§3087. Requirements for continuance of certification as a LCDFI

A. A LCDFI is required to comply with all of the requirements of this Section in order to make investments in its loan or investment funds eligible for tax credits. A LCDFI must make qualified investments from each investment pool according to the following schedule:

(1) Within five years after the investment date for each investment pool, at least fifty percent of each investment pool must be placed in qualified investments.

(2) Within seven years after the investment date for each investment pool, at least eighty percent of each investment pool must be invested in qualified Louisiana businesses.

(3) One hundred percent of all capital raised must be invested in low-income communities before June 30, 2015.

B. The following are not qualified investments under this Section:

(1) 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 or lawyers.

(2) Investments in associates of LCDFIs. The secretary, by rule, shall define "associate". If a legal entity is not an associate before a LCDFI or any of its affiliated LCDFIs initially invests in the entity, it will not be an associate if the LCDFI or any of its affiliated LCDFIs provides additional investment subsequent to the initial investment in the entity.

(3) That portion of a LCDFI's qualified investments outstanding at any one time in any qualified Louisiana business or group of affiliated qualified Louisiana businesses in excess of twenty-five percent of the LCDFI's total certified capital.

(4) Qualified investments, with the exception of participations between LCDFIs, which are reported as qualified investments on another LCDFI's books.

(5) Reciprocal investments or loans made between LCDFIs.

C.(1) Each LCDFI 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 LCDFI entitled to a personal income, corporate income, or corporate franchise tax credit, including federal and state income tax identification numbers and, if applicable, the income tax identification number.

(b) The amount of each investor's investment and tax credit.

(c) The date on which the LCDFI received the investment.

(d) The amount of the LCDFI's certified capital at the end of the quarter.

(e) Whether or not the LCDFI has invested more than fifteen percent of the total certified capital under management in any one company.

(2) Each LCDFI 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 LCDFI shall submit to the commissioner, on or before April thirtieth, annual audited financial statements which include the opinion of an independent certified public accountant.

(4) The LCDFI shall also submit copies of its annual transaction level report and institutional level report, which include detailed information on job creation and retention, to the commissioner upon their completion, provided that all the information specified in R.S. 51:1927.2 is included in or in addition to these reports.

D.(1) Prior to making an investment in a business, a LCDFI 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.

E. A LCDFI 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 LCDFI'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) Violate any provision of this Chapter, any rule or regulation promulgated hereunder, or any order of the commissioner or the secretary of the Department of Revenue.

F. In the event of a change of control of a LCDFI, at least thirty days prior to the effective date, the LCDFI shall provide written notification to the commissioner of the proposed transaction. Unless additional information is required, the commissioner shall review the information submitted and shall issue either an approval or denial of the change of control within thirty days of the receipt of the notification. Information to be included in the notification shall be defined by rule.

G. A LCDFI shall make no investment if after making such investment, the total investment outstanding would exceed fifteen percent of the total certified capital under management unless the investment is defined to be a permissible investment for a LCDFI. The department may promulgate rules which include a method of defining "permissible investments".

Acts 2005, No. 491, §1, eff. July 12, 2005; Acts 2007, No. 345, §2, eff. June 30, 2007.