SECTION 1. Chapter 23A of the General Laws is hereby amended by adding the following section:-
Section 66. (a) The secretary of housing and economic development shall establish a tax increment financing program, hereinafter the program, which shall incentivize the development of small businesses in particular areas of the commonwealth in accordance with the requirements of this section. The program shall provide exemptions from certain state taxes and fees to qualifying businesses.
(b) The secretary of housing and economic development shall establish no more than 6 zones in which the program shall be available, hereinafter referred to as a business zone. No municipality shall be in more than 1 zone. A zone shall include a municipality that satisfies at least 2 of the following requirements:
(1) The municipality is classified as a Massachusetts Micropolitan NECTA by the United States Census Bureau;
(2) The municipality has former mill or manufacturing infrastructure with little to no active use;
(3) The municipality has vacant parcels classified as Brownsfields land;
(4) The municipality has a poverty rate higher than the commonwealth average; or
(5) The municipality has an unemployment rate higher than the commonwealth average.
(c) In order to qualify for the program, a business shall apply to the department of housing and economic development on an application which the department shall develop, and shall meet the following requirements in order to enter into a tax increment financing plan:
(1) The business shall be located within a business zone;
(2) The business shall be new to the commonwealth, which shall mean: (i) the business is not currently operating or located in the commonwealth, (ii) the business will not be transferring existing jobs from another part of the commonwealth, and (iii) the business is not substantially similar to another business in operation in the commonwealth within the last 5 years;
(3) The business shall not be a restaurant, a retail business, a real estate brokerage firm, a law firm, a real estate management company, a hospitality business, a finance or financial services business, a business providing personal, administrative or support services, an accounting firm, or a business providing utilities or generating electricity;
(4) The business shall meet the current definition of a small business established by the United States Small Business Administration; and
(5) The business shall demonstrate the potential to create new jobs in the commonwealth, which shall mean: (i) jobs that will not been transferred from another business in the commonwealth through acquisition, merger, consolidation, or other reorganization of a business; (ii) jobs that will be full-time, pay a living wage, include benefits and require at least 35 hours of work per week; and (iii) job designed to be filled for no less than 12 months. A business whose application demonstrates the ability to create 50 or more new jobs shall establish training programs to qualify local workers for such jobs or shall agree to participate with local employment and training agencies to give local residents the first priority for employment at such jobs.
(d) A qualifying business approved and selected by the department for the program shall enter into an agreement with the secretary establishing the terms of the business’s individualized tax increment finance plan, hereinafter the plan. The plan shall establish the business’s exemptions from otherwise applicable taxes and fees, which shall be a percentage of such taxes and fees that shall not exceed 100 per cent, and which shall be reduced annually by a set amount. No exemptions shall be available for a period longer than 10 years. The taxes and fees from which a plan may allow a business to be exempt shall include, but are not limited to, the following:
(1) Business registration fees;
(2) The use tax;
(3) The personal income tax, provided that this shall apply to sole proprietorships only;
(4) The annual report fee for domestic corporations and domestic limited partnerships;
(5) Sales tax on newly purchased equipment; and
(6) Taxes on corporations.
(e) The secretary of housing and economic development shall implement the tax increment financing program by issuing regulations and rules consistent with the requirements of this section.
SECTION 2. The secretary of housing and economic development shall issue the regulations required by subsection (e) of section 66 of chapter 23A of the General Laws on or before January 1, 2017.
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