Renewal of the Angel Investor Tax Credit was one of the Chamber’s top priorities for 2019. The bill will expand and extend the life of an extremely successful entrepreneurial support program set to expire in 2020.
The Angel Investor Tax Credit improves our entrepreneurial ecosystem by offering a tax credit to people willing to invest in early stage companies. These are the kinds of startups which often don’t qualify for typical business loans.
The Senate tacked Angel Investor on to H. 3986 – the SC Able bill, which provides savings accounts to care for people with disabilities. SC Able is in Title 12 of the tax code, Angel Investor is in Title 11. There were legitimate questions about whether it was a germane addition to H. 3986. A court challenge may have determined it to be “bobtailing” and thus unconstitutional.
The best path forward in the final week was to attach Angel Investor language to S. 76, which Rep. Bannister did in the House. But that revision didn’t get out of the Senate in time.
When the conference committee on 3986 met on Wednesday, the House insisted Angel Investor language be taken out. The Senate held firm, insisting on keeping the language in. Then negotiations started.
Chairman Murrell Smith and the House conferees were adamant that it was not germane. Advocates for the bill encouraged the Senate to hold firm – which would have killed the entire piece of legislation. The SC Able bill was authored by Chairman Smith, who House members reported was not amused.
Bill supporters relayed a message to Chairman Smith through Representatives Bannister, Caskey, Rose, Willis, as well as, Senators McElveen, Corbin and Cromer that the Senate would back down if the House promised to get Angel Investor first up next session. Without a firm commitment for swift passage in January, 2020, the Senate would hold firm and his legislation would die.
Chairman Smith agreed, so Angel Investor language was taken out of 3986. Commitment has been made to pass the Angel Investor Tax Credit early in 2020.
Since there were legitimist questions of germaneness, it’s very possible a court would have struck it down anyway. We understand that Chairman Smith doesn’t have a problem with Angel Investor per se, but it was just the bill he picked out to mess with the Senate.
The bill will have to be re-written since it will expire on December 31. Ways and Means staff will write a new Angel Investor bill that will be retroactive, amend it to S. 185 (which is currently in the House) and pass it out ASAP in January.
Your head hurt yet? Mine still does.