The original instrument and the following digest, which constitutes no part of the
legislative instrument, were prepared by Riley Boudreaux.
DIGEST
SB 78 Original 2015 Regular Session Mills
Proposed law provides that any bill or joint resolution that enacts a tax exemption or amends or
renews an existing tax exemption, which would have the effect of materially reducing state revenues,
and required to be prefiled shall have an Exemption Explanatory Note attached that is prepared by
the author, or by a proponent of the instrument on the author's behalf relative to the fiscal and
economics of the exemption.
Requires the proposed Exemption Explanatory Note to include the following:
(1)The total decrease in taxes, fees, charges or other revenue estimated over the five ensuing
fiscal years from the instrument's effective date.
(2)The state's revenue loss ratio; that is, the amount of money to be gained by the state
compared to the cost of the benefit granted.
(3)The effect on household earnings, employment, and value added in Louisiana.
(4)An indication of which beneficial economic actions will be incentivized by the instrument.
(5)Data indicating whether the same or similar provisions have been enacted in other states or
territories of the United States or other nations.
(6)The methodology and assumptions utilized to produce the information in the report.
Proposed law creates the Exemption Review Conference (Conference), composed of five members:
(1)The governor, or his designee.
(2)The president of the Senate, or his designee.
(3)The speaker of the House of Representatives, or his designee.
(4)Two economists who each have at least 10 years of economic forecasting expertise. The two
economists and one alternate shall be selected by the other three members from a list of as
many as six, but no fewer than four names, submitted to them by the Board of Regents after
the board consults with the president of the Louisiana Association of Independent Colleges
and Universities.
Provides that the Board of Regents in consultation with the La. Assn. of Independent Colleges and Universities shall propose the compensation to be paid to the economist
members of the conference.
Requires the election of the initial chair of the conference from the membership. Thereafter,
the chair shall rotate among the membership annually, with no one member serving as chair
more than once in a five-year period. Provides for the duties of the chair.
Provides for the commissioner of administration to convene the initial meeting of the
conference on or before January 31, 2016, and preside until the economist members are
selected and there is an election for a chair. The initial selection of the two economists and
alternate shall occur by May 1, 2016.
Proposed law provides that four members of the Conference shall constitute a quorum for the
transaction of business and requires the Conference to be subject to the Open Meetings Law.
Requires the conference to consider information provided by any participant at meetings of the
conference, including members of the public.
Authorizes the Conference to utilize whatever staff, information, and technical expertise is required
in its determinations, and the Conference may request and shall receive assistance from any public
entity.
Proposed law provides that decisions to adopt an official exemption analysis and recommendations
or any other action shall be by a majority vote of the total membership of the conference.
Proposed law requires an economist member of the conference to recuse himself if he has a material
interest in any tax exemption instrument before the conference. The alternate economist shall serve
in place of the recused member.
Proposed law provides that when a tax exemption instrument is prefiled, the chief clerical officer of
the house of origin shall promptly provide a copy of the instrument and the attached Exemption
Explanatory Note to the Exemption Review Conference. The two economists shall review the
instrument and note, which review shall encompass all aspects of the instrument and note, including
but not limited to the following:
(1)The reasonableness of the revenue loss estimates.
(2)The validity, credibility, or reasonableness of the information in the Exemption Explanatory
Note or the methodology and assumptions utilized to produce the information, or questions
raised by such information or methodology.
(3)Whether the actions being incentivized are already occurring without the enactment of the
instrument.
(4)A review of the data in the Exemption Explanatory Note and from other sources as to
whether the same or similar provisions have been enacted in other states or territories of the United States or other nations.
(5)Any other information not included in the Exemption Explanatory Note which may have a
bearing on the question of whether the conference should recommend the tax exemption
instrument for enactment.
Proposed law provides for the two economists to prepare their own analysis, and present the analysis
in writing to the Conference for adoption, along with a written proposal for the type of action the
Conference should recommend to the legislature regarding the instrument.
Proposed law provides that prior to the last day for prefiling legislative instruments in a legislative
session, the Exemption Review Conference shall, in a public meeting, adopt an official tax
exemption analysis and make an official recommendation to the legislature regarding the disposition
of the tax exemption instrument, with reasons, of any of the following:
(1)For enactment, addition, or renewal of the tax exemption.
(2)For enactment, addition, or renewal of the tax exemption with modifications.
(3)Against enactment, addition, or renewal of the tax exemption.
Requires that the Exemption Review Conference recommendation and the official tax exemption
analysis be attached to the tax exemption instrument by the chief clerical officer of the house of the
legislature where the instrument was filed.
Proposed law provides that a tax exemption instrument that does not have an official tax exemption
analysis and recommendation attached, or any tax exemption instrument that has been amended and
has no revised analysis and recommendation attached, shall at any time, upon the motion of any
legislator, be referred to the conference for a determination within five legislative days as to whether
the instrument requires such an analysis and recommendation. A decision that an analysis and
recommendation are needed shall require the affirmative vote of only two members of the
conference.
Proposed law provides that if the decision is that an analysis and recommendation are required, then
the Exemption Review Conference may either proceed with preparation of an analysis and
recommendation, or defer the process until the interim between legislative sessions. Provides that
if the item is deferred, it may be introduced and considered in the next regular session, whether it
is an odd-numbered year session or not.
Proposed law requires the conference to prepare a schedule no later than September 1, 2016,
designating which tax exemptions existing prior to July 1, 2016, shall terminate on June 30 of each
odd-numbered year. The schedule shall be prepared so that each exemption is given sufficient time
for a thorough review for the purpose of preparing an analysis and recommendation in the event tax
exemption instruments are prefiled to renew all the exemptions terminating on June 30 of that odd-
numbered year. The first such tax exemptions to be terminated shall terminate on June 30, 2017.
The schedule shall be reviewed and may be amended by the Senate Committee on Revenue and
Fiscal Affairs and the House Committee on Ways and Means meeting jointly. If the committees do
not meet jointly within 60 days of receipt of the schedule, or if the committees cannot reach
agreement, the schedule shall be considered approved.
Effective if and when the proposed amendment of Article III, Sections 2(A)(2)(d) and 15.1 and
Article XIII, Section 1(A)(3), and the addition of Article III, Sections 2(A)(2)(e) of the Constitution
of Louisiana contained in the Act which originated as Senate Bill No. ______ of the 2015 Regular
Session of the Legislature is adopted at the statewide election to be held on October 24, 2015, and
becomes effective.
(Adds R.S. 24:991-994)