Code of Massachusetts Regulations
801 CMR - EXECUTIVE OFFICE FOR ADMINISTRATION AND FINANCE
Title 801 CMR 51.00 - Generating New State Tax Revenues And Local Tax Revenues By Stimulating Sustainable Economic Development Through Infrastructure Improvements
Section 51.02 - Definitions
Unless otherwise provided in 801 CMR 51.00, terms shall have the meanings assigned to them in St. 2006, c. 293, §§ 5 through 12, as amended by St. 2008, c. 129, §§ 2 through 17. The following terms shall have the following meanings or, if such terms have been assigned meanings in St. 2006, c. 293, §§ 5 through 12, as amended by St. 2008, c. 129, §§ 2 through 17, and St. 2012, c. 238, §§ 60 through 63, the following modified meanings in addition to the meanings so assigned:
Annual Certification of New State Tax Revenues, the annual certificate the Commissioner is required to make to the Secretary and the Treasurer pursuant to St. 2006, c. 293, § 10(a) regarding the Commissioner's determination of the New State Tax Revenues generated with respect to each Project Component in the prior fiscal year of the Commonwealth, which annual certificate shall be issued in accordance with 801 CMR 51.00 and the DOR Guidance and shall clearly identify, for the prior fiscal year of the Commonwealth: the total state tax revenues generated from each Project Component; the portion of such state tax revenues that constitutes New Revenues from each Project Component, including the Annual Data and Displacement Factors upon which such determination is based; the portion of any such New Revenues that constitutes Dedicated Revenue from each Project Component; the New State Tax Revenues generated from each Project Component; the Shortfall amount, if any, with respect to each Project Component; the cumulative New State Tax Revenues with respect to each Project Component for all prior fiscal years of the Commonwealth; and a statement as to whether the cumulative New State Tax Revenues with respect to an Project Component equal or exceed the Net Debt Service on the Bonds allocable to the Project Component.
Annual Data, the data that the Owner of each Project Component is required to submit to the Department pursuant to the DOR Guidance in order for the Commissioner to determine the New Revenues and New State Tax Revenues for the prior fiscal year of the Commonwealth and to issue the Annual Certification of New State Tax Revenues.
Application Fee, a fee in the amount of $50,000 payable by the Developer to the Commonwealth upon the filing of a Preliminary Economic Development Proposal with the Secretary for administrative costs of the Secretary, the Department and the Agency related to the evaluation and processing of the Preliminary Economic Development Proposal.
Bond Anticipation Notes or "BANs", bonds or notes issued to fund Project Costs maturing no later than the date of expected substantial completion of the Project Component or two years, whichever is sooner, for which all interest and other costs are to be paid by the Developer, and principal is to be refunded from the proceeds of permanent long-term financing.
Bond Issuance Fee, a fee payable by the Developer to the Agency upon the issuance of the Bonds for the Agency's role as the issuer of the Bonds; the amount of such fee shall be determined by the Agency in accordance with the fee schedule it customarily uses in connection with the issuance of bonds.
Bonds, includes, all bonds issued by the Agency pursuant to 801 CMR 51.00, without limitation, including Bond Anticipation Notes and refunding bonds issued to refinance Bond Anticipation Notes or bonds issued to finance Costs of Public Infrastructure Improvements.
Commitments, written commitments from prospective tenants or purchasers of all or a portion of a Project Component that the Developer has provided to the Secretary and that the Secretary determines, in his or her sole discretion, to be sufficient evidence of the prospective tenants' or purchasers' commitment to lease for the specified term or to purchase all or a portion of a Project Component. New State Tax Revenue projected during a lease for less than ten years shall only count as projected New State Tax Revenues during the term of the lease. New State Tax Revenue projected during a lease of ten years or longer shall count as projected New State Tax Revenues during the term of the lease and shall also serve as the basis for, and shall be taken into account in, projecting New State Tax Revenue from the Project Component which shall be counted through the term of the Bonds. If there is a compelling reason in connection with the facts related to a specific development to believe that a lease commitment of less than ten years but not less than five years resulting in New State Tax Revenues is indicative of the level of New State Tax Revenues that will be generated from the related Project Component following the term of the lease, the Secretary may, in his or her discretion, direct the Commissioner to assume the same level of projected New State Tax Revenues from the related Project Component following the lease term through the term of the Bonds.
Convention Center District, the convention center finance district, as defined in St. 1997, c. 152, § 2, and the Springfield civic and convention center finance district, as defined in St. 1997, c. 152, §10b1/2.
Cost of Project, Project Costs and Costs, the costs of Public Infrastructure Improvements to be funded from proceeds of Bonds which may include any of the costs identified in the statutory definition that are identified by the Developer in its proposal, including costs of issuing the Bonds and costs of acquisition of land prior to approval which are directly related to and needed for the Public Infrastructure Improvements, but the Secretary shall not approve any proposal that includes interest on the Bonds as a cost to be financed by the Bonds. The Secretary shall not approve costs incurred prior to the approval of any proposal by the Secretary unless:
(a) these costs were incurred after September 7, 2006;
(b) sufficient evidence is provided to the Secretary showing that the costs incurred prior to approval are preliminary costs directly related to the planning or design of the proposed Public Infrastructure Improvements or the acquisition of land directly related to and needed for such Public Infrastructure Improvements; and
(c) compelling evidence is provided that the Economic Development Project would not happen or would not happen to the same extent without the financing provided under St. 2006, c. 293, §§ 5 through 12, as amended by St. 2008, c. 129, §§ 2 through 17 and St. 2012, c. 238, §§ 60 through 63.
Displacement Factors, discount factors to be used in calculating New Revenues and New State Tax Revenues to adjust for any estimated reduction in revenues resulting from jobs and commercial activity in the Commonwealth that are indirectly displaced as a result of new commercial activity within the Economic Development District, which factors shall be determined by the Commissioner of Revenue based on the Independent Consultant Analysis and in accordance with the DOR Guidance.
DOR Guidance, Any Technical Information Release or any other guidance issued by the Commissioner pursuant to St. 2006, c. 293, § 12.
Eligible New Job, shall not include any job that directly replaces a job elsewhere in the Commonwealth, as determined in accordance with 801 CMR 51.00 and the DOR Guidance, or the retention of any job in the Commonwealth, except in circumstances where the Developer provides compelling evidence that the job would have been relocated outside of the Commonwealth if the Economic Development Project were not carried out.
Growth District, a geographic area designated as such by the Executive Office of Housing and Economic Development for purposes of coordinating an effort among the Commonwealth, the Municipality and property owners to pre-permit the area to expedite commercial and residential development within the area.
Independent Consultant Analysis, an analysis of an independent expert or experts in real estate development feasibility, market and economic impacts of development and estimating construction costs with respect to the cost of the Economic Development Project, including the Public Infrastructure Improvements, the feasibility of the Economic Development Proposal, the Displacement Factors recommended for the various Project Components and the New Revenues and New State Tax Revenues to be generated as a result of the Economic Development Proposal.
Infrastructure Development Assistance Agreement, the agreement required pursuant to St. 2006, c. 293, § 8, as amended by St. 2008, c. 129, §§ 8 and 9.
Municipality, includes only the city or town or those cities or towns within which all or a portion of the Economic Development District is located, and does not include any city or town wholly outside of the Economic Development District even if Public Infrastructure Improvements adjacent to the Economic Development District and related to the Economic Development Project are located in whole or in part in the city or town.
Municipal Liquidity Reserve, the liquidity reserve the Municipality is required to establish for each Assessment Parcel pursuant to St. 2006, c. 293, § 7, as amended by st. 2008, c. 129, §§ 5 through 7, and St. 2012, c. 238, §§ 60 through 62, and in accordance with 801 CMR 51.12 and 51.13.
Net Debt Service, the Debt Service payable on the Bonds or on any portion thereof, as the context requires, less:
(a) any Shortfall Payments previously made to the Commonwealth with respect to the payment of any portion of such Debt Service previously due and payable; and
(b) any infrastructure assessments collected and paid to the Commonwealth with respect to the payment of any portion of such Debt Service due and payable on any of the Bonds prior to the related Project Component being certified as an Occupied Project Component.
New Revenue.
(a) shall not include any revenue that would have been realized by the Commonwealth if a Certified Economic Development Project had not been carried out under St. 2006, c. 293, §§ 5 through 12, as amended by St. 2008, c. 129, §§ 2 through 17 and St. 2012, c. 238, §§ 60 through 63, including any revenue resulting from commercial activity that has been or is expected to be relocated from elsewhere in the Commonwealth to the Economic Development District and from commercial activity that is indirectly displaced as a result of new commercial activity within the Economic Development District, all as determined in accordance with 801 CMR 51.00 and the DOR Guidance; and
(b) shall be net of any revenue that the Commonwealth realized from commercial activity or jobs located in the Economic Development District in the fiscal year prior to the filing of the Economic Development Proposal or the fiscal year prior to the Developer's acquisition of the property, whichever fiscal year yielded more revenue to the Commonwealth from the property as determined in accordance with the DOR Guidance, that has been or will be displaced as a result of the Project and not relocated elsewhere in the Commonwealth.
New State Tax Revenue, as defined in St. 2006, c. 293, §§ 5 through 12, as amended by St. 2008, c. 129, §§ 2 through 17 and St. 2012, c. 238, §§ 60 through 63, shall include not more than 50% of any New Revenue attributable to construction-related activity and purchases in connection with the Economic Development Project, and, in any given fiscal year, the amount of construction-related New State Tax Revenue derived from a Project Component shall not exceed 50% of annual Debt Service allocable to the Project Component.
Occupied Project Component, a Project Component that the Developer certifies to the Secretary and to the Agency has been completed and is occupied by tenants or an Owner at a level equal to or greater than the minimum level of occupancy for the Project Component established under the Infrastructure Development Assistance Agreement in accordance with St. 2006, c. 293, § 9. Such minimum level of occupancy shall not be established at a level that would result in projected New State Tax Revenues generated from the Project Component at that minimum occupancy level being less than the Debt Service payable on the related Bonds. New State Tax Revenue attributable to construction-related activity and purchases shall be allocated among all Occupied Project Components in any fiscal year on a pro rata basis based on the portion of the Bonds allocable to such Occupied Project Components. Both the Commonwealth and the Municipality shall have a right of review and an opportunity to contest any determination that a Project Component is occupied. Each shall be given 30 days to inspect the Project Component and to review related commitments regarding occupancy to confirm that the Project Component is in fact an Occupied Project Component as provided for in the Infrastructure Development Assistance Agreement. If either the Commonwealth or the Municipality challenges the Developer's certification of an Occupied Project Component, the Agency shall have the right to inspect and make the final decision and certification as to whether or not the Project Component is in fact an Occupied Project Component. Once a Project Component has been certified as an Occupied Project Component, it shall thereafter always be considered an Occupied Project Component.
Owner, the current property taxpayer for an Assessment Parcel.
Phased Project, an Economic Development Project that the Developer proposes to be approved and completed in phases and that is contained within one contiguous Economic Development District, includes at least one Commercial Component and one Public Infrastructure Improvement in each phase of the Project, and constitutes a single Economic Development Project for all purposes of St. 2006, c. 293, §§ 5 through 12, as amended by St. 2008, c. 129, §§ 2 through 17 and St. 2012, c. 238, §§ 60 through 63, and 801 CMR 51.00.
Preliminary Approval Letter, the letter of the Secretary approving the Preliminary Economic Development Proposal under 801 CMR 51.08.
Preliminary Certificate of the Agency , the certificate of the Agency regarding estimated Costs of the Project that may be supported by New State Tax Revenues under 801 CMR 51.06.
Preliminary Certificate of the Commissioner, the certificate of the Commissioner regarding estimated New State Tax Revenues and other matters pursuant to 801 CMR 51.07 and the DOR Guidance.
Preliminary Economic Development Proposal, the preliminary proposal required to be submitted to the Secretary, the Agency, the Municipal Officers and the Commissioner prior to filing the Economic Development Proposal with the Municipality as described in 801 CMR 51.06.
Project Component, not more than one Commercial Component of an Economic Development Project, located on not more than one Assessment Parcel, and exclusive of any Public Infrastructure Improvements.
Shortfall, the amount certified by the Commissioner in the Annual Certification of New State Tax Revenues by which Debt Service on Bonds allocable to an Occupied Project Component in any fiscal year of the Commonwealth exceeded the amount of New State Tax Revenues derived from the Occupied Project Component in that fiscal year, less the sum of:
(a) any New State Tax Revenues on any other Occupied Project Component that exceeded the Debt Service allocable to such other Occupied Project Component in that fiscal year that is available to reduce this amount plus;
(b) the portion of the cumulative amount of the New State Tax Revenues received through the prior fiscal year of the Commonwealth that exceeded the cumulative amount of the Net Debt Service due and payable on the Bonds through said prior fiscal year that has been transferred to the Agency and not yet used or legally committed to defease or pay a portion of the Bonds. The cumulative construction-related New State Tax Revenue used or legally committed through the current fiscal year shall not exceed 50% of cumulative Debt Service due and payable on any of the Bonds through said current fiscal year.
Sustainable Development Principles, the sustainable development principles in 801 CMR 51.18.
