LEGISLATIVE FISCAL OFFICE
Fiscal Note
Fiscal Note On: HB 16 HLS 243ES 20
Bill Text Version: ORIGINAL
Opp. Chamb. Action:
Proposed Amd.:
Sub. Bill For.:
Date: November 12, 2024 10:13 AM Author: EMERSON
Dept./Agy.: Local Govt, Tax Commission, Assessors
Subject: Property Tax Law Restructuring, Optional Inventory Tax Exemption Analyst: Benjamin Vincent
TAX/AD VALOREM TAX OR 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. Additionally, proposed law establishes an optional local ad valorem tax exemption, provided that multiple
participants including sheriffs, school boards, and parish governing authorities all assent.
For taxing authorities that opt to exempt inventories, the bill partially offsets the resulting revenue reductions with payments
apparently from the Revenue Stabilization Trust Fund (RSTF), specifying payment amounts based on estimates of recent-
year inventory tax collections by parish and whether the exemption is phased in or immediately applied fully.
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 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 parish to potentially be awarded 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 eligibility for a payment that is approximately equal to the actual prior
year’s collections. Over a five-year horizon, the proposal would reduce local revenues for any political subdivision that would
opt in.
The magnitude of any local or statewide fiscal impact is indeterminable, as participation in the 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.
For any given political subdivision, the net revenue impact of the proposed bill would be determined by its own decision to
either retain the inventory tax, grant the exemption immediately, or phase it in.
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:
HB16 Original: 47:1(A), 47:1705(B)(1), 47:1713(B), 47:1714, 47:1715