The public will have its first chance to weigh in on the state’s proposed changes to the Industrial Tax Exemption Program tomorrow morning in Baton Rouge.
The Louisiana Board of Commerce and Industry will hold the first of two public hearings on the ITEP changes at 9:00 a.m. at the Louisiana State Employees’ Retirement System building on United Plaza Boulevard. A second public hearing will be held June 25 at the LaSalle Building downtown.
Following the hearings and a written comment period, the board will vote on any changes at its June 27 meeting. If no changes are made and the rules are adopted, they are expected to go into effect August 20.
The administration of Gov. John Bel Edwards released a set of proposed changes to the ITEP guidelines in late April—18 months after the governor altered the popular tax break program to give local governments a greater say in whether to grant property tax abatements to manufacturers under ITEP.
The governor’s proposed changes are intended to clear up confusion that has ensued since Edwards’ 2016 executive order by implementing a standard set of rules all local taxing authorities can follow when deciding whether to approve applications. There are concerns, however, among some in the administration and Together Baton Rouge/Together Louisiana that the state may be moving too quickly to approve the changes.
The proposed rules, which Louisiana Economic Development Secretary Don Pierson says were devised with input from various stakeholders, include:
- Giving the state the power to evaluate ITEP applications and recommend approval of property tax abatements under the program before local governments get involved.
- Permitting applications to go before local governments for an up or down vote only after the state Board of Commerce and Industry gives preliminary approval.
- Allowing the tax abatement to automatically go into effect for 10 years if a local government takes no action on an ITEP application after 30 days.
- Capping the tax break at 80% of a manufacturer’s property tax bill for 10 years to enable local government to collect some property tax revenues during the first year of a manufacturer’s operations.
- Simplifying ITEP applications to clearly spell out the size of a manufacturer’s capital investment, how many jobs it will create and the size of its payroll, among other things.
