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C100 2017 Legislative Update 6/20/2017


June 20, 2017
C100 Legislative Wrap-Up 6/19/17
With the 2017 Regular and Special Session finally concluded, the legislature goes on break until next spring, unless the Governor calls them back earlier. Looking back, lawmakers filed more than 900 bills for consideration in the legislative session that just ended, with the heaviest debate focused on tax policy and fiscal measures. Other issues of importance included criminal justice reforms.
The political dynamics were apparent, with the House reluctant to pass any new revenues/taxes for any purpose, while the Senate was unwilling to pass House reform measures that came over, without also addressing new revenues for the budget and fiscal cliff. This impasse played out all Session, down to the last committee meetings and final days of the Regular Session, with many bills bottled up including HB1 (budget) and HB2 (capital outlay) which carried over to a 10-day Special Session where the budget bills were finally acted upon, in a manner preferred by the Senate/Governor.
C100 was tracking about 100 bills in the process, of which few made it through to final passage. Here is a breakdown of the major issues and outcome that C100 was tracking:
No deal was reached on comprehensive tax reform, despite a path set forth by the HCR11 Task Force to restructure the state’s tax code AND address the looming fiscal cliff of $1 billion plus July 1, 2018 when temporary taxes are due to expire. Instead, the legislature did neither, parking reform and the cliff for another day.
The House — where most tax measures must start — blocked many tax policy measures filed. Of the 187 House bills first heard in the Ways and Means Committee, only about 14% passed both Chambers. Of the 65 Senate bills first heard in Revenue and Fiscal Affairs, 29% passed both Chambers. In total, 45 tax related bills out of 252 filed made it through the legislature, sent to the Governor for action. Many of these were not reform related but rather incremental changes to existing law.
Outcome of key tax reform measures:
Failed – Constitutional Convention (Abramson, died in House)
Failed – Commercial Activity Tax - CAT Tax (Jones, never moved)
Failed – Personal Income Tax federal deductibility/flat tax (Stokes, died in Senate)
Failed – Corporate Income Tax federal deductibility/flat tax (Ivey, died in Senate)
Failed – Sales Tax expand the base/reduce the rate (Reynolds, never moved)
Failed – Sales Tax exemption cleaning/rate reduction (J. Morris/James, died in House)
Failed – Sales Tax Uniformity (Stokes, died in the Senate)
Failed – Franchise Tax phase out (Hilferty, never moved)
Failed – Inventory Tax phase out (Allain, never moved)
Failed – PILOT ad valorem tax changes (Seabaugh, died in Senate)
Failed – ITEP ad valorem tax changes (Allain and Morrell, died in Senate)
Failed – Gasoline Tax for transportation/infrastructure (S. Carter, died in House)
Failed – Removing Revenue Dedications (Shadoin, died in the House)
Passed - Establishes the Louisiana Uniform Local Sales Tax Board (HB601 Stokes)
Click here for the status of all bills referred to House Ways and Means
Click here for a status of all bills referred to Senate Revenue and Fiscal Affairs
Click here for joint statement by C100/CABL calling the Session a “Missed Opportunity”
Several bills passed, relative to economic development programs and incentives, as administered by LED. These bills are generally consistent with the recommendations of the HCR11 Task Force dealing with sunsets for most programs, some limited repeals, and revisions to targeted programs to improve the program mechanics, while providing long term savings to the state.
Outcome of key economic development measures:
Passed – Changes the Motion Picture Tax Credit (SB254 Morrell)
Passed – Changes the Quality Jobs Program (SB183 Morrell)
Passed – Changes the R&D Tax Credit (HB300 Davis)
Passed – Changes the Ports Tax Credit (SB150 Chabert)
Passed – Changes the Angel Investor Tax Credit (HB454 Abramson)
Passed – Changes the Sound Recording Tax Credit (HB646 Leger)
Passed – Extends the Enterprise Zone program (HB237 Barras)
Passed – Provides sunset on various Tax Credits (SB178 Morrell)
Passed – Makes permanent the 28% reduction to tax credits in 2015 (SB79 Luneau)
Passed – Property Tax Exemption on Construction While in Progress - CWIP
(SB140 Walsworth, constitutional amendment on November 2017 ballot)
The bright spot of the Session was passage of a criminal justice package aimed at reducing Louisiana's top-in-the-nation incarceration rate and addressing recidivism, while providing savings to the state and reinvestment into the system. The bills lessen sentences for nonviolent crimes, boost spending on programs aimed at helping people who leave prison so they don't re-offend, and ease the financial burdens ex-offenders face when they are released, as well as providing workforce opportunities.
C100 has formed a Fiscal Reform committee comprised of:
•Tom Clark-Adams and Reese
•Ron Gitz-Society of Louisiana CPAs
•Greg Bowser-Louisiana Chemical Association
•Jim Tucker-CommCare Corporation
•Tim Barfield-CSRS
•Bill Backstrom-Jones Walker
This committee will focus on tax and fiscal reform measures for 2018 and beyond. Additionally C100 has engaged the Tax Foundation in Washington DC to continue consulting on tax and fiscal reform in Louisiana.
You can view a complete list of the bills we are tracking HERE


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