HLS 16RS-1192 ENGROSSED
2016 Regular Session
HOUSE BILL NO. 794
BY REPRESENTATIVE ABRAMSON
TAX/TAX REBATES: Provides relative to the Competitive Projects Payroll Incentive
Program
1 AN ACT
2To amend and reenact R.S. 51:3121(C)(3)(a)(ii) and (4), relative to the Competitive Projects
3 Payroll Incentive Program; to provide for a sales and use tax rebate; to extend the
4 termination date of the program; to provide for rule promulgation; and to provide for
5 related matters.
6Be it enacted by the Legislature of Louisiana:
7 Section 1. R.S. 51:3121(C)(3)(a)(ii) and (4) are hereby amended and reenacted to
8read as follows:
9 ยง3121. Competitive Projects Payroll Incentive Program
10 * * *
11 C. Applications and contract approval and administration.
12 * * *
13 (3)(a)
14 * * *
15 (ii) No new contract shall be approved on or after July 1, 2017 July 1, 2018,
16 but contracts existing on that date may continue and may be renewed.
17 * * *
18 (4)(a) In addition, a qualified business shall be entitled to either the same
19 sales and use tax rebates authorized in R.S. 51:1787 for capital expenditures for the
20 facility or facilities designated in the contract provided for in Subparagraph (b) of
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HB NO. 794
1 this Paragraph, or the project facility expense rebate provided for in Subparagraph
2 (c) of this Paragraph, if the employer meets the enterprise zone program hiring
3 requirements and all other limitations, procedures, and requirements in R.S. 51:1787.
4 (b) Any qualified business which receives a contract pursuant to this Chapter
5 shall also be entitled to a rebate of local sales and use taxes under the same
6 procedures and requirements provided for in R.S. 51:1787 for approval of rebates for
7 the sales and use taxes of political subdivisions and law enforcement districts,
8 including but not limited to the requirement that any such request for a rebate of
9 local sales and use taxes be accompanied by an endorsement resolution approved by
10 the governing authority of the appropriate political subdivision or law enforcement
11 district in whose jurisdiction the qualified business is or will be located. A rebate of
12 sales and use tax imposed by the state or any political subdivision of the state, upon
13 approval of the governing authority of the appropriate political subdivision,
14 including the office of sheriff in the case of a law enforcement district, on the
15 purchases of the construction of a building, or any addition or improvement thereon,
16 for housing any legitimate business enterprise or machinery and equipment used in
17 that enterprise.
18 (c) In lieu of the sales and use tax rebate, a qualified business shall be
19 entitled to a project facility expense rebate equal to one and one-half percent of the
20 amount of qualified capital expenditures for the facility or facilities designated in the
21 contract for which an invitation to apply was extended by the secretary before July
22 1, 2015. With respect to projects for which an invitation to apply is extended by the
23 secretary on or after July 1, 2015, a qualified business shall be entitled to a project
24 facility expense rebate equal to one and two-tenths percent of the amount of qualified
25 capital expenditures for the facility or facilities designated in the contract. For
26 purposes of this Subparagraph, the term "qualified capital expenditures" means
27 amounts classified as capital expenditures for federal income tax purposes related to
28 the project plus exclusions from capitalization provided for in Internal Revenue Code
29 Section 263 (a)(1)(A) through (L), minus the capitalized cost of land, capitalized
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HB NO. 794
1 leases of land, capitalized interest, capitalized costs of manufacturing machinery and
2 equipment to the extent capitalized manufacturing machinery and equipment costs
3 are excluded from sales and use tax pursuant to R.S. 47:301(3), and the capitalized
4 cost for the purchase of an existing building. When a qualified business purchases
5 an existing building and capital expenditures are used to rehabilitate the building,
6 only the costs of the rehabilitation shall be considered qualified capital expenditures.
7 Additionally, a qualified business shall be allowed to increase its qualified capital
8 expenditures to the extent the qualified business's capitalized basis is properly
9 reduced by claiming a federal credit. A qualified business earns the project facility
10 expense rebate in the qualified business's fiscal year in which the project is placed
11 in service but the qualified business may not be issued the project facility expense
12 rebate until the Department of Economic Development signs a project completion
13 report or such other time as provided for by rule or regulation. The project
14 completion report for the project facility expense rebate shall adhere to the same
15 requirements found in R.S. 51:1787(A)(1)(a)(ii) for the sales and use tax rebate.
16 * * *
17 Section 2. This Act shall become effective on July 1, 2016; if vetoed by the governor
18and subsequently approved by the legislature, this Act shall become effective on July 1,
192016, or on the day following such approval by the legislature, whichever is later.
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 794 Engrossed 2016 Regular Session Abramson
Abstract: Provides relative to a sales and use tax rebate authorized under Competitive
Projects Payroll Incentive Program and extends the termination date of the program.
Present law establishes the Competitive Projects Payroll Incentive Program through which
businesses may contract with the Dept. of Economic Development for receipt of rebate
payments in exchange for the creation of jobs. The contract provides for three different
rebates: a rebate based on the amount of new payroll, a sales and use tax rebate for taxes
paid, and a rebate equal to a percentage of the amount of certain qualified capital
expenditures associated with a facility utilized in the performance of the contract.
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Present law entitles a qualified business participating in the program to receive the same
benefits authorized through the Enterprise Zone Program.
Proposed law replaces the additional benefits in present law that a qualified business is
entitled to receive through the Enterprise Zone Program with a sales and use tax rebate for
the purchases of materials used in the construction, addition, or improvement of a building
used to house the business or its equipment.
Proposed law modifies the definition of "qualified capital expenditures" relative to
capitalized costs of machinery and equipment to specify that the qualifying machinery and
equipment are manufacturing machinery and equipment.
Proposed law extends the termination date of the program from July 1, 2017 to July 1, 2018.
Effective July 1, 2016.
(Amends R.S. 51:3121(C)(3)(a)(ii) and (4))
Summary of Amendments Adopted by House
The Committee Amendments Proposed by House Committee on Ways and Means to the
original bill:
1. Change the termination date of the program in present law from July 1, 2017 to
July 1, 2018.
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