La. Admin. Code tit. 13 § I-1117

Current through Register Vol. 50, No. 11, November 20, 2024

Section I-1117 - The Contract

A. The board, after no objection from the executive director of the LWC and secretary of the LDR, and with the approval of the governor, may enter into a contract with an employer for a period up to five years. The business must execute its portion of the contract and return it to Business Incentive Services within 90 days. If the contract is not returned within 90 days, the board's approval shall be deemed rescinded.

1. A contract with an employer shall be limited to a single project site and the benefits the employer shall receive will be based upon the operations at that location. An employer may have only one contract in effect for a project site, except as provided below.

2. Upon written approval of the department, an employer may have one additional contract in effect for a project site for a subsequent expansion project that is distinct from the project associated with the original contract, and that increases the number of new direct jobs at the site by at least 25 percent. If new direct jobs are not increased by at least 25 percent by the end of the third fiscal year of the additional contract, the contract shall be terminated and all benefits for the site shall be determined under the original contract.

3. An employer may have multiple contracts covering multiple locations. The eligibility of each location shall be determined separately.

4. For each contract, the department shall certify that the employer has a net overall increase in employment statewide for each new direct job.

5. A contract may, with the approval of the board, be transferred to a business entity purchasing and continuing the operation of a project site. Upon such transfer, the employment baseline shall be that of the purchaser during the 45-day period prior to the purchase.

6. A contract shall be limited to one employer receiving payroll rebates, however the employer's named related entity or affiliate may generate a sale and use tax rebate or project facility expense rebate for their expenditures directly relating to the project site, but payable to the contract holder, if the following conditions are met:

a. the employer meets all program requirements;

b. the entity is disclosed by the employer in its application; or

c. the entity is listed in the contract attachment Schedule One, which may be amended with the approval of the department and the board.

7. A fee of $250 shall be filed with a request for any contract amendment, including but not limited to, a change of ownership, change in name, or change in location.

B. The contract may be renewed for an additional five years provided that:

1. the employer has complied with all the terms of the contract;

2. the employer has met the statutory minimum hourly wage for the new direct jobs subject to the benefit rate established when the contract was entered into; and

3. the hourly wage rate has increased by an amount which is no less than the greater of either of the following:

a. the hourly wage rate has grown by the percentage increase in the Consumer Price Index published by the U.S. Department of Labor for the five years of the initial term of the contract, compounded; or

b. the hourly wage rate has increased by 2 percent for each of the five years of the initial term of the contract, compounded annually;

c. the greater of the increases required under items a. and b. above shall become the minimum hourly wage for the renewal contract.

C. No contract shall be executed if:

1. the employer has defaulted, not repaid a loan, or not repaid an obligation involving public funds;

2. the employer declared bankruptcy and the obligation to pay or repay public funds or monies was discharged as part of such bankruptcy a contract shall not be executed; or

3. the employer is in default on any filing or payment to the state, or any of its agencies or political subdivisions, for which an assessment or judgment is final.

D. Contract Voided. Violation of the provisions of §1117. C shall void the contract and any rebates paid to the employer prior to the date the violation is discovered, the rebates will be recovered by adding to the income tax liability for the taxable year the violation occurred. Additionally, interest will be assessed from the date of the violation and the employer shall receive no further rebates.

E. Contract Suspended

1. If a rebate is received by an employer as provided under this provision and the employer is rendered an assessment or judgment that is final and nonappealable in favor of the state or any of its agencies or any of its political subdivisions, the contract shall be suspended pending the settlement of the assessment. No rebate shall accrue to the employer under the contract during the period of suspension.

2. After the employer's fiscal year for which the employer applied for his third annual rebate, if at any other time during the 10-year contract period the employer applies for a rebate following the end of the employer's fiscal year, and the verified gross payroll for the fiscal year does not demonstrate the required minimum new direct jobs and the required gross payroll, the rebates shall be suspended and shall not be resumed until such time as the payroll and job requirements are met. No rebate (payroll rebate, sales and use tax rebate or project facility expense rebate) shall accrue or be paid to the employer during a period of suspension.

F. Contract Rebates Reduced

1. If the employer receives a rebate and it is subsequently determined the employer did not qualify for the rebate, future rebates will be reduced by the amount received by the employer.

2. If there are no future rebates to deduct the amount owed the state, the tax liability of the employer will be increased by the amount of the rebate for the taxable period non-qualification was determined.

3. The secretary of the LDR may recover any rebates previously granted to an employer but which rebates disallowed as authorized by R.S. 47:1561.2. The employer shall waive prescription for the purpose of recovering any disallowed rebates.

La. Admin. Code tit. 13, § I-1117

Promulgated by the Department of Economic Development, Office of Commerce and Industry, Financial Incentives Division, LR 22:965 (October 1996), amended by the Department of Economic Development, Office of Business Development, Business Resources Division, LR 29:2309 (November 2003), amended by the Office of Business Development, LR 37:2592 (September 2011), Amended by the Office of Business Development, LR 42866 (6/1/2016), Amended LR 4929 (1/1/2023), Repromulgated LR 49342 (2/1/2023).

AUTHORITY NOTE: Promulgated in accordance with R.S. 51:2451-2462 et seq.