LEGISLATIVE FISCAL OFFICE
Fiscal Note
Fiscal Note On: HB 36 HLS 201ES 1
Bill Text Version: ENGROSSED
Opp. Chamb. Action:
Proposed Amd.:
Sub. Bill For.:
Date: June 11, 2020 9:27 AM Author: IVEY
Dept./Agy.: Economic Development
Subject: Industrial Tax Exemption Analyst: Greg Albrecht
TAX/AD VALOREM-EXEMPTION EG SEE FISC NOTE LF RV See Note Page 1 of 1
(Constitutional Amendment) Establishes certain property tax exemptions for capital investment projects (Item #28)
Present constitution establishes the industrial tax exemption program. As currently administered, the program provides for
an ad valorem tax exemption to 80% of the assessed value of qualifying manufacturing capital investment for ten years; an
initial term of five years with an additional five-year renewal term. Approval is required by the Board of Commerce &
Industry (BC&I), local governing bodies, and the governor.
Proposed constitutional amendment authorizes three different exemption options. A standard exemption of 80% for a single
eight year term, with BC&I review and local approval. A local exemption of up to 100% for a term of no more than fifteen
years, subject to local approval as provided by law. An executive exemption of up to 100% for a term determined by the
governor and requiring local approval as provided by law. Enactment of any law to administer these options shall require a
two-thirds vote of the legislature. The definition of “manufacturing establishment” and “addition” are removed from the
Constitution. To be submitted to the electors at the statewide election to be held on November 3, 2020.
EXPENDITURES 2020-21 2021-22 2022-23 2023-24 2024-25 5 -YEAR TOTAL
State Gen. Fd. $0 $0 $0 $0 $0 $0
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 $0 $0 $0 $0 $0 $0
Annual Total $0 $0 $0 $0 $0 $0
REVENUES 2020-21 2021-22 2022-23 2023-24 2024-25 5 -YEAR TOTAL
State Gen. Fd. $0 $0 $0 $0 $0 $0
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
There is no anticipated direct material effect on governmental expenditures as a result of this measure.
REVENUE EXPLANATION
There is no anticipated direct material effect on state government revenues as a result of this measure. However, local
government ad valorem tax bases would be affected depending on which of the three options is applied by particular
governing entities for particular projects.
To the extent the standard exemption is applied, local tax bases would be expanded after the eighth year of its term relative
to the current total term of ten years (both the current program and the proposed program provide an 80% exemption).
To the extent the local exemption is applied, local tax bases could be expanded or reduced during its term, relative to the
current program of 80% exemption for a total term of ten years, since the option allows for an exemption up to 100% and
for a term of no more than fifteen years.
To the extent the executive exemption is applied, local tax bases could be expanded or reduced during its term, relative to
the current program of 80% exemption for a total term of ten years, since the option allows for an exemption up to 100%
and for a term determined by the governor, and with local approval.
The amendment also removes the definition of “manufacturing establishment” and “addition” from the Constitution. If these
exemption options are applied consistent with the current constitutional provision, this removal is not consequential.
However, a change to the traditional applicability could materially expand or contract the affected tax base.
In addition, while the bill authorizes three different exemption options, it does not provide guidance as to which one is to be
applied in any particular situation. For purposes of this Fiscal Note it is assumed that only one option can be applied to any
particular project, and that statutory provisions for the administration of these options will be enacted.
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}
Evan Brasseaux
13.5.2 >= $500,000 Annual Tax or Fee 6.8(G) >= $500,000 Tax or Fee Increase
Change {S & H} Staff Director
or a Net Fee Decrease {S}