LEGISLATIVE FISCAL OFFICE
Fiscal Note
Fiscal Note On: HB 11 HLS 243ES 15
Bill Text Version: ENROLLED
Opp. Chamb. Action:
Proposed Amd.:
Sub. Bill For.:
Date: November 27, 2024 9:04 AM Author: DESHOTEL
Dept./Agy.: Local Govt, Tax Commission, Assessors
Subject: Property Tax Law Restructuring, Optional Inventory Tax Exemption Analyst: Benjamin Vincent
TAX/AD VALOREM TAX EN SEE FISC NOTE LF RV See Note Page 1 of 1
Provides for the homestead exemption, special assessment level, and other property tax exemptions for purposes of determining ad
valorem taxation of certain property (Items #1 and 10)
Proposed law generally replaces existing constitutional property tax provisions with statutory provisions, typically utilizing
identical language. Proposed law establishes an optional full or partial local ad valorem tax exemption for business
inventories, provided that multiple participants including sheriffs, school boards, and parish governing authorities all assent.
For taxing authorities that opt to fully exempt business inventories, the bill partially offsets resulting revenue reductions with
payments within 30 days of certification by LDR, apparently from the Revenue Stabilization Trust Fund (RSTF). Effectiveness
is contingent on passage of a Constitutional amendment by a statewide election on March 29, 2025, which would be initiated
by HB 7, should it become law.
EXPENDITURES 2024-25 2025-26 2026-27 2027-28 2028-29 5 -YEAR TOTAL
State Gen. Fd. $0 $0 $0 $0 $0 $0
Agy. Self-Gen. $0 $0 $0 $0 $0 $0
Ded./Other SEE BELOW SEE BELOW $0 $0 $0 $0
Federal Funds $0 $0 $0 $0 $0 $0
Local Funds $0 $0 $0 $0 $0 $0
Annual Total $0 $0 $0 $0
REVENUES 2024-25 2025-26 2026-27 2027-28 2028-29 5 -YEAR TOTAL
State Gen. Fd. SEE BELOW SEE BELOW SEE BELOW SEE BELOW SEE BELOW
Agy. Self-Gen. $0 $0 $0 $0 $0 $0
Ded./Other $0 $0 $0 $0 $0 $0
Federal Funds $0 $0 $0 $0 $0 $0
Local Funds SEE BELOW SEE BELOW SEE BELOW SEE BELOW SEE BELOW
Annual Total
EXPENDITURE EXPLANATION
Proposed law would authorize payments out of existing funds within RSTF to political subdivisions, however further
unspecified legislation would be required to enable and execute the payments. The timing of any such payments is thus
unclear.
REVENUE EXPLANATION
The state revenue impact of proposed law is generated by the optional exemption for business inventories to local ad
valorem taxes. A taxing authority would become eligible to receive a payment from a state trust fund should they allow the
exemption, a decision which would be irrevocable.
The varying amounts specified for each participating parish are done so in an effort to offset three typical years’ worth of
recent inventory tax collections (with a maximum of $15 million) for any parish enacting a full exemption. For parishes
phasing the exemption in, the bill specifies a payment approximately equal to the prior year’s collections. Over a five-year
horizon, opting to adopt the exemption would reduce local revenues for any given parish.
The magnitude of any local or statewide fiscal impact is indeterminable, as participation in the full exemption is optional for
any taxing authority. For illustrative purposes, in a scenario where each parish opted to receive their one-time payment
authorized via full exemption, approximately $563 million in payments out of the RSTF would be made to political
subdivisions.
The bill additionally authorizes parishes to allow an effective partial exemption, by reducing the percentage of fair market
value applicable to business inventory. This would reduce the tax liability for the property, to the degree that the percentage
is reduced. Payments from the state that would partially offset any resulting revenue losses are not authorized for parishes
utilizing this mechanism for reducing business inventory tax liability.
For any given political subdivision, the net revenue impact would be determined by its own decision to either retain the
inventory tax, grant the full exemption immediately or phase it in, or reduce the applicable percentage of fair market value.
As interest earned on RSTF monies accrue to the general fund under current law, decisions made by political subdivisions to
receive the payment would mechanically reduce the amount of interest-earning money in the fund, and would therefore
impact SGF revenues. For illustrative purposes, in a scenario where interest earnings were approximately 3%, removing
$543 million from the RSTF would reduce interest earnings to the general fund by approximately $16 million (compounding)
annually.
Senate Dual Referral Rules House
13.5.1 >= $100,000 Annual Fiscal Cost {S & H} 6.8(F)(1) >= $100,000 SGF Fiscal Cost {H & S}
Alan M. Boxberger
13.5.2 >= $500,000 Annual Tax or Fee 6.8(G) >= $500,000 Tax or Fee Increase
Change {S & H} Legislative Fiscal Officer
or a Net Fee Decrease {S}


Statutes affected:
HB11 Original: 47:1(A), 47:1705(B)(1), 47:1713(B), 47:1714, 47:1715
HB11 Engrossed: 47:1(A), 47:1705(B)(1), 47:1713(B), 47:1714, 47:1715
HB11 Reengrossed: 47:1(A), 47:1705(B)(1), 47:1713(B), 47:1714, 47:1715
HB11 Enrolled: 47:1(A), 47:1705(B)(1), 47:1713(B), 47:1714, 47:1715
HB11 Act 12: 47:1(A), 47:1705(B)(1), 47:1713(B), 47:1714, 47:1715