With three weeks to go in the 2021 Regular Session, 1A priorities continue to move forward, including centralized sales tax collection, while debates on how to address statewide worker shortages heated up in the House. The House also approved several tax reform proposals by Sen. Bret Allain, sending them back to the Senate for concurrence. This week, the House will vote on creation of the M.J. Foster Promise Program, a top priority for 1A’s 55 by 25 educational attainment initiative.
Here is an update on key legislation 1A is engaged on and monitoring:
Centralized Sales Tax Collection
HB 199 by Speaker Clay Schexnayder – This Constitutional Amendment establishes the State and Local Streamlined Sales and Use Tax Commission to modernize and simplify our tax system for Louisiana’s small businesses. This new 8-member Commission will have equal representation from state and local governments and will administer sales tax collection, auditing, and dispute resolution. This common-sense reform puts Louisiana’s businesses on a level playing field with online retailers like Amazon and Wayfair. Last week, the House voted to send the bill to Conference Committee to allow time to consider the Senate amendments.
Several tax reform measures authored by Senate Revenue & Fiscal Affairs Chairman Bret Allain cleared the House last week and are scheduled for Senate concurrence with the House amendments on 5/24.
SB 157 by Sen. Bret Allain – This measure exempts nonresident mobile workers who work in the state for fewer than 30 days from individual income tax and their employers from withholding tax. This change was recommended by both the Multistate Tax Commission (MTC) and the Council on State Taxation (COST). SB 157 passed the House unanimously, with amendments.
SB 159 by Sen. Bret Allain – This Constitutional Amendment reduces the maximum rate of individual income tax from 6% to 4.75%, as amended, and it removes the mandate for a deduction for federal income taxes paid. SB 159 passed the House by a vote of 91-2.
SB 160 by Sen. Bret Allain – This good-government bill simplifies tax administration for businesses by aligning state partnership reporting adjustments to federal taxable income with current federal partnership audit adjustments. SB 160 passed the House unanimously, with amendments.
SB 161 by Sen Bret Allain – This bill aids small businesses by extending, through 2025, the exemption from the corporate franchise tax on the first $300,000 of a small business corporation’s taxable capital. SB 161 passed the House unanimously, with amendments.
Unemployment Compensation Trust Fund
The House recently passed HB 642, Speaker Clay Schexnayder’s plan for spending the first tranche of Louisiana’s federal American Rescue Plan Act funds. Following Governor Edwards’ recommendation, the bill directs $400 million to begin replenishing the state’s depleted Unemployment Compensation Trust Fund (UC Trust Fund). HB 642 is currently pending consideration by the Senate Finance Committee.
Legislators have been working to provide stability for businesses as officials plan for solutions to shore up the UC Trust Fund:
SB 89, SCR 3, and SCR 5 by Sen. Mike Reese would ensure that both UC tax rates for businesses and benefit levels for recipients would remain the same for the next year. These measures unanimously passed the full Senate and the House Labor and Industrial Relations Committee and are pending House consideration this week.
1A was also supporting HB 610 by Rep. Rodney Lyons, as amended, which would have created a one-time $1,000 incentive for Louisianans receiving unemployment benefits to return to full-time work, and a one-time $500 incentive for individuals who return to a part-time position. Employers in Acadiana and across the state are reporting worker shortages as Louisiana continues issuing $300 per week in federal supplemental unemployment benefits on top of the state’s $247 per week benefit, making unemployment a competitive alternative to returning to work. HB 610 failed to pass the House when it was considered on 5/20. 1A will continue to monitor and support proposals that are focused on getting more of our labor force back to work.
M.J. Foster Promise Program
SB 148 by Sen. Page Cortez – This bill creates the M.J. Foster Promise Program, a key priority of 1A’s 55 by 25 educational attainment initiative. Beginning in 2022, The M.J. Foster Promise Program would provide financial support for Louisiana adults to earn credentials that align with high-demand jobs in industries like construction, healthcare, information technology, manufacturing, and more. The program will serve as a “last dollar” award, open to Louisiana residents over the age of 21. SB 148 is scheduled for House final passage on 5/26.
HB 459 by Rep. Barbara Freiberg – This bill would require the Louisiana Workforce Commission (LWC) to report certain occupational and employment information to the Board of Regents for economic research and occupational forecasting. These statistics will enable data-based decision making to ensure Louisiana’s educational programs are meeting our current and future workforce needs. 1A supported this bill in the Senate Labor and Industrial Relations Committee, where it was reported favorably. HB 459 is now pending Senate consideration.
HB 60 by Rep. Ken Brass – This measure extends the sunset date of the Dual Enrollment Framework Task Force, ensuring the Task Force can continue studying and making recommendations to guarantee universal access to dual enrollment credit for Louisiana high school students. 1A supported HB 60 in the Senate Education Committee, where it was reported favorably, with amendments. HB 60 is now pending Senate consideration.
1A continues to monitor key infrastructure funding measures, including:
HB 582 by Rep. Jack McFarland – This bill would transfer $120 million of the avails of the existing state gas tax into the Construction Subfund of the Transportation Trust Fund (TTF), ensuring those funds are protected for project delivery, construction, and maintenance. The legislation was amended in the House Appropriations Committee to change the proposed fees on electric and hybrid vehicles from one-time road user fees of $1,000 and $500 respectively, to an annual fee of $200 on electric vehicles and $100 on hybrid vehicles. HB 582 is scheduled for House consideration on 5/24.
HB 40 by Rep. Mark Wright – This bill prevents DOTD from using TTF dollars to pay for employee salaries and pensions by gradually removing those funds from DOTD’s operating budget beginning in FY 2022-2023. The bill passed the House by a vote of 65-31 and is now pending consideration by the Senate Finance Committee.
SB 1 by Sen. Barrow Peacock – This bill phases in the dedication of the temporary 0.45% state sales tax to the Construction Subfund of the TTF beginning in 2022. SB 1 was reported favorably by the Senate Finance Committee and is scheduled to be considered in the Senate on 5/24.
Employee Data Privacy
HB 456 by Rep. Rick Edmonds – This bill pertains to employee data privacy. Currently, employee data – including names, Social Security Numbers, home addresses, wages, and other personal information – from companies who have contracts with Louisiana Economic Development (LED) is subject to public records requests. However, the same information is protected in contracts with other State agencies, posing privacy concerns for companies who work with LED on economic development projects. HB 456 ensures this data is protected from public records requests, consistent with the protections provided for contracts with other State agencies. 1A supported HB 456 in the House, where it passed by a vote of 59-38, and the bill is now pending Senate introduction.