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The 191st General Court of the Commonwealth of Massachusetts

Section 3F: Reports to be filed by controlling business or affiliate awarded EDIP tax credits; material noncompliance with representation made on application; revocation of project certification

[Text of section effective for tax years beginning on or after January 1, 2017. See 2016, 219, Sec. 139.]

Section 3F. (a) Not later than 2 years after the initial certification of a project by the EACC, and annually thereafter, the controlling business or affiliate awarded EDIP tax credits shall file a report with MOBD, signed by an authorized representative of the controlling business or affiliate, certifying whether the controlling business or affiliate has achieved the job creation projections, job retention projections and other material obligations or representations set forth in the EDIP contract.

(b) In the event that MOBD finds that a controlling business or an affiliate is in material noncompliance with a representation made to the EACC in its application for project certification or the obligations set forth in an EDIP contract, MOBD may recommend to the EACC that it revoke the project certification. Prior to making a recommendation, MOBD shall provide written notice to the controlling business stating the basis for the recommended revocation and offering the controlling business an opportunity for a hearing at which the controlling business may contest the basis for the recommendation or establish mitigating circumstances which may be relevant to the recommendation.

(c) The EACC may revoke a project certification if it determines that a controlling business or affiliate is in material noncompliance with a representation made in its application for project certification or the obligations set forth in an EDIP contract. The EACC shall have the discretion to determine whether material noncompliance shall result in revocation of a project certification, taking into account: (i) the conduct of the controlling business subsequent to the project certification; (ii) the extent to which the material noncompliance is the result of unforeseen conditions that are outside the control of the controlling business; (iii) the potential impact on the municipality in which the certified project is located; and (iv) other considerations as the EACC shall establish by regulation or policy.

Where the EACC determines that material noncompliance is due to factors outside the control of the controlling business, the EACC may elect to provide the controlling business with reasonable opportunity to cure the material noncompliance. If the EACC revokes a project's certification, it shall determine the proportion of compliance with job creation requirements applicable to the certified project, and shall report the proportion of compliance to the controlling business and to the department of revenue.

(d) Revocation of a project certification shall take effect on the first day of the tax year in which the material noncompliance occurred, as determined by the EACC. If the EACC revokes a project certification, then: (i) all EDIP tax credits available to the controlling business shall be recaptured in accordance with subsection (g) of section 6 of chapter 62 and subsection (i) of section 38N of chapter 63; and (ii) the local tax incentive, if any, shall terminate unless the written agreements between the municipality and the controlling business provide otherwise. In the event of such termination, the municipality may, at its discretion, preserve the local tax incentive by amending the written agreement with the controlling business in the same manner as the municipality approved it and submitting such amendment to the EACC for approval in accordance with this section.

(e) If a controlling business has claimed tax credits awarded under this chapter prior to the date on which the EACC makes a determination to revoke project certification, then the recapture provisions of subsection (g) of section 6 of chapter 62 and subsection (i) of section 38N of chapter 63 shall apply. If a controlling business has benefited from a local tax incentive under this chapter prior to the revocation of a project certification, then notwithstanding any general law to the contrary, the municipality that offered the local tax incentive may recapture the value of the tax not paid by making a special assessment on the controlling business in the tax year that follows the EACC's decision to revoke project certification. The assessment, payment and collection of the special assessment shall be governed by procedures provided for the taxation of omitted property pursuant to section 75 of chapter 59 notwithstanding the time period set forth in said chapter 59 for which omitted property assessments may be imposed for each of the fiscal years included in the special assessment.