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 87 Engrossed 2016 First Extraordinary Session Anders
Abstract: Reduces the amount of the insurance premium tax credit for certain companies by 5%
for any tax year beginning on or after Jan. 1, 2016, and before Jan. 1, 2018, and eliminates
certain certificates of deposit and cash on deposit as qualified La. investments beginning Jan.
1, 2017.
Present law authorizes a credit against the insurance premium tax credit for insurers who invest a
portion of their total admitted assets in La. financial institutions and investment products. The
amount of the credit is graduated, with the amount increasing as the percentage of an insurer's assets
invested in La. increases as follows:
(1)A 66% tax credit for investment of 16% of assets.
(2)A 75% tax credit for investment of 20% of assets.
(3)An 85% tax credit for investment of 25% of assets.
(4)A 95% tax credit for investment of 33% of assets.
Present law defines "qualified La. investment" as:
(1)Certificates of deposit issued by a La. bank or investments in such instruments by a trust
company with a main office or one or more branches in La.
(2)Bonded debt issued with approval by the La. State Bond Commission.
(3)Mortgages on property located in this state.
(4)Real property located in this state.
(5)Policy loans and other loans to residents and corporations domiciled in La.
(6)Common or preferred stock in corporations domiciled in this state.
(7)Cash on deposit in a La. bank or a trust company holding such funds in trust, operating in the
state with a main office or one or more branches. Proposed law deletes from present law beginning Jan. 1, 2017, the following investments:
(1)Certificates of deposit issued by a La. bank or investments in such instruments by a trust
company with a main office or one or more branches in La.
(2)Cash on deposit in a La. bank or a trust company holding such funds in trust, operating in the
state with a main office or one or more branches.
Proposed law reduces the tax credit as determined in present law by 5% for any tax year beginning
on or after Jan. 1, 2016, and before Jan. 1, 2018, unless the insurance company claiming the
reduction writes life insurance premiums and has total admitted assets of $15 million or less.
Effective upon signature of governor or lapse of time for gubernatorial action.
(Amends R.S. 22:832(A) and (C))
Summary of Amendments Adopted by House
The Committee Amendments Proposed by House Committee on Ways and Means to the original
bill:
1. Decrease the temporary reduction of the amount of the insurance premium tax credit
from 10% to 5%.
2. Exempt insurance companies that write life insurance premiums that have total admitted
assets of $15 million or less from the temporary reduction to the amount of the credit.
3. Add effective date of Jan. 1, 2017, for elimination of cash on deposit and certificates of
deposit from the definition of "qualified La. investment".