Amendment 33

Budget Amendment ID: FY2013-S4-33

OTH 33

Transparency and Accountability for Discretionary Tax Credits

Messrs. Eldridge, Kennedy, Donnelly, Pacheco and Montigny moved that the proposed new text be amended by inserting, after Section 161, the following new Section:-

SECTION XXX:

(a)Section 1 of chapter 62C of the General Laws is hereby amended by adding the following definition:-

“Discretionary tax credit program”: (i) the historic rehabilitation tax credit in section 38R of said chapter 63 and section 6J of said chapter 62; (ii) the life sciences investment tax credit in section 38U of said chapter 63 and subsection (m) of said section 6 of said chapter 62; (iii) the low-income housing tax credit in section 31H of said chapter 63 and section 6I of said chapter 62; (iv) the refundable research credit in subsection (j) of section 38M of said chapter 63; (v) the economic development incentive program in subsection (g) of said section 6 of said chapter 62 and section 38N of said chapter 63; (vi) certified housing development credits of subsection (q) of Section 6 of said Chapter 62 (vii); donated land (conservation) credits of subsection (p) of Section 6 of said Chapter 62; and (viii) any discretionarily awarded tax credits under chapter 62 and 63 established after January 1, 2012.

(b)Chapter 62C of the General Laws is hereby amended by adding the following new section:-

SECTION 88: Application for Discretionary Tax Credit Programs

(a)Notwithstanding any general or special laws to the contrary, the granting body of each discretionary tax credit program, together with the applicant for a discretionary tax credit, shall complete an application for the tax credit on a form prepared by the granting body. The information required on the application shall include, but is not limited to, the following:

(1) A clear written commitment on the part of the applicant to provide a certain benefit to the Commonwealth in exchange for the tax credit, including but not limited to:

(i)An estimate of the number of new jobs to be created by the applicant, broken down by full-time, part-time and temporary positions, where applicable;

(ii)The average hourly wage to be paid to all current and new employees at the project site, where applicable;

(iii)The type and amount of health care coverage to be provided by the applicant within ninety days of commencement of employment at the project site, including any costs to be borne by the employees, where applicable;

(iv)A description of the project to be developed or undertaken, where applicable;

(v)The value of any additional private investment to be committed to this project, where applicable;

(2) A statement as to whether the discretionary tax credit may reduce employment at any other site controlled by the applicant or its corporate parent, within or without of the Commonwealth, resulting from automation, merger, acquisition, corporate restructuring or other business activity;

(b) If the granting body approves the application, it shall send a copy to the commissioner within fifteen days of such approval, which shall be a public record.

(c) Approved applications for discretionary tax credit programs shall be posted on the searchable website created in Section 14C of Chapter 7.

(c) Notwithstanding any general or special laws to the contrary, each granting body of a discretionary tax credit program shall file a progress report with the commissioner for each discretionary tax credit that has been awarded, no later than May 15 of each year. The report, which shall be a public record, shall include the following information:-

(1) The identity of each taxpayer receiving a discretionary tax credit and from which tax credit program the credit was received;

(2)The amount of the discretionary tax credit awarded and issued for each taxpayer and each project, if applicable;

(3)The date that the authorized tax credit was awarded and issued for each taxpayer and each project;

(4)The commitment to provide a certain benefit to the Commonwealth made by the taxpayer, as listed on the initial application required in Section 88 of Chapter 62C;

(5)The benefit to the Commonwealth actually provided, including but not limited to:

(i)The number of jobs created and lost, broken down by full-time, part-time and temporary positions, where applicable;

(ii)The average wage of the jobs created, where applicable;

(iii)The type and amount of health care coverage provided to the employees at the project site, including any costs borne by the employees, where applicable;

(iv)The status of the development project, where applicable;

(v)The amount of private investment committed to this project, where applicable.

(6) The comparison of the total employment in the Commonwealth by the recipient's corporate parent on the date of the application and the date of the report, broken down by full-time, part-time and temporary positions;

(7)A statement as to whether the use of the discretionary tax credit during the previous fiscal year has reduced employment at any other site controlled by the recipient or its corporate parent, within or without of the Commonwealth as a result of automation, merger, acquisition, corporate restructuring or other business activity;

(d) On all subsequent annual progress reports, the granting body shall indicate whether the recipient taxpayer is still in compliance with its goals.

(e) Granting bodies shall file annual progress reports for the duration of the discretionary tax credit, or not less than five years, whichever period is greater.

(f) Progress reports for discretionary tax credit programs shall be posted on the searchable website created in Section 14C of Chapter 7.

(d) Chapter 62C of the General Laws is hereby amended by adding the following new section:-

Section 90: Review and Enforcement of Discretionary Tax Expenditure

(a)The granting body of the discretionary tax expenditure shall have access at all reasonable times to the project site and the records of the recipient taxpayer in order to monitor the project and to prepare progress reports. The granting body shall commit the resources necessary to audit compliance and verify the accuracy of progress reports.

(b)A recipient taxpayer that fails to provide the granting body with the information or access required under paragraphs (a) of this section shall be subject to a fine of not less than $500 per day to commence within ten working days after the May 15 deadline, and of not less than $1,000 per day to commence twenty days after such deadline.

(1)at least 90% of such job creation goal shall be fulfilled within two years of the date of discretionary tax credit and maintained as long as the discretionary tax credit is in effect, or five years, whichever is longer.

(2)the recipient taxpayer must maintain at least 90% of its total employment in the Commonwealth as long as the discretionary tax credit is in effect, or not less than five years, whichever is longer.

(d) Notwithstanding any general or special laws to the contrary, if the requirements under paragraphs (i) or (ii) of subsection (c) are not fulfilled, the granting body shall recapture the discretionary tax credit from the recipient taxpayer as follows:

(1)The state shall recapture the total amount of the discretionary tax credit provided.

(2)The granting body shall declare the tax credit null and void, and shall provide notice to the recipient taxpayer of its intent to recapture the discretionary tax credit and state the reasons and amount to be recaptured. This notice shall be a matter of public record, and should be posted with the initial application and progress report(s) on the searchable website created in Section 14C of Chapter 7. The recipient taxpayer shall remit to the granting body such amount within 60 calendar days of the date of such notice.

(3) Recipient taxpayers that have defaulted on their agreement and had their discretionary tax credit recaptured shall be barred from applying for any discretionary tax credit or economic development subsidy in the Commonwealth for a period not less than 5 years.