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Regular Session, 2013
HOUSE BILL NO. 483
BY REPRESENTATIVE NANCY LANDRY
TAX CREDITS: Extends authority to grant tax credits for certain state-certified musical or
theatrical facility infrastructure projects
AN ACT1
To amend and reenact R.S. 47:6034(A), (B)(4), (8), (9), (10), and (11), (C)(1)(a)(ii)(aa) and2
(bb), (C)(3), (E)(1)(e), (F), and (G), to enact R.S. 47:6034(B)(12), and to repeal R.S.3
47:6034(C)(1)(b), (e), and (f), relative to income tax credits for state-certified4
musical and theatrical productions and state-certified infrastructure projects; to5
extend the time period for granting certain tax credits; to provide with respect to a6
tax credit for state-certified higher education musical or theatrical infrastructure7
projects; to provide relative to certain definitions; to provide for certain requirements8
and limitations; to provide with respect to the application for such tax credits and9
certification of productions and infrastructure projects; to provide for the10
disallowance of credits; to provide for the recovery of credits; and to provide for11
related matters.12
Be it enacted by the Legislature of Louisiana:13
Section 1. R.S. 47:6034(A), (B)(4), (8), (9), (10), and (11), (C)(1)(a)(ii)(aa) and (bb),14
(C)(3), (E)(1)(e), (F), and (G) are hereby amended and reenacted and R.S. 47:6034(B)(12)15
is hereby enacted to read as follows:16
ยง6034. Musical and theatrical production income tax credit17
A. Purpose. It is the intention of the legislature in creating these five18
different types of tax credits: a credit for qualified production expenditures made19
from investments in a state-certified musical or theatrical production; a credit for the20
construction, repair, or renovation of facilities related to such productions and21 HLS 13RS-976 ENGROSSED
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performances; a credit for qualified transportation costs for performance-related1
property; a credit for the payroll of Louisiana residents employed in connection with2
a state-certified musical or theatrical production; and a credit for employing college,3
university, and vocational-technical students employed in connection with a state-4
certified musical or theatrical production, to establish and promote Louisiana as one5
of the primary places in the United States in which live performances, from creation6
to presentation are present and thriving. The live performance industry will enhance7
economic development because it fits well with the state's reputation as a tourist8
destination, will offer numerous and varied employment opportunities, and in9
conjunction with the available federal and state incentives, will be an attraction for10
new and relocating businesses and will provide for the reinventing of countless11
abandoned properties as either performance or rehearsal spaces. The live12
performance industry will also spur educational development: Louisiana colleges,13
universities, and vocational-technical schools will be able to offer talented14
undergraduate and graduate students from this state, other states, and around the15
world a real-world opportunity to participate in degree programs across the state that16
work on the various productions in accounting, law, management, and marketing and17
to fill arts-related positions such as actors, writers, producers, stagehands, and18
directors, as well as technicians working on all aspects of the production such as19
lighting, sound, and actual stage production and operations.20
B. Definitions. For the purposes of this Section:21
* * *22
(4) "Limited state-certified musical or theatrical production" means a23
musical or theatrical production or a series of productions occurring in Louisiana by24
a nonprofit community theater that held a public performance before an audience25
within this state during the 2008 calendar year which has been certified, verified, and26
approved in accordance with the provisions of this Section. "Infrastructure27
expenditures" means expenditures directly related to the state-certified infrastructure28
project or state-certified higher education infrastructure projects including land and29 HLS 13RS-976 ENGROSSED
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land acquisition costs, construction costs, design fees, furniture, fixtures, and1
equipment purchased subject to a sale agreement or capital lease. Infrastructure2
expenditures shall not include indirect costs such as general administrative costs,3
insurance, or any costs related to the transfer or allocation of tax credits. The4
Department of Economic Development may determine if expenditures submitted as5
production-related costs or capital costs related to an infrastructure facility, represent6
legitimate expenditures for the actual costs or related goods or services, having7
economic substance and a business purpose related to the certified production or8
facility, and not constructive dividends, self-dealing, inflated prices or similar9
transactions entered into for the purpose of inflating the amount of tax credits earned10
rather than for the benefit of the production or facility.11
* * *12
(8) "Related party transaction" means a transaction between parties deemed13
to be related by common ownership or control, under generally accepted auditing14
principles. Related party transaction expenditures may be subject to limitations, as15
provided for by rules and regulations promulgated by the department.16
(9)(a) "Resident" or "resident of Louisiana" means a natural person and, for17
the purpose of determining eligibility for the tax incentives provided by this Section,18
a person who qualifies for any of the following reasons:19
(i) The person is domiciled in the state of Louisiana.20
(ii) The person maintains a permanent place of abode within the state and21
spends in the aggregate more than six months of each year within the state.22
(iii) The person pays taxes to the state on the amount of money paid to such23
person for which a credit is sought pursuant to this Section.24
(b) A company owned or controlled by such a person and which lends the25
services of such a person for a state-certified musical or theatrical production shall26
also be deemed a resident if such company is organized or authorized to do business27
in the state and such company pays taxes to the state on the amount of money paid28
to such company for such services of such person.29 HLS 13RS-976 ENGROSSED
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(9) (10) "State-certified higher education musical or theatrical infrastructure1
project" means a new proscenium or black-box theatre infrastructure project situated2
on a parcel of land located on the campus of a higher education institution in this3
state, which is owned by a higher education campus institution or support foundation4
related to the campus primarily operated to benefit and support campus students and5
the higher education facility. The primary purpose of the proposed infrastructure6
facility must be to host live performances, and the facility must have a minimum7
fixed seating capacity of five hundred. Expenditures attributable to areas other than8
where live performances will take place may comprise no more than twenty-five9
percent of total qualifying expenditures. 10
(11) "State-certified musical or theatrical facility infrastructure project" or11
"state-certified infrastructure project" means a capital infrastructure project in the12
state directly related to the production or performance of musical or theatrical13
productions as defined in this Section, and movable and immovable property and14
equipment related thereto, or any other facility which supports and is a necessary15
component of such facility, and any expenditures in the state related to the16
construction, repair, or renovation of such project, which are certified, verified, and17
approved as provided for in this Section.18
(10)(a) (12)(a) "State-certified musical or theatrical production" means a19
musical or theatrical production performed in this state including, but not limited to20
concerts, musical tours, ballet, dance, comedy revue, or live variety entertainment,21
or a series of productions occurring over the course of a twelve-month period, and22
the recording or filming of such production, which originate, are developed, or have23
their initial public performance before an audience within Louisiana, or which have24
their United States debut within Louisiana, and the production expenditures,25
expenditures for the payroll of residents, transportation expenditures, and26
expenditures for employing college and vocational-technical students related to such27
production or productions, that are certified, verified, and approved as provided for28
in this Section. Non-qualifying projects include, but are not limited to non-touring29 HLS 13RS-976 ENGROSSED
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music and cultural festivals, industry seminars, and trade shows, and any production1
activity taking place outside the state.2
(b) A "state-certified musical or theatrical production" which shall be3
eligible for recertification and the credit provided for in this Section shall include a4
previously certified musical or theatrical production which received a credit pursuant5
to this Section, and which is otherwise eligible pursuant to this Section, which6
returns for performances within the state after being performed on Broadway.7
(11)(a) "Transportation expenditures" means expenditures for the packaging,8
crating, and transportation both to the state for use in a state-certified musical or9
theatrical production of sets, costumes, or other tangible property constructed or10
manufactured out of state, and/or from the state after use in a state-certified musical11
or theatrical production of sets, costumes, or other tangible property constructed or12
manufactured in this state. Such term shall include the packaging, crating, and13
transporting of property and equipment used for special and visual effects, sound,14
lighting, and staging, costumes, wardrobes, make-up and related accessories and15
materials, as well as any other performance or production-related property and16
equipment; provided that transportation services are purchased through a company17
which has a significant business presence in the state.18
(b) "Transportation expenditures" shall not include any costs to transport19
property and equipment to be used only for filming and not in a state-certified20
production, any indirect costs, any expenditures that are later reimbursed by a third21
party, or any amounts that are paid to persons or entities as a result of their22
participation in profits from the exploitation of the production.23
C. Income tax credits for state-certified productions and state-certified24
musical or theatrical facility infrastructure projects:25
(1) There is hereby authorized the following types of credits against the state26
income tax:27
(a)28
* * *29 HLS 13RS-976 ENGROSSED
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(ii)(aa) Until For state-certified infrastructure projects which receive initial1
certification on or before January 1, 2014, a base investment credit may be granted2
earned for certified, verified, and approved expenditures made in the state on or3
before January 1, 2014, for the construction, repair, or renovation of a state-certified4
musical or theatrical facility infrastructure project, or for investments made by a5
company or a financier in such infrastructure project which are, in turn, expended for6
such construction, repair, or renovation, not to exceed ten million dollars per state-7
certified infrastructure project, under conditions provided for in this Item. No more8
than sixty million dollars in tax credits under this Section shall be granted for9
infrastructure projects per year.10
(bb) If all or a portion of an infrastructure project is a facility which may be11
used for other purposes not directly related to the production or performance of12
musical or theatrical production activities, then the project shall be approved only if13
a determination is made that the multiple-use facility will support and will be14
necessary to secure musical or theatrical production activities for the musical or15
theatrical production or performance facility and the applicant provides sufficient16
contractual assurances that: For state-certified higher education musical or theatrical17
infrastructure projects which receive initial certification on or before January 1,18
2018, a base investment credit may be earned for expenditures made in the state on19
or before January 1, 2022, for the construction, repair, or renovation of a new state-20
certified higher education musical or theatrical facility infrastructure project, or for21
investments made by a company or a financier in such infrastructure project which22
are, in turn, expended for such construction, repair, or renovation. No more than ten23
million dollars in tax credits per project or sixty million dollars total in tax credits24
shall be granted for state-certified higher education musical or theatrical25
infrastructure projects. Twenty-five percent of the total base investment provided26
for in the initial certification letter of a state-certified higher education musical or27
theatrical infrastructure project must be expended on or before January 1, 2020, in28
order for the project to earn credits for the remaining estimated base investment29 HLS 13RS-976 ENGROSSED
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provided for in the initial certification letter, as expenditures are made in the state on1
or before January 1, 2022. No credits shall be certified until the state-certified higher2
education musical or theatrical infrastructure project is complete. The initial3
certification letter shall be effective for qualified expenditures made no more than4
six months prior to the date of application. State-certified higher education musical5
or theatrical infrastructure projects shall not be subject to the provisions of Subitem6
(cc) of this Item nor shall such projects be subject to the provisions of Subsection H7
of this Section.8
(I) The facility will be used for the production or performance of musical or9
theatrical production activities, or as a support and component thereof, for the useful10
life of the facility. 11
(II) No tax credits shall be earned on such multiple-use facilities until the12
facility directly used in musical or theatrical productions or performances is13
complete. 14
* * *15
(3) Tax credits associated with a state-certified musical or theatrical16
production or a state-certified musical or theatrical facility infrastructure project shall17
never exceed the total base investment in that production or infrastructure project18
and transportation expenditures.19
* * *20
E. Certification and administration:21
(1)22
* * *23
(e) Prior to the final certification of a production or infrastructure project, the24
applicant shall submit to the Department of Economic Development a report an audit25
of the final amount of expenditures qualifying for credits pursuant to this Section,26
which report the Department of Economic Development may require to be prepared27
by an independent certified public accountant. The Department of Economic28
Development shall review the report audit and shall issue a final tax credit29 HLS 13RS-976 ENGROSSED
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certification letter, certifying the applicant and indicating the type and amount of tax1
credits for which the applicant or other companies or financiers are eligible pursuant2
to this Section.3
* * *4
F.(1) Recapture of credits. If the Department of Economic Development, or5
the Department of Revenue find that funds for which a taxpayer received credits6
according to this Section were not expended for expenditures qualifying for a credit7
as provided in this Section, then the taxpayer's state income tax for such taxable8
period shall be increased by such amount necessary for the recapture of credit9
provided by this Section.10
(2)(a) Recovery of credits by Department of Revenue. Credits granted to a11
taxpayer, but later disallowed, may be recovered by the secretary of the Department12
of Revenue through any collection remedy authorized by R.S. 47:1561 and initiated13
within three years from December thirty-first of the year in which the credit was14
taken.15
(b) The only interest that may be assessed and collected on recovered credits16
is interest at a rate three percentage points above the rate provided in R.S.17
9:3500(B)(1), which shall be computed from the original date of the return on which18
the credit was taken.19
(3) The provisions of this Subsection are in addition to and shall not limit the20
authority of the secretary of the Department of Revenue to assess or to collect under21
any other provision of law. Disallowance of credits by the Department of Economic22
Development. Tax credits shall be subject to disallowance in whole or in part, if the23
Department of Economic Development finds that a taxpayer has obtained a tax credit24
in violation of the provisions of this Section, including but not limited to fraud or25
misrepresentation, as further provided by rule.26
G. The Department of Economic Development shall prepare, with input from27
the Legislative Fiscal Office, a written report to be submitted to the Senate28
Committee on Revenue and Fiscal Affairs and the House of Representatives29 HLS 13RS-976 ENGROSSED
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Committee on Ways and Means no less than sixty days prior to the start of the1
Regular Session of the Legislature in 2008, and every second year thereafter. The2
report shall include the overall impact of the tax credits, the amount of the tax credits3
issued, the number of net new jobs created, the amount of Louisiana payroll created,4
the economic impact of the tax credits and the state-certified musical and theatrical5
productions and infrastructure projects, the amount of new infrastructure that has6
been developed in the state, and any other factors that describe the impact of the7
program. Recovery of credits by the Department of Revenue.8
(1) Credits previously granted to a taxpayer but later disallowed by the9
Department of Economic Development may be recovered by the secretary of the10
Department of Revenue through any collection remedy authorized by R.S. 47:156111
and initiated within three years from December thirty-first of the year in which the12
credit was taken. If the taxpayer that claimed the credit is an entity, the Department13
of Revenue shall first seek recapture from the entity that claimed the credit. If the14
entire amount of the credit subject to recapture cannot be recaptured from the entity,15
the remaining credit shall be recaptured from owners of the entity. The amount of16
the credit subject to recapture shall be allocated among the partners, members, or17
shareholders in proportion to their ownership interests at the time the credit was18
claimed.19
(2) The only interest that may be assessed and collected on recovered credits20
is interest at a rate three percentage points above the rate provided for in R.S.21
9:3500(B)(1), which shall be computed from the original date of the return on which22
the credit was taken.23
(3) The provisions of this Subsection are in addition to and shall not limit the24
authority of the secretary of the Department of Revenue to assess or to collect under25
any other provision of law.26
Section 2. R.S. 47:6034(C)(1)(b), (e), and (f) are hereby repealed in their entirety.27 HLS 13RS-976 ENGROSSED
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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)]
Nancy Landry HB No. 483
Abstract: Extends the time period for granting income tax credits related to the
construction, repair, or renovation of facilities related to musical and theatrical
productions and performances and limits credits for projects after Jan. 1, 2014, to
those located on the campus of a higher education institution.
Present law establishes five different types of tax credits related to musical and theatrical
productions.
Proposed law removes the credit for qualified transportation costs for performance-related
property.
One of the five credits authorized in present law is a credit related to the construction, repair,
or renovation of a state-certified musical or theatrical facility infrastructure project. Present
law further provides that the amount of the base investment credit given for investment in
such projects cannot exceed $10,000,000 per project. Further provides that no more than
$60,000,000 in tax credits under present law may be granted for these projects per year.
Proposed law retains present law with respect to the limitations on the amount of credits per
project as well as the annual overall program limit.
Present law provides that such credits must be granted by Dec. 31, 2013.
Proposed law changes the termination date for the authority to grant tax credits from Dec.
31, 2013, to Dec. 31, 2022.
Present law authorizes tax credits for projects without regard to location.
Proposed law retains present law regarding eligibility for tax credits to those state-certified
infrastructure projects which receive initial certification on or before Jan. 1, 2014.
Proposed law provides that after Jan. 1, 2014, the availability for tax credits shall be limited
to those infrastructure projects situated on a parcel of land located on the campus of a higher
education institution, which is owned by a higher education campus institution or support
foundation related to the campus primarily operated to benefit and support campus students
and faculty.
Proposed law defines "infrastructure expenses" to be expenditures that are directly related
to a state-certified infrastructure project or state-certified higher education infrastructure
project including land and land acquisition costs, construction costs, design fees, furniture,
fixtures, and equipment purchased subject to a sale agreement or capital lease. Proposed law
excludes from the defintion of "infrastructure expenditures" indirect costs such as general
administrative costs, insurance, or any costs related to the transfer or allocation of tax
credits.
Present law permits transportation expenses to be included in production expenses eligible
for tax credits.
Proposed law deletes transportation expenses as eligible expenses. HLS 13RS-976 ENGROSSED
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Present law defines "state-certified musical or theatrical production".
Proposed law retains present law definition of "state-certified musical or theatrical
production" and adds a requirement that the production be performed in La.
Proposed law provides that for higher education musical or theatrical infrastructure projects
which receive initial certification on or before Jan. 1, 2018, a base investment credit may be
earned for expenditures made in the state on or before Jan. 1, 2022, for the construction,
repair, or renovation of a new state-certified higher education musical or theatrical facility
infrastructure project, or for investments made by a company or a financier in such
infrastructure project which are, in turn, expended for such construction, repair, or
renovation. 25% percent of the total base investment must be expended on or before Jan.
1, 2020, in order for a project to earn credits for any remaining estimated base investment
provided for in its initial certification letter, as expenditures are made on or before Jan. 1,
2022.
Proposed law requires that an infrastructure project be complete before any credits are
certified.
Present law requires that 50% of the total amount of tax credits granted annually shall be
reserved for projects located outside of Jefferson and Orleans parishes.
Proposed law excludes higher education musical or theatrical infrastructure projects from
the requirements of present law regarding amounts of credits to be allocated outside of
Jefferson and Orleans parishes.
Present law provides for disallowance and recapture of credits.
Proposed law rewords provisions of present law regarding disallowance and recapture, but
retains the substance of present law.
Proposed law repeals the requirement for the Dept. of Economic Development to report
biannually to the legislature regarding the status of the program.
Proposed law repeals present law providing a tax credit for projects for nonprofit community
theaters, which credit is equal to 10% of the investment.
(Amends R.S. 47:6034(A), (B)(4), (8), (9), (10), and (11), (C)(1)(a)(ii)(aa) and (bb), (C)(3),
(E)(1)(e), (F), and (G); Adds R.S. 47:6034(B)(12); Repeals R.S. 47:6034(C)(1)(b), (e), and
(f))
Summary of Amendments Adopted by House
Committee Amendments Proposed by House Committee on Ways and Means to the
original bill.
1. Changes program eligibility after Jan. 1, 2014, from a project located anywhere
in the state to a project on the campus of a higher education institution.
2. Adds requirements for the timing of expenditures for qualification for tax credits.
4. Revises present law regarding disallowance, recapture and recovery of tax
credits.
5. Deletes provisions of present law requiring the Dept. of Economic Development
to report to the legislature with regard to the tax credit program. HLS 13RS-976 ENGROSSED
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6. Deletes the tax credit authorized under present law for certain investments in
nonprofit community theaters.
7. Deletes present law regarding the allowance of transportation costs as certified
expenditures.
8. Adds and revises definitions.