HLS 18RS-753 ORIGINAL
2018 Regular Session
HOUSE BILL NO. 477
BY REPRESENTATIVE IVEY
TAX/AD VALOREM-EXEMPTION: (Constitutional Amendment) Provides for ad
valorem property tax exemptions
1 A JOINT RESOLUTION
2Proposing to amend Article VII, Section 21(F) and to add Article VII, Section 21(O) of the
3 Constitution of Louisiana, to provide with respect to ad valorem property tax
4 exemptions; to provide for exemptions for certain property of a manufacturing
5 establishment or other entities; to establish an exemption for certain property subject
6 to a cooperative endeavor agreement requiring payments in lieu of taxes; to provide
7 for the term of exemptions; to provide relative to authorization for approval of
8 exemptions; to require the legislature to provide by law for certain provisions
9 concerning exemptions; to provide for requirements and limitations; to provide for
10 submission of the proposed amendment to the electors; and to provide for related
11 matters.
12 Section 1. Be it resolved by the Legislature of Louisiana, two-thirds of the members
13elected to each house concurring, that there shall be submitted to the electors of the state of
14Louisiana, for their approval or rejection in the manner provided by law, a proposal to
15amend Article VII, Section 21(F) and to add Article VII, Section 21(O) of the Constitution
16of Louisiana, to read as follows:
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HLS 18RS-753 ORIGINAL
1 §21. Other Property Exemptions
2 Section 21. In addition to the homestead exemption provided for in Section
3 20 of this Article, the following property and no other shall be exempt from ad
4 valorem taxation:
5 * * *
6 (F) Notwithstanding any contrary provision of this Section, the State Board
7 of Commerce and Industry or its successor, with the approval of the governor, may
8 enter into contracts for the there is hereby authorized an exemption from ad valorem
9 taxes for the property of a new manufacturing establishment or an addition to an
10 existing manufacturing establishment, on such terms and conditions as the board,
11 with the approval of the governor, deems in the best interest of the state. The
12 granting of an exemption shall be subject to approval of the governor.
13 (1) The exemption shall be for an initial a term of no more than five seven
14 calendar years, and may be renewed for an additional five years. However, for a
15 specific project, upon the recommendation of the governor, an exemption in excess
16 of seven years may be granted if approved by a favorable vote of two-thirds of the
17 members of a committee of the legislature. All property exempted shall be listed on
18 the assessment rolls and submitted to the Louisiana Tax Commission or its
19 successor, but no taxes shall be collected thereon during the period of exemption.
20 (2) The terms "manufacturing establishment" and "addition" as used herein
21 mean a new plant or establishment or an addition or additions to any existing plant
22 or establishment which engages in the business of working raw materials into wares
23 suitable for use or which gives new shapes, qualities or combinations to matter which
24 already has gone through some artificial process.
25 (3) The legislature by law shall establish a program for implementation and
26 governance of this exemption, which may include requirements for application for
27 and approval of the granting of an exemption and additional eligibility requirements
28 restricted to those that concern expectations for returns on investment for local
29 governments. Any law establishing a procedure concerning the approval of an
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HLS 18RS-753 ORIGINAL
1 exemption, once enacted, shall not be changed except by specific legislative
2 instrument which receives a favorable vote of two-thirds of the elected members of
3 each house of the legislature.
4 * * *
5 (O) Property that is subject to a cooperative endeavor agreement between the
6 owner and one or more taxing authorities which agreement requires the property
7 owner to make payments in lieu of taxes as provided by law. The exemption shall
8 not exceed ten years. However, an exemption may exceed the ten year limitation if
9 recommended by the governor, and to the extent of the governor's recommendation.
10 Property eligible for the exemption shall be as provided in Subparagraph (1) of this
11 Paragraph.
12 (1)(a) Property of a new manufacturing establishment or an addition to an
13 existing manufacturing establishment.
14 (b) A property subject to a cooperative endeavor agreement which has been
15 approved by a committee of the legislature, as provided by law.
16 (2) The exemption authorized under this Paragraph shall be to the extent
17 agreed to and provided for in the cooperative endeavor agreement. All property
18 exempted shall be listed on the assessment rolls and submitted to the Louisiana Tax
19 Commission.
20 (3) Except as otherwise provided herein, property subject to a contract of
21 exemption pursuant to Paragraph (F) of this Section shall be ineligible for the
22 exemption authorized under this Paragraph. However, an ad valorem taxing
23 authority may negotiate and enter into a cooperative endeavor agreement with a
24 property owner for payments in lieu of ad valorem taxes during the first two years
25 of a contract of exemption pursuant to Paragraph (F) of this Section as provided by
26 law.
27 (4) The terms "manufacturing establishment" and "addition" shall have the
28 same meanings ascribed to them in Paragraph (F) of this Section.
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1 (5) Before the execution of a cooperative endeavor agreement, the governing
2 authority of the taxing authority shall adopt a resolution with respect to its intention
3 to execute the agreement, which resolution may be considered for adoption only after
4 a public hearing held in accordance with the same public notice required for an
5 increase in a millage rate without voter approval as provided in Section 23(C) of this
6 Article.
7 Section 2. Be it further resolved that this proposed amendment shall be submitted
8to the electors of the state of Louisiana at the statewide election to be held on November 6,
92018.
10 Section 3. Be it further resolved that on the official ballot to be used at the election,
11there shall be printed a proposition, upon which the electors of the state shall be permitted
12to vote YES or NO, to amend the Constitution of Louisiana, which proposition shall read as
13follows:
14 Do you support an amendment concerning property tax exemptions for
15 manufacturing establishments and for property that is subject to an
16 agreement with local government allowing the property owner to make
17 payments instead of property taxes, including provisions for the terms of the
18 exemptions and authority for approval of exemptions? (Amends Art. VII,
19 Sec. 21(F); Adds Art. VII, Sec. 21(O))
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 477Original 2018 Regular Session Ivey
Abstract: Provides for property tax exemptions for businesses, including the exemption for
certain property of a manufacturing establishment (ITEP) and a new exemption for
property that is subject to a cooperative endeavor agreement that requires the
property owner to make payments in lieu of ad valorem taxes.
Present constitution authorizes the imposition of property taxes by local governments, school
boards, and other special districts.
Present constitution authorizes a variety of exemptions from property tax.
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HLS 18RS-753 ORIGINAL
Present constitution authorizes a property tax exemption for new manufacturing
establishments and miscellaneous additions to existing establishments for an initial term of
five years, with a five year renewal, hereinafter (ITEP exemption). The exemption is
effectuated through a contract granted by the Board of Commerce and Industry, with the
approval of the governor.
Proposed constitutional amendment removes from present constitution specific authority for
the approval of the ITEP exemptions by the State Board of Commerce and Industry but
retains authority for approval by the governor.
Proposed constitutional amendment changes the limit on the term of the ITEP exemption
from an initial five year term with a five year renewal to a term of seven years. Further, for
a specific project, upon the recommendation of the governor, an exemption in excess of
seven years may be granted if approved by a favorable vote of 2/3rds of the members of a
legislative committee.
Proposed constitutional amendment changes present constitution by requiring the legislature
to provide by law for a program governing various aspects of the exemption, which may
include additional eligibility requirements restricted to those that concern expectations for
returns on investment for local governments. Any law establishing a procedure concerning
the authority to approve an exemption, once enacted, shall not be changed except by specific
legislative instrument which receives a favorable vote of 2/3rds of the elected members of
each house of the legislature.
Proposed constitutional amendment changes present constitution by establishing a new
exemption for property subject to a cooperative endeavor agreement that requires the
property owner to make payments in lieu of the property taxes imposed by a taxing authority
that is a party to the agreement. The exemption shall not exceed 10 years in duration.
However, an exemption may exceed the 10 year limitation if recommended by the governor,
and to the extent of the governor's recommendation
Proposed constitutional amendment limits eligibility for the exemption to either a
manufacturing establishment that qualifies for the ITEP exemption, or a property subject to
a cooperative endeavor agreement that has been approved by a legislative committee.
Proposed constitutional amendment further prohibits eligibility for this exemption for a
manufacturing establishment that has a contract for the ITEP exemption, unless it is within
the first two years of the exemption contract.
Proposed constitutional amendment requires that exempt properties be listed on the
assessment rolls and that information concerning those properties be submitted to the La.
Tax Commission.
Provides for submission of the proposed amendment to the voters at the statewide election
to be held Nov. 6, 2018.
(Amends Const. VII, 21(F); Adds Const. Art. VII, §21(O))
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