§ 3A — Economic development incentive program; establishment; definitions for Secs. 3A to 3G

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.[ Definition of "Expansion of an existing facility'' in subsection (b) effective until November 20, 2024. Deleted by 2024, 238, Sec. 20.]"Expansion of an existing facility'', the relocation of business functions and employees from 1 location in the commonwealth to another location in the commonwealth or the expansion of an existing facility located in the commonwealth if such relocation or expansion results in a net increase in the number of permanent full-time employees at the relocated or expanded facility.[ Definition of "Expansion project'' in subsection (b) inserted following definition of "EDIP tax credits'' by 2024, 238, Sec. 20 effective November 20, 2024.]"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.[ Definition of "In-state relocation project'' in subsection (b) inserted following definition of "Gateway municipality'' by 2024, 238, Sec. 21 effective November 20, 2024.]"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.[ Definition of "Municipal project endorsement'' in subsection (b) effective until November 20, 2024. For text effective November 20, 2024, see below.]"Municipal project endorsement'', an endorsement, by vote of the city council with the approval of the mayor in a city and by vote of the board of selectmen in a town, of a proposed project by the municipality in which a proposed project will be located which shall include: (i) a finding by the municipality that the proposed project will be consistent with the municipality's economic development objectives; (ii) a finding by the municipality that the proponent of the proposed project has the means to undertake and complete the proposed project; (iii) a finding by the municipality that the proposed project will have a reasonable chance of increasing or retaining employment opportunities as advanced in the proposal; (iv) a determination by the municipality that the proposed project will not overburden the municipality's infrastructure and other supporting resources; and (v) a description of the local tax incentive, if any, offered by the municipality in support of the proposed project, together with a copy of the fully executed tax increment financing agreement or the fully executed agreement setting forth the terms of the special tax assessment, as applicable.[ Definition of "Municipal project endorsement'' in subsection (b) as amended by 2024, 238, Sec. 22 effective November 20, 2024. For text effective until November 20, 2024, see above.]"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.[ Definition of " Out-of-state relocation project'' in subsection (b) inserted following definition of "Municipality'' by 2024, 238, Sec. 23 effective November 20, 2024.]"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.[ Definition of "Proportion of compliance'' in subsection (b) effective until November 20, 2024. For text effective November 20, 2024, see below.]"Proportion of compliance'', a fraction which has as its numerator the number of actual permanent full-time employees at a facility and which has as its denominator the number of permanent full-time employees required to be employed at the facility under the terms of an EDIP contract.[ Definition of "Proportion of compliance'' as amended by 2024, 238, Sec. 24 effective November 20, 2024. For text effective until November 20, 2024, see above.]"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.[ Definition of "Replacement of an existing facility'' in subsection (b) effective until November 20, 2024. Deleted by 2024, 238, Sec. 25.]"Replacement of an existing facility'', the relocation of business functions and personnel from 1 facility located in the commonwealth to another facility located in the commonwealth or the improvement of an existing facility; provided, that such relocation or improvement does not qualify as an expansion of the existing facility.[ Definition of "Retention project'' in subsection (b) inserted following definition of "Refundable credit'' by 2024, 238, Sec. 25 effective November 20, 2024.]"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.[ Definition of "Special tax assessment'' in subsection (b) effective until November 20, 2024. For text effective November 20, 2024, see below.]"Special tax assessment'', a temporary reduction in real property tax offered by a municipality and approved by the EACC in accordance with subsection (c) of section 3E.[ Definition of "Special tax assessment'' in subsection (b) as amended by 2024, 238, Sec. 26 effective November 20, 2024. For text effective until November 20, 2024, see above.]"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.