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Massachusetts State Senate Approves Overhaul of State Economic Development Agencies
April 09, 2010

BOSTON – State Senator Benjamin B. Downing (D-Pittsfield) announced the Senate on Thursday unanimously passed a major overhaul of the state’s network of agencies charged with developing business interests and economic activity in Massachusetts. The legislation creates a streamlined, cohesive model with built-in oversight and transparency measures to reduce redundancy and waste, and promote a more business-friendly environment that will ultimately help stimulate job growth in the Commonwealth.

 

“This is a great step forward in encouraging businesses to locate and expand in the Commonwealth and create jobs for our citizens” said Senator Downing. “Massachusetts has a wealth of resources, including a highly skilled and educated workforce. This legislation will help us market the region and give businesses streamlined access to the information and capital necessary to grow and be successful here”.   

 

Senator Downing sponsored several successful amendments to the bill, including a provision allowing state and local agencies to establish a preference for products and services provided by businesses located within the Commonwealth. This gives deserving local businesses a competitive advantage in contracting with the state, while retaining tax revenues and jobs.

 

Yet another Downing amendment will require Tax Increment Financing (TIF) plans to report every five years to the granting city or town and the Economic Assistance Coordinating Council its progress and/or results.  Information to be detailed includes status of construction, current value of property, number of jobs created due to the TIF, salary of those new positions, and plans for future hiring.  These reports will help evaluate the impact of TIFs on that economic area.

 

The bill creates a ‘one-stop shop’ for businesses seeking to expand or locate in Massachusetts by requiring the existing Massachusetts Office of Business Development (MOBD) to contract with regionally-based economic development organizations.

 

These private organizations would act as the primary contact for businesses seeking assistance from the state and perform business prospect management services on behalf of the Commonwealth. MOBD would oversee the efforts of these organizations, provide leads, and share information about state programs and services.

 

The legislation also increases accountability, communication and oversight of state agencies, quasi-publics and state contracts with private organizations engaged in economic development activities. It requires every governor to publish a written economic development policy by December 31 of the year he or she is elected to help the Commonwealth strategically assess economic development goals over the long-term.

 

The legislation also requires an economic impact statement to be filed by administrative agencies planning to adopt new regulations that details the cost of the proposed regulations to small businesses before public hearings on those regulations. Additionally, it requires a rolling review of regulations to identify and modify those which prove too costly. 

 

The bill expands the state pension fund’s investment authority by creating a $25-50 million credit program to support lending to fast-growing small businesses in Massachusetts. It also promotes beneficial competition for the issuance of tax-exempt bonds by non-profit institutions by providing parallel authorization to both MassDevelopment and the Massachusetts Health Educational Facilities Authority.

 

Finally, to ensure that all state agencies and authorities in the Commonwealth stay true to their stated mission and goals, and to avoid waste and ineffectiveness in the future, the bill establishes a Sunset Commission to conduct regular reviews and analysis – a measure supported by the Associated Industries of Massachusetts.

 

The commission would consider the continuing need for agencies and authorities in state government, based on their performance, and assign “sunset” dates, or elimination, for any that are found to be unnecessary.

 

Other provisions of the bill include:

 

·         Prohibiting the use of state funds to pay for registered lobbyists;

·         Stopping agency executive salaries from exceeding the amount of the Governor’s salary;

·         Improving low-cost access to small claims courts by raising the limit on filings from $2,000, where it has been for many years, to $7,000;

·         Merging organizations tasked with marketing the state nationally and internationally into a central marketing partnership;

·         Requiring performance management reviews of all economic development agencies;

·         Creating the Massachusetts Growth Capital Corporation, so that small businesses can gain access to working capital and prevent job losses;

·         Providing a three-year permit extension for development projects struggling with tight credit conditions; and,

·         Calling for a study of business energy costs, as well as a study to determine the feasibility of a state-owned bank.

 

The bill now goes to the House of Representatives.

 

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