There's a lot to know about the Economic Development legislation recently signed by the Governor...

Economic Development

Governor Baker has signed economic development legislation passed in the waning hours of the legislative session.  It's a sweeping bill that covers a lot of ground.  We'll see important investments and changes in Community Development, Workforce Development, the Massachusetts Innovation Initiative, and Economic Competitiveness.  Here are some of the major provisions:

Community Development

• MassWorks ($500 million capital authorization): Reauthorizes a capital grant program that provides municipalities and other public entities with public infrastructure grants to support economic development and job creation.
• Transformative Development Initiative ($45 million capital authorization): Supports the revitalization of Gateway Cities, by enabling MassDevelopment to make long-term patient equity investments in key properties in Transformative Development Initiative districts, with the goal of accelerating the maturation of private real estate markets.
• Brownfields Redevelopment Fund ($45 million capital authorization): Moves funding for the state’s Brownfields Redevelopment Fund to the capital program, providing a reliable long-term funding stream for a fund that is the Commonwealth’s primary tool for facilitating the redevelopment of contaminated properties.
• Site Readiness Fund ($15 million capital authorization): Advances regional job creation by creating a new fund for site assembly and pre-development activities that support regionally significant commercial or industrial development opportunities.
• Massachusetts Food Trust Program ($6.4 million capital authorization): Capitalizes a financing program to support rural agriculture and increase food security in low- and moderate-income communities.
• Smart Growth Housing Trust Fund ($15 million capital authorization): Moves funding for the state’s Smart Growth Housing Trust Fund to the capital program, providing a reliable long-term funding stream for a fund that is the Commonwealth’s primary tool for facilitating smart growth housing development.
• Starter Home Zoning: Incentivizes the creation of smaller, denser, and more affordable single-family homes by creating a new starter home option under the Chapter 40R smart growth housing program.
• Housing-Related Tax Increment Financing: Supports housing production in town centers and urban neighborhoods by reforming a seldom-used local-only smart growth tax incentive program, removing onerous regulations, and allowing communities to set their own affordability requirements.
• Housing Development Incentive Program (HDIP) Reform: Supports the development of market-rate housing in Gateway Cities by allowing credits to support new construction, and by raising the formula that sets housing development incentives.

Workforce Development

• Workforce Skills Capital Grants ($45 million capital authorization): Establishes a new grant program for workforce development training equipment, to strengthen workforce skills, and create strong employment pipelines.

The Massachusetts Innovation Initiative

• Massachusetts Manufacturing Innovation Initiative (M2I2) ($71 million capital authorization): Provides matching grants to establish public-private applied research institutes around emerging manufacturing technologies. The state’s capital funds will be matched with federal and private industry funds.
• Scientific and Technology Research and Development Matching Grant Fund ($15 million capital authorization): Reauthorizes a capital grant program that funds nonprofit, university-led research collaboratives working to commercialize emerging technologies, thereby supporting the development of emerging industry clusters.
• Community Innovation Infrastructure Fund ($15 million capital authorization): Creates a new fund for making capital grants that support community-based innovation efforts, including co-working spaces, venture centers, maker spaces and artist spaces.
• Digital Health Care Cluster Development: Broadens the statutory charge of the Massachusetts eHealth Institute (MeHI) to include digital health cluster development.
• Angel Investor Tax Credit: Promotes startup activity and job creation in the Gateway Cities, by incentivizing investment in early-stage life sciences and digital health firms.

Economic Competitiveness

• Conley Terminal Rehabilitation ($109.5 million capital authorization): Permits the Massachusetts Port Authority to pursue the reconstruction of South Boston’s Conley Terminal, including berth construction and crane procurement, to accommodate new, larger cargo ships.
• College Savings Tax Deduction: Provides Massachusetts residents with tax deductions for making deposits into prepaid tuition or college savings accounts.
• Economic Development Incentive Program (EDIP) Reforms: Builds accountability in the state’s primary job-creation incentive program by strengthening the link between the issuance of tax credits, and job creation that would not otherwise occur; adds flexibility to the incentive program by eliminating obsolete, formula-driven incentive categories.
• Liquor Law Reforms: Protects the ability of farmer-wineries, farmer-breweries, and farmer-distilleries to serve their products on their own premises; supports consumer choice and access to markets by allowing retailers who sell alcohol to also serve alcohol in in-house cafés; liberalizes restrictions on the sale of alcohol around certain holidays.
• Regional Economic Development Organization (REDO) Modifications: Shifts the focus of nonprofit regional economic development nonprofits toward systems-based efforts to stimulate economic growth, including strengthening the regional skills pipeline, and executing regional industry cluster development strategies.
• Fantasy Sports: Legalizes daily fantasy sports contests operated in accordance with regulations promulgated by the Attorney General.

Massachusetts End of Session Recap

Legislature wraps up 2-year session with marathon weekend

The Massachusetts House and Senate ran just beyond their self-imposed deadline to complete legislative work by midnight on July 31st.  After that date, they meet only in informal session, allowing members to spend more time in their districts in preparation for the election.  They were able to reach compromise on a number of high-profile bills, although not all of them will get to Governor Baker's desk this year.

Noncompete agreement legislation stalled when lawmakers were unable to reach a compromise, and will likely come up again when the Legislature reconvenes next January.

Here are a few of the big bills that went to the Governor before the session gaveled to a close:

Ride sharing:

Companies such as Uber, Lyft, and Fasten have been creating challenges for policymakers who had laid out very strict policies for taxis.  The taxi and limousine industry has been asking that these companies be regulated in much the same way.  In the final bill, however, ride share drivers will not be subject to fingerprinting as taxi drivers are, but will have to undergo background checks.  A 20-cent per ride fee will be divided among the municipality, the Mass. Department of Transportation and a fund establish to ease the burden on the traditional taxi industry.  They'll also be able to pick up at Logan and the Boston Convention and Exhibition Center.

Renewable energy:

A compromise was reached on legislation that would increase the state's reliability on wind, hydro and solar power.  The final bill did not go as far as the Senate would have liked, mainly because it did not increase the state's renewable portfolio standard.  The House said increasing the standard could result in burdensome costs to consumers.  The bill also requires Massachusetts to come up with a plan to address gas leaks.  Lawmakers left open the possibility that the legislation can be revisited to adjust once the law is in place and there is an opportunity to measure the impact.

Economic development:

The economic development bill that was sent to Governor Baker around midnight on July 31st will not include authorization to establish an online lottery, nor will it include expansion of a tax credit for low-income workers.  Also dead for now is a tax on short-term rentals, as in those through Airbnb, and nonprofits will not be taxed on property they acquire under this legislation.  It does include investment in MassWorks, brownfields funding, and technical education.