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Regular Session, 2012
SENATE BILL NO. 567
BY SENATORS RISER, ALARIO, GARY SMITH AND WALSWORTH
ECONOMIC DEVELOPMENT. Creates the Corporate Headquarters Relocation Program.
(7/1/12)
AN ACT1
To enact Chapter 54 of Title 51 of the Louisiana Revised Statutes of 1950, to be comprised2
of R.S. 51:3111 through 3115, relative to the creation of a Corporate Headquarters3
Relocation Program; to authorize contracts with businesses that relocate or expand4
a headquarters in the state; to provide for the content and approval of contracts; to5
provide for the authority of the Department of Economic Development; and to6
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 through 3115, is hereby enacted to read as follows: 10
CHAPTER 54. CORPORATE HEADQUARTERS RELOCATION PROGRAM11
§3111. Definitions12
The following words or terms as used in this Chapter shall have the13
following meaning, unless a different meaning appears from the context:14
(1) "Board" means the Board of Commerce and Industry.15
(2) "Business" means any individual, firm, joint venture, association,16
corporation, estate, partnership, business trust, receiver, syndicate, or any other17 SB NO. 567
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legal business entity.1
(3) "Department" means the Department of Economic Development2
unless otherwise designated.3
(4) "Headquarters jobs" means permanent full-time new executive,4
administrative, or professional jobs based at a headquarters and filled by5
residents of the state employed by a qualified business, with each job paying at6
least sixty thousand dollars per year or two hundred percent of the average7
annual wages paid by employers subject to the Louisiana Employment Security8
Law in the parish in which the headquarters is located, whichever is lower.9
(5) "Headquarters" means a principal or regional corporate office10
located or to be located in Louisiana, in which are based the principal or11
regional executive officers normally constituting a principal or regional12
headquarters providing corporate governance. Such officers include but are13
not limited to chief executive officer, chief operating officer, and other senior14
level officers or appropriate regional equivalents.15
(6) "Program" means the Corporate Headquarters Relocation Program16
established pursuant to this Chapter.17
(7) "Qualified business" means a business that (a) the secretary has18
determined meets the eligibility requirements of R.S. 51:3112, (b) has been19
approved by the board to participate in the program, and (c) has executed a20
contract with the department governing its participation in the program.21
(8) "Relocation costs" means actual, direct, and substantiated costs22
incurred by the qualified business to relocate a headquarters to the state,23
including capital expenditures and leasing costs for a facility and equipment,24
and personnel relocation costs. Personnel relocation costs shall be limited to25
costs associated with no more than sixty percent of headquarters jobs.26
Relocation costs shall also include capital expenditures and leasing costs for27
expansion of a headquarters facility in the state, excluding personnel relocation28
costs. Relocation costs shall be limited to the maximum amount provided by the29 SB NO. 567
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contract executed pursuant to this Chapter.1
(9) "Secretary" means the secretary of the Department of Economic2
Development.3
(10) "Significant positive economic benefit" means that net positive tax4
revenues to be generated as a result of the project taking into account direct,5
indirect, and induced impacts based on standard economic impact methodology6
utilized by the department and the value of the rebate and any other state tax7
and financial incentives that are used by the department to secure the qualified8
business.9
(11) "State" means the state of Louisiana.10
§3112. Eligibility requirements11
A business shall be eligible to participate in the program if all of the12
following requirements are met:13
(1) The business is relocating a headquarters to the state, or is expanding14
a headquarters in the state.15
(2) The secretary determines that participation in the program will be16
a significant factor in a highly competitive site selection situation to encourage17
the business to relocate or expand the headquarters in the state.18
(3) The secretary determines that securing the project will result in a19
significant positive economic benefit to the state.20
(4) Relocation or expansion of the headquarters will create a minimum21
of twenty-five headquarters jobs.22
§3113. Application; recommendation; approval23
A. At the invitation of the secretary, a business may apply for24
participation in the program by submitting to the department certified25
statements and substantiating documents as the department may require.26
B. Upon determining the business meets the eligibility requirements of27
R.S. 51:3112, the secretary may request board approval of a contract providing28
for such participation on terms and conditions specified by the secretary.29 SB NO. 567
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§3114. Contract administration; rebate1
A.(1) Upon approval by the board, the secretary shall execute the2
contract with the business, and provide a copy to the Department of Revenue3
prior to the payment of any benefits under the contract.4
(2) No new contract shall be approved on or after July 1, 2017, but5
contracts existing on that date may continue and be renewed.6
B. The contract shall provide a rebate to the qualified business of twenty-7
five percent of relocation costs, and shall include the following provisions:8
(1) The maximum amount of qualifying relocation costs.9
(2) The number of headquarters jobs and associated payroll to be10
created and maintained, and any other performance obligations deemed11
appropriate by the secretary.12
(3) The reduction of annual rebate payments if performance obligations13
are not met.14
C. The qualified business shall submit to the department, at least15
annually but no more often than monthly, a certified cost report reasonably16
documenting its relocation costs, including supporting documentation as17
required by the department.18
D. The rebate shall be payable in equal installments over a five year19
period, to be paid after the business files an annual certification of performance20
and the department determines the extent of compliance with contractual21
obligations. Annual payments shall be reduced and forfeited for failure to meet22
performance obligations, as provided in the contract. Rebate amounts within23
the annual limit that are not paid in one year may be carried over and paid in24
a subsequent year, in addition to that year's limit.25
E. The department may obtain, at the expense of the qualified business,26
a certified limited scope audit by an independent certified public accountant, in27
accordance with applicable auditing standards generally accepted in the United28
States, of all books and records of the business relating to its eligibility and29 SB NO. 567
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performance obligations under the program.1
F. Upon approval of the application for annual rebates, the department2
shall send a certification letter to the Department of Revenue for payment of the3
rebate containing the proper entity to which the rebate should be issued and the4
amount of the rebate to be issued. The Department of Revenue may require the5
business to submit any such additional information as may be necessary to6
properly issue the rebate. Payment shall be made from the current collections7
of the taxes imposed by Title 47 of the Louisiana Revised Statutes of 1950, as8
amended.9
G. A taxpayer shall not receive any other incentive administered by the10
Department of Economic Development for any expenditures for which the11
taxpayer has received a rebate pursuant to this Section.12
§3115. Rules13
The department may promulgate rules and regulations after approval14
of the House Committee on Ways and Means and the Senate Committee on15
Revenue and Fiscal Affairs meeting jointly within forty-five days of the16
publication of such proposed rules and regulations in the State Register.17
Section 2. This Act shall become effective on July 1, 2012; if vetoed by the governor18
and subsequently approved by the legislature, this Act shall become effective on July 1,19
2012, or on the day following such approval by the legislature, whichever is later.20
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Riley Boudreaux.
DIGEST
Riser (SB 567)
Proposed law creates the Corporate Headquarters Relocation Program which grants to a
"qualified business" a contract to receive relocation rebate of 25% of "relocation costs" to
relocate or expand its "headquarters" in a location within Louisiana.
"Relocation costs" is defined as actual, direct and substantiated costs incurred by the
qualified business to relocate a headquarters to the state, including capital expenditures and
leasing costs for a facility and equipment, and personnel relocation costs. Personnel
relocation costs are limited to costs associated with no more than 60% of headquarters jobs.
Relocation costs also include capital expenditures and leasing costs for expansion of a
headquarters facility in the state, excluding personnel relocation costs. Relocation costs are
limited to the maximum amount provided by the contract executed. SB NO. 567
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"Qualified business" is defined as a business that (i) the secretary has determined meets the
eligibility requirements below, (ii) has been approved by the board to participate in the
program, and (iii) has executed a contract with the department governing its participation
in the program.
A business is eligible to participate in the program if the following criteria are met:
1. The business is relocating a headquarters to the state, or is expanding a headquarters
in the state. "Headquarters" is defined as a principal or regional corporate office
located or to be located in Louisiana, in which are based the principal or regional
executive officers normally constituting a principal or regional headquarters
providing corporate governance. Such officers include but are not limited to chief
executive officer, chief operating officer, and other senior level officers or
appropriate regional equivalents.
2. The secretary determines that participation in the program will be a significant factor
in a highly competitive site selection situation to encourage the business to relocate
or expand the headquarters in the state.
3. The secretary determines that securing the project will result in a "significant
positive economic benefit" to the state. "Significant positive economic benefit" is
defined as net positive tax revenues to be generated as a result of the project taking
into account direct, indirect, and induced impacts based on standard economic
impact methodology utilized by DED and the value of the rebate and any other state
tax and financial incentives that are used by the department to secure the qualified
business.
4. Relocation or expansion of the headquarters will create a minimum of 25
headquarters jobs. "Headquarters jobs" is defined as permanent, full-time, new
executive, administrative, or professional jobs based at a "headquarters" and filled
by residents of the state employed by a qualified business, that each job pay at least
$60,000 per year or 200% of the average annual wages paid by employers subject
to the Louisiana Employment Security Law in the parish in which the headquarters
is located, whichever is lower.
Proposed law allows a business to apply for the program at the invitation of the secretary of
DED. Once DED determines that the business meets the eligibility requirements of the
program the secretary may request Board of Commerce and Industry approval of the
contract. The contract must contain the following information:
1. The maximum amount of qualifying relocation costs.
2. The number of headquarters jobs and associated payroll to be created and
maintained, and any other performance obligations deemed appropriate by the
secretary.
3. The reduction of annual rebate payments if performance obligations are not met.
Proposed law provides that no new contracts may be approved on or after July 1, 2017, but
contracts existing on that date may continue and be renewed.
Proposed law requires the qualified business to submit certified cost reports reasonably
documenting relocation costs, including supporting documentation as required by the
department.
Proposed law states that the rebate is payable in equal installments over a five-year period.
Annual payments must be reduced and forfeited for failure to meet performance obligations,
as provided in the contract. SB NO. 567
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Proposed law allows the department to obtain a certified limited scope audit performed by
an independent CPA at the expense of the qualifying business. The audit shall be performed
in accordance with applicable auditing standards generally accepted in the United States, of
all books and records of the business relating to its eligibility and performance obligations
under the program.
Proposed law requires DED to notify the Department of Revenue of the amount of the
annual rebate payment due. Upon approval of the application for the annual rebate, a
certification letter is sent to the Department of Revenue for payment of the rebate containing
the proper entity to which the rebate should be issued and the amount of the rebate to be
issued. The DOR may require the business to submit additional information necessary to
properly issue the rebate. The rebate is made from the current collections of the taxes
imposed by Title 47.
Proposed law states that a taxpayer who participates in this program is not allowed to receive
any other incentive administered by the DED for any expenditures for which the taxpayer
has received a rebate pursuant to this program.
Proposed law allows DED to promulgate rules and regulations after approval of the House
Ways and Means and Senate Revenue and Fiscal Affairs meeting jointly within 45 days of
their publication in the State Register.
Effective July 1, 2012.
(Adds R.S. 51:3111-3115)
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Revenue and Fiscal
Affairs to the original bill.
1. Prohibits granting new contracts on and after July 1, 2017, but allows
contracts existing on that date to continue and be renewed.
2. Defines "significant positive economic benefit" which the secretary must find
in order to grant the rebate to the business relocating or expanding
headquarters.
3. Changes the amount of personnel relocation costs which may be included in
the "relocation costs" upon which the rebate is based from 40% of such
personnel relocation costs to 60% of such personnel relocation costs.
4. Changes the procedure by which DED may promulgate regulations from that
which is in the APA to committee approval prior to adoption of the
regulations at a joint meeting within 45 days of their publication in the State
Register.
5. Specifies that the Department of Revenue must receive a copy of an executed
contract from DED prior to the payment of any benefits to a business under
the contract.
6. Requires DED to send a certification letter to DOR upon contract approval
containing the proper entity to which the rebate should be issued and the
amount of the rebate to be issued.
7. Authorizes DOR to require the business to submit any additional information
necessary to properly issue a rebate. SB NO. 567
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8. Specifies payment of the rebate from current collections of all the taxes
imposed by Title 47, not just income and franchise tax.