Baton Rouge-area lawmakers have filed legislation that, if approved, would once again alter the Industrial Tax Exemption Program, this time streamlining the approval process, while keeping a degree of local input.
The proposed law would create a local three-member subcommittee in each parish that would consider ITEP applications in that parish as well as give the local appointees voting rights on the state Board of Commerce and Industry when that board considers those tax break projects.
Sen. Bodi White, R-Central, is the author of the bill, which is co-sponsored by Rep. Franklin Foil and Sen. Dan Claitor, both Baton Rouge Republicans. Foil has also filed an identical bill as backup legislation in the House of Representatives.
Under the bill, the parish president, sheriff and school board president would each appoint a non-elected official to the three-member subcommittee that would hold public meetings to review local ITEP requests before voting whether to approve or reject such applications.
If the subcommittee gives its thumbs up, the application moves to the state BC&I for final approval. Interestingly enough, even if the local group rejects the bid, the application can still go before the 24-member BC&I for a final decision, though the three local subcommittee members also get to vote. In that case, if a majority of what amounts to a 27-member voting body approves the measure, the decision of the local subcommittee is overridden.
“If an item is rejected (by the local subcommittee), the board may only consider the item if the board, including the appropriate local members, by majority vote brings the item up for consideration,” reads the legislation.
ITEP applications will also still require the governor’s approval as well.
“The goal is to bring stability and predictability back to ITEP,” White says. “Right now, most big manufacturing companies don’t think we have the stability they need to bring expansions to our area.”
Under current law, industrial property tax breaks must be approved by the state board, as well as each local taxing entity affected—the parish council, school board and sheriff. Gov. John Bel Edwards gave local governments a say in granting the exemptions via executive order in 2016. Before then, the state alone had authority over ITEP.
Industry leaders have criticized the local approval process as chaotic and unpredictable, as manufacturers must plead their case before multiple boards and elected officials.
“We’re trying to balance the interest of having local input,” Foil says, “but also create a uniform approval system with people who have expertise in economic development and avoid having companies go before multiple boards.”
Sponsors say the bill would change the state statute that sets up the state board, not alter language of the Constitution that governs ITEP, so White and Foil believe the proposed legislation would just need a simple majority vote for approval.
Editor’s note: This story has been updated since its original publication to show that the Board of Commerce and Industry has 24, not 25 members. Daily Report regrets the error.