§ 51:1926 — Requirements for continuance of certification

A. A certified Louisiana capital company is required to comply with all of the requirements of this Section in order to continue certification of its investment pools as certified capital. To continue the certification of any investment pools as certified capital, a certified Louisiana capital company must make qualified investments from each investment pool according to the following schedule:
(1) Within three years after the investment date for each investment pool, at least fifty percent of each investment pool must be invested, with at least thirty percent of each investment pool placed in qualified investments; provided, with respect to investment pools certified after January 1, 2002, at least fifty percent of the amount required to be placed in qualified investments within three years after their respective investment dates must be or have been placed in qualified Louisiana technology-based businesses, qualified Louisiana start-up businesses and/or qualified technology funds, with a minimum of fifty percent of such investments in qualified Louisiana technology-based businesses.
(2) Within five years after the investment date for each investment pool, at least eighty percent of each investment pool must be invested, with at least fifty percent of each investment pool placed in qualified investments; provided, with respect to investment pools certified after January 1, 2002, (a) at least fifty percent of the amount required to be placed in qualified investments within five years after their respective investment dates must be or have been placed in qualified Louisiana technology-based businesses, qualified Louisiana start-up businesses and/or qualified technology funds, with a minimum of fifty percent of such investments in qualified Louisiana technology-based businesses and (b) at least ten percent of the investment pool must be or have been placed in qualified technology funds, qualified investments in approved technology-based businesses and/or qualified investments in research park early stage businesses. The qualified investments used to satisfy the ten percent requirement in this Paragraph may also be used to satisfy the investment requirements regarding investment pools certified after January 1, 2002, as provided in Paragraphs (1) and (2) of this Subsection.
(3) The following are not qualified investments under this Subsection:
(a) Investments in businesses predominantly engaged in oil and gas exploration and development, gaming, real estate development for resale, banking, lending, insurance, or professional services provided by accountants, lawyers, or physicians. The only exception to lending activities under this definition of a qualified investment are those activities permitted under R.S. 51:1935(A)(1)(a) and (b) and investments in qualified venture funds and investments in qualified technology funds.
(b) Investments in associates of certified Louisiana capital companies. The secretary, by rule, shall define "associate". If a legal entity is not an associate before a certified Louisiana capital company or any of its affiliated certified Louisiana capital companies initially invests in the entity, it will not be an associate if the certified Louisiana capital company or any of its affiliated certified Louisiana capital companies provide additional investment subsequent to the initial investment in the entity.
(c) That portion of a certified Louisiana capital company's qualified investments outstanding at any one time in any qualified Louisiana business or group of affiliated qualified Louisiana businesses in excess of fifteen percent of the certified Louisiana capital company's total certified capital.
(d) Qualified investments, with the exception of participations between certified Louisiana capital companies, which are reported as qualified investments on another certified Louisiana capital company's books.
(e) Reciprocal investments or loans made between certified Louisiana capital companies.
(4) For purposes of satisfying the requirements of Paragraphs (1) and (2) of this Subsection and satisfying the requirements of the three-year forty percent tests and the five-year sixty percent tests contained in R.S. 51:1927.1, each dollar invested by a certified Louisiana capital company in a qualified venture fund shall be counted as two dollars.
(5) Notwithstanding any other provision of law to the contrary, for purposes of this Chapter, a qualified investment shall include an investment received by a business prior to August 29, 2005, that was either made by or participated to a certified capital company for the purpose of moving the headquarter operations of the business to Louisiana and which business ceased its operations subsequent to August 29, 2005, but prior to the completion of the relocation to Louisiana. The commissioner shall determine if an investment meets the requirements of this Paragraph.
B. A certified Louisiana capital company shall make no investment if after making such investment, the total investment outstanding would exceed fifteen percent of the total certified capital under management plus, upon written submission to and approval of the commissioner, any reserved leverage resulting from either the receipt by the certified capital company of a written commitment letter from the United States Small Business Administration or the United States Department of Agriculture Business and Industrial Loan Guarantee Program, or both, issued prior to refunding of the investment, unless the investment is defined to be a permissible investment for a certified Louisiana capital company. The department may promulgate rules which include a method of defining "permissible investments".
C. Repealed by Acts 1996, No. 21, §3, eff. June 27, 1996.
D. Documents and other materials submitted by certified Louisiana capital companies or by Louisiana businesses for purposes of the continuance of certification shall not be public records if such records are determined to be trade or business secrets and shall be maintained in a secured environment by the commissioner. All reports, applications, and other information submitted to the commissioner shall contain no materially false or misleading information.
E. All qualified investments in equity in qualified Louisiana businesses as defined in R.S. 51:1923, including any losses therein incurred after certification, will be considered in the calculation of the percentage requirements under Subsections A and B of this Section.
F.(1) Each certified Louisiana capital company shall report the following to the commissioner on a calendar quarterly basis, starting with the first quarter after certification and each quarter thereafter, if any of the following information has changed since the first or any subsequent quarterly report filed:
(a) The name of each investor in a certified Louisiana capital company entitled to either an income tax credit or an insurance premium tax credit, including federal and state income tax identification numbers and, if applicable, the insurance premium tax identification number.
(b) The amount of each investor's investment and tax credit.
(c) The date on which the certified Louisiana capital company received the investment.
(d) The amount of the certified Louisiana capital company's certified capital at the end of the quarter.
(e) Whether or not the certified Louisiana capital company has invested more than fifteen percent, of the total certified capital under management in any one company.
(2) Each certified Louisiana capital company shall report to the commissioner annually, on or before January thirty-first, all qualified investments that the company has made during the previous calendar year, as well as the investment pool from which each investment originated.
(3) The certified Louisiana capital company shall submit to the commissioner, on or before April thirtieth, annual audited financial statements which include the opinion of an independent certified public accountant.
G.(1) Prior to making an investment in a business, a certified Louisiana capital company shall obtain, from an authorized representative of the business, a signed affidavit which shall be maintained by the company in its files.
(2) The commissioner shall by rule specify the substantive content of the affidavit.
H. A certified Louisiana capital company shall not:
(1) Operate or conceal any fact or condition which, if such operation or condition had existed at the time of application for certification, would have justified the commissioner's refusal of the certified Louisiana capital company's certification.
(2) Make any material misrepresentation to the commissioner in an application for certification which would have justified the commissioner's refusal of the certification.
(3) Willfully violate any provision of this Chapter, any rule or regulation promulgated hereunder, or any order of the secretary or the commissioner.

Legislative History

Added by Acts 1983, No. 642, §1. Acts 1984, No. 891, §1, §2, eff. July 20, 1984; Acts 1986, No. 695, §1; Acts 1989, No. 496, §1; Acts 1993, No. 279, §2, eff. June 2, 1993; Acts 1996, No. 21, §§2, 3, eff. June 27, 1996; Acts 2001, No. 1122, §1, eff. July 1, 2001; Acts 2002, No. 84, §2, eff. June 25, 2002; Acts 2006, No. 434, §1.