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ACT No. 499
Regular Session, 2012
HOUSE BILL NO. 694
BY REPRESENTATIVE ROBIDEAUX
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 4355, relative to ad valorem taxation; to3
establish a program for the granting of ad valorem tax exemption contracts for4
certain businesses; to provide for the administration of the program; to provide for5
optional participation by parishes, municipalities, law enforcement districts and6
assessors, and school districts; to provide for eligibility for participation in the7
program; to authorize contracts under certain circumstances; to provide for contract8
terms, conditions, and limitations; to provide with respect to approval of contracts9
and notification of certain entities relative to contracts; to provide with respect to10
contract suspension and cancellation; to authorize rulemaking; to provide for11
effectiveness; and to provide for related matters.12
Be it enacted by the Legislature of Louisiana:13
Section 1. Chapter 5 of Subtitle V of Title 47 of the Louisiana Revised Statutes of14
1950, comprised of R.S. 47:4351 through 4355, is hereby enacted to read as follows:15
CHAPTER 5. CONTRACTS FOR BUSINESSES16
§4351. Definitions17
For the purposes of this Chapter, the following terms shall have the meanings18
indicated unless the context clearly indicates otherwise:19
(1) "Board" means the State Board of Commerce and Industry or its20
successor.21
(2) "Business" means any individual, firm, joint venture, association,22
corporation, estate, partnership, business trust, receiver, syndicate, or any other legal23
business entity.24 ENROLLEDHB NO. 694
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(3) "Contract" means a contract executed between the board and a targeted1
non-manufacturing business, granting the exemption for a facility.2
(4) "Department" means the Louisiana Department of Economic3
Development.4
(5) "Exemption" means the exemption from ad valorem property tax5
provided by Article VII, Section 21(L) of the Constitution of Louisiana for targeted6
non-manufacturing business facilities and granted under this program.7
(6) "Facility" means the new or expanded site of a targeted8
non-manufacturing business's activities in Louisiana, including buildings,9
improvements, equipment and other property necessary or beneficial to such10
operation, which is owned or leased for a term of more than five years by the11
business. "Facility" does not include the land underlying the facility and other12
property pertaining to the facility on which ad valorem taxes have previously been13
paid, inventories, consumables, and property eligible for the manufacturing14
exemption provided by Article VII, Section 21(F) of the Constitution of Louisiana.15
(7) "Headquarters jobs" means executive, administrative, or professional16
jobs based at a principal or regional office located in Louisiana, in which are located17
the principal or regional executive officers normally constituting a principal or18
regional headquarters providing corporate governance. Such principal or regional19
executive officers include but shall not be limited to chief executive officer, chief20
operating officer, and other senior level officers or appropriate regional equivalents.21
(8) "New direct jobs" means permanent full-time positions of employment,22
meaning working thirty or more hours per week, exclusive of contract labor, based23
at the facility and filled by Louisiana residents, and not existing in the state prior to24
implementation of the project and the effective date of the contract.25
(9) "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
(10) "Project" means the establishment and operation of a new facility or29
expanded existing facility in Louisiana by a targeted non-manufacturing business.30 ENROLLEDHB NO. 694
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(11) "Secretary" means the secretary of the Department of Economic1
Development.2
(12) "Shared service center jobs" means jobs based at a business located in3
Louisiana that performs specific corporate operational tasks for the business or its4
affiliates or customers, such as accounting, human resources, payroll, or purchasing.5
(13) "Targeted non-manufacturing business" means a business, other than a6
manufacturer, that meets the requirements of R.S. 47:4354.7
§4352. Program administration8
There is hereby established a program to implement the exemption provided9
by Article VII, Section 21(L) of the Constitution of Louisiana. The program shall10
be implemented and administered by the Department of Economic Development,11
which shall adopt and promulgate such rules as are necessary for the administration12
of the program in compliance with the Administrative Procedure Act except that the13
department may promulgate such rules only after approval of the House Committee14
on Ways and Means and the Senate Committee on Revenue and Fiscal Affairs15
meeting jointly within sixty days of publication of such proposed rules in the State16
Register.17
§4353. Parish participation18
A. A contract for the exemption shall be available only in parishes which19
have agreed to participate in the program. A parish participates in the program upon20
approval by all of the following local governmental entities:21
(1) The parish governing authority.22
(2) All municipalities in the parish which levy an ad valorem tax.23
(3) All school boards in the parish which levy an ad valorem tax.24 ENROLLEDHB NO. 694
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(4) The parish law enforcement district.1
(5) The assessor.2
B. Any one of the local governmental entities listed in Paragraph (A)(1) of3
this Section may withdraw the participation of a parish. The withdrawal of a4
participating parish shall become effective ninety days after the date upon which any5
one of the local governmental entities provides written notification to the secretary6
of its intention to discontinue participation. The withdrawal of a participating parish7
shall not affect existing contracts.8
§4354. Targeted non-manufacturing business9
A targeted non-manufacturing business shall meet all of the following10
requirements:11
(1) The business undertakes a project to establish a new or expanded facility12
in the state.13
(2) The primary activities at the facility are or will be among the following14
targeted non-manufacturing business activities: corporate headquarters, distribution15
facilities, data services facilities, research and development operations, and digital16
media and software development centers.17
(3) With the exception of a business providing at least fifty new headquarters18
jobs or shared service center jobs, a business primarily engaged in retail sales, real19
estate, professional services, natural resource extraction or exploration, financial20
services, or venture capital funds, shall not be eligible for the program. No business21
engaged in gaming or gambling shall be eligible for the program.22
(4) Within the time period provided in the contract, the business shall make23
capital expenditures of at least twenty-five million dollars for the facility, and create24
and maintain at least fifty new direct jobs.25
(5) At least fifty percent of total annual sales by the business from a26
Louisiana site or sites are to out-of-state customers or buyers, or to in-state27
customers or buyers but the product or service is resold by the purchaser to an28
out-of-state customer or buyer for ultimate use, or to the federal government, or any29
combination thereof. The secretary, at his discretion, may include sales by closely30 ENROLLEDHB NO. 694
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associated affiliates of the business in determining the percentage of sales meeting1
this requirement.2
§4355. Contracts3
A. At the invitation of the secretary or any of the local governmental entities4
listed in R.S. 47:4353(A)(1), a targeted non-manufacturing business undertaking a5
project in a participating parish may apply for a contract by submitting to the6
department such certified statements and documentation as the department may7
require.8
B. The secretary may recommend the project to the board for a contract upon9
determining the applicant meets the requirements of a targeted non-manufacturing10
business, and the exemption would be advantageous in a competitive site selection11
situation to encourage the establishment of a targeted non-manufacturing business12
facility which is expected to yield significant positive economic benefit to the state13
and the parish. The secretary, at his discretion, may include sales by affiliates of the14
applicant business in making the fifty percent determination required under R.S.15
47:4354(E). The secretary's recommendation shall include proposed contract terms16
and conditions.17
C. The contract shall include the following provisions:18
(1) A term of ten years.19
(2) Performance obligations, including required capital expenditures and new20
direct jobs, and the time for performance of such obligations.21
(3) Monitoring by the department, reporting by the business and auditing of22
contract performance.23
(4) Consequences of failure to perform contract obligations.24
D. Upon approval by the board, the secretary shall execute the contract on25
behalf of the board and provide a copy of the contract to the assessor and the parish26
governing authority of the respective parish. The secretary shall notify the assessor27
and parish governing authority if a contract is suspended or cancelled.28
E. In the event the secretary determines that a business has failed to meet the29
eligibility requirements of the program or the performance obligations of the30 ENROLLEDHB NO. 694
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contract, the secretary may, at his discretion, suspend or cancel the contract. A1
contract suspension shall remove the exemption for the year in which the failure2
occurred, but secretary may lift the suspension following a year in which eligibility3
requirements and performance obligations are met, and the exemption shall then be4
restored effective for that year. A contract cancellation shall remove the exemption5
for the calendar year in which the failure occurred and all future years. Upon receipt6
of notification from the secretary that a contract is suspended or cancelled, the7
assessor shall adjust the property assessment in the manner provided by law. Taxes8
becoming due for a prior year due to removal of an exemption shall, at the discretion9
of the tax collector, be collectable immediately or with the taxes for the current year.10
Section 2. The state shall be the sole proper defendant in any taxpayer challenge to11
the correctness of an assessment based upon the constitutionality of an exemption provided12
for in this Act.13
Section 3. This Act shall take effect and become operative for all calendar years14
commencing after the proposed amendment adding Article VII, Section 21(L) of the15
Constitution of Louisiana contained in the Act which originated as House Bill No. 674 of16
this 2012 Regular Session of the Legislature is adopted at the statewide election to be held17
on November 6, 2012, and becomes effective.18
SPEAKER OF THE HOUSE OF REPRESENTATI VES
PRESIDENT OF THE SENATE
GOVERNOR OF THE STATE OF LOUISIANA
APPROVED: