Commerce Committee

JOINT FAVORABLE REPORT

Bill No.:

HB-5583

Title:

AN ACT EXPANDING INVESTMENT ELIGIBILITY UNDER THE ANGEL INVESTOR TAX CREDIT PROGRAM.

Vote Date:

3/16/2017

Vote Action:

JFS to Floor

PH Date:

2/23/2017

File No.:

SPONSORS OF BILL:

Commerce Committee

REASONS FOR BILL:

The bill:

● Opens the angel investor tax credit program to businesses in any industry, instead of just those in specified technology industries and

● Generally restricts the amount of credits that may be awarded for investments in those technology businesses.

Eligible Investments. By law, accredited investors receive credits for investments in businesses that meet eligibility criteria (e.g., less than seven years in operation and $ 1 million in annual revenue) and are approved by CI.

● Currently, only bioscience, advanced materials, clean technology, photonics, and information technology businesses ( “emerging technology businesses” under the bill) qualify to receive credit-eligible investments

● Under the bill, eligible businesses in any industry can be approved to receive investments

Credits. By law, the angel investor tax credit program is capped at $3 million per year, and investors apply to CI to have credits reserved for their investments in CI-approved businesses.

● Currently, all of those credits are dedicated to emerging technology businesses, as they are the only ones that qualify

● Under the bill, the amount of credits that CI may reserve for emerging technology businesses is capped at 75% of available credits ($2.25 million), except that CI may exceed that cap if any credits remain after April1 in each year

Effective Date: July 1, 2017

Description of Changes

The substitute adds the provision that caps the total amount of credits that can be reserved for emerging technology businesses.

RESPONSE FROM ADMINISTRATION/AGENCY:

None

NATURE AND SOURCES OF SUPPORT:

● Rep. Catherine F. Abercrombie – programs like the Angel Investor Tax Credit are a great way to encourage crucial investment in Connecticut companies

● Home Builders and Remodelers of CT – state shouldn't pick winners and losers, should allow angels to do so

NATURE AND SOURCES OF OPPOSITION:

● CI – expanding eligibility without increasing the cap could dilute the effect of the program; CI would like to be able to prioritize industries

● Paul Pescatello – technology investment is most effective for creating jobs, bill should retain definition to include “ high technology”

Reported by: Jessica Serrao Asst. Clerk

Date: 03/17/2017