Louisiana Senate Bill SB179

Louisiana 2018 Regular Session

• Introduced: 2/28/18
• Refer: 2/28/18

Caption

Constitutional amendment to authorize local taxing authorities to enter into cooperative endeavor agreements to negotiate stipulated tax payments of ad valorem taxes. (2/3-CA13s1(A))

Impact

The introduction of this bill is expected to have significant implications for local tax policies and economic development strategies across Louisiana. By permitting local taxing authorities to negotiate tax arrangements, the bill fosters a climate conducive to economic growth and encourages investment in local industries. However, it raises questions about the equity of tax obligations and the potential impact on public revenue generated through traditional ad valorem tax structures. The new framework could enable local governments to better tailor their tax incentives to attract businesses while still ensuring that any loss of immediate tax revenue is offset by potential economic benefits from increased business activity.

Summary

Senate Bill 179 proposes a constitutional amendment to allow local taxing authorities in Louisiana to enter into cooperative endeavor agreements with property owners of industrial or commercial properties. This amendment aims to facilitate negotiated tax payments of ad valorem taxes, thereby exempting the agreed-upon properties from standard ad valorem taxes. The proposed agreements would be limited to a maximum term of 40 years, allowing localities to promote economic growth by attracting new manufacturing and industrial operations. The bill suggests that local governments could negotiate stipulated tax payments that could potentially streamline their tax structures, making them more appealing to business investments.

Sentiment

General sentiment surrounding SB179 appears to be supportive among those advocating for economic development and tourism in Louisiana. Proponents argue that it provides local authorities with the flexibility needed to entice new businesses, which is crucial for job creation and enhancing local economies. Conversely, there are concerns from opponents regarding the potential for diminished public revenues from ad valorem taxes. Critics may view this as a shift towards favoring large businesses at the expense of broader community resources and services funded by traditional tax revenues.

Contention

The main points of contention are likely to focus on the balance between fostering economic development and maintaining adequate public funding through tax revenues. While supporters see value in making Louisiana a more attractive place for business through flexible tax agreements, opponents caution that such agreements might disproportionately favor businesses, potentially leading to reduced funding for essential services funded by local taxes. This tension underscores an ongoing debate about the best methods for incentivizing economic growth while ensuring community needs are met.