La. Senate bill would make industrial tax breaks permanent
BATON ROUGE (The Center Square) – Legislation to make permanent changes to Louisiana’s Industrial Tax Exemption Program (ITEP) that Governor John Bel Edwards implemented by executive order in 2016 authorized the Senate Committee on Revenue and tax affairs.
The committee approved Senate Bill 151sponsored by Sen. Rogers Pope, R-Denham Springs, No Objection Monday to enshrine ITEP changes made by executive order in Louisiana’s constitution.
The amendments reduce tax relief from 100% previously to 80% today, and give local taxing authorities, including school boards, sheriff’s offices and local government boards where industrial facilities are located, the ability to approve or reject tax exemptions.
“In my opinion, it’s not that controversial,” Pope told the committee. “It’s about protecting the authority that local governments have to give their local property tax money to business and industry, or a small part of it, anyway.
For years, the Louisiana Board of Commerce and Industry was the sole entity responsible for approving or rejecting 100% ITEP exemptions, and virtually all exemptions have been approved. Changes to Edwards’ executive order allowed local tax authorities to approve or deny exemptions for a portion of tax revenue, although local officials told the committee that most requests were still approved.
Pope said the intention of the bill is to protect changes from future administrations that could easily repeal Edwards. Executive Decree enshrining changes in the state constitution. This process requires two-thirds approval in both houses of the Legislative Assembly, as well as voter approval.
SB 151 limits exemptions to 5 years and requires companies to meet all terms of the agreement for an extension. It also requires the Board of Trade and Industry to provide a cost-benefit analysis for each ITEP exemption offered to local governments.
Many ward presidents, as well as school, town and sheriff officials testified in support of the bill, which they said would codify the changes to bring continuity and predictability to the ITEP program. Capping the ITEP exemption at 80% also brought more money into local coffers, they said.
“Now we’re getting 20%, which we never got before,” West Baton Rouge Parish President Riley Berthelot said. “It was the state, we had no voice. So now I think it’s good that we can actually see some of the money.
The changes allow local officials to meet with company officials to review projects based on their impacts on schools, traffic, the environment and jobs, he said.
“Continuity and predictability is something these companies are looking for and if we enshrine that in the constitution, I think that goes a long way,” said St. Bernard Parish President Guy McInnis, who sits in Louisiana. Board of Commerce and Industry.
The bill is also supported by the Louisiana Assessor’s Association, Louisiana Progress Action, Police Jury Association of Louisiana, Louisiana School Boards Association, Together Baton Rouge, Professional Fire Fighters Association of Louisiana, as well as numerous officials representing the police. , schools, and parishes.
Business interests, including the Louisiana Association of Business and Industry (LABI), the Louisiana Chemical Association, the Louisiana Oil & Gas Association, the Louisiana Mid-continent Oil and Gas Association, and representatives of oil and gas companies and the construction trades and entrepreneurs opposed the bill.
Jim Patterson, LABI’s vice president of government relations, told the committee that enshrining the changes in the state’s constitution was “highly discouraged” because it restricted “the agility of the state to respond to forces operating on the market”.
“It’s necessarily a program to make us competitive with other states that are looking for the same manufacturers we are,” he said.
Patterson argued that changes implemented in 2016 were already hurting the state’s ability to woo big business, citing ITEP requests that have steadily declined in recent years, from 788 requests in 2015 to 619 in 2016, to 197 in 2017 and 150 in 2018, and 146 in 2019. Those numbers continued to drop during the pandemic to 89 in 2020 and 86 in 2021, he said.
“I strongly urge you not to go down that road,” Patterson said.