SECTION 1. The General Laws, as appearing in the 2014 Official Edition, are hereby amended by adding the following new chapter:-
Chapter 40X. Supplemental Infrastructure Financing for Transportation.
Section 1. As used in this chapter, the following words shall, unless the context clearly requires otherwise, have the following meanings:-
“Adjustment factor”, for each fiscal year of the term of a given SIFT agreement, the product of the inflation factors for each fiscal year subsequent to the first fiscal year immediately following the base date.
“Authority”, the Massachusetts Bay Transportation Authority.
“Base date”, the last assessment date of the real property tax immediately preceding the creation of the SIFT district, or any other assessment date designated as the base date in a SIFT agreement.
“Captured assessed value”, the valuation amount by which the current assessed value of all properties within a SIFT district exceeds the original assessed value of such properties within the SIFT district. If the current assessed value is equal to or less than the original, there is no captured assessed value.
“Department”, the Massachusetts Department of Transportation.
“Financial plan”, a statement of the costs and sources of revenue required to complete construction of the transportation project, which shall include: (1) cost estimates; (2) the projected amount of indebtedness to be incurred by the municipality, the department and/or the authority; and (3) any other sources of anticipated capital, including but not limited to any federal funding.
“Inflation factor”, a ratio: (1) the numerator of which shall be the total assessed value of all parcels of residential, commercial and industrial real estate that are assessed at full and fair cash value for the current fiscal year minus the new growth adjustment factor for the current fiscal year attributable to the residential, commercial and industrial real estate as determined by the commissioner of revenue under paragraph (f) of section 21C of chapter 59; and (2) the denominator of which shall be the total assessed value for the preceding fiscal year of all the parcels included in the numerator; provided, however, the ratio shall not be less than 1.
“Original assessed value”, the aggregate assessed value of all properties within the SIFT district as of the base date; provided, however, that unless the city or town has expressly stated within its SIFT agreement that it will not include an inflation factor, the original assessed value in any year shall be equal to the original assessed value as of the base date multiplied by the adjustment factor for that fiscal year.
“Secretary”, the secretary of the Massachusetts Department of Transportation.
“SIFT agreement”, an agreement entered into by the secretary and municipality and approved by the municipality in accordance with section 3 authorizing a municipality to collect and remit tax increment revenue in accordance with this chapter and which shall include without limitation: (1) a detailed description of the transportation project to be financed in whole or in part by the SIFT agreement, including a financial plan for such project; (2) the boundaries of the SIFT district, including a depiction of the SIFT district on a map of the municipality and a listing of the street addresses and lot numbers of all lots within the SIFT district; (3) estimates of the captured assessed value during the term of the SIFT agreement; (4) a projection of the tax revenues to be derived from the SIFT district in the absence of a SIFT agreement; (5) the method of calculating the percentage of the tax increment to be remitted together with any provisions for adjustment of the method of calculation; (6) the board or officer of the city or town responsible for calculating the tax increment; (7) the projected tax increments to be remitted in each year of the SIFT agreement; (8) the portion of the captured assessed value, if any, pledged or otherwise subject to chapter 40Q or section 59 of chapter 40; (9) a statement of the estimated impact of tax increment financing on all taxing jurisdictions in which the SIFT district is located; (10) the term of years of the SIFT agreement; (11) the base date; (12) a copy of the SIFT certificate; (13) the date, if any, following which the SIFT agreement must be re-approved by the city or town in accordance with section 2 if a notice to proceed has not been issued by the department or authority with respect to the transportation project; (14) the department and/or authority fund to which the tax increment revenue shall be remitted; (15) if applicable, a statement of the city or town electing that the original assessed value not be increased by the adjustment factor; and (16) provisions, if any, addressing the municipality’s obligations under the SIFT agreement following material changes regarding the scope, construction or operation of the transportation project.
“SIFT certificate”, a certificate issued by the secretary certifying that a municipality is eligible to enter into a SIFT agreement under this chapter with respect to a particular transportation project; provided, that the SIFT certificate shall designate, without limitation: (i) the eligible municipality or municipalities ; (ii) the eligible transportation project; (iii) the percentage of each municipality’s tax increment to be remitted to the authority or department; (iv) any amounts for continuing maintenance of the transportation project following payment of debt associated with the project; (v) the boundaries of the SIFT district; (vi) the required term of years during which the tax increment shall be collected and remitted; (vii) the department or authority fund to which the tax increment revenue shall be remitted; and (viii) any other condition deemed necessary by the secretary.
“SIFT district”, a specified area within the corporate limits of a city or town as set forth in the SIFT certificate and as designated in a SIFT agreement approved in accordance with section 3.
“Tax increment”, that portion of all real and personal property taxes assessed by a city or town upon the captured assessed value of property in the SIFT district pursuant to the SIFT agreement. The portion of the tax levy attributable to the increased valuation after the base date shall be calculated using the same classification factors as were used as of the base date, or without classification factors, if property was not classified for tax purposes as of the base date. If the base date is earlier than the date as of which the commissioner of revenue makes the certification required by subsection (c) of section 2A of chapter 59, the SIFT agreement may provide for such further adjustment in calculating the tax increment as may be deemed appropriate to reflect changes of practice after the base date with respect to the valuation of property in order to achieve assessment at full and fair cash valuation.
“Transportation project”, any construction project, or any component thereof, undertaken by the authority and/or department, including without limitation construction, repair or enhancement of ways or bridges, on- or off-ramps, bikeways or multi-use paths, transit stations, passenger facilities, and rail projects and extensions.
Section 2. The secretary may issue a SIFT certificate with respect to any transportation project involving one or more municipalities; provided, that a SIFT certificate shall be accompanied by written findings supporting: (i) the determination of eligibility with respect to the municipalities; (ii) the determination of eligibility with respect to the transportation project; (iii) the required term; and (iv) the tax increment to be remitted.
Section 3. (a) No municipality may enter into or implement a SIFT agreement unless and until: (i) the secretary has issued a SIFT certificate authorizing the municipality to enter into a SIFT agreement with respect to the transportation project; (ii) the SIFT agreement is in conformity with all terms set forth in the SIFT certificate; and (iii) the SIFT agreement has been approved by the municipality in accordance with this section.
(b) Notwithstanding any general or special law or regulation to the contrary, not less than 30 days prior to any vote required under subsection (c), a municipality shall hold a public hearing regarding the SIFT agreement or amendment thereto and shall provide the public with an opportunity to submit written comments. The municipality shall create a written record of the public hearing, which shall include a description of the testimony offered by persons at such hearing. Not less than 14 days prior to the hearing: (i) public notice of the hearing shall be published in one or more local newspapers of general circulation and shall be posted in the municipality’s main governmental building and on the municipality’s web site; and (ii) the SIFT agreement or amendment shall be made available by the municipality for inspection and copying.
(c) Notwithstanding any general or special law or regulation to the contrary, a city or town shall approve the SIFT agreement by vote of its town meeting, town council or city council, with the approval of the mayor where required by law; provided, that the term of years, any provision related to calculation of the tax increment, or the boundaries of a SIFT district may only be amended, following approval by the secretary, after meeting the requirements for adoption under this section.
Section 4. (a) Within 60 days following approval of a SIFT agreement in accordance with section 3, the assessor of the city or town shall certify the original assessed value of the taxable property within the boundaries of the SIFT district. Each year after the approval of a SIFT agreement the assessor of the city or town shall certify the amount by which the assessed value has increased or decreased from the original value.
(b) Following approval of a SIFT agreement in accordance with section 3, the city or town shall set aside and remit all tax increment revenues in accordance with the SIFT agreement.
Section 5. Notwithstanding any general or special law or regulation to the contrary, a SIFT agreement may not require a municipality to remit additional payments to the authority, department or any other party in the event that tax increment revenue is less than any annual contributions set forth in the SIFT agreement.
Section 6. The department shall promulgate rules and regulations necessary to implement this chapter, including, without limitation, rules and regulations establishing criteria for evaluating eligible transportation projects.
SECTION 2. Chapter 10 of the General Laws, as so appearing, is hereby amended by inserting after section 35AAA the following 2 new sections:-
Section 35BBB. There is hereby set up on the books of the commonwealth a separate fund to be known as the MBTA SIFT Fund, hereinafter referred to as the Fund. There shall be credited to the Fund all payments made by a city or town to the Fund pursuant to a SIFT agreement adopted in accordance with chapter 40X. Amounts in the Fund shall be held by the state treasurer or his designee as trustee and not on account of the commonwealth, and the state treasurer is hereby authorized and directed to disburse amounts in the Fund, without further appropriation, at the direction of the Massachusetts Bay Transportation Authority, hereinafter referred to as the authority; provided, however, that amounts credited to the Fund pursuant to a SIFT agreement shall be segregated by city or town and shall be used solely for the purpose of financing those transportation projects identified in such SIFT agreements.
All amounts in the Fund shall be available for payment of debt service on debt obligations issued by the authority, and may be pledged to secure debt of the authority in such manner and according to such priority as the authority may determine.
In order to increase the marketability of any bonds or notes of the authority which may be secured by or payable from amounts held in the Fund, the sums to be credited to the Fund as aforesaid are hereby impressed with a trust for the benefit of the authority and the holders from time to time of any such bonds or notes, and, in consideration of the acceptance of payment for any such bonds or notes, the commonwealth covenants with the purchasers and all subsequent holders and transferees of any such bonds or notes that while any such bond or note shall remain outstanding, and so long as the principal of or interest on any such bond or note shall remain unpaid, the sums to be credited to the Fund as aforesaid shall not be diverted from the purposes identified herein.
SECTION 3. Chapter 6C of the General Laws, as so appearing, is hereby amended by inserting after section 4 the following new section:-
Section 4B. There shall be established and placed within the department a separate fund to be known as the Department of Transportation SIFT Fund, hereinafter referred to as the Fund. There shall be credited to the Fund any revenues from appropriations or other monies authorized by the general court and specifically designated to be credited to the Fund, any gifts, grants, private contributions, or investment income earned on the Fund's assets, and all payments made by a city or town to the Fund pursuant to a SIFT agreement adopted pursuant to chapter 40X. Amounts credited to the Fund pursuant to such SIFT agreements shall be segregated by city or town and shall be used solely for the purpose of financing those transportation projects identified in such SIFT agreements. All amounts in the Fund shall be available for expenditure without appropriation for payment of costs associated with construction of such transportation projects and for debt service on debt obligations issued by the department or the commonwealth to fund construction of such transportation projects, and may be pledged to secure debt of the department or the commonwealth in such manner and according to such priority as the department may determine.
SECTION 4. The secretary of transportation and the secretary of administration and finance shall jointly conduct a study on the feasibility and appropriateness of a program dedicating “new state tax revenues,” as that term is defined under sections 5 through 12, inclusive, of chapter 293 of the acts of 2006, as amended, and the regulations promulgated thereunder, attributable to businesses within a SIFT district to transportation projects identified in SIFT programs. The report and recommendation shall be filed with the house and senate committees on ways and means, the joint committee on transportation and the joint committee on revenue not later than June 30, 2017.
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