An Act Relative to Special Development Districts - Senate Bill 146 & House Bill 159 (Proposed Chapter 40T)

The proposed Chapter 40T creates Special Development Districts (SDDs) that would allow property owners to finance needed public infrastructure improvements without burdening the budgets of the Commonwealth or its cities and towns. SDDs could finance needed infrastructure through the issuance of notes or bonds. The debt service on the bonds would be paid back through a schedule of special assessments on the real estate within the SDD. Special development districts would only be established with the approval of both the local property owners and the city or town.

Proponents note that these Development Zones would allow developers to more efficiently take on big projects and get infrastructure into the ground more expeditiously. 40T would also provide municipalities with a new negotiating tool and allow developers to expend dollars on infrastructure on the same tax-exempt terms that communities and the state currently enjoy. 40T would also compliment existing programs such as District Improvement Financing (DIF) and the Massachusetts Opportunity Relocation and Expansion (MORE) program.

Other states including California, Colorado, Florida, Maryland, Pennsylvania, Texas and Virginia, already have their own versions of Chapter 40T, which are proving successful. Making 40T law would enable Massachusetts to not only compete against these states but would also give the commonwealth a competitive advantage against states that do not have this type of program.

A helpful resource for more information on this proposal is www.chapter40T.com. The Joint Committee on Community Development and Small Business (JCD) reported favorably on HB159 and has since referred the bill to the Joint Committee on Bonding, Capital Expenditures and State Assets (JBC), where it currently sits. SB146 is still before the JCD. The North Central Massachusetts Development Corporation, an affiliate of the Chamber, submitted written testimony supporting both bills for the June 11, 2007 hearing.

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