The troubled tax credit program that attracted so many movies and television shows to film in Louisiana will be smaller but more stable if legislation advanced Monday by a Senate committee becomes law, said the panel’s chairman and the bill’s sponsor.
“Right now the program is willy-nilly. They want something that is stable, so everybody knows what you will get going in, in Louisiana,” said Sen. JP Morrell, the New Orleans Democrat who chairs the Senate Revenue and Fiscal Affairs Committee and sponsored the legislation.
In order to rein in costs, a law was passed in the past that would limit the amount of the tax credits paid out each year to $180 million, regardless of how many exemptions were approved. The “back end” cap caused a number of the producers to stop filming in Louisiana.
Morrell filed a 22-page substitute for his Senate Bill 235 that outlined a procedure for how the credits would be approved in the future.
The committee approved the measure without objection and sent it to the full Senate for consideration. The legislation will receive a new bill number.
The measure would limit the state to awarding $150 million in credits on the front end in the future. Producers would apply and a kind of queue system would be set up. Nobody who qualifies will be denied, Morrell said, but the producers will know at the beginning of the process that the tax credits would be paid out in the future.
The state would still pay the outstanding credits at $180 million per year, but those holding credits would have to register in order to receive their money. The state is unsure how many of the credits have been awarded but estimate about $280 million could be claimed by June 30, 2019, according to Louisiana Economic Development Department.
“The main issue is these legacy costs,” Morrell said. The system he proposes would use the additional monies to pay those debts.
Morrell’s bill also would set aside $10 million for small, independent producers.