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The 189th General Court of the Commonwealth of Massachusetts

Section 3E: Economic opportunity areas

[ Text of section effective until August 10, 2016. For text effective August 10, 2016, see below.]

  Section 3E. The EACC may from time to time designate one or more areas of an ETA as an EOA, and take any and all actions necessary or appropriate thereto, upon compliance with the following:

  (1) receipt of a municipal application requesting such designation for a specified period of years, which shall be not less than five years nor more than twenty years, and representing that the municipality, based on its own independent investigation, has determined that the area proposed for designation:

  (a) is wholly within an area designated as an ETA pursuant to section three D;

  (b) conforms to the definition of a "blighted open area'', "decadent area'', or "substandard area'' as set forth in section one of chapter one hundred and twenty-one A or has experienced a plant closing or permanent layoff resulting in a job loss of two thousand or more within the four years prior to designation as an EOA or the municipality has sited within it a generation facility, as defined pursuant to section 1 of chapter 164, which has a market value at the time of sale that is at least 50 per cent less than its current net book value; and

  (c) satisfies such additional mandatory or permissive criteria as may be prescribed from time to time by the EACC; and

  (2) receipt with the municipal application of the following documents:

  (a) a detailed map of the area proposed for designation, which clearly delineates and identifies such area and which indicates with particularity existing streets, highways, waterways, natural boundaries and other physical features;

  (b) a statement describing the economic development goals of the municipality for the area proposed for designation for the five year period subsequent to the date on which the application is submitted;

  (c) a statement which describes the manner and extent to which the municipality shall provide for an increase in the efficiency of the delivery of local services within the area proposed for designation;

  (d) a plan, if any, to link the municipality's choice of banking institutions to the performance of such institutions in complying with the requirements of the community reinvestment act;

  (e) a proposal which identifies an individual who shall be authorized to review and approve project proposals for and on behalf of the municipality and the standards and procedures to be employed thereby; and

  (f) in the case of a municipal application submitted, in whole or in part, by a municipality with a population in excess of fifty thousand people according to the most recent United States census, an economic development plan submitted by said municipality which contains the following elements:

  (i) a proposal which provides for streamlined licensing procedures for certified projects within the area proposed for designation;

  (ii) a proposal which provides for the provision of adequate infrastructure support, including transportation access, water and sewer hook-ups, lighting, and other utilities, to and for certified projects within the area proposed for designation;

  (iii) a statement which describes the municipality's proposals to secure access to publicly or privately sponsored training programs to be made available to employees of certified projects, or others who reside in the ETA which contains the area proposed for designation; and

  (iv) a plan by which the municipality shall increase the level of involvement by private persons and community development organizations in the economic revitalization of the area proposed for designation, which may include commitments from private persons to provide jobs and job training to residents and employees who work, or who will work, for certified projects in the area proposed for designation, if applicable; and

  (g) such additional documentation or information as may be prescribed by the EACC; and

  (3) receipt with the municipal application of a binding written offer from the municipality, subject only to acceptance by the EACC through designation of the area proposed therefor, in the municipal application as an EOA, to provide to certified projects within the project EOA and pursuant to section 59 of chapter 40 either tax increment financing or a special tax assessment consistent with subsection (f) or (g) of section 3F.

  (4) approval of the municipal application by the EACC, provided that the EACC shall find, based on the information submitted in support of the municipal application and such additional investigation as the EACC shall make, and incorporate in its minutes, that:

  (a) the area or areas proposed for designation in said application comport with the definition of an EOA as set forth in clauses (a) to (c), inclusive, of paragraph (1); provided, however, that such decision shall be effective as specified by the EACC; provided, further, that the statistical criteria employed by the EACC in making its decision hereunder shall be the most recent data available as of the date of such decision; provided, further, that the EACC shall be under no obligation to withdraw or rescind any such designations because of changes in said statistical data which are published subsequent to such decision; provided, further, that in the event the statistical categories incorporated by reference in said clauses (a) to (c), inclusive, of said paragraph (1) are subsequently materially altered or superseded by the publishers thereof, the EACC is authorized and directed to develop or employ new categories of statistical criteria which most nearly comport with those incorporated by reference as aforesaid; and provided, further, that said new categories of statistical criteria shall become effective when approved by the director of economic development;

  (b) the documents required pursuant to clauses (a) to (g), inclusive, of paragraph (2) are final and complete and otherwise satisfactory;

  (c) the binding offer of the municipality complies with the requirements of paragraph (3); and

  (d) the request for designation as set forth in the municipal application, in its entirety and including all documents and materials submitted therewith, will if approved, have a reasonable probability of inducing businesses to locate or expand within the area proposed for designation and thereby increase the prospects of achieving economic stability and reducing chronic unemployment in said area; provided, however, that (i) in evaluating requests for designation pursuant to this clause the EACC may, subject to such criteria as it shall prescribe, consider and rank the relative merits of municipal applications, ascribing to each a total score which reflects the considered judgment of the EACC as to the prospects and degree to which said applications, if approved, will further the public purposes set forth in this clause; (ii) the EACC shall, if and as directed by the director of economic development, establish an application process pursuant to which municipal applications are reviewed in a competitive fashion; (iii) the EACC shall work with interested municipalities to assist such municipalities to understand the purpose and requirements of the application process and how to best exploit the economic development potential of an affirmative designation decision and, further, to minimize the administrative burden associated with such application process; and (iv) the EACC shall, through regulations or otherwise, tailor its program specifications to maximize the extent to which the commonwealth's economic opportunity area program can benefit from similar programs sponsored by the federal government and if necessary or appropriate, file legislation with the general court which seeks amendments designed to serve such purpose.

  An EOA shall retain its designation for at least 5 years and not more than 20 years from the date it is so designated, as determined by the EACC, unless such designation is revoked prior to the expiration of the specified period; provided, however, that the EACC shall not specify a duration in excess of that requested in the municipal application. Only the EACC may revoke the designation of an EOA and only upon the following grounds: (a) upon the petition of the municipality which requested the designation which petition satisfies the authorization requirements for a municipal application and which petition shall be granted as a matter of course; or (b) if the EACC determines, based on its own investigation, that plans and commitments incorporated with the municipal application for such designation are materially at variance with the conduct of the municipality subsequent to the designation and such variance is found to frustrate the public purpose which such designation was intended to advance. Any such revocation of an EOA designation shall only be applied prospectively to deny certification to any projects located or to be located in such EOA and not certified prior to such revocation and shall not apply to, nor revoke any benefits due to or which may become due to, any certified project already in existence in the EOA including, but not limited to, any benefits included in any plans and commitments incorporated with the municipal application for such designation; provided, however, that in no event shall a certified project receive any benefits arising from its status as a certified project for a period of longer than that specified by the EACC in its certification designation, including any renewals thereof, or 20 years, whichever period is of shorter duration. No designation of an area as an EOA shall be renewed or extended except pursuant to paragraphs (1) to (4), inclusive.

  (5) notwithstanding any provisions of sections three to three H, inclusive, the EACC shall not designate nor shall there exist at any one time more than 40 Economic Target Areas. The limitations imposed by this section shall not apply to the EACC in its designation of communities applying for designation under the federal empowerment zones and enterprise communities program, so called, or to communities applying for economic target area designation that qualify under the criteria set forth in subclauses (I) and (J) of clause (ii) of paragraph (a) of section 3D.

  (6) Upon application from a city or town, the EACC may from time to time designate any area of a city or town as an area presenting exceptional opportunities for increased economic development. In making such designation, the EACC shall consider whether there is a strong likelihood that any of the following will occur within the area in question within a specific and reasonably proximate period of time:

  (i) a significant influx or growth in business activity;

  (ii) the creation of a significant number of new jobs and not merely a replacement or relocation of current jobs within the commonwealth; or

  (iii) a private project or investment that will contribute significantly to the resiliency of the local economy.

Chapter 23A: Section 3E. Municipality provided incentives to owners of certified projects; local tax incentive; tax increment financing; special tax assessment; approval of amendments

[ Text of section as recodified by 2016, 219, Sec. 7 effective August 10, 2016 for tax years beginning on or after January 1, 2017. See 2016, 219, Sec. 139. For text effective until August 10, 2016, see above.]

  Section 3E. (a) A municipality may offer a local tax incentive to the owner or controlling business of a certified project, or to the owner of a real estate project, if the municipality determines that the project is consistent with the municipality's economic development objectives and is likely to increase or retain employment opportunities for residents of the municipality.

  (b) Tax increment financing may be offered by a municipality in accordance with section 59 of chapter 40 to the controlling business of a certified project, or to any person or entity undertaking a real estate project or to any person or entity expanding a facility in an area designated by the EACC as a TIF-eligible area. The EACC may designate an area as a TIF-eligible area if it finds, upon petition from the municipality, that there is a strong likelihood that any of the following will occur within the area in question within a specific and reasonably proximate period of time: (i) a significant influx or growth in business activity; (ii) the creation of a significant number of new jobs and not merely a replacement or relocation of current jobs within the commonwealth; or (iii) a private project or investment that will contribute significantly to the resiliency of the local economy.

  If a municipality offers tax increment financing to the owner of a certified project, the municipal project endorsement for the certified project shall include a fully executed copy of the tax increment financing agreement adopted pursuant to said section 59 of said chapter 40. Any tax increment financing agreement shall be approved by the EACC before it shall be valid and enforceable. The EACC may approve a tax increment financing agreement pursuant to regulations adopted by the EACC. Any approval shall include a finding, reflected in the EACC's minutes, that the tax increment financing agreement complies with said section 59 of said chapter 40 and will further the public purpose of encouraging increased industrial and commercial activity in the commonwealth.

  (c) A municipality may offer a special tax assessment to the controlling business of a certified project, to a person or entity undertaking a real estate project or to a person or entity proposing to retain permanent full-time jobs at a facility that otherwise would be at risk of relocating outside of the commonwealth. Any special tax assessment shall be set forth in a written agreement between the municipality and the property owner. The agreement shall include the amount of the tax reduction and the period of time over which such reduction shall be in effect, which shall be for not less than 5 years or not more than 20 years. Every special tax assessment approved by the EACC shall provide for a reduction of the real property tax that otherwise would be due. The reduction shall be based upon a percentage reduction in the tax that otherwise would be due on the full assessed value of the affected property. The special tax assessment shall provide for tax reduction at least equal to the following: (i) in the first year, the tax reduction shall be not less than 50 per cent of the tax that would be due based on the full assessed value of the affected property; (ii) in the second and third years, the tax reduction shall be not less than 25 per cent of the tax that would be due based on the full assessed value of the affected property; and (iii) in the fourth and fifth years, the tax reduction shall be not less than 5 per cent of the tax that would be due based on the full assessed value of the affected property.

  The municipality may at its discretion provide for greater real property tax reductions than provided in clauses (i) to (iii).

  A written agreement for a special tax assessment pursuant to this subsection shall be approved by the EACC before it is valid and enforceable. The EACC may approve special tax assessments pursuant to rules and regulations adopted by the EACC if the EACC determines that: (i) the municipality has made a formal determination that the property owner is either undertaking a project or making other investment that will contribute to economic revitalization of the municipality and will significantly increase employment opportunities for residents of the municipality or is retaining permanent full-time employees that otherwise would be relocated to a facility outside of the commonwealth; (ii) the special tax assessment is reasonably necessary to enable the owner's investment in the project or to retain the jobs that otherwise would be relocated; and (iii) the total amount of local tax foregone is reasonably proportionate to the public benefits resulting from the special tax assessment. Any such approval shall include a finding, reflected in the EACC's minutes, that the special tax assessment complies with the requirements of this section.

  (d) Any tax increment financing agreement or special tax assessment approved by the EACC shall not be amended without the approval of the EACC.