SENATE DOCKET, NO. 1363        FILED ON: 1/18/2013

SENATE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 1369

The Commonwealth of Massachusetts

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PRESENTED BY:

Mark C. Montigny

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To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:

The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:

An Act relative to economic development tax credits.

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PETITION OF:

SENATE DOCKET, NO. 1363        FILED ON: 1/18/2013

SENATE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 1369

The Commonwealth of Massachusetts

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In the Year Two Thousand Thirteen

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An Act relative to economic development tax credits.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
 

Section 1. Section 1 of Chapter 62C, as appearing in the 2010 Official Edition, is hereby amended by inserting the following new subsections in the definition of “tax credit program” after subsection (xi):-

(xii) the investment tax credit in section 31A of chapter 63, (xiii) the devens refundable tax credit in section 38N of chapter 63 (xiv) the abandoned building renovation deduction in section 38O of chapter 63.

Section 2.  Said Chapter 62C, as appearing in the 2010 Official edition, is amended by inserting after section 89 the following:-

Section 90. Sunsets for Tax Credit Programs

(a)Notwithstanding any general or special law to the contrary, all tax credit programs shall expire after a period of three years unless reauthorized by an act of the legislature after review and examination of the effectiveness of each such tax credit program by the department of revenue and the executive office of administration and finance’s office of commonwealth performance, accountability and transparency.

(b) Notwithstanding any general or special law to the contrary, all tax credit programs existing and in effect at the time of the passage of this law, shall expire after one year of the date of the passage of this law unless reauthorized by an act of the legislature after review and examination of the effectiveness of each such tax credit program by the department of revenue and the  executive office of administration and finance’s office of commonwealth performance, accountability and transparency.

Section 3. Said chapter 62C, as appearing in the 2010 official edition, is hereby amended by inserting after section 90 the following:-

Section 91. In any review and examination of a tax credit program, the department of revenue and the office of commonwealth accountability, performance and transparency shall, in addition to any other analysis deemed appropriate by the agencies, identify and develop metrics for assessing the effectiveness of each tax credit program at achieving its identified purposes and outcomes, identify revenue foregone, beneficiaries and distribution of amounts received, and the number of jobs created ,if applicable.  After completion of such review and examination, the agencies shall issue a report to the governor and legislature’s committees on way and means and post audit and oversight.  Except for the reports on the examination of tax credit programs under section 90(b), the report shall be completed one year before the expiration date of the tax credit program which is the subject of the report.    In any report issued by the agencies after the review and examination of any tax credit program, the report, based on the agencies’ examination of the tax credit program, studies and data from other states and academia, shall make recommendations for elimination or modification of the tax credit program to more effectively achieve the tax credit programs identified public policy purposes.

Section 4. Said chapter 62C, as appearing in the 2010 official edition, is hereby amended by inserting after section 91 the following;-

  Section 92. Notwithstanding any general or special law to the contrary, all tax credit programs shall contain and include a clawback provision, so called, that permits the commonwealth to recoup foregone tax receipt from tax credit program recipients who fail to achieve or meet stated goals and benchmarks, including but not limited to job creation goals set forth in their tax credit program.

Section 5.  Said chapter 62C, as appearing in the 2010 official edition, is hereby amended by inserting after section 92 the following:-

Section 93.  Before submitting any new tax credit program for legislative approval, the governor shall include in the governor’s legislative proposal or bill for the new tax credit program the following: (a) the new tax credit program’s clearly  specified public policy purpose and desired outcome, (b) a finding that the tax credit program is expected to be highly effective  at achieving the stated public policy purposes, (c) estimates of foregone revenue from the new tax credit program, (d) for discretionary grant like tax credit programs an overall annual dollar cap on foregone revenue, (e) for discretionary grant like tax credit programs, the criteria to be applied by the administering agency in making discretionary awards of tax credit programs and (f) for discretionary grant like tax credit programs, provisions for the tax credit program’s administration  including, but not limited to, (i) clear written conditions and commitments,(ii) public disclosure of recipients and tax benefits, (iii) if tax credit program conditions are not met by the recipient, threshold for further review and enforcements including the use of the tax credit program’s clawback provision, and (iv) a competitive award process.