Senate Passes Economic Development Bill Investing in Housing, Research, and Responsible AI

Legislation creates AI safety guardrails, funds housing and research,
bans deceptive cryptocurrency kiosks, implements ‘fun agenda’

(BOSTON—7/23/2026) Following two days of debate, the Massachusetts Senate today passed an economic development package that lifts up small businesses and burgeoning industries, bans predatory kiosks used in cryptocurrency scams, and reins in the potential dangers of artificial intelligence by instituting responsible guardrails against catastrophes. 

The bill also surges the production of new housing units through automatic two-family zoning across Massachusetts, creates safety rules for fast electric scooters and e-bikes, and invests $100 million in immediate support for scientific research programs at public higher education institutions. 

With $575.4 million in authorizations, the economic development bond bill is poised to grow quality jobs in the Commonwealth, support innovation, and improve the quality of life for workers and families. 

“Today the Senate took action to maintain the Commonwealth’s economic edge while giving Massachusetts residents, families, and businesses the best bet at success,” said Senate President Karen E. Spilka (D-Ashland). “The bill we passed today will help small businesses cut through red tape, provide opportunities for new families to find a home they can afford, and set our state up to face the challenges and embrace the opportunities of the coming years. The strength of the final legislation reflects ideas from every Senate member in an effort to lift up every region of the Commonwealth. I applaud Chair Finegold for his steady stewardship of this wide-ranging bill, Chair Rodrigues for his continued leadership and collaboration, and all of my Senate colleagues for their invaluable contributions.” 

“It’s critically important to keep the Massachusetts economy on the cutting edge, and this economic stimulus package does just that and more,” said Senator Michael J. Rodrigues (D-Westport), Chair of the Senate Committee on Ways and Means. “This bill hits all sectors of the state’s economy, jumpstarting scientific research, spurring housing development, investing in workforce development and business growth, supporting the defense industry, and setting limits on the overreach of artificial intelligence. With the federal government no longer a partner, we need to continue to be ambitious and utilize the tools that we have to grow and develop the economic engine of the Commonwealth. I would like to thank Senator Finegold for his work shepherding this legislation, my Senate colleagues for their thoughtful input in further shaping this bill, and President Spilka for her determined leadership in these uncertain times.” 

“We have a responsibility to invest in the future and to create opportunity for everyone who calls Massachusetts home,” said Senator Barry R. Finegold (D-Andover), Senate Chair of the Joint Committee on Economic Development and Emerging Technologies. “I’m proud this economic development bill threads that needle, by strengthening our leadership position as a hub for industries of the future while uplifting small businesses and working families who are the backbone of our economy. Our state is already a place where AI, defense tech, and robotics thrive. This bill ensures we stay competitive. AI is here, and it’s moving fast. We must keep up. That’s why this bill establishes commonsense guardrails and a comprehensive transparency framework to hold AI companies accountable; fostering innovation while ensuring catastrophic risk never occurs. We can do both—keep the people of Massachusetts safe and be a globally competitive powerhouse.” 

The bill prioritizes bonding investments to boost every aspect of the Massachusetts economy, including: 

•  $100 million to support and promote economic growth and job creation in the defense sector;
• $75 million to support the development and application of AI;
• $25 million to support downtown and main street vitality in Massachusetts towns and cities, in addition to $2.5 million to help convert vacant storefronts into pop-up opportunities for new small businesses;
• $25 million for research and development of robotics technology;
• $20 million to support construction of early stage and high growth business ventures;
• $20 million to support community development financial institutions and small businesses; and
• $25 million to support arts, culture, and the creative economy, building on recent successes of the Massachusetts tourism and cultural sector. 

The legislation requires major AI developers—known as large frontier developers—to account for their AI models’ risk of critical safety incidents by setting frameworks to avoid potential catastrophes. The Attorney General’s Office (AGO) would be empowered to bring civil lawsuits against major AI developers if they violate these new safety requirements. 

The bill would create unprecedented levels of new housing units in Massachusetts by allowing two-family homes on all residentially zoned lots, subject to reasonable local limitations. 

Supporting the Massachusetts economy’s workers and their families, the bill goes further to boost the state’s housing stock by creating a new, easier process for converting commercial properties into residential units, and requiring timely review processes for housing construction projects. 

Recent e-bike and electric scooter technology has moved beyond older state laws into unregulated territory. This bill accounts for these developments by creating new safety standards that keep young children off these devices, some of which can speed at 30 miles per hour, and banning mopeds and similar devices from bike lanes and shared use paths.  

Scientific research drives a significant part of the Massachusetts economy. With federal research funding under threat, the legislation invests an immediate $100 million in bridge funding for public higher education institutions to help maintain the pace of scientific discovery and retain talented graduate and post doctorate workers. 

Over the course of the past two days, the Senate built on the underlying bill by adopting amendments in critical areas related to responsible technological advancement, the hospitality industry and vibrant business districts, and the ability for certain professions to work across state lines. 

Safety in Technological Innovation 

Frontier AI Risk Reports and Independent Verification (Amendment 471): Verifies that large AI developers are complying with this legislation’s new safety requirements by requiring independent, third-party safety audits. Additionally requires large AI companies to undergo in-depth, independent safety testing every four months to identify any residual catastrophic risks. 

Protecting Against CSAM (Amendment 94): Criminalizes the creation, possession, or sharing of AI-generated child sexual abuse material (CSAM), in response to new AI technology and computer programs capable of generating synthetic images that are indistinguishable from real photos. Penalties for sharing such images go up to 10 years imprisonment. Creating or prompting synthetic CSAM is punishable by up to five years in prison, or 10 years if the image depicts a real child. 

Responsible Robotics (Amendment 118): Ensures the responsible use of robotics technology. Prohibits the possession, operation, manufacture, or sale of robots that are equipped with weapons—including firearms, chemical agents, weaponized lasers and explosives. Prohibits the use of a robotic device to criminally harass or physically restrain another person. Violations are punishable by up to five years in prison. Includes a waiver process for defense companies and contractors; an exemption for the military; and a process for law enforcement to use weaponized robots to destroy or diffuse bombs, with a proper warrant. 

The ‘Fun Agenda’ 

No Soccer No Party (Amendment 595): Convenes a working group to study the feasibility of a future international soccer tournament to be held in Massachusetts. The group, organized under the Office of International Trade and Investment, would study potential dates, venues, operational needs, and funding sources, and would coordinate with representatives of participating countries including the United States, Scotland, and nations with a significant diaspora in Massachusetts. 

Making music affordable by reining in predatory ticket scalping (Amendment 20): Institutes a 110 per cent cap on prices charged by ticket resale platforms for music concert tickets. 

Happy Hour (Amendment 78): Gives cities and towns the option of re-establishing ‘happy hour’ discounted alcohol sales policies, boosting bars, restaurants, and other licensed establishments. Municipalities would regulate happy hours by local ordinance. 

Conviviality Districts (Amendment 309): Builds on the success of a historic summer by permanently allowing cities and towns to permit public alcohol consumption in designated outdoor districts. Municipalities would be able to adopt the local-option districts for areas such as streets and parks, with the requirement that drinks be purchased from licensed establishments within the designated area. 

Public Arts and Entertainment Microgrant Program (Amendment 354): Authorizes $1 million for a new grant program to boost the cultural and economic vitality of downtown areas, commercial areas, cultural districts, gathering places, and nightlife destinations. The Massachusetts Cultural Council would distribute the microgrants to support public arts, performances, and programming. 

Cultivating Agritourism Across Massachusetts (Amendment 70): Authorizes $5 million for grants to support local farms, agriculture, and small businesses through agritourism. 

Massport Liquor License Flexibility (Amendment 441): Allows bars and restaurants at Logan Airport to continue serving alcohol as long as flights are arriving and departing from the airport. 

Networking Jobs Across State Lines 

Psychology Interjurisdictional Compact (Amendment 11): Increases access to psychology services by adding Massachusetts to an interstate compact that recognizes the licensure of psychologists in other participating states. Allows licensed psychologists from those states to practice via telehealth across state lines. 

Social Work Licensure Compact (Amendment 222): Supports Massachusetts social workers by joining surrounding states in the social work licensure compact, ensuring they can continue to care for patients in other states. 

Establishing a Physical Therapy Compact (Amendment 402): Bolsters the physical therapy workforce by working toward the creation of an interstate compact, which would allow licensed physical therapists and assistants to practice across participating state lines.  

Fostering a Strong Local and Regional Economy 

Juvenile Jurisdiction (Amendment 495): Raises the age of juvenile jurisdiction to include residents who are 18 years old. The ‘raise the age’ initiative is proven to decrease crime, increase public safety and improve economic outcomes by allowing emerging adults who are 18 years old—the typical age of a high school senior—to be tried as juveniles instead of adults for certain crimes. 

Requiring Automated Criminal Record Sealing (Amendment 511): Automates and expedites the process of sealing criminal records, ensuring that eligible people are able to move forward without bureaucratic delays. 

Affordable Homeownership Pilot (Amendment 46): Supports the development and construction of permanently affordable homeownership units by aiding the creation of a pilot program. Authorizes $2.5 million to fund the creation of units for low- and moderate-income households, including units within mixed-use developments. 

Municipal Tax Relief (Amendment 554): Gives cities and towns the option of providing enhanced tax relief in the form of a rebate to lower- and middle-income taxpayers who already receive the residential tax exemption. Creates an additional tool on top of the established residential exemption, which gives property tax relief to local residents by shifting more of the residential tax burden onto vacation homes and investment properties. 

West-East Passenger Rail (Amendment 196): Authorizes $5 million for the development of the passenger rail station in Palmer, a key stop for West-East Passenger Rail to span the state from Boston to Pittsfield. 

The ENOUGH Act (Amendment 401): Creates a fund and framework to capitalize on public-private partnerships to lift families and communities out of poverty. Support would extend to community organizations to boost areas such as early education and care, affordable housing, public safety, and civic infrastructure. 

Zoo New England (Amendment 22): Authorizes $5 million for capital improvements at facilities of Zoo New England, which supports education and conservation through the Franklin Park Zoo in Boston and Stone Memorial Zoo in Stoneham. 

Massachusetts National Guard Museum Birthplace (Amendment 366): Unlocks federal dollars to support the development of the Massachusetts National Guard Museum by giving an official designation to the museum. Designates the facility’s location as Salem, the birthplace of the National Guard where the first muster of the colonial Militia was held 389 years ago. 

The package is based on legislation originally filed by Governor Maura Healey. A prior version was passed by the House of Representatives. 

The Senate passed the bill and sent it back to the House of Representatives for further consideration. 

###