The 2020 Louisiana Regular Legislative Session convened on March 9, 2020 and closed on June 1, 2020 after a long suspension due to the Coronavirus. Immediately after that, the Legislature held a special session running through June 30, 2020 focused on spending and business priorities. Important legislation from these two sessions includes a package of extensions and expansions of tax incentives and other business assistance, bills aimed at limiting liability of businesses for claims of exposure to Coronavirus, and a bill allowing remote online notarization. Several bills that will impact business and real estate interests are summarized below.
Tax Incentives and Other Legislation Supporting Businesses
Unless otherwise noted, the upshot for the tax incentive legislation is that the negative impacts of the Coronavirus on local businesses encouraged lawmakers and the Governor to expand tax incentive legislation that has previously raised concerns about these programs’ effectiveness in light of their cost to the state treasury.
SB 189 – Act 311 creates the Louisiana Main Street Recovery Program, a small business set aside of $300 million of the $1.8 billion the State received from the federal CARES Act. Louisiana companies with 50 or fewer employees that had normal business operations interrupted by the pandemic are eligible for grants up to $15,000 for eligible expenses. The act requires that, during the first 60 days of the program, at least $40 million dollars in grants must be awarded to minority business enterprises.
Upshot: This state program gives first priority relief to businesses that did not receive a Payment Protection Program loan, insurance payment or Economic Injury Disaster loan or advance as a result of the Coronavirus. For additional information on the program visit the Louisiana Main Street website.
HB 4 – Act 25 extends the sunset of the tax credit for rehabilitation of historic structures from January 1, 2022 to January 1, 2026 and limits the maximum aggregate total of tax credits that may be reserved for applications received after January 1, 2021 to $125 million dollars annually, although the amounts will roll over.
SB 6 – Act 15 suspends Louisiana’s corporation franchise tax for small business corporations (taxable capital of less than $1 million) for the period July 1, 2020 to June 30, 2021.
HB 13 – Act 28 amends the Enterprise Zone program to allow participation by accommodation and food providers with less than 50 employees through 2023.
HB 19 – Act 29 amends the Quality Jobs Program to expand eligibility to certain COVID-19-impacted businesses with less than 50 employees.
SB 24 – Act 22 amends the Angel Investor Tax Credit Program to provide for an enhanced credit and extend the program into 2025.
SB 13 – Act 17 amends the Louisiana New Markets Jobs Act to provide for an additional $75 million of qualified equity investment funds for certain applicants beginning August 1, 2020.
HB 11 – Act 27 allows businesses to retain a slightly larger percentage (1.5%) of sales taxes collected.
HB 70 – Act 12 amends the Enterprise Zone Program to provide essential critical infrastructure workers, such as nurses, who worked at least 200 hours in responding to the COVID-19 crisis between March 22, 2020 and May 14, 2020 with a one-time hazard pay rebate of $250.
HB 57 – Act 37 creates the Civil Justice Reform Act of 2020 to amend various procedure and evidence statutes to (i) lower the threshold for a jury trial from $50,000 to $10,000, (ii) limit evidence of insurance coverage at trial and (iii) limit medical damages to those actually paid (not the amount billed), plus an additional amount for the cost of procurement.
Upshot: This bill is a compromise arising out of a long debate regarding what “tort reform” measures are appropriate to promote a reduction in Louisiana’s high insurance rates.
HB 826 – Act 336 limits the liability of entities, people and governments for claims of injury or death from exposure to COVID-19 in the course of business operations unless the person, entity or government failed to substantially comply with applicable COVID-19 procedures established by the government and the injury or death was caused by the person’s, entity’s or government’s gross negligence or wanton or reckless misconduct. Event planners and hosts and personal protective equipment providers are also expressly protected unless they are grossly negligent or exhibit wanton or reckless misconduct. Employees exposed to COVID-19 are also limited in their remedies.
Upshot: Proving gross negligence is difficult, and Act No. 336 will make successful suits for COVID-19 exposure in the course of business or government operations or from attendance at a convention, trade show, or other large event quite rare.
SB 508 – Act 305 limits the liability of restaurants for injury or death due to COVID-19 infection during the state of emergency if the restaurant was in substantial compliance with emergency health proclamations and procedures, unless the alleged injury or death arises from gross negligence or willful and wanton misconduct.
Upshot: Many businesses consider these liability protections essential to their ability to continue to operate their businesses while COVID-19 infection remains a threat.
HB 805 – Act 162 suspends prescriptive and preemptive periods and legal deadlines which would otherwise expire between March 17, 2020 and July 5, 2020 until July 6, 2020.
Upshot: These suspensions will benefit those who had claims that would have prescribed or preempted during the shutdowns related to the pandemic, but the suspensions will not impact prescriptive and preemptive periods that expire outside of the March 17, 2020 – July 5, 2020 window.
HB 122 – Act 131 confirms that acts executed by remote online notarization between March 11, 2020 and May 1, 2020 pursuant to the Governor’s emergency orders are valid to the same extent as if traditionally notarized. This does not apply to authentic acts, testaments, trusts, donations inter vivos, matrimonial agreements, or spousal support documents.
HB 274 – Act 254 provides for electronic notarization of instruments such as affidavits and acknowledgements using audio and video technology. The act does not allow for electronic notarization of testaments, trusts, donations inter vivos, matrimonial agreements, or acts regarding spousal support. It also does not allow for electronic notarization of any authentic act as defined under Louisiana Civil Code Art. 1833. If authentic acts were electronically notarized, those acts would not be in authentic form, but may still be valid as acts under private signature or acknowledged acts, as provided in existing laws. The act provides that its provisions cannot be altered by agreement of the parties. The Secretary of State is required to adopt rules to provide the details of implementation of the act. The act also revises La. R.S. 9:2760 and La. C. C. art. 3344 to provide for recordation of copies of electronic records even if they lack an original signature as long as the notary certifies the copy is an accurate copy of the electronic record. The primary substantive provisions of the act are not effective until the earlier of the enactment of the federal SECURE Notarization Act or February 1, 2022.
Upshot: Because authentic acts are excluded from the statute, many important transactions, such as those involving mortgages that can be enforced by executory process, will still require in-person notarization.
HB 722 – Act 109 adds La. R.S. 13:3733.3 to provide that electronic signatures used in transactions with financial institutions are enforceable to the full extent of the law and specifies evidence that can be used to refute a claim by a signer that their signature is not valid, including evidence of the signer’s receipt of a benefit from the transaction such as receipt of loan funds.
Upshot: Electronic signatures are already generally allowed by La. R.S. § 9:2607, but this provision clarifies evidence requirements for purposes of litigation of disputes related to such acts.
Real Estate Legislation
HB 594 – Act 281 amends code and procedure articles to include reference to private sale of co-owned property without consent of all co-owners or where one co-owner is an absentee pursuant to terms set by the court in accordance with statutory requirements.
Upshot: Practitioners should exercise caution in relying on this act and ensure that any partition complies with other existing laws, such as La. R.S. § 9:1113, which sets out specific requirements allowing some co-owners to buy out another co-owner with a minor interest.
HB 126 – Act 20 deletes an existing civil code provision that allows the buyer and occupant of a residence under a bond for deed contract to be considered an owner entitled to a homestead exemption.