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Regular Session, 2012
HOUSE BILL NO. 694
BY REPRESENTATIVE ROBIDEAUX
TAX/AD VALOREM-EXEMPTION: Establishes a program to authorize the granting of
ad valorem tax exemption contracts by the Board of Commerce and Industry for
certain businesses
AN ACT1
To amend and reenact R.S. 44:4.1(B)(29) and to enact Chapter 5 of Subtitle V of Title 472
of the Louisiana Revised Statutes of 1950, to be comprised of R.S. 47:4351 through3
4355, relative to ad valorem taxation; to establish a program for the granting of ad4
valorem tax exemption contracts for certain businesses; to provide for the5
administration of the program; to provide for optional participation by parishes; to6
provide relative to the confidentiality of certain records in the possession of parish7
governing authorities relative thereto; to provide for eligibility for participation in8
the program; to authorize contracts under certain circumstances; to provide for9
contract terms, conditions, and limitations; to provide with respect to approval of10
contracts and notification of certain entities relative to contracts; to provide with11
respect to contract suspension and cancellation; to authorize rulemaking; to provide12
for effectiveness; and to provide for related matters.13
Be it enacted by the Legislature of Louisiana:14
Section 1. R.S. 44:4.1(B)(29) is hereby amended and reenacted to read as follows:15
§4.1. Exceptions16
* * *17
B. The legislature further recognizes that there exist exceptions, exemptions,18
and limitations to the laws pertaining to public records throughout the revised19
statutes and codes of this state. Therefore, the following exceptions, exemptions, and20 HLS 12RS-767 REENGROSSED
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limitations are hereby continued in effect by incorporation into this Chapter by1
citation:2
* * *3
(29) R.S. 47:15, 349, 633.6, 1508, 1515.3, 1516, 1837, 2130, 2327, 2605,4
4352(C), 6036, 90065
* * *6
Section 2. Chapter 5 of Subtitle V of Title 47 of the Louisiana Revised Statutes of7
1950, comprised of R.S. 47:4351 through 4355, is hereby enacted to read as follows:8
CHAPTER 5. CONTRACTS FOR BUSINESSES9
§4351. Definitions10
For the purposes of this Chapter, the following terms shall have the meanings11
indicated unless the context clearly indicates otherwise:12
(1) "Board" means the State Board of Commerce and Industry or its13
successor.14
(2) "Business" means any individual, firm, joint venture, association,15
corporation, estate, partnership, business trust, receiver, syndicate, or any other legal16
business entity.17
(3) "Department" means the Louisiana Department of Economic18
Development.19
(4) "Headquarters jobs" means executive, administrative, or professional20
jobs based at a principal or regional office located in Louisiana, in which are located21
the principal or regional executive officers normally constituting a principal or22
regional headquarters providing corporate governance. Such principal or regional23
executive officers include but shall not be limited to chief executive officer, chief24
operating officer, and other senior level officers or appropriate regional equivalents.25
(5) "Program" means the program provided for in this Chapter for the26
granting of ad valorem tax exemptions pursuant to the authority granted under27
Article VII, Section 21(L) of the Constitution of Louisiana.28 HLS 12RS-767 REENGROSSED
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(6) "Qualified business" means a business certified by the secretary of the1
department as meeting the eligibility requirements of R.S. 47:4353 and approved to2
participate in the program.3
(7) "Secretary" means the secretary of the Department of Economic4
Development.5
(8) "Shared service center jobs" means jobs based at a business located in6
Louisiana that performs specific corporate operational tasks for the business or its7
affiliates or customers, such as accounting, human resources, payroll, or purchasing.8
§4352. Program administration; parishes9
A. There is hereby established a program for the granting of contracts for ad10
valorem tax exemptions for qualifying businesses with projects which, if located in11
Louisiana, are expected to yield significant positive economic benefit to the state.12
The program shall be implemented and administered by the Department of Economic13
Development and shall be available and operate in all parishes which have elected14
to participate therein. As provided in this Chapter, the program shall consist of an15
application process for, and review, certification, approval, and oversight of contracts16
for ad valorem tax exemptions. In compliance with the Administrative Procedure17
Act, the department shall adopt and promulgate such rules as are necessary for the18
administration of this program.19
B.(1) The governing authority of any parish may elect to participate in the20
program by the adoption of a resolution or ordinance approving the granting of an21
ad valorem tax exemption for any of the following:22
(a) All projects recommended by the secretary and approved by the board23
and the governor;24
(b) All projects meeting specific criteria selected by the parish governing25
authority from a list of options proposed by the department; however, the authority26
may reserve the right to require its approval of any other specific project by27
subsequent resolution or ordinance;28 HLS 12RS-767 REENGROSSED
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(c) Projects on an individual basis by adoption of a subsequent resolution or1
ordinance.2
(2) An election to participate in the program shall not be deemed to end3
active negotiation for purposes of R.S. 44:22(C).4
(3) Participation in the program shall be for an indefinite term, but may be5
rescinded at any time by the parish governing authority. However, such rescission6
shall not affect existing contracts or renewals thereof, and shall be without effect as7
to any project previously approved by the parish for the ad valorem tax exemption8
by any of the methods provided in Paragraph (1) of this Subsection, and for which9
an offer including the exemption has been made to a business by the department.10
C. A record in the custody of a parish governing authority pertaining to a11
project under consideration for inclusion in the program that would be confidential12
pursuant to R.S. 44:22 if it were in the custody of the department shall be13
confidential to the extent provided by R.S. 44:22 as though it were in the custody of14
the department.15
§4353. Eligibility requirements16
A. A business shall be eligible for participation in the program if all of the17
following requirements are met:18
(1) At least fifty percent of the total annual sales of the business from a19
Louisiana site or sites is to out-of-state customers or buyers, or to in-state customers20
or buyers but the product or service is resold by the purchaser to an out-of-state21
customer or buyer for ultimate use, or the federal government, or any combination22
thereof.23
(2) The activities of the business at a Louisiana site or sites include or will24
include corporate headquarters, logistics, warehousing, data center, clean technology,25
destination health care, research and development, renewable energy, digital media26
and software development, or other business sector targeted by the secretary as a27
focus of the department's economic development efforts.28 HLS 12RS-767 REENGROSSED
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(3) The business intends to either locate a project or undertake an expansion1
project in Louisiana, either of which shall involve a capital expenditure within2
Louisiana by the business or an affiliate or partner on its behalf of at least twenty-3
five million dollars.4
B. The secretary, at his discretion, may include sales by affiliates of the5
business in determining the percentage of sales meeting the requirements of6
Paragraph (A)(1) of this Section.7
C. With the exception of a business providing at least twenty-five new8
headquarter jobs or shared service center jobs, a business primarily engaged in retail9
sales, real estate, professional services, natural resource extraction or exploration,10
financial services, or venture capital funds, shall not be eligible for this program. No11
business engaged in gaming or gambling shall be eligible for the program.12
§4354. Application and recommendation13
A. At the invitation of the secretary or parish governing authority, a qualified14
business may apply for a contract based on a project located in a parish participating15
in the program. Application shall consist of submission by the business to the16
department such certified statements and substantiating documents as the department17
may require. At the discretion of the secretary, he may recommend the project of a18
qualified business for a contract in either of the following circumstances:19
(1) The granting of a contract would be advantageous in the case of a20
competitive site selection situation so as to encourage a new business to locate its21
project in the state.22
(2) The granting of a contract would encourage an existing business to locate23
a competitive expansion project in the state.24
B. The secretary's recommendation shall include proposed contract terms25
and conditions. A contract shall include at a minimum the following terms:26
(1) An initial term of no more than five calendar years with, at the option of27
the secretary and the board, a renewal of up to an additional five calendar years.28
(2) Requirements for specific performance and reporting thereof.29 HLS 12RS-767 REENGROSSED
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(3) Audits and review of performance.1
(4) Provisions governing the consequences for failure to perform or other2
contract violations.3
§4355. Approval of contract; contract administration4
A.(1) If the project is located in a parish which requires the approval of each5
proposed contract by the parish governing authority pursuant to R.S.6
47:4352(B)(1)(c), the secretary shall submit the proposed contract to the authority.7
If approved, the proposed contract shall then be submitted by the secretary to the8
board and the governor for approval.9
(2) If the project is located in a parish which does not require parish10
approval of each contract, the secretary shall submit the proposed contract to the11
board and the governor for approval.12
(3) Upon approval by the board and the governor, the secretary shall execute13
the contract on behalf of the board and provide a copy of the contract to the assessor14
and the parish governing authority of the respective parish. The secretary shall15
notify the assessor and parish governing authority when an existing contract is16
renewed, expires, is suspended, or is cancelled.17
B. In the event the secretary determines that a business has failed to meet the18
eligibility requirements of the program or the performance objectives of the contract,19
the secretary may, at his discretion, suspend or cancel the contract. A contract20
suspension would remove the exemption for the calendar year in which the failure21
occurred. A contract cancellation would remove the exemption for the calendar year22
in which it occurred and all future years. Upon receipt of notification from the23
secretary that a contract was suspended or cancelled, the assessor shall adjust the24
property assessment in the manner provided by law. Taxes becoming due for a prior25
year due to removal of an exemption shall, at the discretion of the tax collector, be26
collectable immediately or with the taxes for the current year.27
Section 3. This Act shall take effect and become operative for all calendar years28
commencing after the proposed amendment adding Article VII, Section 21(L) of the29 HLS 12RS-767 REENGROSSED
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Constitution of Louisiana contained in the Act which originated as House Bill No. 674 of1
this 2012 Regular Session of the Legislature is adopted at the statewide election to be held2
on November 6, 2012, and becomes effective.3
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)]
Robideaux HB No. 694
Abstract: Authorizes the secretary of the Dept. of Economic Development on behalf of the
State Board of Commerce and Industry to enter into ad valorem tax exemption
contracts with certain businesses that locate or expand a project in La. if the project
includes at least $25 million in capital investments.
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 entail capital investments in excess of $25 million which 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.
Proposed law provides for optional participation in the program by parish governments. A
parish may choose to participate in the program and approve the granting of ad valorem tax
exemptions in the following manner: approval of all projects recommended by the
department, or all projects recommended by the department which meet specific criteria
determined by the parish, or projects on a case by case basis.
Proposed law provides that the election to participate in the program by a parish governing
authority shall be evidenced by the adoption of a resolution or ordinance. Participation in
the program shall be for an indefinite term and may be rescinded at any time by the parish
governing authority. A parish's withdrawal from the program shall not affect existing
contracts or renewals thereof.
Proposed law provides the criteria for eligibility of a business to participate in the program:
(1)A business which has at least 50% of the total annual sales from a La. site or sites is
to out-of-state customers or buyers, in-state customers or buyers but the product or
service is resold by the purchaser to an out-of-state customer or buyer for ultimate
use, or the federal government, or any combination thereof.
(2)The activities of the business at a La. site or sites include corporate headquarters,
logistics, warehousing, data center, clean technology, destination health care,
research and development, renewable energy, digital media and software
development, or other business sector targeted by the secretary as a focus of the
department's economic development efforts. HLS 12RS-767 REENGROSSED
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(3)The business intends to either locate a project or undertake an expansion project in
La., either of which shall involve a capital expenditure of at least $25 million by the
business or an affiliate or partner on its behalf.
Proposed law further provides that the secretary, at his discretion, may include sales by
affiliates of the business in determining the percentage of sales meeting the requirements for
eligibility.
Proposed law provides that the following types of business are ineligible for participation
in the program:
(1)With the exception of a business providing at least 25 new headquarter jobs or shared
service center jobs, a business primarily engaged in retail sales, real estate,
professional services, natural resource extraction or exploration, financial services,
or venture capital funds.
(2)Businesses engaged in gaming or gambling.
Proposed law provides that a business may apply for a contract upon invitation of the
secretary or the parish governing authority. The application shall consist of the business
furnishing to the department such certified statements and substantiating documents as the
department may require.
Proposed law authorizes the secretary, at his discretion, to recommend a qualified business
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 locate an
expansion project in the state.
Proposed law provides that the terms of a contract shall be recommended by the secretary
and provides for minimum contract terms with respect to duration, performance, audits, and
violations.
Proposed law requires approval of each contract by the board and the governor and in certain
circumstances by the parish governing authority.
Proposed law requires that approved contracts be sent by the secretary to the assessor and
governing authority of the respective parish. Such parties shall also be notified by the
secretary if a contract is renewed, expires, is suspended, or cancelled.
Proposed law authorizes the secretary to suspend or cancel a contract if it is determined that
a business has failed to meet the eligibility requirements of the program or the performance
objectives of the contract. A contract suspension would remove the exemption for the
calendar year in which the failure occurred. A contract cancellation would remove the
exemption for the calendar year in which it occurred and all future years. Upon receipt of
notification from the secretary that a contract was suspended or cancelled, the assessor shall
adjust the property assessment in the manner provided by law. Taxes becoming due for a
prior year due to removal of an exemption shall, at the discretion of the tax collector, be
collectable immediately or with the taxes for the current year. HLS 12RS-767 REENGROSSED
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Proposed law authorizes the rulemaking by the department in compliance with the
Administrative Procedure Act.
Effective for all calendar years commencing after the constitutional amendment proposed
in House Bill No. 674 of this 2012 R.S. is adopted and becomes effective.
(Amends R.S. 44:4.1(B)(29); Adds R.S. 47:4351-4355)
Summary of Amendments Adopted by House
Committee Amendments Proposed by House Committee on Ways and Means to the
original bill.
1. Adds requirement that a project include at least $25 million in capital
investments in La.
2. Deletes the 24 month waiting period for effectiveness of a parish's
discontinuation of participation in the program.
3. Adds specific circumstances under which a parish may indicate its approval of
ad valorem tax exemption contracts for certain businesses.
4. Adds authorization for a parish governing authority to invite an eligible business
to apply for a tax exemption contract.
5. Adds provisions for the approval of specific ad valorem tax exemption contracts
by a parish governing authority.
Committee Amendments Proposed by House Committee on House and Governmental
Affairs to the engrossed bill.
1. Clarifies the application of the proposed public records limitation by providing
that a record in the custody of a parish governing authority pertaining to a project
is confidential to the same extent as a record in the custody of the department
pursuant to present law relative to economic development negotiations.
2. Includes a reference to the public records limitation in the Public Records Law.
3. Specifies that the required minimum $25 million capital expenditure be made by
the business or an affiliate or partner on its behalf.
4. Specifies that the secretary executes the contract on behalf of the State Board of
Commerce and Industry.
5. Provides that the secretary notify the assessor and the governing authority if a
contract is renewed.
6. Changes references to "year", "tax year", and "taxable year" to "calendar year."