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Senator Spilka Files Economic Reforms Bill Aimed at Economic Growth, Creates MetroWest Tourism and Visitor’s Bureau

February 8, 2010

Senator Karen Spilka (D-Ashland) and Senate President Therese Murray today filed An Act to Promote Economic Development Throughout the Commonwealth, a bill designed to create a more business-friendly and stable economic environment in Massachusetts.

“In this unprecedented economic climate, it is more important than ever that Massachusetts position itself to be economically competitive on a national and global scale,” stated Spilka.  “This legislation will increase taxpayers’ return on investment while growing the state’s economic base.”

In a major victory for her district, the bill also includes the creation of a MetroWest Tourism and Visitor’s Bureau, an idea long-championed by Senator Spilka.  The bureau will be part of the state’s new marketing partnership.

“For years, the MetroWest has been considered part of Greater Boston for the purposes of tourism and marketing,” stated Spilka, “meaning that the dollars generated by our tourist activity went to promote all of Boston, rather than being re-invested here our region.  As with the creation of the MetroWest RTA, when I stopped our transportation dollars from being sent to Boston and created a public transit system for the residents of the MetroWest, I have fought hard and, with this bill, won, the right to keep our tourism dollars in MetroWest.”

The Senate initiative would create 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.  These private organizations would act as the primary contact for businesses seeking assistance from the state and perform business prospect management services on behalf of the Commonwealth.  MOBD would oversee the efforts of these organizations, provide leads, and share information about state programs and services.

“Increased competition amongst the regions for new business will ensure that individual businesses’ needs are attended to and that companies will be more likely to find a fit in Massachusetts,” stated Spilka.  “In addition, with MOBD and the regional organizations providing a clear direction for accessing economic development services, there will be less confusion as to how to access vital resources like technical assistance, grant and loan programs, and expansion support.”

The legislation also provides a boost to small businesses by reducing costs and creating a more favorable climate for entrepreneurship.  The bill requires the filing of an economic impact statement by administrative agencies planning to adopt new regulations that details the cost of the proposed regulations to small businesses, and requires a rolling review of regulations to find and modify those which prove too costly.  Low-cost access to small claims court is also improved by raising the limit on filings from $2,000, where it has been for many years, to $7,000.

Through the creation of the Massachusetts Small Business Finance 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.  The legislation also moves the Economic Stabilization Trust, which provides financial assistance and turnaround consulting to struggling businesses, within this new corporation, further streamlining the steps small businesses need to take to access the help they need.

To assist new small business in getting off the ground, the bill establishes a program of direct expertise for small businesses through the Office of Small Business and Entrepreneurship.  For those small companies that receive financial assistance from the state, finance and management consulting will be mandatory, in an effort to keep companies afloat and prevent job losses.  Finally, the bill authorizes the creation of a $25-50 million program of credit support by the state pension fund to support lending to fast growing small businesses in Massachusetts.

This proposal also seeks to increase accountability and oversight of state agencies, quasi-publics and the state’s contracts with private organizations engaged in economic development activities. So that the Commonwealth can strategically assess its economic development goals over the long-term, each Governor will be required to publish a written economic development policy for the Commonwealth by December 31 of the year he or she is elected.

“Businesses crave consistency and a stable environment,” stated Spilka, who is the Senate Chair of the Joint Committee on Economic Development and Emerging Technologies, “but our approach to economic development has for too long changed with each new administration.  Some governors set forth an economic plan for the state while others do not.  This bill codifies, for the first time, the requirement for executive leadership in this area.”

To promote accountability, communication and coordination, the bill further requires that the Secretary of Housing and Economic Development act as chair of the boards of all state authorities engaged in economic development and business assistance activities.  Those authorities will also be subject to performance management reviews that take into account both output measures, such as the average length of time to return a call, and outcome measures, such as the number of jobs retained as a result of the organizations’ efforts.  All organizations involved in economic development activities, including quasi-public authorities, will be required to submit annual reports to the Secretary of Housing and Economic Development and publish audited financial statements.  Finally, state authorities will be prohibited from using state funds to pay for registered lobbyists.

“Taxpayers who invest in the Commonwealth expect efficiency and accountability and a strong return in terms of new growth, and they deserve nothing less,” stated Spilka.  “This bill moves us closer to that goal.”

The final major objective of the legislation is to streamline 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.  In addition, the duplicative functions within MassDevelopment and the Health and Educational Facilities Authority (HEFA), is eliminated, with HEFA retaining the ability to issue tax-exempt bonds on behalf of non-profit educational institutions and cultural facilities.  Several other agencies, including the Massachusetts Sports and Entertainment Commission and the Massachusetts Industrial Development Authority, are eliminated, with an estimated savings to taxpayers of $1 million a year.

In the most sweeping changes, the legislation would merge those 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, the Massachusetts Sports Partnership and the Massachusetts Export Center will also be included, as would the new MetroWest Tourism and Visitor’s Bureau.

Other provisions of the bill include increased flexibility on tax-increment financing and district improvement financing zones for municipalities, the ability to extend permits for development projects struggling with tight credit conditions, and a study of energy programs and their effect on the cost of doing business in Massachusetts.

“This bill is timely and necessary.  Every job counts in this economy, and I am therefore committed to working with my colleagues to reform our system of economic development activity so that we can be fully focused on job creation,” stated Spilka.  “Not only will these reforms help us gain focus as we pull ourselves out of our current economic situation, but they will provide long-term benefits as we take a more strategic approach to our economic development activities in the future, and build a stronger Commonwealth for everyone.”

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