SLS 14RS-544 ENGROSSED
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
Regular Session, 2014
SENATE BILL NO. 99
BY SENATOR RISER
BANKS/BANKING. Provides for determining the fair market value of bank stock for
purposes of tax assessment. (8/1/14)
AN ACT1
To amend and reenact R.S. 47:1967(D), relative to listing and assessment of bank stock; to2
provide for determining the fair market value of bank stock; and to provide for3
related matters.4
Be it enacted by the Legislature of Louisiana:5
Section 1. R.S. 47:1967(D) is hereby amended and reenacted to read as follows: 6
ยง1967. Listing and assessment of bank stock; procedure7
* * *8
D. For the purposes in determining the fair market value of bank stock, the9
following criteria shall be used: stockholder equity as defined in Subsection C above10
shall serve as a four times factor, eighty percent; annual net earnings of the11
individual banking institution shall serve as a one time factor, twenty percent.12
Annual net earnings shall be adjusted to remove that portion of earnings based on13
United States obligations by deducting a percentage of annual net earnings based on14
the ratio of interest on United States obligations to total operating income. Negative15
earnings shall not be considered be included in this formula, and but there shall be16
no earnings loss carried forward or backward. For the purpose of computing the one17 SB NO. 99
SLS 14RS-544 ENGROSSED
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.
time, twenty percent earnings factor, the earnings shall be capitalized by multiplying1
the annual net earnings or net loss of the banking institution by the average price2
earnings ratio for all banks in the United States as published by a nationwide3
recognized bond and securities rating firm.4
* * *5
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Thomas L. Tyler.
DIGEST
Riser (SB 99)
Present law requires that the following criteria be used in determining the fair market value
of bank stock for purposes of determining tax liability:
(1)Stockholder equity as defined by law for purposes of valuation shall serve as a four
times factor, 80%.
(2)Annual net earnings of the individual banking institution shall serve as a one time
factor, 20%.
Requires that annual net earnings be adjusted to remove that portion of earnings based on
U.S. obligations by deducting a percentage of annual net earnings based on the ratio of
interest on U.S. obligations to total operating income.
Proposed law retains these provisions in present law.
Present law provides that negative earnings shall not be considered in this formula, and there
shall be no earnings loss carried forward or backward. Provides that for purpose of
computing the one time, 20% earnings factor, the earnings shall be capitalized by
multiplying the annual net earnings of the banking institution by the average price earnings
ratio for all banks in the U.S. as published by a nationwide recognized bond and securities
rating firm.
Proposed law provides that negative earnings be included in the formula, but there shall be
no earnings loss carried forward or backward and that in computing the one time, 20%
earnings factor, the earnings may also be capitalized by multiplying the annual net loss of
the institution multiplied by the average price earnings ratio for all banks in the U.S. as
published by a nationwide recognized bonds and securities rating firm.
Effective August 1, 2014.
(Amends R.S. 47:1967(D))