Opinion Number ( 2008 )

Dear Ms. McConnell:

Your request for an Attorney General's Opinion has been assigned to me for research and reply. You have asked for our opinion regarding the applicability of Section 3(C) of Act 456 of the 2007 Regular Session relating to tax credits for state-certified infrastructure projects.

Effective July 1, 2007, Section 3(C) of Act 456 amended La. Rev. Stat.47:6007(C)(2) and provides the following:

An application for an infrastructure project filed on or before August 1, 2007 shall have twenty-four months from the date of approval of the rules or January 1, 2008, whichever is earlier, in which to qualify for the forty percent tax credits earned on expenditures. Tax credits on infrastructure projects shall be considered earned in the year in which the expenditures are made, provided that a minimum of twenty percent or ten million dollars of the total base investment provided for in the initial certification that is unique to the film production infrastructure shall be expended before infrastructure tax credits can be earned on expenditures. The payment of tax credits may extend beyond or be made after the year expenditures are made.

Specifically, you ask for our opinion on the following question:

Whether under Section 3(C) of Act 456 an infrastructure project that filed an application on or before August 1, 2007 is required to incur expenditures within the 24 month period from January 1, 2008¹ to earn tax credits or whether expenditures can be incurred and tax credits can be earned after the end of the 24 month period, provided that 20% or $10 million dollars of the total base investment as set forth in the initial certification is expended during the 24 month period.

In addressing the question presented, we are guided by established rules of statutory interpretation and construction. The fundamental question in cases of statutory construction is legislative intent.Succession of Boyter, 99-0761 (La. 1/7/00), 756 So.2d 1122, 1128. Statutes should be interpreted to give effect to all parts of the statute and should not be given an interpretation that makes any part superfluous or meaningless. Id. at 1129.

After review of the specific language of Act 456 of the 2007 Regular Session, it is the opinion of this office that in order to qualify for tax credits in connection with an infrastructure project that applied for tax credits on or before August 1, 2007, all expenditures must be incurred within the two year time period from January 1, 2008. We believe infrastructure expenditures incurred after this two year time period are not eligible for tax credits.

As you are aware, Section 3(C) of the Act requires that a minimum of 20 % or $10 million dollars of the total base investment must be expended before tax credits are earned. This requirement is similar to the provision of La. Rev. Stat. 47:6007 (C)(2)(b)(iii), which requires that 25% of the total base investment must be expended before any tax credits may be earned. We agree with your assessment that both provisions were included to require that a substantial portion of the infrastructure project must be completed before tax credits can be certified.

Our reading of Section 3(C) of Act 456 fails to indicate that expenditures can be incurred and tax credits earned after the end of the two year time period. We believe Section 3(C) of Act 456 mandates that 20% or $10 million dollars of the total base investment must be spent in order to earn any tax credits and all tax credits must be earned in the 24 month period. There is no language in the Section 3(C) to suggest that the two year time period can be extended. To interpret otherwise Section 3(C) otherwise, would be inconsistent with other parts of the statute.

We trust this adequately responds to your request. If you should have any questions about the response contained herein, please feel free to contact our office.

Yours very truly,

JAMES D. "BUDDY" CALDWELL Attorney General

Michael J. Vallan Assistant Attorney General

¹ You have indicated that rules have not been approved. So January 1, 2008 is the earlier date.