The Revenue Estimating Conference (REC) met last week to revise their revenue projections, where they recognized $323 million in additional income for use in the current budget, and more than $400 million in additional revenue for next year’s budget, meaning legislators have even more excess funds at their disposal than originally planned. Meanwhile, the Senate Finance Committee is scheduled to receive public testimony on the State budget, HB 1, today, 5/22.
In economic development news, several of 1A’s priority bills continued progressing through the process last week, including measures related to critical state economic development programs, including the Research and Development Tax Credit program, career readiness data-sharing, and more.
Read on for a recap of week six and a look ahead at week seven.
Economic Development Toolkit
1A is supporting measures to enhance Louisiana’s economic development toolkit, including HB 408 by Rep. Willard, related to the Research and Development (R&D) Tax Credit, which is designed to encourage existing businesses with operating facilities in Louisiana to establish or continue research and development activities within the state.
The bill would allow R&D recipients to also access grants from the state’s Small Business Innovation Retention Fund and Small Business Innovation Recruitment Fund, which were created in 2022 to bolster applications for the federal Small Business Innovation Research (SBIR) and Small Business Technology Transfer (SBTT) grant programs.
HB 408 passed the House unanimously on 5/17 and now heads to Senate Revenue & Fiscal Affairs.
Insurance Market Stability
Legislators are eyeing solutions to stabilize Louisiana’s property insurance market. More than 30 related measures have been filed this session, and 1A is supporting bills that increase availability, affordability, and reliability of property insurance, and help mitigate future storm damage. Several related bills continue to move through the Legislature with strong support:
- HB 110 by Rep. Firment – requires insurers to offer an endorsement to upgrade to a fortified roof in the event of roof damage that requires a replacement
- HB 294 by Rep. Willard and SB 113 by Sen. Hewitt – require insurers to provide premium discounts to insureds who build or retrofit structures in compliance with fortified home or commercial standards
HB 110 passed the Senate on 5/18 and soon heads to the Governor’s desk, where HB 294 is already awaiting the chief executive’s signature. SB 113 is pending consideration in the House.
Carbon Capture and Storage (CCS)
HB 571 by Speaker Schexnayder would create a comprehensive legal framework for carbon capture projects in Louisiana, including provisions for permitting, revenue sharing, public notice and reporting requirements, and more. HB 571 was reported favorably by Senate Natural Resources last week and is scheduled to be considered in the full Senate this afternoon, 5/22.
Two remaining anti-carbon capture bills that advanced out of the Natural Resources Committee earlier in the session were rejected in the full House of Representatives last week. 1A opposed these bills, which could have had a chilling effect on CCS projects in Louisiana:
- HB 120 by Rep. Muscarello – would have prohibited permitting for injection wells in Lake Maurepas (failed by a vote of 27-72)
- HB 267 by Rep. Wheat – would have placed a moratorium on CCS projects on Lake Maurepas and the Maurepas Swamp Wildlife Management Area (failed by a vote of 26-75)
MJ Foster Promise Program
1A-supported SB 204 by Sen. Hewitt advanced last week – the bill makes eligibility changes to the MJ Foster Promise Program, which provides financial support for Louisiana adults to earn credentials that align with high-demand jobs. Currently, only about 10% of program funds have been utilized, and SB 204 would make the program accessible to more students by tweaking some of the provisions, including the requirement that students complete the federal FAFSA application, which was not designed with adult learners in mind.
SB 204 passed the Senate unanimously on 5/15 and is now pending House Education.
Career Readiness Data Sharing
Another 1A-supported bill advanced last week, SB 205 by Senate President Page Cortez. The bill would create the Louisiana Foundational Integrated Research System for Transformation (LA FIRST) program, to be housed at the Blanco Public Policy Center at UL Lafayette. This legislation enables the Blanco Center to enter into data-sharing agreements with several state agencies so that career readiness and criminal justice programs can be better evaluated for their effectiveness and return on public investment.
SB 205 was reported favorably by House Education on 5/16 and now heads to House Appropriations.
LOOKING AHEAD
Budget Update
With less than three weeks to go, the budget debate is taking center stage at the Capitol, as the Senate receives public testimony on the House-passed budget (HB 1) in Senate Finance today, 5/22. The House budget differs substantially from Governor Edwards’ original proposal, which, among other items, included $196 million in funding for K-12 teacher pay raises and $52 million for early childhood education programs.
House lawmakers instead opted to direct more than $900 million toward paying down large portions of the State’s retirement debt, arguing that the move would free up money that state agencies and K-12 and higher education systems would have otherwise had to use to pay retirement obligations, therefore allowing them to address funding needs on their own.
Senators favor a plan to exceed the constitutionally mandated spending cap and infuse surplus funds on one-time investments, including road and bridge projects. Senate President Cortez recently spoke on the Senate’s gameplan, noting that as Senators consider the State spending plan, the goal will be to produce two versions of the bill, one that spends excess revenues on one-time needs across the State, and one that more closely resembles the House plan.
Tax Bills Up Early This Week
This is also a big week for tax policy, as House Ways and Means and Senate Revenue and Fiscal Affairs will meet today, 5/22, to discuss key bills, including 1A-supported SB 69 by Sen. Foil, to extend the Research and Development Tax Credit, SB 108 by Sen. Jimmy Harris, to extend the Angel Investor Tax Credit, which encourages investment in early stage, small wealth-creating Louisiana businesses that are seeking startup and expansion capital, and HB 558 by Rep. Beaullieu, which aims to move the State one step closer to a more streamlined sales tax system for Louisiana’s brick and mortar businesses.
On the House floor, 1A is joining with business and economic development partners in opposition to HB 641 by Ways and Means Chairman Stuart Bishop. The bill would terminate tax exemptions, exclusions, credits, and other tax incentives in 2027 unless legislators reauthorize each one. This includes programs that are critical to Acadiana’s, and the State’s, economic competitiveness, such as the Angel Investor Tax Credit, the Digital Interactive Media and Software Program, the Research and Development Tax Credit and more. HB 641 is scheduled to be considered tomorrow, 5/23, after being returned to the calendar last week due to the large amount of opposition received from the statewide business community.
The Louisiana Association of Business and Industry (LABI) has created a call-to-action requesting legislators reject HB 641 – click here to add your voice!
Click here to view 1A’s 2023 Legislative Priorities, which cover the following issue areas:
- Tax competitiveness
- Industry growth
- Insurance market stability
- Infrastructure investment
- Talent development
Be on the lookout for 1A legislative updates on these issues, and more, every Monday morning during the session.