulations,7
and proposed legislation; to provide for an effective date; and to provide for related8
matters.9
Be it enacted by the Legislature of Louisiana:10
Section 1. R.S. 47:32(D) is hereby enacted to read as follows: 11
§32. Rates of tax12
* * *13
D.(1) Notwithstanding the provisions of Subsections A and C of this14
Section, the rates applicable to each class of taxpayer as set forth in those15
Subsections shall be phased out over ten calendar years as follows:16
(a) For tax years beginning during 2013, ninety percent of the rates17 SB NO. 259
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provided for in those Subsections.1
(b) For tax years beginning during 2014, eighty percent of the rates2
provided for in those Subsections.3
(c) For tax years beginning during 2015, seventy percent of the rates4
provided for in those Subsections.5
(d) For tax years beginning during 2016, sixty percent of the rates6
provided for in those Subsections.7
(e) For tax years beginning during 2017, fifty percent of the rates8
provided for in those Subsections.9
(f) For tax years beginning during 2018, forty percent of the rates10
provided for in those Subsections.11
(g) For tax years beginning during 2019, thirty percent of the rates12
provided for in those Subsections.13
(h) For tax years beginning during 2020, twenty percent of the rates14
provided for in those Subsections.15
(i) For tax years beginning during 2021, ten percent of the rates provided16
for in those Subsections.17
(2) No tax shall be assessed, levied, collected, or paid upon the income18
of an individual or a corporation for any tax year commencing on or after19
January 1, 2022.20
(3)(a) In order to insure that the phase-out of individual and corporate21
income tax beginning in 2013 and completed by January 1, 2022, required by22
the provisions of Subsections A and C of this Section is offset by reductions of23
state expenditures, the governor and the commissioner of administration are24
hereby directed to do the following to implement or begin the implementation25
of the budget reduction actions set forth in Subparagraph (c) of this Paragraph26
within the time provided for in Subparagraph (b) of this Paragraph. They shall:27
(i) Take the necessary administrative action, or require the appropriate28
head of any governmental agency under their jurisdiction to take such29 SB NO. 259
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administrative action, in those cases where such budget reduction actions may1
be implemented by such administrative action.2
(ii) Adopt the necessary rules or regulations, or require the secretary of3
a department or the appropriate head of any governmental agency under their4
jurisdiction to adopt such rules or regulations, in those cases where such budget5
reduction actions require the adoption of rules or regulations in order to be6
implemented.7
(iii) Propose specific legislative bills to be enacted by the legislature8
where such budget reduction actions require the enactment of a law or laws in9
order to be implemented.10
(b) No later than the day required for the governor to submit the11
executive budget to the Joint Legislative Committee on the Budget as provided12
for in R.S. 39:37(A), the governor and the commissioner of administration are13
hereby further directed to provide a written report to such committee and to14
provide to each member of the legislature a printed copy of such report within15
a week thereafter of the following to implement or begin the implementation of16
the budget reduction actions set forth in Subparagraph (c) of this Paragraph:17
(i) The administrative actions they have taken, propose to take, or have18
required the secretary of a department or the appropriate head of any19
governmental entity under their jurisdiction to take.20
(ii) The rules or regulations they have adopted, or that the secretaries of21
departments or the appropriate heads of governmental agencies under their22
jurisdiction have adopted.23
(iii) The specific legislative bills they will propose to the legislature to be24
enacted, a statement of their full support for such legislation, and a25
comprehensive plan of the governor for persuading the voters of the state and26
legislators to support the enactment of such legislation.27
(c) The budget reduction actions which the governor and the28
commissioner of administration are hereby directed to implement or provide29 SB NO. 259
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for the implementation are the following:1
(i) Require only one manager for every ten state employee positions or2
more.3
(ii) Eliminate ten percent by value of state consulting contracts.4
(iii) Renegotiate the state’s consulting contracts to require a five percent5
reduction in cost.6
(iv) Establish a system of centralized collection, automated notices, and7
tax refund offsets to collect state accounts receivables.8
(v) Require the implementation of R.S. 22:1065 (LaHIPP) in order to9
purchase private insurance for low-income citizens when it is cheaper than10
Medicaid.11
(vi) Propose legislation to change state law and provide for the12
enforcement of federal law to reduce state-funded emergency room visits for13
nonemergencies by twenty-five percent.14
(vii) Require the review of all Medicaid-funded hospitalizations for15
medical necessity.16
(viii) Establish physician-training agreements between Charity Hospitals17
and other hospitals in Louisiana with a high Medicare patient mix in order to18
capture Medicare medical education funding.19
(ix) Reform the state Medicaid Preferred Pharmaceutical Drug List to20
include the most effective drugs at the lowest price for each illness.21
(x) Reduce administrative costs for the state Medicaid Program by ten22
percent.23
(xi) Require state prisoners to pursue a GED as an incentive for24
probation or parole in order to reduce the recidivism rate.25
(xii) Establish a self-sustaining state revolving loan fund to finance local26
capital outlay projects at reduced borrowing costs.27
(xiii) Postpone the current “LaGov ERP” computer upgrade until a28
cost-benefit analysis is completed and discontinue the program if the analysis29 SB NO. 259
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indicates that it should be discontinued.1
(xiv) Propose legislation to place all higher education institutions except2
for community colleges under the jurisdiction of the Board of Regents.3
(xv) Require the Board of Regents to eliminate wasteful duplicate4
programs by assigning each college and university a role, scope, and mission;5
provide for Louisiana State University to be the state’s flagship university; and6
implement a system for the universal uniform transfer of course credits from7
community colleges to four-year colleges and universities, and also for the8
universal uniform transfer of course credits among colleges and universities.9
(xvi) Enter into joint ventures with private developers, chosen by10
competitive bid, to develop underutilized state land into income-producing11
assets, with the recurring revenues shared by the state and the private12
developers.13
(xvii) Authorize the legislative auditor to audit per-patient costs,14
employees per occupied bed, and medical supplies procurement and15
management at Louisiana’s Charity Hospitals, and require the implementation16
of recommendations by the legislative auditor. 17
(xviii) Direct that annual spending per secure commitment in the18
Louisiana Office of Juvenile Justice be equal to the southern average.19
(xix) Require conditions in the contracts of all state vendors and20
contractors that they receive a tax clearance from the Department of Revenue21
certifying that all state taxes have been paid, and that the state is authorized to22
offset any future tax liabilities against contract payments owed such vendors23
and contractors.24
(xx) Establish cooperative agreements with the states of Mississippi and25
Arkansas to purchase supplies in bulk and share heavy equipment, specialized26
vehicles, aircraft, warehouse space, call centers, collection operations, licensing27
functions, back office operations, and agricultural, fishery and nursery28
operations, similar to the Wisconsin-Minnesota Collaboration Project.29 SB NO. 259
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(xxi) Propose legislation to competitively bid state contracts for1
maintenance of state-owned computer hardware and software.2
(xxii) Propose an executive budget which appropriates only ninety-seven3
percent of revenue estimates by the Revenue Estimating Conference in order to4
minimize mid-fiscal year budget cuts and avoid disruption of agency budgets.5
(xxiii) Any recommendations proposed by the Commission on6
Streamlining Government in its report dated December 15, 2009, which are not7
in conflict with or otherwise would limit the budget reduction actions required8
by this Subparagraph.9
(xxiv) Any other budget reduction actions proposed by the governor or10
the commissioner.11
Section 2. A. There is hereby established and provided for the State Commission on12
Revenues and Expenditures (SCORE) to develop a plan which includes the reduction and13
eventual elimination of the state personal and corporate income taxes set forth in Section 114
of this Act and recommendations on actions to be taken to maintain a balanced budget15
sufficient for the ordinary expenses of the operation of state government while providing the16
level of services and programs necessary to meet the needs of the citizens of Louisiana,17
particularly in the areas of education, health, social services, and the quality of life.18
B. The plan shall include recommendations for replacing or otherwise taking into19
account the loss of revenues due to the reduction and elimination of income taxes, through20
the reduction or elimination of various tax exemptions, exclusions, deductions, rebates, or21
credits; the reduction or elimination of government services; enhancing effectiveness,22
efficiencies, and/or economies in the provision of government services, including23
restructuring state government; or some combination of these actions.24
C. The commission shall be composed of the following members:25
(1) The president of the Senate or his designee.26
(2) The speaker of the House of Representatives or his designee.27
(3) The governor or his designee.28
(4) The chair of the Senate Finance Committee or his designee.29 SB NO. 259
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(5) The chair of the Senate Revenue and Fiscal Affairs Committee or his designee.1
(6) The chair of the Senate Education Committee or his designee.2
(7) The chair of the Senate Health and Welfare Committee or his designee.3
(8) The chair of the House Appropriations Committee or his designee.4
(9) The chair of the House Ways and Means Committee or his designee.5
(10) The chair of the House Education Committee or his designee.6
(11) The chair of the House Health and Welfare Committee or his designee.7
(12) The commissioner of administration or his designee.8
(13) A faculty member of a university or college in Louisiana who has expertise in9
forecasting revenues jointly selected by the president of the Senate, the speaker of10
the House of Representatives, and the governor.11
D. The designation of membership set forth in this Section shall be completed and12
submitted to the office of the Senate president prior to July 1, 2011. The commission shall13
meet upon the call of the president of the Senate prior to August 1, 2011. At its first14
meeting, the commission shall select a chairman from among its members.15
E. The staffs of the Senate, the House of Representatives, the legislative fiscal office,16
the legislative auditor, and the division of administration shall provide staff support and17
otherwise assist the commission to the extent requested by the commission.18
F. Every agency, board, commission, and department of state and local government19
shall furnish such information, reports, aid, services, and assistance as may be requested by20
the commission.21
G. The commission shall submit a written plan to the legislature and the governor22
on or before January 6, 2012, together with recommendations for legislation. At the 201223
Regular Session, by concurrent resolution which includes the plan, the legislature shall24
consider the plan, may modify the plan, and may adopt the resolution. Adoption of the25
concurrent resolution shall be considered adoption of the plan contained in the resolution.26
Section 3. Section 1 of this Act shall become effective upon the adoption of a27
concurrent resolution pursuant to Section 2 of this Act. Sections 2 and 3 of this Act shall28
become effective upon signature by the governor or, if not signed by the governor, upon29 SB NO. 259
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expiration of the time for bills to become law without signature by the governor, as provided1
by Article III, Section 18 of the Constitution of Louisiana. If vetoed by the governor and2
subsequently approved by the legislature, this Act shall become effective on the day3
following such approval.4
The original instrument was prepared by Jerry J. Guillot. The following
digest, which does not constitute a part of the legislative instrument, was
prepared by Riley Boudreaux.
DIGEST
Marionneaux (SB 259)
Present law provides tax rates on individual and corporate income as follows:
Individual rates
2% of the first $12,500 of net income which is in excess of the credits against net
income provided for in present law.
4%percent on the next $37,500 of net income.
6% on any amount of net income in excess of $50,000 of net income.
Corporate rates
4% on the first $25,000 of net income.
5% on the amount of net income above $25,000 but not in excess of $50,000.
6% on the amount of net income above $50,000 but not in excess of $100,000.
7% on the amount of net income above $100,000 but not in excess of $200,000.
8% on all net income in excess of $200,000.
Proposed law creates the State Commission on Revenues and Expenditures (SCORE) and
requires the commission to submit a written plan to the legislature and the governor on or
before January 6, 2012, together with recommendations for legislation, for a plan which
includes the reduction and eventual elimination of the state personal and corporate income
taxes set forth in the proposed law and recommendations on actions to be taken to maintain
a balanced budget sufficient for the ordinary expenses of the operation of state government
while providing the level of services and programs necessary to meet the needs of the
citizens of Louisiana. The plan must also include recommendations for replacing or
otherwise taking into account the loss of revenues due to the reduction and elimination of
income taxes, through the reduction or elimination of tax benefits; the reduction or
elimination of government services; enhancing effectiveness, efficiencies, and/or economies
in the provision of government services, including restructuring state government; or some
combination of such actions.
Requires the legislature to consider the plan at the 2012 Regular Session in a concurrent
resolution and permits the legislature to modify the plan or adopt the resolution. If the
resolution is adopted, the plan in the resolution is considered "adopted".
The commission is composed of the following members:
(1)The president of the Senate or his designee.
(2)The speaker of the House of Representatives or his designee.
(3)The governor or his designee.
(4)The chair of the Senate Finance Committee, or his designee. SB NO. 259
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(5)The chair of the Senate Revenue and Fiscal Affairs Committee or his designee.
(6)The chair of the Senate Education Committee or his designee.
(7)The chair of the Senate Health and Welfare Committee or his designee.
(8)The chair of the House Appropriations Committee or his designee.
(9)The chair of the House Ways and Means Committee or his designee.
(10)The chair of the House Education Committee or his designee.
(11)The chair of the House Health and Welfare Committee or his designee.
(12)The commissioner of administration or his designee.
(13)A faculty member of a university or college in Louisiana who has expertise in
forecasting revenues jointly selected by the president of the Senate, the speaker of
the House of Representatives, and the governor.
Proposed law provides that if the concurrent resolution containing the plan is adopted, then
the Section of the proposed law becomes effective which phases out the individual and
corporate income tax over 10 calendar years by reducing the above rates 10% per calendar
year, beginning with calendar year 2013 and ending in calendar year 2022, when no
individual or corporate income tax would be due. For instance, for tax years beginning in
2013, tax would be assessed at 90% of the rates above; for tax years beginning in 2014,
80%; 2015, 70%, etc.
Proposed law provides that if the concurrent resolution containing the plan is adopted, then
the Section of the proposed law becomes effective which directs the governor and the
commissioner of administration to take the following actions:
1. Take the necessary administrative action, or require such action to be taken to
implement the budget reductions set forth below.
2. Adopt the necessary rules or regulations, or require the secretary of a department or
the appropriate head to adopt such rules or regulations to implement the budget
reductions set forth below.
3. Propose specific legislative bills to be enacted by the legislature where such budget
reduction actions set forth below require the enactment of a law or laws in order to
be implemented.
Directs the governor and the commissioner of administration to provide a written report to
the Joint Legislative Committee on the Budget no later than the day required for the
governor to submit the executive budget to the committee on the administrative budget
reduction actions they have taken and the rules and regulations that were adopted and the
specific legislative bills they will propose to the legislature to be enacted, a statement of their
full support for such legislation, and a comprehensive plan of the governor for persuading
the voters of the state and legislators to support the enactment of such legislation.
The budget reduction actions the governor and the commissioner of administration are
directed to implement or provide for the implementation are the following:
(1)Require only one manager for every 10 state employee positions or more.
(2)Eliminate 10% by value of state consulting contracts. SB NO. 259
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(3)Renegotiate the state’s consulting contracts to require a 5% reduction in cost.
(4)Establish a system of centralized collection, automated notices, and tax refund
offsets to collect state accounts receivables.
(5)Require the implementation of RS 22:1065 (LaHIPP) in order to purchase private
insurance for low-income citizens when it is cheaper than Medicaid.
(6)Propose legislation to change state law and provide for the enforcement of federal
law to reduce state-funded emergency room visits for nonemergencies by 25%.
(7)Require the review of all Medicaid-funded hospitalizations for "medical necessity".
(8)Establish physician-training agreements between Charity Hospitals and other
hospitals in Louisiana with a high Medicare patient mix in order to capture Medicare
medical education funding.
(9)Reform the state Medicaid Preferred Pharmaceutical Drug List to include the most
effective drugs at the lowest price for each illness.
(10)Reduce administrative costs for the state Medicaid Program by 10%.
(11)Require state prisoners to pursue a GED as an incentive for probation or parole in
order to reduce the recidivism rate.
(12)Establish a self-sustaining state revolving loan fund to finance local capital outlay
projects at reduced borrowing costs.
(13)Postpone the current “LaGov ERP” computer upgrade until a cost-benefit analysis
is completed and discontinue the program if the analysis indicates that it should be
discontinued.
(14)Propose legislation to place all higher education institutions except for community
colleges under the jurisdiction of the Board of Regents.
(15)Require the Board of Regents to eliminate wasteful duplicate programs by assigning
each college and university a role, scope, and mission; provide for LSU to be the
state’s flagship university; and implement a system for the universal uniform transfer
of course credits from community colleges to 4-year colleges and universities, and
also for the universal uniform transfer of course credits among colleges and
universities.
(16)Enter into joint ventures with private developers, chosen by competitive bid, to
develop underutilized state land into income-producing assets, with the recurring
revenues shared by the state and the private developers.
(17)Authorize the Legislative Auditor to audit per-patient costs, employees per occupied
bed, and medical supplies procurement and management at Louisiana’s Charity
Hospitals, and require the implementation of recommendations by the Legislative
Auditor.
(18)Direct that annual spending per secure commitment in the Louisiana Office of
Juvenile Justice be equal to the Southern average.
(19)Require conditions in the contracts of all state vendors and contractors that they
receive a tax clearance from the Department of Revenue certifying that all state taxes
have been paid, and that the state is authorized to offset any future tax liabilities
against contract payments owed such vendors and contractors. SB NO. 259
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(20)Establish cooperative agreements with the states of Mississippi and Arkansas to
purchase supplies in bulk and share heavy equipment, specialized vehicles, aircraft,
warehouse space, call centers, collection operations, licensing functions, back office
operations, and agricultural, fishery and nursery operations, similar to the
Wisconsin-Minnesota Collaboration Project.
(21)Propose legislation to competitively bid state contracts for maintenance of
state-owned computer hardware and software.
(22)Propose an Executive Budget which appropriates only 97% of revenue estimates by
the Revenue Estimating Conference in order to minimize mid-fiscal year budget cuts
and avoid disruption of agency budgets.
(23)Any recommendations proposed by the Commission on Streamlining Government
in its Report dated December 15, 2009, which is not in conflict with or otherwise
would limit the budget reduction actions required by this section of the proposed law.
(24)Any other budget reduction actions proposed by the governor or the commissioner.
Effective upon signature of the governor or lapse of time for gubernatorial action.
(Adds R.S. 47:32(D))
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Revenue and Fiscal
Affairs to the engrossed bill.
1. Changes the bill from a 4-year phase out of individual and corporate income
tax beginning in 2011 and ending in 2015, when no tax would be due to the
10-year phase out described above.
Senate Floor Amendments to reengrossed bill.
1. Creates the State Commission on Revenues and Expenditures (SCORE) and
requires the commission to submit a written plan to the legislature and the
governor on or before January 6, 2012, together with recommendations for
legislation, for a plan to reduce and eventually eliminate state income taxes;
recommend budget reduction actions; and reduce or eliminate tax benefits.
2. Authorizes the legislature to modify and adopt the plan through the adoption
of a concurrent resolution.
3. Provides that if the concurrent resolution containing the plan is adopted, then
the section of the proposed law becomes effective which phases out the
individual and corporate income tax over 10 calendar years.
4. Provides that if the concurrent resolution containing the plan is adopted, then
the section of the proposed law becomes effective which directs the governor
and the commissioner of administration to take administrative actions; adopt
rules and regulations; and propose specific legislation to take a list of budget
reduction actions set forth in the proposed law.