2016 House Notes 1st Special Weeks 1 and 2

HOUSE NOTES
Louisiana House of Representatives

Communications Office
2016 First Extraordinary Session
Weeks One and Two, Feb. 26, 2016
On Sunday, February 14, the 2016

First Extraordinary Session of the Louisiana
Legislature convened to begin the process of
addressing adjustments to the state's budget
shortfalls.
The governor directed all state offices
to reduce expenditures, conduct reviews of all
executive branch contracts and implement
expenditure and hiring freezes.
The Joint Legislative Committee on
the Budget voted to approve a reduction of
statutory dedications by 5%, according to
provisions of R.S. 39:75. Those dollars would
become available to the general fund.
During the first week of the session,
the House Committee on Appropriations
heard overviews by the Commissioner of
Administration and state agencies concerning
the Fiscal Year 2015 - 2016 and Fiscal Year
2016 - 2017 budgets.
The House Committee on Ways and
Means heard testimony from the Governor's
Office and the Department of Revenue on the
state's fiscal outlook, and held hearings on a
large number of revenue proposals.
A brief description of some of the bills
that generated public interest follows.
APPROPRIATIONS
*
House Concurrent Resolution 2,
adopted by the House 103-0, directs the
Commissioner of Administration, the
Commissioner of Higher Education and all
statewide elected officials to review all state
contracts, identify any currently in effect that
can be terminated, determine the amount of
savings as a result of each termination, initiate
the termination and to report their initial
findings to the Joint Legislative Committee on
the Budget by March 1, 2016, and all final
findings by March 14, 2016. All state boards
and commissions are directed to meet the
requirements of HCR2, as well.
HCR2 additionally requires that the
report identify contracts that are awarded to
minority and women-owned businesses.
Finally, contracts for critical healthcare
services and contracts for classroom activities
related to elementary and secondary education
are excluded under provisions of HCR2.
*
By a vote of 99-2, the House approved
House Bill 42, which requires any contracting
entity to electronically submit information and
documentation to the Legislative Auditor prior
to entering into or renewing a contract with a
state agency.
The contracting entity would be
required to submit the official name and
address; the list of owners, board of directors
or equivalent governing body and officers;

documentation certifying all payroll taxes
have been paid; information indicating the
type or nature of the contract with the state
agency, including whether the contract was
publicly bid, competitively bid or negotiated,
or let through a noncompetitive process, value
of the contract, and the name of each state
agency which is or would be a party to the
contract; the names and addresses of all
registered lobbyists lobbying on behalf of the
contracting entity; and the percentage of
minority, women, veteran and Louisianabased ownership of the entity.
*
House Bill 86, which passed the House
103-0, establishes the Revenue Stabilization
Trust Fund, which would receive mineral
revenue between $650 million and $950
million per year after all existing allocations
of mineral revenue are satisfied. Mineral
revenues are defined severance taxes,
royalties, bonuses and rentals. Additionally,
the Fund is to receive corporate income and
franchise tax receipts in excess of $500
million per year. Monies in the fund are to be
invested in the same manner as the
Millennium Trust Fund. Earnings of the fund
are to be deposited into the state general fund.
A maximum of 5 percent of the fund balance
may be appropriated in any year in which the
balance of the fund exceeds $10 billion at the
beginning of the year.
*
92-0, adds the Legislative Auditor as an
allocation entity and redistributes the
allocation of revenues collected and deposited
into the Medical Assistance Programs Fraud
Detection Fund as follows: 45 percent to the
Office of Attorney General, 45 percent to the
Department of Health and Hospital (DHH)
and 10 percent to the Legislative Auditor.
Additionally, HB89 requires DHH to
reimburse the legislative auditor for any actual
expenses incurred with any audit pertaining to

fraud within the medical assistance program.
*
House Bill 100, which passed the
House 55-43, eliminates 53 statutorily
dedicated funds and authorizes the treasurer to
transfer any unencumbered balances
remaining in the funds repealed and abolished
by proposed law to the State General Fund
after satisfying appropriations for FY 2015-16.
*
House Bill 118, approved by a vote of
80-10, reduces appropriations for the
Louisiana Judiciary for Fiscal Year 2015-16
by $3,991,120.
*
House Bill 119, approved by the
House 97-0, reduces the state General Fund
appropriation for the Louisiana Legislature for
Fiscal Year 2015-2016 by $1,589,207 and
directs the Legislative Budgetary Control
Council to reduce the Fees and Self-Generated
Revenue appropriations for the Louisiana
Legislature for Fiscal Year 2015-16 in the
amount of $444,036.
*
House 102-0, makes supplemental
appropriations and reductions to
appropriations for Fiscal Year 2015-16.
*
Senate Bill 1 adds "college
tournaments and championships" to the
definition of "qualified event" or "qualified
major event" for purposes of the Major Events
Incentive Program.
The House approved SB1, 96-0.
*
Senate Concurrent Resolution 2, which
passed the House 98-0, makes available for
appropriation from the Budget Stabilization
Fund the sum of $128,459,663.85 not to
exceed 1/3 of the balance of the Budget
Stabilization Fund as of the beginning of the
Fiscal Year 2015-16.
ALCOHOL
*
House Bill 27, pending House final
passage, increases the excise tax on alcoholic
Page -2-
beverages by the following amounts: liquors

25/liter; sparkling wines and wines of more
than 24 percent alcohol by volume 19/liter;
low alcohol still wines 22/ liter; high alcohol
still wines 47/liter; and malt beverages and
low alcohol content beverages (beer) $3.33
per 31-gallon barrel.
The new taxes are applicable to
purchases made on and after April 1, 2016,
and to inventories on hand.
*
passage, reduces the discount rates for
reporting and remitting excise taxes by half to
1 b percent for wine and liquor and 1 percent
for beer and malt liquor. Local discounts
would remain unchanged.
HB30 would become effective with

tax periods beginning April 1.
CIGARETTE/TOBACCO
*
House Bills 14, pending House final
passage, raises the cigarette tax rate from 86
cents to $1.08 per 20-pack, effective April 1.
TAX/CORPORATE INCOME
EXEMPTION
*
99-0, increases the amount of the corporate
income exclusion for dividend income
received from certain banking institutions
from 72 percent to 100 percent.
EARNED INCOME TAX CREDIT

*
passage, would increase the amount of the
earned income tax credit to 7 percent of the
federal credit amount.
INTERNET TAX
*
98-5, expands the definition of dealer to
include internet sales for state and local sales
tax purposes.
Any company with an affiliated agent
who sells the same or similar products under
the same or similar name greater than $50,000
per year in the state would be considered
dealers. Such companies would be obligated
to collect and remit sales tax on behalf of the
state and local governments of 8%, including
internet transactions mailed to the state and
allows quarterly local use tax distribution of
the 4% local share.
SALES TAX
*
passage, dedicates all proceeds of the existing
1 percent sales tax to the Stability in
Education Fund, created in this legislation.
*
House Bill 62, which passed 76-28,
imposes a one-cent sales and use tax.
TAX/CORPORATE FRANCHISE
*
passage, expands the definition of "domestic
corporation" for purposes of the corporate
franchise tax.
TAX/CORPORATE
*
95-8, limits the net operating loss deduction
that a corporation may claim to 72 percent of
Louisiana net income.
*
passage, repeals the three-year sunset of a 28
percent reduction to corporate income tax
deductions, exemptions and exclusions
affecting public transportation corporations,
oil and gas well allowance for depletion, net
operating losses, corporate income tax
refunds, dividends from banking
corporations, certain expenses disallowed for
federal taxation, dividend income and
hurricane recovery benefits.
*
passage, repeals the three-year sunset of 28
Page -3-
percent reductions that affect 37 income and

corporation franchise tax credits.
*
89-9, provides that for purposes of calculating
corporation income tax liability, the taxable
income of every corporation shall be
computed at the rate of six and one-half
percent on all Louisiana taxable income.
*
House Bill 31, a proposed
constitutional amendment, which passed the
House 82-14, would eliminate the income tax
deduction for federal income taxes paid when
computing corporate income taxes.
*
passage, reduces the tax rates on the taxable
income of individuals on the existing brackets
to 1.5 percent on the first $12,500, 3.5 percent
on the next $37,500 (bracket up to $50,000),
and 5.5 percent on net income above $50,000.
Bracket ranges are doubled for joint filers.
*
passage, reduces the amount of the individual
income tax deduction from 100 percent to 50
percent of excess federal itemized deductions.
*
passage, changes middle and upper income tax
brackets for purposes of calculating individual
income tax by making the following
reductions: 2 percent on the first $12,500, 4
percent on the next $17,500 (bracket up to
$30,000), and 6 percent on net income above
$30,000. Bracket ranges are doubled for joint
filers.
*
79-18, requires corporations to add-back
otherwise deductible interest expenses, costs
and management fees incurred in connection
with transactions with one or more related
members for purposes of calculating corporate
income tax liability.
*
66-33, repeals the three-year sunset on certain
eligibility requirements relative to the income
tax credit for net taxes paid to other states.

*
House Bill 78, a proposed
constitutional amendment, repeals the income
tax deduction for federal income taxes paid
when computing corporate income tax
liability. HB78 provides that the maximum
rate for state corporate income taxes shall not
exceed 8 percent.
*
passage, repeals the state income tax
deduction for federal income taxes paid for
purposes of calculating individual and
corporate income taxes.
*
83-16, eliminates the state income tax
deduction for federal income taxes paid and
applies only to corporate returns.
*
House Bill 99, approved by the House
85-6, changes the apportionment percent for
apportionable income derived for certain
transportation and service industry sectors to
a single ratio calculation.
*
passage, requires that certain otherwise
deductible interest expenses and costs, and
intangible expenses and costs, and
management fees be added back to a
corporations computation of its Louisiana net
income.
*
House 60-31, requires the net operating loss
deduction for corporate income tax from the
most recent taxable year to be applied first.
TAX CREDITS/INVENTORY
*
passage, reduces the amount of the tax credits
for ad valorem taxes paid to all political
subdivisions for inventory from 100 percent to
80 percent and modifies refundability of
excess credit amounts for ad valorem taxes
paid on and after Jan. 1, 2016.
*
Page -4-
passage, provides that for inventory taxes paid

on or after Jan. 1, 2016, the amount of the
credit would be reduced from 100 percent to
80 percent of inventory taxes paid to political
subdivisions.
TAX/SALES & USE
*
76-27, caps the annual vendor compensation
for the collection and remittance of state sales
and use taxes at $1,000 per month per dealer
with one or more business locations in the
state.
*
80-18, requires the advance payment of sales
tax for vendors with sales tax remittances
greater than $20,000 per month in the
preceding tax year.
*
80-21, adds persons who remarket sleeping
rooms, cottages, or cabins that are located in
the state to the definition of "dealer"for
purposes of imposing the state sales and use
tax.
*
passage, provides for the administration of
state sales and use taxes on business utilities.
*
78-20, repeals provisions that reduce the tax
on interstate and international
telecommunications services from 2% to 1%
effective April 1, 2016 thereby keeping the
rate for these services at 2%.
*
passage, is a proposed constitutional
amendment that removes the exemption from
state sales tax on gasoline and motor fuels and
dedicates the proceeds to the Transportation
Trust Fund.
*
passage, expands the sales tax base and
increases the rate on the entire tax base by 0.5
percent to 4.5 percent (2% levy goes to
2.5%). Previously exempt transactions include

business utilities for non-manufacturing
sectors, sales tax holidays, paper and wood
manufacturer consumables among many other
current exemptions and exclusions. The rate
increase is in effect from March 1, 2016 to
June 30, 2021, at which time the rate is
lowered to 3.5 percent (2.5% levy goes to
1.5%). HB104 also authorizes a rebate for
manufacturing machinery and equipment.
*
passage, is the enabling legislation to the
proposed constitutional amendment outlined
in House Bill 84, contingent upon voter
approval, which removes the exemption on
motor fuels from state sales tax.
*
passage, dedicates the avails of the existing 2
percent state sales and use tax to the Stability
in Higher Education Fund and provides with
respect to the extent of that tax base for
purposes of monies available for deposit into
the fund.
Page -5-

2016 House Notes 1st Special Weeks 1 and 2

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

2016 House Notes 1st Special Weeks 1 and 2

Uploaded by

Copyright:

Available Formats

HOUSE NOTES

Louisiana House of Representatives

On Sunday, February 14, the 2016

or equivalent governing body and officers;

expenses incurred with any audit pertaining to

beverages by the following amounts: liquors

HB30 would become effective with

EARNED INCOME TAX CREDIT

percent reductions that affect 37 income and

tax credit for net taxes paid to other states.

passage, provides that for inventory taxes paid

2.5%). Previously exempt transactions include

You might also like