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)]
Leger HB No. 726
Abstract: Creates the Louisiana New Markets Jobs Act to provide credits against the insurance
premium tax.
Present law taxes insurers based on the amount of premiums, called a "premium tax".
Proposed law establishes the Louisiana New Markets Jobs Act for purposes of a tax credit which
may be claimed against insurance premium tax. Eligibility for the credit is based on the investment
of private capital in a low-income community business located in La.
Proposed law defines "qualified active low-income community business" (QALICB or business) as
an entity which under federal law is defined as a business located in either a census tract with a
poverty rate of at least 20% or a census tract with a median income that does not exceed 80% of the
benchmark median income.
Proposed law defines a "qualified community development entity" (QCDE or entity) as a privately
managed investment entity that has received New Market Tax Credit allocation authority.
Proposed law defines the types of investments required for tax credit eligibility.
Proposed law provides that the amount of the tax credit shall be the product of multiplying the
amount of the investment purchase price by the following percentages: 0% for the first three years,
15% for the next three years, and 0% thereafter. The total of all such credits taken cannot exceed the
taxpayer's state premium tax liability for the tax year for which the credit is claimed; however,
unused credits may be carried forward for up to 10 years. Unclaimed tax credits are transferable to
one or more transferees.
Proposed law requires that investments eligible for the award of tax credits be certified by the Dept.
of Revenue. If a QDE applies for certification of investments, the department shall inform such
entity within 30 days of application whether there is certification or a denial of an application. In
the case of a denial, the entity shall have the right to provide additional information regarding the
application within 15 days of the denial.
Proposed law authorizes a total of $110,000,000 of investment authority for certification and
allocation for the purpose of earning tax credits. The department shall begin accepting applications
on August 1, 2013, for allocation and certification of up to $55,000,000 of QEI. Allocation of the
remaining $55,000,000 shall be available starting with an application process which begins August 1, 2014.
Proposed law requires the issuance of investments within 20 days of receiving certification and that
evidence thereof be provided to the Dept. of Revenue.
Proposed law provides for conditions under which the Dept. of Insurance shall recapture tax credits
which include a recapture of federal tax credits by the federal government, or a failure to invest an
amount equal to 100% of the purchase price of the investment within 12 months of the issuance of
the investment.
Proposed law requires the payment of a deposit of $500,000 for an application for qualification of
an investment. The deposit shall be paid to the Dept. of Revenue and deposited into the New
Markets performance guarantee account which is established by proposed law. The deposit is
returnable after compliance with the requirements of proposed law.
Proposed law requires reporting by a QCDE to the Dept. of Revenue within five days of the first
anniversary of the initial credit allowance date, as well as annual reporting with regard to the number
of employment positions created and retained as a result of the investments and the average annual
salary of such positions.
Proposed law requires the Dept. of Revenue to notify the Dept. of Insurance of the name of any
insurance company allocated tax credits, as well as the amount of any credits.
Proposed law authorizes the department to promulgate rules to implement the provisions of proposed
law.
Proposed law applies to tax returns or reports originally due on or after January 1, 2014.
(Adds R.S. 47:6016.1)
Summary of Amendments Adopted by House
House Floor Amendments to the engrossed bill.
1. Changes the time within which the application for a tax credit must be approved or
denied from 30 to 20 days.
2. Changes the date for the start of the application process for the first period in which tax
credits may be granted from November 1, 2013, to August 1, 2013.
3. Changes the date for the start of the application process for the second period in which
tax credits may be granted from September 2, 2013, to August 1, 2014.