Moore votes for incentives to jump start public infrastructure improvements

March 28, 2008 ... During Thursday’s formal session, Sen. Richard T. Moore, D-Uxbridge, and his colleagues in the Senate approved legislation to help municipalities and developers funding public infrastructure projects that will create thousands of jobs for the Commonwealth. The bill improves an existing mechanism to finance work on streets, sidewalks, water and sewer lines, storm drainage facilities and street lights.

The Infrastructure Investment Incentive bill, or “I-Cubed”, makes significant changes to the original law passed in 2006, including increased funding, revenue safeguards and expanded community access.

“This legislation encourages public and private partnerships on essential infrastructure projects that are part of new developments,” said Moore. “Considering that municipalities are spending every dollar carefully and with the utmost scrutiny, this legislation can certainly provide a boost to our economy at just the right time.”

The new legislation includes built-in safeguards to protect the Commonwealth from any loss of revenue, ensuring that all procurement laws apply to funded projects and that laws relating to health, workers compensation and unemployment insurance are adhered to by developers.

The bill allows Massachusetts to invest in infrastructure projects by issuing up to $250 million in bonds – $50 million more than the original law. This change makes I-Cubed funding more widely available to eligible economically distressed areas.

The new legislation also eliminates the five-project cap and a sunset date instituted by the original law, thereby making I-Cubed funding an option for more projects in more communities.

How I-Cubed works:

Through the sale of bonds, the state provides the initial capital money to build the project.

Once a project is approved, the parties (the state, the municipality, and the developer) enter into an agreement that lays out the requirements for special real estate tax assessments and payment of the debt service.

Project developers are then responsible for the debt service payments. Once the project is up and running, the debt service payments are made through the new revenues generated by the project.

Bonds are repaid by the tax assessments on development parcels that benefit from the infrastructure improvements.

This entire concept is dependent upon agreements between the municipality, the developer and the Commonwealth. Studies are conducted to find out how much new revenue a project is expected to generate, and the amount of debt service paid on the bonds is calculated to ensure that all outstanding debts are covered by the new project.

The bill will now go to the House of Representatives for further action.

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