COMMUNITY ECONOMIC DEVELOPMENT ASSISTANCE CORPORATION

M.G.L. pt. Part I, tit. Title VII, ch. c. 40H

in effect

M.G.L. c. 40H, § 1 Public purpose

c. 40H, § 1. Public purpose Section 1. The general court finds and declares that: (a) the commonwealth has already designated certain chronically depressed areas, and may hereafter designate other such areas, as target areas; (b) the development of these target areas will promote employment and the fuller utilization of local resources and will enhance the fiscal health of the commonwealth and its cities and towns; (c) the commonwealth has already implemented policies designed to provide capital and other financial assistance to community development corporations and other organizations seeking to alleviate the debilitating conditions characterizing these target areas, but the lack of technical assistance to these organizations inhibits the commonwealth's ability to redevelop such areas; (d) due to the critical shortage of housing in the commonwealth that is affordable to persons of low and moderate income, the preservation of existing and the creation of new housing that is affordable to persons of low and moderate income will enhance the fiscal health of the economy of the commonwealth; (e) therefore, it is in the public interest of the commonwealth to promote the prosperity and general welfare of its citizens, a public purpose for which public money may be expended, to provide technical and financial assistance and related services to community development corporations, nonprofit corporations and other organizations, to promote the revitalization of target areas and to preserve and develop housing affordable to low and moderate income persons; and (f) the creation of the Community Economic Development Assistance Corporation will assist in serving these public purposes.

M.G.L. c. 40H, § 2 Definitions

c. 40H, § 2. Definitions Section 2. The following terms as used in this chapter shall have the following meanings, except when the context clearly indicates otherwise:— ''Affordable housing'', a dwelling unit: (i) rented to a household whose annual income, adjusted for family size, is equal to or less than 80 per cent of the median income of the Metropolitan Statistical Area, Primary Metropolitan Statistical Area or nonmetropolitan county in which the dwelling unit is located, as such median income is determined from time to time by the United States Department of Housing and Urban Development or any successor agency; or (ii) sold to and occupied by a household whose annual income, adjusted for family size, is equal to or less than 100 per cent of the aforesaid median income. ''Board'', the board of directors of the CEDAC. ''CDC'' or ''Community Development Corporation'', a non-profit corporation organized under chapter 180, and exempt from taxation under section 501(c) of the Internal Revenue Code and which: (a) focuses a substantial majority of the corporation's efforts on serving 1 or more specific neighborhoods or municipalities, a region of the commonwealth or a constituency that is economically disadvantaged; (b) has as the corporation's purpose to engage local residents and businesses to work together to undertake community development programs, projects and activities which develop and improve urban, rural and suburban communities in sustainable ways that create and expand economic opportunities for low and moderate income people; (c) demonstrates to the executive office of housing and livable communities that the corporation's constituency, including low and moderate income people, is meaningfully represented on the board of directors of the corporation; provided, however, that in making this determination, the executive office shall consider the following criteria: (1) the percentage, if any, of the board that is elected by the general membership; (2) the percentage of the board members that are residents of the service area; (3) the percentage of board members that are people of low or moderate income; (4) the racial and ethnic composition of the board in comparison to the racial and ethnic composition of the community being served; (5) other mechanisms, including committees, membership meetings, that the organization uses to ensure that their constituency has a meaningful role in the governance and direction of the organization; and (6) other criteria as determined by the executive office. ''CEDAC'' or ''Corporation'', the Community Economic Development Assistance Corporation. ''Eligible organization'', a CDC, a nonprofit corporation or such other entity or organization, including a public agency and a limited equity cooperative housing corporation organized under or subject to chapter 157B which the board determines to be engaged primarily in activities intended: (i) to contribute to the development and economic well–being of a target area or areas, and to increase or retain primary employment and capital in a target area or areas; or (ii) to contribute to the preservation of existing or the creation of new affordable housing. ''Primary employment'', work which pays at least one and one half times the minimum wage as defined in chapter one hundred fifty-one or as established by federal law, whichever is higher, offers adequate fringe benefits including health insurance, and is not seasonal or part-time. ''Target area'', a contiguous geographic area in which the project is located and is: (1) an economic target area designated under section 3G of chapter 23A, or meeting the criteria for such designation; (2) the service area of community development corporation; or (3) a zip code whose current unemployment rate exceeds the state unemployment rate by at least 25 per cent or whose mean household income is at or below 80 per cent of the state mean household income as of the most recent decennial census. ''Technical and financial assistance'', professional, financial and other assistance to assist eligible organizations to plan, organize and implement economic activities which may reasonably be expected: (i) to contribute to the development and economic well-being of a target area or areas, and to increase or retain primary employment and capital in a target area or areas; or (ii) to contribute to the preservation of existing or the creation of new affordable housing.

M.G.L. c. 40H, § 2A Certification and recertification of organizations as community development corporations; annual report

c. 40H, § 2A. Certification and recertification of organizations as community development corporations; annual report Section 2A. (a) The secretary of housing and livable communities shall establish and maintain a list of organizations that have been certified as CDCs consistent with this chapter and develop a process for certifying those organizations; provided, however, that the organizations shall be recertified at least once every 4 years. The process shall include an analysis of the organization's governance and a determination of whether the organization's constituency, including low and moderate income persons, is meaningfully represented on the board of directors of the organization. In making such determination, the director shall consider the following criteria: (i) the percentage, if any, of the board that is elected by the general membership; (ii) the percentage of the board members who are residents of the service area; (iii) the percentage of board members that are persons of low or moderate income; (iv) the racial and ethnic composition of the board in comparison to the racial and ethnic composition of the community that the organization serves; (v) other mechanisms, including committees, membership meetings and others that the organization uses to ensure that the organization's constituency has a meaningful role in the governance and direction of the organization; and (vi) other criteria as determined by the secretary of housing and livable communities. (b) The secretary of housing and livable communities shall file an annual report on December 15 with the speaker of the house of representatives, the president of the senate, the chairs of the house and senate committees on ways and means, the chairs of the joint committee on housing, and the chairs of the joint committee on community development and small business providing: (i) a list of certified CDCs in the commonwealth; and (ii) a summary of programs, initiatives or partnerships operated by the the executive office of economic development, the executive office of housing and livable communities, and the agencies and quasi-public agencies organized under either of said executive offices, that are designed to build the capacity of CDCs, provide training or technical assistance to CDC employees or board members, provide funding to support CDCs and their programs, projects and initiatives and otherwise help CDCs to engage local residents and businesses to work together to undertake programs, projects and activities which develop and improve urban, rural and suburban communities by creating and expanding economic opportunities for low and moderate income persons together with recommendations for action to enhance the ability of CDCs to advance those activities.

M.G.L. c. 40H, § 3 Creation; public instrumentality; board of directors; officers and employees

c. 40H, § 3. Creation; public instrumentality; board of directors; officers and employees Section 3. (a) There is hereby created a body politic and corporate, to be known as the Community Economic Development Assistance Corporation or CEDAC. CEDAC is hereby constituted a public instrumentality and the exercise by CEDAC of the power conferred by this chapter shall be deemed to be performance of an essential governmental function. The corporation is hereby placed in the executive office of housing and livable communities but shall not be subject to the supervision or control of any executive office, department, division, commission, board, bureau or agency except to the extent and in the manner provided by law. (b) The corporation shall be governed and its corporate powers exercised by a board of directors, which shall consist of 9 directors, 1 of whom shall be the secretary of the housing and livable communities or a designee, who shall serve as chair, 3 of whom shall be appointed by the governor from among persons who are officers or employees of the commonwealth having related program responsibilities and five other persons appointed by the governor, one of whom shall be a member of a CDC, one of whom shall be a representative of a community action program, one of whom shall be familiar with economic development finance, and two of whom shall be experienced in community economic development. Each member appointed by the governor, who is not an officer or employee of the commonwealth, shall serve for a term of five years, except that in making the initial appointments the governor shall appoint one member to serve for one year, one member to serve for two years, one member to serve for three years, one member to serve for four years, and one member to serve for five years. Any person appointed to fill a vacancy in the office of a member shall be appointed in a like manner as and shall serve for only the unexpired term of such member. Any member shall be eligible for reappointment. Any member may be removed from his appointment by the governor for cause. (c) Five members of the board shall constitute a quorum and the affirmative vote of five members shall be necessary for any action to be taken by the board. The members of the board shall serve without compensation, but each member shall be entitled to reimbursement for his actual and necessary expenses incurred in the performance of his official duties. (d) The provisions of chapter two hundred sixty-eight A shall apply to all directors, officers and employees of CEDAC, except that the corporation may purchase from, sell to, borrow from, loan to, contract with or otherwise deal with any eligible organization in which any director of the corporation is in any way interested or involved; provided, that such interest or involvement is disclosed in advance to the members of the board and recorded in the minutes of the board; and provided, further, that no director having such an interest or involvement may participate in any decision of the board relating to such eligible organization. (e) The board shall hire an executive director and shall establish his salary. The executive director shall be the chief administrative and operational officer of the corporation and shall direct and supervise its administrative affairs and general management. The executive director may, subject to the general supervision of the board, employ other employees, consultants, agents, including counsel, and advisors, and shall attend meetings of the board. (f) Neither CEDAC nor any of its officers, agents, employees, consultants or advisors shall be subject to the provisions of sections nine A, forty-five, forty-six and fifty-two of chapter thirty or to chapter thirty-one, or to the provisions of chapter two hundred of the acts of nineteen hundred and seventy-six. (g) The directors shall annually elect one of their members as vice chairman and designate a secretary and a treasurer who need not be members of the board. The secretary shall keep a record of the proceedings of the corporation and shall be the custodian of all books, documents, and papers filed with the corporation, the minute books of the corporation and its official seal. The secretary shall cause copies to be made of all minutes and other records and documents of the corporation and shall certify that such copies are true copies, and all persons dealing with the corporation may rely upon such certification. (h) All officers and employees of CEDAC having access to its cash or negotiable securities shall give bond to CEDAC, at its expense in such amount and with such surety as the board may prescribe. The persons required to give bond may be included in one or more blanket or scheduled bonds.

M.G.L. c. 40H, § 4 Powers

c. 40H, § 4. Powers Section 4. CEDAC shall have the following powers: (a) to make, amend and repeal bylaws, rules and regulations for the management of its affairs; (b) to adopt an official seal; (c) to sue and be sued, in its own name; (d) to make contracts and execute all instruments necessary or convenient for the exercise of its power and functions; (e) to acquire, own, hold and dispose of personal property of any nature or any interest therein; (f) to enter into agreements or other transactions with any federal, state or municipal agency; (g) to provide technical and financial assistance, either to particular eligible organizations or in the form of assistance, such as the publishing of materials or holding of conferences or the like, intended to contribute to the public purposes of this chapter generally; (h) to appear in its own behalf before boards, commissions, departments or other agencies of municipal, state or federal government; (i) to procure insurance against any losses in connection with its property in such amounts and from such insurers, as may be necessary or desirable; (j) to apply for and accept grants, loans, advances and contributions from any source of money, property, labor or other things of value, to be held, used and applied for the purposes of this chapter; (k) to provide and pay for such advisory services and technical and financial assistance as may be necessary or desirable to carry out the purposes of this chapter; (l) to exercise any other powers of a corporation organized under chapter 156B; and (m) to do all things necessary or convenient to carry out its purposes and exercise the powers expressly granted in this chapter.

M.G.L. c. 40H, § 5 Technical and financial assistance; eligible organizations; standards; preference to certain projects

c. 40H, § 5. Technical and financial assistance; eligible organizations; standards; preference to certain projects Section 5. CEDAC may, subject to appropriation by the general court or funds made available from any other public or private source and pursuant to rules and regulations adopted by it, provide technical and financial assistance to particular eligible organizations or projects intended to contribute to the public purposes of this chapter generally; provided, however, that preference shall be given to projects in which community controlled organizations or community action programs have, or will have, an ownership interest; and provided further, that before providing technical and financial assistance to a particular eligible organization, CEDAC shall find and incorporate in its minutes that: (1) the eligible organization is devoting a substantial part of its efforts to activities intended to contribute to the redevelopment and economic well–being of target areas and to increase or retain primary employment and capital in target areas or to activities intended to preserve existing or create new units of affordable housing; and (2) technical and financial assistance shall be used solely for a particular project which meets the following standards: (i) the project is within a target area and may reasonably be expected to contribute to the redevelopment and economic well–being of the target area within which it is located and to increase or maintain threatened primary employment and capital within such target area, or if the project may reasonably be expected to preserve existing or create new units of affordable housing; (ii) the project has provided reasonable assurance that it will conform to all applicable environmental, zoning and building laws; (iii) the benefits of the project, including the addition or retention of primary employment and of capital in the project's target area, shall primarily accrue to the residents of such target area, or a portion of the dwelling units in the project shall constitute or otherwise qualify as affordable housing; (iv) there is a reasonable expectation that the project will be successful and that the eligible organization and project participants are responsible parties; (v) the private sector has not provided sufficient primary employment opportunities in the project's target area; (vi) alternative sources, including other agencies and subdivisions of the commonwealth and of the federal government, for technical and financial assistance have been sought and are either insufficient or unavailable to meet the needs of the project; (vii) the technical and financial assistance to be provided is essential to the success of the project; and (viii) provision has been made for the active participation of residents of the target area in the project; and (3) adequate provisions have been made for reporting by the eligible organization and the project concerning the manner in which the technical and financial assistance is used and the extent to which it achieves its intended results. Such findings by CEDAC shall be conclusive. In providing technical and financial assistance to eligible organizations, CEDAC shall give preference to projects that provide potential benefits in addition to those listed herein.

M.G.L. c. 40H, § 6 Report of activities

c. 40H, § 6. Report of activities Section 6. CEDAC shall annually submit a complete and detailed report of the corporation's activities within ninety days after the end of the fiscal year to the clerk of the house of representatives and to the clerk of the senate.

M.G.L. c. 40H, § 7 Audit of books and records

c. 40H, § 7. Audit of books and records Section 7. The books and records of the Community Economic Development Assistance Corporation shall be subject to an audit by the state auditor, in accordance with generally accepted government auditing standards, as often as the state auditor determines is necessary.

M.G.L. c. 40H, § 8 Construction of chapter

c. 40H, § 8. Construction of chapter Section 8. The provisions of this chapter being necessary for the welfare of the commonwealth and its inhabitants, shall be liberally construed to effect its purposes.

M.G.L. c. 40H, § 9 Application of other laws to the community economic development assistance corporation

c. 40H, § 9. Application of other laws to the community economic development assistance corporation Section 9. CEDAC shall be subject to section 16G1/2 of chapter 6A.

Source: Massachusetts General Court (malegislature.gov)URL: https://malegislature.gov/Laws/GeneralLaws/PartI/TitleVII/Chapter40HFetched: 10/20/2026