PETITION OF:

SECTION 1. Chapter 40J of the General Laws is hereby amended by adding after section 12 the following sections:-

Section 13. As used in section 13 and section 14, the following words shall, unless the context clearly requires otherwise, have the following meanings:

"Affiliated company" means a company that is same entity directly or indirectly or owns or controls 5% or more of the voting rights or 5% or more of the value of all classes of stock of the corporation surrendering the tax benefit. "Corporation" shall be the Massachusetts Technology Development Corporation, established pursuant to section 2 of chapter 40G of the General Laws. "New or Expanding Company" means a corporation that: (1) has significant operations in the Commonwealth and (2) has 250 or fewer employees, of whom at least 75% are Massachusetts based employees filling a position or job in the Commonwealth. "Biotechnology company" is a business primarily engaged in the research, development, production, or provision of biotechnology for the purpose of developing or providing products or processes for specific commercial or public purposes, including, but not limited to, medical pharmaceutical, nutritional, and other health-related purposes or an entity engaged in providing services or products necessary for such research, development, production, or provision. "Emerging technology company" means an entity whose headquarters or base of operations is located in Massachusetts, and who employs some combination of the following: highly educated or trained managers and workers, or both, employed in Massachusetts who use sophisticated scientific research service or production equipment, processes or knowledge to discover, develop, test, transfer or manufacture a product or service. "Tax Benefit" means the amount of research and development tax credit, the amount of Investment Tax Credit (ITC), and the amount of unused net operating loss carryover that has not been applied to the current tax year.

Section 14. (a) The Corporation shall establish the Massachusetts Tax Credit Certificate Program, a corporate business tax benefit transfer program to allow new or expanding emerging technology and biotechnology companies with tax benefits to surrender those tax benefits for use by other corporate business taxpayers in the state. (b) The Corporation, with the assistance of the Department of Revenue, shall review and approve applications by new or expanding companies with unused but otherwise allowable tax benefits to surrender those tax benefits in exchange for private financial assistance to be made by the corporate business taxpayer that is equal to at least 75% of the amount of the surrendered tax benefit. The company surrendering the tax benefits shall not be an affiliated company to the corporate business taxpayer that purchases those surrendered benefits. All applications must be received on or before June 30 for the next succeeding state fiscal year. (c) The Corporation may consider the following criteria Program eligibility: (1) the company's long term viability; (2) whether the company's products are sufficiently innovative to provide a competitive advantage; (3) whether the company has sufficient resources to operate in the short term; and (4) whether the proposed financial assistance will result in growth in permanent, full-time employment in the state. (d) The Corporation may require certifications or audits to determine compliance with subsection (c) of this section. (e) The total amount of the tax credit transfers authorized by the Corporation shall not exceed $20,000,000 for any given year. The maximum lifetime value of tax benefits that a company shall be allowed to surrender shall not exceed $5,000,000. No application shall be approved in which the new or expanding company (1) has demonstrated positive net income in any of the two previous full years of ongoing operations as determined on its financial statements; or (2) has demonstrated a ratio in excess of 110% or greater of operating revenues divided by operating expenses in any of the two previous full years of operations as determined on its financial statements; or (3) is directly or indirectly at least 50% owned or controlled by another corporation that has demonstrated positive net income in any of the two previous full years of ongoing operations as determined on its financial statements or is part of a consolidated group of affiliated corporations, as filed for federal income tax purposes, that in the aggregate has demonstrated positive net income in any of the two previous full years of ongoing operations as determined on its combined financial statements. Companies more than 50% owned by venture capital firms or other investor partnerships shall be eligible for participation in the Massachusetts Tax Credit Certificate Program. (f) The Corporation shall issue Corporation Business Tax Benefit Certificates to successful applicants. (g) A corporation that acquires a Corporation Business Tax Benefit Certificate shall enter into a written agreement with the new or expanding company concerning the terms and conditions of the private financial assistance made in exchange for the Corporation Business Tax Benefit Certificate. (h) Any new or expanding business who is applies for a Tax Benefit Certificate under this program shall pay a non-refundable fee of $1000 for their first application and a $500 fee for their second and subsequent applications. (i) The Corporation, in consultation with the Department of Revenue, shall develop additional criteria for program eligibility and promulgate regulations as deemed necessary to implement these sections.