Wednesday, May 28, 2014

Hearing On Patrick's Economic Development Bill Tomorrow

Would Eliminate Local Limits On Liquor Licenses

Ken O’Brien

The Joint Committee on Economic Development and Emerging Technologies, chaired by Sen. Gale Candaras, D-Wilbraham, and Rep. Joseph Wagner, D-Chicopee, meets Thursday at 1 p.m. Lawmakers will hear the $100 million economic development bill that Gov. Deval Patrick filed in April.

The bill provides municipalities with the power to grant liquor licenses without quota limits, eliminates "non-compete" agreements, adopts the Uniform Trade Secrets Act, and seeks to expand the state's international marketing efforts to boost tourism. The bill also overhauls a research and development tax credit program, and extends the Massachusetts Technology Collaborative's internship and mentoring program.

The committee has requested an extension on reporting out the bill until June 13.

After Patrick's bill was filed, House Speaker Robert DeLeo, who has talked about filing his own economic development package, said the governor had caused a "little bit of a stir" with his proposal to eliminate non-compete clauses. The hearing comes as Patrick, joined by Economic Development Secretary Greg Bialecki and private industry officials, travels on a trade mission to Israel and the United Arab Emirates.

Bill Summary

 An Act to Promote Growth and Opportunity (H. 4045):

• Broadly expanding opportunity into communities in Massachusetts not yet reached by the state’s economic successes, and
• Accelerating the growth of our economy’s innovation sectors.

EXPANDING OPPORTUNITY
This bill brings the opportunities created by Massachusetts’ strong economy to the entire state through the following programs and initiatives:
Middle Skills Job Training Grant Fund
The Act will provide funding of $20 million to support training and education programs that address workforce shortages of the advanced manufacturing and information technology industries. The program over four years will create 4,000 additional skilled graduates poised for careers in advanced manufacturing and IT. The Commonwealth Corporation will provide grants to vocational-technical schools, community colleges and other qualifying entities to create opportunity for Massachusetts residents by supporting this middle skills job training.
Gateway Cities Transformative Development Fund
The bill brings growth and opportunity to Gateway Cities by enabling equity investments and technical assistance to support transformative development in these communities. This will be accomplished through the creation of a $15 million Transformative Development Fund at MassDevelopment. This Fund also will support the creation of collaborative workspaces in Gateway Cities.
Additional Funding for Massachusetts Growth Capital Corporation (MGCC)
Additional funding of $5 million for the MGCC, the state’s working capital lender for small businesses, will help small businesses create additional jobs by providing greater access to capital and technical assistance.
Expanded Housing Development Incentive Program (HDIP)
The expansion of the Housing Development Incentive Program will provide residents of Gateway Cities with increased access to housing, including affordable housing. Developers in these cities will be offered tax credits of up to 10% for market rate and mixed income housing units. The bill further incentivizes developers investing in these communities by eliminating the 50-unit per development cap on the number of units per development and increases the state income tax credits available from $5 to $10 million for the next four years.
Additional Funding for Brownfields Redevelopment Fund
Economically-distressed areas will see growth as a result of $10 million in additional funding for the Brownfields Redevelopment Fund at MassDevelopment, which encourages development in these areas by providing loans and grants for environmental site assessments and cleanup. The fund was partially re-capitalized with $15 million in the most recent supplemental budget.

ACCELERATING INNOVATION
This bill accelerates the vital Massachusetts innovation economy through the following programs and initiatives:
R&D Tax Credit
The bill will foster additional innovation in Massachusetts by altering the current statutory R&D tax credit formula to give companies, whose R&D expenditures are rising, a relatively larger credit without affecting the Commonwealth’s overall tax expenditure.
Job Creation Incentive in the EDIP
The bill encourages job creation in the tech industry by recognizing that companies in this sector frequently expand without making large capital expenditures. Businesses will be incentivized to create a significant number of new jobs in the absence of sizable capital costs through targeted tax credits to businesses. Total state tax credit expenditures under the economic development incentive program would remain capped at $25 million per year.
Global Entrepreneur Program Fund
The bill will support continued innovation in Massachusetts by establishing a new program that would help talented and entrepreneurial international students in Massachusetts to stay here after graduation so that they could start or grow a new business. The program, which would be based at the Mass Tech Collaborative, would work with public and private institutions of higher education to place selected foreign students as “entrepreneurs in residence” at these schools, and would make $3 million in state funds available to support such placements.
Non-Compete/Uniform Trade Secrets
The bill will remove a significant barrier to innovation in the Commonwealth by eliminating the enforceability of non-competition agreements in Massachusetts. Non-Compete agreements restrict employee mobility, which stifles innovation, restricts growth, and limits the creation of start-ups in our economy. The bill also adopts the Uniform Trade Secrets Act (UTSA), already adopted in 48 other states, to further protect business intellectual property.
International Tourism Marketing
Increasing funding for international tourism marketing by $7 million will create new opportunities for our businesses by bolstering a growing and successful piece of the Massachusetts economy. This funding supports an aggressive international tourism marketing campaign over the next two years, focused on increasing visitation from countries with new direct air connections.
Additional Funding for Housing Preservation and Stabilization Trust Fund
Massachusetts residents will have increased opportunities to access affordable housing as a result of $5 million in additional funding for the Housing Preservation and Stabilization Trust Fund, which provides a flexible method for funding affordable housing for low-income families and individuals in the Commonwealth. Adding affordable housing allows us to attract and retain our workforce, which is essential to the continued growth and success of our economy
Additional Funding for MassVentures
This bill will expand our innovation economy by directing $5 million to MassVentures, enabling additional investments in early-stage, high-growth Massachusetts startups as they move from concept to commercialization.
Codify STEM Advisory Council
Student interest in in science, technology, engineering and mathematics (STEM) is vital to the ongoing success of our innovation economy. Massachusetts needs a workforce that is skilled and engaged in these disciplines in order to continue to compete on the global economic stage. The STEM Advisory Council brings the public and private sectors together with legislators and educators, to engage in meaningful collaboration with the Executive Branch around strategies to further student involvement in these areas. This proposal codifies the existing Council to preserve momentum for stakeholders of this widely supported initiative.
Additional Funding for Innovation Institute, Internships and Mentoring
The bill supports the future workforce of the innovation economy by investing in internships and mentoring programs to ensure that the pool of potential employees in the Commonwealth is trained and experienced in our high tech industries. The Innovation Institute leads the Mass Tech Collaborative’s technology and innovation initiatives. The internship program provides grants to qualifying high tech companies to hire interns, providing students with experience and networking opportunities. The mentoring program provides entrepreneurs with access to advice and support. A total of $10 million will be directed toward these initiatives.
I-Cubed
The bill will encourage investment in growth by raising the current statutory limits on the successful Infrastructure Investment Inventive program (I-Cubed), which provides innovative financing for infrastructure projects expected to leverage significant economic investment. The bill raises the number of allowed projects within any community to eight, and increases the total financing allowed under the program to $600 million.

CONTINUING REFORM, TECHNICAL CORRECTIONS AND ADDITIONAL PROPOSALS
Liquor License Quota Repeal
The bill supports local economic opportunities removing statutory limitations on the number of liquor licenses a local liquor authority can issue, in order to give a local community greater control of the number of liquor licenses in their community.
MassDOT Land
The bill allows for auction of certain MassDOT properties, which will increase MassDOT’s ability to market property available for disposition through a variety of sales channels, while ensuring that any such disposition is made to the highest responsible bidder.
Economic Target Areas (ETAs)/Economic Opportunity Areas (EOAs)
The bill removes the requirement that EDIP projects be located in an ETA or EOA, designations which no longer serve their intended purpose and which now interfere with state support of worthwhile projects.
EDIP Tax Credit Recapture
The bill adopts a technical correction to make clear the Commonwealth’s right to recapture tax credits from non-compliant companies.
MassWorks Technical Correction
The bill makes a technical correction to the statute authorizing the state’s MassWorks Infrastructure Program, to clarify the types of projects that may be funded.
Special Tax Assessment Technical Fix
The bill amends the Economic Development Incentive Program statute to allow municipalities the same flexibility to enter into special tax assessments that they have with respect to tax increment financing (TIFs). Cities and towns would be authorized to offer a special tax assessment to a project that would benefit the local economy but does not meet the standards for state incentives.
Financial Services Advisory Council
The bill enacts into statute a financial services advisory council composed of public and private representatives, to exchange ideas and develop strategies for business and government to work together to strengthen the Massachusetts financial services industry in areas such as public policy, workforce development, international trade and direct foreign investment, industry promotion, and competitiveness. 

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