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LUBA 2000 Legislative Wrap-Up

Sine Die with no Appropriations Bill

The 2000 Regular Session ended at 6:00 p.m. on Wednesday, June 7th without the Legislature having time to vote on the appropriations bill. During the afternoon as both houses struggled to put together enough votes to pass revenue measures to fund the budget, the clock was ticking down to the constitutionally required 6 p.m. sine die adjournment. Rather than ask members to vote on the conference report for the appropriations bill with only three minutes remaining in the session, leadership felt it was more responsible to come back in a special session prior to July 1, 2000 and give members some time to review HB 1 in its final version. After the dust settled, revenue measures that will generate $220 million were passed taking care of most of the unfunded portion of the budget.

The Special Session to vote on HB 1 and any other items the Governor puts on the call will probably begin on Monday, June 19, 2000. Additional revenue measures will likely be included. If this session is to begin on June 19th, the call must be issued by Wednesday, June 14th.

Business Tax Reform

The issue of long term tax reform for the state of Louisiana is being discussed as the Legislature is attempting to balance the budget and continue to pay for all the services our citizens feel they are entitled to have. HB 296 by Stelly and the companion bill for the constitutional amendment (HB 73 by Daniel) reforms the individual tax structure. However, no changes were made to the taxation for businesses in the state.

The following bills proposed major tax changes to business; however, none of them were enacted.

HB 134 by Hammett levies a state occupational tax.

HB 146 by DeWitt extends the levy of the state sales and use tax to all services.

HB 237 by Baylor enacts the Louisiana Business Productivity Tax and repeals certain other taxes.

HB 326 by DeWitt enacts the Louisiana Business Tax (Substitute for HB 235). This is the infamous Single Business Tax. A much more scaled down version of this tax was recommended by the Law Institute Tax Study Committee chaired by former Senator Randy Ewing. That recommendation was to implement a very small percentage SBT to see how it would affect businesses. We may very well see this come back in a different version.

These proposals may be considered again in a later tax reform session.

HB 258 by Holden also failed to pass during the session. This bill levies a “unitary” tax on multi-state companies. There are rumors that this may be included in the Governor’s call for the upcoming special session.

HB 140 by Alario was passed in the last hours. This bill removes the exemption for food and utilities from the 4th penny of sales tax. If the individual income tax reform is passed by the electorate, this tax will go away along with the sales tax on the other 3 pennies for food and utilities.

HB 299 by Hammett which disallows 50% of the excess itemized deductions from individual state income taxes was amended in the Senate to also include a disallowance of 50% of inventory tax credits. However, this amendment was stripped during the conference committee. The inventory tax credits may still be a target since there is a sentiment that business has escaped any increased taxes while the individual taxpayers really got hit hard.

Business Related Bills that Passed

HB 22 by Montgomery extends the time period for the current exemption of certain buses, trucks and trailers used in interstate commerce to 7-1-2002.

HB 44 by Daniel limits the amount of sales tax that can be charged on a new manufactured home to 46% of the sales price.

HB 193 by DeWitt extends the current sales tax charged on automobile rental contracts of no more than 29 days until 6-30-2002.

SB 85 by Michot and Daniel makes changes in the Louisiana Quality Jobs Program Act.

Among those changes are:

1. Allowing the motor vehicle parts manufacturing industry to apply their $5,000 tax credit per job created against any state income tax liability or any state franchise tax liability within a ten-year period.
2. A business can be considered for the tax credit only if less than 50% of it business is of a multi-state, national, or international nature.
3. For applications filed before June 1, 2000, the employer must pay at least 50% of the health benefit premium and for application filed after June 1, 2000, the employer must pay at least 75% of the health benefit premium for full-time employees and 50% of the premium for part-time employees as well as offer group coverage for dependents of all full-time and part-time employees at the employees’ expense.
4. The applicant must pay an average of at least one and one-half times the minimum hourly wage required by law for all new direct jobs.

SB 87 by Romero creates an assessment district for the purpose of funding the office of assessor in parishes with a population between 68,000 and 70,000 according to the 1990 census. Prior law named 61 specific parishes out of the total 64 parishes.

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