Louisiana House Bill HB555

Louisiana 2011 Regular Session

• Introduced: 4/25/11
• Refer: 4/25/11

Caption

Creates the Louisiana Entrepreneurial Assistance and Development (LEAD) Program for tax credits for venture capital investments (OR -$37,500,000 GF RV See Note)

Impact

The implementation of HB 555 is projected to inject significant amounts of capital into the state’s economy, particularly benefitting eligible businesses with up to 100 employees and focusing on those with a net worth of less than five million dollars or with less than fifteen million dollars in net income. With up to two hundred million dollars in eligible capital, this program aims to attract substantial investments necessary to bolster local entrepreneurship, ultimately fostering a more robust business environment in Louisiana.

Summary

House Bill 555 establishes the Louisiana Entrepreneurial Assistance and Development Program (LEAD), aimed at promoting venture capital investments in local businesses by providing tax credits against insurance premium taxes. The bill allows investors to receive a 75% credit on eligible capital invested in certified LEAD funds. The intent behind this program is to enhance the availability of capital for small and medium-sized enterprises in Louisiana, particularly to counteract economic downturns and facilitate job growth in communities that historically rely on emerging businesses for economic development.

Sentiment

Feedback surrounding HB 555 is generally positive, with advocates for economic development expressing support for the incentives it provides to engage venture capital investors. The sentiment reflects optimism about the potential for job creation and the positive impact on local businesses. However, there are concerns about the efficacy of tax credits in achieving long-term economic stability and equitable investment distribution among various sectors or communities within the state.

Contention

Some points of contention relate to the effectiveness of tax incentives in genuinely stimulating economic growth versus simply benefiting affluent investors. There are worries among critics that without effective oversight, the program may disproportionately favor certain industries or lead to misallocation of resources. The bill does include provisions for compliance and performance reporting to mitigate these risks, mandating that LEAD funds satisfy specific investment criteria and create or retain jobs to maintain certification.