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)]
Leger HB No. 551
Abstract: Extends the termination date of the Investor Tax Credit and the Import Export Credit
from Jan. 1, 2017 to Jan. 1, 2020, and deletes the requirement that the bond commission
approve the certification of qualifying projects.
Present law authorizes the Department of Economic Development (DED) to grant a credit against
corporate income and franchise tax liability equal to the total capital costs of a "qualifying
project", to be taken at 5% per tax year, limited to the total cost of the project.
Present law defines a "qualifying project" as a project sponsored or undertaken by a public port
and one or more investing companies that has a capital cost of not less than $5 million and at
which the predominant trade or business activity conducted will constitute industrial,
warehousing, or port and harbor operations and cargo handling, including any "port or port and
harbor activity".
"Port or port and harbor activity" is defined as any trade or business described in the 1997 North
American Industry Classification System (NAICS) within Subsector 493 (Warehousing and
Storage), Industry Number 488310 (Port and Harbor Operations), or Industry Number 488320
(Marine Cargo Handling).
Proposed law reduces the capital cost of a "qualifying project" from $5 million to one and one-
half million dollars and expands the definition of "port or port and harbor activity" to include
Industry Number 336611 (Ship Building and Repair) and Industry Number 213112 (Support
Activities for Oil and Gas Operations).
Present law requires DED to issue the Investor Tax Credit for a "qualifying project" if the
commissioner of administration, after approval of the Joint Legislative Committee on the Budget
and the state bond commission certifies to the secretary of DED that the state will receive
sufficient revenue to offset the effect of the tax credits provided.
Proposed law removes the need for certification approval from the state bond commission
and requires DED to issue the Investor Tax Credit if the commissioner of administration
certifies, after approval of the Joint Legislative Committee on the Budget, 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 revenue that must be determined by taking into
account direct, indirect, and induced impacts of the project based on a standard economic impact
methodology utilized by the commissioner, the value of the credit, and any other state tax and financial incentives used by DED to secure the project.
Proposed law authorizes DED the option to grant, in lieu of a credit equal to the total capital
costs of the project taken at 5% per tax year, a different amount of tax credit to be taken at a
different percentage which is warranted by the "significant positive economic benefit"
determined by the commissioner; however, the total amount of credits cannot exceed the total
cost of the project.
Present law authorizes the secretary of DED to certify "international business entities" for an
Import Export Cargo Credit against the individual and corporate income and corporate franchise
tax equal to the product of multiplying $5 by the "international business entity's" number of tons
of "qualified cargo" for the taxable year, but only for all or a portion of a fiscal year if the
commissioner of administration certifies to the secretary of DED that sufficient revenue will be
received by the state to offset the effect of the tax credits, and the certification is approved by the
Joint Legislative Committee on the Budget and the state bond commission.
"International business entity" is defined as a taxpayer entity, all or a portion of whose activities
involve the import or export of breakbulk or containerized cargo to or from manufacturing,
fabrication, assembly, distribution, processing, or warehousing facilities located within
Louisiana.
Proposed law removes the need for certification approval from the state bond commission and
authorizes the secretary of DED to certify the credit for an international business entity if the
commissioner of administration certifies to the secretary that the increased utilization of public
port facilities and other activity in Louisiana associated with the import or export of the
international business entity's qualified cargo will result in a "significant positive economic
benefit to the state".
Proposed law authorizes DED the option to grant, in lieu of a credit equal to the product of
multiplying $5 by the number of tons of cargo for the taxable year or a portion of a fiscal year,
the product of multiplying the number of dollars by the taxpayer's number of tons of qualified
cargo for the taxable year or portion of a taxable year which is warranted by the "significant
positive economic benefit" determined by the commissioner.
Proposed law extends the termination date of the Investor Tax Credit from January 1, 2017 to
January 1, 2020, and terminates the Import Export Credit on that same date.
Effective August 1, 2013.
(Amends R.S. 47:6036(B)(8) and (13), (C)(1)(b) and (c), (G), (I)(1)(intro para), (I)(1)(c), and
(2)(a))