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 725 Engrossed 2015 Regular Session Leger
Abstract: Authorizes $65 million in investment authority for $29 million in tax credits allocated
under the La. New Markets Jobs Act for investments made on or after Aug. 1, 2015.
Present law establishes the La. 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. The amount of the tax credit shall
be the product of multiplying the amount of the investment purchase price (investment authority) by
the following percentages: 14% for the 1
st
and 2
nd
credit allowance dates and 8.5% for the 3
rd
and
4
th
credit allowance dates.
Proposed law retains present law but changes the tax credit percentages for qualified equity
investments issued on or after Aug. 1, 2015, as follows: 0% for the 1
st
through 3
rd
credit allowance
dates and 15% for the 4
th
through 6
th
credit allowance dates (a total of 45%).
Proposed law retains present law and adds authority for certification and allocation of $65 million
in equity investments, for up to $29 million in tax credits, beginning Aug. 1, 2015.
Proposed law requires that a qualified community development entity together with its transferees
invest an aggregate amount equal to no less than 25% of the price of its total certified qualified
equity investments in qualified active low-income community businesses located in
non-metropolitan parishes in La. as identified by the Community Development Financial Institutions
Fund.
Proposed law prohibits an affiliate of a qualified active low-income community business that
receives a qualified low-income community investment from owning or having the right to own an
interest in a qualified community development entity or member or affiliate of a qualified
community development entity.
Proposed law prohibits an affiliate of a qualified active low-income community business from
making a loan or investing in a qualified community development entity or member or affiliate of
a qualified community development entity.
Proposed law provides that for qualified equity investments issued after Dec. 1, 2015, the
requirement for a federal qualified equity investment with the Community Development Financial
Institutions Fund shall not apply. Applicable for all tax periods beginning on and after Jan. 1, 2016.
Effective July 1, 2015.
(Amends R.S. 47:6016.1(B)(1); Adds R.S. 47:6016.1(N))
Summary of Amendments Adopted by House
The Committee Amendments Proposed by House Committee on Ways and Means to the original
bill:
1. Change the amount of new authority for equity investments eligible for certification and
allocation from $100 to $65 million. This reduces the amount of tax credits authorized
from $45 to $29 million.
2. Add a requirement that a community development entity must invest 25% of its
aggregate amount of certified qualified equity investments in qualified active low-income
community businesses located in non-metropolitan parishes.
3. Add prohibitions regarding affiliates and related entities of a qualified community
development entity or qualified active low-income community business.
4. Add an exemption from the requirement for a federal match for investments made after
December 1, 2015.