Finance, Revenue and Bonding Committee
JOINT FAVORABLE REPORT
Bill No.: Senate Bill 382
AN ACT CONCERNING A CONNECTICUT NEW MARKET TAX CREDIT
Title: PROGRAM.
Vote Date: 4/5/2022
Vote Action: Joint Favorable
PH Date: 3/15/2022
File No.: 614
Disclaimer: The following JOINT FAVORABLE Report is prepared for the benefit of the
members of the General Assembly, solely for purposes of information, summarization and
explanation and does not represent the intent of the General Assembly or either chamber
thereof for any purpose.
SPONSORS OF BILL:
The Finance, Revenue and Bonding Committee
REASONS FOR BILL:
This bill establishes a Connecticut New Markets Tax Credit Program for calendar years 2023
and 2024 to be administered by the Connecticut Health and Educational Facilities Authority
(CHEFA) and Community Development Corporations (CDC).
Such a program would stimulate economic development in low-income communities by
allowing private investors and businesses that are making qualified low-income community
investments through a community development entity (CDE) to receive state tax business
credits equal to 39% of their investment, which they may claim over a seven-year period.
RESPONSE FROM ADMINISTRATION/AGENCY:
None expressed.
NATURE AND SOURCES OF SUPPORT:
The following individuals testified in support of this bill, stating that it has the potential to change
the face of our communities that are struggling by stimulating economic development through
creating good jobs, expanding access to healthy foods in food deserts, and making
environmental improvements. The following individuals thought that this proposal would
strategically incentivize investments that would build wealth, reduce income inequality, and
contribute to economic growth in underserved communities.
Beverley Brakeman, Regional Director, United Auto Workers, Region 9A
William Buhler, Member, CSEA SEIU Local 2001, Recovery For All Coalition
Carl Chisem, President, Connecticut Employees Union Independent, SEIU Local 511, Member,
Recovery For All Coalition
Lauren Doninger, Member, Recovery For All Coalition
Callie Gale Heilmann, President & Co-Director, Bridgeport Generation Now
Madeline Granato, Policy Director and Brandi A. Kennedy, Master Social Worker Policy
Practice Intern, Connecticut Womens Education and Legal Fund
Ed Hawthorne, President, Connecticut AFL-CIO, Member, Recovery For All Coalition
John L. Cattelan, Vice President of Government Relations, Connecticut Alliance of YMCAs
testified that the tax credit may incentivize economic development in our state's low-income
communities to address social and economic issues. Mr. Cattelan thought that creating a
Connecticut New Markets Tax Credit Program would provide affordable capital to nonprofit
organizations that serve in low-income communities, and was an innovative approach to
address the racial and economic inequalities. This bill would allow Connecticut's YMCAs to
make important investments in their facilities, which have been delayed due to the pandemic.
Joelle Fishman, Chair, Connecticut Communist Party USA supported this bill, stating that the
pandemic exacerbated the long term and extreme inequalities of wealth and race in
Connecticut. It is time to fix it, and this bill moves to do just that. She cited the Tax Incidence
Report that was issued earlier this year, which affirmed that low- and middle-income families
who are suffering economically are paying a much higher percentage rate than the 13
billionaires in Connecticut.
Seth Freeman, President, Congress of Connecticut Community Colleges supported this bill,
stating that progressive revenue is desperately needed in our state to remedy the inequalities
along race and class. Mr. Freeman, as a native to the state, has seen little done to address
the divide between rich and poor. He asserts that this legislation moves our state forward
towards equity.
The Hartford Foundation for Public Giving noted that creating this tax credit would provide a
new source of financing for nonprofit entities and community facilities located in the state's
most challenged communities. The Hartford Foundation for Public Giving outlined that
Connecticut's nonprofits are major providers and, in many cases, the sole provider for services
such as food, healthcare, childcare, education and youth programming. The Foundation
asserts that the New Market Tax Credit Program would be a valuable tool in supporting
nonprofit organizations that work in Connecticut's urban communities, and would provide the
state's businesses with a state income tax credit in exchange for their investments these
nonprofit organizations. This program represents a thoughtful approach to addressing the
decades-long systemic racial and economic inequalities in our low-income communities.
Jim Horan, Executive Director, Local Initiatives Support Corporation (LISC) Connecticut
Program supported this bill, highlighting that the federal New Markets Tax Credit Program has
been instrumental in transforming community development projects across the country, but
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Connecticut's allocations from this tax credit have been limited. LISC supports CHEFA being
granted the authority to administer the Connecticut New Tax Markets Tax Credit Program, as
they have the capacity and expertise to launch this program and ensure that division of the tax
credits is equitable in the communities where it is needed most.
Jim O'Rourke, Chief Executive Officer, Greater Waterbury YMCA supported this bill stating the
Connecticut New Markets Tax Credit Program would be an invaluable tool to our state, and
can be tailored to address the economic and social needs of individual communities. The
projects supported through this program would enhance economic development in low-income
communities and increase access to goods and services. The new market tax credit can
provide nonprofits the financial support that will enable them to complete capital projects
without having to go into debt or not being able to fund programs.
Michele Rulnick, President/CEO, Northern Middlesex YMCA supported this bill stating that the
Connecticut New Markets Tax Credit Program would provide an important financing source for
nonprofits and community facilities in the state's most distressed municipalities. It would allow
for YMCAs to make investments in their facilities that have been postponed due to the
pandemic.
Stuart Savekoul, Chief of Staff, American Federation of Teachers (AFT) Connecticut was
excited by the potential of this bill. It is proposals like this one that give us the opportunity to
strengthen our communities, and is a vital part of building a better Connecticut.
Arvind Shaw, Chief Executive Officer, Generations Family Health Center supported this bill.
The Generations Willimantic Facility is just one of many community health centers across the
country that have been able to finance with new market tax credits. Mr. Shaw stated that before
the new markets credit program, traditional lenders were not able to finance Generation's major
capital project due to their traditional underwriting rules. Since Generation's secured funding
from the new market tax credits, they have been able to double the volume of services to low-
income individuals and families in Eastern Connecticut, double their workforce, as well as
reduce their overall occupancy costs. The New Markets Tax Credit Program can attract private
investments into areas where it has not been not traditionally available. Leveraging this
additional capital funding serves to enhance the impact of taxpayer dollars.
Jeff Shaw, Senior Policy Advisor, Connecticut Community Nonprofit Alliance supported this bill,
stating it will create an additional source of funding for essential services and programs. CHEFA
currently issues revenue bonds on behalf of Connecticut's nonprofit 501(c)(3) organizations.
Mr. Shaw states that investments like the New Market Tax Credit Program will strengthen the
state's health and human services for children, families and seniors. In 2019, CHEFA formed
CHEFA Community Development Corporation to help to expand economic development in low-
income communities and provide affordable and flexible financing products to qualified
nonprofits. Mr. Shaw asserts that, if this bill is passed, it would provide a mechanism to facilitate
addition investments and incentivize private investment in nonprofits that are undertaking
capital improvements within these low-income communities. Mr. Shaw states that with the new
markets tax credit, Connecticut businesses will be able to receive a state income tax credit in
exchange for their investment in a nonprofit organization. By investing in a Connecticut New
Market Tax Credit Program, the state will be addressing the racial and economic inequalities
in our low-income communities in an innovative way.
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Jeanette W. Weldon, Executive Director, Connecticut Health and Educational Facilities
Authority (CHEFA) and CHEFA Community Development Corporation (CDC) supported this
bill, stating that CHEFA issues tax-exempt revenue bonds on behalf of Connecticut's nonprofit
hospitals, colleges, universities and other eligible 501(c)(3) organizations. CHEFA CDC was
formed in 2019 with the mission to broaden its impact across the state. It is certified as a
community development entity by the U.S. Treasury to participate in the federal New Market
Tax Credit Program. The mission for CHEFA CDC is to expand economic development in the
states low-income communities by providing affordable and flexible financing to qualified
nonprofit organizations. Ms. Weldon also stated that passing this bill and investing in a
Connecticut New Markets Tax Credit Program would create an innovative approach to help
address economic inequality in the state's communities, provide critical access to services, and
support the workforce development.
NATURE AND SOURCES OF OPPOSITION:
David Godbout opposed the bill on the grounds that the current session of the Connecticut
General Assembly is illegal, in breach of Article 3, Section 16 of the State Constitution.
Reported by: Christina Pen Date: 4/18/2022
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