By Sam Larson
Senior Vice President, Government Affairs 

The Massachusetts House of Representatives passed its economic development bond bill (H.5562) on July 8, capping months of work with a wide-ranging package of investments and policy reforms aimed at keeping the Commonwealth competitive.  

After debating nearly 700 proposed amendments, representatives approved a final package that grew to roughly $561 million in spending as passed, funded through an initial bond authorization of $425.1 million plus additional funding added during floor debate. 
 
For AIM member-companies across manufacturing, life sciences, clean energy, technology, and real estate, the bill touches a lot of what matters most: capital investment, workforce, tax incentives, and the regulatory environment we operate in every day. 

“This bill is a smart, forward-looking investment in Massachusetts’ economy. It backs the industries of the future while helping our communities grow the housing and infrastructure to support them.” Said Brooke Thomson, President and CEO of the Associated Industries of Massachusetts.  

“We thank the House for its steadfast commitment to supporting our member companies with sound, pro-growth economic policies.” 

The state Senate is expected to develop its own economic-development bill before the end of the session. The two chambers will then work out differences between the measures.
 
AIM is pleased to review the provisions that members should know about. 
 
Direct capital investment in growth industries  

The bill authorizes tens of millions of dollars in 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 — funding that will flow through the Executive Office of Economic Development and partner agencies like the Massachusetts Technology Park Corporation and the Massachusetts Development Finance Agency.  

• $25 million — Business facility construction/expansion grants (decarbonization focus)  

• $120 million – Housing support grants to convert underused commercial buildings into housing, support for veteran-supported housing, and funding to remediate former state-owned properties for redevelopment.    

• $75 million — AI technology development in life sciences, healthcare, advanced manufacturing, climatetech, quantum, defense, transportation, robotics  

• $20 million — Early-stage business venture site development  

• $100 million — Defense sector capital and infrastructure  

• $25 million — Robotics R&D (through Technology Park Corporation)  

• $25 million — Downtown/main street economic development grants to municipalities  

• $10 million — Food science and agricultural technology  

• $25 million — Arts, culture, and creative economy  

Housing   

In addition to the $120 million investment, the bill also lets municipalities adopt zoning that will allow commercial-to-residential conversions as of right and standardizes local site plan review procedures statewide.  

Yes in God’s Backyard- The bill incorporates a version of the long-discussed YIGBY proposal, allowing multifamily housing to be built as of right on land owned by religious institutions for the first time. Supporters point to the thousands of underused parcels held by houses of worship statewide as a meaningful new source of housing supply — with density up to 30 units per acre (more with added affordability) and reduced parking requirements near transit.  

The DRIVE Act 

The bill folds in a version of Governor Healey’s DRIVE Act, establishing a $200 million bridge funding reserve to help the state’s public and private nonprofit colleges and universities absorb cuts to federal research funding — protecting research jobs, graduate and postdoctoral positions, and the pipeline of innovation our member companies rely on. 
 
Micromobility 

E-bikes, scooters, and similar devices get a statewide regulatory structure for the first time — safety standards, age and equipment requirements, and registration authority — replacing a patchwork of local rules. 
 
Grid Modernization & Economic Development Utility Rates 

The bill establishes a “gridtech” deployment advisory board to cut red tape on new grid technologies and requires utilities to offer standardized economic development electricity rates to attract and retain large employers.  

Climatech Tax Credit 

The current climatech tax credit statute requires property owners to make a $5 million investment into their facilities for a tenant company to qualify for the tax credit. This bill would update this requirement by allowing the $5 million facility investment requirement to be made by both the property owner and the tenant. This would improve access to the tax credit for companies that do not own their properties. Additional updates to the climatetech program would allow the Massachusetts Clean Energy Center, which administers the program, to award tax credits more frequently and over multiple years. 

Small Business Energy Tax Exemption 

Small businesses with up to 10 employees can now qualify for the sales tax exemption on gas, steam, electricity, and heating fuel. Previously, the exemption was limited to businesses with no more than 5 employees, and the update would make the exemption available to more small businesses. 

Small Business & LLC Fees 

The bill includes language to lower the initial Limited Liability Company (LLC) filing fee from $500 to $100, then raise it each year until returning to $500. Through the amendment process, a provision was added to support microbusinesses, by capping their LLC fees at $200 in the second year and $300 thereafter. This small, yet substantial change will help reduce barriers for new business formation and bring Massachusetts into closer alignment with peer states.  

The Amendment Process 

AIM’s government affairs team was active on behalf of members in the amendment process, successfully pushing back against significant changes that would have harmed business, including: 

Noncompete agreement changes – (the “garden leave” consideration provisions amending c. 149 §24L).  

Labor relations law changes- Would have made the most sweeping changes in decades to Massachusetts private sector labor rights in decades. The package proposed to:   

• Establish an automatic state backstop if federal labor law coverage is reduced or withdrawn was a direct response to concerns about the current federal administration’s approach to the NLRB);  
• Create a card check alternative to NLRB elections;   
• Revive agency fee arrangements for private-sector workers   
• Ban captive audience meetings during organizing campaigns;    
• Broaden who counts as an employee and employer using the “ABC test” which Massachusetts already uses for most employment law issues   
• The health care sector would have received specific attention with both an expanded employer definition and a 10-day strike notice requirement.  

Have questions about how this bill might affect your business? Reach out to me at slarson@aimnet.org.