Louisiana House Bill HB66

Louisiana 2016 1st Special Session

• Introduced: 2/16/16
• Refer: 2/16/16

Caption

Provides relative to the Enterprise Zone Program (Item #27) (OR +$2,000,000 GF RV See Note)

Impact

The impact of HB 66 primarily revolves around changing the landscape for businesses in Louisiana that rely on the Enterprise Zone Program for incentives. By enacting these limitations, the bill restricts how businesses can qualify for tax benefits, potentially leading to fewer applications from sectors deemed ineligible, such as construction and administrative services. Supporters of the bill, including some legislative members, argue that these changes will enhance the fairness and sustainability of the Program, ensuring that tax money is spent effectively to boost job creation in critical areas. However, it may also discourage some businesses from expanding if they no longer perceive the tax credits as a feasible incentive.

Summary

House Bill 66 aims to amend the existing Enterprise Zone Program in Louisiana by limiting tax credits and modifying eligibility requirements for businesses seeking these benefits. The bill stipulates that the amount of sales and use tax rebates or investment income tax credits can only reach a maximum of $100,000 per net new employee created. It also emphasizes that these new jobs must be filled by local residents and only count toward the benefits in the year they are created. This represents a tightening of the previous structure designed to incentivize business growth and job creation within specific sectors of the economy.

Sentiment

Public and legislative sentiment surrounding HB 66 is mixed. Proponents feel that tightening the criteria for receiving tax credits is a necessary measure to allocate state resources judiciously and avoid exploitation of the previous system, which they argue was too lenient. Conversely, opponents worry that the bill may hinder economic growth, particularly in areas that require more flexible support structures to adapt to local needs. This debate reflects broader tensions in economic policy around how best to stimulate job growth while maintaining fiscal responsibility.

Contention

Notable points of contention include the elimination of certain industries from the program and the stricter criteria imposed for job creation. Critics argue that removing industries such as construction from eligibility will adversely affect growth in critical infrastructure projects, while supporters argue that the bill focuses incentives more effectively where they can make the most significant impact. This bill, thus, represents a critical turning point in Louisiana's approach to economic development, balancing the need for job creation with fiscal accountability.