Proposals to make significant investments in growth industries, establish reasonable regulation of data privacy and reduce the cost of energy all remain in play as the Massachusetts Legislature on Friday passed what was formerly the end-of-session deadline for approving bills. 

Beacon Hill previously operated under rules that required bills to be passed by the end of session on July 31 of even years – unless the measure gathered the unanimous support needed for passage during informal session. Under new rules this year, however, any bill passed by both the House and Senate and under negotiation in a legislative conference committee remains eligible for passage in a “pop-up” formal session during the fall or at year-end. 

That means the 2026 version of AIM’s traditional end-of-session report resembles an interim report rather than a post-mortem on the Legislative session. 

The good news is that the AIM Government Affairs team worked with lawmakers throughout 2025 and 2026 to hammer out key measures that balance the needs of employers with larger policy objectives. No bill is perfect, but legislators and Governor Maura Healey remain open to initiatives designed to grow the Massachusetts economy. 

Economic Development Bond Bill 

Perhaps the most significant item awaiting approval is a sprawling economic-development bill that would invest hundreds of millions of dollars in Massachusetts growth industries. Both House and Senate versions of the economic-development measure authorize new grant programs supporting AI and advanced technology adoption, defense-sector innovation, robotics R&D, food and agricultural technology, and manufacturing facility construction and expansion. 

In addition to significant spending commitments, the House and Senate economic-development bills are both dense with policy proposals. The Senate bill includes 237 unique policies, while the House contains 142. While both branches agree on important issues like reducing the licensing fees for starting an LCC or easing commercial to residential construction rules, they contain several important differences as well. For example, only the Senate contains a “fun agenda” with proposals to allow happy hour and continued public consumption districts, while only House offers new tax credits for video game developers. 

Both bills contain concerning concessions to organized labor; the House bill would extend the prevailing wage past the job site to cover some prefabricated work while the Senate bill would establish state-level labor organizing laws in the event that the National Labor Relations Board stopped functioning.

The bill includes several notable energy provisions. It increases small business eligibility for the sale- tax exemption for the sale of fuel from five employees to 10 employees, and from $1 million gross income to $2 million gross income. It changes the rules around the climatetech tax credit, allowing a tenant and landlord to split the required minimum investment of $5 million in order for the tenant business to receive the tax credit. Currently, the entire minimum investment must be made by the owner in order for the tenant to receive the credit. The bill also requires the Department of Public Utilities to initiate an investigation into economic-development utility rates to support attracting new businesses into the state and promoting the expansion of existing ones. 

Just as important for employers is what is not in the bill. AIM urged legislators to omit a provision supported by the Healey Administration to limit the ability of employers and employees to negotiate payments as part of non-compete agreements. Both chambers left that provision out of their bills so that issue is effectively over this session.  

Data Privacy 

AIM led the effort to ensure that legislation designed to protect consumer online privacy did not simultaneously disadvantage small, Main-Street businesses that depend upon online advertising to compete. 

The association has urged the conference committee to adopt the Senate’s enforcement framework, which grants the Attorney General exclusive jurisdiction for prosecuting violations of the legislation. The House version allows for a private right of action against “large data holders,” a provision AIM believes is an existential threat to the Massachusetts economy. 

At the same time, AIM supports the House approach to establishing a new data-minimization standard. The Senate standard is based on an untested Maryland statute that limits the collection of personal data to what is reasonably necessary to provide or maintain a specific product or service requested by the consumer. That approach could meaningfully alter the online services and experiences that Massachusetts consumers currently use and value.  

Throughout both bills, AIM has advocated consistency and alignment with existing privacy laws in other states. While we ultimately believe that this is an issue that should be governed nationally at the federal level, we believe conformity should be a key principle to reduce overall costs. 

Energy 

The House and Senate both responded as Massachusetts businesses and homeowners struggled with some of the highest energy costs in the nation. Legislators did so while wrestling with Massachusetts’ aggressive clean-energy objectives at a time when the federal government has opposed development of wind, solar and other non-carbon sources of power. 

The House energy bill, passed by the chamber in February, seeks to provide ratepayers with near-term cost relief by reducing the Mass Save budget by $1 billion, and requires that 70% of Alternative Compliance Payments be returned to ratepayers. It also establishes an Electric Rates Task Force to make recommendations on the current and future costs of electricity in Massachusetts. 

The bill proposes to advance several clean-energy and transmission and distribution infrastructure initiatives to grow renewable resources and the ability to move that additional energy. However, it does not bring any meaningful relief to natural-gas supply constraints or the natural-gas price volatility that customers experience during periods of high energy demand. 

The Senate passed its version of the energy bill, one that differs significantly from the House version, on July 1. The Senate version officially changes the legal purpose of the Mass Save program from an energy-efficiency program to an electrification and building decarbonization program and removes gas utilities as administrators of the program in their service territories.  

The bill seeks to phase out the Gas System Enhancement Plan (GSEP) program, which enables utility companies to repair or replace ageing, leaking gas infrastructure in a timely fashion, by 2030 – just four years away. It would also eliminate a utility’s obligation to serve existing natural gas customers, effectively removing customer choice. Additionally, the bill proposes to securitize large, long-term infrastructure investments by allowing utilities to sell rate-reduction bonds, which customers would repay with interest.  

Similar to the House bill, the Senate bill also proposes to advance clean energy initiatives aimed at growing storage, solar, offshore wind, and thermal energy.  

Both bills require all competitive suppliers and brokers to post a financial bond with the Department of Public Utilities (DPU) in order to secure a license to do business in Massachusetts. The House bill sets the bond at $5 million for all competitive suppliers and brokers. The Senate bill sets it at $5 million for suppliers and brokers serving residential customers, and $1 million for suppliers and brokers serving commercial and industrial customers. 

This is an immense financial burden for commercial and industrial suppliers and brokers who find themselves in the crosshairs of a solution meant for a customer protection problem to which they do not contribute. It is also a duplication of rules that already require C&I suppliers and brokers to pay a $1 million bond to the Department of Energy Resources under MGL 25a, Section 11F. 

The two chambers will now seek to reconcile the differences of the texts. The most contentious issues are likely to be securitization, GSEPs, obligation to serve, and each chamber’s very different approach to the Mass Save program. AIM will advocate for positive changes that help lower costs for ratepayers and protect and grow the Commonwealth’s energy supply. 

Health-Care Costs

Environmental Bond Bill 

The Senate passed an environmental bond bill that authorized about $3.64 billion in total financing, while the House’s version of the bill reduced that total by about 18%, to $3.08 billion.  

The Senate bill included a ban on most retail plastic carryout bags and a mandatory 10-cent fee on paper bags. It made single-use food service ware “by request only.” It also created a paint Extended Producer Responsibility (EPR) program that would be funded by a per-container fee at the point of sale. Additionally, the Senate included a $200 million appropriation for coastal and port infrastructure, and created a 21 member Special Commission on Commonwealth Port Development, which would focus on a broad economic-development vision for the fishing, energy, shipping, tourism, and ocean technology industries.  

The House bill removed the ban on plastic bags, limitations on single-use food service ware, and the paint EPR program. It carried through the Senate’s Special Commission on Commonwealth Port Development, and added its own Special Commission on Resilient Urban Coasts to focus specifically on permitting reform for coastal and port properties. It also increased the Senate’s appropriation for coastal and port infrastructure to $250 million. The House bill also exempts rolling stock (trucks, tractors, and trailers) used in interstate commerce from state sales and use tax, bringing Massachusetts into the fold of 37 other states who do so. 

Both bills equip the Department of Environmental Protection with $120 million for PFAS remediation, but do not introduce any new regulatory standards on the use of PFAS. The bills include significant and positive permitting reforms by creating new general licenses and general permits, which will create an efficient and predictable permitting process, helping to reduce delays and administrative burdens for businesses pursuing development, infrastructure, and environmental improvement projects. 

The bills are now in conference committee, which begins its work with two bills that are more similar than different. AIM’s advocacy with the conference committee will focus keeping costs on businesses and consumers down, while reiterating our support for positive reforms and policies that will support economic development. 

Housing 

The Economic Development bill contains novel and interesting proposals which, if adopted, would increase the pace of residential construction in the Commonwealth. Both versions of the bill seek to help businesses convert commercial properties to residential buildings thanks to improved regulations and new tax credits. The House bill adopts provisions from the “Yes in God’s Backyard” proposal that will allow for residential development on property owned by religious institutions. The House also increases funding to Housing Development Incentive Program (HDIP), which supports multifamily development in gateway cities. The Senate offers a bold proposal of its own to allow duplexes on any residential lot with existing single-family homes and provides more generous credits for starter homes.  

The most important housing news of the year happened a few months ago when the state Supreme Judicial Court ruled that a rent-control referendum that could have chilled housing development across the commonwealth could appear on the November ballot. The ballot question would have limited annual rent increases to the annual change in consumer price index (CPI) – which has averaged just 2.58% over the past 20 years – up to a maximum 5%. It would have mandated a one-size-fits-all policy in all 351 communities across Massachusetts, with no opt-out. 

Please contact Stephanie Swanson, Executive Vice President of Government Affairs, at sswanson@aimnet.org, with questions or comments.