Louisiana House Bill HB725

Louisiana 2015 Regular Session

• Introduced: 4/3/15
• Refer: 4/3/15
• Refer: 4/13/15
• Report Pass: 6/3/15
• Engrossed: 6/4/15

Caption

Increases the qualified equity investment authority for the La. New Markets Jobs Act tax credits (EG -$29,250,000 GF RV See Note)

Impact

The proposed changes are anticipated to influence state laws regarding tax incentives and development funding, particularly targeting investments in low-income areas. By reducing the expected tax credit percentages for the initial credits while raising the amount available for later investment claims, the bill encourages a longer-term investment perspective. Furthermore, the requirement for designated investments to occur in non-metropolitan communities is a significant shift aimed at enhancing economic conditions and job creation in areas that are often overlooked by major investment entities.

Summary

House Bill 725 amends existing legislation under the Louisiana New Markets Jobs Act to authorize $65 million in investment authority, allowing for the distribution of up to $29 million in tax credits for investments made in low-income community businesses. The bill establishes new parameters for tax credits that can be claimed against insurance premium tax, incentivizing investment in areas that may lack sufficient economic opportunities. Specifically, the bill adjusts the percentages of tax credits available for equity investments issued after August 1, 2015, and mandates that a portion of these investments be channeled into non-metropolitan parishes, thereby supporting local economies.

Sentiment

General sentiment around HB 725 appears to be cautiously optimistic among supporters who advocate for reducing barriers to investment in economically disadvantaged regions. They argue that this effort could stimulate local job growth and economic revitalization. However, some skepticism remains regarding the efficacy of the proposed tax credit structure and whether it will provide adequate incentives that lead to significant economic transformations in the targeted communities. This duality reflects an ongoing debate about the best methods to achieve economic growth while safeguarding community interests.

Contention

Notable points of contention include the bill's requirement for investments to be made primarily in non-metropolitan parishes, as some critics argue that this could limit the geographical flexibility of investors. Additionally, the provisions that prohibit affiliations between community development entities and recipients of equity investments suggest a stringent regulatory oversight that may stifle collaboration opportunities and lessen the vibrant community involvement that often accompanies development initiatives. These aspects of the bill suggest a careful balancing act between promoting necessary investment and maintaining a framework of accountability.