HLS 12RS-705 ORIGINAL
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Regular Session, 2012
HOUSE BILL NO. 958
BY REPRESENTATIVE ROBIDEAUX
TAX/TAX REBATES: Creates the Competitive Projects Payroll Incentive Program which
grants rebate to certain qualifying businesses
AN ACT1
To enact Chapter 54 of Title 51 of the Louisiana Revised Statutes of 1950, to be comprised2
of R.S. 51:3111, relative to the creation of the Competitive Projects Payroll Incentive3
Program; to provide for contract for the payment of rebates to certain qualified4
businesses; to provide for procedures and requirements for the execution of such5
contracts and the payment or repayment of such rebates; to provide for an effective6
date; and to provide for related matters.7
Be it enacted by the Legislature of Louisiana:8
Section 1. Chapter 54 of Title 51 of the Louisiana Revised Statutes of 1950,9
comprised of R.S. 51:3111 is hereby enacted to read as follows: 10
CHAPTER 54. COMPETITIVE PROJECTS PAYROLL11
INCENTIVE PROGRAM12
§3111. Competitive Projects Payroll Incentive Program13
A. Definitions. For purposes of this Section, the following words or terms14
as used in this Chapter shall have the following meaning, unless a different meaning15
appears from the context:16
(1) "Basic health benefits plan" means coverage for basic hospital care,17
coverage for physician care, and coverage for health care which is determined by the18
Department of Economic Development to have a value of at least one dollar and19
twenty-five cents per hour and which is the same coverage as is provided to20 HLS 12RS-705 ORIGINAL
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employees employed in a bona fide executive, administrative, or professional1
capacity by the employer who are exempt from the minimum wage and maximum2
hour requirements of the federal Fair Labor Standards Act, 29 U.S.C.A. §201, et seq.3
(2) "Board" means the Board of Commerce and Industry.4
(3) "Business" means any individual, firm, joint venture, association,5
corporation, estate, partnership, business trust, receiver, syndicate, or any other legal6
business entity.7
(4) "Department" means the Department of Economic Development.8
(5) "Headquarter jobs" means permanent full-time executive, administrative,9
or professional jobs based at a principal or regional office located in Louisiana, in10
which are located the principal or regional executive officers normally constituting11
a principal or regional headquarters providing corporate governance. Such principal12
or regional executive officers include but shall not be limited to chief executive13
officer, chief operating officer, and other senior level officers or appropriate regional14
equivalents.15
(6) "New Jobs" means permanent full-time direct new jobs based at the16
facilities designated in the contract and filled by residents of the state.17
(7) "New payroll" means payment by the business to its employees for new18
jobs, exclusive of benefits and defined as wages under Louisiana Employment19
Security Law (La. R.S. 23:1472(20)).20
(8) "Program" means the Competitive Projects Payroll Incentive Program.21
(9) "Qualified business" means a business certified by the secretary as22
meeting the eligibility requirements of Subsection B of this Section, approved by the23
board to participate in the program, and executing a contract providing the terms and24
conditions for its participation.25
(10) "Secretary" means the secretary of the Department of Economic26
Development27
(11) "Shared services center jobs" shall mean jobs of full time employees28
located in the state of Louisiana which are based at a business located in Louisiana29 HLS 12RS-705 ORIGINAL
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that performs specific corporate operational tasks for the business, its affiliates, or1
customers, such as accounting, human resources, payroll, or purchasing.2
B.(1) Eligibility Requirements. A business shall be eligible for participation3
in the program if all of the following requirements are met:4
(a) At least fifty percent of the total annual sales of the business from a5
Louisiana site or sites is to out-of-state customers or buyers, in-state customers or6
buyers but the product or service is resold by the purchaser to an out-of-state7
customer or buyer for ultimate use, or the federal government, or any combination8
thereof.9
(b) The activities of the business at a Louisiana site or sites include corporate10
headquarters, clean technology, next generation automotive, aerospace, destination11
healthcare, research and development operations, pharmaceutical manufacturing,12
renewable energy or other business sector targeted by the Secretary as a focus of the13
department's economic development efforts.14
(c) The business offers, or will offer within ninety days of the effective date15
of qualifying for the incentive rebates pursuant to the provisions of this Chapter, a16
basic health benefits plan to the individuals it employs as provided in Paragraph A(1)17
of this Section.18
(2) The secretary, at his discretion, may include sales by affiliates of the19
business in determining the percentage of sales meeting the requirements of20
Paragraph (1) of this Subsection.21
(3) With the exception of a business providing at least twenty-five new22
headquarter jobs or shared service center jobs, a business primarily engaged in retail23
sales, real estate, professional services, gaming or gambling, natural resource24
extraction or exploration, financial services, or venture capital funds, shall not be25
eligible for this program. 26
C.(1) Applications. At the invitation of the secretary, a business may apply27
for a contract by submitting to the department such certified statements and28
substantiating documents as the department may require. 29 HLS 12RS-705 ORIGINAL
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(2) Certification. The secretary may certify eligibility of the business and1
request board approval of its participation in the program on terms and conditions2
specified by the secretary in a proposed contract, if the secretary determines that:3
(a) The business meets the eligibility requirements provided for in4
Subsection B of this Section.5
(b) Participation in the program is needed in a highly competitive site6
selection situation to encourage the business to locate or expand in the state; and7
(c) Securing the project will result in a significant positive economic benefit8
to the state.9
(3) Approval; contract administration.10
(a) Upon the board's approval of participation in the program by the11
business, the secretary shall execute the contract with the business, and provide a12
copy to the Department of Revenue.13
(b) The contract shall provide for a rebate to the qualified business based14
upon new payroll, and shall include the following provisions:15
(I) The percentage of new payroll eligible for rebate, up to a maximum of16
fifteen percent.17
(ii) The maximum amount of new payroll eligible for rebate.18
(iii) The number of new jobs and amount of new payroll required to be19
created and maintained, and any other performance obligations required to be met20
in order to remain qualified for participation in the program.21
(iv) Designation of the facility or facilities eligible for participation in the22
program.23
(v) Monitoring of performance and consequences for failure to perform and24
other contract violations.25
(vi) An initial term of the contract, which may be up to five years, and any26
renewal term available at the discretion of the secretary, which may be up to an27
additional five years.28 HLS 12RS-705 ORIGINAL
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(4)(a) In addition, a qualified business shall be entitled to either the same1
sales and use tax rebates authorized in R.S. 51:1787 for capital expenditures for the2
facility or facilities designated in the contract, or the project facility expense rebate3
provided for in Paragraph (c) of this Subsection, if the employer meets the enterprise4
zone program hiring requirements and all other limitations, procedures, and5
requirements in R.S. 51:1787. 6
(b) Any qualified business which receives a contract pursuant to this Chapter7
shall also be entitled to a rebate of local sales and use taxes under the same8
procedures and requirements provided for in R.S. 51:1787 for approval of rebates for9
the sales and use taxes of political subdivisions and law enforcement districts,10
including but not limited to the requirement that any such request for a rebate of11
local sales and use taxes be accompanied by an endorsement resolution approved by12
the governing authority of the appropriate political subdivision or law enforcement13
district in whose jurisdiction the qualified business is or will be located.14
(c) In lieu of the sales and use tax rebate, a qualified business shall be15
entitled to a capital expenditure rebate equal to one and one-half percent of the16
amount of capital expenditures for the facility or facilities designated in the contract.17
For purposes of this Subparagraph, the term "qualified expenditures" means amounts18
classified as capital expenditures for federal income tax purposes related to the19
project plus exclusions from capitalization provided for in Internal Revenue Code20
Section 263(a)(1)(A) through (L), minus the capitalized cost of land, capitalized21
leases of land, capitalized interest, capitalized costs of machinery and equipment,22
and the capitalized cost for the purchase of an existing building. When a qualified23
business purchases an existing building and capital expenditures are used to24
rehabilitate the building, the costs of the rehabilitation only shall be considered25
qualified expenditures. Additionally, a qualified business shall be allowed to26
increase its qualified expenditures to the extent the qualified business' capitalized27
basis is properly reduced by claiming a federal credit. A qualified business earns the28
project facility expense rebate in the qualified business' fiscal year in which the29 HLS 12RS-705 ORIGINAL
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project is placed in service. but the qualified business may not claim the project1
facility expense rebate until the Department of Economic Development signs a2
project completion report or such other time as provided for by rule or regulation.3
The project completion report for the project facility expense rebate shall adhere to4
the same requirements found in R.S. 51:1787(A)(1)(a)(ii) for the sales and use tax5
rebate.6
D. Annual Certification of Eligibility. (1) The approved qualified business7
shall file applications for annual rebates with the Department of Economic8
Development. A corporate officer of the qualified business must sign documentation9
to certify its continued eligibility for the rebates, as provided in Subsection B of this10
Section. The qualified business may be subjected to a limited audit by the11
Department of Economic Development to verify such eligibility at the company's12
expense. The approved contract between the qualified business and the Department13
of Economic Development shall authorize the continued rebate as long as the14
business remains a qualified business as defined in this Section and complies with15
the terms and performance obligations of its contract, as they existed at the time of16
such approval. If a qualified business fails to maintain the eligibility requirements17
for participation in the program or fails to meet all performance obligations of the18
contract, the secretary may suspend or terminate its participation in the program.19
(2) Upon approval of the application for annual rebates, the department shall20
send the application to the Department of Revenue for payment of the rebate.21
Payment shall be made from the current collections of income and franchise taxes.22
E. A taxpayer shall not receive any other incentive administered by the23
Department of Economic Development for any expenditures or jobs for which the24
taxpayer has received a credit pursuant to this Section.25
F. The department may promulgate rules and regulations in accordance with26
the Administrative Procedure Act as are necessary to implement the provisions of27
this Section. Any rules and regulations promulgated pursuant to the provisions of28 HLS 12RS-705 ORIGINAL
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this Section shall only be subject to oversight by the House Committee on Ways and1
Means and the Senate Committee on Revenue and Fiscal Affairs.2
Section 2. This Act shall become effective on July 1, 2012; if vetoed by the governor3
and subsequently approved by the legislature, this Act shall become effective on July 1,4
2012, or on the day following such approval by the legislature, whichever is later.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)]
Robideaux HB No. 958
Abstract: Creates the Competitive Projects Payroll Incentive Program which grants payroll
tax, sales and use tax, or capital expenditures rebates to certain qualifying businesses.
Proposed law creates the Competitive Projects Payroll Incentive Program which provides
a "qualified business" a contract to receive the following rebates under a five year contract,
renewable for another five years:
(1)A rebate of up to 15% of "new payroll" determined to be eligible for such rebate by
the secretary of the Dept. of Economic Development (DED) if the number of new
jobs and amount of "new payroll" required to be created and maintained, along with
any other performance obligations under the contract are met.
"New payroll" is defined as payment by the business to its employees for new jobs,
exclusive of benefits and defined as wages under La. Employment Security Law
(R.S. 23:1472(20)).
(2)The same rebates of state and local sales and use tax rebates authorized for
Enterprise Zone-eligible business purchases of material used in the construction or
improvement of, or addition to, a building and machinery and equipment used in the
enterprise as provided in R.S. 51:1787 for the qualified business' expenditures on its
facility at the facility or facilities designated by the department in the contract.
Or
In lieu of the sales and use tax rebate, a "project facility expense rebate" equal to one
and one-half percent of the amount of qualified business' "qualified expenditures"
on the facility or facilities designated by the department in the contract.
"Qualified expenditures" is defined as amounts classified as capital expenditures for
federal income tax purposes plus certain exclusions from capitalization in IRC
§§263(a)(1)(A) - (L), minus the capitalized cost or leases of land, capitalized interest,
capitalized costs of machinery and equipment, and the capitalized cost for the
purchase of an existing building. Only the capital expenditures for rehabilitation of
an existing building are considered "qualified expenditures". Additionally, qualified
expenditures may be increased to the extent the qualified business' capitalized basis
is properly reduced by claiming a federal credit.
Proposed law defines a "qualified business" eligible for the rebate contracts as businesses
meeting all of the following criteria: HLS 12RS-705 ORIGINAL
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(1)Businesses that DED determines will have the following activities at its La. site:
corporate headquarters; clean technology; next-generation automotive; aerospace;
destination healthcare; research and development operations; pharmaceutical
manufacturing; renewable energy; or other business sectors targeted by the Secretary
as a focus of the department's economic development efforts.
(2)Businesses which have, or will have within one year, sales of at least 50% of its total
sales to out-of-state customers or buyers, to in-state customers or buyers if the
product or service is resold by the purchaser to an out-of-state customer or buyer for
ultimate use, to the federal government or any combination thereof. The secretary
of DED, at his discretion, may include sales of affiliates of the business in
determining the 50% sale requirement.
(3)Businesses which offer, or will offer within 90 days of the effective date of
qualifying for the rebates a "basic health benefits plan" to the individuals it employs.
"Basic health benefits plan" is defined in the same manner as for Enterprise Zone
employers, meaning coverage for basic hospital care, physician care, and health care
which is determined by the DED to have a value of at least $1.25 per hour and which
is the same coverage as is provided to employees employed in a bona fide executive,
administrative, or professional capacity who are exempt from the minimum wage
and maximum hour requirements.
Unless a business is providing at least 25 new "headquarter jobs" or "shared service
center jobs", the following businesses, are not eligible for rebates: retail sales, real
estate, professional services, gaming or gambling, natural resource extraction or
exploration, financial services or venture capital funds.
"Headquarter jobs" are defined as jobs of full time employees that are executive,
administrative, or professional jobs based at a principal or regional office located in
Louisiana, in which are located the principal or regional executive officers normally
constituting a principal or regional headquarters providing corporate governance.
Such principal or regional executive officers include but are not limited to chief
executive officer, chief operating officer, and other senior level officers or
appropriate regional equivalents.
"Shared services center jobs" are defined as jobs of full time employees residing in
the state which are based at a business located in La. that performs specific corporate
operational tasks for the business, its affiliates or customers, such as accounting,
human resources, payroll, or purchasing.
Proposed law requires the qualified business to apply to DED after being invited to
participate by the secretary of DED.
DED must determine if the applicant is an eligible "qualified business", that participation
in the program is needed in a highly competitive site selection situation to encourage the
business to locate or expand in the state, and that securing the project will result in a
significant positive economic benefit to the state.
Proposed law requires DED to propose a contract for the applicant to the Board of
Commerce and Industry. Upon the Board's approval, the secretary must execute the
contract. The contract must provide a rebate to qualified businesses based upon new payroll.
The contract will have an initial term of up to five years. It may be renewed for an
additional five years provided that the qualified business has complied with all the terms of
the contract and has complied with the provisions of the proposed law.
The contract shall provide for a rebate to the qualified business based upon new payroll, and
shall include the following provisions: HLS 12RS-705 ORIGINAL
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(1)The percentage of new payroll eligible for rebate, up to a maximum of 15%.
(2)The maximum amount of new payroll eligible for rebate.
(3)The number of new jobs and amount of new payroll required to be created and
maintained, and any other performance obligations required to be met in order to
remain qualified for participation in the program.
(4)Designation of the facility or facilities eligible for participation in the program.
(5)Monitoring of performance and consequences for failure to perform and other
contract violations.
(6)An initial term of the contract, which may be up to five years, and any renewal term
available at the discretion of the secretary, which may be up to an additional five
years.
Proposed law requires a qualified business to file applications for rebates with DED to show
its continued eligibility for the rebates. It may be subjected to a limited audit by DED to
verify its eligibility.
Proposed law requires the qualified business to file an application for an annual rebate with
the DED, which contains a sworn statement by a duly authorized officer of the qualified
business that the qualified business had complied with the contract and the proposed law
during the fiscal year. Upon approval of the application for the annual rebate, the
application is forwarded to the Dept. of Revenue for payment. The rebate is made from the
current collections of the income and franchise tax.
Proposed law prohibits a taxpayer who participates in this program from receiving any other
incentive administered by DED for any expenditures for which the taxpayer has received a
credit pursuant to this program.
Proposed law allows DED to promulgate rules and regulations necessary for the
implementation of the program. Any such rules or regulations promulgated shall be subject
to oversight by the House Committee on Ways and Means and the Senate Committee on
Revenue and Fiscal Affairs only.
Effective July 1, 2012.
(Adds R.S. 51:3111)