HLS 21RS-202 ORIGINAL
2021 Regular Session
HOUSE BILL NO. 526
BY REPRESENTATIVE NELSON
Prefiled pursuant to Article III, Section 2(A)(4)(b)(i) of the Constitution of Louisiana.
TAX: (Constitutional Amendment) Provides for state and local revenue
1 A JOINT RESOLUTION
2Proposing to amend Article VI, Sections 26(A) through (C), 27, and 29, Article VII,
3 Sections 4(A), 11(C), 18(C) and (F)(1), 20(A)(1), 21(B) and (F), and 26(B), and
4 Article VIII, Section (13)(B) and (C) of the Constitution of Louisiana, to add Article
5 VI, Section 26.1 and Article VII, Sections 21(O) and 26(F) of the Constitution of
6 Louisiana, and to repeal Article VI, Section 26(E) and Article VII, Sections 2.2,
7 21(C)(10) and (12), and 26(E) of the Constitution of Louisiana, relative to state and
8 local revenue; to provide for parish ad valorem tax; to provide for parish ad valorem
9 tax millages; to provide for the cost of uncompensated healthcare; to provide for
10 municipal ad valorem tax; to provide for municipal ad valorem tax millages; to
11 provide for the approval of the electors; to provide for the maximum sales and use
12 tax rate to be levied by a local governmental subdivision or school board; to provide
13 for bond security; to prohibit a tax on net income and capital; to provide for land
14 valuation; to provide for an ad valorem tax exemption for certain business inventory;
15 to provide for the homestead exemption; to provide for the amount of the homestead
16 exemption; to provide for certain religious, burial, cultural, or educational ad
17 valorem property tax exemptions; to provide for industrial manufacturing
18 establishment ad valorem exemptions; to provide for an ad valorem tax exemption
19 for items constituting business inventory; to provide for entities eligible for capital
20 outlay funding; to provide for the Revenue Sharing Fund; to provide for the
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1 Minimum Foundation Program; to provide for definitions; to provide for
2 effectiveness; to provide for certain requirements and limitations; to provide for
3 submission of the proposed amendment to the electors; and to provide for related
4 matters.
5 Section 1. Be it resolved by the Legislature of Louisiana, two-thirds of the members
6elected to each house concurring, that there shall be submitted to the electors of the state of
7Louisiana, for their approval or rejection in the manner provided by law, a proposal to
8amend Article VI, Sections 26(A) through (C), 27, and 29 of the Constitution of Louisiana
9and to add Article VI, Section 26.1 of the Constitution of Louisiana, to read as follows:
10 §26. Parish Ad Valorem Tax
11 Section 26.(A) Parish Tax for General Purposes; Millage Limits; Increase.
12 The governing authority of a parish may levy annually an ad valorem tax for general
13 purposes not to exceed four eight mills on the dollar of assessed valuation. However,
14 in Orleans Parish the limitation shall be seven mills, and in Jackson Parish the
15 limitation shall be five mills. Millage rates may be increased in any parish when
16 approved by a majority of the electors voting thereon in an election held for that
17 purpose. for general purposes up to the amount provided for in this Paragraph
18 without approval of the electors.
19 (B) Millage Increase Not for General Purposes. When the millage increase
20 is for other than general purposes, the Millage rates may be increased in any parish
21 for purposes other than general purposes when approved by a majority of the electors
22 voting in an election held for that purpose. The proposition provided to electors for
23 the purpose of increasing a millage pursuant to this Paragraph shall state the specific
24 purpose or purposes for which the tax is to be levied and the length of time the tax
25 is to remain in effect. All proceeds of the tax levied pursuant to this Paragraph shall
26 be used solely for the purpose or purposes set forth in the proposition.
27 (C) Parish Tax in Municipality. The amount of the parish tax for general
28 purposes which any parish, except Orleans Parish, may levy, without a vote of the
29 electors, on property located wholly within any municipality which has a population
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1 exceeding one thousand inhabitants according to the last federal decennial census,
2 or other census authorized by law, and which provides and maintains a system of
3 street paving, shall not exceed one-half the tax levy for general purposes.
4 * * *
5 §26.1. Local responsibility for uncompensated healthcare costs
6 (A) Responsibility for uncompensated care provided by a hospital shall be
7 borne by the governing authority of the parish in which the hospital that delivered
8 the care is physically located. The governing authority of each parish may levy
9 annually an ad valorem tax for the purposes of paying the cost provided in this
10 Section. Nothing in this Section shall be construed to require the governing authority
11 to cover the full cost of the care. The initial levy of the ad valorem tax authorized
12 pursuant to this Section shall equal an amount sufficient to provide the same level
13 of uncompensated care funding as the hospitals in the parish received in the last full
14 fiscal year immediately prior to the effective date of this Section. The millage rate
15 may be modified once the initial levy expires, and any renewal of the levy shall
16 require approval by a majority of the electors in the parish voting in an election held
17 for that purpose.
18 (B) For the purposes of this Section, "uncompensated care" shall mean the
19 difference between the amount billed by a hospital for services rendered to a patient
20 and the amount of payment received, if any.
21 * * *
22 §27. Municipal Ad Valorem Tax
23 Section 27.(A) Municipal Tax for General Purposes; Millage Limits;
24 Increase. The governing authority of a municipality may levy annually an ad
25 valorem tax for general purposes not to exceed seven fourteen mills on the dollar of
26 assessed valuation. However, if a municipality, by its charter or by law, is exempt
27 from payment of parish taxes or, under legislative or constitutional authority,
28 maintains its own public schools, it may levy an annual tax not to exceed ten twenty
29 mills on the dollar of assessed valuation. Millage rates may be increased in any
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1 municipality when approved by a majority of the electors voting thereon in an
2 election held for that purpose for general purposes up to the amounts provided for
3 in this Paragraph without approval of the electors.
4 (B) Millage Increase Not for General Purposes. When the millage increase
5 is for other than general purposes, the Millage rates may be increased in any
6 municipality for purposes other than general purposes when approved by a majority
7 of the electors voting in an election held for that purpose. The proposition provided
8 to electors for purposes of increasing a millage pursuant to this Paragraph shall state
9 the specific purpose or purposes for which the tax is to be levied and the length of
10 time the tax is to remain in effect. All proceeds of the tax levied pursuant to this
11 Paragraph shall be used solely for the purpose or purposes set forth in the
12 proposition.
13 (C) Exception. This Section shall not apply to the city of New Orleans.
14 * * *
15 §29. Local Governmental Subdivisions and School Boards; Sales Tax
16 Section 29.(A) Sales Tax Authorized. Except as otherwise authorized in a
17 home rule charter as provided for in Section 4 of this Article, the governing authority
18 of any local governmental subdivision or school board may levy and collect a tax
19 upon the sale at retail, the use, the lease or rental, the consumption, and the storage
20 for use or consumption, of tangible personal property and on sales of services as
21 defined by law, if approved by a majority of the electors voting thereon in an election
22 held for that purpose. The total rate thereof, when combined with the rate of all other
23 sales and use taxes, exclusive of state sales and use taxes, levied and collected within
24 any local governmental subdivision, shall not exceed three percent.
25 (B) Additional Sales Tax Authorized. However, the legislature, by general
26 or by local or special law, may authorize the imposition of additional sales and use
27 taxes by local governmental subdivisions or school boards, if approved by a majority
28 of the electors voting thereon in an election held for that purpose.
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1 (C) Bonds; Security. Nothing in this Section shall affect any sales or use tax
2 authorized or imposed on the effective date of this constitution or prior to an
3 amendment to this Section, or affect or impair the security of any bonds payable
4 from the proceeds of the tax.
5 (D) (C) Exemptions; Protection of Bonds. Except when bonds secured
6 thereby have been authorized, the legislature may provide for the exemption or
7 exclusion of any goods, tangible personal property, or services from sales or use
8 taxes only pursuant to one of the following:
9 (1) Exemptions or exclusions uniformly applicable to the taxes of all local
10 governmental subdivisions, school boards, and other political subdivisions whose
11 boundaries are not coterminous with those of the state.
12 (2) Exemptions or exclusions applicable to the taxes of the state or
13 applicable to political subdivisions whose boundaries are coterminous with those of
14 the state, or both.
15 (3) Exemptions or exclusions uniformly applicable to the taxes of all the tax
16 authorities in the state.
17 Section 2. Be it resolved by the Legislature of Louisiana, two-thirds of the members
18elected to each house concurring, that there shall be submitted to the electors of the state of
19Louisiana, for their approval or rejection in the manner provided by law, a proposal to
20amend Article VII, Sections 4(A), 18(C) and (F)(1), 20(A)(1), 21(B) and (F), and 26(B) of
21the Constitution of Louisiana and to add Article VII, Sections 21(O) and 26(F) of the
22Constitution of Louisiana, to read as follows:
23 §4. Income Tax; Severance Tax; Political Subdivisions
24 Section 4.(A) Income Tax. Equal and uniform taxes may be levied on net
25 incomes, and these taxes may be graduated according to the amount of net income.
26 However, the state individual and joint income tax schedule of rates and brackets
27 shall never exceed the rates and brackets set forth in Title 47 of the Louisiana
28 Revised Statutes on January 1, 2003. Federal income taxes paid shall be allowed as
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1 a deductible item in computing state income taxes for the same period. No taxes may
2 be levied on net income or capital.
3 * * *
4 §18. Ad Valorem Taxes
5 Section 18.
6 * * *
7 (C) Use Value. Bona fide agricultural, horticultural, marsh, and timber
8 lands, as defined by general law, shall be assessed for tax purposes at ten percent of
9 use value rather than fair market value. The legislature may provide by law similarly
10 for buildings of historic architectural importance.
11 * * *
12 (F) Reappraisal. (1) All property subject to taxation shall be reappraised
13 and valued annually in accordance with this Section, at intervals of not more than
14 four years.
15 * * *
16 §20. Homestead Exemption
17 (A) Homeowners.
18 (1)(a) The bona fide homestead, consisting of a tract of land or two or more
19 tracts of land even if the land is classified and assessed at use value pursuant to
20 Article VII, Section 18(C) of this constitution, with a residence on one tract and a
21 field with or without timber on it, pasture, or garden on the other tract or tracts, not
22 exceeding one hundred sixty acres, buildings and appurtenances, whether rural or
23 urban, owned and occupied by any person or persons owning the property in
24 indivision, shall be exempt from state, parish, and special ad valorem taxes to the
25 extent of seven thousand five hundred dollars of the assessed valuation. as follows:
26 (i) Beginning January 1, 2023, to the extent of six thousand one hundred
27 twenty-five dollars of the assessed valuation.
28 (ii) Beginning January 1, 2024, to the extent of four thousand seven hundred
29 fifty dollars of the assessed valuation.
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1 (iii) Beginning January 1, 2025, to the extent of three thousand three hundred
2 seventy-five dollars of the assessed valuation.
3 (iv) Beginning January 1, 2026, to the extent of two thousand dollars of the
4 assessed valuation.
5 (b) The same homestead exemption shall also fully apply to the primary
6 residence, including a mobile home, which serves as a bona fide home and which is
7 owned and occupied by any person or persons owning the property in indivision,
8 regardless of whether the homeowner owns the land upon which the home or mobile
9 home is sited; however, this homestead exemption shall not apply to the land upon
10 which such primary residence is sited if the homeowner does not own the land.
11 * * *
12 §21. Other Property Exemptions
13 Section 21. In addition to the homestead exemption provided for in Section
14 20 of this Article, the following property and no other shall be exempt from ad
15 valorem taxation:
16 * * *
17 (B)(1)(a)(i) Property owned by a nonprofit corporation or association
18 organized and operated that is used exclusively for religious, dedicated places of
19 burial, charitable, health, welfare, fraternal, cultural, or educational purposes,. The
20 property shall be owned by a non-profit corporation or association, no part of the net
21 earnings of which inure to the benefit of any private shareholder or member thereof
22 and which is declared to be exempt from federal or state income tax; and. The
23 legislature may provide for additional restrictions on the conditional eligibility for
24 the exemption provided for in this Paragraph, however the legislature shall not
25 provide for any additional property tax exemptions in this Paragraph. Exemptions
26 shall not be defined in a way that results in the exemption of a single entity from ad
27 valorem property tax.
28 (ii) medical equipment leased for a term exceeding five years to such a
29 nonprofit corporation or association which owns or operates a small, rural hospital
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1 and which uses the equipment solely for health care purposes at the hospital,
2 provided that the property shall be exempt only during the term of the lease to such
3 corporation or association, and further provided that "small, rural hospital" shall
4 mean a hospital which meets all of the following criteria:
5 (aa) It has less than fifty Medicare-licensed acute care beds.
6 (bb) It is located in a municipality with a population of less than ten
7 thousand which has been classified as an area with a shortage of health manpower
8 by the United States Health Service; and
9 (b) property leased to such a nonprofit corporation or association for use
10 solely as housing for homeless persons, as defined by regulation adopted by the tax
11 commission or its successor provided that the term of such lease shall be for at least
12 five years, that as a condition of entering into the lease the property be in compliance
13 with all applicable health and sanitation codes for use as housing for homeless
14 persons, that the lease shall provide that compensation to be paid the lessor shall not
15 exceed one dollar per year, and that such contract of lease shall recite that the
16 property shall be used exclusively for the purpose of housing the homeless, and
17 further provided that at such time as the property is no longer used solely as housing
18 for homeless persons, the property shall no longer be exempt from taxation;
19 (2) property of a bona fide labor organization representing its members or
20 affiliates in collective bargaining efforts; and
21 (3) property of an organization such as a lodge or club organized for
22 charitable and fraternal purposes and practicing the same, and property of a nonprofit
23 corporation devoted to promoting trade, travel, and commerce, and also property of
24 a trade, business, industry or professional society or association, if that property is
25 owned by a nonprofit corporation or association organized under the laws of this
26 state for such purposes.
27 None of the property or any portion of the property listed in Paragraph (B)
28 this Paragraph shall be exempt if owned, operated, leased, held, or used for
29 commercial or other non-exempt purposes unrelated to the exempt purposes of the
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1 corporation or association. The exemption provided for in this Paragraph shall be on
2 a pro rata basis for the portion of property exclusively utilized for an exempt
3 purpose.
4 * * *
5 (F)(1) Notwithstanding any contrary provision of this Section, the State
6 Board of Commerce and Industry or its successor, with the approval of the governor,
7 may enter into contracts for the exemption from ad valorem taxes of a new
8 manufacturing establishment or an addition to an existing manufacturing
9 establishment, on such terms and conditions as the board, with the approval of the
10 governor, deems in the best interest of the state.
11 (2) The exemption shall be for an initial term of no more than five calendar
12 years, and may be renewed for an additional five years. All property exempted shall
13 be listed on the assessment rolls and submitted to the Louisiana Tax Commission or
14 its successor, but no taxes shall be collected thereon during the period of exemption.
15 (3) The terms "manufacturing establishment" and "addition" as used herein
16 mean a new plant or establishment or an addition or additions to any existing plant
17 or establishment which engages in the business of working raw materials into wares
18 suitable for use or which gives new shapes, qualities or combinations to matter which
19 already has gone through some artificial process.
20 (4) Beginning January 1, 2023, new contracts and new renewals for an
21 exemption provided for in this Paragraph shall be prohibited.
22 * * *
23 (O)(1) Beginning January 1, 2023, items constituting business inventory,
24 including goods which are held for sale, goods in production or for ultimate
25 consumption in the production of goods or services for sale, and goods utilized in
26 marketing and distribution activities, referred to hereinafter as "property", shall be
27 exempt in accordance with the following:
28 (a) For taxes payable in 2023, the value of the exemption shall be equal to
29 fifty percent of the assessed value of the property.
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1 (b) For taxes payable in 2024, the value of the exemption shall be equal to
2 sixty-five percent of the assessed value of the property.
3 (c) For taxes payable in 2025, the value of the exemption shall be equal to
4 eighty percent of the assessed value of the property.
5 (d) Beginning January 1, 2026, the value of the exemption shall be equal to
6 one hundred percent of the assessed value of the property.
7 (2) Notwithstanding any provision of this constitution to the contrary,
8 property for which the exemption authorized in this Paragraph has been claimed shall
9 not be treated as taxable property for purposes of any subsequent reappraisals and
10 valuation for millage adjustment purposes pursuant to Article VII, Section 23(B) of
11 this constitution.
12 * * *
13 §26. Revenue Sharing Fund
14 * * *
15 (B) Annual Allocation. For fiscal years commencing prior to Fiscal Year
16 2023-2024, the sum of ninety million dollars is allocated annually from the state
17 general fund to the revenue sharing fund. The legislature may not appropriate
18 additional sums to the fund.
19 * * *
20 (F) Notwithstanding any provision of this Section to the contrary, for Fiscal
21 Year 2023-2024, the sum of sixty-seven and one-half million dollars shall be
22 allocated from the state general fund to the revenue sharing fund. For Fiscal Year
23 2024-2025, the sum of forty-five million dollars shall be allocated from the state
24 general fund to the revenue sharing fund. For Fiscal Year 2025-2026, the sum of
25 twenty-two and one-half million dollars shall be allocated from the state general fund
26 to the revenue sharing fund. Beginning in Fiscal Year 2026-2027 and each fiscal
27 year thereafter, no state general fund monies shall be allocated to the revenue sharing
28 fund.
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1 Section 3. Be it resolved by the Legislature of Louisiana, two-thirds of the members
2elected to each house concurring, that there shall be submitted to the electors of the state of
3Louisiana, for their approval or rejection in the manner provided by law, a proposal to
4amend Article VII, Section 11(C) of the Constitution of Louisiana, to read as follows:
5 §11. Budgets
6 Section 11.
7 * * *
8 (C) Capital Budget. The governor shall submit to the legislature, at each
9 regular session, a proposed five-year capital outlay program and request
10 implementation of the first year of the program. Prior to inclusion in the
11 comprehensive capital budget which the legislature adopts, each capital improvement
12 project shall be evaluated through a feasibility study, as defined by the legislature,
13 which shall include an analysis of need and estimates of construction and operating
14 costs. The legislature shall provide by law for procedures, standards, and criteria for
15 the evaluation of such feasibility studies and shall set the schedule of submission of
16 such feasibility studies which shall take effect not later than December thirty-first
17 following the first regular session convening after this Paragraph takes effect. These
18 procedures, standards, and criteria for evaluation of such feasibility studies cannot
19 be changed or altered except by a separate legislative instrument approved by a
20 favorable vote of two-thirds of the elected members of each house of the legislature.
21 For those projects not eligible for funding under the provisions of Article VII,
22 Section 27 of this constitution, the request for implementation of the first year of the
23 program shall include a list of the proposed projects in priority order based on the
24 evaluation of the feasibility studies submitted. Capital outlay projects approved by
25 the legislature shall be made a part of the comprehensive state capital budget, which
26 shall be adopted by the legislature. Beginning July 1, 2023, nongovernmental entity
27 projects shall be ineligible for capital outlay funding.
28 * * *
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1 Section 4. Be it resolved by the Legislature of Louisiana, two-thirds of the members
2elected to each house concurring, that there shall be submitted to the electors of the state of
3Louisiana, for their approval or rejection in the manner provided by law, a proposal to
4amend Article VIII, Section 13(B) and (C) of the Constitution of Louisiana, to read as
5follows:
6 §13. Funding; Apportionment
7 * * *
8 (B) Minimum Foundation Program. (1) The State Board of Elementary and
9 Secondary Education, or its successor, shall annually develop and adopt a formula
10 which shall be used to determine the cost of a minimum foundation program of
11 education in all public elementary and secondary schools as well as to equitably
12 allocate the funds to parish and city school systems. The cost of the program shall
13 be shared by the state and each city, parish, and other local public school board as
14 provided in this Paragraph. Such The formula shall provide that cities, parishes, and
15 other local public school districts having lower total ad valorem property tax value
16 per student within their boundaries shall receive a higher proportionate share of the
17 state's share of the program funding for a contribution by every city and parish
18 school system. Prior to approval of the formula by the legislature, the legislature
19 may return the formula adopted by the board to the board and may recommend to the
20 board an amended formula for consideration by the board and submission to the
21 legislature for approval.
22 (2)(a) The Prior to Fiscal Year 2023-2024, the legislature shall annually
23 appropriate funds sufficient to fully fund the current cost to the state of such a
24 program as determined by applying the approved formula in order to insure a
25 minimum foundation of education in all public elementary and secondary schools.
26 (b) The legislature shall appropriate the following amounts of state general
27 fund monies to fund the state's share of the program funding established pursuant to
28 this Section:
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1 (i) For Fiscal Year 2023-2024, no more than three billion five hundred
2 seventy-five million dollars.
3 (ii) For Fiscal Year 2024-2025, no more than three billion two hundred fifty-
4 three million dollars.
5 (iii) For Fiscal Year 2025-2026, no more than two billion nine hundred
6 thirty-two million dollars.
7 (iv) For Fiscal Year 2026-2027, no more than two billion six hundred ten
8 million dollars.
9 (c) For each Fiscal Year after 2026-2027, the maximum amount of state
10 general fund monies that may be appropriated to fund the state's share of program
11 funding shall be two billion six hundred ten million dollars. This maximum may be
12 increased by up to two percent at the discretion of the legislature through an
13 appropriation in the general appropriation bill. When an increase in the amount is
14 adopted, the new total amount shall constitute a new maximum for the purposes of
15 this Subsubparagraph. Each ensuing new maximum may also be increased by up to
16 two percent as provided in this Subsubparagraph.
17 (d) The difference between the total program cost to the city, parish, or other
18 local public school board, as applicable, and the amount of state funding it receives
19 each year pursuant to the formula shall be funded by the city, parish, or other local
20 public school board with self-generated revenues.
21 (e) Neither the governor nor the legislature may reduce such any
22 appropriation made pursuant to this Subparagraph, except that the governor may
23 reduce such appropriation using means provided in the act Act containing the
24 appropriation provided that any such reduction is consented to in writing by
25 two-thirds of the elected members of each house of the legislature. The funds
26 appropriated shall be equitably allocated to parish and city school systems according
27 to the formula as adopted by the State Board of Elementary and Secondary
28 Education, or its successor, and approved by the legislature prior to making the
29 appropriation.
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1 (3) Whenever the legislature fails to approve the formula most recently
2 adopted by the board, or its successor, the last formula adopted by the board, or its
3 successor, and approved by the legislature shall be used for the determination of the
4 cost of the minimum foundation program and for the allocation of funds
5 appropriated. The maximum state funding amounts established in Subsubparagraphs
6 (2)(b) and (c) of this Paragraph shall apply to any formula that becomes effective,
7 regardless of whether the formula was established prior to the effective date of
8 Subsubparagraphs (2)(b) and (c) of this Paragraph.
9 (C) Local Funds. Local funds for the support of elementary and secondary
10 schools shall be derived from the following sources:
11 First: Each parish school board, Orleans Parish excepted, and each
12 municipality or city school board (1)(a) For the tax years beginning January 1, 2023,
13 2024, 2025, and 2026, each city, parish, or other local public school board actually
14 operating, maintaining, or supporting a separate system of public schools, shall may
15 levy annually an ad valorem maintenance tax not to exceed five mills on the dollar
16 of assessed valuation on property subject to such taxation within the applicable
17 parish, or city, respectively or local public school district, without the approval of the
18 electors. The millage rate of any tax levied pursuant to the provisions of this
19 Subparagraph shall be sufficient to generate an amount of revenue at least equal to
20 the sum of:
21 (i) The total amount of revenue generated by the ad valorem taxes levied by
22 the city, parish, or other local public school board for the last complete tax year
23 immediately prior to the effective date of this Subparagraph.
24 (ii) An amount equal to the difference between the total amount of state
25 funds the city, parish, or other local public school board received pursuant to the
26 provisions of this Section in the last complete fiscal year immediately prior to the
27 effective date of this Subparagraph and the total amount of state funds the city,
28 parish, or other local public school board received pursuant to the provisions of this
29 Section.
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1 (b) The duration of any tax levied pursuant to the provision of this
2 Subparagraph shall not exceed four years.
3 Second: The Orleans Parish School Board shall levy annually a tax not to
4 exceed thirteen mills on the dollar of the assessed valuation of property within the
5 city of New Orleans assessed for city taxation, and shall certify the amount of the tax
6 to the governing authority of the city. The governing authority shall have the tax
7 entered on city tax rolls. The tax shall be collected in the manner, under the
8 conditions, and with the interest and penalties prescribed by law for city taxes. The
9 money thus collected shall be paid daily to the Orleans Parish School Board.
10 (2) For the tax year beginning January 1, 2027, and continuing each year
11 after, each city, parish, or other local public school board actually operating,
12 maintaining, or supporting a separate system of public schools may levy annually an
13 ad valorem tax on property within the applicable parish, city, or local public school
14 district with the approval of a majority of the electors of the parish, city, or local
15 public school district, as applicable, in an election held for that purpose. The millage
16 rate of any tax levied pursuant to the provisions of this Subparagraph shall be
17 sufficient to generate an amount of revenue at least equal to the amount required
18 pursuant to Subsubparagraph (B)(2)(d) of this Section. The duration of any tax levied
19 pursuant to the prevision of this Subparagraph shall not exceed ten years.
20 Third: (3) For giving additional support to public elementary and secondary
21 schools, any parish, school district, or subschool district, or any municipality or city
22 school board which supports a separate city system of public schools may levy an ad
23 valorem tax for a specific purpose, when authorized by a majority of the electors
24 voting in the parish, municipality, district, or subdistrict in an election held for that
25 purpose. The amount, duration, and purpose of the tax shall be in accord with any
26 limitation imposed by the legislature.
27 * * *
28 Section 5. Be it resolved by the Legislature of Louisiana, two-thirds of the members
29elected to each house concurring, that there shall be submitted to the electors of the state of
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1Louisiana, for their approval or rejection in the manner provided by law, a proposal to repeal
2Article VI, Section 26(E) and Article VII, Sections 2.2, 21(C)(10) and (12), and 26(E) of
3the Constitution of Louisiana.
4 Section 6.(A) Be it further resolved that the provisions of the amendment contained
5in Sections 1, 2, 4, and, 5 of this Joint Resolution shall become effective January 1, 2023,
6and shall be applicable to taxable years beginning on or after January 1, 2023.
7 (B) Be it further resolved that the provisions of the amendment contained in Section
83 of this Joint Resolution shall become effective July 1, 2023.
9 Section 7. Be it further resolved that this proposed amendment shall be submitted
10to the electors of the state of Louisiana at the statewide election to be held on November 8,
112022.
12 Section 8. Be it further resolved that on the official ballot to be used at the election,
13there shall be printed a proposition, upon which the electors of the state shall be permitted
14to vote YES or NO, to amend the Constitution of Louisiana, which proposition shall read as
15follows:
16 Do you support an amendment to repeal sales and use tax exemptions on
17 food for home consumption, residential utilities, and prescription drugs; limit
18 the amount of millages a parish can increase for general purposes not to
19 exceed eight mills without a vote of the electorate; to require parishes to
20 assume the costs of uncompensated healthcare; to levy a tax to pay for
21 uncompensated care; to limit the amount of millages a municipality can
22 increase for general purposes not to exceed fourteen mills without a vote of
23 the electorate; to limit the amount of sales and use taxes local governmental
24 subdivisions and school boards may levy to three percent; to repeal income
25 tax; to prohibit tax on net income or capital; to remove marsh lands from
26 lands eligible for use valuation for purposes of property tax; to decrease the
27 value of the homestead exemption over four years; to repeal certain ad
28 valorem property tax exemptions for property owned by certain charitable,
29 religious, health, or welfare organizations; to provide an ad valorem tax
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1 exemption for certain property owned by certain cultural organizations; to
2 prohibit any new industrial tax exemption contracts and to prohibit any
3 renewal of any industrial tax exemption contract; to exempt certain items
4 constituting business inventory from ad valorem property taxation; to
5 prohibit nongovernmental entities from using capital outlay funding; to
6 decrease the amount of money appropriated to the Revenue Sharing Fund;
7 to reduce the maximum amount of state funding provided to a minimum
8 foundation program for K-12 education; to require city, parish, or other local
9 public school boards to cover the nonstate portion of required minimum
10 foundation program funding; and to authorize city, parish, or other local
11 public school boards to levy an ad valorem tax to cover the cost? (Effective
12 January 1, 2023, except for provisions repealing nonstate entity capital outlay
13 funding are effective July 1, 2023) (Amends Article VI, Sections 26(A)
14 through (C), 27, and 29, Article VII, Sections 4(A), 11(C), 18(C) and (F)(1),
15 20(A)(1), 21(B) and (F), and 26(B), and Article VIII Section (13)(B) and (C);
16 Adds Article VI, Section 26.1 and Article VII, Sections 21(O) and 26(F);
17 Repeals Article VI, Section 26(E), Article VII, Sections 2.2, 21(C)(10) and
18 (12), and 26(E)
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 526 Original 2021 Regular Session Nelson
Abstract: Provides relative to state and local revenue.
Parish Ad Valorem Tax
Present constitution authorizes the governing authority of a parish to levy an ad valorem tax
for general purposes not to exceed four mills. Permits increasing millage rates when
approved by a majority of electors voting in an election held for that purpose.
Present constitution provides when a parish governing authority increases the millage other
than for general purposes the increase shall go to the electors of approval and the proposition
must state the specific purpose for which the tax is to be levied and length of time for which
the tax is to remain in effect.
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HB NO. 526
Proposed constitutional amendment raises the maximum amount of mills that may be levied
for general purposes by a governing authority of a parish from an amount not exceeding four
mills to an amount not exceeding eight mills. Further provides that the governing authority
of a parish may raise the amount of mills up to eight mills without approval of the voters.
Present constitution provides the maximum millage parish governing authority may levy in
Orleans Parish is seven mills and five mills in Jackson Parish.
Proposed constitutional amendment repeals present constitution.
Effective Jan. 1, 2023.
Municipality Ad Valorem Tax
Present constitution authorizes the governing authority of a municipality to levy an ad
valorem tax for general purposes not to exceed seven mills. If a municipality is exempt from
payment of parish taxes or under legislative or constitutional authority maintains its own
public schools, it may levy an annual tax not to exceed ten mills. Permits increasing millage
rates when approved by a majority of electors voting in an election held for that purpose.
Present constitution provides when a municipality governing authority increases the millage
other than for general purposes the increase shall go to the electors of approval and the
proposition must state the specific purpose for which the tax is to be levied and length of
time for which the tax is to remain in effect.
Proposed constitutional amendment raises the maximum amount of mills that may be levied
for general purposes by a governing authority of municipality from an amount not exceeding
seven mills to an amount not exceeding 14 mills. Further provides that the governing
authority of a parish may raise the amount of mills up to 14 mills without approval of the
voters.
Proposed constitutional amendment increases the maximum millage that a municipality may
levy when it is exempt from payment of parish taxes or under legislative or constitutional
authority maintains its own public schools from ten to 20 mills.
Effective Jan. 1, 2023.
State Sales and Use Tax
Present constitution provides for state sales and use tax exemptions on food for home
consumption, residential utilities, and prescription drugs.
Proposed constitutional amendment repeals present constitution.
Effective Jan. 1, 2023.
Local Governmental Subdivision and School Board Sales and Use Tax
Present constitution authorizes the governing authority of any local governmental
subdivision or school board to levy and collect a sales and use tax if approved by a majority
of the electors in an election held for that purpose. Further provides that the rate, when
combined with all other sales and use taxes except those of the state shall not exceed three
percent.
Proposed constitutional amendment retains present constitution.
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HB NO. 526
Present constitution provides that the legislature by general local or special law may
authorize the imposition of additional sales and use taxes by local governmental subdivisions
or school boards if approved by a majority of electors.
Proposed constitutional amendment repeals present constitution.
Present constitution provides that no changes in sales tax shall affect or impair the security
of any bonds payable from proceeds of any sales and use tax levied by a local governmental
subdivision. Proposed constitutional amendment retains present constitution.
Effective Jan. 1, 2023.
Income Tax
Present constitution authorizes the levy of equal and uniform taxes on net income. Further
provides the taxes may be graduated according to the amount of net income.
Proposed constitutional amendment repeals present constitution and prohibits taxes on net
income or capital.
Effective Jan. 1, 2023.
Capital Outlay
Present law requires the governor to submit a capital outlay budget which implements the
first year of the five-year capital outlay program and the bond authorization bill for the sale
of bonds to fund projects included in the bond portion of the capital outlay bill to the
legislature no later than the 8
th
day of each regular session.
Present law further provides general obligation bonds can fund both state and
nongovernmental entity projects.
Proposed constitutional amendment prohibits nongovernmental entity projects from
receiving capital outlay funding beginning July 1, 2023.
Effective July 1, 2023.
Ad Valorem Taxation
Present constitution provides property subject to ad valorem taxation shall be reappraised
and valued at intervals of not more than four years.
Proposed constitutional amendment repeals present constitution and provides property shall
be appraised and valued annually.
Present constitution provides for the valuation of property at fair market value for purposes
of determine ad valorem property tax.
Present constitution provides for certain property exemptions including an exemption for
property owned by a nonprofit corporation or association organized an operated for
religious, burial, charitable, health, welfare, fraternal, or educational purposes.
Proposed constitutional amendment changes the property exemption to exempt only property
used exclusively for religious, burial, cultural, or educational purposes. Further provides the
property shall be owned by a non profit corporation or association which no part of the net
earnings inure to the benefit of any private shareholder or member.
Proposed constitutional amendment also provides that the property shall not be exempt if
owned, operated, leased, held, or used for commercial or other non-exempt purposes. The
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exemption shall be on a pro rata basis for the portion of the property exclusively utilized for
an exempt purpose.
Present constitution also exempts irrevocably dedicated place of burial held by individuals
for purposes of burial and property used for cultural, Mardi Gras carnival, or civic activities
not operated for profit to the owners from property tax.
Proposed constitutional amendment repeals present constitution.
Present constitution provides the State Board of Commerce and Industry, with the approval
of the governor, may enter into contracts for an ad valorem property tax exemptions for
property of new manufacturing establishments or additions to manufacturing establishments.
Further provides that these contracts shall be for an initial term of no more than five years
and may be renewed for an additional five years.
Proposed constitutional amendment provides beginning on Jan. 1, 2023 new contracts and
new renewals for exemptions for manufacturing establishments shall be prohibited.
Effective Jan. 1, 2023.
Homestead Exemption
Present constitution provides for a homestead exemption on certain property which exempts
property to the extent of $7,000 of the assessed value of the property.
Proposed constitutional amendment gradually lowers the amount of valuation exempt from
property tax as follows:
(1)Beginning Jan. 1, 2023 the exemption shall be to the extent of $6,125 of the assessed
valuation.
(2)Beginning Jan. 1, 2024, the exemption shall be to the extent of $4,750 of the
assessed valuation.
(3)Beginning Jan. 1, 2025, the exemption shall be to the extent of $3,375 of the
assessed valuation.
(4)Beginning Jan. 1, 2026 the exemption shall be to the extent of $2,000 of the assessed
valuation.
Present constitution provides the sum of $90 million dollars to be allocated annually from
the state general fund to the revenue sharing fund for the purpose of parish to offsetting
current losses due to the homestead exemption authorized in present constitution. . Further
provides the revenue sharing fund shall be distributed annually as provided by law based on
the population and number of homesteads in each parish.
Present constitution authorizes the legislature to appropriate additional sums to the revenue
sharing fund.
Proposed constitutional amendment changes present constitution and prohibits the legislature
from appropriating additional sums to the revenue sharing fund.
Proposed constitutional amendment changes the allocation of monies to the revenue sharing
fund to the following:
(1)For FY 2023-2024, the sum of $67,500,000 shall be allocated from the state general
fund to the revenue sharing fund.
(2)For FY 2024-2025, the sum of $45,000,000 shall be allocated from the state general
fund to the revenue sharing fund.
(3) For FY 2025-2026, the sum of $22,500,000 shall be allocated from the state general
fund to the revenue sharing fund.
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(4)Beginning FY 2026-2027 and each subsequent fiscal year after, no state general fund
monies shall be allocated to the revenue sharing fund.
Effective Jan. 1, 2023.
Bonded Debt
Present constitution provides political subdivisions authority to incur debt by issuing
negotiable bonds and may pledge for payments the proceeds received from the revenue
sharing fund.
Proposed constitutional amendment repeals present constitution.
Effective Jan. 1, 2023.
Minimum Foundation Program
Present constitution (Art. VIII, Section 13) establishes the Minimum Foundation Program
(MFP), the process for establishing and allocating the cost of K-12 education. Proposed
constitution retains present constitution, but makes significant changes to how the program
works.
Present constitution requires the State Board of Elementary and Secondary Education
(BESE) to annually develop and adopt a formula to determine the cost of K-12 education in
all public elementary and secondary schools. Further requires the formula to equitably
allocate the funds to parish and city school systems.
Present constitution provides that every city and parish school system must contribute to the
cost of the program, but requires the state to pay the difference between the total cost and
the local portion.
For fiscal years 2023-2024 and after, proposed constitutional amendment places maximum
caps on the amount of state general fund monies that may be appropriated to fund the state's
share of the cost of the MFP and requires city and parish school systems to pay the
remainder of the cost.
Proposed constitutional amendment further requires BESE's proposed formula to provide
for distribution of the state portion of the cost in a way that results in cities, parishes, and
other local school systems with lower total taxable ad valorem property values receiving
more state funding than cities, parishes, and other local school systems with higher total
taxable ad valorem property values.
Present constitutional amendment places maximum caps on the amount of ad valorem taxes
that parish and city school districts may levy to fund their portion of the annual MFP cost.
Proposed constitutional amendment repeals these caps.
Proposed constitution establishes the following maximums on the state's use of general fund
monies to fund the annual MFP cost:
(1)For FY 2023-2024, no more than $3,575,000,000.
(2)For FY 2024-2025, no more than $3,253,000,000.
(3)For FY 2025-2026, no more than $2,932,000,000.
(4)For FY 2026-2027, no more than $2,610,000,000.
For each fiscal year after 2026-2027, the maximum amount of state general fund monies is
capped at $2,610,000,000. Proposed constitutional amendment provides the legislature with
the authority to increase this maximum by up to 2% through adoption of an increased
amount in the general appropriation bill. Once an increase has been adopted, it shall
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constitute the new maximum and may in turn be increased by 2% in the future, at the
legislature's discretion, as provided in proposed constitutional amendment.
Present constitution prohibits reduction of any state general fund appropriation for the MFP
cost, outside of certain circumstances. Proposed constitutional amendment retains present
constitution.
Present constitution provides that if the legislature fails to approve BESE's most recently
approved MFP formula, the last formula adopted by BESE and approved by the legislature
shall be used for determination of the cost and for allocations of funds appropriated.
Proposed constitutional amendment further provides that the maximum state funding
amounts established in proposed constitutional amendment shall apply to any formula that
becomes effective, regardless of whether the formula was established prior to the effective
date of proposed constitutional amendment.
Present constitution authorizes parishes to levy an ad valorem tax to fund their required
contribution to the annual cost of the MFP as required by present constitution. Provides that
such millages are capped as five mills on the dollar for every parish except Orleans and 13
mills on the dollar for Orleans.
Proposed constitution authorizes each city, parish, or other local public school board
operating a separate system of public schools to levy an ad valorem tax to fund its share of
the annual MFP cost. Provides that for the tax year beginning January 1, 2023, the tax shall
be at a millage rate sufficient to generate income at least equal to:
(1)The total amount of revenue generated by the ad valorem taxes levied by the city,
parish, or other local public school district for the last complete tax year prior to the
effective date of proposed constitution.
(2)An amount sufficient to fund the difference between what the district receives
pursuant to proposed constitution and the MFP cost.
Provides that any tax levied pursuant to this provision may not exceed 4 years and may be
levied without a vote of the electors of the district.
Further provides that for the tax year beginning January 1, 2027, and continuing each year
thereafter, the city, parish, or other local public school board may levy an ad valorem tax
sufficient to fund its share of the MFP cost, but the levy must be approved by a majority of
the electors and the duration of such levy may not exceed 10 years.
Effective Jan. 1, 2023.
(Amends Const. Art. VI, §§26(A)-(C), 27, and 29, Art. VII, §§4(A), 11(C), 18(C) and (F)(1),
20(A)(1), 21(B) and (F), and 26(B), and Art. VIII, §(13)(B) and (C); Adds Const. Art. VI,
§26.1 and Art. VII, §§21(O) and 26(F); Repeals Const. Art. VI, §26(E) and Art. VII, §§2.2,
21(C)(10) and (12), and 26(E))
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