RÉSUMÉ DIGEST
HB 846 2020 Regular Session Wright
Existing law establishes the Competitive Projects Payroll Incentive Program (program) for
qualified businesses to receive a rebate of up to 15% of eligible new payroll and for either
a sales and use tax rebate for capital expenditures for a facility designated in the contract or
for a project facility expense rebate.
Existing law authorizes businesses to participate in the program upon invitation by the
secretary of the Dept. of Economic Development (DED) and approval by the Joint
Legislative Committee on the Budget (JLCB). Further authorizes other business activities
to be eligible to participate in the program as recommended by the secretary of DED and
approved by JLCB.
Existing law prohibits any new contracts from being approved on or after July 1, 2022, but
contracts existing on that date may continue and may be renewed.
Proposed law would have established a rebate for any eligible COVID-19-impacted business
(impacted business) assigned a North American Industry Classification Code of 44, 45, or
72 that met certain criteria including having a physical and active operation in La. on March
13, 2020, having no more than 50 full-time employees as of March 1, 2020, filing all
applicable state tax returns, and filing an initial application with DED to be recognized as an
impacted business on or before Dec. 31, 2021. In order to have qualified for the rebate, the
impacted business would have been required to create a minimum of five new jobs between
May 15, 2020, and Dec. 31, 2021, and would have been required to create a minimum new
annual payroll from new jobs of at least $40,000 before Dec. 31, 2021.
Proposed law would have established the benefit rate for the rebate at 6% of the wages for
each new job created. In order to determine the number of new jobs eligible for the rebate,
the applicant's employment baseline would have been the total number of active full-time and
part-time employees at the impacted business's place of operation that were La. residents on
May 14, 2020.
Proposed law would have defined "new jobs" as employment with an impacted business
where each employee was employed by the impacted business at its place of operation, the
employee was a La. resident, the employee's hire or rehire date was on or after May 15, 2020,
and the employee was paid, as a base wage, at least the federal minimum wage excluding
tips, bonuses, and commissions.
Proposed law would have required the initial rebate amount to be based on new jobs and
annual payroll created between May 15, 2020, and Dec. 31, 2021. Would have further
provided that a business would have been eligible for a rebate for each year that it maintained
or exceeded the minimum required new jobs and annual payroll as provided in proposed law.
Proposed law would have limited eligible payroll to $500,000 per impacted business per
calendar year, limited impacted businesses from receiving the rebate for more than three
years, and prohibited a rebate from being paid for any new job or payroll created after Dec.
31, 2022.
Proposed law would have provided for the application, administration, payment, and
recovery of the rebate.
Proposed law would have prohibited a business from receiving any other nondiscretionary
statutory incentive administered by DED for any payroll expenditures for which the business
had received a rebate pursuant to proposed law.
Proposed law would have authorized DED, in consultation with DOR, to adopt and
promulgate rules and regulations that would have been necessary to implement proposed law.
(Proposed to add R.S. 51:3122)
VETO MESSAGE: "Please be advised that I have vetoed House Bill 846 of the 2020 Regular Session.
In its enrolled form, House Bill 846 of the 2020 Regular Session adds a new payroll incentive rebate
program to the long list of incentive programs already administered by the Department of Economic
Development. Unlike other incentive programs linked to payroll like Quality Jobs, which requires
creation of jobs with payroll nearly three times the minimum wage, any retail or food service
business in the state employing less than 50 employees would be eligible to receive this rebate if the
business creates five new, minimum-wage paying jobs between May 15, 2020 and December 31,
2021. At a time when 80% of Louisianans support increasing the minimum wage, incentivizing the
creation of minimum wage jobs at $7.25 per hour is contrary to the sentiment of the people of
Louisiana that our workforce should be able to earn a true living wage.
Furthermore, numerous bills similar to House Bill 846 ran not only in the last session, but are also
running in this current special session without thoughtful consideration of what impact such
legislation would affect the state’s budget. While the fiscal note does not provide the exact amount
of a decrease in collections of state general fund due to this program in the upcoming fiscal year, the
eligibility requirements of the program create such a large pool of businesses that will be eligible
to participate that there is potential that the cost to the state could be substantial. With so much
uncertainty surrounding the state’s economic stability in the wake of COVID-19, beginning a new
program without truly understanding the direct effect on the upcoming fiscal year would not be
prudent. I am more than happy, however, to work with the authors of these measures on quality
incentive programs once we know the true effects of COVID-19 on the state’s economy."