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Regular Session, 2013
HOUSE BILL NO. 686
BY REPRESENTATIVE GAROFALO
TAX CREDITS: Establishes the Firearm and Ammunitions Manufacturer Tax Credit
AN ACT1
To enact Chapter 48 of Title 51 of the Louisiana Revised Statutes of 1950, to be comprised2
of R.S. 51:3025 through 3029, relative to tax credits; to establish the Firearm and3
Ammunition Manufacturers Tax Credit Program; to authorize contracts with certain4
businesses that establish or relocate a headquarters or manufacturing facility in the5
state; to provide for the content and approval of contracts; to authorize tax credits;6
to provide for administrative authority of the Department of Economic Development7
for purposes of the program; to provide for an effective date; and to provide for8
related matters.9
Be it enacted by the Legislature of Louisiana:10
Section 1. Chapter 48 of Title 51 of the Louisiana Revised Statutes of 1950,11
comprised of R.S. 51:3025 through 3029, is hereby enacted to read as follows: 12
CHAPTER 48. FIREARM AND AMMUNI TION MANUFACTURERS13
TAX CREDIT PROGRAM14
§3025. Definitions15
The following words or terms as used in this Chapter shall have the following16
meaning, unless a different meaning appears from the context:17
(1) "Ammunition" and "ammunition components" means propellants,18
primers, cartridge cases, and black powder designed for use in any firearm.19
(2) "Black powder" means a propellant made from potassium or sodium20
nitrate, charcoal, and sulfur which is used for a firearm.21
(3) "Board" means the Board of Commerce and Industry.22 HLS 13RS-1487 ENGROSSED
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(4) "Business" means any individual, firm, joint venture, association,1
corporation, estate, partnership, business trust, receiver, syndicate, or any other legal2
business entity engaged in the manufacture of firearms, firearm components, firearm3
accessories, ammunition, or ammunition components.4
(5) "Department" means the Department of Economic Development unless5
otherwise designated.6
(6) "Establishment costs" means actual, direct, and substantiated costs7
incurred by a qualified business to establish a headquarters or manufacturing facility8
in Louisiana, including capital expenditures and leasing costs for a facility and9
equipment. Qualifying establishment costs shall be limited to the maximum amount10
provided by a contract executed pursuant to this Chapter.11
(7) "Firearm" means pistol, revolver, rifle, shotgun, and other similar device12
that is portable by one person and the possession of which is protected by Article I,13
Section 11 of the Constitution of Louisiana.14
(8) "Firearm accessories" means items that connect to a small arm or are15
used to carry or load small arms ammunition, including but not limited to16
handguards, scopes, magazines, clips, slings, and speed loaders.17
(9) "Firearm components" means items which are used in the manufacture18
of small arms, including but not limited to barrels, frames, cylinders, chokes, stocks,19
grips, and fore-ends.20
(10) "Headquarters" means a principal or regional corporate office located21
or to be located in Louisiana, in which are based the principal or regional executive22
officers normally constituting a principal or regional headquarters providing23
corporate governance. Such officers include but are not limited to chief executive24
officer, chief operating officer, and other senior level officers or appropriate regional25
equivalents.26
(11) "Manufacturing facility" means a facility where a business performs the27
manufacture of firearms, firearm components, firearm accessories, ammunition, and28
ammunition components.29 HLS 13RS-1487 ENGROSSED
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(12) "Program" means the Firearm and Ammunition Manufacturers Tax1
Credit Program established pursuant to this Chapter.2
(13) "Qualified business" means a business that (a) the secretary has3
determined meets the eligibility requirements of R.S. 51:3026, (b) has been approved4
by the board to participate in the program, and (c) has executed a contract with the5
department governing its participation in the program.6
(14) "Relocation costs" means actual, direct, and substantiated costs incurred7
by a qualified business to relocate a headquarters or manufacturing facility to8
Louisiana, including capital expenditures and leasing costs for a facility and9
equipment, and personnel relocation costs. Personnel relocation costs shall be10
limited to costs associated with no more than sixty percent of headquarters or11
manufacturing jobs, whichever is greater. Qualifying relocation costs shall be12
limited to the maximum amount provided by a contract executed pursuant to this13
Chapter.14
(15) "Secretary" means the secretary of the Department of Economic15
Development.16
(16) "Significant positive economic benefit" means that net positive tax17
revenues are to be generated as a result of the project. This shall be determined by18
taking into account direct, indirect, and induced impacts based on a standard19
economic impact methodology utilized by the department, the value of the tax credit,20
and any other state tax and financial incentives that are used by the department to21
secure the qualified business.22
§3026. Eligibility requirements23
A business shall be eligible to participate in the program if the secretary24
determines all of the following requirements are met:25
(1) The business is establishing or relocating a headquarters or26
manufacturing facility in Louisiana.27
(2) Participation in the program will be a significant factor in a site selection28
situation to encourage the business to establish or relocate in Louisiana.29 HLS 13RS-1487 ENGROSSED
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(3) Securing the project will result in a significant positive economic benefit1
to the state.2
(4) Establishment or relocation of a headquarters will create a minimum of3
ten jobs and establishment or relocation of a manufacturing plan will create a4
minimum of twenty-five manufacturing jobs.5
§3027. Application; recommendation; contract approval6
A. At the invitation of the secretary, a business may apply for participation7
in the program by submitting to the department certified statements and8
substantiating documents as the department may require.9
B. Upon determining the business meets the eligibility requirements of R.S.10
51:3026, the secretary may request board approval of a contract providing for such11
participation on terms and conditions specified by the secretary.12
§3028. Contract administration; tax credit13
A. Upon approval by the board, the secretary shall execute a contract with14
the qualified business, and provide a copy of the contract to the Department of15
Revenue prior to the certification of expenses necessary to receive a tax credit which16
may be claimed against Louisiana income or corporation franchise taxes.17
B. The contract shall provide for a tax credit for the qualified business which18
is equal to thirty percent of establishment or relocation costs of a headquarters or a19
manufacturing facility, or both, and shall include all of the following provisions:20
(1) The maximum amount of qualifying establishment or relocation costs.21
(2) The number of headquarters or manufacturing jobs and associated payroll22
to be created and maintained and any other performance obligations deemed23
appropriate by the secretary.24
(3) The denial of certification for issuance of tax credits if performance25
obligations are not met.26
C. The qualified business shall submit to the department, at least annually27
but no more often than monthly, a certified cost report reasonably documenting its28 HLS 13RS-1487 ENGROSSED
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establishment or relocation costs, including supporting documentation as required1
by the department.2
D. The department may obtain, at the expense of the qualified business, a3
certified limited scope audit by an independent certified public accountant, in4
accordance with applicable auditing standards generally accepted in the United5
States, of all books and records of the business relating to its eligibility and6
performance obligations under the program.7
E.(1) A tax credit certificate may be issued by the secretary after the8
qualified business files an annual certification of performance and the department9
determines the extent of compliance with contractual obligations. The tax credit10
certificate, unless rescinded by the department, shall be accepted by the Department11
of Revenue as proof of the credit. The department shall maintain a list of the tax12
credit certificates issued.13
(2)(a) The tax credit authorized pursuant to this Chapter may be taken14
against Louisiana income and corporate franchise taxes. A copy of the tax credit15
certificate shall be attached to the Louisiana tax return upon which it is taken.16
(b)(i) All entities taxed as corporations for Louisiana income or corporate17
franchise tax purposes shall claim any credit allowed under this Chapter on their18
corporation income and corporate franchise tax return.19
(ii) Individuals shall claim any credit allowed under this Chapter on their20
individual income tax return.21
(iii) Estates or trusts shall claim any credit allowed under this Chapter on22
their fiduciary income tax returns.23
(iv) Entities not taxed as corporations shall claim any credit allowed under24
this Chapter on the returns of the partners or members as follows:25
(aa) Corporate partners or members shall claim their share of the credit on26
their corporation income or corporation franchise tax returns.27
(bb) Individual partners or members shall claim their share of the credit on28
their individual income tax returns.29 HLS 13RS-1487 ENGROSSED
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(cc) Partners or members that are estates or trusts shall claim their share of1
the credit on their fiduciary income tax returns.2
§3029. Rules3
The department may promulgate rules and regulations in accordance with the4
Administrative Procedure Act for implementation of the program. Legislative5
oversight of such rules for purposes of the Administrative Procedure Act shall be6
conducted by the House Committee on Ways and Means and the Senate Committee7
on Revenue and Fiscal Affairs.8
Section 2. This Act shall become effective on July 1, 2013; if vetoed by the governor9
and subsequently approved by the legislature, this Act shall become effective on July 1,10
2013, or on the day following such approval by the legislature, whichever is later.11
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)]
Garofalo HB No. 686
Abstract: Establishes the Firearm and Ammunition Manufacturers Tax Credit Program for
La. income and corporation franchise tax credits equal to 30% of establishment or
relocation costs for firearm and ammunition manufacturers which establish or
relocate a headquarters or manufacturing facility, or both, in La.
Proposed law establishes the Firearm and Ammunition Manufacturers Tax Credit Program
under which a qualified business may contract with the Dept. of Economic Development
(DED) to receive a tax credit equal to 30% of the establishment or relocation costs involved
in establishing or relocating its headquarters or manufacturing facility, or both, in La.
Proposed law provides for definitions, which include:
(1)"Business" means a manufacturer of firearms, firearms components, firearms
accessories, ammunition, or ammunition components.
(2)"Establishment costs" means actual costs incurred by a business for the
establishment of a headquarters or manufacturing facility in La. Costs may include
capital expenditures and leases of facility and equipment.
(3)"Headquarters" means a principal or regional corporate office located in La., in
which are based the principal or regional executive officers which provide corporate
governance for the business.
(4)"Manufacturing facility" means the facility where a business performs the
manufacture of firearms, firearm components, firearm accessories, ammunition, and
ammunition components. HLS 13RS-1487 ENGROSSED
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(5)"Relocation costs" means actual costs incurred by a business for the relocation of a
headquarters or manufacturing facility to La. Costs may include capital
expenditures, leases of facility and equipment, and personnel relocation costs.
Proposed law establishes eligibility requirements for the program which include:
(1)The business is establishing or relocating a headquarters or manufacturing facility
in La.
(2)The secretary of DED (secretary) determines that participation in the program will
be a significant factor in a site selection situation to encourage the business to
establish or relocate in La.
(3)The secretary determines that securing the project will result in a significant positive
economic benefit to the state.
(4)Establishment or relocation of the headquarters will create a minimum of 10
headquarters jobs, or establishment or relocation of the manufacturing facility will
create a minimum of 25 manufacturing jobs.
Proposed law authorizes the secretary to invite potential businesses to apply for participation
in the program. If DED determines that the business meets the eligibility requirements, the
secretary may request the Board of Commerce and Industry to approve a contract to provide
for tax credits for the business.
Proposed law authorizes the secretary to enter into a contract with a qualified business and
requires that the Dept. of Revenue be notified of the contract.
Proposed law provides requirements for the contract, which include the maximum amount
of qualifying establishment or relocation costs, the relevant number of headquarters or
manufacturing facility jobs, and provisions for reductions in tax credits if performance
obligations are not met.
Proposed law requires the submission of certain reports by the qualified business and
authorizes DED to obtain audits at the expense of the business.
Proposed law establishes the procedure for the issuance of tax credit certificates. The tax
credit certificate, unless rescinded by DED, shall be accepted by the Dept. of Revenue as
proof of a tax credit. DED shall maintain a list of the tax credit certificates issued.
Proposed law provides that the tax credit authorized pursuant to proposed law may be taken
against La. income and corporation franchise taxes. A copy of the tax credit certificate shall
be attached to the La. tax return upon which it is taken.
Proposed law authorizes DED to promulgate rules and regulations in accordance with the
Administrative Procedure Act. Legislative oversight of such rules shall be conducted by the
House Committee on Ways and Means and Senate Committee on Revenue and Fiscal
Affairs.
Effective July 1, 2013.
(Adds R.S. 51:3025-3029)