Bill H.2533

HOUSE DOCKET, NO. 3427 FILED ON: 1/18/2013

HOUSE . . . . . . . . . . . . . . . No. 2533

By Mr. Conroy of Wayland, a petition (accompanied by bill, House, No. 2533) of Thomas P. Conroy and Thomas J. Calter for legislation to provide for a local option real estate tax education surcharge. Revenue.

The Commonwealth of Massachusetts

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In the Year Two Thousand Thirteen

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An Act relative to local education investment.

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. This chapter shall be known and may be cited as the Local Education Investment Act.

SECTION 2. As used in this chapter, the following words shall, unless the context clearly indicates a different meaning, have the following meanings:-

"Annual income", a family's or person's gross annual income less such reasonable allowances for dependents, other than a spouse, and for medical expenses as the housing authority or, in the event that there is no housing authority, the department of housing and community development, determines.

"School committee", the committee established by the legislative body of a city or town to make recommendations for education, as provided in section 5.

"Local Education Investment Fund", the municipal fund established under section 7.

"Legislative body", the agency of municipal government which is empowered to enact ordinances or by-laws, adopt an annual budget and other spending authorizations, loan orders, bond authorizations and other financial matters and whether styled as a city council, board of aldermen, town council, town meeting or by any other title.

SECTION 3. (a) Sections 3 to 7, inclusive, shall take effect in any city or town upon the approval by the legislative body and their acceptance by the voters of a ballot question as set forth in this section.

(b) Notwithstanding the provisions of chapter 59 or any other general or special law to the contrary, the legislative body may vote to accept sections 3 to 7, inclusive, by approving a surcharge on real property of not more than 3 per cent of the real estate tax levy against real property, as determined annually by the board of assessors. The amount of the surcharge shall not be included in a calculation of total taxes assessed for purposes of section 21C of said chapter 59.

(c) All exemptions and abatements of real property authorized by said chapter 59 or any other law for which a taxpayer qualifies as eligible shall not be affected by this chapter. A taxpayer receiving an exemption of real property authorized by said chapter 59 or any other law shall be exempt from any surcharge on real property established under this section. The surcharge to be paid by a taxpayer receiving an abatement of real property authorized by said chapter 59 or any other law shall be reduced in proportion to the amount of such abatement.

(d) Any amount of the surcharge not paid by the due date shall bear interest at the rate per annum provided in section 57 of said chapter 59.

(e) The legislative body may also vote to accept one or more of the following exemptions:

(1) for property owned and occupied as a domicile by a person who would qualify for low income housing or low or moderate income senior housing in the city or town;

(2) for class three, commercial, and class four, industrial, properties as defined in section 2A of said chapter 59, in cities or towns with classified tax rates; or

(3) for $100,000 of the value of each taxable parcel of residential real property.

(f) Upon approval by the legislative body, the actions of the body shall be submitted for acceptance to the voters of a city or town at the next regular municipal or state election. The city or town clerk or the state secretary shall place it on the ballot in the form of the following question:

"Shall this (city or town) accept sections 3 to 7, inclusive of chapter 44B of the General Laws, as approved by its legislative body, a summary of which appears below?"

(Set forth here a fair, concise summary and purpose of the law to be acted upon, as determined by the city solicitor or town counsel, including in said summary the percentage of the surcharge to be imposed.)

If a majority of the voters voting on said question vote in the affirmative, then its provisions shall take effect in the city or town, but not otherwise.

(g) The final date for notifying or filing a petition with the city or town clerk or the state secretary to place such a question on the ballot shall be 35 days before the city or town election or 60 days before the state election.

(h) If the legislative body does not vote to accept sections 3 to 7, inclusive, at least 90 days before a regular city or town election or 120 days before a state election, then a question seeking said acceptance through approval of a particular surcharge rate with exemption or exemptions, may be so placed on the ballot when a petition signed by at least 5 per cent of the registered voters of the city or town requesting such action is filed with the registrars, who shall have seven days after receipt of such petition to certify its signatures. Upon certification of the signatures, the city or town clerk or the state secretary shall cause the question to be placed on the ballot at the next regular city or town election held more than 35 days after such certification or at the next regular state election held more than 60 days after such certification.

SECTION 4. (a) Upon acceptance of sections 3 to 7, inclusive, and upon the assessors' warrant to the tax collector, the accepted surcharge shall be imposed.

(b) After receipt of the warrant, the tax collector shall collect the surcharge in the amount and according to the computation specified in the warrant and shall pay the amounts so collected, quarterly or semi-annually, according to the schedule for collection of property taxes for the tax on real property, to the city's or town's treasurer. The tax collector shall cause appropriate books and accounts to be kept with respect to such surcharge, which shall be subject to public examination upon reasonable request from time to time.

(c) The remedies provided by chapter 60 for the collection of taxes upon real estate shall apply to the surcharge on real property pursuant to this chapter.

SECTION 5. (a) The school committee of a city or town that accepts sections 3 to 7, inclusive, shall (1) study the needs, possibilities and resources of the city or town regarding local public education. As part of its study, the committee shall hold one or more public informational hearings on the needs, possibilities and resources of the city or town regarding local education possibilities and resources, notice of which shall be posted publicly and published for each of two weeks preceding a hearing in a newspaper of general circulation in the city or town.

(2) The school committee shall make recommendations to the legislative body for the improvement of all the schools in the city or town school district, including ideas related, but not limited to, teacher professional development; purchase of technology; enhancing health and wellness education; and meeting capital needs that are not reimbursable under the guidelines set by the Massachusetts School Building Authority. In no instances shall funds from this act be used for teacher and other professional or administrative staff salaries or benefits, or maintenance needs of school buildings or properties, or similar school operating needs.

(3) The school committee may include in its recommendation to the legislative body a recommendation to set aside for later spending funds for specific purposes that are consistent with improving schools but for which sufficient revenues are not then available in the Local Education Fund to accomplish that specific purpose or to set aside for later spending funds for general purposes that are consistent with improving schools.

(c) The school committee shall not meet or conduct business without the presence of a quorum. A majority of the members of the school committee shall constitute a quorum. The school committee shall approve its actions by majority vote. Recommendations to the legislative body shall include their anticipated costs.

(d) After receiving such recommendations from the school committee, the legislative body shall then take such action and approve such appropriations from the Local Education Fund as set forth in section 8, and such additional appropriations as it deems appropriate to carry out the recommendations of the school committee.

SECTION 6. In every fiscal year and upon the recommendation of the school committee, the legislative body shall spend, or set aside for later spending, not less than 50 per cent of the annual revenues in the Local Education Fund. In each fiscal year, the legislative body shall make such appropriations from the Local Education Fund as it deems necessary for the additional administrative and operating expenses of the school committee pursuant to this act, but the appropriations shall not exceed one per cent of the annual revenues in the Local Education Fund. Funds that are set aside shall be held in the Local Education Fund and spent in that year or later years, but funds set aside for a specific purpose shall be spent only for the specific purpose. The local education funds shall not replace existing operating funds, only augment them.

SECTION 7. Notwithstanding the provisions of section 53 of chapter 44 or any other general or special law to the contrary, a city or town that accepts sections 3 to 7, inclusive, shall establish a separate account to be known as the Local Education Fund of which the municipal treasurer shall be the custodian. The authority to approve expenditures from the fund shall be limited to the legislative body and the municipal treasurer shall pay such expenses in accordance with chapter 41.

The following monies shall be deposited in the fund: (a) all funds collected from the real property surcharge or bond proceeds in anticipation of revenue pursuant to sections 4 and 11; and (b) all funds received from the commonwealth or any other source for such purposes. The treasurer may deposit or invest the proceeds of the fund in savings banks, trust companies incorporated under the laws of the commonwealth, banking companies incorporated under the laws of the commonwealth which are members of the Federal Deposit Insurance Corporation, and any income therefrom shall be credited to the fund. The expenditure of revenues from the fund shall be limited to implementing the recommendations of the school committee and providing administrative and operating expenses to the committee.

SECTION 8. (a) The fees determined annually by the commissioner of administration under the provision of section three B of chapter seven, for all licenses issued under the authority of the division of professional licensure, except as otherwise provided, shall be subject to a surcharge of $20. The surcharges shall be imposed for the purposes of improving public education in the commonwealth.

(c) All surcharges on fees collected pursuant to this section shall be forwarded to the Massachusetts Local Education Trust Fund, established in section 9.

SECTION 9. (a) There shall be established and set up on the books of the commonwealth a separate fund, to be known as the Massachusetts Local Education Trust Fund, for the benefit of cities and towns that have accepted sections 3 to 7, inclusive, and pursuant to said sections 3 to 7, inclusive, have imposed a surcharge on their real property tax levy, subject to any exemptions adopted by a municipality. The fund shall consist of all revenues received by the commonwealth: (1) under the provisions of section 8; (2) from public and private sources as gifts, grants and donations to further education improvement programs; or (3) all other monies credited to or transferred to from any other fund or source pursuant to law.

(b) The state treasurer shall deposit the fund in accordance with the provisions of section 10 in such manner as will secure the highest interest rate available at a banking company incorporated under the laws of the commonwealth that is a member of the Federal Deposit Insurance Corporation and with the requirement that all amounts on deposit be available for withdrawal without penalty for such withdrawal at any time. All interest accrued and earnings shall be deposited into the fund. The fund shall be expended solely for the administration and implementation of this chapter. Any unexpended balances shall be redeposited for future use consistent with the provisions of this chapter.

(c) The state treasurer shall make all disbursements and expenditures from the fund without further appropriation, as directed by the commissioner of revenue in accordance with said section 10. The department of revenue shall report by source all amounts credited to said fund and all expenditures from said fund. The commissioner of revenue shall assign personnel of the department as it may need to administer and manage the fund disbursements and any expense incurred by the department shall be deemed an operating and administrative expense of the program. The operating and administrative expenses shall not exceed 2.5 per cent of the annual total revenue received under the provisions of said section 10.

SECTION 10. (a) The commissioner of revenue shall annually on October 15 disburse monies from the fund established in section 10 to cities and towns that have accepted sections 3 to 7, inclusive, and notified the commissioner of their acceptance. The community shall notify the commissioner of the date and terms on which the voters accepted said sections 3 to 7, inclusive. The municipal tax collecting authority shall certify to the commissioner the amount the municipality has raised through June 30 by imposing a surcharge on its real property levy and shall certify the percentage of the surcharge applied.

(b) The commissioner shall multiply the amount in the fund by 80 per cent. This amount distributed in the first round distribution shall be known as the match distribution. The first round total shall be distributed to each city or town accepting said sections 3 to 7, inclusive, in an amount not less than 5 per cent but not greater than 100 per cent of the total amount raised by the additional surcharge on real property by each city or town. The percentage shall be the same for each city and town and shall be determined by the commissioner annually in a manner that distributes the maximum amount available to each participating city or town.

(c) The commissioner shall further divide the remaining 20 per cent of the fund in a second round distribution, known as the equity distribution. The commissioner shall determine the equity distribution in several steps. The first step shall be to divide the remaining 20 per cent of the fund by the number of cities and towns that have accepted said sections 3 to 7, inclusive. This dividend shall be known as the base figure for equity distribution. This base figure shall be determined solely for purposes of performing the calculation for equity distribution and shall not be added to the amount received by a participant.

(d) Each city and town in the commonwealth shall be assigned a local education rank for purposes of the equity distribution. The commissioner shall determine each community's rank by first determining the municipality's equalized property valuation per capita ranking, ranking municipalities from highest to lowest valuation. The commissioner shall also determine the population of each municipality and rank each from largest to smallest in population. The commissioner shall add each equalized property valuation rank and population rank, and divide the sum by two. The dividend is the local education raw score for that municipality.

(e) The commissioner shall then order each municipality by LE raw score, from the lowest raw score to the highest raw score. This order shall be the LE rank for each municipality. If more than one municipality has the same LE raw score, the municipality with the higher equalized valuation rank shall receive the higher LE rank.

(f) After determining the LE rank for each municipality in the commonwealth, the commissioner shall divide all municipalities into deciles according to their LE ranking, with approximately the same number of municipalities in each decile, and with the municipalities with the highest LE rank shall be placed in the lowest decile category, starting with decile 10. Percentages shall be assigned to each decile as follows:- decile 1, 140 per cent of the base figure; decile 2, 130 per cent of the base figure; decile 3,120 per cent of the base figure; decile 4, 110 per cent of the base figure; decile 5, 100 per cent of the base figure; decile 6, 90 per cent of the base figure; decile 7, 80 per cent of the base figure; decile 8, 70 per cent of the base figure; decile 9, 60 per cent of the base figure; decile 10, 50 per cent of the base figure.

After assigning each municipality to a decile according to their LE rank, the commissioner shall multiply the percentage assigned to that decile by the base figure to determine the second round equity distribution for each participant.

(f) Notwithstanding any other provision of this section, the total state contribution for each city or town shall not exceed the amount raised by the municipality's surcharge on its real property levy.

(g) When there are monies remaining in the trust fund after the first and second round distributions, and any necessary administrative expenses have been paid in accordance with section 6, the commissioner may conduct a third round surplus distribution. Any remaining surplus in the fund may be distributed by dividing the amount of the surplus by the number of cities and towns that have accepted this chapter. The resulting dividend shall be the surplus base figure. The commissioner shall then use the decile categories and percentages as defined in this section to determine a surplus equity distribution for each participant.

(h) The commissioner shall determine each participant's total state grant by adding the amount received in the first round distribution with the amounts received in any later round or rounds of distributions, with the exception of a city or town that has already received a grant equal to 100 per cent of the amount the community raised by its surcharge on its real property levy.

(1) Only those cities and towns that adopt the maximum surcharge allowed by this chapter shall be eligible to receive additional state monies through the equity and surplus distributions.

(2) If less than 10 per cent of the cities and towns in the commonwealth have accepted sections 3 to 7, inclusive, and imposed and collected a surcharge on their real property levy, the commissioner may calculate the state grant with only one round of distributions, or in any other equitable manner.

(j) After distributing the trust fund in accordance with this section, the commissioner may keep any remaining funds in the trust for distribution in the following year.

SECTION 11. The school committee shall keep a full and accurate account of all of its actions, including its recommendations and the action taken on them and records of all appropriations or expenditures made from the Local Education Fund. The records and accounts shall be public records.

SECTION 12. Notwithstanding the provisions of any general or special law to the contrary, every city and town may accept sections 3 to 7, inclusive, and may thereupon receive state grants under section 10. A city or town that accepts said sections 3 to 7, inclusive, shall not be precluded from participating in state grant programs.

State grant programs may include local adoption of this chapter among the criteria for selection of grant recipients. Funds in the Local Education Fund may be made available and used by the city or town as the local share for state or federal grants upon recommendation of the school committee and the legislative body, as provided for in section 5, if such grants and such local share are used in a manner consistent with the recommendations of the school committee.

SECTION 13. (a) At any time after imposition of the surcharge, the legislative body may approve and the voters may accept an amendment to the amount and computation of the surcharge, or to the amount of exemption or exemptions, in the same manner and within the limitations set forth in this chapter.

(b) At any time after the expiration of five years after the date on which sections 3 to 7, inclusive, have been accepted in a city or town, said sections may be revoked in the same manner as they were accepted by such city or town, but the surcharge imposed under section 3 shall remain in effect in any such city or town, with respect to unpaid taxes on past transactions and with respect to taxes due on future transactions, until all contractual obligations incurred by the city or town prior to such termination shall have been fully discharged.

Section 14. The commissioner of revenue shall have the authority to promulgate rules and regulations to effect the purposes of this chapter.

Name:	District/Address:	Date Added:
Thomas P. Conroy	13th Middlesex	1/18/2013
Thomas J. Calter	12th Plymouth