§ 3E — Municipality provided incentives to owners of certified projects; local tax incentive; tax increment financing; special tax assessment; approval of amendments

[ Text of section effective until November 20, 2024. For text effective November 20, 2024, see below.]Section 3E. (a) A municipality may offer a local tax incentive to the owner or controlling business of a certified project, or to the owner of a real estate project, if the municipality determines that the project is consistent with the municipality's economic development objectives and is likely to increase or retain employment opportunities for residents of the municipality.(b) Tax increment financing may be offered by a municipality in accordance with section 59 of chapter 40 to the controlling business of a certified project, or to any person or entity undertaking a real estate project or to any person or entity expanding a facility in an area designated by the EACC as a TIF-eligible area. The EACC may designate an area as a TIF-eligible area if it finds, upon petition from the municipality, that there is a strong likelihood that any of the following will occur within the area in question within a specific and reasonably proximate period of time: (i) a significant influx or growth in business activity; (ii) the creation of a significant number of new jobs and not merely a replacement or relocation of current jobs within the commonwealth; or (iii) a private project or investment that will contribute significantly to the resiliency of the local economy.If a municipality offers tax increment financing to the owner of a certified project, the municipal project endorsement for the certified project shall include a fully executed copy of the tax increment financing agreement adopted pursuant to said section 59 of said chapter 40. Any tax increment financing agreement shall be approved by the EACC before it shall be valid and enforceable. The EACC may approve a tax increment financing agreement pursuant to regulations adopted by the EACC. Any approval shall include a finding, reflected in the EACC's minutes, that the tax increment financing agreement complies with said section 59 of said chapter 40 and will further the public purpose of encouraging increased industrial and commercial activity in the commonwealth.(c) A municipality may offer a special tax assessment to the controlling business of a certified project, to a person or entity undertaking a real estate project or to a person or entity proposing to retain permanent full-time jobs at a facility that otherwise would be at risk of relocating outside of the commonwealth. Any special tax assessment shall be set forth in a written agreement between the municipality and the property owner. The agreement shall include the amount of the tax reduction and the period of time over which such reduction shall be in effect, which shall be for not less than 5 years or not more than 20 years. Every special tax assessment approved by the EACC shall provide for a reduction of the real property tax that otherwise would be due. The reduction shall be based upon a percentage reduction in the tax that otherwise would be due on the full assessed value of the affected property. The special tax assessment shall provide for tax reduction at least equal to the following: (i) in the first year, the tax reduction shall be not less than 50 per cent of the tax that would be due based on the full assessed value of the affected property; (ii) in the second and third years, the tax reduction shall be not less than 25 per cent of the tax that would be due based on the full assessed value of the affected property; and (iii) in the fourth and fifth years, the tax reduction shall be not less than 5 per cent of the tax that would be due based on the full assessed value of the affected property.The municipality may at its discretion provide for greater real property tax reductions than provided in clauses (i) to (iii).A written agreement for a special tax assessment pursuant to this subsection shall be approved by the EACC before it is valid and enforceable. The EACC may approve special tax assessments pursuant to rules and regulations adopted by the EACC if the EACC determines that: (i) the municipality has made a formal determination that the property owner is either undertaking a project or making other investment that will contribute to economic revitalization of the municipality and will significantly increase employment opportunities for residents of the municipality or is retaining permanent full-time employees that otherwise would be relocated to a facility outside of the commonwealth; (ii) the special tax assessment is reasonably necessary to enable the owner's investment in the project or to retain the jobs that otherwise would be relocated; and (iii) the total amount of local tax foregone is reasonably proportionate to the public benefits resulting from the special tax assessment. Any such approval shall include a finding, reflected in the EACC's minutes, that the special tax assessment complies with the requirements of this section.(d) Any tax increment financing agreement or special tax assessment approved by the EACC shall not be amended without the approval of the EACC.Chapter 23A: Section 3E. Municipality provided incentives to owners of certified projects; local tax incentive; tax increment financing; special tax assessment; approval of amendments[ Text of section as amended by 2024, 238, Sec. 36 effective November 20, 2024. For text effective until November 20, 2024, see above.]Section 3E. (a) Tax increment financing may be offered by a municipality in accordance with section 59 of chapter 40 to the controlling business of a certified project, or to any person or entity undertaking a real estate project or to any person or entity expanding a facility if the municipality finds that there is a strong likelihood that any of the following will occur within the area in question within a specific and reasonably proximate period of time: (i) a significant influx or growth in business activity; (ii) the creation of a significant number of new jobs and not merely a replacement or relocation of current jobs within the commonwealth; or (iii) a private project or investment that contributes significantly to the resiliency of the local economy.(b)(1) A municipality may offer a special tax assessment to the controlling business of a certified project, to a person or entity undertaking a real estate project or to a person or entity proposing to retain permanent full-time jobs at a facility that otherwise would be at risk of relocating outside of the commonwealth. A special tax assessment shall be set forth in a written agreement between the municipality and the property owner. The agreement shall include, but shall not be limited to, the amount of the tax reduction and the period of time over which such reduction shall be in effect, which shall be for not less than 5 years and not more than 20 years. A special tax assessment approved by the municipality shall provide for a reduction of the real property tax that otherwise would be due. The reduction shall be based upon a percentage reduction in the tax that otherwise would be due on the full assessed value of the affected property. The special tax assessment shall provide for tax reduction at least equal to the following: (i) in the first year, the tax reduction shall be not less than 50 per cent of the tax that would be due based on the full assessed value of the affected property; (ii) in the second and third years, the tax reduction shall be not less than 25 per cent of the tax that would be due based on the full assessed value of the affected property; and (iii) in the fourth and fifth years, the tax reduction shall be not less than 5 per cent of the tax that would be due based on the full assessed value of the affected property. The municipality may at its discretion provide for greater real property tax reductions than those described in clauses (i) to (iii), inclusive.(2) A municipality may approve special tax assessments if it determines that: (i) the property owner is either: (A) undertaking a project or otherwise making an investment that contributes to economic revitalization of the municipality and significantly increases employment opportunities for residents of the municipality; or (B) retaining permanent full-time employees that otherwise would be relocated to a facility outside of the commonwealth; (ii) the special tax assessment is reasonably necessary to enable the owner's investment in the project or to retain the jobs that otherwise would be relocated; and (iii) the total amount of local tax foregone is reasonably proportionate to the public benefits resulting from the special tax assessment.(c) If a municipality offers tax increment financing or special tax assessment to the owner or controlling business of a certified project or to the owner of a facility where a certified project is located, the municipality shall notify the EACC by submitting a fully executed copy of the adopted local incentive agreement and any amendments thereto.