Qualified equity investment tax credits; authorize Governor to designate winter storm recovery zones for.

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To: Finance
MISSISSIPPI LEGISLATURE REGULAR SESSION 2026

By: Senator(s) Harkins, Simmons (13th)

SENATE BILL NO. 3227

AN ACT TO AMEND SECTION 57-105-1, MISSISSIPPI CODE OF 1972, 1
TO AUTHORIZE THE GOVERNOR OF MISSISSIPPI TO DESIGNATE ONE OR MORE 2
COUNTIES OF THE STATE AS ELIGIBLE RECOVERY ZONES IN RESPONSE TO 3
THE STATE OF EMERGENCY DECLARED BY THE GOVERNOR ON JANUARY 22, 4
2026, FOR THE PURPOSE OF QUALIFIED EQUITY INVESTMENT INCOME TAX 5
AND INSURANCE PREMIUM TAX CREDITS; TO PROVIDE THAT SUCH AUTHORITY 6
SHALL EXPIRE AFTER JUNE 30, 2027; TO PROVIDE THAT, THROUGH JUNE 7
30, 2027, A QUALIFIED COMMUNITY DEVELOPMENT ENTITY MAY MAKE A 8
QUALIFIED LOW-INCOME COMMUNITY INVESTMENT IN A BUSINESS, AND SUCH 9
BUSINESS SHALL QUALIFY AS A QUALIFIED ACTIVE LOW-INCOME COMMUNITY 10
BUSINESS, EVEN IF NOT LOCATED IN A LOW-INCOME COMMUNITY, IF IT IS 11
LOCATED IN A RECOVERY ZONE AND OTHERWISE SATISFIES THE 12
REQUIREMENTS OF THE SECTION, AND AN EXECUTIVE OFFICER OF SUCH 13
BUSINESS CERTIFIES THAT THE QUALIFIED LOW-INCOME COMMUNITY 14
INVESTMENT WILL BE USED FOR RECOVERY FROM THE STATE OF EMERGENCY; 15
AND FOR RELATED PURPOSES. 16
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI: 17
SECTION 1. Section 57-105-1, Mississippi Code of 1972, is 18
amended as follows: 19
57-105-1. (1) As used in this section: 20
(a) "Adjusted purchase price" means the investment in 21
the qualified community development entity for the qualified 22
equity investment, substantially all of the proceeds of which are 23
used to make qualified low-income community investments in 24
Mississippi. 25
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For the purposes of calculating the amount of qualified 26
low-income community investments held by a qualified community 27
development entity, an investment will be considered held by a 28
qualified community development entity even if the investment has 29
been sold or repaid; provided that the qualified community 30
development entity reinvests an amount equal to the capital 31
returned to or recovered by the qualified community development 32
entity from the original investment, exclusive of any profits 33
realized, in another qualified low-income community investment in 34
Mississippi, including any federal Indian reservation located 35
within the geographical boundary of Mississippi within twelve (12) 36
months of the receipt of such capital. A qualified community 37
development entity will not be required to reinvest capital 38
returned from the qualified low-income community investments after 39
the sixth anniversary of the issuance of the qualified equity 40
investment, the proceeds of which were used to make the qualified 41
low-income community investment, and the qualified low-income 42
community investment will be considered held by the qualified 43
community development entity through the seventh anniversary of 44
the qualified equity investment's issuance. 45
(b) "Applicable percentage" means: 46
(i) For any equity investment issued prior to July 47
1, 2008, four percent (4%) for each of the second through seventh 48
credit allowance dates for purposes of the taxes imposed by 49
Section 27-7-5 and one and one-third percent (1-1/3%) for each of 50
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the second through seventh credit allowance dates for purposes of 51
the taxes imposed by Sections 27-15-103, 27-15-109 and 27-15-123. 52
(ii) For any equity investment issued from and 53
after July 1, 2008, eight percent (8%) for each of the first 54
through third credit allowance dates for purposes of the taxes 55
imposed by Section 27-7-5 or the taxes imposed by Sections 56
27-15-103, 27-15-109 and 27-15-123. 57
(c) "Credit allowance date" means, with respect to any 58
qualified equity investment: 59
(i) The later of: 60
1. The date upon which the qualified equity 61
investment is initially made; or 62
2. The date upon which the Mississippi 63
Development Authority issues a certificate under subsection (4) of 64
this section; and 65
(ii) 1. For equity investments issued prior to 66
July 1, 2008, each of the subsequent six (6) anniversary dates of 67
the date upon which the investment is initially made; or 68
2. For equity investments issued from and 69
after July 1, 2008, each of the subsequent two (2) anniversary 70
dates of the date determined as provided for in subparagraph (i) 71
of this paragraph. 72
(d) "Qualified community development entity" shall have 73
the meaning ascribed to such term in Section 45D of the Internal 74
Revenue Code of 1986, as amended, if the entity has entered into 75
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an Allocation Agreement with the Community Development Financial 76
Institutions Fund of the United States Department of the Treasury 77
with respect to credits authorized by Section 45D of the Internal 78
Revenue Code of 1986, as amended. 79
(e) "Qualified active low-income community business" 80
shall have the meaning ascribed to such term in Section 45D of the 81
Internal Revenue Code of 1986, as amended. 82
(f) "Qualified equity investment" shall have the 83
meaning ascribed to such term in Section 45D of the Internal 84
Revenue Code of 1986, as amended. The investment does not have to 85
be designated as a qualified equity investment by the Community 86
Development Financial Institutions Fund of the United States 87
Treasury to be considered a qualified equity investment under this 88
section but otherwise must meet the definition under the Internal 89
Revenue Code. In addition to meeting the definition in Section 90
45D of the Internal Revenue Code such investment must also: 91
(i) Have been acquired after January 1, 2007, at 92
its original issuance solely in exchange for cash; and 93
(ii) Have been allocated by the Mississippi 94
Development Authority. 95
For the purposes of this section, such investment shall be 96
deemed a qualified equity investment on the later of the date such 97
qualified equity investment is made or the date on which the 98
Mississippi Development Authority issues a certificate under 99
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subsection (4) of this section allocating credits based on such 100
investment. 101
(g) "Qualified low-income community investment" shall 102
have the meaning ascribed to such term in Section 45D of the 103
Internal Revenue Code of 1986, as amended; provided, however, that 104
the maximum amount of qualified low-income community investments 105
issued for a single qualified active low-income community 106
business, on an aggregate basis with all of its affiliates, that 107
may be included for purposes of allocating any credits under this 108
section shall not exceed Ten Million Dollars ($10,000,000.00), in 109
the aggregate, whether issued by one (1) or several qualified 110
community development entities. 111
(2) A taxpayer that holds a qualified equity investment on 112
the credit allowance date shall be entitled to a credit applicable 113
against the taxes imposed by Sections 27-7-5, 27-15-103, 27-15-109 114
and 27-15-123 during the taxable year that includes the credit 115
allowance date. The amount of the credit shall be equal to the 116
applicable percentage of the adjusted purchase price paid to the 117
qualified community development entity for the qualified equity 118
investment. The amount of the credit that may be utilized in any 119
one (1) tax year shall be limited to an amount not greater than 120
the total tax liability of the taxpayer for the taxes imposed by 121
the above-referenced sections. The credit shall not be refundable 122
or transferable. Any unused portion of the credit may be carried 123
forward for seven (7) taxable years beyond the credit allowance 124
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date on which the credit was earned. The maximum aggregate amount 125
of qualified equity investments that may be allocated by the 126
Mississippi Development Authority may not exceed an amount that 127
would result in taxpayers claiming in any one (1) state fiscal 128
year credits in excess of Sixteen Million Dollars 129
($16,000,000.00), exclusive of credits that might be carried 130
forward from previous taxable years; however, a maximum of 131
one-third (1/3) of this amount may be allocated as credits for 132
taxes imposed by Sections 27-15-103, 27-15-109 and 27-15-123. Any 133
taxpayer claiming a credit under this section against the taxes 134
imposed by Sections 27-7-5, 27-15-103, 27-15-109 and 27-15-123 135
shall not be required to pay any additional tax under Section 136
27-15-123 as a result of claiming such credit. The Mississippi 137
Development Authority shall allocate credits within this limit as 138
provided for in subsection (4) of this section. 139
(3) Tax credits authorized by this section that are earned 140
by a partnership, limited liability company, S corporation or 141
other similar pass-through entity, shall be allocated among all 142
partners, members or shareholders, respectively, either in 143
proportion to their ownership interest in such entity or as the 144
partners, members or shareholders mutually agree as provided in an 145
executed document. Such allocation shall be made each taxable 146
year of such pass-through entity which contains a credit allowance 147
date. 148
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(4) The qualified community development entity shall apply 149
for credits with the Mississippi Development Authority on forms 150
prescribed by the Mississippi Development Authority. The 151
qualified community development entity must pay an application fee 152
of One Thousand Dollars ($1,000.00) to the Mississippi Development 153
Authority at the time the application is submitted. In the 154
application the qualified community development entity shall 155
certify to the Mississippi Development Authority the dollar amount 156
of the qualified equity investments made or to be made in this 157
state, including in any federal Indian reservation located within 158
the state's geographical boundary, during the first twelve-month 159
period following the initial credit allowance date. The 160
Mississippi Development Authority shall allocate credits based on 161
the dollar amount of qualified equity investments as certified in 162
the application. Once the Mississippi Development Authority has 163
allocated credits to a qualified community development entity, if 164
the corresponding qualified equity investment has not been issued 165
as of the date of such allocation, then the corresponding 166
qualified equity investment must be issued not later than one 167
hundred twenty (120) days from the date of such allocation. If 168
the qualified equity investment is not issued within such time 169
period, the allocation shall be cancelled and returned to the 170
Mississippi Development Authority for reallocation. Upon final 171
documentation of the qualified low-income community investments, 172
if the actual dollar amount of the investments is lower than the 173
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amount estimated, the Mississippi Development Authority shall 174
adjust the tax credit allowed under this section. The Department 175
of Revenue may recapture all of the credit allowed under this 176
section if: 177
(a) Any amount of federal tax credits available with 178
respect to a qualified equity investment that is eligible for a 179
tax credit under this section is recaptured under Section 45D of 180
the Internal Revenue Code of 1986, as amended; or 181
(b) The qualified community development entity redeems 182
or makes any principal repayment with respect to a qualified 183
equity investment prior to the seventh anniversary of the issuance 184
of the qualified equity investment; or 185
(c) The qualified community development entity fails to 186
maintain at least eighty-five percent (85%) of the proceeds of the 187
qualified equity investment in qualified low-income community 188
investments in Mississippi at any time prior to the seventh 189
anniversary of the issuance of the qualified equity investment. 190
Any credits that are subject to recapture under this 191
subsection shall be recaptured from the taxpayer that actually 192
claimed the credit. 193
The Mississippi Development Authority shall not allocate any 194
credits under this section after July 1, 2029. 195
(5) Each qualified community development entity that 196
receives qualified equity investments to make qualified low-income 197
community investments in Mississippi must annually report to the 198
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Mississippi Development Authority the North American Industry 199
Classification System Code, the county, the dollars invested, the 200
number of jobs assisted and the number of jobs assisted with wages 201
over one hundred percent (100%) of the federal poverty level for a 202
family of four (4) of each qualified low-income community 203
investment. 204
(6) The Mississippi Development Authority shall file an 205
annual report on all qualified low-income community investments 206
with the Governor, the Clerk of the House of Representatives, the 207
Secretary of the Senate and the Secretary of State describing the 208
North American Industry Classification System Code, the county, 209
the dollars invested, the number of jobs assisted and the number 210
of jobs assisted with wages over one hundred percent (100%) of the 211
federal poverty level for a family of four (4) of each qualified 212
low-income community investment. The annual report will be posted 213
on the Mississippi Development Authority's Internet website. 214
(7) (a) The purpose of this subsection is to authorize the 215
creation and establishment of public benefit corporations for 216
financing arrangements regarding public property and facilities. 217
(b) As used in this subsection: 218
(i) "New Markets Tax Credit transaction" means any 219
financing transaction which utilizes either this section or 220
Section 45D of the Internal Revenue Code of 1986, as amended. 221
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(ii) "Public benefit corporation" means a 222
nonprofit corporation formed or designated by a public entity to 223
carry out the purposes of this subsection. 224
(iii) "Public entity or public entities" includes 225
utility districts, regional solid waste authorities, regional 226
utility authorities, community hospitals, regional airport 227
authorities, municipal airport authorities, community and junior 228
colleges, educational building corporations established by or on 229
behalf of the state institutions of higher learning, school 230
districts, planning and development districts, county economic 231
development districts, urban renewal agencies, any other regional 232
or local economic development authority, agency or governmental 233
entity, and any other regional or local industrial development 234
authority, agency or governmental entity. 235
(iv) "Public property or facilities" means any 236
property or facilities owned or leased by a public entity or 237
public benefit corporation. 238
(c) Notwithstanding any other provision of law to the 239
contrary, public entities are authorized pursuant to this 240
subsection to create one or more public benefit corporations or 241
designate an existing corporation as a public benefit corporation 242
for the purpose of entering into financing agreements and engaging 243
in New Markets Tax Credit transactions, which shall include, 244
without limitation, arrangements to plan, acquire, renovate, 245
construct, lease, sublease, manage, operate and/or improve new or 246
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existing public property or facilities located within the 247
boundaries or service area of the public entity. Any financing 248
arrangement authorized under this subsection shall further any 249
purpose of the public entity and may include a term of up to fifty 250
(50) years. 251
(d) Notwithstanding any other provision of law to the 252
contrary and in order to facilitate the acquisition, renovation, 253
construction, leasing, subleasing, management, operating and/or 254
improvement of new or existing public property or facilities to 255
further any purpose of a public entity, public entities are 256
authorized to enter into financing arrangements in order to 257
transfer public property or facilities to and/or from public 258
benefit corporations, including, without limitation, sales, 259
sale-leasebacks, leases and lease-leasebacks, provided such 260
transfer is related to any New Markets Tax Credit transaction 261
furthering any purpose of the public entity. Any such transfer 262
under this paragraph (d) and the public property or facilities 263
transferred in connection therewith shall be exempted from any 264
limitation or requirements with respect to leasing, acquiring, 265
and/or constructing public property or facilities. 266
(e) With respect to a New Markets Tax Credit 267
transaction, public entities and public benefit corporations are 268
authorized to enter into financing arrangements with any 269
governmental, nonprofit or for-profit entity in order to leverage 270
funds not otherwise available to public entities for the 271
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acquisition, construction and/or renovation of properties 272
transferred to such public benefit corporations. The use of any 273
funds loaned by or contributed by a public benefit corporation or 274
borrowed by or otherwise made available to a public benefit 275
corporation in such financing arrangement shall be dedicated 276
solely to (i) the development of new properties or facilities 277
and/or the renovation of existing properties or facilities or 278
operation of properties or facilities, and/or (ii) the payment of 279
costs and expenditures related to any such financing arrangements, 280
including, but not limited to, funding any reserves required in 281
connection therewith, the repayment of any indebtedness incurred 282
in connection therewith, and the payment of fees and expenses 283
incurred in connection with the closing, administration, 284
accounting and/or compliance with respect to the New Markets Tax 285
Credit transaction. 286
(f) A public benefit corporation created pursuant to 287
this subsection shall not be a political subdivision of the state 288
but shall be a nonprofit corporation organized and governed under 289
the provisions of the laws of this state and shall be a special 290
purpose corporation established to facilitate New Markets Tax 291
Credit transactions consistent with the requirements of this 292
section. 293
(g) Neither this subsection nor anything herein 294
contained is or shall be construed as a restriction or limitation 295
upon any powers which the public entity or public benefit 296
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corporation might otherwise have under any laws of this state, and 297
this subsection is cumulative to any such powers. This subsection 298
does and shall be construed to provide a complete additional and 299
alternative method for the doing of the things authorized thereby 300
and shall be regarded as supplemental and additional to powers 301
conferred by other laws. 302
(8) The Mississippi Development Authority shall promulgate 303
rules and regulations to implement the provisions of this section. 304
(9) (a) The purpose of this subsection is to authorize the 305
Governor of Mississippi to designate one or more counties of the 306
state as eligible recovery zones in response to the State of 307
Emergency declared by the Governor on January 22, 2026, arising 308
from widespread, severe and destructive winter weather conditions, 309
including prolonged freezing temperatures, ice accumulation, power 310
outages and substantial disruption to commerce and essential 311
public services, occurring on and after January 23, 2026. 312
(b) As used in this subsection, "recovery zone" means 313
any county designated by the Governor under this subsection in 314
response to the state of emergency declared in January 2026. 315
(c) The Governor may designate a recovery zone by 316
executive proclamation or written order, which shall identify the 317
county subject to the designation and the effective date of such 318
designation. The designation shall be filed with the Secretary of 319
State and provided to the Mississippi Development Authority, and 320
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ST: Qualified equity investment tax credits;
authorize Governor to designate winter storm
recovery zones for.
the Mississippi Development Authority shall publish notice of the 321
designation on its official website. 322
(d) Notwithstanding any other provision of this 323
section, through June 30, 2027, a qualified community development 324
entity may make a qualified low-income community investment in a 325
business, and such business shall qualify as a qualified active 326
low-income community business if the business satisfies the 327
requirements of this section and an executive officer of such 328
business certifies that the qualified low-income community 329
investment will be used for recovery from the state of emergency 330
referenced above but for the requirement that it be located in a 331
low-income community, as defined in Section 45D of the Internal 332
Revenue Code of 1986, as amended, if the business is located in a 333
recovery zone. 334
(e) The authority granted to the Governor under this 335
subsection shall expire after June 30, 2027, and no original 336
qualified low-income community investments may be made in a 337
recovery zone on or after that date; however, any capital returned 338
to a qualified community development entity that must be 339
reinvested under the requirements of this section may be 340
reinvested in any recovery zone that otherwise meets the 341
requirements of this section. 342
SECTION 2. This act shall take effect and be in force from 343
and after July 1, 2026, and shall stand repealed on June 30, 2026. 344