Bill > H2503

This bill establishes the Massachusetts New Markets Tax Credit program to encourage investment in economically distressed communities by offering tax credits to entities making qualified equity investments in qualified community development entities. These qualified community development entities, which must be certified by the Department of Housing and Economic Development and have a service area that includes Massachusetts, will then use the invested funds to make qualified low-income community investments, such as loans or equity investments, in qualified active low-income community businesses located within the state. The tax credits are calculated based on an "applicable percentage" of the investment amount and are applied against an entity's state premium tax liability, with provisions for carrying forward unused credits and limitations on the total amount of credits that can be awarded annually. The bill also outlines specific requirements for qualified community development entities, including application procedures, reporting obligations, and conditions under which tax credits can be recaptured, such as early redemption of debt or failure to invest in qualifying businesses within the state. Importantly, the bill includes a "refundable performance fee" that qualified community development entities must pay to the department as assurance of compliance, which can be forfeited if certain conditions are not met, though a six-month cure period is provided for most noncompliance issues.