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2023 Regular Session
SENATE BILL NO. 151
BY SENATOR REESE
Prefiled pursuant to Article III, Section 2(A)(4)(b)(i) of the Constitution of Louisiana.
ECONOMIC DEVELOPMENT. Provides relative to the Louisiana New Markets Jobs Act.
(gov sig)
1 AN ACT
2 To amend and reenact R.S. 47:6016.1(B)(6), (7), and (10)(b), (E)(5)(c), (F)(3) and (4),
3 (H)(1)(b), and (J)(1) and to enact R.S. 47:6016.1(E)(5)(d) and (F)(5), relative to the
4 Louisiana New Markets Jobs Tax Credit; to provide relative to eligibility; to provide
5 for an additional allocation of qualified equity investment authority; to provide for
6 terms, conditions, and definitions; and to provide for related matters.
7 Be it enacted by the Legislature of Louisiana:
8 Section 1. R.S. 47:6016.1(B)(6), (7), and (10)(b), (E)(5)(c), (F)(3) and (4), (H)(1)(b),
9 and (J)(1) are hereby amended and reenacted and R.S. 47:6016.1(E)(5)(d) and (F)(5) are
10 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 * * *
17 (6) "Recovery zone" means any parish for which the Federal Emergency
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1 Management Agency of the United States Department of Homeland Security has
2 made a determination that the parish is eligible for both individual and public
3 assistance under the declaration of major disaster for the state of Louisiana Docket
4 Number FEMA-4559-DR. for the duration of that declaration. Follow-on
5 investments in a qualified active low-income community business that was
6 qualified by its location in a recovery zone at the time of the initial qualified
7 low-income community investment in that business shall be considered qualified
8 low-income community investments even if made after the end of the
9 declaration, subject to other provisions of this Section.
10 (7) "Rural parish" means a parish with a population less than one hundred
11 thousand as of the July 1, 2019, census estimate by the United States Census Bureau.
12 the following:
13 (a) With respect to qualified equity investments issued before August 1,
14 2023, a parish with a population less than one hundred thousand as of the July
15 1, 2019 census estimate by the United States Census Bureau.
16 (b) With respect to qualified equity investments issued after August 1,
17 2023, a parish with a population less than one hundred thousand as of the most
18 recent federal decennial census.
19 * * *
20 (10) "Qualified equity investment" means any equity investment in a
21 qualified community development entity that meets each of the following criteria:
22 * * *
23 (b) Has at least one hundred percent of its cash purchase price used by the
24 issuer to make qualified low-income community investments in qualified active low-
25 income community businesses located in this state by the first anniversary of the
26 initial credit allowance date with respect to qualified equity investments issued prior
27 to August 1, 2020, and after August 1, 2023, and within nine months of the initial
28 credit allowance date with respect to qualified equity investments issued on or after
29 August 1, 2020, and before August 1, 2023.
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1 * * *
2 E.(1) * * *
3 (5)(a) * * *
4 (c) A total of one hundred fifty million dollars of qualified equity
5 investment authority shall be available for certification and allocation for
6 applications beginning August 1, 2023. The department shall accept applications
7 beginning on August 1, 2023, for allocation and certification of up to one
8 hundred fifty million dollars of qualified equity investments.
9 (d) If a pending request cannot be fully certified due to these limits of
10 qualified equity investment authority, the department shall certify the portion of
11 qualified equity investment authority that may be certified unless the qualified
12 community development entity elects to withdraw its request rather than receive
13 partial certification.
14 * * *
15 F. The Department of Insurance shall recapture, from the entity that claimed
16 the credit on a return, the tax credit allowed pursuant to this Section if any of the
17 following occur:
18 * * *
19 (3) With respect to qualified equity investments issued on or after August 1,
20 2020, but before August 1, 2023, the issuer fails to invest an amount equal to one
21 hundred percent of the purchase price of the qualified equity investment in qualified
22 low-income community investments in Louisiana within nine months of the issuance
23 of the qualified equity investment with at least fifty percent of the purchase price
24 invested in qualified low-income community investments in impact businesses.
25 (4) With respect to qualified equity investments issued on or after
26 August 1, 2023, the issuer fails to invest an amount equal to one hundred
27 percent of the purchase price of the qualified equity investment in qualified low-
28 income community investments in Louisiana within twelve months of the
29 issuance of the qualified equity investment with at least fifty percent of the
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1 purchase price invested in qualified low-income community investments in
2 impact businesses.
3 (5) The issuer fails to maintain such the levels of investment set forth in
4 Paragraphs (2) and (3), (3), and (4) of this Subsection in qualified low-income
5 community investments in Louisiana until the last credit allowance date for the
6 qualified equity investment. For purposes of this Section, an investment shall be
7 considered held by an issuer even if the investment has been sold or repaid if the
8 issuer reinvests an amount equal to the capital returned to or recovered by the issuer
9 from the original investment, exclusive of any profits realized, in another qualified
10 low-income community investment within twelve months of the receipt of the
11 capital. Periodic amounts received during a calendar year as repayment of principal
12 on a loan that is a qualified low-income community investment shall be treated as
13 continuously invested in a qualified low-income community investment if the
14 amounts are reinvested in another qualified low-income community investment by
15 the end of the following calendar year as set forth in 26 CFR 1.45D-1. An issuer
16 shall not be required to reinvest capital returned from qualified low-income
17 community investments after the sixth anniversary of the issuance of the qualified
18 equity investment, the proceeds of which were used to make the qualified low-
19 income community investment, and the qualified low-income community investment
20 shall be considered held by the issuer through the seventh anniversary of the
21 qualified equity investment's issuance.
22 * * *
23 H.(1) A qualified community development entity that seeks to have an equity
24 investment designated as a qualified equity investment and eligible for tax credits
25 pursuant to this Section shall pay a deposit in the amount of five hundred thousand
26 dollars payable to the department. The entity shall forfeit the deposit in its entirety
27 if either:
28 * * *
29 (b) The qualified community development entity or any transferee pursuant
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1 to Paragraph (E)(6) of this Section that issues a qualified equity investment certified
2 pursuant to this Section fails to meet the investment requirement under Paragraph
3 (F)(2) of this Section by the second credit allowance date of such benefit of the six-
4 month cure period established pursuant to Subsection G of this Section or Paragraph
5 (F)(3) of this Section by the nine-month anniversary of the initial credit allowance
6 date without the benefit of the three-month cure period established pursuant to
7 Subsection G of this Section or Paragraph (F)(4) of this Section by the
8 twelve-month anniversary of the initial credit allowance date without the benefit
9 of the three-month cure period established pursuant to Subsection G of this
10 Section.
11 * * *
12 J.(1)(a) Qualified community development entities that issue qualified equity
13 investments before August 1, 2020, and after August 1, 2023, shall submit a report
14 to the department within the first five business days after the first anniversary of the
15 initial credit allowance date that provides documentation as to the investment of one
16 hundred percent of the purchase price in qualified low-income community
17 investments in qualified active low-income community businesses, including
18 qualified low-income community investments made in satisfaction of Paragraph
19 (F)(4) of this Section, located in Louisiana. The report shall include:
20 (i) A bank statement of the qualified community development entity
21 evidencing each qualified low-income community investment.
22 (ii) Evidence that the business was a qualified active low-income community
23 business or impact business at the time of such qualified low-income community
24 investment.
25 (b) Qualified community development entities that issue qualified equity
26 investments on or after August 1, 2020, but before August 1, 2023, shall submit a
27 report to the department within the first five business days after the nine-month
28 anniversary of the initial credit allowance date that provides documentation as to the
29 investment of one hundred percent of the purchase price in qualified low-income
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1 community investments in qualified active low-income community businesses,
2 including qualified low-income community investments made in satisfaction of
3 Paragraph (F)(3) of this Section, located in Louisiana. The report shall include:
4 (i) A bank statement of the qualified community development entity
5 evidencing each qualified low-income community investment.
6 (ii) Evidence that the business was a qualified active low-income community
7 business or impact business at the time of such qualified low-income community
8 investment.
9 * * *
10 Section 2. This Act shall become effective upon signature by the governor or, if not
11 signed by the governor, upon expiration of the time for bills to become law without signature
12 by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If
13 vetoed by the governor and subsequently approved by the legislature, this Act shall become
14 effective on the day following such approval.
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Xavier I. Alexander.
DIGEST
SB 151 Engrossed 2023 Regular Session Reese
Present law provides for the Louisiana New Markets Jobs Act tax credit that may be claimed
against insurance premium tax. Provides that eligibility for the credit is based on the
investment of private capital in a low-income community business located in La.
Present law defines "recovery zone" as any parish for which FEMA has made a
determination that the parish is eligible for both individual and public assistance under the
declaration of major disasters in the state.
Proposed law retains the present law and adds to the definition of "recovery zone" follow-on
investments in a qualified active low-income community business that was qualified by its
location in a recovery zone shall be considered qualified low-income community
investments even if made after the end of such declaration.
Present law defines "rural parish" as a parish with a population of less than 100,000 as of the
July 1, 2019 census estimate by the United States Census Bureau.
Proposed law retains present law and further defines "rural parish" as a parish with a
population less than 100,000 as of the most recent federal decennial census.
Present law defines the types of investments required for tax credit eligibility.
Proposed law retains present law and further provides that the issuer make qualified
low-income community investments of at least 100% of the cash purchase price in the
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qualified active low-income community business by the first anniversary of the initial credit
allowance date with respect to investments issued prior to August 1, 2020, and after
August 1, 2023, and within nine months of the initial allowance date with respect to
investments issued on or before August 1, 2023.
Present law authorizes a total of $55 million and $75 million of investment authority for
certification and allocation for the purpose of earning tax credits.
Proposed law authorizes a total of $150 million of investment authority for certification and
allocation for the purpose of earning tax credits.
Present law provides for conditions under which the Dept. of Insurance shall recapture tax
credits that include a recapture of federal tax credits by the federal government, or a failure
to invest an amount equal to 100% of the purchase price of the investment within nine
months of the issuance of the investment or less than 50% of the purchase price was invested
in "impact businesses".
Proposed law retains present law recapture provision and adds a recapture condition for
investments made on or after August 1, 2023, if there has been a failure to invest an amount
equal to 100% of the purchase price of the investment within 12 months of the issuance of
the investment or less than 50% of the purchase price was invested in impact businesses.
Proposed law requires reporting by a qualified community development entity that issues
qualified equity investments on or after August 1, 2020, but before August 1, 2023, to the
Dept. of Revenue within five days of the first anniversary of the initial credit allowance date.
Provides that the report shall include evidence that the business was a qualified active
low-income community business or impact business at the time of the qualified low-income
community investment.
Effective upon signature of the governor or lapse of time for gubernatorial action.
(Amends R.S. 47:6016.1(B)(6), (7), and (10)(b), (E)(5)(c), (F)(3) and (4), (H)(1)(b), and
(J)(1); adds R.S. 47:6016.1(E)(5)(d) and (F)(5))
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.