The original instrument and the following digest, which constitutes no part of the
legislative instrument, were prepared by James Benton.
DIGEST
SB 3 Original 2016 First Extraordinary Session LaFleur
Present law, relative to the La. Enterprise Zone Act, provides that the Department of Economic
Development and the Department of Revenue, may enter into contracts, with a maximum term of
five years, to provide for either of the following:
(1)The use of customer-owned tooling in a compression molding process.
(2)Purchases of the material used in the construction of a building, or any addition or
improvement thereon, for housing any legitimate business enterprise and machinery and
equipment used in that enterprise.
Proposed law retains present law.
Proposed law provides that the amount of state sales and use tax rebate or investment income tax
credit allowed will be limited to $100,000 of rebate or credit for each net new job created under the
Louisiana Enterprise Zone Act. Further provides that this limitation will only apply to businesses
participating in the enterprise zone.
Proposed law provides that a business subject to this limitation will not receive any sales and use tax
rebate or investment tax credit until it has provided all documentation, including filing of its annual
certification report, as required by program rules and has shown proof of the creation of the net new
job. Each net new job will only be counted as new for purposes of earning the $100,000 of sales and
use tax rebate or investment income tax credit in the year of its creation
Present law provides that the tax credit provided in present law will be applicable only to a position
within the state and that is filled by a person who is a U.S. citizen and who is domiciled in Louisiana,
or who is a U.S. citizen and becomes domiciled in Louisiana within 60 days after his employment
in such position, performing duties in connection with the operation of the business enterprise as a
regular, full-time employee. The total number of credits allowed to a business enterprise for
employees who are U.S. citizens and who become domiciled in Louisiana within 60 days after
employment will not exceed 50% of the total number of credits allowed to the business enterprise
under the contract.
Proposed law retains present law but changes applicability guideline to refer only to a position within
the state that is in excess of the median statewide number of employees of the business, including
affiliates, that did not previously exist in the business enterprise prior to the contract effective date.
Proposed law provides that a business which is assigned a North American Industry Classification
Code of 23, 561, or 721 and whose advance notification is not filed before April 1, 2016, will be ineligible to receive benefits.
Present law provides that the business creates:
(1)A minimum of the lesser of five net new permanent jobs to be in place within the first two
years of the contract period, or the number of net new jobs equal to a minimum of 10% of
the existing employees, minimum of one, within the first year of the contract period.
(2)The number of net new jobs equal to a minium of 10% of the existing employees, minimum
of one, within the first year of the contract period.
Proposed law retains present law but adds the requirement of using the company's average annual
employment reported under the La. Employment Security Law for purposes of determining if the
business is in compliance with present law. Further proves that the methodology for averaging will
be determined by department rule.
Proposed law provides that a business will be deemed to meet the enterprise zone hiring
requirements and all other limitations, procedures, and requirements in present law, if the business
creates a minimum of five new direct jobs in the third fiscal filing.
Proposed law provides that a business will be deemed to meet the enterprise zone hiring
requirements and all other limitations, procedures, and requirements in present law, if the business
creates a minimum of five new jobs in accordance with the program contract.
Proposed law will apply to any new contract that an advance notification has been filed on or after
April 1, 2016, and to the renewal of any existing contract occurring on or after April 1, 2016.
Effective upon signature of the governor or lapse of time for gubernatorial action.
(Amends R.S. 51:1787(A)(3), (B)(3)(c) and (B)(5); adds R.S. 51:1787(A)(1)(c), and (B)(3)(d))