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Regular Session, 2012
HOUSE BILL NO. 658
BY REPRESENTATIVE TIM BURNS
TAX/AD VALOREM-EXEMPTION: Authorize a local option for the granting of ad
valorem tax exemptions
AN ACT1
To enact Chapter 5 of Subtitle V of Title 47 of the Louisiana Revised Statutes of 1950, to2
be comprised of R.S. 47:4351 through 4354, relative to ad valorem taxation; to3
establish a program for the granting of ad valorem tax exemption contracts to certain4
business enterprises; to provide for the administration of the program; to provide for5
optional participation by parishes; to authorize the Board of Commerce and Industry6
to enter into contracts under certain circumstances; to provide for contract terms,7
conditions and limitations; to provide with respect to approval of contracts and8
notification of certain entities relative to contracts; to require reporting; to provide9
with respect to contract cancellation; to authorize rulemaking; to provide for10
effectiveness; and to provide for related matters.11
Be it enacted by the Legislature of Louisiana:12
Section 1. Chapter 5 of Subtitle V of Title 47 of the Louisiana Revised Statutes of13
1950, comprised of R.S. 47:4351 through 4354, is hereby enacted to read as follows:14
CHAPTER 5. CONTRACTS FOR BUSINESSES15
§4351. Definitions.16
For the purposes of this Chapter, the following terms shall have the meanings17
indicated unless the context clearly indicates otherwise:18
(1) "Board" means the State Board of Commerce and Industry or its19
successor.20 HLS 12RS-283 ORIGINAL
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(2)(a) "Business" means any individual, firm, joint venture, association,1
corporation, estate, partnership, business trust, receiver, syndicate, or any other legal2
business entity whose primary business activity is any of the following:3
(i) Logistics.4
(ii) Warehousing.5
(iii) Data center.6
(iv) Products and services which improve operational performance,7
productivity, or efficiency while reducing costs, inputs, energy consumption, waste8
or environmental pollution, which may be referred to collectively as "clean9
technology".10
(v) Provision of health care services of such quality and volume as to11
encourage medical tourism.12
(vi) Research and development.13
(vii) Products, services, and processes that harness renewable materials and14
energy sources, reduce the use of natural resources, and reduce pollution, emissions,15
and waste.16
(viii) Digital media and software development.17
(ix) For any type of industry, a corporate headquarters which is a principal18
or regional office located in Louisiana, in which is located the principal or regional19
executive officers who provide corporate governance, who shall include but not be20
limited to a chief executive officer, chief operating officer, and other senior level21
officers or appropriate regional equivalents.22
(x) As determined by the secretary, any other business having a majority of23
its total sales made to either out-of-state customers or buyers, or to in-state customers24
or buyers if the products or service is resold by the purchaser to an out-of-state25
customer or buyer for ultimate use, or to the federal government.26
(b) "Business" shall not mean any individual, firm, joint venture, association,27
corporation, estate, partnership, business trust, receiver, syndicate, or any other legal28
business entity whose primary business activity is any of the following:29 HLS 12RS-283 ORIGINAL
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(i) Retail sales.1
(ii) Professional services.2
(iii) Gaming.3
(iv) Natural resource exploration or extraction.4
(v) Financial services.5
(vi) Venture capital investment and services.6
(3) "Contract" means a contract between the Board of Commerce and7
Industry and a business for the granting of an ad valorem tax exemption in exchange8
for the performance of certain activity and achievement of certain goals by the9
business.10
(4) "Department" means the Louisiana Department of Economic11
Development.12
(5) "District" means a district created for the purpose of economic13
development established by a local governing authority or by law. The board may14
determine whether or not a district complies with this definition.15
(6) "Local governing authority" means the governing authority of a parish16
which is participating in the program and in which the project may be located.17
(7) "Program" means the program provided for in this Chapter for the18
granting of ad valorem tax exemptions pursuant to the authority granted under19
Article VII, Section 21(L) of the Constitution of Louisiana.20
(8) "Project" means an initiation or expansion of business activity, which21
may include capital investment, and which may be located in a parish which is22
participating or has participated in the program.23
(9) "Secretary" means the secretary of the Department of Economic24
Development.25
§4352. Program administration; parishes26
A. There is hereby established a program for the granting of contracts for ad27
valorem tax exemptions for business projects which, if located in Louisiana, are28
expected to yield significant positive economic benefit to the state. The program29 HLS 12RS-283 ORIGINAL
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shall be implemented and administered by the Department of Economic1
Development and shall be available and operate in all parishes which have elected2
to participate therein. As provided in this Chapter, the program shall consist of an3
application process for, and review, recommendation, approval and oversight of4
contracts for ad valorem tax exemptions. In compliance with the Administrative5
Procedure Act, the department shall adopt and promulgate such rules as are6
necessary for the administration of this program.7
B.(1) The governing authority of any parish, hereinafter referred to as8
"governing authority", may elect to participate in the program. Such action shall be9
evidenced by the adoption of a resolution or ordinance. The election to participate10
in the program shall be for an indefinite term, and may be rescinded at any time at11
the request of the governing authority. A parish's withdrawal from the program shall12
become effective on the last day of the twenty-fourth month after the date upon13
which the governing authority provides written notification to the secretary of its14
intention to discontinue participation. The secretary shall establish any guidelines15
or procedures as may be necessary for purposes of this Subsection.16
(2) A parish governing authority may designate the economic development17
district established to conduct economic development activities within the parish,18
hereinafter referred to as "parish district", to conduct the functions of the parish19
governing authority for all purposes authorized by this Chapter, except for the20
election to participate in the program. A parish which participates in the program21
established by this Chapter shall develop its own program for review and22
recommendation of projects. A parish program shall be in accordance with rules or23
regulations which have been promulgated by the secretary for such purpose.24
§4353. Application and recommendation25
A. A business may apply for a contract either by invitation from the26
secretary or the parish district or governing authority of the parish in which the27
project is anticipated to be located. In response to such an invitation, a business may28
apply for a contract based on a project by submitting such certified statements and29 HLS 12RS-283 ORIGINAL
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substantiating documents as the department or parish district or governing authority1
may require.2
B. The secretary or the parish district or the governing authority shall3
consider applications and may recommend a business project for a contract in either4
of the following circumstances:5
(1) The granting of a contract would be advantageous in the case of a6
competitive site selection situation so as to encourage a new business to locate its7
project in the state.8
(2) The granting of a contract would encourage an existing business to9
undertake a project in the state.10
C. A recommendation to the board by the secretary or the parish district or11
the governing authority shall include proposed contract terms and conditions;12
however, the contract terms and conditions shall be those deemed by the board to be13
in the best interest of the state. A contract shall include at a minimum the following14
terms:15
(1) An initial term of no more than five calendar years with an optional16
renewal of up to an additional five years.17
(2) Requirements for specific performance and reporting thereof.18
(3) Audits and review of performance.19
(4) Provisions governing the consequences for failure to perform or other20
contract violations.21
§4354. Approval of contract 22
A. The board shall consider a recommendation from the secretary or a parish23
district or a governing authority for a contract based on a business project and shall24
conduct a public hearing for such purpose. If the board decides in favor of granting25
the contract, it shall forward its recommendation to the governor, the Joint26
Legislative Committee on the Budget, and the parish governing authority and its27
parish district if applicable, and each member of the legislature in whose district the28 HLS 12RS-283 ORIGINAL
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project is located. The contract shall be subject to approval by the board, the1
governor and the Joint Legislative Committee on the Budget.2
B. Once a contract has been approved and executed, the board shall notify3
the parish assessor and the parish governing authority. All property exempted shall4
be listed on the assessment rolls although no taxes shall be collected thereon during5
the period of exemption. The board shall notify the assessor and the respective6
parish governing authority when an existing exemption contract expires or is7
cancelled.8
C. A business which receives an exemption contract shall be eligible to9
receive a contract renewal regardless of whether the parish in which it is located10
maintains its participation in the program. Further, such business shall be ineligible11
to receive any other ad valorem tax exemption contract authorized in Article VII,12
Section 21 of the Constitution of Louisiana.13
D. The secretary and the parish governing authority or parish district shall14
establish procedures whereby a business with an exemption contract shall annually15
report its performance under the terms of the contract. The secretary and the parish16
governing authority or parish district may provided information to the board with17
respect to such reports. In the event it is determined by the board that a business has18
violated any term or condition of the contract, the board shall provide written19
notification to the business with respect to the deficiency or violation. In the event20
the deficiency or violation is not corrected within ninety days of the board's21
notification, the board may cancel and terminate the contract. At the time a contract22
is cancelled, any remaining portion of the tax exemption authorized by the contract23
may be declared rescinded retroactively to the date of confection. Upon receipt of24
notification that an exemption contract has been cancelled, the assessor shall adjust25
the property assessment in the manner provided by law. Taxes becoming due for a26
prior year due to removal of an exemption shall, at the discretion of the tax collector,27
be collectable immediately or with the taxes for the current year.28 HLS 12RS-283 ORIGINAL
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Section 2. This Act shall take effect and become operative for all taxable years1
commencing after the proposed amendment adding Article VII, Section 21(L) of the2
Constitution of Louisiana contained in the Act which originated as House Bill No. ___ of3
this 2012 Regular Session of the Legislature is adopted at the statewide election to be held4
on November 6, 2012, and becomes effective.5
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Tim Burns HB No. 658
Abstract: Authorizes the State Board of Commerce and Industry to enter into ad valorem
tax exemption contracts with certain businesses at the recommendation of the
secretary of the Dept. of Economic Development, a parish governing authority or the
economic development district of a parish.
Present constitution and present law authorize political subdivisions of the state to impose
ad valorem taxes.
Proposed law retains present law and establishes a program for the granting of contracts for
ad valorem tax exemptions by the Board of Commerce and Industry (hereinafter board) for
business projects which, if located in La., are expected to yield significant positive economic
benefit to the state. The program shall be implemented and administered by the Dept. of
Economic Development (hereinafter department) and shall be available and operate in all
parishes which have elected to participate therein.
Proposed law provides definitions for purposes of proposed law, including the following:
(1)"Business" means an entity whose primary activity is any of the following:
(a)Logistics.
(b)Warehousing.
(c) Data center.
(d) Products and services which improve operational performance, productivity,
or efficiency while reducing costs, inputs, energy consumption, waste or
environmental pollution.
(e) Provision of health care services of such quality and volume as to encourage
medical tourism.
(f) Research and development.
(g)Products, services and processes that harness renewable materials and energy
sources, reduce the use of natural resources, and reduce pollution and waste.
(h)Digital media and software development. HLS 12RS-283 ORIGINAL
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(i)For any type of industry, a corporate headquarters which is a principal or
regional office located in La.
(j)As determined by the secretary, any other business having a majority of its
total sales made to either out-of-state customers or buyers, or to in-state
customers or buyers if the products or service is resold by the purchaser to
an out-of-state customer or buyer for ultimate use, or to the federal
government.
(2) "Business" shall not mean an entity whose primary activity is any of the following:
(a)Retail sales.
(b)Professional services.
(c) Gaming.
(d) Natural resource exploration or extraction.
(e) Financial services.
(f) Venture capital investment and services.
(3)"Project" means an initiation or expansion of business activity which may be located
in a parish which is participating or has participated in the program.
Proposed law provides for optional participation in the program by parish governments. The
governing authority of any parish may elect to participate in the program as evidenced by
the adoption of a resolution or ordinance. The election to participate in the program shall
be for an indefinite term, and may be rescinded at any time at the request of the parish
governing authority. A parish's withdrawal from the program shall become effective two
years after it has notified the secretary of its intention to discontinue participation; however,
the renewal of an exemption contract is not contingent upon the parish remaining a
participant in the program
Proposed law authorizes a parish to designate an economic development district which is
established for purposes of that parish to conduct the functions of the parish governing
authority with respect to proposed law with the exception of the decision of the parish to
participate in the program.
Proposed law provides that a business may apply for a contract upon invitation of the
secretary, a parish or district. The application shall consist of the business furnishing to the
department, parish or district such certified statements and substantiating documents as the
may be required.
Proposed law provides discretionary authority to the secretary or parish or district to
recommend a business project for a contract in either of the following circumstances:
(1)The granting of a contract would be advantageous in the case of a competitive site
selection situation so as to encourage a new business to locate its project in the state.
(2)The granting of a contract would encourage an existing business to undertake a
project in the state.
Proposed law provides that the terms of a contract shall be recommended by the secretary
parish or district, however, the contract terms and conditions shall be those deemed by the
board to be in the best interest of the state. At a minimum, the contract shall include the
following terms: HLS 12RS-283 ORIGINAL
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(1)An initial term of no more than five calendar years with an optional renewal of up
to an additional five years.
(2)Requirements for specific performance and reporting thereof.
(3)Audits and review of performance.
(4)Provisions governing the consequences for failure to perform or other contract
violations.
Proposed law provides with respect to the board's consideration and approval of contracts.
Contracts which the board deems appropriate for approval are sent to the governor, the Joint
Legislative Committee on the Budget, the parish governing authority, and each member of
the legislature in whose district the project is located. Contracts are subject to approval by
the board, the governor, and the Joint Legislative Committee on the Budget.
Proposed law requires the board to notify the assessor and parish governing authority when
an exemption contract is approved or cancelled.
Proposed law prohibits a business receiving an exemption contract provided under proposed
law from eligibility for any other ad valorem tax exemption contract authorized in Article
VII, § 21 of the Constitution of La.
Proposed law requires the secretary or parish or district to establish a procedure whereby a
business shall report its performance under the contract. Information contained in such
reports may be shared with the board. In the event the board determines that a business is
deficient or has violated any term or condition of the contract, the board is required to give
written notification to the business with respect to the deficiency or violation . The contract
may be cancelled by the board if the business has not cured the deficiency or violation within
90 days.
Proposed law provides for assessment and tax collection procedures with respect to the
property of a business whose exemption contract has been cancelled.
Proposed law authorizes rulemaking by the department in accordance with the
Administrative Procedure Act.
Effective for all taxable years commencing after the constitutional amendment proposed in
House Bill No. ___ of this 2012 R.S. is adopted and becomes effective.
(Adds R.S. 47:4351-4354)