SLS 161ES-78 ORIGINAL
2016 First Extraordinary Session
SENATE BILL NO. 16
BY SENATOR ALLAIN
TAX/AD VALOREM. Constitutional amendment to provide for ad valorem taxes paid on
certain property. (Item #31)(2/3 - CA13s1(A))
1 A JOINT RESOLUTION
2 Proposing to amend Article VII, Section 4(A) and add Article VII, Sections 10(F)(4)(h),
3 10.15, and 21(C)(20) and (21) of the Constitution of Louisiana, relative to ad
4 valorem property tax credits and exemptions; to eliminate certain income and
5 franchise tax credits; to provide for an exemption for certain inventory and vessels;
6 to provide certain terms, conditions, procedures, and requirements; and to specify an
7 election for submission of the proposition to electors and provide a ballot
8 proposition.
9 Section 1. Be it resolved by the Legislature of Louisiana, two-thirds of the members
10 elected to each house concurring, that there shall be submitted to the electors of the state, for
11 their approval or rejection in the manner provided by law, a proposal to amend Article VII,
12 Section 4(A) and add Article VII, Sections 10(F)(4)(h), 10.15, and 21(C)(20) and (21) of the
13 Constitution of Louisiana, to read as follows:
14 §4. Income Tax; Severance Tax; Political Subdivisions
15 Section 4.(A) Income Tax. Equal and uniform taxes may be levied on net
16 incomes, and these taxes may be graduated according to the amount of net income.
17 However, the state individual and joint income tax schedule of rates and brackets
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1 shall never exceed the rates and brackets set forth in Title 47 of the Louisiana
2 Revised Statutes on January 1, 2003. Federal income taxes paid shall be allowed as
3 a deductible item in computing state income taxes for the same period. There shall
4 be no refundable credit allowed against any Louisiana income or corporation
5 franchise tax for ad valorem taxes paid to political subdivisions on or after
6 January 1, 2016, on inventory held by manufacturers, distributors, and retailers
7 except, as provided in R.S. 47:6006, for taxpayers whose ad valorem taxes paid
8 to all political subdivisions in the taxable year was less than ten thousand
9 dollars. However, any unused portion of the credit may be carried forward as
10 a credit against subsequent tax liability for a period not to exceed five years.
11 * * *
12 §10. Expenditure of State Funds
13 Section 10.
14 * * *
15 (F) Projected Deficit.
16 * * *
17 (4) The provisions of Subparagraphs (1) and (2) of this Paragraph shall not
18 be applicable to, nor affect:
19 * * *
20 (h) The Local Investment Fund as provided in Article VII, Section 10.15
21 of this constitution.
22 * * *
23 §10.15. Local Investment Fund
24 Section 10.15.(A) There is hereby created as a special fund within the
25 state treasury the "Local Investment Fund", hereinafter referred to as the
26 "fund".
27 (B) Annually, beginning in Fiscal Year 2017-2018, the lesser of (1) the
28 sum of five hundred million dollars or (2) fifteen point six hundred twenty-five
29 percent of the total state sales and use tax revenues generated during the second
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1 immediately preceding fiscal year under the provisions of R.S. 47:302, 47:321,
2 and 47:331 at the rates and bases existing as of June 30, 2015, as certified by the
3 Revenue Estimating Conference as actual collections no later than December
4 31 of the immediately preceding calendar year shall be allocated from the state
5 general fund to the fund. The legislature may appropriate additional sums to
6 the fund. All unexpended and unencumbered monies in the fund at the end of
7 the fiscal year shall remain in the fund. The monies in the fund shall be invested
8 by the state treasurer in the same manner as monies in the state general fund,
9 and all earnings on investment of the fund shall be deposited into the fund.
10 (C) The fund shall be distributed annually as provided by law solely on
11 the basis of the total assessed value of other property as classified under Article
12 VII, Section 18 of this constitution in each parish in proportion to the total
13 assessed valuation of other property as classified under Article VII, Section 18
14 of this constitution throughout the state. Unless otherwise provided by law, the
15 assessed valuations for the immediately preceding calendar year, as reported
16 to the Louisiana Tax Commission or its successor, shall be utilized for this
17 purpose. After deductions in each parish for retirement systems and
18 commissions as authorized by law, the remaining funds, to the extent available,
19 shall be distributed to the tax recipient bodies, as defined by law within the
20 parish, to help offset a portion of the revenue loss due to the exemptions under
21 Article VII, Section 21(C)(20) and (21) of this constitution. For purposes of this
22 Paragraph, other property as classified under Article VII, Section 18 of this
23 constitution shall include property exempt under Article VII, Section 21(C)(20)
24 and (21) of this constitution.
25 (D) The funds distributed to each parish as provided in Paragraph (C)
26 shall be distributed in Orleans Parish by the city treasurer of New Orleans and
27 in all other parishes by the parish tax collector, who each shall disburse the
28 funds in accordance with a schedule prepared by the parish assessor, as
29 provided by law.
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1 (E) For purposes of Article VII, Section 23 of this constitution,
2 distributions from the fund shall be considered by taxing authorities to be ad
3 valorem taxes collected and to be collected and shall be taken into account when
4 setting millage rates.
5 (F) Bond millages levied to service general obligation bonds under the
6 authority of Article VI, Section 33(B) of this constitution or any other
7 constitutional or statutory authority for the issuance of general obligation bonds
8 shall share in the distributions from the fund. The governing authority of the
9 issuing political subdivision shall take such distributions into account when
10 levying and collecting or causing to be levied and collected on all taxable
11 property in the political subdivision ad valorem taxes sufficient to pay principal
12 and interest and redemption premiums, if any, on such bonds as they mature.
13 (G) A political subdivision may incur debt by issuing negotiable bonds
14 and may pledge for the payment of all or part of the principal and interest of
15 such bonds the proceeds derived or to be derived from that portion of the funds
16 received by it from the fund. Unless otherwise provided by law, no monies
17 allocated within any parish from the balance remaining in its distribution may
18 be pledged to the payment of the principal or interest of any bonds. Bonds
19 issued under this Paragraph shall be issued and sold as provided by law, and
20 shall require approval of the State Bond Commission or its successor prior to
21 issuance and sale.
22 * * *
23 §21. Other Property Exemptions
24 Section 21. In addition to the homestead exemption provided for in Section
25 20 of this Article, the following property and no other shall be exempt from ad
26 valorem taxation:
27 * * *
28 (C) * * *
29 (20) Inventory held by manufacturers, distributors, and retailers that is
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1 properly reported to parish assessors in accordance with procedures prescribed
2 by the Louisiana Tax Commission or its successor.
3 (21) Vessels, including ships, oceangoing tugs, towboats, and barges,
4 principally operated in Outer Continental Shelf Lands Act Waters that are
5 properly reported to parish assessors in accordance with procedures prescribed
6 by the Louisiana Tax Commission or its successor. "Outer Continental Shelf
7 Lands Act Waters" shall include all waters above all submerged land seaward
8 and outside of the area of state submerged lands beneath navigable waters as
9 defined in the Submerged Lands Act, 43 U.S.C. §1301 et seq. The term shall
10 further include all waters above Outer Continental Shelf submerged lands to
11 which the Outer Continental Shelf Lands Act of Title 43 U.S.C. §1331 et seq.
12 applies.
13 Section 2. Be it further resolved that this proposed amendment shall become effective
14 January 1, 2017.
15 Section 3. Be it further resolved that this proposed amendment shall be submitted to
16 the electors of the state of Louisiana at the statewide election to be held on November 8,
17 2016.
18 Section 4. Be it further resolved that on the official ballot to be used at said election
19 there shall be printed a proposition, upon which the electors of the state shall be permitted
20 to vote YES or NO, to amend the Constitution of Louisiana, which proposition shall read as
21 follows:
22 Do you support an amendment to eliminate refundable income and corporate
23 franchise tax credits for ad valorem taxes paid to political subdivisions on
24 inventory held by manufacturers, distributors, and retailers on or after
25 January 1, 2016, except as provided in R.S. 47:6006; exempt from property
26 tax inventory held by manufacturers, distributors, and retailers and vessels
27 principally operated in Outer Continental Shelf waters that are properly
28 reported to parish assessors; to establish the Local Investment Fund,
29 (hereinafter, the "Fund"); to dedicate certain state tax revenues to the Fund
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1 in order to help offset a portion of the tax recipient bodies' revenue losses
2 attributable to the exemptions; and to prohibit monies in the Fund from being
3 used or appropriated for other purposes when adjustments are made to
4 eliminate a state deficit?
5 (Adds Article VII, Sections 10(F)(4)(h), 10.15, and 21(C)(20) and (21))
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Ben Huxen.
DIGEST
SB 16 Original 2016 First Extraordinary Session Allain
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 January 1, 2016, except for taxpayers
whose ad valorem taxes paid to all political subdivisions in the taxable year was less than
$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 Fiscal Year 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 December
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 Article VII, Section 18 of the constitution in each parish in proportion to the total
assessed valuation of other property as classified under Article VII, Section 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
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Article VII, Section 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 Article VI, Section 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
Article 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
November 18, 2016.
Effective January 1, 2017.
(Amends Art. VII, Sec. 4(A); adds Const. Art. VII, Secs. 10(F)(4)(h), 10.15 and 21(C)(20)
and (21))
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