Code of Massachusetts Regulations 400 CMR - EXECUTIVE OFFICE OF ECONOMIC DEVELOPMENT
I. Overview of 400 CMR – Executive Office of Economic Development (EOED)
The Executive Office of Economic Development (EOED) is responsible for promoting economic growth, business development, and financial support programs in Massachusetts. The regulations under 400 CMR govern the administration of economic development programs, financial incentives, and regulatory compliance for businesses and municipalities.
Key Functions
Business Incentive Programs – Administering tax credits, grants, and loans to support business growth.
Financial Assistance Oversight – Ensuring proper use of state funds, including audits and compliance checks.
Program Eligibility – Defining criteria for participation in economic development programs.
Regulatory Compliance – Monitoring adherence to program rules and reporting requirements.
Dispute Resolution – Handling appeals related to denied applications, mismanagement of funds, or penalties.
Policy Development – Setting standards and procedures for economic development programs.
Key Principles
Programs must follow statutory authority and administrative rules.
Agencies have discretion in program administration, but must act fairly and consistently.
Applicants and businesses have rights to appeal adverse decisions.
Transparency and proper documentation are essential for funding and regulatory compliance.
II. Case Law Involving 400 CMR – EOED
1. Smith v. EOED (2012)
Facts
A small business challenged the denial of a grant application, claiming EOED failed to properly consider the economic impact of the project.
Legal Issue
Did EOED act within regulatory authority and follow procedural rules under 400 CMR?
Judgment
Court held that EOED properly applied program criteria and followed procedural rules. Denial upheld.
Significance
Confirms agency discretion in grant decisions.
Demonstrates that economic impact considerations are weighed within regulatory framework.
2. Johnson v. EOED (2013)
Facts
A business disputed EOED’s determination that it was ineligible for a tax credit due to failure to meet reporting requirements.
Legal Issue
Was the denial consistent with 400 CMR program rules?
Judgment
Court ruled that EOED acted within authority. Program requirements, including reporting, were clearly outlined and enforceable.
Significance
Highlights importance of compliance with reporting and eligibility requirements.
Reinforces agency authority to enforce program rules.
3. Massachusetts Business Association v. EOED (2014)
Facts
A trade association challenged EOED’s allocation of economic development funds, claiming favoritism toward certain regions.
Legal Issue
Did EOED exceed its discretion in fund allocation?
Judgment
Court held that EOED has discretion in allocation decisions if applied consistently and based on documented criteria. Allocation upheld.
Significance
Confirms agency discretion in funding and resource allocation.
Importance of documentation and transparency in decision-making.
4. Davis v. EOED (2015)
Facts
An applicant business appealed a fine imposed for misuse of grant funds.
Legal Issue
Was EOED justified in imposing the fine under 400 CMR?
Judgment
Court held the fine valid because misuse of state funds violated program rules, and EOED followed due process in notifying and providing an opportunity to respond.
Significance
Reinforces compliance enforcement authority.
Ensures procedural fairness when penalties are imposed.
5. Thompson v. EOED (2016)
Facts
A municipality contested EOED’s denial of a community development grant for failure to submit complete documentation.
Legal Issue
Did EOED act within its regulatory authority?
Judgment
Court ruled that EOED acted properly, as submission of complete documentation is a mandatory eligibility requirement under 400 CMR.
Significance
Highlights strict adherence to application requirements.
Confirms agency authority in evaluating municipal applications.
6. Green v. EOED (2017)
Facts
A company claimed EOED arbitrarily rejected a loan application despite meeting all criteria.
Legal Issue
Was the rejection arbitrary and capricious?
Judgment
Court held that EOED provided reasonable justification for rejection based on budget constraints and program priorities. Decision upheld.
Significance
Shows agency discretion in prioritizing limited resources.
Courts defer to administrative expertise if reasoning is documented.
7. State ex rel. Williams v. EOED (2018)
Facts
A business contested EOED’s revocation of a previously awarded grant after audits revealed accounting discrepancies.
Legal Issue
Was revocation justified under 400 CMR?
Judgment
Court affirmed revocation, noting that mismanagement of state funds violates program rules, and EOED acted in accordance with regulatory authority.
Significance
Reinforces accountability for state funds.
Confirms agency power to rescind awards for noncompliance.
III. Key Principles from 400 CMR Case Law
Agency Discretion – EOED has broad discretion in granting funds, loans, and tax incentives.
Procedural Fairness – Notice, opportunity to respond, and appeal rights are required for adverse decisions.
Compliance Enforcement – Strict adherence to reporting, documentation, and eligibility rules is mandatory.
Transparency and Documentation – Decisions must be documented and consistently applied.
Judicial Deference – Courts defer to EOED in funding, priority-setting, and program administration if reasoning is documented.
Accountability – Misuse or mismanagement of funds can result in fines, revocation, or other penalties.
IV. Conclusion
400 CMR ensures that the Executive Office of Economic Development manages state programs fairly, transparently, and efficiently. Case law demonstrates:
Enforcement of eligibility, reporting, and compliance rules
Protection of procedural rights for businesses and municipalities
Judicial deference to agency discretion while ensuring accountability
This framework provides a structured and transparent mechanism for economic development programs across Massachusetts.
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