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Senate Bill 277 concerning digital interactive media has been formally sent to the Governor for his signature on Thursday June 25, 2009. We hope that the Governor will act soon on this important piece of legislation.

Unfortunately, a proposed amendment to the new digital media program allowing a digital media tax credit recipient to have the state convert the tax credit to cash at $0.90 on the dollar did not complete the legislative process on Thursday before the formal deadline for adjournment. This concept was presented to LISTA by the Baton Rouge Area Chamber of Commerce. We felt this option was an excellent addition to the program proposed in SB 277. LISTA regrets that this amendment was not adopted by the legislature as a whole. We will review this concept again in two years at the time of the next Louisiana fiscal legislative session.

In the coming weeks, the original members of LISTA will meet to discuss the future direction of the organization. One of my first proposals to the membership will be opening membership up to a broader group of interested people and companies. The original members were asked to make substantial financial contributions in order to get the organization started. I will now propose to the membership that the average cost of membership be reduced significantly and that the organization make efforts to enlist many new members.

As with any government sponsored business incentives program, the new digital media program will not survive unless it is beneficial to the state as a whole. Determining whether the program is successful requires an expert in economics and financial analysis to review and analyze all of the available relevant data. I would like to see LISTA join with other economic development agencies and organizations in Louisiana to sponsor a university professor's effort to track all available data on the digital media industry in Louisiana from July 1, 2009 and forward to determine whether the digital media act is fulfilling its potential for the state.

I would also like to see LISTA and such a university professor track the geographical distribution of the beneficiaries of the digital media act in the state. Our goal at LISTA is to encourage and support growth of digital interactive media businesses throughout the state. We thus want to know the extent to which this goal is being fulfilled.

The new digital media program will also lead to the adoption of related rules for the administration of the program by the Louisiana Department of Economic Development. LISTA and its members will actively participate in and comment on the development of such rules. 

Additionally, LISTA and my law firm, Kean Miller, will undertake a series of presentations inside and outside of the state on the use of the digital media tax credit program. Further still, LISTA and Kean Miller will begin offering educational seminars on topics of interest to the digital media community. 

Again, I offer my thanks to all of the people who assisted with the adoption of SB 277. It has been an educational and ultimately gratifying experience for me.

Erich P Rapp.   

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The Louisiana Senate has concurred on the amendments to Senate Bill 277 from the House of Representatives. The formal legislative process is complete.  SB 277 now goes to the Louisiana Governor for his signature. Please send messages and make phone calls to the Louisiana Governor's office urging the Governor to sign SB 277.

Assuming that Governor Jindal signs SB 277, the new digital media program is a game changing event in the history of the Louisiana economy. I suggest to you that the impact of this event on the Louisiana economy over the next ten years will rival the impact of sugar and cotton agriculture in the early 1800's and the discovery of oil in Louisiana in the early 1900's.

Louisiana is about to enter the digital media revolution in a dramatic way.

Erich P Rapp.

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The Louisiana House of Representatives passed Senate Bill 277 re digital interactive media tax credits today. The bill must now return to the Senate for a concurrence vote on the House amendments. If the Senate concurs on the House amendments, the bill will be sent to the Governor for his signature.  Thankfully, Senate Bill 277 received a favorable vote in the morning.

The successful passage of SB 277 will allow a wide array of software and web platform development projects to earn 25-35% marketable/transferable tax credits on the cost of production of such software and web platforms. This program will likely result in a material increase in the value of software and web platform development in Louisiana. SB 277 is authored by Senator Ann Duplessis and supported by the Louisiana Internet Software and Technology Association (LISTA), Greater New Orleans, Inc. (GNO, Inc.) and Baton Rouge Area Chamber of Commerce (BRAC).

In the mid-afternoon after SB 277 had successfully passed the House, a small group of House members unhappy with the governor's proposed budget cuts began an effort to slow consideration of other bills on the agenda. This effort successfully prevented about 20 bills scheduled for debate from being considered and many more bills on the agenda subject to call from being considered. 

At 6 PM today, the legislature reached a Constitutionally mandated deadline for considering bills that have not yet been voted on favorably by both houses. Thus, the bills remaining on the docket at 6 PM will die unless both houses simultaneously vote to allow consideration of any given bill. Some effort to get a two-third vote on some of the remaining bills will be taken tomorrow morning. It remains unknown how successful this effort will be.

One victim of this work slowdown and the hard 6 PM deadline was an amendment to the digital interactive media bill allowing the program users to choose between tax credits and a discounted tax rebate in cash. The successful passage of this bill contemplated for SB 199 would have been to put a minimum value on the tax credits in the market. LISTA, GNO, Inc. and BRAC all supported this amendment which was contemplated to be amended into SB 199. SB 277 in the form passed by the House and the Senate only provides for the issuance of marketable/transferable tax credits. It is also unknown if this bill will ultimately be considered in this session by suspension of the rules by two-thirds vote. The effectiveness of the effort to suspend the rules and allow further bills to be considered will likely be known by  the middle of the day on Tuesday.

A further report will follow tomorrow.

Erich P Rapp.

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The Louisiana House of Representatives has scheduled Senate Bill 277 for a vote in the House of Representatives on Monday June 22, 2009. Senate Bill 277 is, of course, the renewal and extension of the digital interactive media business/tax incentive program. Between now and then, please call your Representatives and voice  your support for SB 277.

Senate Bill 277 is authored by Senator Ann Duplessis of New Orleans and now being managed in the House of Representatives by Representative Cameron Henry. The bill is supported by the Louisiana Internet Software & Technology Association (LISTA), Greater New Orleans, Inc. (GNO, Inc which is the business development arm of metropolitan New Orleans), BRAC (Baton Rouge Area Chamber of Commerce), and the Jindal administration. The bill will provide marketable/transferable tax credits and cash rebates to businesses spending funds in Louisiana to create a broad array of software and web platform design and development projects.

By encouraging the operation of these types of  businesses, Louisiana will likely draw many new high paying jobs into the state on a long term basis. LISTA is very optimistic that this legislation will have a transformative impact on the Louisiana economy if adopted.

Between now and Monday June 22, 2009, please call your Representatives and voice your support for SB 277 and then Louisiana can join the digital media revolution.

Erich P. Rapp.

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The Louisiana Governor's office declared its support today for Senate Bill 277 concerning digital interactive media business incentives in Louisiana. After several weeks of negotiations and discussions with the leadership at the Louisiana Department of Economic Development about the exact language to be contained in Senate Bill 277, Senator Duplessis, LISTA, the Department of Economic Development and the Governor's office have reached an agreement on the terms of Senate Bill 277.

The Ways and Means Committee of the Louisiana House of Representatives will hold a hearing on Senate Bill 277 on Monday June 15, 2009 at 9 AM. If you are involved in this business and interested in supporting Senate Bill 277, please come to the committee hearing to show the committee members the business community support for the bill. If we as a digital interactive media industry in Louisiana fail to show our interest, we may find the committee members find it hard to care about our bill. Let's show our support.

The most exciting part of the bill is the definition of "digital interactive media." Under the new program, the digital interactive media incentives would be available for the development of many different types of software and web platform development as well as the development of video games and interactive animation. Under the existing law, the incentives have largely been limited to video game development. We are very excited about the potential for new businesses in the broader community of digital interactive media moving into Louisiana. In the years ahead, we anticipate new developer/programmer and new design jobs coming to Louisiana in material numbers.

The next most exciting thing about Senate Bill 277 is the proposed incentive parity with the film and television production incentives program. Under the existing digital interactive media program, the benefit was 20% transferable tax credits on in-state expenditures and the percentage declined over time. The new program would allow 25% transferable tax credits on all in-state expenditures and a 10% bonus for expenditures on labor residing in Louisiana for 35% transferable tax credits on expenditures on labor residing in Louisiana without any declining  benefit over time. As a practical matter, this combination of benefits effectively reduces the cost of developing many types of software and web platforms in Louisiana by over 30%.

It will take time to educate the digital interactive media industry about the benefits of this new program, but the program will eventually be a significant draw for new software and web platform development business in Louisiana.

Once this legislation becomes law, we must begin thinking about qualified workforce development by education and by transfer of qualified labor into Louisiana and we must work to change the perceptions about the workforce potential in Louisiana. Louisiana, however, can overcome these problems and build a digital interactive future.

I offer a prediction. With the proposed digital interactive media program enacted, Louisiana will be transformed from a digital interactive media backwater to a top five state player within ten years. Louisiana will be a leader in software and web platform development.

Erich P Rapp.

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The Louisiana Senate passed Senate Bill 277 on Thursday June 4, 2009. The bill will now be considered by the Ways and Means Committee of the Louisiana House of Representatives. The hearing has not yet been scheduled. An update will be provided on this blog when the meeting is scheduled.

We need everyone to send emails and make phone calls to their Representatives in the House expressing their support for Senate Bill 277 authored by Senator Duplessis and also expressing their opposition to Senate Bill 199 authored by Neil Riser.

SB 277 concerns tax credit incentives for businesses operating in the digital interactive media arena. The bill would provide tax credits for many types of software and web platform development. The objective of the bill is to increase the amount of such business being done in Louisiana and to increase the number of  software and web development and design jobs in the state.

The bill is a renewal of a program that has been in place for the past four years, but has been little used because it was previously limited to video games. The renewal of the program would include a modernization of the definition of digital interactive media and would place the level of tax credits granted on parity with the existing film tax credit program.

Senator Riser's Senate Bill 199 would not change the definition of digital interactive media to include software and web platform development and design generally. It would instead limit the coverage to video game development. LISTA is opposed to Senate Bill 199 by Senator Riser.

We need you to express your support for SB 277 and your opposition to SB 199 to all of your Representatives in the Louisiana House of Representatives. Every call and every email is important. A message to a Representative from a constituent voter will have a big influence on the legislator. The message can be limited to a sentence or two expressing your wishes. You can get the email address and phone number of  your representative at  http://www.legis.state.la.us/

For more information, the Saturday June 6, 2009 edition of the New Orleans Times Picayune includes an article describing SB 277 and its progress through the legislative process. The article was written by Times Picayune Capital Bureau Chief, Robert Travis Scott, and is entitled, Growth is sought in digital media. 

Erich P Rapp.

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The Louisiana Senate Revenue and Fiscal Affairs Committee voted a favorable referral of Senate Bill 277 out of committee to the full Senate on Tuesday May 26th. The current form of the bill is not yet available on the Louisiana legislature web site, but should be posted very soon. 

Representatives of LISTA have worked with representatives of the Louisiana Department of Economic Development on language for the legislation that would provide material support for the growth of operations of Louisiana web platform and software development businesses in Louisiana. Despite concerns of some for the potential cost to Louisiana state government of the legislation, the bill has so far been favorably received by the legislators.

The current legislation would provide transferable tax credits in the amount of 25% of web platform and software development costs and 35% of certain related labor costs to firms developing such projects in Louisiana. These tax credits could then be sold in the secondary market for as much as $0.90 on the dollar.  The passage of this legislation would seem likely to make Louisiana a national hub for web platform and software development in the years ahead.

The full Louisiana Senate may vote on this legislation on Thursday May 28th or Monday June 1st. If you are interested in web platform and software development businesses in Louisiana, please email and call your Senators and Representatives asking them to support Senate Bill 277.

If you do not know who your Senator and Representative are, you can find out by typing your home and business addresses into the appropriate place at  http://www.legis.state.la.us. It only takes a few minutes to find out and send your representative and senator an email. Please take the time to do this. It is really a big deal for the growth of this important industry in Louisiana.

For media coverage on Senate Bill 277 and the Louisiana Internet Software and Technology Association, please see the New Orleans Times Picayune article on Wednesday May 27th entitled, Movie, software tax benefits OK'd.

Erich P Rapp.

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Senator Ann Duplessis of New Orleans has filed Louisiana Senate Bill 277 providing for a digital interactive media tax credit.  This bill has been co-authored by Senators Kostelka (Monroe), Marionneaux (Livonia/Baton Rouge region), Michot (Lafayette), Quinn (Metairie) and Walsworth (West Monroe). It has also been co-authored by Representatives Abramson (New Orleans), Arnold (New Orleans), Cortez (Lafayette), Downs (Ruston), Leger (New Orleans), Ligi (Metairie) and Robideaux (Lafayette).

You can read and print a copy of Senate Bill 277 from the Louisiana legislature web site or click on this link provided.

We are confidant that we have built a group of Senators and Representatives from all regions of the state. We also anticipate adding additional co-authors at the time the bill comes before a legislative committee for hearing.

Futher still, Greater New Orleans, Inc. ("GNO, Inc.") has also endorsed Senate Bill 277.

The passage of this bill in its current form would be a giant step forward for the Louisiana economy. The future of the United States economy is information and media driven. The jobs that would be brought to Louisiana after the passage of this bill would be almost uniformly high paying and bring new outside money into our economy. We urge everyone to contact their Representatives and Senators and ask them to support Senate Bill 277 in its current form.

Erich P Rapp 

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