HLS 181ES-59 ENGROSSED
2018 First Extraordinary Session
HOUSE BILL NO. 16
BY REPRESENTATIVE LEGER
TAX/TAX REBATES: Reduces the amount of the rebate for the Competitive Projects
Payroll Incentive Program and provide for continued effectiveness of reductions in
the amount of certain rebates (Item #3)
1 AN ACT
2To amend and reenact R.S. 51:3121(C)(4)(c) and Section 6 of Act No. 126 of the 2015
3 Regular Session of the Legislature as amended by Act No. 28 of the 2016 First
4 Extraordinary Session of the Legislature and to repeal Section 3 of Act No. 126 of
5 the 2015 Regular Session of the Legislature and Section 7 of Act No. 126 of the 2015
6 Regular Session of the Legislature as enacted by Act No. 28 of the 2016 First
7 Extraordinary Session of the Legislature, relative to certain rebates; to provide
8 relative to the competitive projects payroll incentive program; to reduce the project
9 facility expense rebate; to provide for continued effectiveness of certain rebate
10 reductions; to provide for an effective date; and to provide for related matters.
11Be it enacted by the Legislature of Louisiana:
12 Section 1. R.S. 51:3121(C)(4)(c) is hereby amended and reenacted to read as
13follows:
14 §3121. Competitive Projects Payroll Incentive Program
15 * * *
16 C. Applications and contract approval and administration.
17 * * *
18 (4)
19 * * *
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HB NO. 16
1 (c) In lieu of the sales and use tax rebate, a qualified business shall be
2 entitled to a project facility expense rebate equal to one and one-half percent of the
3 amount of qualified capital expenditures for the facility or facilities designated in the
4 contract for which an invitation to apply was extended by the secretary before July
5 1, 2015. With respect to projects for which an invitation to apply is extended by the
6 secretary on or after July 1, 2015, a qualified business shall be entitled to a project
7 facility expense rebate equal to one and two-tenths percent of the amount of qualified
8 capital expenditures for the facility or facilities designated in the contract. For
9 purposes of this Subparagraph, the term "qualified capital expenditures" means
10 amounts classified as capital expenditures for federal income tax purposes related to
11 the project plus exclusions from capitalization provided for in Internal Revenue Code
12 Section 263 (a)(1)(A) through (L), minus the capitalized cost of land, capitalized
13 leases of land, capitalized interest, capitalized costs of manufacturing machinery and
14 equipment to the extent capitalized manufacturing machinery and equipment costs
15 are excluded from sales and use tax pursuant to R.S. 47:301(3), and the capitalized
16 cost for the purchase of an existing building. When a qualified business purchases
17 an existing building and capital expenditures are used to rehabilitate the building,
18 only the costs of the rehabilitation shall be considered qualified capital expenditures.
19 Additionally, a qualified business shall be allowed to increase its qualified capital
20 expenditures to the extent the qualified business's capitalized basis is properly
21 reduced by claiming a federal credit. A qualified business earns the project facility
22 expense rebate in the qualified business's fiscal year in which the project is placed
23 in service but the qualified business may not be issued the project facility expense
24 rebate until the Department of Economic Development signs a project completion
25 report or such other time as provided for by rule or regulation. The project
26 completion report for the project facility expense rebate shall adhere to the same
27 requirements found in R.S. 51:1787(A)(1)(a)(ii) for the sales and use tax rebate.
28 * * *
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HB NO. 16
1 Section 2. Section 6 of Act No. 126 of the 2015 Regular Session of the Legislature
2as amended by Act No. 28 of the 2016 First Extraordinary Session of the Legislature is
3hereby amended and reenacted to read as follows:
4 * * *
5 Section 6. The provisions of Section 2 of this Act shall become effective on
6 July 1, 2015. In the event the Act that originated as House Bill No. 62 of the 2016
7 First Extraordinary Session of the Legislature is enacted and becomes effective, the
8 provisions of Section 2 of this Act shall remain in effect through the sunset date in
9 the Act that originated as House Bill No. 62 of the 2016 First Extraordinary Session
10 of the Legislature.
11 * * *
12 Section 3. Section 3 of Act No. 126 of the 2015 Regular Session of the Legislature
13and Section 7 of Act No. 126 of the 2015 Regular Session of the Legislature as enacted by
14Act No. 28 of the 2016 First Extraordinary Session of the Legislature are hereby repealed
15in their entirety.
16 Section 4. The provisions of this Act shall become effective on July 1, 2018, but
17only if all of the following conditions are met:
18 (A) The Acts which originated as House Bill Nos. 2, 3, 12, 23, and 29 of this 2018
19First Extraordinary Session of the Legislature are enacted and if any of the Acts are vetoed
20by the governor, the Act is subsequently approved by the legislature.
21 (B) House Concurrent Resolution No. 2 of this 2018 First Extraordinary Session of
22the Legislature is adopted by the legislature.
23 (C) The proposed amendment of Article VII of the Constitution of Louisiana
24contained in the Act which originated as House Bill No. 15 of this 2018 First Extraordinary
25Session of the Legislature is adopted by the legislature.
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HB NO. 16
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 16 Engrossed 2018 First Extraordinary Session Leger
Abstract: Relative to the Competitive Projects Payroll Incentive Program, reduces the
amount of the rebate percentage from 1.2% to 1% and removes the sunset date on
reductions in various rebates.
Present law (R.S. 51:3121) establishes the Competitive Projects Payroll Incentive Program
through which businesses can 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 taxes 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.
Present law sets the amount of the rebate equal to 1.2% of certain qualified capital
expenditures and a maximum of 12% of eligible new payroll until June 30, 2018, after which
time the maximum rebate is 1.5% of the amount of such capital expenditures and up to 15%
of eligible new payroll. Proposed law reduces the authorized rebate from 1.2% to 1% of
qualified capital expenditures and removes provision for increase in maximum rebate.
Proposed law also removes present law provisions for future increases in the following
rebates by removing the June 30, 2018, sunset date on the current rebate:
Present law (R.S. 51:2367) authorizes the secretary of the Dept. of Economic Development
to grant a La. Mega Project Energy Assistance Rebate of severance taxes paid on natural gas
to certain mega-projects when the secretary has determined that the consumption of energy
will be a major cost component of the operation of the project. Present law provides that the
maximum rebate is 80% of La. severance taxes paid on natural gas until June 30, 2018, after
which the maximum rebate is 100% of such amount.
Present law (R.S. 51:2455) provides for the Quality Jobs Program, which authorizes the
granting of contracts by the Bd. of Commerce and Industry to businesses for the purposes
of providing rebates and tax credits for the achievement of certain performance by the
business. The term of the contract is five years. Present law authorizes a rebate equal to the
benefit rate as defined in present law multiplied by 80% of the gross payroll of new direct
jobs until June 30, 2018, after which the maximum rebate is 100% of the gross payroll.
Present law (R.S. 51:3114) creates the Corporate Headquarters Relocation Program, which
grants to a "qualified business" a contract to receive a relocation rebate to relocate or expand
its "headquarters" in La. Present law authorizes a rebate of 20% of "relocation costs" until
June 30, 2018, after which the maximum rebate is 25% of relocation costs.
Effective July 1, 2018, but only if the Acts which originated as House Bill Nos. 2, 3, 12, 23,
and 29 of this 2018 First E. S. are enacted, if HCR No. 2 of this 2018 First E.S. is adopted,
and the proposed amendment of Article VII of the Constitution of Louisiana contained in the
Act which originated as HB No. 15 of this 2018 First E.S. is adopted by the legislature.
(Amends R.S. 51:3121(C)(4)(c) and §6 of Act No. 126 of 2015 R.S. as amended by Act
No. 28 of 2016 1st E.S.; Repeals §3 of Act No. 126 of 2015 R.S. and §7 of Act No. 126 of
2015 R.S. as enacted by Act No. 28 of 2016 1st E.S.)
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HB NO. 16
Summary of Amendments Adopted by House
The Committee Amendments Proposed by House Committee on Ways and Means to the
original bill:
1. Change the effective date of proposed law from governor's signature to
effectiveness based on enactment of HB Nos. 2, 3, 12, 23, and 29, adoption of
HCR No. 2, and the proposed amendment of Article VII of the Constitution
contained in the Act which originated as HB No. 15 is adopted, all from the 2018
First E.S.
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