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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,6
municipalities, and school districts; to provide relative to the confidentiality of7
certain records in the possession of parish governing authorities relative thereto; to8
provide for eligibility for participation in the program; to authorize contracts under9
certain circumstances; to provide for contract terms, conditions, and limitations; to10
provide with respect to approval of contracts and notification of certain entities11
relative to contracts; to provide with respect to contract suspension and cancellation;12
to authorize rulemaking; to provide for effectiveness; and to provide for related13
matters.14
Be it enacted by the Legislature of Louisiana:15
Section 1. R.S. 44:4.1(B)(29) is hereby amended and reenacted to read as follows:16
§4.1. Exceptions17
* * *18
B. The legislature further recognizes that there exist exceptions, exemptions,19
and limitations to the laws pertaining to public records throughout the revised20 HLS 12RS-767 RE-REENGROSSED
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statutes and codes of this state. Therefore, the following exceptions, exemptions, and1
limitations are hereby continued in effect by incorporation into this Chapter by2
citation:3
* * *4
(29) R.S. 47:15, 349, 633.6, 1508, 1515.3, 1516, 1837, 2130, 2327, 2605,5
4352(C), 6036, 90066
* * *7
Section 2. Chapter 5 of Subtitle V of Title 47 of the Louisiana Revised Statutes of8
1950, comprised of R.S. 47:4351 through 4355, is hereby enacted to read as follows:9
CHAPTER 5. CONTRACTS FOR BUSINESSES10
§4351. Definitions11
For the purposes of this Chapter, the following terms shall have the meanings12
indicated unless the context clearly indicates otherwise:13
(1) "Board" means the State Board of Commerce and Industry or its14
successor.15
(2) "Business" means any individual, firm, joint venture, association,16
corporation, estate, partnership, business trust, receiver, syndicate, or any other legal17
business entity.18
(3) "Department" means the Louisiana Department of Economic19
Development.20
(4) "Headquarters jobs" means executive, administrative, or professional21
jobs based at a principal or regional office located in Louisiana, in which are located22
the principal or regional executive officers normally constituting a principal or23
regional headquarters providing corporate governance. Such principal or regional24
executive officers include but shall not be limited to chief executive officer, chief25
operating officer, and other senior level officers or appropriate regional equivalents.26
(5) "Program" means the program provided for in this Chapter for the27
granting of ad valorem tax exemptions pursuant to the authority granted under28
Article VII, Section 21(L) of the Constitution of Louisiana.29 HLS 12RS-767 RE-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, municipalities, and14
school districts which have elected to participate therein. As provided in this15
Chapter, the program shall consist of an application process for, and review,16
certification, approval, and oversight of contracts for ad valorem tax exemptions. In17
compliance with the Administrative Procedure Act, the department shall adopt and18
promulgate such rules as are necessary for the administration of this program.19
B.(1) The governing authority of any parish may elect to participate in the20
program by the adoption of an ordinance approving the granting of an ad valorem tax21
exemption for projects on any of the bases provided for in Subparagraphs (a) through22
(c) of this Paragraph. In any parish which elects to participate in the program, the23
program shall not be operable within any municipality or school district unless the24
governing authority of the municipality or school district has elected to participate25
in the program on the same bases as chosen by the parish, which election shall be26
evidenced by the adoption of a resolution or ordinance.27
(a) All projects recommended by the secretary and approved by the board28
and the governor;29 HLS 12RS-767 RE-REENGROSSED
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(b) All projects meeting specific criteria selected by the parish governing1
authority from a list of options proposed by the department; however, the authority2
may reserve the right to require its approval of any other specific project by3
subsequent resolution or ordinance;4
(c) Projects on an individual basis by adoption of a subsequent ordinance.5
(2) An election to participate in the program shall not be deemed to end6
active negotiation for purposes of R.S. 44:22(C).7
(3) Participation in the program shall be for an indefinite term, but may be8
rescinded at any time by the parish governing authority or, if applicable,9
municipality or school district. However, such rescission shall not affect existing10
contracts or renewals thereof, and shall be without effect as to any project previously11
approved by the parish, and, if applicable, the municipality or school district, for the12
ad valorem tax exemption by any of the methods provided in Paragraph (1) of this13
Subsection, and for which an offer including the exemption has been made to a14
business by the department.15
C. A record in the custody of a parish governing authority pertaining to a16
project under consideration for inclusion in the program that would be confidential17
pursuant to R.S. 44:22 if it were in the custody of the department shall be18
confidential to the extent provided by R.S. 44:22 as though it were in the custody of19
the department.20
§4353. Eligibility requirements21
A. A business shall be eligible for participation in the program if all of the22
following requirements are met:23
(1) At least fifty percent of the total annual sales of the business from a24
Louisiana site or sites is to out-of-state customers or buyers, or to in-state customers25
or buyers but the product or service is resold by the purchaser to an out-of-state26
customer or buyer for ultimate use, or the federal government, or any combination27
thereof.28 HLS 12RS-767 RE-REENGROSSED
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(2) The activities of the business at a Louisiana site or sites include or will1
include corporate headquarters, logistics, warehousing, data center, clean technology,2
destination health care, research and development, renewable energy, digital media3
and software development, or other business sector targeted by the secretary as a4
focus of the department's economic development efforts.5
(3) The business intends to either locate a project or undertake an expansion6
project in Louisiana, either of which shall involve a capital expenditure within7
Louisiana by the business or an affiliate or partner on its behalf of at least twenty-8
five million dollars.9
B. The secretary, at his discretion, may include sales by affiliates of the10
business in determining the percentage of sales meeting the requirements of11
Paragraph (A)(1) of this Section.12
C. With the exception of a business providing at least twenty-five new13
headquarters jobs or shared service center jobs, a business primarily engaged in retail14
sales, real estate, professional services, natural resource extraction or exploration,15
financial services, or venture capital funds, shall not be eligible for this program. No16
business engaged in gaming or gambling shall be eligible for the program.17
§4354. Application and recommendation18
A. At the invitation of the secretary or parish governing authority, a qualified19
business may apply for a contract based on a project located in a parish and, if20
applicable, municipality or school district, participating in the program. Application21
shall consist of submission by the business to the department such certified22
statements and substantiating documents as the department may require. At the23
discretion of the secretary, he may recommend the project of a qualified business for24
a contract in either of the following circumstances:25
(1) The granting of a contract would be advantageous in the case of a26
competitive site selection situation so as to encourage a new business to locate its27
project in the state.28 HLS 12RS-767 RE-REENGROSSED
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(2) The granting of a contract would encourage an existing business to locate1
a competitive expansion project in the state.2
B. The secretary's recommendation shall include proposed contract terms3
and conditions. A contract shall include at a minimum the following terms:4
(1) An initial term of no more than five calendar years with, at the option of5
the secretary and the board, a renewal of up to an additional five calendar years.6
(2) Requirements for specific performance and reporting thereof.7
(3) Audits and review of performance.8
(4) Provisions governing the consequences for failure to perform or other9
contract violations.10
§4355. Approval of contract; contract administration11
A.(1) If the project is located in a parish, municipality, or school district12
which requires the approval of each proposed contract by the parish governing13
authority and, if applicable, municipality or school district, pursuant to R.S.14
47:4352(B)(1)(c), the secretary shall submit the proposed contract to the authority.15
If approved, the proposed contract shall then be submitted by the secretary to the16
board and the governor for approval.17
(2) If the project is located in a parish which does not require parish, and, if18
applicable, municipality or school district, approval of each contract, the secretary19
shall submit the proposed contract to the board and the governor for approval.20
(3) Upon approval by the board and the governor, the secretary shall execute21
the contract on behalf of the board and provide a copy of the contract to the assessor22
and the parish governing authority of the respective parish and, if applicable, the23
governing authority of the municipality and school district. The secretary shall24
notify the assessor and parish governing authority when an existing contract is25
renewed, expires, is suspended, or is cancelled.26
B. In the event the secretary determines that a business has failed to meet the27
eligibility requirements of the program or the performance objectives of the contract,28
the secretary may, at his discretion, suspend or cancel the contract. A contract29 HLS 12RS-767 RE-REENGROSSED
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suspension would remove the exemption for the calendar year in which the failure1
occurred. A contract cancellation would remove the exemption for the calendar year2
in which it occurred and all future years. Upon receipt of notification from the3
secretary that a contract was suspended or cancelled, the assessor shall adjust the4
property assessment in the manner provided by law. Taxes becoming due for a prior5
year due to removal of an exemption shall, at the discretion of the tax collector, be6
collectable immediately or with the taxes for the current year.7
Section 3. This Act shall take effect and become operative for all calendar years8
commencing after the proposed amendment adding Article VII, Section 21(L) of the9
Constitution of Louisiana contained in the Act which originated as House Bill No. 674 of10
this 2012 Regular Session of the Legislature is adopted at the statewide election to be held11
on November 6, 2012, and becomes effective.12
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, and, if applicable,
municipalities and school districts 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. However, in any parish which
has elected to participate in the program, the program shall not be operable within any
municipality or school district unless the governing authority of the municipality or school HLS 12RS-767 RE-REENGROSSED
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district has elected to participate in the program on the same bases as was chosen by the
parish.
Proposed law provides that the election to participate in the program by a parish governing
authority shall be evidenced by the adoption of an ordinance. Participation in the program
shall be for an indefinite term and may be rescinded at any time by the parish governing
authority, or, if applicable, the governing authority of a municipality or school district.
Withdrawal by a parish, municipality, or school district 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.
(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. HLS 12RS-767 RE-REENGROSSED
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Proposed law requires approval of each contract by the board and the governor and in certain
circumstances by the parish governing authority, municipality, or school district.
Proposed law requires that approved contracts be sent by the secretary to the assessor and
governing authority of the respective parish, and, if applicable, municipality, or school
district. 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.
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. HLS 12RS-767 RE-REENGROSSED
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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."
House Floor Amendments to the reengrossed bill.
1. Adds approval authority for municipalities and school districts relative to
program participation and the granting of ad valorem tax exemption contracts.