HB 618 amends R.S. 36:104 and 104.1 to increase the ceilings and minimums on a range of fees charged by Louisiana Economic Development (LED), adds a new fee category for miscellaneous administrative documents, and raises the billable hourly ceiling for verification work. The bill also gives the LED secretary express discretion to reduce or waive fees for small businesses that would face disproportionate hardship, limits fee revenues to program administration, and requires biennial inflation adjustments starting in 2029.
Why it matters: the bill shifts more of the administrative cost of incentive and tax-credit programs onto applicants and third-party verifiers, while building automatic indexing into LED’s fee schedule and giving the secretary a tool to address equity concerns. That combination affects the cost-benefit calculation for businesses that pursue LED incentives and changes how vendors and in-house staff will be compensated for compliance and verification work.
At a Glance
What It Does
Amends LED’s statutory fee authority to raise allowable fees for advance notifications, application filings (including a percentage-based application fee), loan guaranties, certification and completion reports, contract amendments and renewals, and verification work performed by CPAs or tax attorneys. It creates a new miscellaneous administrative-document fee, authorizes fee reductions or waivers for qualifying small businesses, restricts fee use to administration, and permits biennial CPI-based adjustments to minimums and maximums.
Who It Affects
Companies that apply for LED incentives or tax-credit certifications, third-party CPAs and tax attorneys who perform required verification work, LED’s contracting and compliance operations, and small businesses that may seek waivers. Vendors and applicants that budget for incentive-related compliance will see direct financial impact.
Why It Matters
By increasing fee floors and ceilings and making them inflation-adjustable, the bill increases predictability of LED revenue while raising the up-front and ongoing cost of participating in LED programs. The secretary’s waiver power preserves discretion to protect small players, but also introduces administrative judgment into fee collection.
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What This Bill Actually Does
Under current law LED may charge a series of administrative fees tied to its incentive and certification programs. HB 618 modifies that statutory authority: rather than merely maintaining prior ceilings and floors, it systematically increases the allowable amounts across most fee categories and creates an explicit line for miscellaneous, unique administrative documents.
For application-driven incentives the statute still ties the filing fee to a percentage of the incentive or exempted taxes, but the bill increases the allowable minimum and maximum values that fee can reach.
Verification work — the CPA or tax-attorney attestations and audits that programs require — remains chargeable to the applicant, but HB 618 restructures how those costs are calculated and recovered. The law preserves two methods for sizing verification fees: an hourly rate for contracted services or a pro rata calculation based on salary and benefits for department-employed staff.
The bill raises the permissible hourly rate for contract work and removes a fixed statutory cap on the total verification fee, while keeping an upfront deposit requirement for applicants to secure the verification work.Administrative controls in the bill are twofold. First, fee revenues must be used solely for administration of LED programs, which preserves a narrow purpose for the receipts.
Second, the secretary gains explicit authority to reduce or waive fees for small businesses where fees present a financial hardship and are disproportionate to the benefits, as long as the waiver is judged to be in the state's best interest. That creates a case-by-case relief route rather than an automatic exemption.HB 618 also sets a mechanical update process for fee levels: beginning January 1, 2029, and every two years thereafter, the department may adjust minimums and maximums based on cumulative changes in the Consumer Price Index, and must publish adjusted amounts on its website.
The act takes effect January 1, 2027, meaning LED will implement the new statutory fee framework for filings and verifications occurring on or after that date.
The Five Things You Need to Know
The bill raises the maximum loan-guaranty fee from 4% to 5.5% of the guaranteed loan amount.
Application filing fees remain 0.5% of incentives or exempted taxes but the minimum increases from $500 to $650 and the maximum from $15,000 to $20,000.
Contracted verification services are billable at up to $325 per hour (up from $225), and the prior $25,000 statutory cap on total verification fees is repealed.
LED may charge a new miscellaneous administrative-document fee with a maximum of $350 and may increase existing per-item caps that were previously $250 in many categories.
On January 1, 2029, and every two years after, LED may adjust minimums and maximums according to cumulative changes in the CPI and must publish adjusted amounts on its website.
Section-by-Section Breakdown
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Revised fee schedule and new miscellaneous-document fee
This subsection lists the fee categories LED may charge and is the primary vehicle for the numeric changes. HB 618 increases the allowable ceilings and, in some categories, minimums for advance notifications, application filings (tied to a percent of incentives), loan guaranties, affidavits of final cost, annual certification reports, contract amendments, renewals, and verification work. It also inserts a new line authorizing a miscellaneous or unique administrative document fee (capped at $350), giving LED an explicit charge for ad hoc letters or special requests that previously may have lacked a statutory price tag.
Discretion to reduce or waive fees for small businesses
This provision grants the LED secretary express discretion to reduce or waive fees where fees cause a financial hardship for small businesses and are disproportionate to the benefit received, provided the reduction or waiver is determined to be in the state's best interest. The change formalizes a discretionary relief path but leaves the substantive criteria (what qualifies as 'small business', how disproportion is measured, and how 'best interest' is determined) to agency policy and practice.
Limitation on use of fee revenues
HB 618 reiterates that fees collected under this section must be used solely for costs associated with administering LED programs. That confines LED’s authority to retain and spend receipts to program administration rather than allowing transfers to unrelated budgets, preserving a tight nexus between fee revenue and compliance/processing functions.
Biennial CPI adjustments and publication requirement
New Subsection F authorizes automatic adjustments to the minimum and maximum fee amounts based on cumulative changes in the Consumer Price Index beginning January 1, 2029, and every two years thereafter. The department must publish adjusted fee schedules on its website. The mechanism is formulaic — tied to a federal CPI series — and replaces the need for periodic legislative rate changes while requiring LED to provide public notice of updates.
Verification fee mechanics and deposit requirement
These paragraphs change how expenditure or expense verification reports are charged. The bill raises the maximum hourly rate LED can use to bill contracted CPA or tax-attorney services and clarifies that applicants are responsible for the actual cost of verification. It also increases the maximum upfront deposit required from applicants and removes the prior statutory cap on the total verification fee, shifting predictability risk to applicants and reinforcing the applicant-pay model for third-party compliance work.
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Who Benefits
- Louisiana Economic Development — higher fee ceilings and CPI indexing create a more predictable and potentially larger administrative revenue stream to cover program oversight costs.
- LED program applicants with large incentives — those who can absorb higher fees benefit from continued access to LED programs while fees better fund timely processing and verification.
- Third-party auditors and CPA/tax-attorney firms — higher allowable hourly rates for contracted verification work raise potential revenue per engagement for vendors.
- Small businesses eligible for discretionary waivers — the secretary’s waiver authority creates a pathway to reduce upfront costs for qualifying smaller applicants.
Who Bears the Cost
- Applicants seeking LED incentives, particularly small and mid-sized businesses — higher minimums, raised ceilings, and upfront deposits increase the cost of applying and complying.
- Businesses budgeting for long-term credits or multi-phase projects — CPI indexing can raise future compliance costs beyond expectations unless models account for inflation adjustments.
- Companies facing verification audits — removal of the total fee cap and higher hourly rates increase exposure to unpredictable audit bills.
- LED administration and legal staff — implementing waiver processes, publishing CPI adjustments, and managing deposit accounting adds operational work and requires clear procedural rules.
Key Issues
The Core Tension
The central tension is funding program administration versus preserving affordable, predictable access to incentives: HB 618 increases LED’s ability to recover administrative costs (and to let those recoveries grow with inflation) while relying on discretionary waiver power to protect small businesses — a trade-off between fiscal sustainability and administrative fairness that depends heavily on how the secretary implements waiver criteria and publishes transparent fee practices.
HB 618 balances two goals — funding LED’s administrative workload and preserving access to incentives — but leaves several implementation questions unresolved. The secretary’s authority to waive or reduce fees is broadly phrased and lacks statutory definitions for key terms such as 'small business', 'financial hardship', or 'disproportionate to benefits received', which means LED must create criteria and procedures by rule or guidance.
That discretion can address equity concerns but also risks inconsistent application or legal challenge if not clearly documented. Removing a hard cap on total verification fees shifts pricing uncertainty onto applicants; while increasing the hourly ceiling and deposit amount gives LED leverage to secure services, it can create sticker shock and deter participation, particularly for smaller projects with tight razor-thin returns.
The CPI-based adjustment mechanism adds predictability for LED revenue but effectively automates fee growth without periodic legislative review. Biennial indexing tied to the national CPI may not align with state-specific cost pressures or LED’s actual administrative cost drivers; it also means fees can increase even if program demand falls.
Finally, the effective date (January 1, 2027) gives applicants and vendors a limited window to adjust budgeting and contracting practices and requires LED to publish new schedules and establish waiver processes before practical use.
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