House Notes

Louisiana House of Representatives

2016 Second Extraordinary Legislative Session
Communications Office
WRAP-UP, JUNE 23, 2016
The 2016 Second Extraordinary
Legislative Session adjourned sine die
Thursday, June 23.
Representatives Joe Lopinto and Bryan
Adams submitted to Speaker Barras their
letters of resignation from the House and
made their parting farewells to members.
A brief description of some of the bills
that generated public interest this special
session follows.
APPROPRIATIONS
*
House Bill 69, which has completed
the legislative process, makes supplemental
appropriations for Fiscal Year 2016-17,
provides for means of financing substitutions
and other budgetary adjustments for the
operation of various departments.
HB69 additionally appropriates for a
list of priorities subject to the recognition of
additional revenue by the Revenue Estimating
Conference.
HB69 reduces TOPS scholarships to
70 percent, but front-loads the reduction to
students who will receive a full scholarship
for the fall semester, which drops to 40
percent in the spring.

CAPITAL OUTLAY
*
House Bill 2, which has been sent to
the governor, provides for the capital outlay
budget and program for FY 2016-17and
provides for the funding of the capital outlays
from the specified amounts and sources of
monies.
*
House Bill 3, which has been sent to
the governor, provides for the implementation
of a five-year capital improvement program,
for the repeal of certain prior bond
authorizations, for new bond authorizations
and their authorization and sale by the State
Bond Commission and for related matters.
Additionally, HB3 repeals the Act that
originated as HB No. 3 of the 2016 Regular
Session of the Legislature.
*
House Bill 52, which has been sent to
the governor, requires that all projects for
which a line of credit has been approved in
Fiscal Year 2015-16, shall submit a new
capital outlay request to the Office of Facility
Planning, which shall be received by the office
on or before Nov. 1, 2016. All new capital
outlay requests submitted by non-state
projects for which a line of credit has been
approved in Fiscal Year 2015-16, shall submit
a new capital outlay request, which shall

include a letter of support from a legislator in

whose district the project is located, in order
to be eligible to receive capital outlay funding
for Fiscal Year 2017-18. The non-state project
application shall not be deemed complete
unless the project has either a fully executed
cooperative endeavor agreement or proof of
the applicable local match, if required,
submitted to and received by the Division of
Administration, Office of Facility Planning
and the Joint Legislative Committee on
Capital Outlay by Feb. 1, 2017.
Additionally, HB52 provides specific
exemptions from present law for the
management and execution of specific capital
outlay projects or the projects of specific
recipient entities.
INCOME TAXES/DEDUCTIONS
*
House Bill 50, which has completed
the legislative process, reduces the individual
income tax deduction for net capital gains and
allows the deduction to gains from sales of
property that have been held for at least five
years immediately prior to its sale
The amount of the deduction shall be
limited as follows:
(1) 50 percent for a business domiciled in the
state for 5 years or more, but less than 10
years.
(2) 60 percent for a business domiciled in the
state for 10 years or more, but less than 15
years.
(3) 70 percent for a business domiciled in the
state for 15 years or more, but less than 20
years.
(4) 80 percent for a business domiciled in the
state for 20 years or more, but less than 25
years.
(5) 90 percent for a business domiciled in the
state for 25 years or more, but less than 30
years.
(6) 100 percent for a business domiciled in the

state for 30 years or more.

REVENUE DEPARTMENT
*
House Bill 29, which has been sent to
the governor, equalizes the treatment of
severance tax overpayments by making
statutory interest begin 90 days after the later
of the due date of the return, the filing date of
the return or claim for refund or the date the
tax was paid.
TAX/EXEMPTION PUBLIC FACILITIES
*
House Bill 53, which has completed
the legislative process, removes the exemption
for state sales tax on all public facilities in the
state, including the Superdome/Arena, Zephyr
Field, CajunDome and others.
If the facility is on higher education
property, all tax proceeds will be returned to
that institution.
HB53 additionally provides for the
disposition of state tax proceeds to the state
general fund and for allocations to several
local entities, the Bond Security and
Redemption Fund and economic development,
definitions, effective dates and related matters.
TAX/AD VALOREM
*
Senate Bill 6, which has completed the
legislative process, provides for the carry
forward rather than the refund of a certain
portion of the tax credit for ad valorem taxes
paid on inventory.
SB6 allows 100 percent of available
excess credit to be refunded for tax payers
whose ad valorem tax paid is up $500,000.
For tax between $500,000 and $1
million, 75 percent of the excess credit will be
refundable and 25 percent non-refundable but
allowed a five-year carry-forward against
future state tax liabilities. For tax over $1
million, the first $750,000 of excess will be
refunded with the remaining balance allowed

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a five-year carry-forward. Consolidated

federal tax filers are treated as a single
taxpayer. Businesses formed or registered
after April 15, 2016, with $10,000 or less of
ad valorem tax shall be refunded 100 percent
of excess credit; with tax from $10,000 to $1
million are refunded 75 percent of excess
credit with the balance allowed a five year
carry-forward, applicable to returns filed on or
after July 1, 2016.
*
Senate Bill 10, which has completed
the legislative process, provides that if the
inventory credit available to a manufacturer is
greater than the firms state income and
franchise tax liability, all of the excess credit
is subject to a carry-forward against tax
liabilities in five subsequent years.
These provisions apply to all claims
for these credits on any return filed on or after
July 1, 2016, regardless of the taxable year to
which the return relates.
Additionally, SB10 permits the use of
ad valorem tax forms by the Department of
Revenue for purposes of verifying eligibility
for inventory tax credits.
TAX/CORPORATE INCOME
*
House Bill 47, which has completed
the legislative process, clarifies that the
corrective language of Act 6 of the 2016 First
Extraordinary Special Session, which insured
the 28 percent deduction cut to net operating
loss deductions (NOL) imposed by Act 123 of
2015 was implemented in the manner
consistent with fiscal anticipation of Act 123,
did not impose the 28 percent reduction to
amended returns filed by July 1, 2015 in
which an NOL had been properly claimed on
the original return.
TAX/INCOME CREDIT
*
House Bill 25, which has been sent to
the governor, permanently reduces the amount

of the income tax credit for the Louisiana

Citizens Property Insurance Corporation
Assessment to 25 percent of the assessment
paid.
TAX/INSURANCE PREMIUMS
*
House Bill 24, which has been sent to
the governor, provides that health
maintenance organizations are not subject to
the 5 percent reduction in the insurance
premium tax credit and excepts these insurers
from the modification of the type of
investments that no longer provide
qualification for the credit.
*
House Bill 35, which has been sent to
the governor, increases the annual tax for
health maintenance organizations, including
the Louisiana partnerships from 2.25 percent
to 5.5 percent.
TAX/SALES-USE/EXEMPTIONS
*
House Bill 27, which has been sent to
the governor, changes the exclusion for sales
of materials for further processing to an
exemption for sales of raw materials for
further processing. The purchase of all raw
materials for the production of agricultural,
forestry-related cultivation and aquacultural
products are included in the exclusion without
exception. However, other materials further
processed into a byproduct for sale shall be
taxable.
*
House Bill 51, which has completed
the legislative process, exempts certain
transactions from the 3 percent state sales tax
and outlines an exemption list of call items, 7
through 34, in the bill.
*
Senate Bill 15, which has completed
the legislative process, requires certain nonprofit organizations receiving state sales tax
exclusions or exemptions to electronically
provide an annual report to the Department of
Revenue containing annual gross sales and

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any other information the Secretary requires to

determine the revenue loss to the state to
comply with Tax Exemption Budget
reporting.

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