Louisiana’s House Ways and Means Committee advanced a bill Thursday that would require a two-thirds vote of the Legislature to enact any new tax incentives. However, a separate bill that threatens to remove the authority that local governments have over corporate property tax exemptions was proposed and ultimately deferred, Louisiana Illuminator reports.
HB202, sponsored by Rep. Stuart Bishop, R-Lafayette, is a critical component of the tax reform agenda being pushed by GOP leaders in the legislature this year.
Louisiana offers close to 200 various tax exemptions, credits, deductions and other incentives that collectively cost taxpayers $8 billion in lost revenue every year, according to Karen White, executive counsel for the Louisiana Municipal Association.
Bishop’s bill would make it much more difficult for lawmakers to both give and take away tax incentives by requiring the approval of at least 70 of the 105 state representatives and 26 of the 39 senators.
It took about 15 minutes of discussion before committee members approved the measure without objection.
“This is, I think, good policy,” Rep. Malinda White, D-Bogalusa, said. “It does affect the revenue, and I want to move favorably at the appropriate time.”
The bill would propose a constitutional amendment, requiring passage by two-thirds of the Legislature and then approval by voters in a statewide election on Nov. 8, 2022. If it clears all those hurdles, it would take effect on Jan. 1, 2023.
Later Thursday morning, however, Rep. Phillip DeVillier, R-Eunice, who sits on the committee, proposed a separate bill that would unravel the overwhelmingly supported reforms that were placed on the state’s Industrial Tax Exemption Program five years ago.
HB318 is a constitutional amendment that would return complete authority of ITEP to the state Board of Commerce and Industry, removing the reforms enacted via executive order by Gov. John Bel Edwards in 2016. That executive order gave local governments the authority to approve or reject any property tax exemptions authorized by the Board of Commerce and also required that companies create jobs with the tax incentives. The reforms further limited exemptions to 80% of a company’s total property tax bill rather than 100%.
Prior to 2016, local taxing entities such as parishes, school boards and sheriffs had no say in whether the state board (made up of nonelected members) should exempt a company from paying local property taxes—a primary source of revenue for local governments. DeVillier’s bill would largely reinstate that system but would leave the 80% limit intact.
A related measure placed on the ballot last year was overwhelmingly rejected by Louisiana voters.