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Regular Session, 2014
SENATE BILL NO. 338
BY SENATOR DONAHUE
FISCAL CONTROLS. Provides relative to economic and financial reports for projects
submitted in conjunction with the request for the review or approval of the Joint Legislative
Committee on the Budget. (7/1/14)
AN ACT1
To enact R.S. 24:653(M), relative to duties and function of the Joint Legislative Committee2
on the Budget; to provide relative to economic reports for projects submitted in3
conjunction with the request for approval of the Joint Legislative Committee on the4
Budget; to provide for an effective date; and to provide for related matters.5
Be it enacted by the Legislature of Louisiana:6
Section 1. R.S. 24:653(M) is hereby enacted to read as follows:7
ยง653. Duties and functions8
* * *9
M.(1) All economic and financial reports for projects submitted in10
conjunction with the request for approval of the Joint Legislative Committee11
on the Budget in excess of a total state commitment of ten million dollars for the12
term of the project shall provide the following information:13
(a) Inclusion of all input information, data, and assumptions, including14
but not limited to data sources, economic growth assumptions, and an15
assessment/basis of the reasonableness of each.16
(b) A description of the analytical model employed for the report and17 SB NO. 338
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how each input was utilized with that model.1
(c) Results in terms of value-added, household earnings, and2
employment, and a description of each concept.3
(d) Results by industry sector, with an assessment of possible adverse4
effects on sectors that compete with the subsidized company for in-state5
customers.6
(e) Explicit identification of the project's effect on direct expenditure7
requirements in the state budget or any reduction in taxes or state revenues,8
including but not limited to tax exemptions, exclusions, deductions, reductions,9
repeals, rebates, incentives, abatements, or credits.10
(f) An additional assessment by the secretary of the Department of11
Economic Development regarding the extent to which the project would not12
have occurred but for the proposed state financial support. The secretary's13
assessment shall reference other business factors which contributed to the14
project activity occurring and factors which will be required for ongoing15
sustainability including but not limited to labor, transportation, energy, among16
others.17
(g) Cost/benefit comparisons of the incentives in the package compared18
to the costs in the package shall be for the same period of time or the same term,19
both for the direct benefits to the state as well as the indirect benefits to the20
state.21
(2)(a) The department shall submit the request for Joint Legislative22
Committee on the Budget approval of the project with the analysis to the23
committee for its review at least seventeen business days, or as permitted by the24
chairman, prior to the meeting for which the department is seeking the25
committee's approval. In the event that the chairman specifies a request26
submission period that is less than seventeen business days, the chairman shall27
notify all members of the committee of the revised submission time period.28
Presentation of the information required shall be in a format developed in29 SB NO. 338
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consultation with the Joint Legislative Committee on the Budget.1
(b) Upon receipt of the request, the Joint Legislative Committee on the2
Budget shall transmit the report to the legislative fiscal office for evaluation of3
the department's assessment and the legislative fiscal office shall make such4
information available to the committee during its review.5
(3) For the purposes of this Section and notwithstanding any other6
provision of law to the contrary, "project" shall mean any public-private7
partnership, agreement with a nonpublic party, lease, cooperative endeavor8
agreement, memorandum of understanding, or other contractual agreement9
which would result in or is expected to result in the obligation of state resources10
or the expenditure of revenues from the operation, management, or control of11
a state resource for the purposes of engendering economic growth or12
development in the state through the utilization of certain incentives, including13
but not limited to tax exemptions, exclusions, deductions, reductions, repeals,14
rebates, incentives, abatements, or credits.15
Section 2. This Act shall become effective on July 1, 2014; if vetoed by the governor16
and subsequently approved by the legislature, this Act shall become effective on July 1,17
2014, or on the day following such approval by the legislature, whichever is later.18
The original instrument was prepared by Jay Lueckel. The following digest,
which does not constitute a part of the legislative instrument, was prepared
by Ann S. Brown.
DIGEST
Donahue (SB 338)
Proposed law provides that all economic and financial reports for projects in excess of a total
state commitment of ten million dollars for the term of the project submitted in conjunction
with the request for approval of the Joint Legislative Committee on the Budget (JLCB) shall
provide the following information:
(1) Inclusion of all input information, data, and assumptions, including but not limited
to data sources, economic growth assumptions, and an assessment/basis of the
reasonableness of each.
(2) A description of the analytical model employed for the report and how each input
was utilized with that model.
(3) Results in terms of value-added, household earnings, and employment, and a
description of each concept. SB NO. 338
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(4)Results by industry sector, with an assessment of possible adverse effects on sectors
that compete with the subsidized company for in-state customers.
(5) Explicit identification of the project's effect on direct expenditure requirements in
the state budget or any reduction in taxes or state revenues, including but not limited
to tax exemptions, exclusions, deductions, reductions, repeals, rebates, incentives,
abatements, or credits.
(6) An additional assessment by the secretary of the Department of Economic
Development regarding the extent to which the project would not have occurred but
for the proposed state financial support. The secretary's assessment shall reference
other business factors which contributed to the project activity occurring and factors
which will be required for ongoing sustainability including but not limited to labor,
transportation, energy, among others.
(7) Cost/benefit comparisons of the incentives in the package compared to the costs in
the package shall be for the same period of time or the same term, both for the direct
benefits to the state as well as the indirect benefits to the state.
Proposed law also provides the department shall submit the request to the committee at least
seventeen business days, or as permitted by the chairman prior to the meeting for which the
department is seeking the committee's approval and provides for notification of the Joint
Legislative Committee on the Budget membership if the time period for submission is
shortened.
Proposed law provides that the Joint Legislative Committee on the Budget shall transmit the
report to the legislative fiscal office for evaluation of the department's assessment upon
receipt of the request. Further provides that the legislative fiscal office shall make such
information available to the committee during its review.
Clarifies definition of project to include various agreements with nonpublic parties which
would result in the obligation of state resources for the purposes of engendering economic
growth or development in the state through the utilization of certain incentives.
Effective July 1, 2014.
(Adds R.S. 24:653(M))
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Finance to the original
bill
1. Establishes a threshold of projects requiring approval of the Joint Legislative
Committee on the Budget in excess of a total state commitment of $10
million for the term of the project.
2. Requires various information, including all input information, data,
assumptions, data sources, economic growth assumptions, description of the
analytical model used, information by industry sector, assessments of
possible adverse effects, identification of direct expenditure requirements in
the state budget, effects on of state revenues or taxes, proposed state financial
support, cost/benefit comparisons, among other analyses of the requested
project.
3. Extends period for request submission up to 17 business days from two full
weeks and provides for notification of the Joint Legislative Committee on the SB NO. 338
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Budget membership if the time period for submission is shortened.
4. Deletes requirements for static and dynamic economic model analysis.
5. Clarifies definition of project to include various agreements with nonpublic
parties which would result in the obligation of state resources for the
purposes of engendering economic growth or development in the state
through the utilization of certain incentives.
Senate Floor Amendments to engrossed bill
1. Deletes the requirement that the project's report, submitted to the Joint
Legislative Committee on the Budget (JLCB), include an analysis
addressing the wage, labor and price dynamics analytically.
2. Specifics that the project's report include an assessment of possible adverse
effects on sectors that compete with the subsidized company for in-state
customers.
3. Adds a requirement that the JLCB transmit the project's report to the
legislative fiscal office for evaluation upon receipt of the request. Further
provides that such information be made available to the committee during its
review.
4. Adds financial reports to the requirements of proposed law.
5. Technical amendments.