BOSTON – Final Senate and House agreement on economic development legislation includes a sales tax holiday and promotes a business-friendly environment that will help small businesses open, expand and create jobs. The bill was enacted by the Senate on Friday and is schedule for enactment by the House today. The bill will overhaul the state’s network of business development agencies, establishing a streamlined, cohesive model with built-in oversight to reduce redundancy and waste.

“This bill is about eliminating the middle man and extending a helping hand to businesses,” said Senator Joyce, Chairman of the Joint Committee on State Administration and Regulatory Oversight. “By consolidating agencies, we make it easier for growing companies to get the necessary help and support that they need.”

The bill also sets the sales tax holiday for Massachusetts retailers this year for August 14 and 15 to help accelerate consumer demand and continue the state’s economic recovery.

The legislation 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. With MOBD and the regional organizations providing clear direction for accessing economic development services, there will be less confusion about how to access technical assistance, grant and loan programs, and expansion support.

The legislation merges organizations tasked with marketing the state nationally and internationally, including the Massachusetts Office of Travel & Tourism, into the newly-created Massachusetts Marketing Partnership. The Partnership will serve as a central marketing organization for the entire state and will be charged with increasing the Commonwealth’s efforts in the areas of tourism and international trade. The Massachusetts Film Office and the Massachusetts Sports Partnership will also be included in the Partnership.

Through the creation of the Massachusetts Growth Capital Corporation, a larger number of small businesses will gain access to working capital so that they can continue to grow even in times of tight credit. For those small companies that receive financial assistance from the state, finance and management consulting will be mandatory to help keep companies afloat and prevent job losses.

The legislation also consolidates the Economic Stabilization Trust, which provides financial assistance and consulting to struggling businesses, with the existing Community Development Finance Corporation, further streamlining state assistance to small businesses.

The bill also 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.

Further streamlining the state’s approach to economic development, the Department of Business Development is eliminated within the Executive Office of Housing and Economic Development, allowing MOBD a direct reporting line to the Secretary, and the Massachusetts Health Educational Facilities Authority (HEFA) is merged with MassDevelopment.

Several other agencies, including the independent Massachusetts Sports and Entertainment Commission and the Massachusetts Industrial Development Authority, are eliminated, with an estimated savings to taxpayers of $1 million a year.

Other provisions of the bill:

· Improves 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;

· Provides a two-year permit extension for development projects struggling with tight credit conditions;
 
· Calls for a study of business energy costs, and a study to determine the feasibility of a state-owned bank.
 
· Approves new rules clarifying the application of the state’s new combined reporting rules, enacted in 2008, to foreign-owned companies doing business in Massachusetts;
 
· Extends the period in which a corporation can carry forward its losses, from the current five-year period to 20 years;
 
· Encourages investment in Massachusetts-based start-ups by creating a 3 percent tax rate on capital gains earned on investments in those companies; and
 
· Approves new borrowings by the state to capitalize the new Massachusetts Growth Capital Corporation and re-capitalize the Massachusetts Technology Development Corporation.

Senator Joyce noted that the bill is one of several measures passed this week, including small business health reform, that are designed to further improve the recent regional economic improvement.