Provides relative to enterprise zone requirements, incentives, and effectiveness, and establishes a sunset date for the program. (Item #27)(gov sig) (RE INCREASE GF RV See Note)
Impact
The proposed changes are expected to have a significant impact on state laws regarding business taxation and job creation. By raising the tax credits for new employment within enterprise zones, the bill aims to attract more companies to these areas, thereby facilitating job creation and boosting local economies. Additionally, the introduction of credits for outside enterprise zone jobs broadens the scope of potential benefits, suggesting a more inclusive approach to economic development across the state.
Summary
Senate Bill 3 aims to modify and enhance the Louisiana Enterprise Zone Act by introducing changes to incentive structures for businesses operating within designated enterprise zones. The bill increases the tax credit available for companies within these zones from $2,500 to $3,500 for each new job created, while also establishing a new $1,000 credit for jobs created outside enterprise zones. This adjustment is part of a broader strategy to stimulate economic growth by incentivizing businesses to create new employment opportunities within the state.
Sentiment
Discussions around SB 3 have reflected a generally positive sentiment among proponents who argue that the enhanced tax credits will provide businesses with a stronger incentive to hire locally. Supporters, including many business groups, believe that the law will help make Louisiana more competitive by increasing job prospects in economically distressed areas. However, concerns have been raised by opponents who assert that the effectiveness of such tax incentives can be difficult to measure and may not always lead to sustainable job growth.
Contention
While the bill was ultimately passed without opposition, some points of contention included discussions on the adequacy of the proposed sunset provision, set for July 1, 2017. Critics question whether the benefits derived from the tax credits will outweigh potential revenue losses during these years. Moreover, there is an ongoing debate about the extent of reliance on tax incentives for economic development, as some advocates call for a more diversified approach to attracting and maintaining businesses within the state.
Provides for administration of incentive rebates under the Quality Jobs and Enterprise Zone programs. (Items #21 and 27)(gov sig) (REF -$3,128,880 GF RV See Note)
Establishes a baseline limit on the payment of rebates and the use of tax credits in a fiscal year for Enterprise Zone and provides a sunset date for the Enterprise Zone program. (gov sig) (OR SEE FISC NOTE GF RV)
Makes permanent reductions to credits and rebates under the Enterprise Zone, Quality Jobs, and Competitive Project Payroll Incentive programs. (Items #26 and 27) (gov sig) (EG +$23,290,000 GF RV See Note)
Establishes a baseline limit on the payment of rebates and the use of tax credits in a fiscal year for Enterprise Zone and Quality Job Program contracts and provides a sunset date for the Enterprise Zone program. (gov sig)
Provides for a quarterly report to the Joint Legislative Committee on the Budget regarding contracts let in the construction of the University Medical Center in New Orleans (EG GF EX See Note)
Requires that businesses under the La. Enterprise Zone Act certify that at least fifty percent of its employees meet certain residency requirements. (gov sig)