Commerce Committee

JOINT FAVORABLE REPORT

Bill No.:

SB-75

Title:

AN ACT INCREASING THE ANNUAL CAP ON THE NEIGHBORHOOD ASSISTANCE ACT TAX CREDIT PROGRAM.

Vote Date:

3/20/2014

Vote Action:

Joint Favorable Substitute

PH Date:

3/13/2014

File No.:

SPONSORS OF BILL:

Commerce Committee

REASONS FOR BILL:

The Neighborhood Assistance Act (NAA) provides business tax credits to companies that invest in certain municipally approved community activities and programs

The bill:

Raises the annual cap on Neighborhood Assistance Act tax credits from %5 million to $10 million and

Extends the credit to businesses organized as partnerships, limited liability companies or other “pass-through” entities whose owners pay personal income taxes on the income they derive from the business.

EFFECTIVE DATE: July 1, 2014 and applicable to income and taxable years beginning January 1, 2014.

SUBSTITUE LANGAUAGE-The substitute adds provisions extending the credit to pass-through entities.

RESPONSE FROM ADMINISTRATION/AGENCY:

None

NATURE AND SOURCES OF SUPPORT:

Senator Martin looney, Majority Leader – Business firms make cash investments in qualifying community programs conducted by tax exempt municipal organizations. The community programs must be approved by both the municipality in which the programs are conducted and by the Department of Revenue Services. The program are capped at $5 million, due to the success businesses have made contributions that would significantly exceed this cap and thus the credits have been prorated. SB-75 would increase cap to $10 million which would allow corporations to receive the full credit. SB-420 would expand the types of business that would expand the types of businesses that could apply for credits under the NAA. “I believe that this change should wait until it is clear that there is room under the increased cap to fund tax credits for these entities as well.

John Cattelan, Executive director, Connecticut alliance of YMCA's – In 2011 PA11-140 did not make all the additional changes to allow S corporations and limited liabilities, limited partnerships to participate in the program. Additional changes need to be made to do more for the “S” corporations.

Jewish Federation Assocaiiton of Connecticut (JFACT Fund, Inc_. Robert Fishman, Executive Director – In full support of SB-75 , We request the committee to support SB-75 to increase the cap for Neighborhood Assistance Act to $10 million and include $3 million of this for S Corporations, Partnerships and LLC's which are the smaller local businesses which are most familiar with the charities in their local businesses.

Jeff Shaw, Director of Public Policy, The Connecticut Association of Nonprofits- We need to extend the eligibility to limited liability companies (LLCS) and privately held corporations (“S” Corporations). Under current law only available to “C” corporation business. The Neighborhood Assistance Act is atool that can help nonprofits achieve these objectives. We support SB-75.

Mary Roberts, Director of Ct. Federation of Catholic School Parents – We respectfully request on behalf of the Catholic school, that you support SB 75 as it provides our schools with the means necessary to continue to thrive and build upon past success through the tax credit it provides our generous donors and benefactors.

The Bushnell of the Performing Arts – The Bushnell respectfully asks the commerce committee to increase the cap on tax credits available to business entities through the Connecticut Neighborhood Assistance Act Tax Credit Program from $5 million to $10million.

NATURE AND SOURCES OF OPPOSITION-

None

Reported by: Kathy Salemi, Clerk

Date: 3-24-1014