HLS 23RS-109 ORIGINAL
2023 Regular Session
HOUSE BILL NO. 414
BY REPRESENTATIVE NELSON
Prefiled pursuant to Article III, Section 2(A)(4)(b)(i) of the Constitution of Louisiana.
TAX: (Constitutional Amendment) Provides relative to various sources of 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), 23.1, and 26(F) of the Constitution
6 of 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 taxes; to provide for parish ad
9 valorem tax millages; to provide relative to public financing of the cost of
10 uncompensated healthcare; to provide for uses of municipal ad valorem tax revenues;
11 to provide for municipal ad valorem tax millages; to provide for instances in which
12 approval of the electors is or is not required for millage rate increases; to provide for
13 the maximum sales and use tax rate to be levied by a local governmental subdivision
14 or school board; to provide for bond security; to prohibit taxes on net income and
15 capital; to provide for assessed valuation of certain lands for ad valorem tax
16 purposes; to provide for the homestead exemption, including for reductions in the
17 amount of such exemption; to provide relative to ad valorem tax exemptions for
18 property owned by certain nonprofit, religious, burial, cultural, or educational
19 organizations; to provide for industrial manufacturing establishment ad valorem tax
20 exemptions; to require reductions in millages in proportion to revenue changes
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1 resulting from additional types and portions of value of properties becoming subject
2 to ad valorem taxation; to provide for an ad valorem tax exemption for certain items
3 constituting business inventory; to provide relative to eligibility of certain entities for
4 capital outlay funding; to provide relative to the Revenue Sharing Fund; to provide
5 relative to the Minimum Foundation Program; to provide for definitions; to provide
6 for effectiveness; to provide for certain requirements and limitations; to provide for
7 submission of the proposed amendment to the electors; and to provide for related
8 matters.
9 Section 1. Be it resolved by the Legislature of Louisiana, two-thirds of the members
10elected to each house concurring, that there shall be submitted to the electors of the state of
11Louisiana, for their approval or rejection in the manner provided by law, a proposal to
12amend Article VI, Sections 26(A) through (C), 27, and 29 of the Constitution of Louisiana
13and to add Article VI, Section 26.1 of the Constitution of Louisiana, to read as follows:
14 §26. Parish Ad Valorem Tax
15 Section 26.(A) Parish Tax for General Purposes; Millage Limits; Increase.
16 The governing authority of a parish may levy annually an ad valorem tax for general
17 purposes not to exceed four eight mills on the dollar of assessed valuation. However,
18 in Orleans Parish the limitation shall be seven mills, and in Jackson Parish the
19 limitation shall be five mills. Millage rates may be increased in any parish when
20 approved by a majority of the electors voting thereon in an election held for that
21 purpose for general purposes up to the amount provided for in this Paragraph without
22 approval of the electors.
23 (B) Millage Increase Not for General Purposes. When the millage increase
24 is for other than general purposes, the proposition Millage rates may be increased in
25 any parish for purposes other than general purposes when approved by a majority of
26 the electors voting in an election held for that purpose. The proposition provided to
27 electors for the purpose of increasing a millage pursuant to this Paragraph shall state
28 the specific purpose or purposes for which the tax is to be levied and the length of
29 time the tax is to remain in effect. All proceeds of the tax levied pursuant to this
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1 Paragraph shall be used solely for the purpose or purposes set forth in the
2 proposition.
3 (C) Parish Tax in Municipality. The amount of the parish tax for general
4 purposes which any parish, except Orleans Parish, may levy, without a vote of the
5 electors, on property located wholly within any municipality which has a population
6 exceeding one thousand inhabitants according to the last federal decennial census,
7 or other census authorized by law, and which provides and maintains a system of
8 street paving, shall not exceed one-half the tax levy for general purposes.
9 * * *
10 §26.1. Local Responsibility for Uncompensated Healthcare Costs
11 Section 26.1.(A) Responsibility for uncompensated care provided by a
12 hospital shall be borne by the governing authority of the parish in which the hospital
13 that delivered the care is physically located. The governing authority of each parish
14 may levy annually an ad valorem tax for the purposes of paying the cost provided in
15 this Section. Nothing in this Section shall be construed to require the governing
16 authority to cover the full cost of the care. The initial levy of the ad valorem tax
17 authorized pursuant to this Section shall equal an amount sufficient to provide the
18 same level of uncompensated care funding as the hospitals in the parish received in
19 the last full fiscal year immediately prior to the effective date of this Section. The
20 millage rate may be modified once the initial levy expires, and any renewal of the
21 levy shall require approval by a majority of the electors in the parish voting in an
22 election held for that purpose.
23 (B) For purposes of this Section, "uncompensated care" shall mean the
24 difference between the amount billed by a hospital for services rendered to a patient
25 and the amount of payment received, if any.
26 §27. Municipal Ad Valorem Tax
27 Section 27.(A) Municipal Tax for General Purposes; Millage Limits;
28 Increase. The governing authority of a municipality may levy annually an ad
29 valorem tax for general purposes not to exceed seven fourteen mills on the dollar of
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1 assessed valuation. However, if a municipality, by its charter or by law, is exempt
2 from payment of parish taxes or, under legislative or constitutional authority,
3 maintains its own public schools, it may levy an annual tax not to exceed ten twenty
4 mills on the dollar of assessed valuation. Millage rates may be increased in any
5 municipality when approved by a majority of the electors voting thereon in an
6 election held for that purpose for general purposes up to the amounts provided for
7 in this Paragraph without approval of the electors.
8 (B) Millage Increase Not for General Purposes. When the millage increase
9 is for other than general purposes, the proposition Millage rates may be increased in
10 any municipality for purposes other than general purposes when approved by a
11 majority of the electors voting in an election held for that purpose. The proposition
12 provided to electors for purposes of increasing a millage pursuant to this Paragraph
13 shall state the specific purpose or purposes for which the tax is to be levied and the
14 length of time the tax is to remain in effect. All proceeds of the tax levied pursuant
15 to this Paragraph shall be used solely for the purpose or purposes set forth in the
16 proposition.
17 (C) Exception. This Section shall not apply to the city of New Orleans.
18 * * *
19 §29. Local Governmental Subdivisions and School Boards; Sales Tax
20 Section 29.(A) Sales Tax Authorized. Except as otherwise authorized in a
21 home rule charter as provided for in Section 4 of this Article, the governing authority
22 of any local governmental subdivision or school board may levy and collect a tax
23 upon the sale at retail, the use, the lease or rental, the consumption, and the storage
24 for use or consumption, of tangible personal property and on sales of services as
25 defined by law, if approved by a majority of the electors voting thereon in an election
26 held for that purpose. The total rate thereof, when combined with the rate of all other
27 sales and use taxes, exclusive of state sales and use taxes, levied and collected within
28 any local governmental subdivision, shall not exceed three percent.
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1 (B) Additional Sales Tax Authorized. However, the legislature, by general
2 or by local or special law, may authorize the imposition of additional sales and use
3 taxes by local governmental subdivisions or school boards, if approved by a majority
4 of the electors voting thereon in an election held for that purpose.
5 (C) Bonds; Security. Nothing in this Section shall affect any sales or use tax
6 authorized or imposed on the effective date of this constitution or prior to an
7 amendment to this Section, or affect or impair the security of any bonds payable
8 from the proceeds of the tax.
9 (D) (C) Exemptions; Protection of Bonds. Except when bonds secured
10 thereby have been authorized, the legislature may provide for the exemption or
11 exclusion of any goods, tangible personal property, or services from sales or use
12 taxes only pursuant to one of the following:
13 (1) Exemptions or exclusions uniformly applicable to the taxes of all local
14 governmental subdivisions, school boards, and other political subdivisions whose
15 boundaries are not coterminous with those of the state.
16 (2) Exemptions or exclusions applicable to the taxes of the state or
17 applicable to political subdivisions whose boundaries are coterminous with those of
18 the state, or both.
19 (3) Exemptions or exclusions uniformly applicable to the taxes of all the tax
20 authorities in the state.
21 Section 2. Be it resolved by the Legislature of Louisiana, two-thirds of the members
22elected to each house concurring, that there shall be submitted to the electors of the state of
23Louisiana, for their approval or rejection in the manner provided by law, a proposal to
24amend Article VII, Sections 4(A), 18(C) and (F)(1), 20(A)(1), 21(B) and (F), and 26(B) of
25the Constitution of Louisiana and to add Article VII, Sections 21(O), 23.1, and 26(F) of the
26Constitution of Louisiana, to read as follows:
27 §4. Income Tax; Severance Tax; Political Subdivisions
28 Section 4.(A) Income Tax. Equal and uniform taxes may be levied on net
29 incomes, and these taxes may be graduated according to the amount of net income.
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1 However, the maximum state individual rate shall not exceed four and three-quarters
2 percent for tax years beginning after December 31, 2021. Federal income taxes paid
3 may be allowed as a deductible item in computing state income taxes for the same
4 period as provided by law. No tax shall be levied on net income or capital after
5 December 31, 2023.
6 * * *
7 §18. Ad Valorem Taxes
8 Section 18.
9 * * *
10 (C) Use Value. Bona fide agricultural, horticultural, marsh, and timber
11 lands, as defined by general law, shall be assessed for tax purposes at ten percent of
12 use value rather than fair market value. The legislature may provide by law similarly
13 for buildings of historic architectural importance.
14 * * *
15 (F) Reappraisal. (1) All property subject to taxation shall be reappraised and
16 valued annually in accordance with this Section, at intervals of not more than four
17 years.
18 * * *
19 §20. Homestead Exemption
20 Section 20.(A) Homeowners.
21 (1)(a) The bona fide homestead, consisting of a tract of land or two or more
22 tracts of land even if the land is classified and assessed at use value pursuant to
23 Article VII, Section 18(C) of this constitution, with a residence on one tract and a
24 field with or without timber on it, pasture, or garden on the other tract or tracts, not
25 exceeding one hundred sixty acres, buildings and appurtenances, whether rural or
26 urban, owned and occupied by any person or persons owning the property in
27 indivision, shall be exempt from state, parish, and special ad valorem taxes to the
28 extent of seven thousand five hundred dollars of the assessed valuation. Except as
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1 provided in Subsubparagraph (b) of this Subparagraph, the extent of the exemption
2 shall be as follows:
3 (i) Beginning January 1, 2024, to the extent of six thousand one hundred
4 twenty-five dollars of the assessed valuation.
5 (ii) Beginning January 1, 2025, to the extent of four thousand seven hundred
6 fifty dollars of the assessed valuation.
7 (iii) Beginning January 1, 2026, to the extent of three thousand three hundred
8 seventy-five dollars of the assessed valuation.
9 (iv) Beginning January 1, 2027, to the extent of two thousand dollars of the
10 assessed valuation.
11 (b) Any person who was entitled to and was granted the special assessment
12 level set forth in Section 18(G) of this Article prior to January 1, 2024, shall be
13 exempt from state, parish, and special ad valorem taxes to the extent of seven
14 thousand five hundred dollars of the assessed valuation. Any such person shall
15 remain entitled to the seven thousand five hundred dollar exemption if he remains
16 qualified for and receives the special assessment level set forth in Paragraph (G) of
17 Section 18 of this Article.
18 (c) The same homestead exemption shall also fully apply to the primary
19 residence, including a mobile home, which serves as a bona fide home and which is
20 owned and occupied by any person or persons owning the property in indivision,
21 regardless of whether the homeowner owns the land upon which the home or mobile
22 home is sited; however, this homestead exemption shall not apply to the land upon
23 which such primary residence is sited if the homeowner does not own the land.
24 * * *
25 §21. Other Property Exemptions
26 Section 21. In addition to the homestead exemption provided for in Section
27 20 of this Article, the following property and no other shall be exempt from ad
28 valorem taxation:
29 * * *
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1 (B)(1)(a)(i) Property owned by a nonprofit corporation or association
2 organized and operated that is used exclusively for religious, dedicated places of
3 burial, charitable, health, welfare, fraternal cultural, or educational purposes,. The
4 property shall be owned by a nonprofit corporation or association, no part of the net
5 earnings of which inure to the benefit of any private shareholder or member thereof
6 and which is declared to be exempt from federal or state income tax; and. The
7 legislature may provide for additional restrictions on the conditional eligibility for
8 the exemption provided for in this Paragraph; however, the legislature may not
9 provide for any property tax exemptions in addition to those provided in this Section.
10 Exemptions shall not be defined in a way that results in the exemption of a single
11 entity from ad valorem property tax.
12 (ii) medical equipment leased for a term exceeding five years to such a
13 nonprofit corporation or association which owns or operates a small, rural hospital
14 and which uses the equipment solely for health care purposes at the hospital,
15 provided that the property shall be exempt only during the term of the lease to such
16 corporation or association, and further provided that "small, rural hospital" shall
17 mean a hospital which meets all of the following criteria:
18 (aa) It has less than fifty Medicare-licensed acute care beds.
19 (bb) It is located in a municipality with a population of less than ten
20 thousand which has been classified as an area with a shortage of health manpower
21 by the United States Health Service; and
22 (b) property leased to such a nonprofit corporation or association for use
23 solely as housing for homeless persons, as defined by regulation adopted by the tax
24 commission or its successor provided that the term of such lease shall be for at least
25 five years, that as a condition of entering into the lease the property be in compliance
26 with all applicable health and sanitation codes for use as housing for homeless
27 persons, that the lease shall provide that compensation to be paid the lessor shall not
28 exceed one dollar per year, and that such contract of lease shall recite that the
29 property shall be used exclusively for the purpose of housing the homeless, and
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1 further provided that at such time as the property is no longer used solely as housing
2 for homeless persons, the property shall no longer be exempt from taxation;
3 (2) property of a bona fide labor organization representing its members or
4 affiliates in collective bargaining efforts; and
5 (3) property of an organization such as a lodge or club organized for
6 charitable and fraternal purposes and practicing the same, and property of a nonprofit
7 corporation devoted to promoting trade, travel, and commerce, and also property of
8 a trade, business, industry or professional society or association, if that property is
9 owned by a nonprofit corporation or association organized under the laws of this
10 state for such purposes.
11 (2) None of the property or any portion of the property listed in Paragraph
12 (B) this Paragraph shall be exempt if owned, operated, leased, held, or used for
13 commercial or other non-exempt purposes unrelated to the exempt purposes of the
14 corporation or association. The exemption provided for in this Paragraph shall be
15 on a pro rata basis for the portion of property exclusively utilized for an exempt
16 purpose.
17 * * *
18 (F)(1) Notwithstanding any contrary provision of this Section, the State
19 Board of Commerce and Industry or its successor, with the approval of the governor,
20 may enter into contracts for the exemption from ad valorem taxes of a new
21 manufacturing establishment or an addition to an existing manufacturing
22 establishment, on such terms and conditions as the board, with the approval of the
23 governor, deems in the best interest of the state.
24 (2) The exemption shall be for an initial term of no more than five calendar
25 years, and may be renewed for an additional five years. All property exempted shall
26 be listed on the assessment rolls and submitted to the Louisiana Tax Commission or
27 its successor, but no taxes shall be collected thereon during the period of exemption.
28 (3) The terms "manufacturing establishment" and "addition" as used herein
29 mean a new plant or establishment or an addition or additions to any existing plant
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1 or establishment which engages in the business of working raw materials into wares
2 suitable for use or which gives new shapes, qualities or combinations to matter which
3 already has gone through some artificial process.
4 (4) Beginning January 1, 2024, new contracts and new renewals for an
5 exemption provided for in this Paragraph shall be prohibited.
6 * * *
7 (O)(1) Beginning January 1, 2024, items constituting business inventory,
8 including goods which are held for sale, goods in production or for ultimate
9 consumption in the production of goods or services for sale, and goods utilized in
10 marketing and distribution activities, referred to hereafter in this Paragraph as
11 "property", shall be exempt from ad valorem taxation in accordance with the
12 following provisions:
13 (a) For taxes payable in 2024, the value of the exemption shall be equal to
14 fifty percent of the assessed value of the property.
15 (b) For taxes payable in 2025, the value of the exemption shall be equal to
16 sixty-five percent of the assessed value of the property.
17 (c) For taxes payable in 2026, the value of the exemption shall be equal to
18 eighty percent of the assessed value of the property.
19 (d) For taxes payable in 2027 and thereafter, the value of the exemption shall
20 be equal to one hundred percent of the assessed value of the property.
21 (2) Notwithstanding any provision of this constitution to the contrary,
22 property for which the exemption authorized in this Paragraph has been claimed shall
23 not be treated as taxable property for purposes of any subsequent reappraisals and
24 valuation for millage adjustment purposes pursuant to Paragraph (B) of Section 23
25 of this Article.
26 * * *
27 §23.1. Change in Marsh Land Valuation Method, Homestead Exemption
28 Reductions, and Repeal of Other Property Exemptions; Adjustment of Ad
29 Valorem Tax Millages
30 Section 23.1.(A) In the year in which bona fide marsh lands are first assessed
31 for tax purposes at a percentage of fair market value rather than use value pursuant
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1 to an amendment to Paragraph (C) of Section 18 of this Article, the total amount of
2 ad valorem taxes collected by any taxing authority shall not be increased, because
3 of the change in the method of determining the assessed value of marsh lands, above
4 ad valorem taxes collected by that taxing authority in the year preceding the change
5 in the method of determining the assessed value of marsh lands. To accomplish this
6 result, each affected taxing authority, in the year in which bona fide marsh lands are
7 first assessed for tax purposes at a percentage of fair market value rather than use
8 value as provided in this Paragraph, shall adjust millages downward, and the
9 maximum authorized millages shall be decreased, without further voter approval, in
10 proportion to the amount of additional ad valorem tax revenue realized as a result of
11 the change in the method of determining the assessed valuation of marsh lands as
12 provided in this Paragraph. In ensuing years, such millages shall remain in effect
13 unless changed as permitted by this constitution.
14 (B) The total amount of ad valorem taxes collected by any taxing authority
15 in each year in which a reduction to the homestead exemption amount provided in
16 Subparagraph (A)(1) of Section 20 of this Article is implemented shall not be
17 increased, because of the reduction to the homestead exemption amount, above ad
18 valorem taxes collected by that taxing authority in the year preceding
19 implementation. To accomplish this result, each affected taxing authority, in each
20 year in which a reduction to the homestead exemption amount is implemented, shall
21 adjust millages downward, and the maximum authorized millages shall be decreased,
22 without further voter approval, in proportion to the amount of additional ad valorem
23 tax revenue realized as a result of the reduction to the homestead exemption amount.
24 After the final reduction to the homestead exemption amount provided in
25 Subparagraph (A)(1) of Section 20 of this Article is implemented, such millages
26 shall remain in effect unless changed as permitted by this constitution.
27 (C) In the year in which previously exempted property first becomes subject
28 to ad valorem taxation pursuant to the amendment or repeal of any provisions of
29 Paragraphs (B) or (C) of Section 21 of this Article, the total amount of ad valorem
30 taxes collected by any taxing authority shall not be increased, because of previously
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1 exempted property becoming subject to ad valorem taxation, above ad valorem taxes
2 collected by that taxing authority in the final year in which the property was
3 exempted from ad valorem taxation. To accomplish this result, each affected taxing
4 authority, in the year in which previously exempted property first becomes subject
5 to ad valorem taxation as provided in this Paragraph, shall adjust millages
6 downward, and the maximum authorized millages shall be decreased, without further
7 voter approval, in proportion to the amount of additional ad valorem tax revenue
8 realized as a result of previously exempted property becoming subject to ad valorem
9 taxation as provided in this Paragraph. In ensuing years, such millages shall remain
10 in effect unless changed as permitted by this constitution.
11 * * *
12 §26. Revenue Sharing Fund
13 Section 26.
14 * * *
15 (B) Annual Allocation. The For fiscal years commencing prior to Fiscal
16 Year 2024-2025, the sum of ninety million dollars is allocated annually from the
17 state general fund to the revenue sharing fund. The legislature may appropriate
18 additional sums to the fund. For Fiscal Year 2024-2025 and ensuing fiscal years, the
19 legislature shall allocate monies from the state general fund to the revenue sharing
20 fund in accordance with the provisions of Paragraph (F) of this Section.
21 * * *
22 (F) Notwithstanding any provision of this Section to the contrary, for Fiscal
23 Year 2024-2025, the sum of sixty-seven and one-half million dollars shall be
24 allocated from the state general fund to the revenue sharing fund. For Fiscal Year
25 2025-2026, the sum of forty-five million dollars shall be allocated from the state
26 general fund to the revenue sharing fund. For Fiscal Year 2026-2027, the sum of
27 twenty-two and one-half million dollars shall be allocated from the state general fund
28 to the revenue sharing fund. For Fiscal Year 2027-2028 and each fiscal year
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1 thereafter, no state general fund monies shall be allocated to the revenue sharing
2 fund.
3 Section 3. Be it resolved by the Legislature of Louisiana, two-thirds of the members
4elected to each house concurring, that there shall be submitted to the electors of the state of
5Louisiana, for their approval or rejection in the manner provided by law, a proposal to
6amend Article VII, Section 11(C) of the Constitution of Louisiana, to read as follows:
7 §11. Budgets
8 Section 11.
9 * * *
10 (C) Capital Budget. The governor shall submit to the legislature, at each
11 regular session, a proposed five-year capital outlay program and request
12 implementation of the first year of the program. Prior to inclusion in the
13 comprehensive capital budget which the legislature adopts, each capital improvement
14 project shall be evaluated through a feasibility study, as defined by the legislature,
15 which shall include an analysis of need and estimates of construction and operating
16 costs. The legislature shall provide by law for procedures, standards, and criteria for
17 the evaluation of such feasibility studies and shall set the schedule of submission of
18 such feasibility studies which shall take effect not later than December thirty-first
19 following the first regular session convening after this Paragraph takes effect. These
20 procedures, standards, and criteria for evaluation of such feasibility studies cannot
21 be changed or altered except by a separate legislative instrument approved by a
22 favorable vote of two-thirds of the elected members of each house of the legislature.
23 For those projects not eligible for funding under the provisions of Article VII,
24 Section 27 of this constitution, the request for implementation of the first year of the
25 program shall include a list of the proposed projects in priority order based on the
26 evaluation of the feasibility studies submitted. Capital outlay projects approved by
27 the legislature shall be made a part of the comprehensive state capital budget, which
28 shall be adopted by the legislature. Beginning July 1, 2024, no nongovernmental
29 entity project shall be eligible for capital outlay funding.
30 * * *
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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 Section 13.
8 * * *
9 (B) Minimum Foundation Program. (1) The State Board of Elementary and
10 Secondary Education, or its successor, shall annually develop and adopt a formula
11 which shall be used to determine the cost of a minimum foundation program of
12 education in all public elementary and secondary schools as well as to equitably
13 allocate the funds to parish and city school systems. The cost of the program shall
14 be shared by the state and each city, parish, and other local public school board as
15 provided in this Paragraph. Such The formula shall provide that cities, parishes, and
16 other local public school districts having lower total ad valorem property tax value
17 per student within their boundaries shall receive a higher proportionate share of the
18 state's contribution to program funding for a contribution by every city and parish
19 school system. Prior to approval of the formula by the legislature, the legislature
20 may return the formula adopted by the board to the board and may recommend to the
21 board an amended formula for consideration by the board and submission to the
22 legislature for approval.
23 (2)(a) For fiscal years prior to Fiscal Year 2024-2025, the The legislature
24 shall annually appropriate funds sufficient to fully fund the current cost to the state
25 of such a program as determined by applying the approved formula in order to insure
26 a minimum foundation of education in all public elementary and secondary schools.
27 (b) For Fiscal Year 2024-2025 through Fiscal Year 2027-2028, the
28 legislature shall appropriate the following amounts of state general fund monies to
29 fund the state's share of the program funding established pursuant to this Section:
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1 (i) For Fiscal Year 2024-2025, no more than three billion seven hundred
2 ninety-three million dollars.
3 (ii) For Fiscal Year 2025-2026, no more than three billion five hundred forty
4 million dollars.
5 (iii) For Fiscal Year 2026-2027, no more than three billion two hundred
6 eighty-seven million dollars.
7 (iv) For Fiscal Year 2027-2028, no more than three billion thirty-four million
8 dollars.
9 (c)(i) Except as provided in Item (ii) of this Subsubparagraph, for each fiscal
10 year after 2027-2028, the maximum amount of state general fund monies that may
11 be appropriated to fund the state's share of program funding shall be three billion
12 thirty-four million dollars.
13 (ii) The maximum amount established in Item (i) of this Subsubparagraph
14 may be increased by up to two percent at the discretion of the legislature through an
15 appropriation in the general appropriation bill. When an increase in the amount is
16 adopted, the new total amount shall constitute a new maximum for the purposes of
17 this Subsubparagraph. Each ensuing new maximum may also be increased by up to
18 two percent as provided in this Subsubparagraph.
19 (d) The difference between the total program cost to the city, parish, or other
20 local public school board, as applicable, and the amount of state funding it receives
21 each year pursuant to the formula shall be funded by the city, parish, or other local
22 public school board with self-generated revenues.
23 (e) Neither the governor nor the legislature may reduce such any
24 appropriation made pursuant to this Subparagraph, except that the governor may
25 reduce such appropriation using means provided in the act Act containing the
26 appropriation provided that any such reduction is consented to in writing by
27 two-thirds of the elected members of each house of the legislature. The funds
28 appropriated shall be equitably allocated to parish and city school systems according
29 to the formula as adopted by the State Board of Elementary and Secondary
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1 Education, or its successor, and approved by the legislature prior to making the
2 appropriation.
3 (3) Whenever the legislature fails to approve the formula most recently
4 adopted by the board, or its successor, the last formula adopted by the board, or its
5 successor, and approved by the legislature shall be used for the determination of the
6 cost of the minimum foundation program and for the allocation of funds
7 appropriated. The maximum state funding amounts established pursuant to
8 Subsubparagraphs (2)(b) and (c) of this Paragraph shall apply to any formula that
9 becomes effective, regardless of whether the formula was established prior to the
10 effective date of Subsubparagraphs (2)(b) and (c) of this Paragraph.
11 (C) Local Funds. Local funds for the support of elementary and secondary
12 schools shall be derived from the following sources:
13 First: Each parish school board, Orleans Parish excepted, and each
14 municipality or city school board (1)(a) For the taxable years beginning January 1,
15 2024, January 1, 2025, January 1, 2026, and January 1, 2027, each city, parish, or
16 other local public school board actually operating, maintaining, or supporting a
17 separate system of public schools, shall may levy annually an ad valorem
18 maintenance tax not to exceed five mills on the dollar of assessed valuation on
19 property subject to such taxation within the respective parish, or city, respectively
20 or local public school district without the approval of the electors. The millage rate
21 of any tax levied pursuant to the provisions of this Subparagraph shall be sufficient
22 to generate an amount of revenue at least equal to the sum of the following:
23 (i) The total amount of revenue generated by the ad valorem taxes levied by
24 the city, parish, or other local public school board for the last complete tax year
25 immediately prior to the effective date of this Subparagraph.
26 (ii) An amount equal to the difference between the total amount of state
27 funds the city, parish, or other local public school board received pursuant to the
28 provisions of this Section in the last complete fiscal year immediately prior to the
29 effective date of this Subparagraph and the total amount of state funds the city,
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1 parish, or other local public school board received pursuant to the provisions of this
2 Section.
3 (b) The duration of any tax levied pursuant to the provision of this
4 Subparagraph shall not exceed four years.
5 Second: The Orleans Parish School Board shall levy annually a tax not to
6 exceed thirteen mills on the dollar of the assessed valuation of property within the
7 city of New Orleans assessed for city taxation, and shall certify the amount of the tax
8 to the governing authority of the city. The governing authority shall have the tax
9 entered on city tax rolls. The tax shall be collected in the manner, under the
10 conditions, and with the interest and penalties prescribed by law for city taxes. The
11 money thus collected shall be paid daily to the Orleans Parish School Board.
12 (2) For the taxable year beginning January 1, 2028, and continuing each year
13 thereafter, each city, parish, or other local public school board actually operating,
14 maintaining, or supporting a separate system of public schools may levy annually an
15 ad valorem tax on property within the respective parish, city, or local public school
16 district with the approval of a majority of the electors of the parish, city, or local
17 public school district, as applicable, in an election held for that purpose. The millage
18 rate of any tax levied pursuant to the provisions of this Subparagraph shall be
19 sufficient to generate an amount of revenue at least equal to the amount required
20 pursuant to Subsubparagraph (B)(2)(d) of this Section. The duration of any tax
21 levied pursuant to the provisions of this Subparagraph shall not exceed ten years.
22 Third: (3) For giving additional support to public elementary and secondary
23 schools, any parish, school district, or subschool district, or any municipality or city
24 school board which supports a separate city system of public schools may levy an ad
25 valorem tax for a specific purpose, when authorized by a majority of the electors
26 voting in the parish, municipality, district, or subdistrict in an election held for that
27 purpose. The amount, duration, and purpose of the tax shall be in accord with any
28 limitation imposed by the legislature.
29 * * *
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1 Section 5. 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 repeal
4Article VI, Section 26(E) and Article VII, Sections 2.2, 21(C)(10) and (12), and 26(E) of
5the Constitution of Louisiana.
6 Section 6.(A) Be it further resolved that the provisions of the amendment contained
7in Sections 1, 2, 4, and 5 of this Joint Resolution shall become effective January 1, 2024, and
8shall be applicable to taxable years beginning on or after January 1, 2024.
9 (B) Be it further resolved that the provisions of the amendment contained in Section
103 of this Joint Resolution shall become effective July 1, 2024.
11 Section 7. Be it further resolved that this proposed amendment shall be submitted
12to the electors of the state of Louisiana at the statewide election to be held on October 14,
132023.
14 Section 8. Be it further resolved that on the official ballot to be used at the election,
15there shall be printed a proposition, upon which the electors of the state shall be permitted
16to vote YES or NO, to amend the Constitution of Louisiana, which proposition shall read as
17follows:
18 Do you support an amendment to repeal the state income tax; to prohibit
19 taxes on net income and capital; to raise the limit on property tax increases
20 that parishes and municipalities can impose for general purposes without a
21 vote of the electorate; to require parishes to assume the costs of
22 uncompensated health care delivered by hospitals and to levy a tax to pay for
23 such care; to limit the rate of sales and use taxes that local governments and
24 school boards may levy; to remove marsh lands from lands eligible for use
25 valuation for purposes of property tax; to decrease the value of the homestead
26 exemption over four years; to preserve the full homestead exemption for
27 people who qualify for a special assessment level; to repeal certain property
28 tax exemptions for property owned by charitable, religious, health, or welfare
29 organizations; to provide a property tax exemption for certain property that
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1 is used exclusively for religious, burial, cultural, or educational purposes; to
2 prohibit new industrial tax exemption program contracts and the renewal of
3 the program's existing contracts; to exempt certain items constituting
4 business inventory from property taxation; to prohibit nongovernmental
5 entities from obtaining funding through the state's capital outlay program; to
6 reduce the amount of money the state appropriates to parishes through the
7 Revenue Sharing Fund; to reduce the limit on state funding provided to the
8 minimum foundation program for K-12 education; to require city, parish, and
9 other local public school boards to cover the nonstate portion of required
10 minimum foundation program funding; and to authorize city, parish, and
11 other local public school boards to levy ad valorem taxes to support
12 elementary and secondary schools? (Effective January 1, 2024, except for
13 provisions repealing nongovernmental entity capital outlay funding which are
14 effective July 1, 2024) (Amends Article VI, Sections 26(A) through (C), 27,
15 and 29, Article VII, Sections 4(A), 11(C), 18(C) and (F)(1), 20(A)(1), 21(B)
16 and (F), and 26(B), and Article VIII, Section (13)(B) and (C); Adds Article
17 VI, Section 26.1 and Article VII, Sections 21(O), 23.1, and 26(F); Repeals
18 Article VI, Section 26(E), Article VII, Sections 2.2, 21(C)(10) and (12), and
19 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 414 Original 2023 Regular Session Nelson
Abstract: Provides relative to state and local revenues derived from ad valorem taxes, sales
and use taxes, income taxes, and taxes on capital; provides further for the state
capital outlay budget, bonded debt, the homestead exemption, the Minimum
Foundation program, local funding for the support of public education, and local
funding of uncompensated health care delivered by hospitals.
Ad Valorem Tax – Parishes
Present constitution authorizes the governing authority of a parish to levy an ad valorem tax
for general purposes not to exceed four mills on the dollar of assessed valuation. Permits
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HB NO. 414
increases in millage rates when approved by a majority of electors voting in an election held
for that purpose.
Present constitution provides that when a parish governing authority increases a millage
other than for general purposes, the increase shall go to the electors for approval and the
proposition must state the specific purpose for which the tax is to be levied and the length
of time for which the tax is to remain in effect.
Proposed constitutional amendment raises the maximum total millage that may be levied for
general purposes by a parish governing authority from four mills to eight mills. Further
provides that a parish governing authority may raise the total millage amount up to the limit
provided in proposed constitutional amendment without approval of the voters.
Proposed constitutional amendment repeals present constitution providing special millage
limits for Jackson Parish and for Orleans Parish.
Proposed constitutional amendment requires that responsibility for uncompensated care
provided by a hospital shall be borne by the governing authority of the parish in which the
hospital that delivered the care is physically located. Authorizes parish governing authorities
to levy an ad valorem tax for the purposes of paying the cost of such care.
Effective Jan. 1, 2024.
Ad Valorem Tax – Municipalities
Present constitution authorizes the governing authority of a municipality to levy an ad
valorem tax for general purposes not to exceed seven mills on the dollar of assessed
valuation. Provides that 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 that when a municipality's governing authority increases the
millage other than for general purposes, the increase shall go to the electors for approval and
the proposition must state the specific purpose for which the tax is to be levied and the
length of time for which the tax is to remain in effect.
Proposed constitutional amendment raises the maximum total millage that may be levied for
general purposes by a municipality's governing authority from seven mills to 14 mills.
Further provides that the governing authority of a parish may raise the total millage amount
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, 2024.
State Sales and Use Tax
Present constitution exempts sales or purchases of food for home consumption, residential
utilities, and prescription drugs from the state sales and use tax. Proposed constitutional
amendment repeals present constitution.
Effective Jan. 1, 2024.
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Sales and Use Taxes of Local Governmental Subdivisions and School Boards
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 3%.
Proposed constitutional amendment retains present constitution.
Present constitution provides that the legislature, by general or by 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 the electors voting on the tax increase in an
election held for that purpose. Proposed constitutional amendment repeals present
constitution.
Present constitution provides that no changes in a sales tax imposed by a local governmental
subdivision or school board shall affect or impair the security of any bonds payable from
proceeds of that tax. Proposed constitutional amendment retains present constitution.
Effective Jan. 1, 2024.
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 after Dec. 31, 2023.
Effective Jan. 1, 2024.
Capital Outlay
Present constitution requires the governor to submit to the legislature, at each regular
session, a proposed five-year capital outlay program. Further provides that general
obligation bonds may fund both state and nongovernmental entity projects.
Proposed constitutional amendment provides that, beginning July 1, 2024, no
nongovernmental entity project shall be eligible for capital outlay funding; otherwise, retains
present constitution relative to the state's capital budget.
Effective July 1, 2024.
Ad Valorem Tax – General Provisions
Present constitution provides that property subject to ad valorem taxation shall be
reappraised and valued at intervals of not more than four years. Proposed constitutional
amendment revises present constitution to provide instead that property shall be appraised
and valued annually.
Present constitution provides that bona fide agricultural, horticultural, marsh, and timber
lands shall be assessed for ad valorem tax purposes based upon a percentage of use value
rather than a percentage of fair market value. Proposed constitutional amendment revises
present constitution to cause marsh lands to be assessed based upon a percentage of fair
market value.
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Present constitution provides for ad valorem tax exemptions for property owned by nonprofit
organizations operated exclusively for religious, burial, charitable, health, welfare, fraternal,
or educational purposes. Proposed constitutional amendment revises present constitution
to exempt from ad valorem taxation only property of nonprofit organizations that is used
exclusively for religious, cultural, or educational purposes.
Proposed constitutional amendment repeals present constitution exempting the following
property from ad valorem taxation:
(1)Certain medical equipment leased to a nonprofit organization which owns or
operates a small, rural hospital as defined in present constitution.
(2)Property leased to a nonprofit organization for use solely as housing for homeless
persons, subject to certain conditions provided in present constitution.
(3)Property of a bona fide labor organization representing its members or affiliates in
collective bargaining efforts.
(4)Property of a nonprofit organization such as a lodge or club organized for charitable
and fraternal purposes.
(5)Property of a nonprofit organization devoted to promoting trade, travel, and
commerce.
(6)Property of a trade, business, industry, or professional society or association owned
by a nonprofit organization.
(7)Irrevocably dedicated places of burial held by individuals for purposes of burial of
themselves or members of their families.
(8)Property used for cultural, Mardi Gras carnival, or civic activities and not operated
for profit to the owners.
Present constitution authorizes the State Board of Commerce and Industry, with the approval
of the governor, to enter into contracts for 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 that,
beginning on Jan. 1, 2024, new contracts and renewals of existing contracts for such
exemptions shall be prohibited.
Proposed constitutional amendment requires reductions in millages in proportion to revenue
changes resulting from additional types of properties, and portions of value of properties,
becoming subject to ad valorem taxation pursuant to proposed constitutional amendment.
Effective Jan. 1, 2024.
Ad Valorem Tax – Business Inventory Exemption
Proposed constitutional amendment provides that, beginning January 1, 2024, items
constituting business inventory, including goods which are held for sale, goods in production
or for ultimate consumption in the production of goods or services for sale, and goods
utilized in marketing and distribution activities, shall be exempt from ad valorem taxation
as follows:
(1)For taxes payable in 2024, the value of the exemption shall be equal to 50% of the
assessed value of the property.
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(2)For taxes payable in 2025, the value of the exemption shall be equal to 65% of the
assessed value of the property.
(3)For taxes payable in 2026, the value of the exemption shall be equal to 80% of the
assessed value of the property.
(4)For taxes payable in 2027 and thereafter, the value of the exemption shall be equal
to 100% of the assessed value of the property.
Proposed constitutional amendment stipulates that property for which the ad valorem tax
exemption authorized therein has been claimed shall not be treated as taxable property for
purposes of any subsequent reappraisals and valuation for millage adjustment purposes
pursuant to present constitution relative to adjustment of ad valorem tax millages (Const.
Art. VII, §23(B)).
Effective Jan. 1, 2024.
Ad Valorem Tax – Homestead Exemption
Present constitution establishes a homestead exemption for certain owner-occupied property
which exempts $7,500 of the assessed value of that property from property tax.
Proposed constitutional amendment reduces the value of the homestead exemption over time
according to the following schedule:
(1)Beginning Jan. 1, 2024, the homestead exemption shall equal $6,125 of the assessed
value of the qualifying property.
(2)Beginning Jan. 1, 2025, the homestead exemption shall equal $4,750 of the assessed
value of the qualifying property.
(3)Beginning Jan. 1, 2026, the homestead exemption shall equal $3,375 of the assessed
value of the qualifying property.
(4)Beginning Jan. 1, 2027 the homestead exemption shall equal $2,000 of the assessed
value of the qualifying property.
Effective Jan. 1, 2024.
Revenue Sharing Fund
Present constitution creates the Revenue Sharing Fund as a special fund in the state treasury.
Provides that monies in the fund shall be distributed annually to parishes on the basis of
population and number of homesteads in each parish in proportion to population and the
number of homesteads throughout the state. Requires that $90 million be allocated annually
from the state general fund to the Revenue Sharing Fund.
Proposed constitutional amendment revises present constitution to provide that the $90
million annual allocation to the Revenue Sharing Fund shall be effective only for fiscal years
commencing prior to FY 2024-2025. Requires that allocations in ensuing years shall be
reduced as follows:
(1)For FY 2024-2025, the sum of $67,500,000 shall be allocated from the state general
fund to the revenue sharing fund.
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(2)For FY 2025-2026, the sum of $45,000,000 shall be allocated from the state general
fund to the revenue sharing fund.
(3) For FY 2026-2027, the sum of $22,500,000 shall be allocated from the state general
fund to the revenue sharing fund.
(4)For FY 2027-2028 and each fiscal year thereafter, no state general fund monies shall
be allocated to the revenue sharing fund.
Present constitution authorizes political subdivisions to incur debt by issuing negotiable
bonds and to pledge for the payment of such bonded debt monies derived, or to be derived,
from the Revenue Sharing Fund. Proposed constitutional amendment repeals present
constitution.
Effective Jan. 1, 2024.
Minimum Foundation Program
Present constitution establishes the Minimum Foundation Program (MFP) which provides
for the establishment, allocation, and funding of the cost of K-12 education in public
elementary and secondary schools. 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. Requires further that the formula
equitably allocate funding to parish and city school systems.
Proposed constitutional amendment retains the framework for the MFP provided in present
constitution but makes substantial changes to provisions for funding of the program by the
state and local governing authorities, respectively.
Proposed constitutional amendment provides that cities, parishes, and other local public
school districts having lower total property tax value per student within their boundaries
shall receive a higher proportionate share of the state's contribution to MFP funding.
For fiscal years 2024-2025 and thereafter, proposed constitutional amendment places the
limits listed below on the amount of state general fund monies that may be appropriated
annually to finance the state's share of the cost of the MFP. Requires city and parish school
systems to pay the remainder of the cost and authorizes levying of ad valorem taxes
necessary for such school systems to do so. Requires the legislature to appropriate the
following amounts of state general fund monies annually to fund the state's share of the
MFP:
(1)For FY 2024-2025, no more than $3,793,000,000.
(2)For FY 2025-2026, no more than $3,540,000,000.
(3)For FY 2026-2027, no more than $3,287,000,000.
(4)For FY 2027-2028, no more than $3,034,000,000.
Proposed constitutional amendment provides that for each fiscal year after FY 2027-2028,
the maximum amount of state general fund monies appropriated for the MFP shall be capped
at $3,034,000,000; but authorizes the legislature to increase this amount by up to 2% by
appropriating additional state general fund monies to the MFP in the general appropriation
bill. Provides that if such an increase occurs, the increased amount shall 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.
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Present constitution authorizes parishes to levy ad valorem taxes to fund their required
contribution to the annual cost of the MFP but places specific limits on the millages
associated with such taxes. Proposed constitutional amendment repeals these millage limits.
Proposed constitutional amendment requires that for the taxable years beginning Jan. 1,
2024, Jan. 1, 2025, Jan. 1, 2026, and Jan. 1, 2027, the ad valorem taxes imposed by city,
parish, and other local school boards for operating, maintaining, or supporting a system of
public schools shall be at millage rates sufficient to generate revenues at least equal to the
sum of the following:
(1)The total amount of revenue generated by the ad valorem taxes levied by the city,
parish, or other local public school board for the last complete tax year immediately
prior to the effective date of proposed constitutional amendment.
(2)An amount equal to the difference between the total amount of state funds the city,
parish, or other local public school board received pursuant to the provisions of
proposed constitutional amendment in the last complete fiscal year immediately prior
to the effective date of proposed constitutional amendment and the total amount of
state funds it received pursuant to proposed constitutional amendment.
Proposed constitutional amendment provides that the duration of a local ad valorem tax
levied for operating, maintaining, or supporting a system of public schools shall not exceed
four years, and that such tax may be levied without a vote of the electors of the district.
Proposed constitutional amendment provides that for the taxable year beginning Jan. 1,
2028, and continuing each year thereafter, a city, parish, or other local public school board
may levy an ad valorem tax sufficient to fund its share of the MFP cost. Stipulates, however,
that 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, 2024.
Submission of Amendment to Voters
Provides for submission of proposed constitutional amendment to the voters at the statewide
election to be held Oct. 14, 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), 23.1, 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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