HLS 15RS-1180 ENGROSSED
2015 Regular Session
HOUSE BILL NO. 725
BY REPRESENTATIVE LEGER
TAX CREDITS: Increases the qualified equity investment authority for the La. New
Markets Jobs Act tax credits
1 AN ACT
2To amend and reenact R.S. 47:6016.1(B)(1) and to enact 47:6016.1(N), relative to insurance
3 premium tax; to provide for the Louisiana New Markets Jobs Act tax credits; to
4 provide for definitions, to provide for applicable percentage; to provide with respect
5 to issuance date; to provide with respect to amounts available for certification and
6 allocation; to provide for applicability; to provide for an effective date; and to
7 provide for related matters.
8Be it enacted by the Legislature of Louisiana:
9 Section 1. R.S. 47:6016.1(B)(1) is hereby amended and reenacted and R.S.
1047:6016.1(N) is hereby enacted to read as follows:
11 ยง6016.1. Louisiana New Markets Jobs Act; premium tax credit
12 * * *
13 B. As used in this Section, the following words, terms, and phrases have the
14 meaning ascribed to them unless a different meaning is clearly indicated by the
15 context:
16 (1) "Applicable percentage" means: fourteen percent for the first and second
17 credit allowance dates and eight and one-half percent for the third and fourth credit
18 allowance dates. with respect to qualified equity investments issued after August 1,
19 2013 but prior to August 1, 2015, fourteen percent for the first and second credit
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HB NO. 725
1 allowance dates and eight and one-half percent for the third and fourth credit
2 allowance dates.
3 * * *
4 N. Sixty-five million dollars of qualified equity investment authority shall
5 be available for certification and allocation for qualified equity investments as
6 provided in this Subsection, and for which the department shall accept applications
7 beginning August 1, 2015.
8 (1) For purposes of this Subsection, "applicable percentage" means zero
9 percent for the first through third credit allowance dates and fifteen percent for the
10 fourth through sixth credit allowance dates.
11 (2) For purposes of this Subsection, a qualified community development
12 entity together with its transferees pursuant to Paragraph (E)(6) of this Section shall
13 invest an aggregate amount equal to no less than twenty-five percent of the purchase
14 price of its total certified qualified equity investments in qualified active low-income
15 community businesses located in non-metropolitan parishes in this state as identified
16 by the Community Development Financial Institutions Fund. The level of
17 investment shall be maintained in accordance with Paragraph (F)(1) of this Section.
18 (3) For purposes of this Subsection, no affiliate of a qualified active
19 low-income community business that receives a qualified low-income community
20 investment may directly or indirectly, either:
21 (a) Own or have the right to acquire an ownership interest in a qualified
22 community development entity or member or affiliate of a qualified community
23 development entity, including a holder of a qualified equity investment issued by the
24 qualified community development entity; or
25 (b) Loan to or invest in a qualified community development entity or
26 member or affiliate of a qualified community development entity, including a holder
27 of a qualified equity investment issued by a qualified community development entity
28 when the proceeds of the loan or investment are directly or indirectly used to fund
29 or refinance the purchase of a qualified equity investment.
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HB NO. 725
1 (4) The requirements of Paragraph (E)(7) of this Section with respect to
2 designating a qualified equity investment as a federal qualified equity investment
3 with the Community Development Financial Institutions Fund shall not apply to
4 qualified equity investments issued after December 1, 2015.
5 Section 2. The provisions of this Act shall be applicable to taxable periods beginning
6on or after January 1, 2016.
7 Section 3. This Act shall become effective on July 1, 2015.
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.
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HB NO. 725
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.
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are additions.