HLS 202ES-80 ORIGINAL
2020 Second Extraordinary Session
HOUSE BILL NO. 30
BY REPRESENTATIVE WRIGHT
TAX CREDITS: Establishes the Louisiana Re-shoring Incentive Program (Item #65)
1 AN ACT
2To enact Chapter 55-A of Title 51 of the Louisiana Revised Statute of 1950, to be comprised
3 of R.S. 51:3126; relative to the establishment of the Louisiana Re-shoring Incentive
4 Program; to provide for the payment of tax credits and rebates to certain eligible
5 businesses; to provide for the procedures and requirements for the execution of
6 certain contracts; to provide for certain definitions; to provide for the administration
7 of the program; to prohibit the approval of certain contracts after a certain date; to
8 authorize the promulgation of rules and regulations; to provide for an effective date;
9 and to provide for related matters.
10Be it enacted by the Legislature of Louisiana:
11 Section 1. Chapter 55-A of Title 51 of the Louisiana Revised Statute of 1950,
12comprised of R.S. 51:3126 is hereby enacted to read as follows:
13 CHAPTER 55-A. LOUISIANA RE-SHORING INCENTIVE PROGRAM
14 ยง3126. Louisiana Re-shoring Incentive Program
15 A. Definitions. The following words or terms as used in this Chapter shall
16 have the following meanings, unless a different meaning appears from the context:
17 (1) "Basic health benefits plan" means coverage for basic hospital care,
18 coverage for physician care, and coverage for health care which is determined by the
19 Department of Economic Development to have a value of at least one dollar and
20 twenty-five cents per hour and which is the same coverage as is provided to
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1 employees employed in a bona fide executive, administrative, or professional
2 capacity by the employers who are exempt from the minimum wage and maximum
3 hour requirements of the federal Fair Labor Standards Act, 29 U.S.C. 201 et seq.
4 (2) "Business" means any individual, firm, joint venture, association,
5 corporation, estate, partnership, business trust, receiver, syndicate, or any other legal
6 business entity.
7 (3) "Department" means the Department of Economic Development.
8 (4) "New jobs" means permanent full-time direct new jobs based at the
9 facilities designated in the contract and filled by residents of the state.
10 (5) "New payroll" means payment by the business to its employees for new
11 jobs, exclusive of benefits, and defined as wages pursuant to the Louisiana
12 Employment Security Law (R.S. 23:1472(20)).
13 (6) "Program" means the Louisiana Re-Shoring Incentive Program.
14 (7) "Qualified business" means a business certified by the secretary as
15 meeting the eligibility requirements of Subsection B of this Section and that executes
16 a contract providing the terms and conditions for its participation.
17 (8) "Regional economic development organization" means One Acadiana,
18 the South Louisiana Economic Council, the Baton Rouge Area Chamber, the Central
19 Louisiana Economic Development Alliance, the Northeast Louisiana Economic
20 Alliance, the North Louisiana Economic Partnership, Greater New Orleans, Inc., and
21 the Southwest Louisiana Economic Development Alliance.
22 (9) "Re-shoring" means bringing jobs, services, production, research, or
23 manufacturing to Louisiana from overseas with the aim of creating employment
24 opportunities, boosting local economies, or balancing trade deficits.
25 (10) "Secretary" means the secretary of the Department of Economic
26 Development.
27 (11) "Significant positive economic benefit" means net positive tax revenue.
28 This shall be determined by taking into account direct, indirect, and induced impacts
29 based on a standard economic impact methodology utilized by the department, the
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1 value of the rebate, and any other state tax and financial incentives that are used by
2 the department to secure the project.
3 B. Eligibility requirements. (1) A business shall be eligible for participation
4 in the program if either of the following requirements are met:
5 (a) The business is a new business that is locating in this state that will be re-
6 shoring its supply chain for the manufacture or production of its products by using
7 business in this state.
8 (b) The business is an existing Louisiana business whose current production
9 of goods is outside of this state or the United States and the business provides
10 documentation that it is relocating the supply chain for the production of its products
11 into Louisiana.
12 (2) An eligible business shall offer, or offer within ninety days of the
13 effective date of qualifying for the incentive rebates pursuant to the provisions of this
14 Chapter, a basic health benefits plan to the individuals it employs as provided in
15 Paragraph (A)(1) of this Section.
16 (3) In addition to the eligibility requirements provided for in Paragraph (1)
17 of this Subsection, businesses selected by regional economic development
18 organizations in accordance with this Paragraph shall also be eligible to participate
19 in this incentive program.
20 (a) No later than December 20, 2020, each regional economic development
21 organization may select up to two industry sectors from its economic development
22 region for participation in the program. Each regional economic development
23 organization shall base its selection of an industry sector on whether the sector will
24 diversify the region's economy.
25 (b) Each industry sector selected by a regional economic development
26 authority shall also be approved by the secretary.
27 C. Applications and contract approval and administration. (1) A business
28 may apply for a contract by submitting to the department such certified statements
29 and substantiating documents as the department may require.
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1 (2) The secretary may certify eligibility of the business on terms and
2 conditions specified by the secretary in a proposed contract, if the secretary
3 determines all of the following:
4 (a) The business meets the eligibility requirements provided for in
5 Subsection B of this Section.
6 (b) Securing the project will result in a significant positive economic benefit
7 to the state.
8 (3)(a)(i) The secretary shall execute the contract with the business and
9 provide a copy of the executed contract to the Department of Revenue prior to the
10 payment of any benefits under the contract.
11 (ii) No new contract shall be approved on or after December 31, 2023, but
12 contracts existing on that date may continue and may be renewed.
13 (b) The contract shall provide for a rebate to the qualified business based
14 upon new payroll and shall include the following provisions:
15 (i) The percentage of new payroll eligible for rebate, up to a maximum of ten
16 percent.
17 (ii) The maximum amount of new payroll eligible for rebate.
18 (iii) The number of new jobs and amount of new payroll required to be
19 created and maintained and any other performance obligations required to be met in
20 order to remain qualified for participation in the program.
21 (iv) Designation of the facility or facilities eligible for participation in the
22 program.
23 (v) Monitoring of performance and consequences for failure to perform and
24 other contract violations.
25 (vi) An initial term of the contract, which may be up to five years, and any
26 renewal term available at the discretion of the secretary, which may be up to an
27 additional five years.
28 (4)(a) In addition, a qualified business shall be entitled to either a state sales
29 and use tax rebate for capital expenditures for the facility or facilities designated in
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1 the contract provided for in Subparagraph (b) of this Paragraph, or a project facility
2 expense rebate provided for in Subparagraph (c) of this Paragraph.
3 (b) Any qualified business which receives a contract pursuant to this Chapter
4 shall also be entitled to a rebate of sales and use tax imposed by the state on
5 purchases of materials used in the construction of a building, or any addition or
6 improvement thereon, for housing any legitimate business enterprise or machinery
7 and equipment used in that enterprise.
8 (c) In lieu of a state sales and use tax rebate, a qualified business shall be
9 entitled to a project facility expense rebate equal to one and two-tenths percent of the
10 amount of qualified capital expenditures for the facility or facilities designated in the
11 contract. For purposes of this Subparagraph, the term "qualified capital
12 expenditures" means amounts classified as capital expenditures for federal income
13 tax purposes related to the project plus exclusions from capitalization provided for
14 in 26 U.S.C. 263(a)(1), minus the capitalized cost of land, capitalized leases of land,
15 capitalized interest, capitalized costs of manufacturing machinery and equipment to
16 the extent capitalized manufacturing machinery and equipment costs are excluded
17 from sales and use tax pursuant to R.S. 47:301(3), and the capitalized cost for the
18 purchase of an existing building. When a qualified business purchases an existing
19 building and capital expenditures are used to rehabilitate the building, only the costs
20 of the rehabilitation shall be considered qualified capital expenditures. Additionally,
21 a qualified business shall be allowed to increase its qualified capital expenditures to
22 the extent the qualified business's capitalized basis is properly reduced by claiming
23 a federal credit. A qualified business earns the project facility expense rebate in the
24 qualified business's fiscal year in which the project is placed in service, but the
25 qualified business may not be issued the project facility expense rebate until the
26 Department of Economic Development signs a project completion report or such
27 other time as provided for by rule or regulation.
28 D. Annual certification of eligibility. (1) The qualified business shall file
29 requests for approval of annual rebates with the department. The request shall
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1 include documentation signed by a corporate officer of the qualified business
2 certifying its continued eligibility for the program, as provided in Subsection B of
3 this Section, and its actual new payroll and the performance of any other contractual
4 obligations for the subject year. The qualified business may be subject to a limited
5 audit by the department, at the expense of the qualified business, to verify its
6 eligibility and performance. The approved contract between the qualified business
7 and the department shall authorize the continued rebate as long as the business
8 remains eligible for the program and complies with the terms and performance
9 obligations of the contract. If a qualified business fails to maintain the eligibility
10 requirements for participation in the program or fails to meet all performance
11 obligations of the contract, the secretary may suspend or terminate its participation
12 in the program.
13 (2) After verification of continued eligibility and performance, the
14 department shall send a rebate certification letter to the Department of Revenue
15 stating the amount of actual new payroll for the subject year, the amount of the
16 rebate to be issued, and the entity to which the rebate shall be issued. The
17 Department of Revenue may require the business to submit additional information
18 as may be necessary to properly issue the rebate. Payment of rebates shall be made
19 from the current collections of the taxes imposed pursuant to Title 47 of the
20 Louisiana Revised Statutes of 1950.
21 E. Incentive limitations. A taxpayer shall not receive any other incentive
22 administered by the Department of Economic Development for any expenditures or
23 jobs for which the taxpayer has received a rebate pursuant to this Section.
24 F. Rules. The department may promulgate rules as are necessary in
25 accordance with the Administrative Procedure Act, subject to oversight by the House
26 Committee on Ways and Means and the Senate Committee on Revenue and Fiscal
27 Affairs, to implement the provisions of this Section.
28 Section 2. This Act shall become effective upon signature by the governor or, if not
29signed by the governor, upon expiration of the time for bills to become law without signature
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1by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If
2vetoed by the governor and subsequently approved by the legislature, this Act shall become
3effective on the day following such approval.
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 30 Original 2020 Second Extraordinary Session Wright
Abstract: Establishes an incentive rebate of up to 10% of new payroll for qualified
businesses and either a state sales and use tax rebate for capital expenditures for
facilities or a project facility expense rebate for businesses that re-shore jobs,
services, production, research, or manufacturing to La. from overseas.
Proposed law authorizes an incentive program for qualified businesses that re-shore jobs,
services, production, research, or manufacturing to La. from overseas with the aim of
creating employment opportunities, boosting local economies, or balancing trade deficits.
The incentives include a rebate of up to 10% of new payroll for qualified businesses and
either a state sales and use tax rebate for capital expenditures for facilities or a project
facility expense rebate.
Proposed law provides that the state sales and use tax rebate shall be on purchases of
materials used in the construction of a building, or any addition or improvement to the
building, for housing a legitimate business enterprise or machinery and equipment used in
that enterprise.
Proposed law provides that the project facility expense rebate shall be equal to 1.2% of the
amount of qualified capital expenditures for the facility designated in the contract. Proposed
law defines "qualified capital expenditures" as amounts classified as capital expenditures for
federal income tax purposes related to the project plus exclusions from capitalization
provided for in federal tax law, minus certain capitalized costs and the cost for the purchase
of an existing building. A qualified business earns the project facility expense rebate in the
fiscal year in which the project is placed in service but may not be issued the rebate until the
Dept. of Economic Development (DED) signs a project completion report.
Proposed law defines a qualified business as one which meets either of the following
eligibility requirements:
(1)A new business that is locating in this state that will be re-shoring its supply chain
for the manufacture or production of its products by using business in this state.
(2)An existing La. business whose current production of goods is outside of this state
or the U.S. and the business provides documentation that it is relocating the supply
chain for the production of its products into La.
Proposed law authorizes businesses selected by regional economic development
organizations to also participate in the incentive program. No later than Dec. 20, 2020, each
regional economic development organization may select up to two industry sectors from its
region to participate in the program. Each regional economic development organization is
required to base its selection of an industry sector on whether the sector will diversify the
region's economy.
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Proposed law requires a qualified business to offer, or offer within 90 days of the date of
qualifying for the incentive rebates in proposed law, a basic health benefits plan to
individuals it employs that includes coverage for basic hospital care, physician care, and
health care and is determined by DED to have a value of at least $1.25 per hour and which
is the same coverage as is provided to employees employed in a bona fide executive,
administrative, or professional capacity by the employers who are exempt from the
minimum wage and maximum hour requirements of federal law.
Proposed law establishes an application process for participation in the incentive program
as well as a process for businesses to apply for an incentive contract with DED. Authorizes
the secretary of DED to certify that a business meets the eligibility requirements provided
for in proposed law and that securing the project will result in a significant positive
economic benefit to the state.
Proposed law requires the contract for the payment of a payroll rebate to include the
following:
(1)The percentage of new payroll eligible for rebate, up to a maximum of 10%.
(2)The maximum amount of new payroll eligible for rebate.
(3)The number of new jobs and amount of new payroll required to be created and
maintained and any other performance obligations required to be met in order to
remain qualified for participation in the program.
(4)Designation of the facility or facilities eligible for participation in the program.
(5)Monitoring of performance and consequences for failure to perform and other
contract violations.
(6)An initial contract term of up to five years, and any renewal term available at the
discretion of the secretary, which may be up to an additional five years.
Proposed law requires a business to annually certify its eligibility and to file requests for
approval of rebates with DED. After verification of continued eligibility and performance,
DED shall send a rebate certification letter to the Dept. of Revenue, stating the amount of
actual new payroll for the subject year, the amount of rebate to be issued, and the entity to
which the rebate shall be issued. Rebates shall be paid from the current collections of the
taxes imposed pursuant to present law.
Proposed law prohibits a taxpayer who received the incentive provided for in proposed law
from receiving any other incentive administered by DED for any expenditures or jobs for
which the taxpayer has received a rebate pursuant to proposed law.
Proposed law authorizes the department to promulgate rules in accordance with present law
subject to oversight by the Ways and Means and Revenue and Fiscal Affairs committees to
implement the provisions of proposed law.
Proposed law prohibits any new contract from being approved on or after Dec. 31, 2023, but
contracts existing on that date may continue and may be renewed.
Effective upon signature of governor or lapse of time for gubernatorial action.
(Adds R.S. 51:3126)
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