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)]
HB 541 Original 2015 Regular Session Stokes
Abstract: Reestablishes the Angel Investor Tax Credit Program, reduces the amount of the credit
from 35% to 30% of the investment, reduces the limitation on an investor's percentage of
ownership in the business, and reestablishes the credit through July 1, 2019.
Present law authorizes a credit against La. income and corporation franchise tax liability for
qualifying individuals who invest in "La. Entrepreneurial Businesses", as approved and certified by
the Dept. of Economic Development ("department").
Present law authorizes $5 million per year in transferrable tax credits for the program, with any
residual amount unused at year's end carried forward for use in subsequent years, notwithstanding
the $5 million annual cap. The credit is equal to 35% of the amount of the investment, for
investments of up to $1 million per year, and $2 million per business. The total amount of the credit
is divided into five equal portions, and the first year in which the credit can be used is 24 months
after the investment was certified by the department.
Proposed law retains present law with the following changes: the amount of the credit is reduced
from 35% to 30% of the amount invested, the number of years into which the amount of the credit
is divided is reduced from 5 to 3 years, and the period of time before the credit may be used is
reduced from 24 to 12 months.
Proposed law adds convertible securities issued by the La. Entrepreneurial Business as qualified
investments for purposes of the program.
Proposed law requires that a qualifying investment shall be made no more than 30 days prior to the
application for tax credits.
Present law prohibits an angel investor from being a principal owner of a La. Entrepreneurial
Business, with such ownership deemed to be 50% or more.
Proposed law changes present law by reducing the limitation on an investor's ownership in the
business from 50% or more to 30%.
Present law becomes null and void on July 1, 2015.
Provisions of proposed law become null and void on July 1, 2019. Applicable to applications made on or after July 1, 2015.
Effective July 1, 2015.
(Amends R.S. 47:6020(C)(1)(a) and (b), (2)(b), (D)(1) and (2)(a) and (b); Adds R.S. 47:6020(G))