§ 51:1924 — Income tax credit or premium tax reduction

Louisiana § 51:1924

• Jurisdiction: Louisiana
• Title 51: Trade and Commerce

Text

§1924. Income tax credit or premium tax reduction
A. A person, either natural or artificial, who invests in the certified capital of a
certified Louisiana capital company may claim either a premium tax reduction pursuant to
R.S. 22:832(E) or a credit against the person's Louisiana income tax in the person's taxable
year in which the investment is made, as certified by the commissioner, pursuant to rules
promulgated by the secretary, to the Department of Insurance or the Department of Revenue.
B.(1) The income tax credit shall be calculated by the commissioner as thirty-five
percent of the person's cash investment in the certified capital of a certified Louisiana capital
company.
(2) The total income tax credits granted in any calendar year shall not result in an
additional reduction of total income tax revenues of greater than two million dollars.
(3) During any calendar year in which this Subsection will limit the amount of
certified capital for which income tax credits are allowed, certified capital for which income
tax credits are allowed will be allocated among certified Louisiana capital company groups.
Requests for allocation shall be prepared for filing not later than December first on a form
prescribed by the commissioner, which form shall include an affidavit by the person pursuant
to which such person shall become legally bound and irrevocably committed to make an
investment of certified capital in a certified Louisiana capital company subject only to receipt
of an allocation pursuant to this Subsection. Any requests for allocation filed with the
commissioner before December first of any calendar year shall be deemed to have been filed
on December first of such year. Requests for allocation shall be allocated as follows:
(a) When aggregate requests for allocation by certified Louisiana capital company
groups do not exceed five million seven hundred fourteen thousand two hundred eighty-five
dollars, all requests for allocations shall be approved by the commissioner.
(b) When aggregate requests for allocation exceed five million seven hundred
fourteen thousand two hundred eighty-five dollars, each certified Louisiana capital company
group shall be entitled to receive an allocation to be calculated by dividing five million seven
hundred fourteen thousand two hundred eighty-five dollars by the number of certified
Louisiana capital company groups requesting allocations. In the event that this allocation
results in one or more certified Louisiana capital groups receiving an allocation in excess of
the amount which was requested, such excess shall be reallocated to the remaining certified
Louisiana capital groups on an equal basis until the entirety of the allocation has been fully
distributed.
(c) No certified Louisiana capital company certified after December first of any year
shall be entitled to receive an allocation pursuant to Subparagraph (b) of this Paragraph for
the same calendar year in which it was certified.
(d) Annually within ten days of December first, the commissioner shall review all
requests for allocation of income tax credits and notify the certified Louisiana capital
companies of the amount of certified capital for which income tax credits are allowed to such
persons that are investors in such companies. During this ten-day period, each certified
Louisiana capital company group may allow for the substitution of one investor for another
when the initial investor is unable or unwilling to complete the proposed investment.
(e) If a certified Louisiana capital company does not receive an investment of
certified capital equaling the amount of the allocation made to it pursuant to Subparagraph
(c) of this Paragraph within ten days of receipt of notice of such allocation, that portion of
the allocation will be forfeited and reallocated to the remaining certified Louisiana capital
company groups pursuant to the allocation procedure set forth in Subparagraph (b) of this
Paragraph, substituting the reallocated amount for the total amount to be allocated.
C. A capital company's initial capitalization, at the time of seeking certification, must
be two hundred thousand dollars or more.
D.(1) The total insurance premium tax credits granted pursuant to R.S. 22:832(E)
in any calendar year shall not result in an additional reduction of total premium tax revenues
of greater than five million dollars per year.
(2) During any calendar year in which this Subsection will limit the amount of
certified capital for which insurance premium tax credits are allowed, certified capital for
which insurance premium tax credits are allowed will be allocated among certified Louisiana
capital companies. Requests for allocation shall be prepared for filing not later than October
first on a form prescribed by the commissioner, which form shall include an affidavit by the
insurance company investor pursuant to which such investor shall become legally bound and
irrevocably committed to make an investment of certified capital in a certified Louisiana
capital company subject only to receipt of an allocation pursuant to this Subsection. Any
requests for allocation filed with the commissioner before October first of any calendar year
shall be deemed to have been filed on October first of such year. Requests for allocation
shall be allocated as follows:
(a) When aggregate requests for allocation by certified Louisiana capital company
groups do not exceed the maximum amount of capital for which insurance premium tax
credits may be granted in such calendar year under Paragraph (1) of this Subsection, all
requests for allocation shall be approved by the commissioner.
(b) When aggregate requests for allocation exceed the maximum amount of capital
for which insurance premium tax credits may be granted in such calendar year under
Paragraph (1) of this Subsection, each certified Louisiana capital company group shall be
entitled to receive an allocation to be calculated by dividing the maximum amount of capital
for which insurance premium tax credits may be granted in such calendar year under
Paragraph (1) of this Subsection by the number of certified Louisiana capital company
groups requesting allocations. If this allocation results in one or more certified Louisiana
capital company groups receiving an allocation in excess of the amount which was requested,
such excess shall be reallocated to the remaining certified Louisiana capital groups on an
equal basis until the entirety of the allocation has been fully distributed.
(3) No certified Louisiana capital company certified after October first of any year
shall be entitled to receive an allocation pursuant to Paragraph (2) of this Subsection for the
same calendar year in which it was certified.
(4) Annually within ten days of October first, the commissioner shall review all
requests for allocation of insurance premium tax credits and notify the certified Louisiana
capital companies of the amount of certified capital for which insurance premium tax credits
are allowed to the investors in such company.
(5) If a certified Louisiana capital company does not receive an investment of
certified capital equaling the amount of the allocation made pursuant to Paragraph (4) of this
Subsection within ten days of its receipt of notice of such allocation, that portion of the
allocation will be forfeited and reallocated to the remaining certified Louisiana capital
company groups pursuant to the allocation procedure set forth in Paragraph (2) of this
Subsection, substituting the reallocation amount for the total amount to be allocated.
(6) Each certified Louisiana capital company shall submit to the commissioner by
the first day of September of each year a certified statement stating the amount of certified
capital that such company possesses that has not yet been invested to meet the sixty percent
investment requirement of R.S. 51:1928(B)(1), if applicable; the amount of certified capital
that such company possesses that has not been invested to meet the one hundred percent
investment requirements of R.S. 51:1928(B)(2) or (3), if applicable; and the amount of
certified capital that such company possesses that has not been invested pursuant to other
contractual agreements, if applicable. No certified Louisiana capital company group shall
be eligible to submit a request on or before the first day of October of any calendar year for
certified capital for which premium tax or income tax credits are allowed if on the first day
of September of such year, such certified Louisiana capital company group had certified
capital in excess of fifteen million dollars that has not yet met the aforementioned investment
requirements of R.S. 51:1928(B)(1), (2), or (3), or other such contractual agreements.
E. The amount of the tax credit which exceeds the person's premium tax and income
tax liability for the taxable year for which credits are allowed or the amount of premium and
income tax credits that are not used by such person for the taxable year for which such credits
are allowed may be carried forward to subsequent years until the credits are exhausted;
however, the reduction in any taxable year shall not exceed such person's premium tax or
income tax liability for such taxable year.
F. The department shall provide for the transfer or sale of premium and income tax
credits under this Chapter. The transfer or sale of income or premium tax credits will be
restricted to transfers or sales between affiliates and sophisticated investors, collectively
referred to as acquirers. No acquirer shall be able to utilize any premium tax credit earned
after July 1, 2002, until at least the second anniversary of the investment date of the
investment pool from which the premium tax credits were earned. Furthermore, even
though a transfer or sale of credits, known as an election under this Section, may involve
several entities, only one election may be made during any calendar quarter. Therefore, an
investor in a certified Louisiana capital company may only transfer or sell credits once during
a calendar quarter and the entity that purchases the credit may not transfer credits obtained
during the quarter in which the credits are transferred or purchased. In any subsequent
calendar year, the purchaser of the credits may make one transfer election per calendar
quarter.
G. The certified Louisiana capital company shall include in any offering involving
the sale of shares to an investor, the following statement: "The state of Louisiana is not liable
for damages to an investor in a certified Louisiana capital company. Use of the words
'certified' or 'Louisiana' in an offering does not constitute a recommendation or endorsement
of the investment by Louisiana Economic Development or the Office of Financial
Institutions".

Legislative History

Added by Acts 1983, No. 642, §1. Acts 1984, No. 891, §1, eff. July 20, 1984; Acts 1986, No. 695, §1; Acts 1989, No. 496, §1; Acts 1996, No. 21, §§2, 3, eff. June 27, 1996; Acts 1998, No. 70, §2, eff. Oct. 1, 1998; Acts 2001, No. 8, §17, eff. July 1, 2001; Acts 2001, No. 1122, §1, eff. July 1, 2001; Acts 2002, No. 84, §2, eff. June 25, 2002; Acts 2008, No. 415, §2, eff. Jan. 1, 2009.