Mass. Gen. Laws ch. 23A, sec. 3A — MA Code / Part I / Title II / Chapter 23A / Section 3A
Economic development incentive program; establishment; definitions for Secs. 3A to 3G
Status: in_force

Section 3A. (a) There shall be an economic development incentive program, or EDIP, which shall be administered by the economic assistance coordinating council established pursuant to section 3B, under the oversight of the secretary of economic development, to provide incentives that stimulate job creation and investment of private capital and to promote economic growth and expand economic opportunity to all areas of the commonwealth. EDIP tax credits and other incentives shall be administered to stimulate job creation, attract new business activity and promote investment that would not otherwise occur in the commonwealth. (b) As used in this section and sections 3B to 3H, inclusive, the following words shall have the following meanings unless the context clearly requires otherwise: ''Affiliate'', a business which directly or indirectly controls another business, a business which is controlled by another business or a business which is under direct or indirect common control of at least 1 other business including, but not limited to, a business with whom a business is merged or consolidated or which purchases all or substantially all of the assets of a business. ''Business'', a corporation, partnership, firm, unincorporated association or other entity engaging or proposing to engage in economic activity within the commonwealth and any affiliate thereof which is subject to taxation under chapter 62 or 63. ''Certified project'', a proposed project that is certified by the EACC pursuant to section 3C. ''Controlling business'', a business that owns, leases or has the power to direct the operation or management of all or a portion of a facility at which the business employs or intends to employ permanent full-time employees. ''EDIP contract'', a written agreement between MOBD and the recipient of EDIP tax credits setting forth the amount of credits awarded, the schedule on which the credits may be claimed, any restriction on the carryover of unused credits, the consequences for failing to produce the projected new jobs or new investment and such other terms and conditions as MOBD may in its discretion require. ''EDIP tax credits'', the tax credits authorized by the EACC pursuant to section 3D and claimed by a taxpayer pursuant to subsection (g) of section 6 of chapter 62 or section 38N of chapter 63. ''Expansion project'', the expansion of an existing facility located in the commonwealth that results in a net increase in the number of permanent full-time employees at the expanded facility. ''Facility'', the real property, which may include multiple buildings or locations, owned or leased, on which a business is undertaking or will undertake a commercial, manufacturing or industrial activity. ''Gateway municipality'', a municipality with a population greater than 35,000 and less than 250,000 with a median household income below the commonwealth's average and a rate of educational attainment of a bachelor's degree or above that is below the commonwealth's average. ''In-state relocation project'', the relocation of a business from 1 location in the commonwealth to another location in the commonwealth that results in a net increase in the number of permanent full-time employees. ''Material noncompliance'', the failure of a controlling business to substantially achieve the capital investment, job creation, job retention or other economic benefits set forth in the EDIP contract or any other act, omission or misrepresentation by the controlling business that frustrates the public purpose of the economic development incentive program. ''Municipal project endorsement'', an endorsement of a city council with the approval of the mayor in a city, a select board or a board of selectmen in a town that: (i) finds a proposed project is consistent with the municipality's economic development objectives; (ii) finds a proposed project has a reasonable chance of increasing or retaining employment opportunities as advanced in the proposal; and (iii) provides a description of the local tax incentive, if any, offered by the municipality in support of the proposed project. ''Municipality'', a city or town or, in a case in which 2 or more cities or towns agree to act jointly for some purpose pursuant to a collaborative agreement, all cities and towns participating in the collaborative agreement. ''Out-of-state relocation project'', the relocation of a business and permanent full-time employees from outside the commonwealth to a location within the commonwealth. ''Permanent full-time employee'', an individual who is paid wages by a controlling business and who: (i) at the inception of the employment relationship, does not have a termination date which is either a date certain or determined with reference to the completion of some specified scope of work; (ii) works at least 35 hours per week; and (iii) receives employee benefits at least equal to those provided to other full-time employees of the controlling business; provided, however, that ''permanent full-time employee'' shall not include contractors or part-time employees who may be included in a calculation of the controlling business' full-time equivalent workforce. ''Proportion of compliance'', a determination made by the economic assistance coordinating council, established pursuant to section 3B, of a certified project's compliance with obligations related to capital investment, job creation, job retention or other obligations applicable to the certified project. ''Proposed project'', a proposal submitted by a controlling business to the EACC for designation as a certified project. ''Real estate project'', the construction, rehabilitation or improvement of any building or other structure on a parcel of real property which, when completed, will result in at least a 100 per cent increase in the assessed value of the real property over the assessed value of the real property prior to the project. ''Refundable credit'', a tax credit awarded pursuant to this chapter that is not limited by the amount of the controlling business' tax liability and which may result in a payment from the department of revenue to the controlling business or a reimbursement of costs incurred for capital investments made as a part of a certified project. ''Retention project'', a project that enables a controlling business to retain not less than 50 permanent full-time employees at a facility located within a gateway city or in an adjacent city or town that is accessible by public transportation to residents of a gateway city; provided, that without such project, the retained jobs would be relocated outside of the commonwealth. ''Special tax assessment'', a temporary reduction in real property tax offered by a municipality in accordance with subsection (c) of section 3E. ''Tax increment financing agreement'', an agreement between a municipality and a real property owner consistent with subsection (b) of section 3E and section 59 of chapter 40. ''TIF'', tax increment financing.

Section 3A. (a) There shall be an economic development incentive program, or EDIP, which shall be administered by the economic assistance coordinating council established pursuant to section 3B, under the oversight of the secretary of economic development, to provide incentives that stimulate job creation and investment of private capital and to promote economic growth and expand economic opportunity to all areas of the commonwealth. EDIP tax credits and other incentives shall be administered to stimulate job creation, attract new business activity and promote investment that would not otherwise occur in the commonwealth.

(b) As used in this section and sections 3B to 3H, inclusive, the following words shall have the following meanings unless the context clearly requires otherwise:

''Affiliate'', a business which directly or indirectly controls another business, a business which is controlled by another business or a business which is under direct or indirect common control of at least 1 other business including, but not limited to, a business with whom a business is merged or consolidated or which purchases all or substantially all of the assets of a business.

''Business'', a corporation, partnership, firm, unincorporated association or other entity engaging or proposing to engage in economic activity within the commonwealth and any affiliate thereof which is subject to taxation under chapter 62 or 63.

''Certified project'', a proposed project that is certified by the EACC pursuant to section 3C.

''Controlling business'', a business that owns, leases or has the power to direct the operation or management of all or a portion of a facility at which the business employs or intends to employ permanent full-time employees.

''EDIP contract'', a written agreement between MOBD and the recipient of EDIP tax credits setting forth the amount of credits awarded, the schedule on which the credits may be claimed, any restriction on the carryover of unused credits, the consequences for failing to produce the projected new jobs or new investment and such other terms and conditions as MOBD may in its discretion require.

''EDIP tax credits'', the tax credits authorized by the EACC pursuant to section 3D and claimed by a taxpayer pursuant to subsection (g) of section 6 of chapter 62 or section 38N of chapter 63.

''Expansion project'', the expansion of an existing facility located in the commonwealth that results in a net increase in the number of permanent full-time employees at the expanded facility.

''Facility'', the real property, which may include multiple buildings or locations, owned or leased, on which a business is undertaking or will undertake a commercial, manufacturing or industrial activity.

''Gateway municipality'', a municipality with a population greater than 35,000 and less than 250,000 with a median household income below the commonwealth's average and a rate of educational attainment of a bachelor's degree or above that is below the commonwealth's average.

''In-state relocation project'', the relocation of a business from 1 location in the commonwealth to another location in the commonwealth that results in a net increase in the number of permanent full-time employees.

''Material noncompliance'', the failure of a controlling business to substantially achieve the capital investment, job creation, job retention or other economic benefits set forth in the EDIP contract or any other act, omission or misrepresentation by the controlling business that frustrates the public purpose of the economic development incentive program.

''Municipal project endorsement'', an endorsement of a city council with the approval of the mayor in a city, a select board or a board of selectmen in a town that: (i) finds a proposed project is consistent with the municipality's economic development objectives; (ii) finds a proposed project has a reasonable chance of increasing or retaining employment opportunities as advanced in the proposal; and (iii) provides a description of the local tax incentive, if any, offered by the municipality in support of the proposed project.

''Municipality'', a city or town or, in a case in which 2 or more cities or towns agree to act jointly for some purpose pursuant to a collaborative agreement, all cities and towns participating in the collaborative agreement.

''Out-of-state relocation project'', the relocation of a business and permanent full-time employees from outside the commonwealth to a location within the commonwealth.

''Permanent full-time employee'', an individual who is paid wages by a controlling business and who: (i) at the inception of the employment relationship, does not have a termination date which is either a date certain or determined with reference to the completion of some specified scope of work; (ii) works at least 35 hours per week; and (iii) receives employee benefits at least equal to those provided to other full-time employees of the controlling business; provided, however, that ''permanent full-time employee'' shall not include contractors or part-time employees who may be included in a calculation of the controlling business' full-time equivalent workforce.

''Proportion of compliance'', a determination made by the economic assistance coordinating council, established pursuant to section 3B, of a certified project's compliance with obligations related to capital investment, job creation, job retention or other obligations applicable to the certified project.

''Proposed project'', a proposal submitted by a controlling business to the EACC for designation as a certified project.

''Real estate project'', the construction, rehabilitation or improvement of any building or other structure on a parcel of real property which, when completed, will result in at least a 100 per cent increase in the assessed value of the real property over the assessed value of the real property prior to the project.

''Refundable credit'', a tax credit awarded pursuant to this chapter that is not limited by the amount of the controlling business' tax liability and which may result in a payment from the department of revenue to the controlling business or a reimbursement of costs incurred for capital investments made as a part of a certified project.

''Retention project'', a project that enables a controlling business to retain not less than 50 permanent full-time employees at a facility located within a gateway city or in an adjacent city or town that is accessible by public transportation to residents of a gateway city; provided, that without such project, the retained jobs would be relocated outside of the commonwealth.

''Special tax assessment'', a temporary reduction in real property tax offered by a municipality in accordance with subsection (c) of section 3E.

''Tax increment financing agreement'', an agreement between a municipality and a real property owner consistent with subsection (b) of section 3E and section 59 of chapter 40.

''TIF'', tax increment financing.