SENATE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 2121

The Commonwealth of Massachusetts

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In the One Hundred and Ninetieth General Court
(2017-2018)

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by inserting, after section __, the following new section:-

"SECTION __. The General Laws are hereby amended by inserting after chapter 40W, the following chapter:-

Chapter 40X.  Community Benefit Districts

Section 1.  As used in this chapter, the following words shall have the following meanings unless the context clearly requires otherwise:

“Community benefit district” or “CBD”, a contiguous geographic area with clearly defined boundaries, formed pursuant to this chapter.

“CBD corporation”, the nonprofit corporation designated to receive funds and otherwise implement the CBD, including the board of directors, officers and any employees.

“CBD fee”, a payment for services or improvements specified by the initial management plan and any management plan.

“Initial management plan”, the strategic and operating plan for the CBD as approved by the municipal governing body as part of the creation of the CBD.

“Management plan”, any subsequent, updated version of the initial management plan that is approved by the board of directors.

“Memorandum of understanding with the municipality” or “MOU”, a document which describes the standard government services and supplemental services to be provided within the CBD and how the municipality will participate in the CBD as a property owner and member.

“Municipal governing body”, the city council or board of aldermen in a city or the board of selectmen or town council in a town.

“Petition signer”, a property owner, or their designee, within the CBD who affirmatively signs the petition to establish the CBD.

“Property”, real property located within the CBD, whether commercial, tax exempt or residential.

“Property owner”, the owner of record of property; provided, however, that when a property is owned by an entity other than a natural person, a petition signer for that property shall include the petition-signer’s title and shall demonstrate its authority to sign as owner; and provided further, that if a property is owned by multiple persons, the signature of 1 owner shall be sufficient if that owner demonstrates authority to sign on behalf of the other owners.

“Standard government services”, governmental functions, programs, activities, facilities, improvements and other services that a municipality is authorized to perform or provide and that are paid for out of the municipal government budget.

“Supplemental services”, the provision of programs, public rights of way services, activities, amenities or information in addition to the standard governmental services provided to the CBD.

Section 2.  The rights and powers of a CBD corporation in a CBD approved by the municipal governing body pursuant to section 4 shall include: retaining or recruiting business; administering and managing central and neighborhood business districts; promoting economic development; managing parking; designing, engineering, constructing, maintaining or operating buildings, facilities, urban streetscapes or infrastructures to further economic development and public purposes; conducting historic preservation activities; leasing, owning, acquiring, or optioning real property; owning and managing parks, public spaces and community facilities; supplementing maintenance, security, or sanitation; planning and designing services; formulating a fee structure; accumulating interest; incurring costs or indebtedness; entering into contracts; suing and being sued; employing legal and accounting services; undertaking planning, feasibility and market analyses; developing common marketing and promotional activities; engaging in placemaking, programming, and event management within the district; soliciting donations, sponsorships and grants; operating transit services; and supporting public art, human and environmental services related to the enhancement of the district or other supplemental services or programs that would further the purposes of this chapter.

Section 3. The organization of a CBD shall be initiated by a petition of the property owners within the proposed CBD, which shall be filed in the office of the clerk of the municipality and contain the following:

(i) the signatures of the property owners, including participating tax-exempt entities, or petition signers in the proposed district who support the establishment of the district and who will pay more than 50 per cent of the assessments proposed to be levied; provided, however, that the amount of the assessment attributable to property owned by the same property owner that is in excess of 20 per cent of the amount of all assessments proposed shall not be included in the calculation or, alternatively, if there are not more than 4 property owners in the proposed district, all such property owners shall sign the petition;

(ii) a description of and a site map delineating the boundaries of the proposed CBD;

(iii) the identity and address of the CBD corporation, including its initial set of directors and officers and a copy of its by-laws;

(iv) an initial management plan, which shall set forth the supplemental services and programs, vision, strategy, budget and fee structures proposed for the CBD;

(v) the criteria for waiving the fee for any property owner within the CBD who can provide evidence that the imposition of such a fee would create a significant financial hardship; and

(vi) a staffing plan, which may include private nonprofit, for profit or public agency contractors or subcontractors.

A petition may include a mechanism for reimbursing the municipality for the costs incurred in establishing the CBD, and for costs incurred in collecting the district fees. A copy of the petition shall be filed with the undersecretary of housing and community development and the secretary of housing and economic development not more than 30 days following receipt of the petition by the clerk of the municipality.

Section 4. (a) The municipal governing body shall hold a public hearing not more than 60 days following receipt of the petition by the clerk of the municipality. Written notification of the hearing shall be sent to each property owner within the boundary of the proposed CBD not more than 30 days before a hearing by mailing notice to the address listed in the property tax records. Notification of the hearing shall be published for 2 consecutive weeks in a newspaper of general circulation in the area, the last publication being not less than 14 days before the hearing and listed on the municipality’s website. The public notice shall contain the proposed boundaries of the CBD, the proposed fee level, a summary of supplemental programs and services and where the property owner may obtain a full copy of the initial management plan.

(b) Prior to the public hearing, the municipal governing body shall direct the town clerk, city clerk or a designee to determine that the establishment criteria have been met, as set forth in section 3. In determining whether a signature is authentic, the clerk shall apply the same standard used when certifying signatures for a petition to place a referendum on a local or state ballot.

(c) Not more than 45 days after the public hearing, a municipal governing body, in its sole discretion, may, by vote of the city council with approval of the mayor in a city and by vote of the board of selectmen in a town, declare the district organized and describe the boundaries and service area of the district; provided, however, that in a town with a population of not more than 10,000, the district shall not be declared organized without a vote by the board of selectmen and a town meeting. The declaration shall include authorization to municipal staff to enter into an agreement with the CBD corporation with respect to operations and funding consistent with the approved initial management plan. Upon such declaration, the CBD may commence operations.

(d) Notice of the declaration of the organization of the CBD shall be mailed or delivered to each property owner within the proposed CBD. The notice shall explain that membership in the CBD is irrevocable unless the CBD is dissolved pursuant to section 10 and shall include a description of the basis for determining the district fee, the projected fee level and the services to be provided within the CBD. Such notice shall be published for 2 consecutive weeks in a newspaper of general circulation in the area, the last publication being not more than 30 days after the vote to declare the district organized.

(e) Participation in the CBD shall be permanent unless the CBD is dissolved pursuant to section 10. All property owners shall contribute in accordance with fee structures based upon the benefits anticipated to be received, as outlined in the initial management plan.

Section 5. (a) Each CBD corporation shall have a not for profit board of directors that shall oversee its operations to insure the implementation of the initial management plan and any management plan. At least 51 per cent of the board shall be composed of property owners, which may include participating tax-exempt property owners, or their designees; and the remaining members may be a balanced group of stakeholders representing the community, including residents, municipal government, business tenants and nonprofits.

(b) The initial management plan shall be updated at least once every 3 years by the CBD board of directors and a copy thereof shall be mailed, emailed or delivered to each CBD member and filed with the municipal governing body.

(c) The CBD corporation shall comply with the public charity reporting requirements of section 8F of chapter 12.

Section 6. All real property located within a proposed CBD shall be considered in the fee formula for supplemental services and programs as outlined in the initial management plan, except that any residential property with a homeowner eligible for a property tax exemption established by statute, or local ordinance or bylaw, shall not be charged a fee for participating in the district.

Tax-exempt property owners in the district shall not be required to pay assessment fees, but may elect to do so. Tax-exempt property owners may also enter into a Memorandum of Agreement with the district management entity in lieu of, or to supplement, monetary payments, and which may include such contributions as: space for events, loans of equipment or vehicles, volunteers or volunteer management, staff time, programs and services to the community, or any other contribution deemed appropriate to support implementation of the district management plan.

The CBD corporation, at its sole discretion, may grant a financial hardship waiver to any property owner, pursuant to the waiver criteria established within the CBD. A waiver is not intended to be permanent and shall be requested and granted on an annual basis, and shall be based upon temporary, extraordinary circumstances. The CBD corporation may also, at its discretion, approve in-kind contributions or services in addition to, or in lieu of, fees upon execution of a memorandum of agreement with a property owner.

Section 7. Upon formal approval of a CBD, the municipal governing body shall adopt the district fee structure for the financing of items submitted in the initial management plan for the CBD; provided, however, that the total fees assessed in any 1 year may not exceed 1/2 of 1 per cent of the sum of the assessed valuation of the real property owned by participating members in the CBD district. The basis of a district fee may be determined by a formula utilizing at least 1 or a combination of the following methodologies:

(i) different levels for varying classifications of real property;

(ii) benefit zones;

(iii) assessed valuation;

(iv) building or parcel square footage;

(v) street frontage; or

(vi) any other formula which meets the objectives of the CBD.

The CBD, through its management plan, shall have the option to limit or cap the maximum annual fee derived from individual properties or the total annual revenue generated by the CBD.

The initial management plan may also propose a “phase-in” period of not more than 3 years, with assessments increasing over the stated period. The formula for determining the district fee structure shall be set forth in the original petition as required by section 3.

The CBD may change the formula or the assessment level set forth in the initial management plan or management plan by majority vote of its board of directors, ratified by vote of 2/3 of the property owners that are members in the CBD.  Within 30 days after amendment of the formula or assessment level, the CBD shall file notice of the changes with the municipal governing body, the undersecretary of housing and community development and the secretary of housing and economic development. In addition to receiving funds from the district fee, the CBD corporation may receive grants, donations, revenues generated from parking fees, CBD activities or gifts on behalf of the CBD.

Section 8. The collector or treasurer of the municipality may collect district fees in designated CBDs and disburse the funds to the CBD corporation. In addition to the items identified in section 3A of chapter 60, the collector or treasurer may include notices for district fees in the envelope or electronic message in which a property bill is sent. District fees collected shall be used solely to fund items to further the goals identified and approved in the initial management plan for the CBD. The collector or treasurer shall disburse fee revenues to the CBD corporation not later than 30 days after the collection of such fees, together with any interest earned on those fees.

Following establishment of the CBD, all fees billed by or on behalf of the CBD and unpaid after 30 days from the date of billing shall become a lien on the property, which shall have priority over all other liens except municipal liens and mortgages of record prior to the recording of a notice of lien, if notice of the lien is duly recorded by the CBD corporation in the appropriate registry of deeds or land court registry district.

Section 9. At any time after the establishment of a CBD pursuant to this chapter, the district boundaries upon which the establishment was based may, upon the recommendation of the CBD corporation, be amended by the municipal governing body after compliance with the procedures set forth in this section.

The CBD corporation shall prepare a petition, consistent with the criteria described in section 3; provided, however, that if the petition concerns an amendment to expand the district, the petition shall be accompanied by signatures of the property owners who are required to pay more than 50 per cent of the assessments in the expanded area. If the petition concerns an amendment to reduce the size of the district, it shall be accompanied by signatures of the property owners who are required to pay more than 50 per cent of the assessments levied in the existing district. The municipal governing body shall hold a public hearing not more than 60 days after its receipt of a petition to amend the district boundaries. In the case of an expansion petition, written notification of the hearing shall be sent to each property owner within the proposed expansion area of the CBD not more than 30 days before the hearing, by mailing notice to the address listed in the property tax records. In the case of a reduction petition, the notice shall be sent to each property owner in the existing district. For either an expansion or reduction petition, notification of the hearing shall also be published for 2 consecutive weeks in a

newspaper of general circulation in the area with the last publication being not more than 14 days before the hearing and shall be listed on the municipality’s website. For an expansion petition, the public notice shall contain the proposed expanded boundaries of the CBD, the fee level, a summary of supplemental programs and services, and where the property owner may obtain a full copy of the management plan. For a reduction petition, the public notice shall contain the proposed reduced boundaries of the CBD and any changes in the fee level, supplemental programs and services or other material aspects of the management plan that will occur as a result of the boundary change. Not more than 30 days after the hearing, and upon determination by the city or town clerk, or designee, that the petition has met the necessary criteria, the municipal governing body, in its sole discretion, may by a vote declare the district boundaries amended. Upon the adoption of an amendment to the district boundaries which increases the size of the district, owners of property to be added to the district shall be notified of the new boundaries of the district in accordance with section 4.

Section 10.  A CBD may be dissolved by a majority vote by its board of directors, ratified by a two-thirds vote of the property owners; provided, however, that the amount of the assessment attributable to property owned by the same property owner that is in excess of 20 per cent of the amount of all assessments proposed shall not be included in the calculation; provided, however, that no CBD shall be dissolved until it has satisfied or paid in full all of its outstanding indebtedness, obligations and liabilities; until funds are on deposit and available therefore or until a repayment schedule has been formulated and municipally approved. Upon dissolution, the CBD shall not incur any new or increased financial obligations.  Any liabilities, either current or future, incurred as a result of action to accomplish the purposes of the management plan shall not be an obligation of the municipality. Liabilities shall be paid for entirely from revenue gained from the project or facilities authorized, or from the fees on the properties in the CBD.

Upon the dissolution of a CBD, any remaining revenues derived from the sale of assets acquired with fees collected shall be refunded to the property owners in the CBD by applying the same formula used to calculate the fee in the fiscal year in which the CBD is dissolved. Nothing in this section shall prevent the filing of a subsequent petition for a similar CBD."