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Summary of Legislation Passed in the First Extraordinary Session of 2002

Enticements for the Saints and the Hornets

Act 73 (HB 46) changes the dedications of the revenues from a one-percent hotel occupancy levied in Orleans Parish.

• This legislation redirects the one percent hotel occupancy tax levied in Orleans Parish that is currently credited to the New Orleans Area Tourism and Economic Development Fund, which provides $3.3 million to nine specific tourism and economic development agencies in Orleans Parish and the remainder to a legislative grant program administered by the La. Stadium and Exposition District (LSED).
    
• The bill redirects the first $2 million of these collections to the Ernest N. Morial Convention Center Phase IV Expansion Project Fund for construction of the proposed Phase IV of the Morial Convention Center. The remaining funds will be credited to the New Orleans Sports Franchise Fund, administered by the LSED, to fund contractual obligations of the state relative to any National Football League or National Basketball Association franchise located in Orleans Parish.
   
• The bill further provides that an amount not to exceed $1.75 million will be transferred to the State General Fund from any unexpended balance from the sports fund for Hornets transitional and relocation expenses. Any funds remaining would then be provided to the New Orleans Area Tourism and Economic Development Fund.
   
• The legislation prohibits the appropriation of state general funds for any of the purposes covered by Act 73. In order to provide funding for anticipated current year expenditures associated with Saints and Hornets contractual obligations, the bill provides several sources of funds. These sources include the funds collected that would otherwise be provided to the legislative grant program (estimated at $2.5 million), any surplus or carry forward funds ($2.3 million likely derived from the Superdome Renewal and Replacement Fund), and the remainder of unencumbered grant funds from previous fiscal years ($5.3 million).

Act 152 (HB 103) provides for supplemental appropriations for the 2001-2002 Fiscal Year.

• This Act provides a supplemental appropriation of $1.75 million in State General Fund for FY02 to the Office of Business Development within the Department of Economic Development to reimburse the Charlotte Hornets for their NBA application fee and for transitional and relocation expenses incurred in relocating the franchise to New Orleans. The bill provides for reimbursement to the State General Fund from the first $1.75 million deposited to the New Orleans Area Tourism and Economic Development Fund. Should the Charlotte Hornets fail to gain NBA approval of the relocation to New Orleans, this appropriation shall be null and void.

Act 153 (HB 144) revises the quality jobs program.

• This legislation expands, with respect to eligibility and benefits, the Quality Jobs Program administered by the La. Department of Economic Development. The bill restructures the program to align eligibility with certain Vision 2020 cluster industries including medical and biomedical; micro-manufacturing, software, auto regulation, internet and telecommunication technologies; environmental technologies, food technologies; and materials.
   
• The bill reduces the eligibility requirement for gross payroll for new jobs from $1 million to $250,000 for a minimum of five new direct jobs after three years. Other general aspects of the program include employer payment of 75% of the total premium for health insurance coverage, pay 1.5 times the federal minimum hourly wage for a 5% benefit rate, pay 2 times the federal minimum hourly wage for a benefit rate of 6%, must create jobs in a distressed region (parish in lowest quarter of all parishes based on per capita income or in a census tract group below the state median per capita income), the distressed region designation is maintained for the period of the initial quality jobs contract, the employer be categorized in a traditional or seed cluster.
• With respect to the Hornets memorandum of understanding, this legislation expands eligibility to include as a qualifying entity a National Basketball Association Team which relocates to Louisiana prior to November 1, 2003. A quality jobs program contract with such teams shall limit the total tax rebate to $3.65 million in any given year; shall not include the salary of an owner with greater than twenty-five percent interest, may be renewed for five years; shall be awarded with no more than a net benefit rate of five percent; and shall allow players and coaches to be nonresidents of the state.

Act 164 (HB 67) amends 2001 Capital Outlay Act to add projects for NBA upgrades to the New Orleans Arena and for construction of an indoor football practice facility for the New Orleans Saints.

• This bill amends the current fiscal year Capital Outlay Act to appropriate to the Louisiana Stadium and Exposition District for projects related to possible Hornets and Saints contractual obligations. The bill provides $10 million in non-recurring State General Fund for planning and construction of NBA upgrades to the New Orleans Arena. The bill provides $6.75 million for the New Orleans Saints Training Facility for planning and construction of an indoor football practice facility for the New Orleans Saints, related facilities and equipment.