HOME RULE PETITION CONSISTENT WITH THE MASSACHUSETTS COMMUNITY PRESERVATION ACT

What is the Community Preservation Act? The Community Preservation Act (CPA) is enabling legislation that would allow any community to vote to use an increase in the transfer tax or a surcharge on the property tax to address the following core community preservation concerns:

How would the CPA work? Massachusetts already imposes a transfer tax on the sale of real estate which is utilized to fund the Registries of Deeds, among other state and county functions, including corrections, and in certain other communities such as Nantucket and Martha's Vineyard, for other community purposes. The CPA would allow a town or city to vote to increase this tax, known as the deeds excise tax, in an amount up to 1 % of the purchase price on all real property transactions within the town or city. Alternatively, a city or town could vote to impose a surcharge on real property taxes up to 3% of the tax levy, or a combination of both transfer tax (up to 1/2%) and property tax surcharge (up to 1 1/2 percent).

Why should individual communities press for home rule petitions if passage of the CPA would authorize each town and city to impose a transfer tax or property tax surcharge if it so chose? A state-wide enabling bill such as the CPA would be the best way of making this revenue source available to towns and cities that want it. In the mid-eighties, home rule petitions to create land banks on Nantucket and Martha's Vineyard sailed through the Legislature; since then more than 60 communities have passed and submitted home rule petitions for land banks. But, lobbying by realtors’ associations stopped the momentum for this legislation in the eighties. Continuing to bring forward home rule petitions sends the strongest message possible to the Legislature that the electorate wants this measure of local autonomy and that the CPA should be enacted. In fact, one reason given for the near success of a state-wide bill in 1988 was that so many legislators had to support what their constituencies had already voted for as home rule petitions.

Why should community home rule petitions be structured to conform to the particulars set forth in the CPA? Bringing forth home rule petitions which create structures consistent with the CPA would not only signal the Legislature, in the strongest way possible, that there is broad support for the CPA but would also enable a community to set the program into action if the CPA becomes law. The enabling act provides a uniform standard which will be more efficient for real estate producers and consumers alike. Moreover, if the CPA does not pass, the Legislature may pass the home rule petition.

How else can a town or city express support for the CPA? A Town Meeting or City Council could pass a resolution instructing its legislators to seek and support passage of the CPA. If you have any questions about this document, please contact Marcia Molay or Charlotte Moore at the Community Preservation Coalition, 45 School Street, Boston; 02108; PHONE: 617-725-0597; FAX 617-523-3782; E-mail: charlottem@delphi.com.

THE HOME RULE PETITION

Set forth below are draft provisions of a home rule petition that is consistent with the CPA. The home rule petition is divided into several sections. The draft provision is indented in bold after various explanatory comments, in some cases pointing out options that the town or city has in structuring the section, while still maintaining CPA consistency. Each community must decide which of these options or others it will include in its home rule petition in order to create structures and mechanisms that work best for its needs. Many other variations are possible within the given framework.

A COMMUNITY PRESERVATION BILL [FOR SMART-TOWN]

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:

Section 1 - Purpose

<<Explanatory note: The CPA allows communities to create funding mechanisms that address any one or more of the following three community preservation concerns:

The example below encompasses the three concerns. The CPA contemplates that at least 10% of the funds collected must be made available for each of the three concerns. The home rule petition is written in the form appropriate for a Town Meeting form of government. Any city (for which the local legislative body is the City Council) could also submit a similar home rule petition, reworded appropriately.>>

The purpose of this Act shall be to enable the Town of Smart-Town, to exercise one of the three options for funding:

Section 2 - Definitions

The following terms utilized in this Act, are defined in the sections indicated:

Section 3 - The Community Preservation Committee

<<Explanatory note: Under the CPA, the Town has wide discretion in deciding the composition of the Community Preservation Committee (CPC). The town must make the following determinations:

The following draft sets forth one example of how a committee might be composed, but the town or city may choose to elect the entire board or appoint some. >>

(a) A Community Preservation Committee shall be established by the Board of Selectmen, consisting of one member representing the Planning Board, one representing the Conservation Commission, one representing the Park and Recreation Commission, one representing either the Housing Partnership or the Housing Authority, one representing historic preservation commissions and three members at large. The members shall be appointed for staggered, three-year terms.

(b) The Community Preservation Committee shall formulate and carry out a Community Preservation Plan pursuant to Section 4, and it shall administer the Community Preservation Fund established under Section 5.

Section 4 - The Community Preservation Plan

<<Explanatory note: The Community Preservation Plan (CPP) details how the CPC intends to spend the Community Preservation Fund to achieve the objectives set out in Section 1. If a town or city wishes to be entirely consistent with the CPA, it should include in its home rule petition certain funding requirements contained in the CPA. Under the CPA, at a minimum the CPP must allocate 10% of its available funds to open space preservation, 10% to historic preservation, and 10% to affordable housing. The remaining 70% may be spent, in any proportion, in order achieve any one or more of the three possible goals listed in Section 1. In any year, the CPC may spend a maximum of 5% of annual revenues in developing a CPP and 10% on management of open space, historic structures and landscapes, or of community housing.>>
  1. The Community Preservation Committee shall formulate a Community Preservation Plan to address the Town's needs for open space preservation, historic preservation and affordable housing, which Plan shall set forth strategies for meeting and funding these needs and their management.
  2. The Committee shall make available in one or more public places, including the Town Hall, copies of the Plan, and shall hold one or more public informational hearings on the Plan, publicized through the press and posting conspicuous notices. The committee shall make such changes to the Plan as it shall deem appropriate in light of the public hearings and comments and shall approve the Plan by majority vote and submit the same to the Town Meeting for final approval, subject to such amendments, if any, as the Town Meeting shall adopt.
    3.
  3. Amendments to the Plan shall be made by the same process including approval at the Town Meeting.
    4.
  4. The Committee shall take such action and spend such funds from the Community Preservation Fund as are necessary or desirable to carry out the Plan, provided, however, that in any year the Committee shall spend, or set aside for later spending, no less than ten percent of the available funds for open space acquisition, no less than ten percent for acquiring, renovating and/or preserving historically important structures and landscapes, and no less than ten percent to foster and support low- or moderate- income housing. Open space purchased with Community Preservation Funds shall be retained in natural, scenic, or open condition, bound by a permanent deed restriction that runs with the land. Acquisition of real property may be in the form of fee simple, future interests, options, easements, development rights, restriction, or other partial interests. The Committee may spend, or set aside for later spending, all remaining funds for any purpose that is consistent with the Community Preservation Plan. Funds set aside shall be held and spent in later years, provided that funds set aside to meet the above specified minimums shall be spent only for the designated purposes.
    5.
  5. The Town may terminate the Plan by majority vote in a duly authorized local ballot referendum. Upon such termination, or exploration of the Plan by its own terms, the increased levy imposed under Section 5 below shall remain in effect, both with respect to unpaid levies on past transactions and with respect to levies due on future transactions, until all contractual obligations incurred by the Committee to carry out the Plan shall have been fully discharged. Upon such termination and discharge of all such obligations, the Committee, in the case of the deeds excise tax, shall notify the register of deeds in each registry district in which the Town is located, and/or in the case of the property tax surcharge, the municipal tax-collecting authority, whereupon the registry shall cease to collect the increased levy imposed by Section 5.

Section 5 - The Community Preservation Fund

<<Explanatory note: The CPA allows for one or more accounts, all constituting the CPF. One account is recommended for each goal enumerated in Section 1. All of these accounts comprise the CPF.>>
  1. At the Town Meeting at which the Community Preservation Plan is approved, the Town Meeting shall also determine the amount and computation of the increase in the levy imposed by General Laws Chapter 64 D, Section 1, upon any deed, instrument or other writing relating to realty in the Town, provided that in no event shall that increase in said levy exceed five dollars for every five hundred dollars or fractional part of the consideration for such deed, instrument or writing in excess of five hundred dollars. The Town Meeting may at any time thereafter amend the amount and computation of the increased levy within the limitations set forth above, provided that the amount thereof must at all times remain sufficient to enable the Committee to discharge fully the obligations incurred pursuant to the Plan. The Town Meeting may exempt up to $100,000 of such consideration from the deeds excise tax. The Town Meeting may exempt up to 1/2 of the mean assessed property value, as determined annually by the board of assessors from the excise on real property.
    2.
  2. Promptly upon approval of the Plan and determination of the increased levy or any amendment thereto by the Town Meeting, the Committee, in the case of the deeds excise tax, shall give written notice thereof to the register of deeds; or, in the case of the excise on real property taxes, to the municipal tax-collecting authority. From and after receipt of such notice the registers of deeds or the municipal tax-collecting authority shall collect such increased levy in the amount and according to the computation specified in the notice and shall pay the amounts so collected, not less frequently than monthly for the deeds excise tax and quarterly or semi-annually according to the schedule for collection of property taxes for the excise on real property, to the Town's Treasurer. If a deeds excise tax is imposed, an amount equal to1/2 percent (0.5%) shall be deducted and retained from the amounts so collected, to reimburse the registry for expenses in collecting and remitting such levy. The register of deeds and/or municipal tax-collecting authority shall cause appropriate books and accounts to be kept with respect to such levy, which shall be subject to examination by the Town upon reasonable request from time to time.
    3.
  3. The penalty provisions of Sections 6A, 7, 8 and 9 of Chapter 64D of the General Laws shall be applicable to the increased levy or levies imposed hereunder.
    4.
  4. The Town Treasurer shall establish one or more revolving or sinking fund. accounts within the treasury, which shall constitute the Community Preservation Fund. Deposits in said accounts shall include: (i) funds appropriated for deposit in said accounts by vote of the Town; (ii) voluntary contributions of money or other liquid assets to the Community Preservation Fund; (iii) revenues from the levy established under Section 5 hereof; (iv) proceeds of any borrowing permitted under Section 6 hereof; and (v) proceeds from disposal of realty acquired with funds from the Community Preservation Fund. All expenses lawfully incurred by the Town in carrying out the provisions of the Plan shall be evidenced by proper vouchers and shall be paid by the Town Treasurer only upon submission of warrants duly approved by the Community Preservation Committee. The Town Treasurer shall prudently invest available assets of any such accounts, and all income therefrom shall accrue to the Community Preservation Fund.

Section 6 - Borrowing

<<Explanatory note: A town or city may want to take advantage of an immediate opportunity and to be able to borrow against anticipated future receipts of the increased transfer levy. This section authorizes the committee to do so, but limits the recourse to those receipts.>>

The Community Preservation Committee may incur debt by issuing bonds or by signing notes secured by a pledge of the Community Preservation Fund, the proceeds of which shall be deposited in the Community Preservation Fund and applied to implement the Community Preservation Plan, but such Committee may not pledge the full faith and credit of the Town as security unless recourse to such credit has been authorized in each instance by a two-thirds vote of the Town Meeting.

Section 7 - Records and Accounts

The Community Preservation Committee shall keep a full and accurate account of all actions, including a record as to when, from or to whom, and on what account money has been paid or received from or to the Community Preservation Fund, and as to when, from whom and for what consideration real property interests have been acquired, improved or disposed of. Said records and accounts shall be public records and shall be subject to examination by the director of accounts or his agent pursuant to Section Forty of Chapter Forty-Four of the General Laws as amended from time to time.

Section 8 - Other Programs

The Town shall not be precluded by reason of this Act from participating in other state grant programs. Funds in the Community Preservation Fund may be made available and used by the Community Preservation Committee as the local share for state and federal grants, provided that such grants and such local share are used in a manner consistent with the Community Preservation Plan.

Section 9 - Referendum Required.

After passage of this act, the act shall take effect upon its approval by a majority of those voters in the town of Smart-Town voting in a general or special election by secret ballot.

MODEL RESOLUTION IN SUPPORT OF THE CPA

To see if the Town will instruct its representatives in the Massachusetts Legislature to support Senate Bill No. 1513, entitled "The Community Preservation Act."

Petitioners Report: The Community Preservation Act, if passed, would allow any community to decide for itself whether it wishes to establish a Community  Preservation Fund by a local ballot referendum to increase the deeds excise tax up to 3% on real estate purchases, or to place a surcharge on the property tax of up to 1%, or to combine both as lesser amounts: up to 1/2% real restate transfer tax and up to 1 1/2% property tax surcharge. The community could choose to exempt up to $100,000 of every purchase from the real estate excise tax or up to 1/2 of the mean assessed property value for the surcharge on the property tax. The steady funding received by the community can be used to address core community preservation concerns: open space preservation; affordable housing; and historic preservation. At least 10% must be devoted to each of the three uses; and the community has total discretion within these uses to set its priorities for use of the remaining 70%. The community must set up a "Community  Preservation Committee" to hold local public hearings and to prepare its own plan for the use of the fund. This statute would enable ____to protect its character and its destiny. [Elaborate on uses appropriate to your town.] or:

To see if the Town will instruct its representatives in the Massachusetts Legislature to support a state-wide enabling bill that would allow any community to decide for itself whether it wishes to establish, by a local ballot referendum, a Community Preservation Fund with revenues flowing from an increase in the deeds excise tax up to 1% on real estate purchases, with a possible exemption of up to $100,000 of every purchase; or a surcharge on the property tax of up to 3%, with a possible exemption of up to 1/2 of the mean assessed property value, or a combination of both taxes at lesser amounts: up to 1/2% real estate transfer tax and up to 1 1/2% property tax surcharge. Said fund to be allocated at least 10% to open space acquisition, at least 10% to affordable housing, and at least 10% to historic preservation, with the remaining 70 % allocated to any or all of these uses according to a Community Preservation Plan established and presented for at a public hearing for public comment by a Community Preservation Committee locally selected according to the method accepted by the voters in the referendum.

Source: Community Preservation Coaltion. Old City Hall, 45 School Street, Boston, MA 02108.