MA Lawmakers Pass Economic Development Bill, Awaits Gov Approval

On August 1, the Massachusetts lawmakers enacted a comprehensive economic development bill (H.4377). The bill currently awaits Gov. Deval Patrick’s approval. Per state law, Gov. Patrick has until August 14 to sign the bill, 10 days after he received it. The approved bill that received unanimous approval by the Massachusetts state Senate was passed as a comprise package between two bills proposed in the Senate and House. Through the bill, Massachusetts policymakers intend to invest more than $80 million to spur economic growth with a significant emphasis on strengthening Massachusetts’ innovation industries. Tech-based economic development efforts will focus on emerging industries, investments in workforce development and education, and promoting targeted regional growth. A major point of contention, language dealing with non-compete agreements, did not survive in the final bill.

In the bill, policymakers place a significant emphasis on supporting tech startups and early-growth companies in emerging industries. Highlights include:

• $150 million for a program that would allow the pension fund (PRIM) to invest at least $150 million in institutions that make capital available to small business and early stage companies;
• $1.5 million for MassVentures to provide funding to early stage tech startups as they move from concept to commercialization;
• $100,000 for the chief information officer in the Division of Information Technology to establish an online business portal, a step-by-step guide to starting a business in the state;
• The creation of an Angel Investor Tax Credit – Investors are eligible for a 20 percent credit of the qualifying angel investment, 30 percent if the recipient business is located in a Gateway City; and,
• $2 million to establish the Innovation Commercialization Seed Fund, a competive grant program for researchers and students at public and private universities in Massachusetts to test business ideas in the marketplace.

The bill also updates the state’s existing research and development tax credit for businesses and creates the Alternative Simplified Credit (ASC) as an alternative to the traditional tax credit. ASC allows employers the option to claim a credit equal to 10 percent of any research expenses that exceed a base amount calculated over a period of three years.

In line with the state’s long-term commitment to becoming a world leader in Big Data (see related Digest article), $2.15 million would be committed to create a Big Data Innovation & Workforce Fund to promote the big data and analytics industries, provide tools for related career development. Funding may be awarded to help researchers and others explore how analytics can help address problems of public concern like transportation, energy and public health. The legislation also calls for the establishment of an Advanced Manufacturing, Technology and Hospitality Training Trust Fund and provides $12.3 million to support training and education programs that address the workforce shortages of the advanced manufacturing, mechanical and technical skills, hospitality and information technology industries.

The bill provides $900,000 for two extensive studies to be completed on the state’s manufacturing sector. The Massachusetts Manufacturing Extension Partnership (MMEP) will be tasked with performing a comprehensive study of the state’s manufacturing industry. The Massachusetts Advanced Manufacturing Collaborative will be tasked with conducting an analysis of the state’s manufacturing supply chain that will need to be filed no later than March 31, 2015. Another report will be published by a special commission to investigate, analyze and study any barriers and hindrances to the "last mile" connections to the broadband internet initiatives.

To support economic renewal in 26 blighted communities across the state, termed Gateway Cities, the legislation provides an initial $16 million investment, a portion of which will support the creation of collaborative workspaces (i.e., incubators, accelerators, and co-working spaces) in these blighted communities to spur innovative and creative business growth. To support job creation in those cities, the bill includes the creation of a Job Creation Incentive that will allow businesses to receive a tax credit up to $1,000 per job created, or up to $5,000 per job created in a Gateway City, capped at $1 million per certified project. Certified projects include the retention of manufacturing jobs if approved by the newly established economic assistance coordinating council.

To support the development of a 21^st century workforce and keep skilled students in the state, the bill includes several initiatives to support innovation workforce development and programs at state universities to help cultivate young talent.  The bill includes a $2 million investment in the Mass Tech’s Talent Pipeline initiative – a program that provides matching stipends for interns at innovation startups and provides mentoring opportunities for new entrepreneurs. The bill also establishes a three-year global entrepreneur-in-residence program at University of Massachusetts (UMass) Lowell and UMass Boston administered by the Massachusetts Technology Collaborative to help start and grow businesses and jobs that will stay in Massachusetts.

In an attempt to reduce the costs and better prepare students for higher education, the bill includes $750,000 for the Early College High School Initiative that encourages partnerships between regional school districts and institutions of public higher education to allow students to work on the completion of a high school diploma while simultaneously earning free college credits towards an associate degree.

The bill also includes an investment of $1.5 million in MassCAN — a public-private partnership to establish widespread, progressive computer science education in public schools. The partnership was founded by a coalition including Google, Microsoft, Mass Business Roundtable, Mass Tech Collaborative, Massachusetts Competitive Partnership and Mass Tech Leadership Council. Partner organizations have pledged a dollar-for-dollar match for this computer science education initiative. Read the bill…

Learn More at SSTI's 2014 Annual Conference!
Join us for Trends in Tech-based Economic Development, an interactive plenary session led Dan Berglund, SSTI’s president and CEO, that ties together what attendees learned through the last day and one-half with SSTI’s distillation of the latest trends in tech-based economic development, the most daunting challenges ahead and their implications. It is a perennial conference favorite! For more information about this session and many other visit the conference website: http://ssticonference.org/