§3088. Decertification

A. The LCDFIs shall submit copies of their reports sent to the CDFI Fund, and the commissioner may conduct an annual review of each LCDFI to determine if the LCDFI is abiding by the requirements of certification for its various investment pools, to advise the LCDFI as to the certification status of its qualified investments, and to ensure compliance with R.S. 51:3085 and 3087. The cost of program administration and the annual review shall be paid by each LCDFI according to a reasonable fee schedule adopted under the provisions of the Administrative Procedure Act.

B. Any violation of R.S. 51:3087, other than R.S. 51:3087(A), shall be grounds for decertification of the LCDFI and any investment pools that have not been decertified. A violation of R.S. 51:3087 shall be grounds for decertification of the noncomplying investment pool in accordance with Subsection C of this Section. If the commissioner determines that a company is not in compliance with any of the requirements of R.S. 51:3087, he shall, by written notice, inform the officers of the company and the board of directors, partners, managers, or members that the LCDFI and any investment pools that have not yet been decertified, as the case may be, may be subject to involuntary decertification in ninety days from the date of mailing of the notice unless they correct the deficiencies and are again in compliance with all requirements for certification.

C. At the end of the ninety-day grace period, if the LCDFI and any investment pools that have not yet been decertified, as the case may be, are still not in compliance with R.S. 51:3087, the commissioner shall send a notice of involuntary decertification of the LCDFI and any affected investment pools, as appropriate, to the company and to the secretary of the Department of Revenue. Voluntary or involuntary decertification of a LCDFI and any affected investment pools shall cause the forfeiture of the remaining and unclaimed tax credits under this Chapter and shall cause the recapture of all credits taken by investors with respect to such LCDFI or to such investment pools to be due and payable to the Department of Revenue in the year of decertification, notwithstanding the years for which the credits were originally taken may have prescribed, as follows:

(1) If any investment pools are decertified due to the inability of a LCDFI to comply with all requirements for continued certification under the provisions of R.S. 51:3087 within three years of the investment dates of such investment pools, one hundred percent of all credits relating to such investment pools which have been taken by investors shall be due and payable and any remaining and previously unclaimed investor credits relating to such investment pools shall be forfeited.

(2) When a LCDFI meets all requirements for continued certification of any investment pools under R.S. 51:3087, including R.S. 51:3087(A)(1), but excluding R.S. 51:3087(A)(2), fifty percent of those tax credits relating to such investment pools which have been or will be taken by investors within three years from the investment dates of such investment pools will not be subject to recapture or repayment.

(3) When a LCDFI meets all requirements for continued certification of any investment pools, including R.S. 51:3087(A)(1) and (2), no tax credits relating to such pools shall be subject to recapture, repayment, retaliation, or forfeiture.

(4) The commissioner may promulgate rules and regulations regarding the recapture or forfeiture of tax credits and which fail to meet the continuing certification requirements of R.S. 51:3087.

(5) When the LCDFI has invested one hundred percent of such investment pool in qualified investments, the LCDFI may voluntarily decertify such investment pool by sending a written request to the secretary or commissioner for a review and decertification. If the decertification of the investment pool is approved by the secretary or commissioner, no tax credits claimed or to be claimed under R.S. 51:3085 with respect to such investment pool will be subject to repayment, recapture, retaliation, or forfeiture by the LCDFI or its investors, except as otherwise provided by rules adopted by the commissioner pursuant to this Section.

(6) The commissioner shall promulgate rules and regulations pursuant to the Administrative Procedure Act no later than October, 2005 providing for the repayment of capital raised by LCDFIs as a result of tax credits granted pursuant to this Act.

D. No distribution to equity owners shall be made from the certified capital contained within a pool prior to decertification other than for any of the following:

(1) Debt service.

(2) Tax payments or distributions to the equity owners of a LCDFI in an amount equal to any projected increase in tax liability to the extent such increase is related to the ownership, management, or operation of the LCDFI.

Acts 2005, No. 491, §1, eff. July 12, 2005.