HLS 10RS-1645 ORIGINAL
Page 1 of 7
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
Regular Session, 2010
HOUSE BILL NO. 1122
BY REPRESENTATIVE FOIL
TAX/TAXATION: Creates the Angel Investor Tax Rebate Program
AN ACT1
To enact Chapter 3 of Subtitle VII of Title 47 of the Louisiana Revised Statutes of 1950, to2
be composed of R.S. 47:6201 through 6204, relative to rebates for income and3
corporation franchise taxes; to establish the Angel Investor Tax Rebate Program; to4
provide with respect to tax rebates for investments in certain companies; to provide5
for eligibility, amount, and limitations on receipt of tax rebates; to provide for6
recapture of tax rebates; to provide for penalties; to authorize the promulgation of7
rules; and to provide for related matters.8
Be it enacted by the Legislature of Louisiana:9
Section 1. Chapter 3 of Subtitle VII of Title 47 of the Louisiana Revised Statutes of10
1950, to be composed of R.S. 47:6201 through 6204, is hereby enacted to read as follows:11
CHAPTER 3. ANGEL INVESTOR TAX REBATE PROGRAM12
§6201. Legislative findings and purposes13
A. The legislature finds that the welfare of the state is enhanced by a healthy14
entrepreneurial business environment and that ready sources of capital necessary to15
support this environment are not currently available.16
B. This Act is intended to achieve the following purposes:17
(1) To create the Angel Investor Tax Rebate Program to encourage third18
parties to invest in early stage wealth-creating business in the state.19 HLS 10RS-1645 ORIGINAL
HB NO. 1122
Page 2 of 7
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
(2) To expand the economy of the state by enlarging its base of wealth-1
creating businesses.2
(3) To enlarge the number of quality jobs available to retain the presence of3
young people educated in Louisiana.4
§6202. Angel Investor Tax Rebate Program; establishment; qualifications;5
administration6
A. Program. There is established the Angel Investor Tax Rebate Program,7
hereinafter referred to in this Chapter as "program", to provide rebates for income8
and corporation franchise taxes to be claimed over a five year period for qualifying9
taxpayers that invest in a Louisiana Entrepreneurial Business, as defined by R.S.10
51:2303(5). The program shall be implemented and administered by the Department11
of Economic Development, hereinafter referred to in this Chapter as "department".12
B. Rules. In compliance with the Administrative Procedure Act, the13
department, in consultation with the secretary of the Department of Revenue, shall14
adopt and promulgate rules as are necessary for the efficient and effective15
administration of the program. The rules shall include provisions for:16
(1) Certification by the department with regard to the eligibility of an17
investor applicant for receipt of tax rebate;18
(2) Development of investor pools for annual allotments of tax rebates;19
(3) Presentation of an investor's eligibility certification and any other20
documentation that may be required for a rebate application; and21
(4) Requirements related to reporting by a Louisiana Entrepreneurial22
Business regarding the use of investment proceeds, number of employees, amount23
of payroll, annual revenue, and any other information requested by the department.24
C. Qualifications.25
(1) Investors. An investor may qualify for receipt of tax rebates if the26
following criteria are satisfied:27
(a) The investment in the Louisiana Entrepreneurial Business is an28
investment that is at risk and not secured or guaranteed. "At risk" means that the29 HLS 10RS-1645 ORIGINAL
HB NO. 1122
Page 3 of 7
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
repayment of the investment is entirely dependent upon the success of the Louisiana1
Entrepreneurial Business.2
(b) The investor cannot be a principal owner of the business involved in the3
operation of the business as a full-time professional activity, nor can his spouse or4
any relative within the third degree of consanguinity or affinity. A principal owner5
means one or more persons who own an aggregate of fifty percent or more of the6
Louisiana Entrepreneurial Business.7
(c) Use of proceeds from the investment is used for capital improvements,8
plant equipment, research and development, working capital for the business, or9
other business activity as may be approved by the department. The proceeds shall10
not be used to pay dividends, repay shareholder's loans, redeem shares, or repay debt11
unless approved by the department.12
(d) The investor meets the definition of accredited investor established by13
Rule 501 in Regulation D of the General Rules and Regulations promulgated under14
the Securities Act of 1933.15
(e) The investment in the Louisiana Entrepreneurial Business by the16
applicant is maintained for three years, unless otherwise approved by the department.17
(2) Louisiana Entrepreneurial Business. An investor may qualify for receipt18
of tax rebates if the following criteria are satisfied with respect to the Louisiana19
Entrepreneurial Business:20
(a) The principal business operations are located in Louisiana.21
(b) Prior to the investment by the investor, the business has received22
approval by the department to be qualified as a business that an investor may invest23
in for purposes of the program.24
(c) The business demonstrates through its business plan that it anticipates25
having more than fifty percent of its sales from outside of Louisiana.26
(d) The business is not a business engaged primarily in retail sales, real27
estate, professional services, gaming or gambling, natural resource extraction or28
exploration, a franchisee, or financial services including venture capital funds.29 HLS 10RS-1645 ORIGINAL
HB NO. 1122
Page 4 of 7
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
§6203. Angel Investor Tax Rebate Program; amount; duration; forfeit1
A. Total Annual Tax Rebates. (1) Except as otherwise provided for in this2
Section, the total amount of tax rebates granted by the department in any calendar3
year shall not exceed five million dollars, irrespective of the year in which they are4
to be used,. The department shall by rule establish the method of allocating available5
tax rebate funding to qualified investors, including but not limited to, a first-come,6
first-served system, reservation of rebates for a specified time period, or other7
method which the department, in its discretion, may find beneficial to the program.8
If the department does not grant five million dollars of tax rebates in any one9
calendar year, the excess unused rebates shall carry forward to subsequent tax years10
and may be granted in subsequent years in addition to the five million dollars in total11
rebates for that year. The five million dollar annual tax rebate funding limit shall not12
apply to investor pools that the department is authorized to determine and approve13
for purpose of the program.14
(2) After approval of an investor pool, the department shall issue a letter15
identifying the amount of tax rebates available to that investor pool; however, no16
rebates shall be granted until an investment is made in a Louisiana Entrepreneurial17
Business.18
B. Tax Rebates for Investors. (1) For investments made after January 1,19
2010, an investor may, if qualified, be granted rebates for income and corporation20
franchise taxes. Rebates shall be available in amounts approved by the secretary of21
the department for investments in a Louisiana Entrepreneurial Business which do not22
exceed one million dollars per year per business and two million dollars per business.23
Rebates shall be granted at the rate of thirty-five percent of the amount of money24
invested, and shall be allotted in equal annual portions over five consecutive years.25
(2) After certifying the qualifications of the investor, the Louisiana26
Entrepreneurial Business, and the amount of the investment, all pursuant to R.S.27
47:6202, the secretary of the department shall issue a tax rebate certificate to the28
investor. The rebate certificate shall contain the investor's name, address, tax29 HLS 10RS-1645 ORIGINAL
HB NO. 1122
Page 5 of 7
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
identification number, the amount of credit, the name of the qualifying business, and1
other information required by the Department of Revenue. The rebate certificate,2
unless rescinded by the department, shall be accepted by the Department of Revenue3
as proof of the rebate. The department shall notify the Department of Revenue of the4
issuance of the rebate certificate and shall provide the Department of Revenue with5
a copy of the certificate. The secretary of the Department of Revenue may require6
the investor to submit additional information as may be necessary to administer the7
provisions of this Chapter.8
(3) The Department of Economic Development shall maintain a list of the9
rebate certificates issued.10
(4) Notwithstanding any provision of this Chapter to the contrary, a rebate11
granted pursuant to the Angel Investor Rebate Program shall expire and have no12
value seven years after it was originally granted.13
D. Recapture. (1) If at the close of any calendar year in the five-year period14
beginning with the first year in which a rebate certificate is issued to an investor, the15
business is no longer domiciled in Louisiana, the rebate claimed under this Chapter16
shall be recaptured from the investor, unless the change of domicile is the result of17
a merger, consolidation, or other acquisition of such business with or by a party not18
affiliated with such business.19
(2) If at the close of any calendar year in the three-year period beginning20
with the first year in which a rebate certificate is issued to an investor, the investor21
transfers the equity received in connection with a qualified investment, the rebate22
claimed under this Chapter shall be recaptured from the investor unless the transfer23
results from:24
(a) The liquidation of the qualified business issuing such equity;25
(b) The merger, consolidation or other acquisition of such business with or26
by a party not affiliated with such business; or27
(c) The death of the investor.28 HLS 10RS-1645 ORIGINAL
HB NO. 1122
Page 6 of 7
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
§6204. False or fraudulent information in making application, claim for rebate, or1
other instrument; penalties2
A. Any person making an application, claim for a rebate, or any report,3
return, statement, or other instrument, or providing any other information pursuant4
to the provisions of the Angel Investor Tax Rebate Program who willfully makes a5
false or fraudulent application, claim, report, return, statement, invoice, or other6
instrument, or who willfully provides any false or fraudulent information, any person7
who willfully aids or abets another in making such false or fraudulent application,8
claim, report, return, statement, invoice, or other instrument, or any person who9
willfully aids or abets in providing any false or fraudulent information, shall be10
guilty, upon conviction, of a felony and shall be punished by the imposition of a fine11
of not less than one thousand dollars and not more than fifty thousand dollars or12
imprisoned for not less than two years and not more than five years, or both.13
B. Any person convicted of a violation of this Chapter shall be liable for the14
repayment of all rebates which were granted to that person. Interest shall be due on15
such repayments at the rate of fifteen percent per annum.16
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Foil HB No. 1122
Abstract: Establishes the Angel Investor Tax Rebate Program.
Proposed law establishes the Angel Investor Tax Rebate Program, hereinafter "program",
to provide for rebates of income and corporation franchise taxes to be allotted and claimed
over a five year period for qualifying taxpayers that invest in a Louisiana Entrepreneurial
Business. The program shall be implemented and administered by the Dept. of Economic
Development, hereinafter "department".
Proposed law requires that the department promulgate rules in accordance with the A.P.A,,
in consultation with the secretary of the Department of Revenue, to administer this program.
The rules shall include provisions for:
(1)Certification by the department with regard to the eligibility of an investor applicant
for receipt of a rebate;
(2)Presentation of an investor's eligibility certification and any other documentation that
may be required for a rebate application; and HLS 10RS-1645 ORIGINAL
HB NO. 1122
Page 7 of 7
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
(3)Reporting requirements related for a Louisiana Entrepreneurial Business.
Proposed law provides for qualifications for an investor to be eligible to receive tax rebates,
including that the business be located in Louisiana, pre-approval of the business, and the
business' ability to demonstrate through its business plan that it anticipates having more than
50% of its sales from outside of Louisiana. Proposed law excludes businesses engaged
primarily in retail sales, real estate, professional services, gaming or gambling, natural
resource extraction or exploration, a franchisee, or financial services including venture
capital funds, from participation in the program.
Proposed law limits the total amount of rebates at $5 million which may be awarded each
year by the department. If the department does not grant the entire $ 5 million of rebates in
any one calendar year, the excess unused rebates shall carry forward to subsequent tax years.
Proposed law requires the department to approve investor pools. A specific amount of
rebate monies shall be set aside for each investor pool. However, no rebates shall be granted
until an investment is made in a Louisiana Entrepreneurial Business.
Proposed law provides that for investments made after January 1, 2010, an investor may be
awarded rebates for income and corporation franchise taxes. Rebates shall be available in
amounts approved by the secretary of the department for investments in a Louisiana
Entrepreneurial Business which do not exceed $1 million dollars per year per business and
$2 million per business. Rebates shall be awarded at the rate of 35% of the amount of
money invested, and allotted to the investor in equal portions over five consecutive years.
Rebates shall expire and have no value seven years after originally awarded.
Proposed law authorizes the secretary to issue rebate certificates to qualified investors. A
rebate certificate shall be accepted by the Dept. of Revenue as proof of the rebate. The Dept.
of Economic Development shall provide the Dept. of Revenue with a copy of the certificate.
The secretary of the Dept. of Revenue may require the investor to submit additional
information as may be necessary to administer the provisions of proposed law.
Proposed law provides for conditions under which a rebate shall be recaptured by the
department.
Proposed law provides for penalties for persons making false or fraudulent applications,
claims for a rebate, reports, or statements relative to a participation in the program.
(Adds R.S. 47:6201 through 6204)