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Regular Session, 2012
SENATE BILL NO. 332
BY SENATORS RISER AND ALARIO
TAX EXEMPTIONS. Establishes a program to authorize the granting of ad valorem tax
exemption contracts by the Board of Commerce and Industry for certain businesses.
(See Act)
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; to authorize the Board of Commerce and Industry6
to enter into contracts under certain circumstances; to provide for contract terms,7
conditions and limitations; to provide with respect to approval of contracts and8
notification of certain entities relative to contracts; to provide with respect to contract9
suspension and cancellation; to authorize rulemaking; to provide for effectiveness;10
and to provide for related matters.11
Be it enacted by the Legislature of Louisiana:12
Section 1. Chapter 5 of Subtitle V of Title 47 of the Louisiana Revised Statutes of13
1950, comprised of R.S. 47:4351 through 4355 is hereby enacted to read as follows: 14
CHAPTER 5. CONTRACTS FOR BUSINESSES15
§4351. Definitions16
For the purposes of this Chapter, the following terms shall have the17 SB NO. 332
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meanings indicated unless the context clearly indicates otherwise:1
(1) "Board" means the State Board of Commerce and Industry or its2
successor.3
(2) "Business" means any individual, firm, joint venture, association,4
corporation, estate, partnership, business trust, receiver, syndicate, or any other5
legal business entity.6
(3) "Department" means the Louisiana Department of Economic7
Development.8
(4) "Headquarters jobs" means executive, administrative, or9
professional jobs based at a principal or regional office located in Louisiana, in10
which are located the principal or regional executive officers normally11
constituting a principal or regional headquarters providing corporate12
governance. Such principal or regional executive officers include but shall not13
be limited to chief executive officer, chief operating officer, and other senior14
level officers or appropriate regional equivalents.15
(5) "Program" means the program provided for in this Chapter for the16
granting of ad valorem tax exemptions pursuant to the authority granted under17
Article VII, Section 21(L) of the Louisiana Constitution.18
(6) "Qualified business" means a business certified by the secretary of19
the department as meeting the eligibility requirements of R.S. 47:4353 and20
approved to participate in the program.21
(7) "Secretary" means the secretary of the Department of Economic22
Development.23
(8) "Shared service center jobs" means jobs based at a business located24
in Louisiana that performs specific corporate operational tasks for the business25
or its affiliates or customers, such as accounting, human resources, payroll or26
purchasing.27
§4352. Program administration; parishes28
A. There is hereby established a program for the granting of contracts29 SB NO. 332
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for ad valorem tax exemptions for business projects which, if located in1
Louisiana, are expected to yield significant positive economic benefit to the2
state. The program shall be implemented and administered by the Department3
of Economic Development and shall be available and operate in all parishes4
which have elected to participate therein. As provided in this Chapter, the5
program shall consist of an application process for, and review, certification,6
approval and oversight of contracts for ad valorem tax exemptions. In7
compliance with the Administrative Procedure Act, the department shall adopt8
and promulgate such rules as are necessary for the administration of this9
program.10
B. The governing authority of any parish may elect to participate in the11
program. Such action shall be evidenced by the adoption of a resolution or12
ordinance. The election to participate in the program shall be for an indefinite13
term, but may be rescinded at any time by the parish governing authority. A14
parish's withdrawal from the program shall become effective on the last day of15
the twenty-fourth month after the date upon which the governing authority16
provides written notification to the secretary of its intention to discontinue17
participation and shall not affect existing contracts or renewals thereof. The18
secretary shall establish any guidelines or procedures as may be necessary for19
purposes of this Subsection.20
§4353. Eligibility requirements21
A. A business shall be eligible for participation in the program if all of22
the 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-state25
customers or buyers but the product or service is resold by the purchaser to an26
out-of-state customer or buyer for ultimate use, or the federal government, or27
any combination thereof; and28
(2) The activities of the business at a Louisiana site or sites include29 SB NO. 332
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corporate headquarters, logistics, warehousing, data center, clean technology,1
destination healthcare, research and development, renewable energy, digital2
media and software development, or other business sector targeted by the3
secretary as a focus of the department's economic development efforts.4
B. The secretary, at his discretion, may include sales by affiliates of the5
business in determining the percentage of sales meeting the requirements of this6
Paragraph (1) of Subsection A of this Section.7
C. With the exception of a business providing at least twenty-five new8
headquarter jobs or shared service center jobs, a business primarily engaged9
in retail sales, real estate, professional services, gaming or gambling, natural10
resource extraction or exploration, financial services, or venture capital funds,11
shall not be eligible for this program.12
§4354. Application and recommendation13
A. At the invitation of the secretary, a business may apply for a contract14
for exemption for a new or expanded facility for the business by submitting to15
the department such certified statements and substantiating documents as the16
department may require. The secretary shall consider applications and, at his17
discretion, may recommend a business project for a contract in either of the18
following circumstances:19
(1) The granting of a contract would be advantageous in the case of a20
competitive site selection situation so as to encourage a new business to locate21
its project in the state.22
(2) The granting of a contract would encourage an existing business to23
locate a competitive expansion project in the state.24
B. The secretary's recommendation shall include proposed contract25
terms and conditions. A contract shall include at a minimum the following26
terms:27
(1) An initial term of no more than five calendar years with, at the28
option of the secretary and the board a renewal of up to an additional five years.29 SB NO. 332
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(2) Requirements for specific performance and reporting thereof.1
(3) Audits and review of performance.2
(4) Provisions governing the consequences for failure to perform or3
other contract violations.4
§4355. Approval of contract; contract administration5
A. Upon approval by the board and governor, the secretary shall6
execute the contract and provide a copy of the contract to the assessor and the7
parish governing authority of the respective parish. The secretary shall notify8
the assessor and parish governing authority when an existing contract expires,9
is suspended, or is cancelled.10
B. In the event the secretary determines that a business has failed to meet11
the eligibility requirements of the program or the performance objectives of the12
contract, the secretary may, at his discretion, suspend or cancel the contract.13
A contract suspension would remove the exemption for the tax year in which the14
failure occurred. A contract cancellation would remove the exemption for the15
tax year in which it occurred and all future years. Upon receipt of notification16
from the secretary that contract was suspended or cancelled, the assessor shall17
adjust the property assessment in the manner provided by law. Taxes becoming18
due for a prior year due to removal of an exemption shall, at the discretion of19
the tax collector, be collectable immediately or with the taxes for the current20
year.21
Section 2. This Act shall take effect and become operative for all taxable years22
commencing after the proposed amendment adding Article VII, Section 21(L) of the23
Constitution of Louisiana contained in the Act which originated as Senate Bill No. ___ of24
this 2012 Regular Session of the Legislature is adopted at the statewide election to be held25
on November 6, 2012, and becomes effective.26 SB NO. 332
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The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Riley Boudreaux.
DIGEST
Proposed law establishes a program for the granting of contracts of exemption from all
property taxes pursuant to Const. Art. VII, Sec. 21(L) administered by the Department of
Economic Development, if the contract is approved by the State Board of Commerce and
Industry and the governor.
The program operates in parishes which elect to participate in the program by the adoption
of a resolution or ordinance. The election to participate must be for an indefinite term, and
may be rescinded at any time by the parish governing authority, but the withdrawal from the
program does not affect existing contracts or renewals and becomes effective on the last day
of the 24
th
month after the date upon which the governing authority provides written
notification to the secretary of DED of its intention to discontinue participation. The
secretary is required to establish any guidelines or procedures necessary for such purposes.
Proposed law provides that a business is eligible for participation in the program if all of the
following requirements are met:
1. At least 50% of the total annual sales of the business from a Louisiana site or sites,
which may include, at the secretary of DED's discretion sales by affiliates of the
business, is to any of the following:
a. Out-of-state customers or buyers.
b. 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.
c. The federal government.
d. Any combination of the above.
2. The activities of the business at a Louisiana site or sites include corporate
headquarters, logistics, warehousing, data center, clean technology, destination
healthcare, 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.
Proposed law provides that businesses primarily engaged in retail sales, real estate,
professional services, gaming or gambling, natural resource extraction or exploration,
financial services, or venture capital funds are not eligible for the program, unless it is a
business providing at least 25 new "headquarter jobs" or "shared service center jobs".
"Headquarters jobs" is defined as 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 service center jobs" means jobs based at a business located in Louisiana that
performs specific corporate operational tasks for the business or its affiliates or customers,
such as accounting, human resources, payroll or purchasing.
Proposed law permits businesses to apply for an exemption for a new or expanded facility SB NO. 332
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at the invitation of the secretary of DED by submitting to the department such certified
statements and substantiating documents as the department may require. The secretary must
consider the applications and, at his discretion, may recommend a business project 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 a
competitive expansion project in the state.
The secretary's recommendation must include proposed contract terms and conditions which
must include at a minimum:
1. An initial term of no more than 5 calendar years with, at the option of the secretary
and the board, a renewal of up to an 5 additional years.
2. Requirements for specific performance and reporting thereof.
3. Audits and review of performance.
4. Provisions governing the consequences for failure to perform or other contract
violations.
Proposed law authorizes DED to adopt and promulgate rules that are necessary for the
administration of this program in compliance with the APA.
Proposed law authorizes the secretary of DED to, at his discretion, suspend or cancel the
contract if he determines 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 tax year in which the failure
occurred. A contract cancellation would remove the exemption for the tax year in which it
occurred and all future years.
Upon receipt of notification from the secretary that contract was suspended or cancelled, the
assessor must adjust the property assessment in the manner provided by law. Taxes
becoming due for a prior year due to removal of an exemption must, at the discretion of the
tax collector, be collectable immediately or with the taxes for the current year.
Effective for all taxable years commencing after the constitutional amendment proposed in
Senate Bill No. of this 2012 R.S. is adopted and becomes effective.
(Adds R.S. 47:4351-4355)