Qualified equity investment tax credit; temporarily authorize additional investments for which credits may be allocated.

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To: Ways and Means
MISSISSIPPI LEGISLATURE REGULAR SESSION 2026

By: Representatives Lamar, Arnold

HOUSE BILL NO. 4066

AN ACT TO AMEND SECTION 57-105-1, MISSISSIPPI CODE OF 1972, 1
TO REVISE THE PROGRAM THAT AUTHORIZES THE MISSISSIPPI DEVELOPMENT 2
AUTHORITY TO ALLOCATE INCOME TAX CREDITS AND INSURANCE PREMIUM TAX 3
CREDITS FOR TAXPAYERS HOLDING CERTAIN QUALIFIED EQUITY 4
INVESTMENTS, TO TEMPORARILY AUTHORIZE ADDITIONAL INVESTMENTS FOR 5
WHICH TAX CREDITS MAY BE ALLOCATED UNDER THE PROGRAM; AND FOR 6
RELATED PURPOSES. 7
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI: 8
SECTION 1. Section 57-105-1, Mississippi Code of 1972, is 9
amended as follows: 10
57-105-1. (1) As used in this section: 11
(a) "Adjusted purchase price" means the investment in 12
the qualified community development entity for the qualified 13
equity investment, substantially all of the proceeds of which are 14
used to make qualified low-income community investments in 15
Mississippi. 16
For the purposes of calculating the amount of qualified 17
low-income community investments held by a qualified community 18
development entity, an investment will be considered held by a 19
qualified community development entity even if the investment has 20
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been sold or repaid; provided that the qualified community 21
development entity reinvests an amount equal to the capital 22
returned to or recovered by the qualified community development 23
entity from the original investment, exclusive of any profits 24
realized, in another qualified low-income community investment in 25
Mississippi, including any federal Indian reservation located 26
within the geographical boundary of Mississippi within twelve (12) 27
months of the receipt of such capital. A qualified community 28
development entity will not be required to reinvest capital 29
returned from the qualified low-income community investments after 30
the sixth anniversary of the issuance of the qualified equity 31
investment, the proceeds of which were used to make the qualified 32
low-income community investment, and the qualified low-income 33
community investment will be considered held by the qualified 34
community development entity through the seventh anniversary of 35
the qualified equity investment's issuance. 36
(b) "Applicable percentage" means: 37
(i) For any equity investment issued prior to July 38
1, 2008, four percent (4%) for each of the second through seventh 39
credit allowance dates for purposes of the taxes imposed by 40
Section 27-7-5 and one and one-third percent (1-1/3%) for each of 41
the second through seventh credit allowance dates for purposes of 42
the taxes imposed by Sections 27-15-103, 27-15-109 and 27-15-123. 43
(ii) For any equity investment issued from and 44
after July 1, 2008, eight percent (8%) for each of the first 45
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through third credit allowance dates for purposes of the taxes 46
imposed by Section 27-7-5 or the taxes imposed by Sections 47
27-15-103, 27-15-109 and 27-15-123. 48
(c) "Credit allowance date" means, with respect to any 49
qualified equity investment: 50
(i) The later of: 51
1. The date upon which the qualified equity 52
investment is initially made; or 53
2. The date upon which the Mississippi 54
Development Authority issues a certificate under subsection (4) of 55
this section; and 56
(ii) 1. For equity investments issued prior to 57
July 1, 2008, each of the subsequent six (6) anniversary dates of 58
the date upon which the investment is initially made; or 59
2. For equity investments issued from and 60
after July 1, 2008, each of the subsequent two (2) anniversary 61
dates of the date determined as provided for in subparagraph (i) 62
of this paragraph. 63
(d) "Qualified community development entity" shall have 64
the meaning ascribed to such term in Section 45D of the Internal 65
Revenue Code of 1986, as amended, if the entity has entered into 66
an Allocation Agreement with the Community Development Financial 67
Institutions Fund of the United States Department of the Treasury 68
with respect to credits authorized by Section 45D of the Internal 69
Revenue Code of 1986, as amended. 70
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(e) "Qualified active low-income community business" 71
shall have the meaning ascribed to such term in Section 45D of the 72
Internal Revenue Code of 1986, as amended. 73
(f) "Qualified equity investment" shall have the 74
meaning ascribed to such term in Section 45D of the Internal 75
Revenue Code of 1986, as amended. The investment does not have to 76
be designated as a qualified equity investment by the Community 77
Development Financial Institutions Fund of the United States 78
Treasury to be considered a qualified equity investment under this 79
section but otherwise must meet the definition under the Internal 80
Revenue Code. In addition to meeting the definition in Section 81
45D of the Internal Revenue Code such investment must also: 82
(i) Have been acquired after January 1, 2007, at 83
its original issuance solely in exchange for cash; and 84
(ii) Have been allocated by the Mississippi 85
Development Authority. 86
For the purposes of this section, such investment shall be 87
deemed a qualified equity investment on the later of the date such 88
qualified equity investment is made or the date on which the 89
Mississippi Development Authority issues a certificate under 90
subsection (4) of this section allocating credits based on such 91
investment. 92
(g) "Qualified low-income community investment" shall 93
have the meaning ascribed to such term in Section 45D of the 94
Internal Revenue Code of 1986, as amended; provided, however, that 95
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the maximum amount of qualified low-income community investments 96
issued for a single qualified active low-income community 97
business, on an aggregate basis with all of its affiliates, that 98
may be included for purposes of allocating any credits under this 99
section shall not exceed Ten Million Dollars ($10,000,000.00), in 100
the aggregate, whether issued by one (1) or several qualified 101
community development entities. 102
(2) A taxpayer that holds a qualified equity investment on 103
the credit allowance date shall be entitled to a credit applicable 104
against the taxes imposed by Sections 27-7-5, 27-15-103, 27-15-109 105
and 27-15-123 during the taxable year that includes the credit 106
allowance date. The amount of the credit shall be equal to the 107
applicable percentage of the adjusted purchase price paid to the 108
qualified community development entity for the qualified equity 109
investment. The amount of the credit that may be utilized in any 110
one (1) tax year shall be limited to an amount not greater than 111
the total tax liability of the taxpayer for the taxes imposed by 112
the above-referenced sections. The credit shall not be refundable 113
or transferable. Any unused portion of the credit may be carried 114
forward for seven (7) taxable years beyond the credit allowance 115
date on which the credit was earned. The maximum aggregate amount 116
of qualified equity investments that may be allocated by the 117
Mississippi Development Authority may not exceed an amount that 118
would result in taxpayers claiming in any one (1) state fiscal 119
year credits in excess of Sixteen Million Dollars 120
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($16,000,000.00), exclusive of credits that might be carried 121
forward from previous taxable years; however, a maximum of 122
one-third (1/3) of this amount may be allocated as credits for 123
taxes imposed by Sections 27-15-103, 27-15-109 and 27-15-123. Any 124
taxpayer claiming a credit under this section against the taxes 125
imposed by Sections 27-7-5, 27-15-103, 27-15-109 and 27-15-123 126
shall not be required to pay any additional tax under Section 127
27-15-123 as a result of claiming such credit. The Mississippi 128
Development Authority shall allocate credits within this limit as 129
provided for in subsection (4) of this section. 130
(3) Tax credits authorized by this section that are earned 131
by a partnership, limited liability company, S corporation or 132
other similar pass-through entity, shall be allocated among all 133
partners, members or shareholders, respectively, either in 134
proportion to their ownership interest in such entity or as the 135
partners, members or shareholders mutually agree as provided in an 136
executed document. Such allocation shall be made each taxable 137
year of such pass-through entity which contains a credit allowance 138
date. 139
(4) The qualified community development entity shall apply 140
for credits with the Mississippi Development Authority on forms 141
prescribed by the Mississippi Development Authority. The 142
qualified community development entity must pay an application fee 143
of One Thousand Dollars ($1,000.00) to the Mississippi Development 144
Authority at the time the application is submitted. In the 145
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application the qualified community development entity shall 146
certify to the Mississippi Development Authority the dollar amount 147
of the qualified equity investments made or to be made in this 148
state, including in any federal Indian reservation located within 149
the state's geographical boundary, during the first twelve-month 150
period following the initial credit allowance date. The 151
Mississippi Development Authority shall allocate credits based on 152
the dollar amount of qualified equity investments as certified in 153
the application. Once the Mississippi Development Authority has 154
allocated credits to a qualified community development entity, if 155
the corresponding qualified equity investment has not been issued 156
as of the date of such allocation, then the corresponding 157
qualified equity investment must be issued not later than one 158
hundred twenty (120) days from the date of such allocation. If 159
the qualified equity investment is not issued within such time 160
period, the allocation shall be cancelled and returned to the 161
Mississippi Development Authority for reallocation. Upon final 162
documentation of the qualified low-income community investments, 163
if the actual dollar amount of the investments is lower than the 164
amount estimated, the Mississippi Development Authority shall 165
adjust the tax credit allowed under this section. The Department 166
of Revenue may recapture all of the credit allowed under this 167
section if: 168
(a) Any amount of federal tax credits available with 169
respect to a qualified equity investment that is eligible for a 170
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tax credit under this section is recaptured under Section 45D of 171
the Internal Revenue Code of 1986, as amended; or 172
(b) The qualified community development entity redeems 173
or makes any principal repayment with respect to a qualified 174
equity investment prior to the seventh anniversary of the issuance 175
of the qualified equity investment; or 176
(c) The qualified community development entity fails to 177
maintain at least eighty-five percent (85%) of the proceeds of the 178
qualified equity investment in qualified low-income community 179
investments in Mississippi at any time prior to the seventh 180
anniversary of the issuance of the qualified equity investment. 181
Any credits that are subject to recapture under this 182
subsection shall be recaptured from the taxpayer that actually 183
claimed the credit. 184
The Mississippi Development Authority shall not allocate any 185
credits under this section after July 1, 2029. 186
(5) Each qualified community development entity that 187
receives qualified equity investments to make qualified low-income 188
community investments in Mississippi must annually report to the 189
Mississippi Development Authority the North American Industry 190
Classification System Code, the county, the dollars invested, the 191
number of jobs assisted and the number of jobs assisted with wages 192
over one hundred percent (100%) of the federal poverty level for a 193
family of four (4) of each qualified low-income community 194
investment. 195
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(6) The Mississippi Development Authority shall file an 196
annual report on all qualified low-income community investments 197
with the Governor, the Clerk of the House of Representatives, the 198
Secretary of the Senate and the Secretary of State describing the 199
North American Industry Classification System Code, the county, 200
the dollars invested, the number of jobs assisted and the number 201
of jobs assisted with wages over one hundred percent (100%) of the 202
federal poverty level for a family of four (4) of each qualified 203
low-income community investment. The annual report will be posted 204
on the Mississippi Development Authority's Internet website. 205
(7) (a) The purpose of this subsection is to authorize the 206
creation and establishment of public benefit corporations for 207
financing arrangements regarding public property and facilities. 208
(b) As used in this subsection: 209
(i) "New Markets Tax Credit transaction" means any 210
financing transaction which utilizes either this section or 211
Section 45D of the Internal Revenue Code of 1986, as amended. 212
(ii) "Public benefit corporation" means a 213
nonprofit corporation formed or designated by a public entity to 214
carry out the purposes of this subsection. 215
(iii) "Public entity or public entities" includes 216
utility districts, regional solid waste authorities, regional 217
utility authorities, community hospitals, regional airport 218
authorities, municipal airport authorities, community and junior 219
colleges, educational building corporations established by or on 220
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behalf of the state institutions of higher learning, school 221
districts, planning and development districts, county economic 222
development districts, urban renewal agencies, any other regional 223
or local economic development authority, agency or governmental 224
entity, and any other regional or local industrial development 225
authority, agency or governmental entity. 226
(iv) "Public property or facilities" means any 227
property or facilities owned or leased by a public entity or 228
public benefit corporation. 229
(c) Notwithstanding any other provision of law to the 230
contrary, public entities are authorized pursuant to this 231
subsection to create one or more public benefit corporations or 232
designate an existing corporation as a public benefit corporation 233
for the purpose of entering into financing agreements and engaging 234
in New Markets Tax Credit transactions, which shall include, 235
without limitation, arrangements to plan, acquire, renovate, 236
construct, lease, sublease, manage, operate and/or improve new or 237
existing public property or facilities located within the 238
boundaries or service area of the public entity. Any financing 239
arrangement authorized under this subsection shall further any 240
purpose of the public entity and may include a term of up to fifty 241
(50) years. 242
(d) Notwithstanding any other provision of law to the 243
contrary and in order to facilitate the acquisition, renovation, 244
construction, leasing, subleasing, management, operating and/or 245
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improvement of new or existing public property or facilities to 246
further any purpose of a public entity, public entities are 247
authorized to enter into financing arrangements in order to 248
transfer public property or facilities to and/or from public 249
benefit corporations, including, without limitation, sales, 250
sale-leasebacks, leases and lease-leasebacks, provided such 251
transfer is related to any New Markets Tax Credit transaction 252
furthering any purpose of the public entity. Any such transfer 253
under this paragraph (d) and the public property or facilities 254
transferred in connection therewith shall be exempted from any 255
limitation or requirements with respect to leasing, acquiring, 256
and/or constructing public property or facilities. 257
(e) With respect to a New Markets Tax Credit 258
transaction, public entities and public benefit corporations are 259
authorized to enter into financing arrangements with any 260
governmental, nonprofit or for-profit entity in order to leverage 261
funds not otherwise available to public entities for the 262
acquisition, construction and/or renovation of properties 263
transferred to such public benefit corporations. The use of any 264
funds loaned by or contributed by a public benefit corporation or 265
borrowed by or otherwise made available to a public benefit 266
corporation in such financing arrangement shall be dedicated 267
solely to (i) the development of new properties or facilities 268
and/or the renovation of existing properties or facilities or 269
operation of properties or facilities, and/or (ii) the payment of 270
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costs and expenditures related to any such financing arrangements, 271
including, but not limited to, funding any reserves required in 272
connection therewith, the repayment of any indebtedness incurred 273
in connection therewith, and the payment of fees and expenses 274
incurred in connection with the closing, administration, 275
accounting and/or compliance with respect to the New Markets Tax 276
Credit transaction. 277
(f) A public benefit corporation created pursuant to 278
this subsection shall not be a political subdivision of the state 279
but shall be a nonprofit corporation organized and governed under 280
the provisions of the laws of this state and shall be a special 281
purpose corporation established to facilitate New Markets Tax 282
Credit transactions consistent with the requirements of this 283
section. 284
(g) Neither this subsection nor anything herein 285
contained is or shall be construed as a restriction or limitation 286
upon any powers which the public entity or public benefit 287
corporation might otherwise have under any laws of this state, and 288
this subsection is cumulative to any such powers. This subsection 289
does and shall be construed to provide a complete additional and 290
alternative method for the doing of the things authorized thereby 291
and shall be regarded as supplemental and additional to powers 292
conferred by other laws. 293
(8) (a) The purpose of this subsection is to authorize the 294
Governor to designate one or more counties of the state as 295
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eligible recovery zones in response to the State of Emergency 296
declared by the Governor of the State of Mississippi on January 297
22, 2026, arising from widespread, severe, and destructive winter 298
weather conditions, including prolonged freezing temperatures, ice 299
accumulation, power outages, and substantial disruption to 300
commerce and essential public services, occurring on and after 301
January 23, 2026. 302
(b) As used in this subsection, "recovery zone" means 303
any county designated by the Governor pursuant to this subsection 304
in response to the state of emergency declared in January of 2026. 305
(c) The Governor may designate a recovery zone by 306
executive proclamation or written order, which shall identify the 307
county subject to the designation and the effective date of such 308
designation. The designation shall be filed with the Secretary of 309
State and provided to the Mississippi Development Authority, and 310
the Mississippi Development Authority shall publish notice of the 311
designation on its official website. 312
(d) Notwithstanding any provision of this section or 313
Section 45D of the Internal Revenue Code of 1986, as amended, 314
until June 30, 2027, a qualified community development entity may 315
make a qualified low-income community investment in a business and 316
such business shall qualify as a qualified active low-income 317
community business if the business satisfies the requirements of 318
this section and an executive officer of such business certifies 319
that the qualified low-income community investment will be used 320
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ST: Qualified equity investment tax credit;
temporarily authorize additional investments for
which credits may be allocated.
for recovery from the State of Emergency referenced above but for 321
the requirement that it be located in a low-income community, as 322
defined in Section 45D of the Internal Revenue Code of 1986, as 323
amended, if the business is located in a recovery zone. 324
(e) The authority granted to the Governor under this 325
subsection shall expire on June 30, 2027, and no original 326
qualified low-income community investments may be made in a 327
recovery zone on or after that date; however, any capital that is 328
returned to a qualified community development entity that must be 329
reinvested pursuant to the requirements of this section may be 330
reinvested in any recovery zone that otherwise meets the 331
requirements of this section. 332
( * * *9) The Mississippi Development Authority shall 333
promulgate rules and regulations to implement the provisions of 334
this section. 335
SECTION 2. This act shall take effect and be in force from 336
and after January 1, 2026. 337