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ACT No. 507
Regular Session, 2012
HOUSE BILL NO. 958
BY REPRESENTATIVES ROBIDEAUX, ADAMS, BARRAS, WESLEY BISHOP,
BROADWATER, GUILLORY, HAZEL, HOFFMANN, JOHNSON, LORUSSO,
AND THIBAUT
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
Department of Economic Development to have a value of at least one dollar and20
twenty-five cents per hour and which is the same coverage as is provided to21
employees employed in a bona fide executive, administrative, or professional22
capacity by the employers who are exempt from the minimum wage and maximum23
hour requirements of the federal Fair Labor Standards Act, 29 U.S.C. §201, et seq.24 ENROLLEDHB NO. 958
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(2) "Business" means any individual, firm, joint venture, association,1
corporation, estate, partnership, business trust, receiver, syndicate, or any other legal2
business entity.3
(3) "Department" means the Department of Economic Development.4
(4) "New jobs" means permanent full-time direct new jobs based at the5
facilities designated in the contract and filled by residents of the state.6
(5) "New payroll" means payment by the business to its employees for new7
jobs, exclusive of benefits, and defined as wages under Louisiana Employment8
Security Law (R.S. 23:1472(20)).9
(6) "Program" means the Competitive Projects Payroll Incentive Program.10
(7) "Qualified business" means a business certified by the secretary as11
meeting the eligibility requirements of Subsection B of this Section, approved by the12
Joint Legislative Committee on the Budget to participate in the program, and13
executing a contract providing the terms and conditions for its participation.14
(8) "Secretary" means the secretary of the Department of Economic15
Development.16
(9) "Significant positive economic benefit" means net positive tax revenue.17
This shall be determined by taking into account direct, indirect, and induced impacts18
based on a standard economic impact methodology utilized by the department, the19
value of the rebate, and any other state tax and financial incentives that are used by20
the department to secure the project.21
B. Eligibility requirements. (1) A business shall be eligible for participation22
in the program if all of the following requirements are met:23
(a) 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 who resell the product or service to an out-of-state customer or buyer for26
ultimate use, or the federal government, or any combination thereof.27
(b) The business will primarily engage in one of the following activities at28
the project site:29 ENROLLEDHB NO. 958
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(i) Manufacturing of the following types of durable goods: automobiles,1
motorcycles or other passenger vehicles, or components thereof; aircraft or2
components thereof; spacecraft or components thereof; medical devices; batteries or3
other power storage devices; motors, engines, turbines or components thereof;4
environmental control systems; household appliances; computers, computer5
peripherals or components thereof; communications equipment; audio or video6
equipment; semiconductors; consumer-oriented electronic devices or components7
thereof; industrial machinery; or construction heavy equipment such as excavators.8
(ii) Manufacturing of pharmaceutical products.9
(iii) Conversion of natural gas to diesel, jet fuel, or other refined fuels.10
(iv) Data storage or data services, provided at least seventy-five percent of11
sales meet the out-of-state sales requirements of Subparagraph (1)(a) of this12
Subsection.13
(v) Other activities as recommended by the secretary and approved by the14
Joint Legislative Committee on the Budget.15
(c) The business offers, or will offer within ninety days of the effective date16
of qualifying for the incentive rebates pursuant to the provisions of this Chapter, a17
basic health benefits plan to the individuals it employs as provided in Paragraph18
(A)(1) of this Section.19
(2) The secretary, at his discretion, may include sales by affiliates of the20
business in determining the percentage of sales meeting the requirements of21
Paragraph (1) of this Subsection.22
(3) All of the following shall not be eligible for the program:23
(a) A business engaged in gaming or gambling.24
(b) A business primarily engaged in natural resource extraction or25
exploration, unless the project activity is conversion of natural gas to diesel, jet fuel,26
or other refined fuels.27
(c) A business primarily engaged in retail sales; real estate; professional28
services; financial services; venture capital funds; shipbuilding; wood products;29 ENROLLEDHB NO. 958
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agriculture; or manufacturing of machinery or equipment primarily intended to serve1
the energy industry.2
C. Applications and contract approval and administration. (1) At the3
invitation of the secretary, a business may apply for a contract by submitting to the4
department such certified statements and substantiating documents as the department5
may require. 6
(2) Certification. The secretary may certify eligibility of the business and7
request approval by the Joint Legislative Committee on the Budget of its8
participation in the program on terms and conditions specified by the secretary in a9
proposed contract, if the secretary determines all of the following:10
(a) The business meets the eligibility requirements provided for in11
Subsection B of this Section.12
(b) Participation in the program is needed in a highly competitive site13
selection situation to encourage the business to locate or expand in the state.14
(c) Securing the project will result in a significant positive economic benefit15
to the state.16
(3)(a)(i) Upon the approval by the Joint Legislative Committee on the17
Budget of participation in the program by the business, the secretary shall execute18
the contract with the business, and provide a copy to the Department of Revenue19
prior to the payment of any benefits under the contract.20
(ii) No new contract shall be approved on or after July 1, 2017, but contracts21
existing on that date may continue and may be renewed.22
(b) The contract shall provide for a rebate to the qualified business based23
upon new payroll and shall include the following provisions:24
(i) The percentage of new payroll eligible for rebate, up to a maximum of25
fifteen percent.26
(ii) The maximum amount of new payroll eligible for rebate.27
(iii) The number of new jobs and amount of new payroll required to be28
created and maintained and any other performance obligations required to be met in29
order to remain qualified for participation in the program.30 ENROLLEDHB NO. 958
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(iv) Designation of the facility or facilities eligible for participation in the1
program.2
(v) Monitoring of performance and consequences for failure to perform and3
other contract violations.4
(vi) An initial term of the contract, which may be up to five years, and any5
renewal term available at the discretion of the secretary, which may be up to an6
additional five years.7
(4)(a) In addition, a qualified business shall be entitled to either the same8
sales and use tax rebates authorized in R.S. 51:1787 for capital expenditures for the9
facility or facilities designated in the contract, or the project facility expense rebate10
provided for in Subparagraph (c) of this Paragraph, if the employer meets the11
enterprise zone program hiring requirements and all other limitations, procedures,12
and requirements in R.S. 51:1787. 13
(b) Any qualified business which receives a contract pursuant to this Chapter14
shall also be entitled to a rebate of local sales and use taxes under the same15
procedures and requirements provided for in R.S. 51:1787 for approval of rebates for16
the sales and use taxes of political subdivisions and law enforcement districts,17
including but not limited to the requirement that any such request for a rebate of18
local sales and use taxes be accompanied by an endorsement resolution approved by19
the governing authority of the appropriate political subdivision or law enforcement20
district in whose jurisdiction the qualified business is or will be located.21
(c) In lieu of the sales and use tax rebate, a qualified business shall be22
entitled to a project facility expense rebate equal to one and one-half percent of the23
amount of qualified capital expenditures for the facility or facilities designated in the24
contract. For purposes of this Subparagraph, the term "qualified capital25
expenditures" means amounts classified as capital expenditures for federal income26
tax purposes related to the project plus exclusions from capitalization provided for27
in Internal Revenue Code Section 263 (a)(1)(A) through (L), minus the capitalized28
cost of land, capitalized leases of land, capitalized interest, capitalized costs of29
machinery and equipment, and the capitalized cost for the purchase of an existing30 ENROLLEDHB NO. 958
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building. When a qualified business purchases an existing building and capital1
expenditures are used to rehabilitate the building, only the costs of the rehabilitation2
shall be considered qualified capital expenditures. Additionally, a qualified business3
shall be allowed to increase its qualified capital expenditures to the extent the4
qualified business' capitalized basis is properly reduced by claiming a federal credit.5
A qualified business earns the project facility expense rebate in the qualified6
business' fiscal year in which the project is placed in service but the qualified7
business may not be issued the project facility expense rebate until the Department8
of Economic Development signs a project completion report or such other time as9
provided for by rule or regulation. The project completion report for the project10
facility expense rebate shall adhere to the same requirements found in R.S.11
51:1787(A)(1)(a)(ii) for the sales and use tax rebate.12
D. Annual Certification of Eligibility. (1) The qualified business shall file13
requests for approval of annual rebates with the department. The request shall14
include documentation signed by a corporate officer of the qualified business15
certifying its continued eligibility for the program, as provided in Subsection B of16
this Section, and its actual new payroll and the performance of any other contractual17
obligations for the subject year. The qualified business may be subject to a limited18
audit by the department, at the expense of the qualified business, to verify such19
eligibility and performance. The approved contract between the qualified business20
and the department shall authorize the continued rebate as long as the business21
remains eligible for the program and complies with the terms and performance22
obligations of the contract. If a qualified business fails to maintain the eligibility23
requirements for participation in the program or fails to meet all performance24
obligations of the contract, the secretary may suspend or terminate its participation25
in the program.26
(2)(a) After verification of continued eligibility and performance, the27
department shall send a rebate certification letter to the Department of Revenue,28
stating the amount of actual new payroll for the subject year, the amount of rebate29
to be issued, and the entity to which the rebate shall be issued. The Department of30 ENROLLEDHB NO. 958
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Revenue may require the business to submit additional information as may be1
necessary to properly issue the rebate. Payment of rebates shall be made from the2
current collections of the taxes imposed pursuant to Title 47 of the Louisiana3
Revised Statutes of 1950, as amended.4
(b) No payment of a rebate shall be made under a specific contract during5
the fiscal year in which such contract is approved by the Joint Legislative Committee6
on the Budget.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. Economic Analysis Verification. Prior to the implementation of the11
program, an independent third-party economist selected by the Legislative Fiscal12
Office and the department, and retained by the department after approval of the Joint13
Legislative Committee on the Budget, shall verify the standard economic impact14
methodology utilized by the department.15
G. Rules. The department may promulgate rules and regulations after16
approval of the House Committee on Ways and Means and the Senate Committee17
on Revenue and Fiscal Affairs meeting jointly within sixty days of publication of18
such proposed rules and regulations in the State Register.19
Section 2. This Act shall become effective on July 1, 2012; if vetoed by the governor20
and subsequently approved by the legislature, this Act shall become effective on July 1,21
2012, or on the day following such approval by the legislature, whichever is later.22
SPEAKER OF THE HOUSE OF REPRESENTATI VES
PRESIDENT OF THE SENATE
GOVERNOR OF THE STATE OF LOUISIANA
APPROVED: