Provides relative to the Louisiana New Markets Jobs tax credit (Item #19) (OR -$60,000,000 GF RV See Note)
Impact
The proposed adjustments include stricter investment requirements; under the new law, qualified community development entities (QCDEs) must invest 100% of the purchase price of qualified equity investments within nine months, with at least 30% allocated to impact businesses owned by women, minorities, or veterans. Additionally, the maximum countable investment in any single business is reduced from $10 million to $5 million for equity investments made post-implementation. Such changes aim to improve monitoring and ensure that funds are effectively utilized to foster economic growth in low-income communities, particularly in rural areas.
Summary
House Bill 45, introduced by Representatives Duplessis and Farnum, seeks to enhance the Louisiana New Markets Jobs tax credit program effective from August 1, 2020. The bill is designed to stimulate investment in qualified active low-income community businesses (QALICBs) by allowing additional allocations and certifications of New Markets Tax Credits, thus increasing access to capital for businesses located in economically disadvantaged areas. This legislation emphasizes a targeted effort to support industries defined by specific North American Industry Classification System (NAICS) codes, ensuring that resources are channeled into sectors that can benefit most from financial support.
Sentiment
General sentiment around HB 45 appears to be supportive among those advocating for economic development and investment in underserved communities. However, some do express concerns regarding the feasibility of the stricter investment recapture provisions and the implications for businesses that might struggle to comply. The adjustments to the tax credit structure are seen as a necessary evolution to better align investments with community needs, although critics warn that excessive regulation might hinder the willing participation of potential investors.
Contention
The bill has drawn attention due to the shifting dynamics in tax credit allocations and the requirement for greater accountability from QCDEs. While proponents argue it will enhance the effectiveness of the New Markets Tax Credits program, opponents caution that the increased scrutiny and inability to invest in more than one business could deter smaller investors from engaging in Louisiana's development efforts. The focus on racial and gender equity is highlighted as a positive, yet it also brings scrutiny regarding the definitions of ‘impact businesses’ and whether they sufficiently capture the requisite diversity in ownership among businesses receiving funding.
Provides for eligibility for the Angel Investor Tax Credit for investments made in federal opportunity zones. (Item #19) (gov sig) (EN DECREASE GF RV See Note)
Dedication of unclaimed property funds and creation of Louisiana Unclaimed Property Permanent Trust Fund. (Item #10) (See Act) (EN -$25,000,000 GF RV See Note)