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 51.17 - Infrastructure Development Assistance Agreement

Universal Citation: 801 MA Code of Regs 801.51

Current through Register 1531, September 27, 2024

(1) The Secretary, Agency, Developer and Municipality shall enter into an Infrastructure Development Assistance Agreement prior to the issuance of any of the Bonds.

(2) The Infrastructure Development Assistance Agreement shall have terms and conditions consistent with the requirements 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, the related Economic Development Proposal and the Secretary's certification of approval of the Economic Development Proposal.

(3) The Infrastructure Development Assistance Agreement shall set forth the finance plan for the Public Infrastructure Improvements, including the amount, structure, date or dates of issuance, security and other relevant terms of the Bonds, and it shall require that the Developer pay the Bond Issuance Fee to the Agency upon the issuance of the Bonds.

(4) The Infrastructure Development Assistance Agreement shall authorize the Agency, upon request of the Secretary, to issue refinancing Bonds to refinance all or a portion of the Bonds originally issued to finance the Public Infrastructure Improvements. No approval of the Municipality shall be required for the issuance of refinancing Bonds unless the issuance of the refinancing Bonds would result in an increase in Debt Service in any fiscal year of the Commonwealth. Upon any refinancing of Bonds that results in a reduction of future Debt Service payments, the Infrastructure Development Assistance Agreement shall be amended to reflect such reduction in Debt Service.

(5) The Infrastructure Development Assistance Agreement shall provide for the Commissioner to issue the Annual Certification of New State Tax Revenues by not later than December 1st in each year in accordance with St. 2006, c. 293, §§ 5 through , as amended by St. 2008, c. 129, §§ 2 through 17 and St. 2012, c. 238, §§ 60 through 63, 801 CMR 51.00 and the DOR Guidance. In order to ensure that the Commissioner has the information necessary to make the determination as to New State Tax Revenues and to issue the Annual Certification as to New State Tax Revenues by December 1st of each year, the Infrastructure Development Assistance Agreement shall require Owners of each Project Component to provide the Annual Data directly to the Commissioner by not later than August 31st of each year. In the event that the Annual Data with respect to any Project Component is not provided to the Commissioner by August 31st, the Annual Certification of New State Tax Revenues with respect to such Project Component shall state that there were no New State Tax Revenues for the prior fiscal year. The Commissioner may, in the Commissioner's sole discretion, waive the August 31st deadline if the Annual Data is provided prior to December 1st with sufficient time for the Commissioner to make the required determination as to New State Tax Revenues prior to December 1st. The Annual Data submitted to the Commissioner will be kept confidential by the Department to the extent required as permitted by law; provided that the Developer and successor Owners shall be required to waive such confidentiality in limited circumstances to permit the Secretary and the Municipal Officers to review the Annual Data as prescribed in the DOR Guidance.

(6) In accordance with St. 2006, c. 293, § 8, as amended by St. 2008, c. 129, §§ 8 and 9 and § 10, as amended by St. 2008, c. 129, §§ 10 through 12, the Infrastructure Development Assistance Agreement shall provide that the Bonds shall be secured by a pledge of the Infrastructure Development Assistance Agreement and the rights of the Agency to receive State Infrastructure Development Assistance in accordance with 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 with the terms of the Infrastructure Development Assistance Agreement. The Infrastructure Development Assistance Agreement shall provide for the State Infrastructure Development Assistance to be paid to the Agency in the amounts and at the times necessary to pay the Debt Service on the Bonds when the same is due and payable. The Infrastructure Development Assistance Agreement shall provide for an administrative fee to be paid to the Agency on a onetime basis or on a periodic basis during the life of the Bonds to cover reasonable costs incurred by the Agency in connection with its ongoing responsibilities related to the Bonds.

(7)

(a) In accordance with St. 2006, c. 293, § 9 of the Infrastructure Development Assistance Agreement shall provide for the Municipality to fix and assess Infrastructure Assessments with respect to each Assessment Parcel commencing with the fiscal year of the Commonwealth following the fiscal year in which the Bonds are issued in amounts sufficient in each fiscal year to reimburse the Commonwealth for the total amount of the Debt Service payable by the Commonwealth during that fiscal year. The Infrastructure Assessments shall be assessed and collected by the Municipality and paid to the Commonwealth by not later than June 30th of the related fiscal year.

(b) The methodology for calculating the amount of the Infrastructure Assessment on each Assessment Parcel provided for in the Infrastructure Development Assistance Agreement shall be consistent with the methodology set forth in the Economic Development Proposal. In the fiscal year of the Commonwealth in which a Project Component becomes an Occupied Project Component, the amount of the Infrastructure Assessment for the related Assessment Parcel shall be equal to a prorated portion of the total Debt Service on the Bonds allocable to such Assessment Parcel payable during that fiscal year based on the number of days in the fiscal year that had elapsed prior to the date on which the related Project Component became an Occupied Project Component.

(c) Pursuant to St. 2006, c. 293, § 10, as amended by St. 2008, c. 129, § 12(d), a Developer may agree in the Infrastructure Development Assistance Agreement to allow the Municipality to fix and assess Infrastructure Assessments with respect to any Assessment Parcel to reimburse the Commonwealth, or to reimburse the Municipal Liquidity Reserve or any credit facility provider thereof to the extent a draw was made by the Commonwealth against the Municipal Liquidity Reserve, to cover all or a portion of any Shortfall. Any such Infrastructure Assessment with respect to an Assessment Parcel with an Occupied Project Component shall be assessed and collected by the Municipality in the fiscal year of the Commonwealth following the fiscal year in which the related Shortfall occurred and shall be paid to the Commonwealth, or shall be applied to reimburse the related Municipal Liquidity Reserve or any credit facility provider thereof to the extent a draw was made by the Commonwealth against the Municipal Liquidity Reserve to cover all or any portion of such Shortfall, by not later than July 1st of the second fiscal year following the fiscal year of the Commonwealth in which the Shortfall occurred. Failure by the Municipality to assess and collect all or any portion of an Infrastructure Assessment to cover a Shortfall, or any failure by the Owner of the related Assessment Parcel to pay any such Infrastructure Assessment, shall not relieve the Municipality of its obligation under St. 2006, c. 293, § 10, as amended by St. 2008, c. 129, §§ 10 through 12, and 801 CMR 51.17(8) to pay Local Development Infrastructure Assistance to the Commonwealth in an amount sufficient, together with any portion of the Infrastructure Assessment that has been assessed, collected and paid to the Commonwealth or applied to reimburse the related Municipal Liquidity Reserve, to cover the Shortfall amount on or before July 1st of the second fiscal year following the fiscal year of the Commonwealth in which the Shortfall occurred.

(8) In accordance with St. 2006, c. 293, § 10, as amended by St. 2008, c. 129, §§ 10 through 12,the Infrastructure Development Assistance Agreement shall provide for the Municipality to pay Local Development Infrastructure Assistance to reimburse the Commonwealth, or to reimburse the related Municipal Liquidity Reserve or any credit facility provider thereof to the extent a draw was made by the Commonwealth against the related Municipal Liquidity Reserve, to cover all or a portion of any Shortfall with respect to any Assessment Parcel on or before July 1st of the second fiscal year following the fiscal year of the Commonwealth in which the Shortfall occurred. If the Developer has agreed to pay Infrastructure Assessments to reimburse the Commonwealth for all or any portion of a Shortfall under St. 2006, c. 293, § 10, as amended by St. 2008, c. 129, § 12(d), and 801 CMR 51.17(7), any such Infrastructure Assessments assessed and collected by the Municipality and paid to the Commonwealth or applied to reimburse the Municipal Liquidity Reserve prior to said July 1st shall be credited against the Municipality's obligation to pay Local Development Infrastructure Assistance to cover the Shortfall. Pursuant to St. 2006, c. 293, § 10(b), as amended by St. 2008, c. 129, § 11, the Infrastructure Development Assistance Agreement shall further provide that, to the extent the Municipality does not pay all or a portion of any Local Development Infrastructure Assistance due to the Commonwealth on any July 1st on which such payment is due, the Secretary shall take the necessary action to withhold the unpaid amount from the local aid amount that would otherwise be distributed by the Commonwealth to the Municipality.

(9) In accordance with St. 2006, c. 293, § 10(b) St. 2008, c. 129, § 11, and 801 CMR 51.00, once the cumulative New State Tax Revenues with respect to a Project Component equal or exceed the Net Debt Service on the Bonds allocable to such Project Component, the Municipality and the Developer shall have no further obligation to provide Local Infrastructure Development Assistance or to pay Infrastructure Assessments with respect to any of the Debt Service on such Bonds that first becomes due and payable thereafter.

(10)

(a) The Infrastructure Development Assistance Agreement shall require that the Agency:

1. deposit any portion of the State Infrastructure Development Assistance paid in any fiscal year that is in excess of the Debt Service due and payable in such fiscal year in a redemption fund or escrow fund pledged to the payment of the Bonds;

2. invest those amounts in permissible investments under the related bond indenture and subject to the approval of the Secretary; and

3. apply those amounts and the investment earnings thereon to prepay Bonds in accordance with a prepayment plan approved by the Secretary.

(b) Upon any prepayment of Bonds as a result of a prepayment of State Infrastructure Development Assistance that results in a reduction of future Debt Service payments, the Infrastructure Development Assistance Agreement shall be amended to reflect the reduced Debt Service amounts.

(11) The Infrastructure Development Assistance Agreement shall provide that the Municipal Liquidity Reserves required to be established for each Assessment Parcel 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, and 801 CMR 51.00 be held by the Municipality as segregated funds of the Municipality for the benefit of the Commonwealth. The Infrastructure Development Assistance Agreement shall further provide that each Municipal Liquidity Reserve be funded in an amount, or have a credit facility approved by the Secretary payable to the Commonwealth in an amount, equal to or greater than twice the maximum annual Debt Service on the Bonds allocable to the related Assessment Parcel. In the event that the Annual Certification of New State Tax Revenues indicates that there was a Shortfall in the prior fiscal year of the Commonwealth with respect to any Occupied Project Component, the Commonwealth shall have the right under the Infrastructure Development Assistance Agreement to require that the Municipality, or the credit facility provider, if applicable, transfer, within ten days of receipt of a written direction to that effect from the Secretary, the Municipality, or the credit facility provider, if applicable, to the Commonwealth from the related Municipal Liquidity Reserve an amount equal to such Shortfall to reimburse the Commonwealth for the portion of the State Infrastructure Development Assistance paid in the prior fiscal year that was equal to the Shortfall. In the event that the Commonwealth draws on a Municipal Liquidity Reserve to cover all or any portion of a Shortfall, the Municipality's obligation to pay Local Infrastructure Development Assistance, and any obligation of the Developer to pay Infrastructure Assessments, to reimburse the Commonwealth for such Shortfall or for the portion thereof that was drawn from the Municipal Liquidity Reserve shall be applied to reimburse the Municipal Liquidity Reserve, or the credit facility provider, if applicable, as provided in 801 CMR 51.00. The Infrastructure Development Assistance Agreement shall further provide that, following the final payment of the related Bonds, any cash-funded Municipal Liquidity Reserve shall be disposed of in either of the following ways, as provided in the Infrastructure Development Assistance Agreement:

(a) transfer any remaining cash in the related Municipal Liquidity Reserves to the public entity that owns the infrastructure for the sole purpose of making improvements to the Public Infrastructure Improvements financed with the Bonds; or

(b) transfer any remaining cash in the related Municipal Liquidity Reserve to the entity that originally funded the reserve.

(12) The Infrastructure Development Assistance Agreement shall provide for the plans and specifications of the Public Infrastructure Improvements to be subject to the review and approval of the Municipality, the public entity that shall own and maintain all or a portion of the Public Infrastructure Improvements if not the Municipality and the Commonwealth. The Infrastructure Development Assistance Agreement shall also provide for the Municipality, the public entity that shall own and maintain all or a portion of the Public Infrastructure Improvements if not the Municipality and the Commonwealth to have the right to inspect and monitor the construction of the Public Infrastructure Improvements. For this purpose, the Municipality, the public entity that shall own and maintain all or a portion of the Public Infrastructure Improvements if not the Municipality and the Commonwealth may jointly engage an independent engineer or other appropriate professional with expertise in the design or construction of public infrastructure similar to the Public Infrastructure Improvements (the "Independent Construction Agent"), and any such Independent Construction Agent shall be funded from proceeds of the Bonds as a Cost of the Public Infrastructure Improvements. The Infrastructure Development Assistance Agreement shall further provide that the Developer must requisition disbursement of proceeds of the Bonds from the Agency to pay Costs of the Public Infrastructure Improvements and that the Commonwealth, the Municipality and the public entity that shall own and maintain all or a portion of the Public Infrastructure Improvements if not the Municipality , acting through the designated Independent Construction Agent or through any designated employee or employees of the Commonwealth, the Municipality or of the public entity that shall own and maintain all or a portion of the Public Infrastructure Improvements if not the Municipality, must approve any such disbursements by the Agency.

(13) The Infrastructure Development Assistance Agreement shall require that the Developer provide evidence to the Secretary and the Municipality of having complied with the competitive procurement process for the selection of a contractor or contractors for the construction of the Public Infrastructure Improvements that was proposed by the Developer in the related Economic Development Proposal, with any modifications to the process that may have been required by the Secretary, including copies of the bid solicitation and bids submitted and written evidence that the basis of the selection made was consistent with the criteria set forth in the bid solicitation.

(14) The Infrastructure Development Assistance Agreement shall require that the Developer pay any Costs of the Public Infrastructure Improvements in excess of the amount to be funded from proceeds of the Bonds as provided in the Economic Development Proposal approved by the Secretary; provided that the Infrastructure Development Assistance Agreement may provide for the Municipality, or the public entity that shall own and maintain the Public Infrastructure Improvements if not the Municipality, to cover all or a portion of such costs.

(15) The Infrastructure Development Assistance Agreement shall require that, prior to the issuance of the Bonds, the Developer shall have caused its contractors for the Economic Development Project to have obtained payment, performance and lien bonds from providers satisfactory to the Secretary to secure the contractors' obligations to complete the construction of the Economic Development Project, or, if the Economic Development Project is a Phased Project, the related phase of the Economic Development Project, including the related Public Infrastructure Improvements, and to have provided for the Developer and the Agency to be co-obligees on any such payment, performance and lien bonds related to the Public Infrastructure Improvements being financed in whole or in part from proceeds of the Bonds payable in an amount equal to or greater than the related Bonds, or that the Developer shall have provided other security satisfactory to the Secretary as provided for in the Economic Development Proposal and in the Secretary's approval thereof.

(16) The Infrastructure Development Assistance Agreement shall require that, prior to the issuance of the related Bonds, the Developer shall enter into an agreement among the Developer, the Developer's construction lender, and the Agency on terms and conditions acceptable to the Secretary which requires the construction lender to advance loan proceeds on the Developer's behalf to pay for the costs of completing Public Infrastructure Improvements that are not being funded from proceeds of the Bonds, notwithstanding whether or not the construction lender's loan with the Developer is in default, or that the Developer shall have provided such other security satisfactory to the Secretary as provided for in the Economic Development Proposal and in the Secretary's approval thereof.

(17) In accordance with St. 2006, c. 293, § 12 as amended by St. 2008, c. 128, § 17, section 12A, the Infrastructure Development Assistance Agreement shall require that, prior to the issuance of the Bonds, the Developer certify to the Secretary and the Municipality that:

(a) the Developer has properly classified and will at all times properly classify any individuals it employs to work on the Public Infrastructure Improvements, and it will require documentation from any contractor it engages to work on the Public Infrastructure Improvements confirming that any such contractor will properly classify individuals it employs to work on the Public Infrastructure Improvements;

(b) the Developer has complied and will at all times comply with the all laws concerning workers' compensation insurance coverage, unemployment insurance, social security taxes and income taxes with respect to all such employees, and it will require documentation from any contractor it engages to work on the Public Infrastructure Improvements confirming that any such contractor will at all times comply with these laws; and

(c) the Developer will require documentation from any contractor it engages to work on the Public Infrastructure Improvements showing that all of the employees of the contractor working on the Public Infrastructure Improvements have hospitalization and medical benefits that meet the minimum requirements of the Connector Board established in M.G.L. c. 176Q.

(18) In accordance with St. 2006, c. 293, § 6(e) of the Infrastructure Development Assistance Agreement shall provide that:

(a) the Developer shall be responsible for all costs and expenses of the Economic Development Project, including the costs of operating and maintaining all Public Infrastructure Improvements prior to their conveyance to the Municipality or to any other governmental entity designated to be the owner of the Public Infrastructure Improvements in the Economic Development Proposal, except for any Costs to be funded from proceeds of the Bonds 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, 801 CMR 51.00 and the Economic Development Proposal approved by the Secretary; and

(b) the Municipality, or such other governmental entity, shall be responsible for operating and maintaining the Public Infrastructure Improvements following the conveyance, provided that the Municipality or other governmental entity may contract with the Developer to operate and maintain the Public Infrastructure Improvements for the period of time following the conveyance and in accordance with such other terms and conditions as the parties shall deem appropriate and desirable. The Infrastructure Development Assistance Agreement shall set forth the terms and conditions for the conveyance. If the Public Infrastructure Improvements are to be conveyed to a governmental entity other than the Municipality, the governmental entity shall be a party to the Infrastructure Development Assistance Agreement for the purpose of the requirements of 801 CMR 51.(18)(b).

(19) Each Infrastructure Development Assistance Agreement shall include the following equal opportunity provisions:

(a) During the performance of this agreement, the Developer agrees as follows:

1. The Developer will not discriminate against any employee or applicant for employment because of race, color, religion, sex, national origin, sexual orientation or disability. The Developer will take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, color, religion, sex, national origin, sexual orientation or disability. Such action shall include, but not be limited to the following: employment, upgrading, demotion, or transfer, recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. The Developer agrees to post in conspicuous places, available to employees and applicants for employment, notices to be provided by the contracting officer setting forth the provisions of this nondiscrimination clause.

2. The Developer will, in all solicitations or advertisements for employees placed by or on behalf of the Developer, state that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex, national origin, sexual orientation or disability.

3. In the event of the Developer's non-compliance with the nondiscrimination clauses of this agreement or with any of such rules, regulations, or orders, the Secretary may: fine the Developer for each instance of non-compliance; refrain from extending any further assistance to the Developer for the Public Infrastructure Improvements until satisfactory assurance of future compliance has been received from the Developer; and refer the case to the Office of the Attorney General for appropriate legal proceedings.

(b) The Developer hereby agrees that it will incorporate or cause to be incorporated into any contract for construction work, or modification thereof, which is paid for in whole or in part with funds from State Infrastructure Development Assistance pursuant to this agreement, the following equal opportunity clause:

During the performance of this contract, the contractor agrees as follows:

1. The contractor will not discriminate against any employee or applicant for employment because race, color, religion, sex, national origin, sexual orientation or disability. The contractor will take affirmative action to ensure that applicants are employed, and that employees are treated during employment without regard to their race, color, religion, sex, national origin, sexual orientation or disability. Such action shall include, but not be limited to the following: employment, upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. The contractor agrees to post in conspicuous places, available to employees and applicants for employment, notices to be provided setting forth the provisions of this nondiscrimination clause.

2. The contractor will, in all solicitations or advertisements for employees placed by or on behalf of the contractor, state that all qualified applicants will receive considerations for employment without regard to race, color, religion, sex, national origin, sexual orientation or disabiliy.

3. The contractor will send to each labor union or representative of workers with which he has a collective bargaining agreement or other contract or understanding, a notice to be provided advising the said labor union or workers' representatives of the contractor's commitments under 801 CMR 51.17, and shall post copies of the notice in conspicuous places available to employees and applicants for employment.

4. The contractor will furnish all information and reports required by the assistance agreement or by the Secretary, and will permit access to his or her books, records, and accounts by the Secretary for purposes of investigation to ascertain compliance with the assistance agreement and orders of the Secretary.

5. In the event of the contractor's noncompliance with the nondiscrimination clauses of this contract, the assistance agreement or orders of the Secretary, the assistance agreement may be canceled, terminated, or suspended in whole or in part.

6. The contractor will include the portion of the sentence immediately preceding the provisions of 801 CMR 51.17(19)(b)1. through 5. in every subcontract or purchase order, so that such provisions will be binding upon each subcontractor or vendor. The contractor will take such action with respect to any subcontract or purchase order as the Secretary may direct as a means of enforcing such provisions, including sanctions for noncompliance.

(c) The Developer agrees to assist and cooperate actively with the Secretary or a designee in obtaining the compliance of contractors and subcontractors with the equal opportunity clause and the agreement and relevant orders of the Secretary, and to furnish the Secretary such information as may require for the supervision of such compliance, and to otherwise assist the Secretary in the discharge of the Secretary's responsibility for securing compliance.

The Developer further agrees that he or she will refrain from entering into any contract or contract modification subject to the agreement, with a contractor debarred from federal or state government construction contracts. In addition, the Developer agrees that if he fails or refuses to comply with these undertakings, the Secretary may take any or all of the following actions: fine the Developer for each instance of non-compliance; refrain from extending any further assistance to the Developer for the Public Infrastructure Improvements until satisfactory assurance of future compliance has been received from such Developer; and refer the case to the Office of the Attorney General for appropriate legal proceedings."

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