SECTION 1. Section 6 of chapter 62 of the General Laws, as appearing in the 2016 Official Edition, is hereby amended by adding the following subsection:-

(u)(1) As used in this subsection, the following words shall have the following meanings:-

“Gateway municipality”, a gateway municipality as defined in section 3A of chapter 23A.

“Qualified investment”, the non-refundable investment, at risk in a small Massachusetts-based high-technology business located in a gateway municipality, of cash that is transferred to the small Massachusetts-based high-technology business by a taxpayer that is not in control of the small Massachusetts-based high-technology business, the transfer of which is in connection with a transaction in exchange for stock, interests in partnerships or joint ventures, exclusive or non-exclusive licenses, rights to use technology, marketing rights, warrants, options or any similar items.

“Small Massachusetts-based high-technology business”, a business in an industry employing new or state-of-the-art technology in biotechnology, marine science technology, pharmaceuticals, clean and renewable energy technology, vehicles powered by clean and renewable energy, defense and homeland security-related technologies, advanced materials, electronics, nanotechnology, environmental, medical device, information technology, plastics and polymers, telecommunications industries involved in the research and development of state-of-the-art medication delivery devices or any other technological field or industry classified as an emerging technology, which maintains its principal place of business in Massachusetts and has fewer than 225 employees, of whom 75 per cent are Massachusetts-based employees filling a position or job in the commonwealth.

(2) A taxpayer shall be allowed a credit against the taxes imposed by this chapter in an amount equal to 10 per cent of the qualified investment made by the taxpayer in the initial year of investment or during each of the 3 subsequent taxable years.

(3) A taxpayer shall be allowed up to a maximum credit of $100,000 for the taxable year for all qualified investments made by the taxpayer.

(4) An unused credit may be carried forward for use in future years, subject to the $100,000 per year limitation.

(5) If the small Massachusetts-based high-technology business ceases to have its principal place of business in a gateway municipality within such 3 year period, the taxpayer shall not claim any further credits and shall repay the total amount of credits claimed to the commonwealth.

(6) The commissioner of revenue in consultation with the executive office of housing and economic development shall authorize annually for the 5-year period beginning January 1, 2020 and ending December 31, 2024, pursuant to this subsection, an amount not to exceed $5,000,000 per year for the credits allowed.

(7) The commissioner of revenue and the executive office of housing and economic development shall promulgate regulations necessary to carry out this subsection.

SECTION 2. Notwithstanding any general or special law to the contrary, the executive office of housing and economic development shall review the Massachusetts high-technology business investment tax credit established by subsection (u) of section 6 of chapter 62 of the General Laws and file a report on its effectiveness and any legislative recommendations with the clerks of the house and senate, the joint committee on revenue, the joint committee on economic development and emerging technologies and the house and senate committees on ways and means no later than 3 years after implementation of the credit.

SECTION 3. This act shall take effect upon its passage.