Requires the appropriation of certain tax expenditures (Item #47)
The passing of HB 65 would fundamentally change how income and franchise tax credits and rebates are managed in Louisiana. By requiring that these expenditures be explicitly appropriated, the bill potentially limits the fiscal burden of tax credits on the state budget. It also aims to impose consistency in the management of such expenditures, as agencies will need to establish specific rules on how these credits and rebates are allocated. Additionally, periodic evaluations of these incentive expenditures will be mandated, conducted at least once every five years, ensuring continued oversight and assessment of their effectiveness on state revenues.
House Bill 65 amends existing laws by mandating the appropriation of income and franchise tax expenditures within the executive budget and the General Appropriation Bill, starting in the fiscal year 2018-2019. This bill aims to enhance fiscal transparency and accountability by ensuring that all tax credits and rebates granted by state agencies are backed by appropriated funds. Specifically, it requires that the allocated amount for each tax credit or rebate must be detailed alongside the appropriations for the specific agency administering the program. This legislative move is significant as it seeks to limit the total amount of tax expenditures granted to taxpayers based on what has been approved in the state's budget.
The sentiment expressed regarding HB 65 has been largely supportive among fiscal conservatives who advocate for more stringent budget controls and accountability in tax expenditures. Supporters argue that this bill will help curb excessive and unaccounted-for spending through tax credits, potentially leading to a more sustainable fiscal environment for the state. However, there are concerns raised by some legislators and advocacy groups who fear that limiting the availability of tax credits could stifle economic growth and innovation by making it more difficult for businesses to access necessary financial incentives.
Notably, discussions surrounding the implementation of HB 65 raised concerns regarding its potential impact on economic development. Opponents suggest that while the intention behind enforcing budget appropriations is sound, it may inadvertently restrict the state’s ability to attract new businesses through flexible tax incentive programs. The debate highlights a fundamental tension between ensuring fiscal responsibility and promoting an environment conducive to business growth, as well as the efficacy of fixed appropriations in responding to the dynamic needs of the business community.