SLS 17RS-318 ORIGINAL
2017 Regular Session
SENATE BILL NO. 130
BY SENATOR ALLAIN
TAX/AD VALOREM. Constitutional amendment to phase out the ad valorem tax on
inventory and to reduce the industrial property tax exemption on millages related to school
funding. (2/3 - CA13sl(A))
1 A JOINT RESOLUTION
2 Proposing to amend Section 21(F) and to add Section 21(N) of Article VII of the
3 Constitution of Louisiana, relative to ad valorem tax exemptions; to prohibit
4 industrial property tax exemptions on ad valorem taxes imposed by school boards;
5 to exempt inventory from ad valorem taxation over a ten-year period; and to specify
6 an election for submission of the proposition to electors and provide a ballot
7 proposition.
8 Section 1. Be it resolved by the Legislature of Louisiana, two-thirds of the members
9 elected to each house concurring, that there shall be submitted to the electors of the state, for
10 their approval or rejection in the manner provided by law, a proposal to amend Section 21(F)
11 and to add Section 21(N) of Article VII of the Constitution of Louisiana, to read as follows:
12 ยง21. Other Property Exemptions
13 Section 21. In addition to the homestead exemption provided for in Section
14 20 of this Article, the following property and no other shall be exempt from ad
15 valorem taxation:
16 * * *
17 (F)(1) Notwithstanding any contrary provision of this Section, the State
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Coding: Words which are struck through are deletions from existing law;
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SLS 17RS-318 ORIGINAL
1 Board of Commerce and Industry or its successor, with the approval of the governor,
2 may enter into contracts for the exemption from ad valorem taxes of a new
3 manufacturing establishment or an addition to an existing manufacturing
4 establishment, on such terms and conditions as the board, with the approval of the
5 governor, deems in the best interest of the state.
6 (2) The exemption shall be for an initial term of no more than five calendar
7 years, and may be renewed for an additional five years. All property exempted shall
8 be listed on the assessment rolls and submitted to the Louisiana Tax Commission or
9 its successor, but no taxes shall be collected thereon during the period of exemption,
10 except as otherwise provided by this Paragraph.
11 (3) The terms "manufacturing establishment" and "addition" as used herein
12 mean a new plant or establishment or an addition or additions to any existing plant
13 or establishment which engages in the business of working raw materials into wares
14 suitable for use or which gives new shapes, qualities or combinations to matter which
15 already has gone through some artificial process.
16 (4)(a) For new contracts or contract renewals entered into pursuant to
17 this Paragraph on or after January 1, 2019, the board may grant a partial
18 exemption for ad valorem taxes dedicated to, levied by, or levied on behalf of a
19 city, parish, or other local public school board. The contract or contract renewal
20 shall provide for a minimum level of taxation such that the avails of any ad
21 valorem taxes dedicated to, levied by, or levied on behalf of a city, parish, or
22 other local public school board shall be no less than the city, parish, or other
23 local public school board millages applied to an assessed valuation based on the
24 modified fair market value of the property. No other exemption may be granted
25 for ad valorem taxes dedicated to, levied by, or levied on behalf of a city, parish,
26 or other local public school board pursuant to this Paragraph.
27 (b) "Modified fair market value" means the fair market value of the
28 property after ten years of use.
29 (c) The modified fair market value shall be determined in accordance
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SLS 17RS-318 ORIGINAL
1 with criteria that shall be established by the Louisiana Tax Commission and
2 that shall apply uniformly throughout the state.
3 * * *
4 (N) Goods held in inventory shall be exempt from ad valorem taxes as
5 follows:
6 (1) Between January 1, 2019, and December 31, 2019, ten percent of the
7 assessed valuation shall be exempt.
8 (2) Between January 1, 2020, and December 31, 2020, twenty percent of
9 the assessed valuation shall be exempt.
10 (3) Between January 1, 2021, and December 31, 2021, thirty percent of
11 the assessed valuation shall be exempt.
12 (4) Between January 1, 2022, and December 31, 2022, forty percent of
13 the assessed valuation shall be exempt.
14 (5) Between January 1, 2023, and December 31, 2023, fifty percent of the
15 assessed valuation shall be exempt.
16 (6) Between January 1, 2024, and December 31, 2024, sixty percent of the
17 assessed valuation shall be exempt.
18 (7) Between January 1, 2025, and December 31, 2025, seventy percent of
19 the assessed valuation shall be exempt.
20 (8) Between January 1, 2026, and December 31, 2026, eighty percent of
21 the assessed valuation shall be exempt.
22 (9) Between January 1, 2027, and December 31, 2027, ninety percent of
23 the assessed valuation shall be exempt.
24 (10) On and after January 1, 2028, all goods held in inventory shall be
25 exempt from ad valorem taxation.
26 Section 2. Be it further resolved that this proposed amendment shall be submitted
27 to the electors of the state of Louisiana at the statewide election to be held on November 6,
28 2018.
29 Section 3. Be it further resolved that on the official ballot to be used at said election
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SLS 17RS-318 ORIGINAL
1 there shall be printed a proposition, upon which the electors of the state shall be permitted
2 to vote YES or NO, to amend the Constitution of Louisiana, which proposition shall read as
3 follows:
4 Do you support an amendment to phase out ad valorem taxes on inventory
5 over ten years and to provide for a reduction of the allowable exemption of
6 ad valorem taxation imposed by school boards under the industrial tax
7 exemption program?
8 (Amends Article VII, Section 21(F); adds Article VII, Section 21(N))
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Leonore Heavey.
DIGEST
SB 130 Original 2017 Regular Session Allain
Present constitution provides that all property is subject to ad valorem taxation unless
specifically exempted.
Present constitution authorizes the State Board of Commerce and Industry, with
gubernatorial approval, to enter into contracts to exempt new and expanding manufacturing
facilities from ad valorem taxation.
Proposed constitutional amendment retains the ability of the board to enter into contracts to
exempt certain manufacturing facilities from certain ad valorem taxes.
Proposed constitutional amendment beginning January 1, 2019, prohibits the board from
providing a full exemption for a manufacturing facility under a new contract or contract
renewal from the payment of ad valorem taxes imposed by or on behalf of a city, parish, or
other local public school board and requires that the manufacturing facility pay no less than
the school related millages on the value of property after ten years of use.
Proposed constitutional amendment provides that the Tax Commission establish criteria for
determining the value of property after ten years of use and that these criteria shall be
uniform throughout the state.
Proposed constitutional amendment phases in an ad valorem tax exemption for goods held
in inventory over a ten-year period completely exempting inventory from ad valorem
taxation after January 1, 2028.
Specifies submission of the amendment to the voters at the statewide election to be held on
November 6, 2018.
(Amends Const. Art. VII, Sec. 21(F); adds Const. Art. VII, Sec. 21(N))
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.