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Bill

H 4164

Community development corporation tax credit

2025-2026 Regular Session Introduced by Chandra Dillard and 6 co-sponsors

Creates a state tax credit program for investments/donations to certified CDCs and CDFIs, with caps, first-come allocation, and sunset in 2030.

Member(s) request name added as sponsor: Montgomery
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Bill Summary · H 4164

Summary — H 4164: Community development corporation tax credit

Note on source text: The bill text provided includes material from two different proposals (Massachusetts Anti‑SLAPP amendments and a South Carolina draft creating a tax credit). This summary focuses on the community development corporation / community development financial institution (CDFI) tax credit language (South Carolina-style provisions) that appears in the text labeled as adding Section 12-6-3531.

Main purpose

Create a state tax credit to encourage private investment and donations into certified community development corporations (CDCs) and community development financial institutions (CDFIs), with limits and administrative rules to target small/rural organizations and cap fiscal exposure.

Key provisions

  • Tax credit amounts:
    • 33% credit against state income tax, bank tax, or premium tax for amounts invested in a certified CDC or CDFI.
    • 50% credit for cash donations to a certified CDC or CDFI.
  • Certification and administration:
    • Taxpayers must obtain a certificate from the Department of Commerce certifying the recipient as a CDC or CDFI and confirming credits will not exceed the annual aggregate limit.
    • Investments made in good faith are eligible even if certification is later revoked.
  • Aggregate and annual limits:
    • Aggregate cap across all years: $15,000,000.
    • Annual cap: $3,000,000 per calendar/tax year.
    • Department must stop authorizing credits once the aggregate cap is reached.
  • Allocation rules:
    • Credits authorized on a first‑come, first‑served basis.
    • Single CDC/CDFI may receive no more than 25% of the total annual credits.
    • During the first three quarters of each year: 25% of annual credits reserved exclusively for small, rural CDCs; no single entity may receive more than 15% of the statewide total in those quarters.
    • Remaining credits become generally available in the fourth quarter.
  • Carryover and limits:
    • Excess credit may be carried forward to succeeding taxable years.
    • Carryover cannot be used for a taxable year that begins on or after three years from the date of the equity acquisition that generated the credit.
    • Carryover amounts are reduced if used to claim future credits.
  • Bank investment limit:
    • Banks/financial institutions may invest up to 10% of their total capital and surplus in eligible CDCs/CDFIs.
  • Definitions and qualifying criteria:
    • CDC: nonprofit (Chapter 31, Title 33), 501(c)(3), mission focused on low‑income community development, locally controlled, with limits on public‑fund assistance per transaction ($25,000; adjustable).
    • CDFI: mission‑driven lender providing capital/technical assistance to underserved communities, board accountability, majority services to low‑income/minority/female/rural areas, per‑transaction cap ($250,000; adjustable), must be certified/recertified.
  • Sunset and effective date:
    • Unless reauthorized, provisions terminate June 30, 2030 (repealed thereafter).
    • Takes effect upon gubernatorial approval and first applies to credits/certificates issued after 2024; credits/certificates issued before 2025 governed by prior law but count toward aggregate cap.

Who is affected

  • Beneficiaries: certified CDCs and CDFIs (increased access to private capital and donations).
  • Investors/donors: individual and corporate taxpayers, banks, and insurers (receive tax credits).
  • State budget: reduced revenue up to the caps ($15M total; $3M/year nominal).
  • Department of Commerce: administers certification, monitors investments, and allocates credits.

Procedural/timeline notes (from provided record)

  • Bill labeled H 4164 introduced 2025; legislative actions include committee referrals, sponsor additions, a Senate concurrence entry (6/2/2025), and hearings scheduled/rescheduled for 11/4/2025. The record also contains unrelated Anti‑SLAPP language for a different jurisdiction; confirm authoritative source text and jurisdiction before legislative or fiscal analysis.

Compiled from official sources — confirm details with the bill’s official record.

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