Code of Massachusetts Regulations
402 CMR - ECONOMIC ASSISTANCE COORDINATING COUNCIL
Title 402 CMR 2.00 - Economic Development Incentive Program
Section 2.07 - Approval of TIF and STA Agreements

Universal Citation: 402 MA Code of Regs 402.2

Current through Register 1537, December 20, 2024

(1) Approval of Local Tax Incentives. A project that is not certified pursuant to 402 CMR 2.05 for EDIP tax credits may be eligible for tax increment financing or a special tax assessment if the host municipality separately petitions the EACC for approval of the proposed TIF agreement or STA agreement in accordance with 402 CMR 2.07.

(2) Approval of TIF Agreements. If a municipality desires to provide tax increment financing for a project that is not certified by the EACC, the municipality must petition the EACC for approval of the TIF agreement. The petition for approval shall include a copy of the fully executed TIF agreement and evidence that it has been duly authorized and executed by each party thereto. The TIF agreement shall set out the amount of the tax increment that the project will generate and, for each year that the agreement will be in effect, the percentage of the incremental tax that will be exempt from taxation. The EACC shall approve a proposed TIF agreement if the EACC finds, based upon the information submitted and such additional investigation as the EACC may make, that:

(a) The TIF parcels are located within an Economic Target Area or in a TIF eligible area;

(b) The project involves a significant capital investment and will create new or retain existing permanent, full-time jobs;

(c) The TIF agreement supports the public purpose of encouraging increased industrial and commercial activity in the Commonwealth;

(d) There is a high likelihood that the TIF agreement will result in actual economic benefits to the host community;

(e) The TIF agreement complies with the requirements and limitations of M.G.L. c. 40, § 59, including limitations on the allowable term of the TIF agreement and instructions regarding the manner in which the exemption is calculated; and

(f) The TIF agreement complies with any written guidance promulgated by the EACC or the Department of Revenue Division of Local Services regarding best practices for a TIF agreement.

(3) Approval of STA Agreements. If a municipality desires to provide a special tax assessment for a project that is not certified by the EACC, it must petition the EACC for approval of a proposed STA agreement. The petition for approval shall include a copy of the fully executed STA agreement and evidence that it has been duly authorized and executed by each party thereto. The STA agreement must identify the STA parcel and set forth all job creation, investment and other material obligations of the owner of the STA project.

(a) A proposed STA agreement shall provide:
1. in the first year, an assessment of not less than 50% of the amount that would be due based on the full assessed valuation of the parcel; provided, that such assessment shall be granted for the year designated in the binding written offer;

2. in the second and third years, an assessment of up to 25% of the actual assessed valuation of the parcel;

3. in the fourth and fifth years, an assessment of no less than to 5% of the actual assessed valuation of the parcel.

(b) A real estate project or other eligible project that is not designated as certified project shall be approved for a special tax assessment only upon a finding by the municipality and the EACC that:
1. the property owner is undertaking a project or making other investment that will contribute to economic revitalization of the municipality and will significantly increase employment opportunities for residents of the municipality, or is retaining permanent full-time employees that otherwise would be relocated to a facility outside of the commonwealth;

2. the special tax assessment is reasonably necessary to enable the owner's investment in the project or to retain the jobs that otherwise would be relocated; and

3. the total amount of local tax foregone is reasonably proportionate to the public benefits resulting from the special tax assessment.

(3) Approvals Prior to Execution. The EACC shall have the discretion, but not the obligation, to approve a TIF agreement or STA agreement before said agreement has been duly executed by all parties; provided that such approval shall be contingent upon subsequent receipt of the executed agreement within 60 days or such other reasonable timeframe as the EACC shall determine.

(4) Amendments. TIF agreements and STA agreements may be amended from time to time following the same procedures that are required to adopt such agreement; provided that no such amendment shall be valid or enforceable unless it is approved by the EACC in accordance with 402 CMR 2.07(4).

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