Parish Government getting say in industrial tax exemption

Published 12:11 am Wednesday, June 29, 2016

LAPLACE — St. John the Baptist Parish Government can now sign off on the level of local tax exemption officials feel is acceptable with projects in the state’s Industrial Tax Exemption Program (ITEP).

The program allows manufacturers to secure a 100 percent exemption of local property taxes on eligible new building and equipment expenditures for up to 10 years.

Louisiana Economic Development announced Friday ITEP is operating under new guidelines, welcome news according to St. John Parish President Natalie Robottom, who said she was surprised by the announcement.

“I am looking forward to working with whomever the governor assigns to establish clear guidelines,” she said. “Our goal is not to inhibit or prohibit industry from coming here, but I do think it is important that local governments have some say in terms of who is coming and what some of those exceptions are.”

The Louisiana Constitution, which authorizes the program as an incentive for manufacturers to invest in capital projects in Louisiana, authorizes the governor to determine a method of approval that is in the best interest of the state.

Until now, Louisiana Economic Development screened ITEP applications for eligibility, the Louisiana Board of Commerce and Industry approved ITEP contracts and the contracts were effective upon the governor’s signature.

Robottom said increased collaboration would “absolutely” benefit St. John.

She said her administration is working with the Parish Council to reappoint an Industrial Development Board, which she said is critical to deal with situations like this.

“I do think it is important to have people who are familiar with financing, long-term and short-term, business development, economic development to help make these decisions so they can actually weigh the benefits to the Parish and propose alternatives when necessary,” Robottom said.

Through an executive order issued Friday, Gov. John Bel Edwards is making the additional changes:

• All ITEP contracts must be accompanied by a Cooperative Endeavor Agreement that outlines a job creation or job retention component — and terms by which the manufacturing investor must abide — to retain the property tax exemption for the initial 5-year period and a potential second five-year renewal period.

ITEP applicants previously had to apply for renewal after the first five years.

• For clarity, the Board of Commerce and Industry may submit companion rules it deems necessary to the governor for consideration, but the governor will not approve ITEP contracts that do not feature local governance approval and a Cooperative Endeavor Agreement unique to the project that includes job creation/job retention requirements.

“We would like to have some input going into the agreement, rather than having business or LED or industry show up at our door saying they have already received this credit not to pay taxes at our local municipality without ever having the discussion with the municipality,” Robottom said. “Clearly, this is a very important decision as we see it. It is my understanding that the governor will be soliciting or attempting to get a set of rules passed to direct industry and local governments on how to address this. That is very important. We don’t want to run business or industry away.”