Title 17. Education
Chapter 26. Colleges and Universities
Part IX. Miscellaneous Provisions
17:3389 University research and development parks; tax exemptions
A. The legislature finds that development of research and development parks in association with public or regionally accredited independent universities in the state, with quality facilities for research and development, manufacturing of goods resulting from and related to research and development activities, and related support services and concerns, will benefit the citizens of Louisiana through improved scientific information and technology and through improved economic conditions and creation of jobs. It is the intent of this Section to provide for the reduction in taxes which would otherwise be payable by concerns which conduct such enterprises and activities in order to encourage their location in such park areas and to provide them with greater resources which may be used for further development and economic activity which will further expand the capabilities of the concerns located in such parks.
B. For purposes of this Section, the following terms shall have the meaning hereinafter ascribed to them, unless the context clearly indicates otherwise:
(1) “Board” means the State Board of Commerce and Industry, or its successor.
(2) “Committee” means the Joint Legislative Committee on the Budget.
(3) “Concern” means any manufacturing, research and development, support, or service business entity whose primary activity is related to research and development or support of such entities and which meets eligibility criteria established by the secretary by rule. A concern shall be technology-based and innovatively growth-oriented as defined by rules promulgated by the secretary.
(4) “Department” means the Department of Economic Development.
(5) “Governing authority” means the governing body of a political subdivision.
(6) “Park area” means the area included in any research and development park which is operated in association with a public or regionally accredited independent university in the state.
(7) “Political subdivision” means a political subdivision as defined in Article VI, Section 44(2) of the Constitution of Louisiana.
(8) “Secretary” means the secretary of the Department of Economic Development.
C. (1) The board, with the approval of the governor and the committee, may enter into contracts for periods not exceeding five years with concerns located or to be located in the park area under which such concerns are granted rebates of, exemptions from, and/or credits for the taxes imposed by this state and by political subdivisions as provided in Subsection E, upon the terms, conditions, and limitations specified in this Section and subject to such other terms, conditions, and limitations as the board, on recommendation of the department, deems to be in the best interests of the state.
(2) Each contract entered into under authority of this Section may be renewed for periods of up to five years, provided that the total number of years of rebate, exemption, and/or credit shall not exceed ten years. Rebates, exemptions, or credits may only be granted for expenditures made after the date of the preliminary approval by the Board of Commerce and Industry. Any renewal of a rebate and/or exemption shall become effective only if the governing authority levying the tax approves such renewal prior to action by the board to renew such rebate and/or exemption.
(3) The authority of the board to contract for rebates of and/or exemptions from taxation of a political subdivision shall become effective when the governing authority of the political subdivision files with the board a resolution, duly adopted by the governing authority, which provides for participation by the political subdivision in the program provided by this Section and provides that the board is authorized to grant rebates and/or exemptions from the taxation of the political subdivision as provided in this Section. A separate resolution shall be required to authorize the granting of rebates and/or exemptions for each park area which is wholly or partly within the jurisdiction of the political subdivision.
(4) Upon violation of any of the terms and conditions of the contract under which rebates, exemptions, and/or credits are granted, the board, with approval of the governor, shall give notice thereof in writing, and unless the violation is corrected within ninety days, any remaining portion of the rebate of, exemption from, and/or credit for taxation granted under any contract entered into under this Section may be terminated.
(5)(a) All rebates of, exemptions from, and/or credits for state taxation granted under contracts entered into under authority of this Section shall be listed, together with the amount thereof, by the board and a copy of each such listing shall be submitted to the Department of Revenue which shall maintain a record thereof and shall include such rebates, exemptions, and/or credits in the annual tax exemption report prepared under authority of R.S. 47:1517. Whenever any such rebate, exemption, and/or credit, or any part thereof, ceases by reason of a violation of the terms of the contract under which it was granted, or for any other cause, the board shall notify the Department of Revenue.
(b) All rebates of and/or exemptions from taxation of a political subdivision granted under contracts entered into under authority of this Section shall be listed, together with the amount of the rebates and/or exemptions, by the board and a copy of each such listing shall be submitted to the governing authority of each affected political subdivision and to the agency or officer which collects such taxes. The governing authority shall maintain a record thereof. Whenever any such rebate and/or exemption, or any part thereof, ceases by reason of a violation of the terms of the contract under which it was granted, or for any other cause, the board shall notify any affected governing authority and the tax collecting officer or agency.
D. (1) Applications for contracts of rebate, exemption, and/or credit shall be addressed to the department. A copy of any application requesting rebate of and/or exemption from taxes of any political subdivision shall be transmitted by the applicant to the governing authority of each political subdivision levying any such taxes. The department shall review the application to determine whether the requirements for a contract have been satisfied, and shall determine whether rebates, exemptions, and/or credits should be provided in a contract or contracts. The Department of Revenue shall aid the department in determining whether the tax information furnished by the applicant is true and correct.
(2) The board shall review any recommendations for rebates, exemptions, and/or credits made by the department. The board shall conduct public hearings on any application for rebate, exemption, and/or credit, upon such terms and under such procedures as it shall promulgate by regulation. Notice of such hearing shall be given to the governing authority of any political subdivision which levies taxes for which rebate and/or exemption is requested. The board shall forward its recommendations, together with all supporting documents and the recommendations of the department, to the governor and the committee.
(3) The department and the board may make and promulgate such rules and regulations consistent with the provisions of this Section as are necessary to carry out the provisions of this Section. The board, based upon recommendations by the department and the Department of Revenue, shall establish by rule criteria for granting rebates, exemptions, and/or credits pursuant to this Section. Such criteria shall be established so as to assure that rebates, exemptions, and/or credits are granted to concerns which are viable and which will contribute to the improved technology of the state and to the development of the park and the expanded capability of the concern requesting the rebate, exemption, and/or credit and of other concerns in the park. Such criteria may provide for consideration of any and all factors which are relevant to the continued and expanded operations of the applicant, including but not limited to the following:
(a) The benefits to the state in terms of continued employment opportunities, expenditures for goods and services, and contributions to the revenue base of the state and local governments, and the creation of new and additional permanent jobs.
(b) Competitive conditions existing in other states or in foreign nations.
(c) The economic viability of the applicant, and the effect of any tax rebates, exemptions, and/or credits on economic viability.
(d) The effects on the applicant of temporary supply and demand conditions.
(e) The effect of casualties and/or natural disasters.
(f) The effects of United States and foreign trade policies.
(g) The effect of federal laws and regulations bearing on the economic viability within the state of the applicant.
(h) The competitive effect of like or similar rebates, exemptions, and/or credits granted to other applicants.
E. (1) Whenever the governor and the committee find that a concern satisfies the requirements of this Section and the criteria established by rule, they shall advise the board that it may enter into a contract with such concern providing for the tax rebates, tax exemptions, and/or tax credits as provided in this Section.
(2) Exemptions from taxation may be granted for any of the following:
(a) The state corporation franchise tax.
(b) The state corporation income tax.
(c) Any other taxes imposed directly by the state on the applicant.
(3) Rebates for taxes paid may be granted for any of the following:
(a) Sales and use taxes imposed by the state and/or any political subdivision on machinery and equipment to be used by the applicant, on materials and building supplies, whether purchased directly or through a contractor, to be used in repair, reconstruction, modification, or construction of plant or facilities, and on materials and supplies necessary for or used in the manufacture or production of the product of the applicant.
(b) Sales and use taxes imposed by the state or by any political subdivision on any other goods and services used or consumed by the applicant.
(4)(a)(i) The total annual amount of state tax rebates and/or exemptions granted to a concern under the provisions of Paragraphs (2) and (3) of this Subsection for any fiscal year shall not exceed thirty percent of the liability for corporate franchise, income, and state sales and use taxes of the concern during the fiscal year preceding the fiscal year for which the rebates and/or exemptions are granted, or such amount as shall be established by contract.
(ii) The total annual amount of rebates of sales taxes of a political subdivision granted to a concern under the provisions of Subparagraphs (3)(a) and (b) of this Subsection for any fiscal year shall not exceed one hundred percent of the liability for sales taxes due to that political subdivision by the concern during the fiscal year preceding the fiscal year for which the rebates are granted, or such amount as shall be established by contract.
(iii) No firm, foreign or domestic, subsidiary, contractor, supplier, support service, or coentity shall be allowed any rebate, exemption, and/or credit authorized pursuant to Items (i) and (ii) of this Subparagraph unless the facility is physically located within the confines of the park area.
(b) Notwithstanding the provisions of Item (a)(i) of this Paragraph, in addition, a tax credit may be granted against the tax liability due for the corporation income tax, and the corporation franchise tax, which credit shall not exceed the cost of purchase by the concern of machinery and scientific equipment used on premises of a concern located in the park area. Such cost may be allocated to the tax liability for up to five tax years as established by contract. Board rules shall provide for the types of machinery and scientific equipment which shall be eligible for this credit.
F. In addition to the rebates, exemptions, and/or credits provided by this Section, the board shall promulgate rules and regulations which clarify the term “manufacturing establishment” for ad valorem tax exemption purposes, pursuant to Article VII, Section 21(F) of the Constitution of Louisiana, as it relates to research and development related manufacturing and manufacturing in support thereof in order to enable concerns in a park area which engage in any activity which may be eligible for ad valorem tax exemptions to apply therefor. No ad valorem tax exemption shall be for more than a total of five years, with the option of renewal for another five years. However, the total number of years of exemption shall not exceed ten years.
G. No contracts shall be entered into pursuant to the provisions of this Section on or after July 1, 2017.
Added by Acts 1991, No. 1023, § 2. Amended by Acts 1992, No. 990, § 2; Acts 2017, No. 386, § 1, eff. June 23, 2017.