Act 298 of the 2007 Regular Session of the Louisiana Legislature By Rep Townsend

1. Act 298 of the 2007 Regular Session of the Louisiana Legislature By Rep Townsend

2. Louisiana Cultural Districts providing tax exemptions and credits in locally designated districts

3. Cultural Districts Background • Cultural Economy Initiative • 144,000 jobs pre Katrina and Rita in 2005 • Search for economic tools to: Bring back Louisiana’s creative talent, to promote the growth and development of cultural production within the state, and to support entrepreneurial development within the cultural economy

4. MT Auburn Associates • Tax incentive research – Feb. 2007 • Three major categories: • artist-based incentives • industry-based incentives • place-based incentives

5. Primary Goal- (modeled after DDD legislation) Cultural Districts revitalize communities by creating locally driven hubs of cultural activity

6. Cultural District • Geographically contiguous • Vital role in cultural life of community • Focus on cultural compound, art institution, art/entertainment businesses • Where artisan production, promotion, preservation and education occurs contributing to the public good

7. HB 359 overview: • Allows local communities to designate cultural districts • Provides for state and local tax exemption on sales of original art • Expands historic preservation tax credits on commercial and owner-occupied properties to historic structures located in cultural districts • Increases the cap on state residential historic tax credits • Requires local governments who designate such districts to report on impact to their community

8. Currently - for Income Producing property • 25% state income tax credit for costs and expenses of rehabilitation of historic structures that are in a DDD and used for commercial, industrial, or rental residential purposes

9. Currently - For Homeowners • May be eligible for up to 25% of rehab cost as credit against individual state income tax for up to 5 years

10. New Law • Expands eligibility of existing tax credits to the rehabilitation of commercial and residential structures located in “Cultural Districts” • Raises the cap on the residential program from $1 to $10 million per program year

11. Rule Making Process • The Administrative Procedure Act defines the procedure for promulgation of administrative rules. • Minimum time between the date of the first publication of the agency’s “Notice of Intent” (NOI) to promulgate rules and the effective date of the rules is four months

12. Timeline November ‘07 draft and revise rules December ‘07 publish Notice of Intent January ‘08 public hearing February ‘08 legislative oversight March ‘08 publish final rules

13. Purpose and Authority Definitions Applications Criteria Determination & Appeals Reporting requirements Sales Tax Exemption Boundaries Termination by Local Termination by State Cultural District Rules

14. Definitions • Local Governing Authority- the local governing authority of the parish or the municipality in which the cultural district is located, or both if a district is located partially in a municipality.

15. Application • A local governing authority may submit to the department an application to designate and certify a specified geographic area as a cultural district • In accordance with the timetable and in the format provided by department policy • Application deficiency must be addressed within 30 days of notification

16. Revitalize a neighborhood or area   Stimulate the economy  Engage residents Draw tourists  Provide a sense of community Serve as a gathering place Encourage creativity Strengthen community partnerships  Promote the arts and support artists Develop an image Enhance property values Capitalize on local cultural, economic and social assets Criteria

17. Reporting requirements • By January of each year, the local governing authority shall prepare and submit to the department an annual report on the impact of the certified cultural district with regard to the purposes of the creation of a cultural district

18. Sales Tax Exemption • Sales and use taxes imposed by the state of Louisiana or any of its political subdivisions shall not apply to the sale of original, one-of-a-kind works of art from an established location within the boundaries of a cultural district.

19. Established location • An “established location” shall not include transient vendors including those who sell art from booths or other temporary structures as street vendors or participants at fairs, festivals, or other temporary activities; except for ongoing, incorporated events, held at least 6 times a year in the same location

20. Certifying tax exempt sales Vendors shall certify and document each tax-exempt sale of original art:  • A description of the work of art including its medium and dimensions, the name of the artist, its date of creation, and the name, contact information, and qualifications of the person vouching for this information • A statement by the vendor certifying that the work of art meets the definition of a tax-exempt work of art.

21. Definition of Original Art/Craft • Art is the creation of a single, unique item, conceived and produced by the artist or under his direction, not intended for multiple or mass production • A craft must be a single, unique item made by hand or with the use of necessary and appropriate tools, conceived and produced by the artist or under his direction

22. Eligible tax-exempt art • Examples include drawings created using pencil, charcoal, graphite, pen and ink, or a combination of media, but not a copy, print or reproduction; paintings created using oil, acrylic, or other paint on paper, canvas, or other surface, but not a copy of another painting, a print, or a reproduction. • Eligible media include drawing, painting, printmaking, photography, sculpture, clay, metals, fiber, glass, leather, wood, mixed media

23. Eligible tax-exempt crafts • Examples of eligible media include clay, glass, fiber, metal, wood, leather, mixed media, and digital installation art • Ineligible media & products include manufactured items; crafts made from commercial molds, stencils, patterns or kits; imports; food products; plants; dried flower arranging; simulated stained glass; china painting; items created through mechanized processes • All jewelry must be handcrafted by the artist and shall not include stringing of manufactured beads

24. For more information: www.crt.state.la.us/culturaldistricts/ Call – 225-342-8161 Email – ghamilton@crt.state.la.us