June 29, 2009
To the Honorable Senate and House of Representatives:
Pursuant to Article LVI, as amended by Article XC, Section 3 of the Amendments to the Constitution of the Commonwealth of Massachusetts, I am returning to you for amendment Sections 31 and 40 of House Bill No. 4129, "An Act Making Appropriations for the Fiscal Year 2010 for the Maintenance of the Departments, Boards, Commissions, Institutions and Certain Activities of the Commonwealth, for Interest, Sinking Fund and Serial Bond Requirements and for Certain Permanent Improvements."
Sections 31 and 40 require public disclosure and analysis of the results of refundable or transferable tax credit programs, including the number of jobs created. I strongly support the purposes of these sections, and I proposed language to accomplish these purposes in my own budget.
As enacted, however, these sections omit important information -- especially the identity of the taxpayer -- necessary to analyze fully the effect of these tax credit programs. While in general I support strict confidentiality of taxpayer information, these refundable or transferable tax credit programs are no different from other state grant programs, where the recipient's identity has always been a public record. Transparency and analysis of these programs requires the same treatment. I am also recommending some administrative improvements recommended by the Department of Revenue since I made my original proposal.
For these reasons, I recommend that Sections 31 and 40 be amended by striking out their text and inserting in place thereof the following text:-
SECTION 31. Section 1 of chapter 62C of the General Laws, as appearing in the 2008 Official Edition, is hereby amended by inserting before the definition of "Building contractor" the following definition:-
"Administering agency head", the agency head responsible for administering the applicable state tax credit program. For the brownfields tax credit and the film tax credit the administering agency head is the department of revenue. For the medical device tax credit, the administering agency head is the Massachusetts life sciences center.
SECTION 31A. Said section 1 of chapter 62C of the General Laws, as so appearing, is hereby further amended by striking out the definition of "Code.
SECTION 31B. Said section 1 of chapter 62C, as so appearing, is hereby further amended by inserting after the definition of "Promoter" the following definition:-
"Secretary", the secretary of administration and finance.
SECTION 31C. Said section 1 of chapter 62C, as so appearing, is hereby further amended by inserting after the definition of "Show" the following definition:-
"Tax credit program", one of the following credits against the state income tax to stimulate economic development and other policy goals: the brownfields tax credit in section 38Q of chapter 63 and subsection (j) of section 6 of chapter 62; the dairy farmer tax credit in section 38Z of chapter 63 and subsection (o) of section 6 of chapter 62; the FDA user fees credit in section 31M of chapter 63 and subsection (n) of section 6 of chapter 62; the film tax credit in subsection (b) of section 38X of chapter 63 and subsection (l) of section 6 of chapter 62; the historic rehabilitation tax credit in section 38R of chapter 63 and section 6J of chapter 62; the life sciences investment tax credit in section 38U of chapter 63 and subsection (m) of section 6 of chapter 62; the low-income housing tax credit in section 31H of chapter 63 and section 6I of chapter 62; the medical device tax credit in section 31L of chapter 63 and section 6 1/2 of chapter 62; and the refundable research credit in subsection (j) of section 38M of chapter 63.
SECTION 40. Said chapter 62C is hereby further amended by adding the following section:-
Section 88. (a)(1) On or before May 15 each year, the administering agency head of each tax credit program shall submit a report to the commissioner on each tax credit program authorized for the previous calendar year, in this section called the report, which shall be a public record.
(2) The report shall contain the following information:
(i) the identity of each taxpayer authorized by the administering agency head to receive a tax credit;
(ii) the amount of tax credit award and issued tax credit for each taxpayer and each project, if applicable;
(iii) the date of the tax credit award or issued tax credit for each taxpayer and each project; and
(iv) additional data and criteria that the secretary determines to be relevant to analyzing the effectiveness of that tax credit program.
(b)(1) On or before February 15 of every year, each taxpayer receiving an authorized tax credit from the administering agency head in the previous calendar year shall submit data and analysis reasonably determined by the Secretary to be relevant to analyzing the effectiveness of the tax credit program.
(2) On or before May 15 of each year, or by another date that the secretary determines to be practicable, the administering agency head shall submit to the commissioner, in a form prescribed by the commissioner, copies of any data and analysis required by paragraph (1), with the report required by subsection (a). The commissioner shall provide this information on a government internet website for public disclosure.