July 8, 2010

State Representative Allen McCarthy yesterday joined his colleagues in the Massachusetts House of Representatives in passing economic development legislation that would streamline economic development agencies, make Massachusetts more attractive to businesses, repeal the state’s medical and pharmaceutical gift ban and establish a sales tax holiday this summer.

"This legislation will help businesses access the resources they need to locate, expand, and create jobs right here in Massachusetts," said McCarthy.  "I was especially pleased to vote in favor of a summer sales tax holiday, which will benefit local businesses and consumers alike." To increase efficiency, the Massachusetts Office of Business Development would be authorized to act as the primary coordinator of business development efforts in the Commonwealth and partner with economic development organizations to develop a business development plan for an identified region of the Commonwealth.

The bill consolidates agencies that play a role in attracting business to the Commonwealth into a Massachusetts Marketing Partnership which would act as the central marketing organization of Massachusetts. The partnership would consist of members from the administration, the private sector, the Massachusetts Convention Center Authority and regional tourism councils.

In an effort to bring more convention activity to the state while stimulating the restaurant and hospitality industries in Massachusetts, the bill would repeal the medical and pharmaceutical gift ban which was originally enacted in 2008.

The bill would also apply a 3% capital gains tax rate to investments made by individual investors in Massachusetts-based start-up companies that are held for more than three years. This provision would give Massachusetts the opportunity to offer the 3rd lowest long-term capital gains tax rate in the nation.

The bill would extend the state’s net operating loss carry-forward provision from 5 to 20 years which is the carry-forward term employed by the federal government. It would be applicable to losses incurred in any taxable year beginning on January 1, 2008 and would assist cyclical industries such as manufacturing, construction, high-tech and biotech, and financial services.

To measure the performance of the state’s economic development initiatives, the bill would create an office of performance measurement in the Executive Office of Housing and Economic Development.  The director of the office would develop performance measurement metrics for all public and quasi-public entities engaged in economic development and seek out private sector advice and models that can be adapted to the needs of the Commonwealth.

According to the legislation, with each new gubernatorial administration, the Secretary of Housing and Economic Development would be required to engage key stakeholders appointed to an economic development advisory council in developing a long-term economic development plan for the Commonwealth.  The council would be represented by members of the administration,
legislature and business community.

The plan would set forth actionable goals and benchmarks and provide a coherent vision and implementation plan for an economic development strategy that is not tied to any one administration.