SECTION 1. Chapter 40 of the General Laws is hereby amended by inserting after section 60A the following section:-
Section 60C. For the purposes of this section, the following terms shall have the following meanings:-
“Executive office”, executive office of housing and community development.
“Neighborhood revitalization municipality”, a municipality with a population less than 15,000 and less than 2,500 people residing in a square mile within such municipality.
“Neighborhood housing”, a 1 to 3 story owner-occupied, pre-existing residential housing unit contained within a neighborhood revitalization municipality.
“Secretary”, secretary of housing and community development.
(b) Notwithstanding any general or special law to the contrary, a town, by vote of its town meeting, town council, with the approval of the mayor where required by law, on its own behalf or in conjunction with 1 or more towns and pursuant to regulations issued by the secretary of housing and economic development, may adopt and implement a neighborhood housing tax increment financing plan, referred to as a NH-TIF plan in this section, intended to encourage rehabilitation and revitalization of neighborhood housing in a neighborhood revitalization municipality. Any such NH-TIF plan shall:
(i) designate 1 or more areas of such municipality a NH-TIF area subject to the approval of the secretary under regulations adopted by the executive office consistent with this section.
(ii) describe in detail the neighborhood housing area contemplated for such NH-TIF area as of the date of adoption of the NH-TIF plan that shall be eligible for the NH-TIF;
(iii) authorize tax increment exemptions from property taxes, under clause Fifty-first of section 5 of chapter 59, for a specified term not to exceed 30 years, for any real property with existing neighborhood housing which is located in the NH-TIF area and for which an agreement has been executed with the owner of the parcel under clause (iv); provided, however, that the NH-TIF plan shall specify the level of exemptions expressed as exemption percentages, not to exceed 100 per cent, to be used in calculating the exemptions for the parcel, and for personal property situated on that parcel, as provided under said clause Fifty-first of said section 5 of said chapter 59; provided, further, that the exemption for each parcel of real property shall be calculated using an adjustment factor for each fiscal year of the specified term equal to the product of the inflation factors for each fiscal year since the parcel first became eligible for such exemption pursuant to this clause; provided, further, that the inflation factor for each fiscal year shall be a ratio:
(a) the numerator of which shall be the total assessed value of all parcels of all commercial and industrial real estate that is assessed at full and fair cash value for the current fiscal year minus the new growth adjustment for the current fiscal year attributable to the neighborhood housing as determined by the commissioner of revenue under paragraph (f) of section 21C of said chapter 59; and
(b) the denominator of which shall be the total assessed value for the preceding fiscal year of all the parcels included in the numerator, except that such ratio shall not be less than 1;
(iv) include executed agreements between such city or town and each eligible owner of a parcel of real property which is located in a NH-TIF area. Each such agreement shall include all material representations of the parties which served as a basis for the descriptions contained in the NH-TIF plan in accordance with clause (ii) and which served as a basis for the granting of a NH-TIF exemption; and
(v) delegate to 1 board, agency or officer of the town the authority to execute agreements in accordance with clause (iv).
SECTION 2. Paragraph (a) of Part B of section 3 of chapter 62 of the General Laws is hereby amended by adding the following subparagraph:-
(16) An amount equal to 20 per cent of the cost of improving neighborhood housing in a neighborhood housing tax increment financing area as approved by the secretary of housing and economic development.
SECTION 3. Section 6 of chapter 62 of the General Laws is hereby amended by adding the following subsection:-
(s) (1) A credit shall be allowed against the tax liability imposed by this chapter, to the extent authorized by the secretary of housing and economic development, up to an amount equal to 50 per cent of such liability in any taxable year; provided, however, that the 50 per cent limitation shall not apply where the credit is refundable under paragraph (5) for approved projects for improving neighborhood housing in neighborhood housing revitalization municipalities.
(2) Any taxpayer entitled to a credit under this subsection for any taxable year may carry over and apply to the tax for any one or more of the next succeeding ten taxable years, the portion, as reduced from year to year, of those credits which exceed the tax for the taxable year; provided, however, that in no event shall the taxpayer apply the credit to the tax for any taxable year beginning more than five years after the approved project ceases to qualify as such under the provisions of section 60C of chapter 40.
(3) For purposes of this subsection, the commissioner of revenue may aggregate the activities of all entities, whether or not incorporated, under common control as defined in subsection (f) of section forty-one of the Code.
(4) The commissioner of revenue shall promulgate such rules and regulations necessary to implement the provisions of this subsection. Such rules and regulations may provide for the adjustment of prices and elimination of transactions between related taxpayers to ensure that all amounts upon which the credit is based reasonably reflect fair market value. In addition, such rules and regulations shall include provisions to prevent the generation of multiple credits with respect to the same property.
(5) If a credit allowed under paragraph (1) exceeds the tax otherwise due under this chapter, 100 per cent of the balance of such credit may, at the option of the taxpayer and to the extent authorized by the department of housing and economic development, be refundable to the taxpayer for the taxable year in which qualified property giving rise to that credit is placed in service. If such credit balance is refunded to the taxpayer, the credit carryover provisions of paragraph (2) shall not apply.
SECTION 4. Section 3 of chapter 121F of the General Laws, as appearing in the 2010 Official Edition is hereby amended by striking out, in line 99, the words, “and (7)” and inserting in place thereof the following words:- (7) to support the rehabilitation and improvement of neighborhood housing as defined in section 60C of chapter 40B, which may include grants, direct loans, loan guarantees and loan loss reserves; and (8).
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