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Regular Session, 2012
HOUSE BILL NO. 958
BY REPRESENTATIVES ROBIDEAUX, ADAMS, BARRAS, WESLEY BI SHOP,
BROADWATER, GUILLORY, HAZEL, HOFFMANN, JOHNSON, LORUSSO,
AND THIBAUT
TAX/TAX REBATES: Creates the Competitive Projects Payroll Incentive Program which
grants rebates 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 prohibit the approval of6
certain contracts after a certain date; to provide for an effective date; and to provide7
for related matters.8
Be it enacted by the Legislature of Louisiana:9
Section 1. Chapter 54 of Title 51 of the Louisiana Revised Statutes of 1950,10
comprised of R.S. 51:3111, is hereby enacted to read as follows: 11
CHAPTER 54. COMPETITIVE PROJECTS PAYROLL12
INCENTIVE PROGRAM13
§3111. Competitive Projects Payroll Incentive Program14
A. Definitions. For purposes of this Section, the following words or terms15
as used in this Chapter shall have the following meanings, unless a different meaning16
appears from the context:17
(1) "Basic health benefits plan" means coverage for basic hospital care,18
coverage for physician care, and coverage for health care which is determined by the19 HLS 12RS-705 REENGROSSED
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Department of Economic Development to have a value of at least one dollar and1
twenty-five cents per hour and which is the same coverage as is provided to2
employees employed in a bona fide executive, administrative, or professional3
capacity by the employers who are exempt from the minimum wage and maximum4
hour requirements of the federal Fair Labor Standards Act, 29 U.S.C. §201, et seq.5
(2) "Board" means the Board of Commerce and Industry.6
(3) "Business" means any individual, firm, joint venture, association,7
corporation, estate, partnership, business trust, receiver, syndicate, or any other legal8
business entity.9
(4) "Department" means the Department of Economic Development.10
(5) "Headquarter jobs" means permanent full-time executive, administrative,11
or professional jobs based at a principal or regional office located in Louisiana, in12
which are located the principal or regional executive officers normally constituting13
a principal or regional headquarters providing corporate governance. Such principal14
or regional executive officers include but shall not be limited to chief executive15
officer, chief operating officer, and other senior level officers or appropriate regional16
equivalents.17
(6) "New jobs" means permanent full-time direct new jobs based at the18
facilities designated in the contract and filled by residents of the state.19
(7) "New payroll" means payment by the business to its employees for new20
jobs, exclusive of benefits, and defined as wages under Louisiana Employment21
Security Law (R.S. 23:1472(20)).22
(8) "Program" means the Competitive Projects Payroll Incentive Program.23
(9) "Qualified business" means a business certified by the secretary as24
meeting the eligibility requirements of Subsection B of this Section, approved by the25
board to participate in the program, and executing a contract providing the terms and26
conditions for its participation.27
(10) "Secretary" means the secretary of the Department of Economic28
Development.29 HLS 12RS-705 REENGROSSED
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(11) "Shared services center jobs" means jobs of full-time employees located1
in the state of Louisiana which are based at a business located in Louisiana that2
performs specific corporate operational tasks for the business, its affiliates, or3
customers, such as accounting, human resources, payroll, or purchasing.4
(12) "Significant positive economic benefit" means that net positive tax5
revenues to be generated as a result of the project. This shall be determined by6
taking into account direct, indirect, and induced impacts based on a standard7
economic impact methodology utilized by the department, the value of the rebate,8
and any other state tax and financial incentives that are used by the department to9
secure the qualified business.10
B. Eligibility requirements. (1) A business shall be eligible for participation11
in the program if all of the following requirements are met:12
(a) At least fifty percent of the total annual sales of the business from a13
Louisiana site or sites is to out-of-state customers or buyers, or to in-state customers14
or buyers who resell the product or service to an out-of-state customer or buyer for15
ultimate use, or the federal government, or any combination thereof.16
(b) The activities of the business at a Louisiana site or sites include corporate17
headquarters, clean technology, next generation automotive, aerospace, destination18
health care, research and development operations, pharmaceutical manufacturing,19
renewable energy, or other business sector targeted by the secretary as a focus of the20
department's economic development efforts.21
(c) The business offers, or will offer within ninety days of the effective date22
of qualifying for the incentive rebates pursuant to the provisions of this Chapter, a23
basic health benefits plan to the individuals it employs as provided in Paragraph24
(A)(1) of this Section.25
(2) The secretary, at his discretion, may include sales by affiliates of the26
business in determining the percentage of sales meeting the requirements of27
Paragraph (1) of this Subsection.28 HLS 12RS-705 REENGROSSED
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(3) With the exception of a business providing at least twenty-five new1
headquarter jobs or shared service center jobs, a business primarily engaged in retail2
sales, real estate, professional services, natural resource extraction or exploration,3
financial services, or venture capital funds shall not be eligible for this program. No4
business engaged in gaming or gambling shall be eligible for the program.5
C. Applications and contract approval and administration. (1) At the6
invitation of the secretary, a business may apply for a contract by submitting to the7
department such certified statements and substantiating documents as the department8
may require. 9
(2) Certification. The secretary may certify eligibility of the business and10
request board approval of its participation in the program on terms and conditions11
specified by the secretary in a proposed contract, if the secretary determines that:12
(a) The business meets the eligibility requirements provided for in13
Subsection B of this Section.14
(b) Participation in the program is needed in a highly competitive site15
selection situation to encourage the business to locate or expand in the state.16
(c) Securing the project will result in a significant positive economic benefit17
to the state.18
(3)(a)(i) Upon the board's approval of participation in the program by the19
business, the secretary shall execute the contract with the business, and provide a20
copy to the Department of Revenue prior to the payment of any benefits under the21
contract.22
(ii) No new contract shall be approved on or after July 1, 2017, but contracts23
existing on that date may continue and may be renewed.24
(b) The contract shall provide for a rebate to the qualified business based25
upon new payroll and shall include the following provisions:26
(i) The percentage of new payroll eligible for rebate, up to a maximum of27
fifteen percent.28
(ii) The maximum amount of new payroll eligible for rebate.29 HLS 12RS-705 REENGROSSED
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(iii) The number of new jobs and amount of new payroll required to be1
created and maintained and any other performance obligations required to be met in2
order to remain qualified for participation in the program.3
(iv) Designation of the facility or facilities eligible for participation in the4
program.5
(v) Monitoring of performance and consequences for failure to perform and6
other contract violations.7
(vi) An initial term of the contract, which may be up to five years, and any8
renewal term available at the discretion of the secretary, which may be up to an9
additional five years.10
(4)(a) In addition, a qualified business shall be entitled to either the same11
sales and use tax rebates authorized in R.S. 51:1787 for capital expenditures for the12
facility or facilities designated in the contract, or the project facility expense rebate13
provided for in Subparagraph (c) of this Paragraph, if the employer meets the14
enterprise zone program hiring requirements and all other limitations, procedures,15
and requirements in R.S. 51:1787. 16
(b) Any qualified business which receives a contract pursuant to this Chapter17
shall also be entitled to a rebate of local sales and use taxes under the same18
procedures and requirements provided for in R.S. 51:1787 for approval of rebates for19
the sales and use taxes of political subdivisions and law enforcement districts,20
including but not limited to the requirement that any such request for a rebate of21
local sales and use taxes be accompanied by an endorsement resolution approved by22
the governing authority of the appropriate political subdivision or law enforcement23
district in whose jurisdiction the qualified business is or will be located.24
(c) In lieu of the sales and use tax rebate, a qualified business shall be25
entitled to a project facility expense rebate equal to one and one-half percent of the26
amount of qualified capital expenditures for the facility or facilities designated in the27
contract. For purposes of this Subparagraph, the term "qualified capital28
expenditures" means amounts classified as capital expenditures for federal income29 HLS 12RS-705 REENGROSSED
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tax purposes related to the project plus exclusions from capitalization provided for1
in Internal Revenue Code Section 263 A(a)(1)(A) through (L), minus the capitalized2
cost of land, capitalized leases of land, capitalized interest, capitalized costs of3
machinery and equipment, and the capitalized cost for the purchase of an existing4
building. When a qualified business purchases an existing building and capital5
expenditures are used to rehabilitate the building, only the costs of the rehabilitation6
shall be considered qualified capital expenditures. Additionally, a qualified business7
shall be allowed to increase its qualified capital expenditures to the extent the8
qualified business' capitalized basis is properly reduced by claiming a federal credit.9
A qualified business earns the project facility expense rebate in the qualified10
business' fiscal year in which the project is placed in service but the qualified11
business may not be issued the project facility expense rebate until the Department12
of Economic Development signs a project completion report or such other time as13
provided for by rule or regulation. The project completion report for the project14
facility expense rebate shall adhere to the same requirements found in R.S.15
51:1787(A)(1)(a)(ii) for the sales and use tax rebate.16
D. Annual Certification of Eligibility. (1) The approved qualified business17
shall file applications for annual rebates with the Department of Economic18
Development. A corporate officer of the qualified business must sign documentation19
to certify its continued eligibility for the rebates, as provided in Subsection B of this20
Section. The qualified business may be subjected to a limited audit by the21
Department of Economic Development to verify such eligibility at the company's22
expense. The approved contract between the qualified business and the Department23
of Economic Development shall authorize the continued rebate as long as the24
business remains a qualified business as defined in this Section and complies with25
the terms and performance obligations of its contract as they existed at the time of26
such approval. If a qualified business fails to maintain the eligibility requirements27
for participation in the program or fails to meet all performance obligations of the28
contract, the secretary may suspend or terminate its participation in the program.29 HLS 12RS-705 REENGROSSED
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(2) Upon approval of the application for annual rebates, the department shall1
send a certification letter to the Department of Revenue for payment of the rebate2
containing the proper entity to which the rebate shall be issued as well as the amount3
of the rebate to be issued. The Department of Revenue may require the business to4
submit additional information as may be necessary to properly issue the rebate.5
Payment of rebates shall be made from the current collections of the taxes imposed6
pursuant to Title 47 of the Louisiana Revised Statutes of 1950, as amended.7
E. Incentive limitations. A taxpayer shall not receive any other incentive8
administered by the Department of Economic Development for any expenditures or9
jobs for which the taxpayer has received a rebate pursuant to this Section.10
F. Rules. The department may promulgate rules and regulations after11
approval of the House Committee on Ways and Means and the Senate Committee12
on Revenue and Fiscal Affairs meeting jointly within forty-five days of publication13
of such proposed rules and regulations in the State Register.14
Section 2. This Act shall become effective on July 1, 2012; if vetoed by the governor15
and subsequently approved by the legislature, this Act shall become effective on July 1,16
2012, or on the day following such approval by the legislature, whichever is later.17
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: Authorizes rebates for the creation of new jobs and improvement of facilities in
targeted industries through the Competitive Projects Payroll Incentive Program.
Proposed law creates the Competitive Projects Payroll Incentive Program through which
eligible businesses may contract with the Dept. of Economic Development (DED) to receive
various rebates based on new jobs, payroll, and certain improvements in existing facilities.
Proposed law provides for definitions, which include:
(1)"Headquarters jobs" mean permanent full-time new executive, administrative, or
professional jobs based at a principal or regional office located in La. which
provides corporate governance for the business. Such jobs include but are not limited
to chief executive officer, chief operating officer, and other senior level officers. HLS 12RS-705 REENGROSSED
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(2)"New payroll" means the payment by the business to its employee s for new jobs,
exclusive of benefits.
(3)"Qualified business" means a business that the secretary of DED has determined to
meet program eligibility requirements, and has executed a contract with DED
governing its participation in the program.
(4)"Qualified expenditures" means amounts expended on an existing building which are
generally classified as capital expenditures for federal income tax purposes plus
certain exclusions from capitalization. Excluded are capitalized cost or leases of
land, interest, machinery and equipment, and costs for the purchase of an existing
building. Qualified expenditures may be increased to the extent the qualified
business' capitalized basis is properly reduced by claiming a federal credit.
(5)"Shared services center jobs" means jobs of full time employees residing in La.
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 provides for eligibility requirements for the program which include:
(1)Determination by DED that the business 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)The business having or achieving 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; however, the
secretary of DED, at his discretion, may include sales of affiliates of the business in
determining this requirement.
(3)The provision of a basic health insurance plan for its employees which is the same
coverage as is provided to employees employed in a bona fide executive,
administrative, or professional capacity.
Proposed law excludes the following businesses from program eligibility unless the business
is providing at least 25 new "headquarter jobs" or "shared service center jobs": retail sales,
real estate, professional services, natural resource extraction or exploration, financial
services, or venture capital funds. Businesses engaged in gaming or gambling are
specifically excluded from the program.
Proposed law authorizes the secretary of DED to invite potential businesses to apply for
participation in the program.
Proposed law provides that DED may certify a business as eligible to participate in the
program if 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 authorizes the secretary of DED to propose and enter into a contract with a
certified business, which contract is subject to approval by the Board of Commerce and
Industry. Contracts are for five years and may be renewed for an additional five years;
however, no contract shall be approved on or after July 1, 2017. HLS 12RS-705 REENGROSSED
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Proposed law provides for requirements of the contract, which include but are not limited
to: the percentage of new payroll upon which rebate shall be based, the number of new jobs
and the amount of new payroll to be maintained for participation, designation of facilities
eligible for qualified expenditures, and the rebates to be paid for compliance with the
program.
Proposed law authorizes a rebate equal to as much as 15% of the value of the "new payroll"
for businesses which participate in the program.
Proposed law authorizes, in addition to the rebate based on new payroll, either of the
following rebates:
(1)A rebate of state and local sales and use tax paid on purchases of material used in the
construction or improvement of, or addition to, a building and machinery and
equipment used by the business for qualified capital expenditures on the facility
designated by DED in the contract.
Or
(2)In lieu of the sales and use tax rebate, a rebate equal to one and one-half percent of
the amount of qualified capital expenditures on the facility designated by DED in the
contract.
Proposed law requires the business to apply annually with DED for receipt of the rebates
based on its maintenance of contract requirements.
Proposed law requires that 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 taxed collected by the Dept. of Revenue.
Proposed law prohibits a business who participates in this program from receiving any other
incentive administered by DED for any expenditures for which it has received a rebate
pursuant to this program.
Proposed law authorizes DED to promulgate rules and regulations subject to oversight by
the House Committee on Ways and Means and the Senate Committee on Revenue and Fiscal
Affairs. The committees are required to meet jointly within 45 days of the rules or
regulations being published in the State Register.
Effective July 1, 2012.
(Adds R.S. 51:3111)
Summary of Amendments Adopted by House
Committee Amendments Proposed by House Committee on Ways and Means to the
original bill.
1. Added definition of "significant positive economic benefit".
2. Added limitation that no contract shall be approved on or after July 1, 2017.
3. Added requirement that DED provide the Dept. of Revenue with the name of
each rebate recipient and the amount of the rebate.
4. Changed the source of money for the payments from income and franchise tax
collections to any taxes collected by the Dept. of Revenue. HLS 12RS-705 REENGROSSED
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5. Added, for purposes of legislative rules oversight, the requirement that the House
and Senate committees meet within 45 days of a rule or regulation being
published in the State Register.