§2367. Louisiana Mega-Project Energy Assistance Rebate

A. In addition to the funding for an economic development mega-project provided for in R.S. 51:2365 or as a separate incentive, the secretary of the Department of Economic Development with the concurrence of the governor may enter into a cooperative endeavor agreement to grant assistance to a mega- project as defined in R.S. 51:2365(F) the Louisiana Mega-Project Energy Assistance Rebate as provided for in this Section, subject to approval of the cooperative endeavor agreement by the Joint Legislative Committee on the Budget.

B. The assistance may be granted if the secretary determines that the consumption of energy will be a major cost component of the operation of a mega fund project and assistance in moderating the cost of such energy will be a major factor in inducing a mega fund project to locate, expand, or remain in the state. Also, the assistance may be granted only if the secretary of the Department of Economic Development certifies to the governor and the Joint Legislative Committee on the Budget that the grant of the energy assistance rebate shall not harm any business located in the state which may be a competitor of the business to be undertaken by the mega fund project.

C. The Louisiana Mega-Project Energy Assistance Rebate to the mega-project shall be granted in the form of a rebate of Louisiana severance taxes that were paid to the state on any natural gas consumed or used directly in the operation of the mega-project facility or consumed indirectly in the manufacture or creation of energy sold to the mega-project facility for its operation, determined as follows:

(1) Prior to implementation of the energy assistance rebate, the Department of Revenue, at the request of the secretary of the Department of Economic Development, shall consult with the operators of the mega-project facility and the following businesses:

(a) The suppliers of natural gas for operation of the mega-project facility.

(b) The utilities or other suppliers of energy which themselves use or consume natural gas for the production of energy which they are expected to sell to the mega-project facility for its operation. Utilities shall be entitled to use estimates for reporting purposes.

(c) Any business or series of businesses back to the ultimate severance tax payer, which are expected to sell natural gas to the businesses described in Subparagraphs (a) and (b) of this Paragraph.

(2)(a) Based upon such consultation, the Department of Revenue shall require periodic reports from any such supplier or utility provided for in Paragraph (1) of this Subsection which will enable the department to make the best estimate of the amount of natural gas which is consumed or used directly in the operation of the mega-project facility or consumed indirectly in the manufacture or creation of energy sold to the mega-project facility for its operation which bears a Louisiana severance tax and the amount of the severance tax paid to the state.

(b) If the department finds that a supplier or utility not involved in such consultation is in the chain of supply of natural gas to the mega-project facility or the utilities or other suppliers as provided in Paragraph (1) of this Subsection, that supplier or utility may also be required to file the reports provided for in this Paragraph.

(3) Based upon the reports, the secretary of the Department of Economic Development may award the Louisiana Mega-Project Energy Assistance Rebate in an amount up to the Louisiana severance tax that has been paid to the state on natural gas for energy consumed or used in the mega-project facility operations as determined by the Department of Revenue at such times as provided for in the cooperative endeavor agreement.

(4) For purposes of establishing the amount of severance taxes which have been paid to the state relative to the granting of a rebate pursuant to this Section, the amount shall be determined by reducing the total amount of severance taxes estimated to have been paid by the amount of such tax which would have been allocated by the state to political subdivisions pursuant to Article VII, Section 4(D) and (E) of the Constitution of Louisiana.

D.(1) The secretary of the Department of Economic Development shall promulgate such rules and regulations for the implementation of this Section in the manner provided for in the Administrative Procedure Act.

(2)(a) The Department of Revenue shall promulgate such rules and regulations for the implementation of the consultation and the reports required by the department in order to make the determination of the amount of rebate which may be granted, all in the manner provided for in the Administrative Procedure Act. Where specific identification of the amount of severance tax paid on natural gas consumed directly or indirectly in the operation of the mega-project is determined by the department not to be reasonably possible, the rules and regulations shall provide for the determination by estimate of the amount to be rebated.

(b) In addition, in preparing such report, the department shall have any authority provided to it for examination and investigation pursuant to Part II of Chapter 18 of Subtitle II of Title 47 of the Louisiana Revised Statutes of 1950, (R.S. 47:1541 et seq.).

(c) Failure to file the periodic reports by any supplier or utility required to do so by the department as provided for in Paragraph (C)(1) of this Section shall make the supplier or utility subject to the same penalty provided for failure to file the severance tax report provided for in R.S. 47:642(A).

NOTE: Subsection E as enacted by Acts 2015, No. 126, §2, eff. through June 30, 2018. See Acts 2016, 1st E.S., No. 28.

E. With respect to projects for which the secretary makes a determination on or after July 1, 2015, that the consumption of energy will be a major cost component of the operation of a mega-fund project, pursuant to this Section, the rebate granted to a mega-project shall not exceed eighty percent of Louisiana severance taxes that were paid to the state on any natural gas consumed or used directly in the operation of the mega-project facility or consumed indirectly in the manufacture or creation of energy sold to the mega-project facility for its operation, as determined in Paragraph (C)(1) of this Section.

F. No cooperative endeavor agreements shall be entered into pursuant to the provisions of this Section on or after July 1, 2017.

Acts 2010, No. 1006, §1, eff. July 1, 2010; Acts 2015, No. 126, §2, eff. July 1, 2015; Acts 2016, 1st Ex. Sess., No. 28, §2, eff. April 1, 2016; Acts 2017, No. 386, §2, eff. June 23, 2017.