Published on Thursday, May 24, 2012
STATE HOUSE NEWS SERVICE
Just a little more than a week after unveiling a job creation and economic development bill, House lawmakers on Wednesday unanimously passed the plan that leaders said would support the state's vibrant research sector and revitalize the manufacturing industry.
Rep. Joseph Wagner, co-chair of the Joint Committee on Economic Development and Emerging Technologies, said the legislation (H 4110) would make Massachusetts more competitive with other states as well as countries around the world vying for jobs.
The bill, which passed 150-0 and now heads to the Senate, includes a new $50 million innovation investment fund to support research and development at universities and research centers where House leaders say the state's economic strengths lie. Projects would need to secure at least $3 in private financing for every $1 of state funding provided through the new capital program.
Rep. Thomas Sannicandro (D-Ashland) said the state's universities and students will benefit from the economic development bill because it provides a vehicle for corporations to better access research and development resources at universities, and in turn, creates a pipeline of future employees for local corporations.
"We are competing not only with other states, but with other countries in our new global economy. In order to move forward we must be sure we are innovating and creating the best environment for corporations," Sannicandro said during debate on the House floor.
The bill also includes a new manufacturing grant program to support small businesses, increases funding to advance large economic projects, and expands efforts to expedite permitting. In addition, it extends local permits for an additional two years for some projects left uncompleted due to tight credit markets.
It also creates a small business online portal where businesses can go to access information about resources available to help them grow.
Republican Minority Leader Bradley Jones (R-North Reading) successfully added an amendment to the bill that changes the way corporations can pay their quarterly taxes. The idea has failed in the past, but was adopted Wednesday without any debate on the floor.
Instead of paying 40 percent of their corporate taxes in the first quarter, and then 25 percent in the second, 25 percent in the third, and 10 percent in the fourth quarter - which is required under current law - corporations can opt for four equal payments of 25 percent each quarter under Jones's amendment.
Corporations will benefit by spreading the payments out evenly rather than paying the largest portion upfront, according to proponents of the change. Thirty-eight other states allow corporations to pay taxes this way, including New Hampshire, Vermont, Maine and Connecticut.
Allowing corporations to pay their quarterly taxes equally does not cost the commonwealth anything, Jones told the News Service after the amendment passed.
"It allows businesses to have a more planned approach when they have cash flow problems too," he said. "It is something some industries have identified as an issue to them."
But the new payment structure could create a cash flow problem for the state, possibly reducing the amount of revenue the state pulls in during the second half of the fiscal year. To alleviate the problem, the amendment allows the state to temporarily borrow money from the stabilization fund, up to $200 million, and repay it in the last quarter.
Republicans also added an amendment that allows communities within 0.5 percent of the statewide average for household median income to qualify as "gateway communities" making them eligible for tax credits, state grants and enhanced local aid. Gateway initiatives are currently restricted to a select number of cities, mostly former industrial centers like Lowell, Worcester, Holyoke and Lawrence.
Before the bill passed, there was a lengthy debate about removing a section of the bill that would allow developers of commercial or residential projects to seek bonds from MassDevelopment for infrastructure projects.
Rep. Denise Provost (D-Somerville), the amendment's sponsor, argued against allowing projects to receive MassDevelopment bonds, citing concerns about real estate investments that went bad during the economic downturn. Provost also said she was concerned that no public authority would oversee the issuance of the bonds.
Proponents of the infrastructure development program argue that no state funds would be at risk, and that MassDevelopment has an excellent track record of managing projects.
Rep. Anthony Cabral (D-New Bedford) called it an "important economic development tool" that communities could choose to use. The amendment to eliminate the program from the bill failed 14 to 135.
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