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House panel advances bill to increase cap on individual development account tax credits
Summary
The committee voted to move House Bill 2,735 A, which raises the annual cap for tax credits for donations to Individual Development Accounts from $7.5 million to $16.5 million, and adopted a technical amendment aligning the sunset date.
The House Committee on Revenue on May 22 adopted the dash A3 amendment and voted to move House Bill 2,735 A to the floor with a due-pass recommendation and subsequent referral to the Joint Committee on Tax Expenditures.
The bill raises the annual cap on tax credits for donations to Individual Development Accounts from $7,500,000 to $16,500,000 for tax years beginning on or after Jan. 1, 2025. Committee staff explained the revenue impact assumes the higher cap would be reached and noted that the existing sunset for the credit remains unchanged, resulting in a projection that cost falls later in the fiscal horizon when the sunset takes effect.
The dash A3 amendment is a technical change aligning the sunset date with language that appeared in earlier House Bill 2,095. Representative comments in committee emphasized the program’s role in helping individuals save for homes and small businesses. “I’ve personally seen how it has benefited so many individuals,” one representative said during discussion in support of the bill.
Vice Chair Walters moved the amendment and the main motion; both passed by voice vote. Committee members praised the bill as a means to expand a program used for homeownership and small-business starts and said the measure will now proceed for further review in the Joint Committee on Tax Expenditures.
