The House Ways and Means Committee voted today to advance two vital pieces of legislation aimed at improving the competitiveness of Louisiana’s international businesses and boosting private investment in public port authorities and.
HB744 by Rep. Cedric Richmond of New Orleans and HB215 by Rep. Nita Hutter of Chalmette, will move to the full House for debate, possibly next week.
The first measure, HB744, establishes the International Business Incentive Tax Credit Program in Louisiana, which provides financial assistance through a tax credit to Louisiana businesses which import or export products internationally through state port facilities.
“The overall goal is to make Louisiana businesses the most competitive they can be in the global marketplace by rewarding existing activity and creating new business activity,” said Port of New Orleans President and CEO Gary LaGrange. “In addition, new cargo moving through Louisiana ports would attract new shipping services and can be leveraged to create new distribution centers and improve transportation networks.”
The incentive program would help create a new critical mass of cargo for Louisiana ports to help lure shippers and distributors, LaGrange said.
Research found Louisiana businesses import and export about 1.6 million tons of cargo per year. Out of that amount, about 700,000 tons are shipped through Louisiana ports. The remaining 900,000 tons are shipped via East and West Coast ports and through competing Gulf Coast ports.
LSU economist James Richardson found a mere 10 percent shift in current Louisiana exports shipped through out-of-state ports would result in more than $1 billion in business activity, $15.8 million in new state tax collections and $10.5 million in new local tax collections.
The figures are also comparable on the import side.
“HB744 provides a valuable incentive to retain and expand Louisiana businesses utilizing Louisiana port facilities to import and export cargo critical to Louisiana’s economy, which certainly includes companies within Louisiana’s oil and gas industry,” said former Congressman Chris John, now president of Louisiana Mid-Continent Oil and Gas Association. “This legislation will not only create more Louisiana jobs in the private sector, it will also prove to expand Louisiana’s statewide port system.”
In addition to Mid-Continent, the World Trade Club of Greater New Orleans, Louisiana Chemical Association, GNO Inc. and numerous businesses from throughout the state voiced their support for the bill in committee.
Another bill that will increase investment in Louisiana’s ports provides for a 5% tax credit for private capital investment at public port facilities. That measure would help encourage financing needed to keep Louisiana’s ports among the most modern and efficient in the nation and the world.
“Building modern Port infrastructure is expensive,” said Joe Accardo, executive director of the Ports Association of Louisiana. “This legislation encourages private companies to invest in the state’s public port facilities.”
Accardo pointed out that there is a huge funding gap between what Louisiana ports need to stay competitive and what the state usually puts toward capital projects at Louisiana public ports. About $80 million in projects at the state’s ports are approved for funding each year through the State’s Port Priority Program, but usually there is only $20 million to $25 million in available funding.
In the last two years, with a budget surplus the state was able to make a larger investment in Port facilities, but Accardo said that’s not likely to continue this year or on a regular basis in the future. The legislation is aimed at finding new sources of private funding to fill the gap.
