Requires the termination of certain tax credits (OR SEE FISC NOTE GF RV See Note)
The implications of HB 587 are significant in terms of state financial management. By evaluating the effectiveness of various tax credits, the bill seeks to enhance the state’s revenue generation capabilities while ensuring that any tax expenditure is justified economically. The bill ultimately enforces a systematic approach to tax credit management and facilitates an ongoing assessment that can lead to more fiscal accountability in state expenditure. Should the bill pass, it will commence legislative actions to track economic performance relative to tax credits, possibly altering the landscape of tax incentives and promoting a more calculated approach to state subsidies.
House Bill 587 aims to reform the tax credit system within Louisiana by requiring a systematic evaluation and potential termination of certain income and corporation franchise tax credits. Specifically, the bill mandates that the House Committee on Ways and Means and the Senate Committee on Revenue and Fiscal Affairs conduct a review of specified tax credits starting January 1, 2015. This review will determine whether the economic benefits provided by these credits justify the loss of state revenue and will culminate in specific recommendations by March 1, 2015, regarding the continuation or termination of these credits.
Overall, the sentiment surrounding HB 587 appears to be pragmatic, focusing on long-term fiscal responsibility. Proponents argue that the bill serves as a necessary measure to prevent state revenue losses linked to ineffective tax credits, while critics may view it as a potential hindrance to economic incentives. The discussions during committee sessions indicate a mixture of support from legislators who prioritize financial accountability and hesitancy from those who advocate for maintaining diversity in tax incentives to encourage economic growth.
Despite its intended economic benefits, HB 587 has faced some contention, particularly regarding the potential negative impact on businesses that benefit from these tax credits. Opponents argue that terminating established tax credits could deter investment and hinder the development of key industries. Additionally, the bill's enactment raises concerns about the potential for abrupt disruptions to projects reliant on currently available tax credits. This conflict between fiscal responsibility and economic development presents a core debate around the bill, highlighting differing priorities among legislators.