PILOTs create a reliable stream of payments that the governmental entity can use to issue bonds for infrastructure projects and public needs, and it provides the investing business with a predictable cost structure. The stream of payments received by the governmental agency is usually larger than they might receive under the Industrial Tax Exemption Program (ITEP), currently the primary tool used for incentivizing industrial investment in Louisiana, and the payments to the local governing entity begin sooner than with the ITEP, which exempts 80% of property taxes for up to 10 years.

This amendment lets businesses (existing or new) and local government agencies negotiate PIILOTs for new projects or additions to existing facilities without the need to transfer legal title of the property. This makes the tool more attractive to businesses, especially those who already operate in Louisiana and are looking to expand; loss of title to their property may not seem like a feasible choice.  It also has a term of up to 25 years, whereas the ITEP is capped at 10 years; this provides flexibility for both parties to structure the deal how they best see fit.

The amendment provides greater control of the incentive at the local level and greater certainty over the outcome for the business, as the ITEP approval process must start at the state level and if approved it then comes to local government for approval, which creates confusion and uncertainty for businesses and a longer approval process. It also minimizes risk to the investing business by providing a longer term for payment and not requiring them to seek re-approval after 5 years.

Business investments are made – or not – for a variety of reasons, but where companies choose to make them often comes down to which communities can best minimize risk, lower cost, and support a quick timeframe for reaching project completion. This amendment gives North Louisiana communities a different and more flexible tool to offer companies to help them make the decision to invest here.

About NLEP
NLEP provides professional economic development services to the 14-parish region of North Louisiana, including lead generation, prospect management and support of existing businesses. The organization also represents the interests of North Louisiana with a unified voice and as a single point of contact. It acts as a catalyst, a convener, and a connector in the region to ensure that North Louisiana’s economic development potential is realized. For more information, visit www.nlep.org.