Two weeks remain in the 2021 Regular Session, and key 1A priorities are nearing the finish line, including centralized sales tax collection and creation of the M.J. Foster Promise Program, a top priority for 1A’s 55 by 25 initiative. The Senate also approved the $38 billion state budget and is in final negotiations on tax reform, with several bills pending in Conference Committee.
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. The bill has passed both the House and the Senate and is now pending in Conference Committee.
Several tax reform measures authored by Senate Revenue & Fiscal Affairs Chairman Bret Allain have cleared both the House and the Senate. At the request of Chairman Allain, the Senate voted to send the bills to Conference Committee to work out final details.
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 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 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 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.
The Senate passed the $38 billion state budget, HB 1 by Rep. Jerome Zeringue, last Thursday, after the Senate Finance Committee moved the bill forward earlier in the week. Additional appropriations bills were passed that address other funding for state and local governments (HB 515, HB 516, HB 553, and HB 695), and these measures now head to the Governor’s desk. Legislation to determine how the first tranche of Louisiana’s federal American Rescue Plan Act funds will be spent (HB 642) was amended in the Senate and is now pending in Conference Committee to finalize details.
Key appropriations in these bills include:
$563 million in additional funding for road and bridge projects across the state
$490 million to shore up the UC Trust Fund and repay related federal loans
$421 million to fully fund TOPS and provide for other financial aid programs to students
$90 million to expand broadband access in rural and disadvantaged areas
$800 teacher pay raises and $400 school support staff pay raises
$50 million for port relief efforts related to COVID-19
Last week, the Senate passed HB 642, Speaker Clay Schexnayder’s plan for spending the first tranche of Louisiana’s federal American Rescue Plan Act funds. Per amendments made by the Senate, the bill directs $300 million to begin replenishing the state’s depleted Unemployment Compensation Trust Fund (UC Trust Fund) and $190 million to repay federal loans taken out when the Fund ran dry in 2020. HB 642 is currently pending in Conference 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 each unanimously passed the full Senate and House. SCR 3 and SCR 5 now go into effect and SB 89 heads to the Governor.
Employers in Acadiana and across the region 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. 1A is engaging in discussions focused on getting more of our labor force back to work. The Louisiana Association of Business and Industry (LABI) wants to hear from employers around the state who are experiencing worker shortages. Take the survey.
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. Named after former Louisiana Governor Mike Foster, the M.J. Foster Promise Program will provide financial support for Louisiana adults to earn credentials that align with high-demand jobs in industries like construction, healthcare, information technology, and manufacturing. The program will serve as a “last dollar” award, open to Louisiana residents over the age of 21. SB 148 unanimously passed the House, and the Senate is expected to vote to concur with the House amendments on 6/1.
Workforce & Education Data Sharing
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 consideration by the Senate Finance Committee to review the fiscal note.
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. HB 60 passed the Senate unanimously last week, and the House is scheduled to vote on concurrence with the Senate amendments on 6/1.
HB 514 by Rep. Tanner Magee – This bill to provide for a state sales tax on medical marijuana was amended on the Senate floor by Sen. Rick Ward to include a new funding source for road and bridge projects. As amended, the bill would make permanent the state’s currently temporary .45-cent sales tax and dedicate those revenues to the Construction Sub Fund of the Transportation Trust Fund (TTF). DOTD would be required to prioritize construction of certain megaprojects, including I-49 South. The amendment also phases out the state sales tax on business utilities by 2031. Due to the amendment’s fiscal impacts, HB 514 has been recommitted to the Senate Finance Committee.
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 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 failed to garner a 2/3 majority (59-34) in the House last week and was returned to the calendar.
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.
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 consideration by the Senate and Governmental Affairs Committee.
In preparation for redistricting after the final U.S. Census population counts are delivered later this year, the House and Governmental Affairs Committee advanced HCR 90 by Speaker Clay Schexnayder. This concurrent resolution issues guidelines for how the Legislature will draw Congressional, Legislative, Supreme Court, BESE, and Public Service Commission districts. The measure requires that redistricting plans comply with the 14th and 15th Amendments and the Voting Rights Act of 1965. Districts must be geographically contiguous, voting precincts cannot be split, and lines must adhere to political boundaries and natural geography as much as possible. HCR 90 is scheduled for House consideration on 6/1.