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)]
HB 91 Original 2016 First Extraordinary Session Bishop
Abstract: Prohibits state income tax credits for property taxes paid on business inventories and
offshore vessels, establishes an annual allocation of at least $500 million from the state
general fund to the Local Investment Fund, a fund established to aid local taxing authorities
due to the tax losses attributable to the exemption of that property.
Present law allows a refundable income or corporate franchise tax credit for ad valorem property
taxes paid on:
(1)Inventory held by manufacturers, distributors, and retailers, and on natural gas held, used,
or consumed in providing natural gas storage services or operating natural gas storage
facilities.
(2)Vessels, including ships, oceangoing tugs, towboats, and barges, principally operated in
Outer Continental Shelf Lands Act Waters.
Proposed constitutional amendment eliminates all refundable income and corporate franchise tax
credits for ad valorem taxes paid to political subdivisions on inventory held by manufacturers,
distributors, and retailers on or after Jan. 1, 2016, except for taxpayers whose ad valorem taxes paid
to all political subdivisions in the taxable year was less than an amount established by law (presently
$10,000). However, any unused portion of the credit may be carried forward as a credit against
subsequent tax liability for a period not to exceed five years.
Proposed constitutional amendment exempts (1) inventory held by manufacturers, distributors, and
retailers (inventory) and (2) vessels, including ships, oceangoing tugs, towboats, and barges,
principally operated in Outer Continental Shelf Lands Act Waters (vessels) from ad valorem property
taxes.
Proposed constitutional amendment establishes the Local Investment Fund (the Fund) and provides
that, beginning in FY 2017-2018, the lesser of (1) $500 million or (2) 15.625% of the total state sales
and use tax revenues generated during the second immediately preceding fiscal year at the rates and
bases existing as of June 30, 2015, as certified by the Revenue Estimating Conference as actual
collections no later than Dec. 31 of the immediately preceding calendar year, shall be allocated from
the state general fund to the Fund.
Proposed constitutional amendment provides that the Fund shall be distributed annually as provided
by law solely on the basis of the total assessed value of other property as classified under Art. VII, §18 of the Constitution of La. in each parish in proportion to the total assessed valuation of other
property as classified under Art. VII, §18 of the constitution throughout the state; and that, after
deductions in each parish for retirement systems and commissions as authorized by law, the
remaining funds, to the extent available, shall be distributed to the tax recipient bodies within the
parish in Orleans Parish by the city treasurer of New Orleans and in all other parishes by the parish
tax collector, who shall disburse the funds in accordance with a schedule prepared by the parish
assessor as provided by law, to help offset a portion of the revenue loss due to the inventory and
vessels exemptions and that, for distribution allocation purposes, other property as classified under
Art. VII, §18 of this constitution shall include exempted inventory and vessels.
Present constitution requires all property subject to ad valorem property taxation to be reappraised
and valued at intervals of not more than four years.
Present constitution provides that the total amount of ad valorem property taxes collected by any
taxing authority in the year in which property is reappraised and revalued shall not be increased or
decreased because of a reappraisal or valuation above or below the total amount of ad valorem taxes
collected by that taxing authority in the year preceding implementation of the reappraisal and
valuation.
Present constitution provides that the governing authority of the issuing political subdivision shall
levy and collect or cause to be levied and collected on all taxable property in the political subdivision
ad valorem taxes sufficient to pay principal and interest and redemption premiums, if any, on such
bonds as they mature.
Proposed constitutional amendment provides that distributions from the Fund shall be considered
by taxing authorities to be ad valorem taxes collected and to be collected and shall be taken into
account when setting millage rates; and that bond millages levied to service general obligation bonds
under the authority of Art. VI, §33(B) of the constitution or any other constitutional or statutory
authority for the issuance of general obligation bonds shall share in the distributions from the Fund.
Proposed constitutional amendment provides that a political subdivision, as defined by Art. VI of
this constitution, may incur debt by issuing negotiable bonds and may pledge for the payment of all
or part of the principal and interest of such bonds the proceeds derived or to be derived from that
portion of the funds received by it from the Fund.
Proposed constitutional amendment prohibits monies in the Fund from being used or appropriated
for other purposes when adjustments are made to eliminate a state deficit.
Specifies submission of the amendment to the voters at the statewide election to be held on Nov. 18,
2016.
Effective January 1, 2017.
(Amends Art. VII, §4(A); Adds Const. Art. VII, §10(F)(4)(h), 10.15, and 21(C)(20) and (21))