Bill S.895

SENATE DOCKET, NO. 1668 FILED ON: 1/19/2023

SENATE . . . . . . . . . . . . . . No. 895

By Ms. Moran, a petition (accompanied by bill, Senate, No. 895) of Susan L. Moran for legislation to promote sustainable affordable housing. Housing.

The Commonwealth of Massachusetts

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In the One Hundred and Ninety-Third General Court
(2023-2024)

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An Act to promote sustainable affordable housing.

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. Section 20 of Chapter 40B of the General Laws, as appearing in the 2020 Official Edition, is hereby amended by inserting, after the definition of “low or moderate income housing”, the following definition:-

“Mixed use development”, a development containing a mix of residential uses and non-residential uses, including, without limitation: commercial, institutional, industrial or other uses; all conceived, planned and integrated to create vibrant, workable, livable and attractive neighborhoods.

SECTION 2. Section 20 of Chapter 40B of the General Laws, as appearing in the 2020 Official Edition, is hereby amended by inserting, at the end of the definition of “consistent with local needs”, the following:-

Requirements or regulations shall be consistent with local needs if they impose a requirement that the development have all of the requirements for mixed use development, as defined by this section.

SECTION 3. Notwithstanding any general or special law to the contrary, the department of housing and community development shall update the definition of “SHI Eligible Housing” in 760 CMR 56.02 to include:

(a) Any manufactured home or unit of a manufactured home, as defined by section 32Q of chapter 140 of the General Laws;

(b) Any unit within an assisted living residence, as defined by section 1 of chapter 19D of the General Laws; and

SECTION 4. Section 38Q of chapter 63 of the General Laws, as appearing in the 2020 Official Edition, is hereby amended by inserting, after the second sentence, the following sentences:-

An additional credit of 10 per cent of these costs shall be allowed for a corporation which achieves and maintains a permanent solution or remedy operation status in compliance with chapter 21E and which develops the economically distressed area into housing accommodations with at least 30 per cent but not more than 40 percent of units eligible for designation as low or moderate income housing by the department of housing and community development. An additional credit of 15 per cent of these costs shall be allowed for a corporation which achieves and maintains a permanent solution or remedy operation status in compliance with chapter 21E and which develops the economically distressed area into housing accommodations with more than 40 per cent of developed units eligible for designated as low or moderate income housing by the department of housing and community development.

SECTION 5. Chapter 184 of the General Laws, as appearing in the 2020 Official Edition, is hereby amended by the adding after section 21, the following section:-

Section 21A. Municipal Right of First Refusal for Affordable Housing Units

(a) For the purposes of this section, the following words shall, unless the context clearly requires otherwise, have the following meanings:

''Affiliate'' an entity owned or controlled by an owner or under common control with the owner.

“Auction” or "public auction", the sale of a housing accommodation, under power of sale in a mortgage loan, by public bidding.

“Borrower", a mortgagor of a Mortgage Loan.

"Deed in lieu," a deed for the collateral property, that the mortgagee accepts from the borrower in exchange for the release of the borrower’s obligation under the mortgage loan.

“Department”, Department of Housing and Community Development, or its successor agency.

“Designee", a nonprofit organization established pursuant to chapter 180, a local housing authority, or a controlled nonprofit or for-profit affiliate of either such entity; provided that the parent organization has requisite experience in developing, owning and/or operating residential real estate and with the financial capacity to secure the financing of the purchase transaction; provided that any purchase by a Designee under this section shall be for the purpose of the use of the property as long-term affordable rental housing set out in a recorded restriction.

"Elderly Tenant Household” a tenant household in which 1 or more of the residents are age 65 or older.

"Foreclosure," a proceeding to terminate a borrower’s interest in property instituted by the mortgagee.

"Housing accommodation," a building or buildings, structure or structures, or part thereof, rented or offered for rent for living or dwelling purposes, including, without limitation, houses, apartments, condominium units, cooperative units and other multi-family residential dwellings; provided, however, that a housing accommodation shall not include a group residence, homeless shelter, lodging house, orphanage, temporary dwelling structure or transitional housing; and provided, further that a housing accommodation shall not include 1-4 unit borrower-occupied housing accommodation if the borrower is domiciled in the housing accommodation at the initiation of the short-sale, deed in lieu, or foreclosure process.

“Immediate Family Member”, the parent, offspring, sibling, or spouse of the Owner.

"Mortgage loan," a loan secured wholly or partially by a mortgage on a housing accommodation.

"Mortgagee," an entity to whom property is mortgaged, the mortgage creditor or lender including, but not limited to, mortgage servicers, lenders in a mortgage agreement and any agent, servant or employee of the mortgagee or any successor in interest or assignee of the mortgagee's rights, interests or obligations under the mortgage agreement.

"Owner", a person, firm, partnership, corporation, trust, organization, limited liability company or other entity, or its successors or assigns, that holds title to real property.

"Purchaser", a party who has entered into a purchase contract with an owner and who will, upon performance of the purchase contract, become the new owner of the property.

"Purchase contract", a binding written agreement whereby an owner agrees to sell property including, without limitation, a purchase and sale agreement, contract of sale, purchase option or other similar instrument.

"Sale", an act by which an owner conveys, transfers or disposes of property by deed or otherwise, whether through a single transaction or a series of transactions, within a 3 year period; provided, that a disposition of housing by an owner to an affiliate of such owner shall not constitute a sale.

"Short-sale," a sale approved by the mortgagee to a bona fide purchaser at a price that is less than the borrower's existing debt on the housing accommodation.

"Tenant", a person entitled to possession or occupancy of a rental unit within residential housing, including a subtenant, lessee and sublessee.

"Third-party offer", an offer to purchase the mortgaged property for valuable consideration by an arm's length purchaser; provided, that a third-party offer shall not include an offer by the borrower or the tenants.

"Third-party purchaser", a purchaser that is not the Tenant Association at the property, or its Designee, Successor, or an Affiliate.

(b) An owner of a residential building with any units designated as affordable by Chapter 40B or any other chapter of the General Laws in the commonwealth shall:

(1) notify the executive and legislative body of the municipality in which the building is located and each tenant household, in writing by hand delivery and United States' mail, of the owner's intention to sell the property or any units within the property (including entertaining an unsolicited offer from a third-party to purchase the property); and

(2) provide a municipality an opportunity to purchase the property or any units within the property at a fair market rate prior to entering into an agreement to sell such property pursuant to the time periods contained in this section, but no owner shall be under any obligation to enter into an agreement to sell such property to the municipality.

(c) A municipality may, within 30 days after receipt of the owner's intention to sell, submit an offer to the owner to purchase the property.  Failure to submit a timely offer shall constitute an irrevocable waiver of the municipality’s rights under this subsection and the owner may enter into a contract to sell the property to a third-party. If the owner and the municipality have not entered into an agreement within 30 days after receipt of the notice of the owner's intent to sell, the owner may enter into an agreement to sell the property to a third-party.

(d) Upon execution of any purchase contract with a third party, the owner shall, within 7 days, submit a copy of the executed contract and proof that the deposit toward the purchase has been paid by the third party along with a proposed purchase contract for execution by the municipality. If the municipality elects to purchase the property, the municipality shall within 30 days after the receipt of the third-party purchase contract and the proposed purchase contract, execute the proposed purchase contract or such other agreement as is acceptable to both parties. The time periods set forth in this subsection may be extended by agreement between the owner and the municipality. Except as otherwise specified, the terms and conditions of the proposed purchase contract offered to the municipality shall be the same as those of the executed third-party purchase contract. Any purchase contract offered to, or proposed by, the municipality shall provide at least the following terms:

(1) the earnest money deposit shall not exceed the lesser of:

(i) the deposit in the third-party purchase contract;

(ii) 5 per cent of the sale price; or

(iii) $250,000; provided, however, that the owner and the municipality may agree to modify the terms of the earnest money deposit; provided, further, that the earnest money deposit shall be held under commercially-reasonable terms by an escrow agent selected jointly by the owner and the municipality;

(2) the Owner must provide the following information, documentation, and permissions, within 30 days of the date of the purchase contract of the municipality: the current rent roll with names of all tenants; documentation of all operating expenses for the prior two years, including utilities, insurance premiums, bills for repairs, and capital improvements; permission to inspect all common and maintenance service areas of the property, including roof, boiler room, electrical and telecommunications rooms; permission to conduct inspections and tests for the presence of lead paint and asbestos, including permission to do small amounts of demolition that will be restored after said inspections and tests are completed; and permission to do tests for regulated environmental toxins on unbuilt areas of the property, if required by the lender of the municipality;

(3) the contract will contain all reasonable contingencies, including financing, marketability of title, and appraisal contingencies;

(4) the earnest money deposit shall be refundable for not less than 90 days from the date of execution of the purchase contract or such greater period as provided for in the third-party purchase contract; provided, however, that if the owner unreasonably delays the buyer's ability to conduct due diligence during the 90 day period, the earnest money deposit shall continue to be refundable for an additional period of one day for every day beyond 30 days that the owner has not complied with the provisions of subsection (5) (ii) above. After the expiration of the specified time period, the earnest money deposit shall become non-refundable but shall continue to be a deposit toward the full purchase price; and

(5) real estate broker commissions or fees that are associated with the third-party purchase transaction shall be payable upon the closing of the purchase.

(e) The municipality shall have 160 days from execution of the purchase and sale agreement to perform all due diligence, secure financing for and close on the purchase of the building. Failure to exercise the purchase option within 160 days shall constitute a waiver of the purchase option by the municipality. The 160 day period may be extended by agreement of both parties.

(f) If the municipality does not exercise their purchase option the Owner may proceed with the sale to the third-party. If the closing date in the third-party contract is extended, for each such extension, the Owner shall provide the municipality a notarized amendment to the purchase contract extending the date of the closing. Within 7 days of the termination of the third-party purchase contract the Owner shall notify the municipality of the termination.

(g) The municipality shall ensure that their purchase of the property will not result in the displacement of any Elderly Tenant Households that choose not to participate in the purchase of the property.

(h) The Department shall enforce this subsection and shall promulgate rules and regulations necessary for enforcement. The Department shall provide municipalities with sample purchase contracts incorporating the requirements of this Section that an owner can provide to a municipality.

(e) Short-sales. In any city or town that adopts the provisions of this Section:

(1) An owner, other than the owner of a 1- 4 unit owner-occupied property, shall give notice to each tenant household of a housing accommodation and the municipality within which the housing accommodation is located of the intention to sell the housing accommodation by way of short-sale to avoid foreclosure. Such notice shall be mailed by regular and certified mail, with a simultaneous copy to the attorney general, and the municipality adopting this section within 2 business days of the owner's submission of a request or application to the mortgagee for permission to sell the housing accommodation by way of short-sale or to accept a deed in lieu. This notice shall also include a notice of the rights provided by this section.

(2) No mortgagee may accept any third-party offers or deem the owner's application for short-sale submitted for review unless and until: the mortgagee receives documentation in a form approved by the attorney general demonstrating that the tenants of the housing accommodation and the municipality within which the housing accommodation is located have been informed of the owner's intent to seek a short-sale or deed in lieu and the municipality has had the opportunity to express their interest in exercising a right of first refusal within 60 days or the opportunity to assigned their right of first refusal, or the municipality has waived those rights. If the municipality has not affirmatively expressed their interest in exercising a right of first refusal or in assigning that right within 60 days, or have not affirmatively waived that right within 60 days, the municipality’s rights are deemed waived.

(3) Before a housing accommodation may be transferred by short-sale or deed-in-lieu, the owner, other than the owner of a 1-4 unit owner-occupied property shall notify each tenant household, with a simultaneous copy to the attorney general and the municipality adopting this section, by regular and certified mail, of any bona fide offer that the mortgagee intends to accept.

(4) A municipality that is entitled to notice under the preceding paragraph (3) shall have the collective right to purchase, in the case of a third-party offer that the mortgagee intends to accept, provided that it:

(i) submits to the owner a proposed purchase and sale agreement on substantially equivalent terms and conditions within 60 days of receipt of notice of the offer made under the preceding paragraph (3),

(ii) obtains a binding commitment for any necessary financing or guarantees within an additional 90 days after execution of the purchase and sale agreement, and

(iii) closes on such purchase within an additional 90 days after the end of the 90-day period described in clause (iii).

No owner shall unreasonably refuse to enter into, or unreasonably delay the execution or closing on a purchase and sale with a municipality which has made a bona fide offer to meet the price and substantially equivalent terms and conditions of an offer for which notice is required to be given pursuant to paragraph (3). Failure of the municipality to submit such a purchase and sale agreement within the first 60-day period, to obtain a binding commitment for financing within the additional 90-day period or to close on the purchase within the second 90-day period, shall serve to terminate the rights of such municipality to purchase. The time periods herein provided may be extended by agreement. Nothing herein shall be construed to require an owner to provide financing to such municipality. A right to purchase hereunder shall be for the purpose of maintaining the use of the housing accommodation as permanently affordable rental housing.

(5) The right of first refusal created herein shall inure to the municipality for the time periods hereinbefore provided, beginning on the date of notice to the municipality under paragraph (1). The effective period for such right of first refusal shall begin anew for each different offer to purchase that the mortgagee intends to accept. The right of first refusal shall not apply with respect to any offer received by the owner for which a notice is not required pursuant to said paragraph (3).

(6) In any instance where the municipality is not the successful purchaser of the housing accommodation, the mortgagee shall provide evidence of compliance with this section by filing an affidavit of compliance with the attorney general and the registry of deeds for the county and district where the property is located within 7 days of the sale.

(7) The attorney general shall enforce this subsection (e) and shall promulgate rules and regulations necessary for enforcement. The attorney general may seek injunctive, declaratory, and compensatory relief on behalf of tenants and the Commonwealth in a court of competent jurisdiction. The attorney general shall post a sample intent to sell notice, sample proof of notice to municipality, sample notice of offer, and other necessary documents.

(f) Foreclosures. In any city or town that adopts the provisions of this Section:

(1) When a mortgagee seeks to foreclose, the mortgagee shall provide copies of all foreclosure notices required by Chapter 244, sections 14 and 35A, or any other applicable foreclosure law by regular and certified mail to the tenants of the housing accommodation and to the municipality adopting this Section. The mortgagee shall also provide tenants and the municipality, by regular and certified mail, with a copy of any Complaint filed in Land Court and any Order of Notice issued by the Land Court, pursuant to the Servicemembers Civil Relief Act if applicable, within five (5) days of issuance.

(2) The mortgagee shall provide each tenant household and the municipality adopting this Section, by regular and certified mail, a copy of any and all Notices of Sale published pursuant to Section 14 of chapter 244.

(3) No later than 5 business days before the foreclosure auction of a housing accommodation, the municipality shall inform the mortgagee, in writing, if the municipality intends to exercise their right of first refusal at auction and desire to receive information relating to the proposed auction.

(4) A municipality may exercise their collective right to purchase the housing accommodation, in the event of a third-party offer at auction that the mortgagee receives, provided that the municipality:

(i) submits to the mortgagee a proposed purchase and sale agreement on substantially equivalent terms and conditions to that received by the mortgagee in the third-party offer within sixty days of receipt of notice of the bid made under paragraph (3) of this section,

(ii) obtains a binding commitment for any necessary financing or guarantees within an additional ninety days after execution of the purchase and sale agreement, and

(iii) closes on such purchase within an additional ninety days after the end of the ninety-day period under clause (iii).

No mortgagee shall unreasonably refuse to enter into, or unreasonably delay the execution or closing on a purchase and sale with a municipality which has made a bona fide offer to meet the price and substantially equivalent terms and conditions of a bid received at auction. Failure of the municipality to submit such a purchase and sale agreement within the first sixty day period, to obtain a binding commitment for financing within the additional ninety day period or to close on the purchase within the second ninety-day period, shall serve to terminate the rights of such municipality to purchase. The time periods herein provided may be extended by agreement.

Nothing herein shall be construed to require a mortgagee to provide financing to such municipality. A right to purchase hereunder shall be for the purpose of maintaining the use of the housing accommodation as permanently affordable rental housing.

If there are no third-party bids at auction for the housing accommodation, the municipality shall have a right of first refusal whenever the mortgagee seeks to sell the housing accommodation. The municipality shall be notified of any offers the mortgagee intends to accept and shall be given an opportunity to meet the price and substantially the terms of a third-party offer based on the same time line described in paragraph (4).

(5) The right of first refusal created herein shall inure to the municipality for the time periods herein before provided, beginning on the date of notice to the municipality under paragraph (1).

(6) The attorney general shall enforce this subsection (f) and shall promulgate rules and regulations necessary for enforcement. The attorney general may seek injunctive, declaratory, and compensatory relief on behalf of tenants and the Commonwealth in a court of competent jurisdiction. The attorney general shall post a sample intent to sell notice, sample proof of notice to municipality, sample notice of offer, and other necessary documents.

(g) In any instance where the municipality is not the successful purchaser, the seller of such unit shall provide evidence of compliance with this section by filing an affidavit of compliance with the attorney general, the Department, and the official records of the county where the property is located within seven days of the sale.

(h) Any notice required by this section shall be deemed to have been provided when delivered in person or mailed by certified or registered mail, return receipt requested, to the party to whom notice is required; except that with respect to providing notice to tenants, notice shall be deemed to have been provided when either: (i) the notice is delivered in hand to the tenant or an adult member of the tenant's household; or (ii) the notice is sent by first class mail and a copy is left in or under the door of the tenant's dwelling unit. A notice to the affected municipality shall be sent to the chief executive officer.

(i) It is illegal for an owner or their agent to take any action to evict, threaten, coerce, or retaliate against a tenant or tenants in order to avoid application of this Section.

(j) This section shall not apply to the following:

(1) property that is the subject of a government taking by eminent domain or a negotiated purchase in lieu of eminent domain;

(2) rental units in any hospital, skilled nursing facility, or health facility;

(3) rental units in a nonprofit facility that has the primary purpose of providing short term treatment, assistance, or therapy for alcohol, drug, or other substance abuse; provided, that such housing is incident to the recovery program, and where the client has been informed in writing of the temporary or transitional nature of the housing;

(4) rental units in a nonprofit facility that provides a structured living environment that has the primary purpose of helping homeless persons obtain the skills necessary for independent living in a permanent housing and where occupancy is restricted to a limited and specific period of time of not more than 24 months and where the client has been informed in writing of the temporary or transitional nature of the housing at its inception;

(5) any unit that is held in trust on behalf of a disabled individual who permanently occupies the unit, or a unit that is permanently occupied by a disabled parent, sibling, child, or grandparent of the owner of that unit;

(10) any property that is owned by a college or university that is occupied exclusively by students; or

(11) any sale to an Immediate Family Member of the owner for a total purchase price below the current assessed value of the property.

(k) A municipality shall not solicit or accept payment or any other consideration for assigning or waiving any rights under this section.

(l) Aggrieved municipalities may seek damages under General Law Chapter 93A and may file a complaint with the attorney general, and may also file a court complaint for equitable and/or monetary relief, including but not limited to damages of a percentage of the sales price and/or injunctive relief in the form of specific performance. At all times, all parties must negotiate in good faith.

SECTION 6. Section 20 of Chapter 40B of the General Laws, as appearing in the 2020 Official Edition, is hereby amended by inserting, at the end of the definition of “consistent with local needs”, the following:-

A requirement that a housing proposal considered under sections 20 to 23 of this chapter include a stipulation that the proposed housing development shall not utilize a septic system for waste disposal and shall utilize a sewer system or modular wastewater treatment system for wastewater disposal shall be consistent with local needs if the proposed housing development would be partially or wholly located on a nitrogen-sensitive area, as designated by the department of environmental protection.

SECTION 7. (a) The department of environmental protection shall establish a grant program to provide funding to upgrade wastewater treatment plants to accommodate affordable housing developments.

(b) Eligible grantees shall include any person, entity, or state agency that owns or operates a wastewater treatment plant or modular wastewater treatment system whose sewer load would expand beyond the plant’s maximum rated load capacity by serving future residents of a housing development proposal that has been approved by a municipality or the commonwealth under sections 20 to 23 of chapter 40B of the General Laws.

(c) Funding distributed pursuant to this section shall not be used for any other purpose besides physical upgrades to said wastewater treatment plant or modular wastewater treatment system or to expand operational capacity for management of said plant or system.

(d) Funding distributed pursuant to this section shall not exceed 100 thousand dollars.

(e) The department shall adopt regulations for the implementation and administration of this section.

SECTION 8. Chapter 29C of the General Laws is hereby amended by inserting, after section 20, the following section:-

Section 21. Affordable Housing Septic and Sewer Loan Program

There shall be an affordable housing septic and sewer loan program administered by the department of housing and community development, in consultation with the department of environmental protection.

The program shall provide zero-interest loans to eligible loan applicants for upgrades to existing residential properties to ensure compliance with Title 5 of the state environmental code.

Eligible loan applicants shall be any public agency or limited dividend or nonprofit organization that owns or operates a residential housing facility that was previously approved for construction under the requirements of sections 20 to 23 of chapter 40B of the General Laws and is currently designated as low or moderate income housing by the department of housing and community development on the state’s subsidized housing inventory.

Loan funding distributed pursuant to this section shall only be used by an eligible loan applicant to conduct, or contract for the following upgrades to a residential housing facility that was previously approved for construction under the requirements of sections 20 to 23 of chapter 40B of the General Laws and is currently designated as low or moderate income housing by the department of housing and community development on the state’s subsidized housing inventory:

(a) physical upgrades to the septic system of a residential housing facility to ensure compliance with Title 5 of the state environmental code; or

(b) transition of a residential housing facility from a septic system to a sewage system.

The department of housing and community development shall consult with the department of environmental protection and promulgate regulations for the administration of this section.

SECTION 9. The department of housing and community development shall develop a pilot program for intergenerational affordable housing development.

The program will seek to support individuals aged 60 years or older in providing housing accommodation to any individual aged 18 years or older, or families, in exchange for services or rent.

Eligible program participants shall be individuals or families currently on the state’s central housing application list, and any individual aged 60 years or older that owns their own home and has adequate accommodation available.

In designing the program, the department shall consult with existing privately intergenerational housing programs in the state, including but not limited to:

(a) LifePath HomeShare;

(b) Treehouse at Easthampton Meadow;

(d) Lasell Village.

The department shall promulgate regulations for the administration of this program.

SECTION 10. Section 25 of Chapter 23B of the General Laws, as appearing in the 2020 Official Edition, is hereby amended by striking the definition of the term “Annual Income” and inserting in place thereof the following:-

“Annual Income”, a person or family’s gross annual income less the following expenses:

(a) payments made towards student loan payments and payments made to licensed child care providers up to an annual combined deduction of $10,000;

(b) reasonable allowances for dependents, other than spouse; and

SECTION 11. Section 38D of Chapter 121B of the General Laws, as appearing in the 2020 Official Edition, is hereby amended by striking the definition of the term “Low or moderate income household” and inserting in place thereof the following:-

“Low or moderate income household”, a household with a gross income of not more than 80 per cent of the area median household income as most recently determined by the United States Department of Housing and Urban Development, adjusted for household size less payments made towards student loan payments and payments made to licensed child care providers up to an annual combined deduction of $10,000; provided, however, that in Nantucket or Dukes county ''low or moderate income household'' shall mean persons and households earning less than 150 per cent of Nantucket county or the county of Dukes County median household income as reported from time to time by the United States Department of Housing and Urban Development.

SECTION 12. Chapter 63 of the General Laws is hereby amended by inserting, after section 38JJ, the following section:-

Section 38KK. Seasonal Employer Housing Tax Credit

(a) For the purposes of this section, the following words shall have the following meanings:

“Seasonal employer”, an employer that, because of climatic conditions or the nature of the product or service, customarily operates more than 70 percent of its business only during a regularly recurring period or periods of less than 20 weeks for all seasonal periods during a calendar year

“Employment season”, any period of time of less than 20 weeks during a calendar year.

(b) There shall be established a seasonal employer housing tax credit program under which a seasonal employer may be allowed a refundable income tax credit based on the amount of rent paid to house any workers employed by the seasonal employer during the employment season. The credit may be claimed against the taxes due pursuant to this chapter.

(c) The tax credit shall only be claimed by the seasonal employer for rent paid to house employees during the employment season.

(d) The commissioner of revenue shall adopt regulations for the implementation, administration and enforcement of this section.

(e) The total cumulative value of the tax credits authorized pursuant to this section shall not exceed $10,000 annually.

(f) If the amount of the credit allowed under this section exceeds the taxpayer's liability, the commissioner of revenue shall treat such excess as an overpayment and shall pay the taxpayer 100 per cent of the amount of such excess, without interest.

SECTION 13. Chapter 63 of the General Laws is hereby amended by inserting, after section 38KK, the following section:-

Section 38LL. Affordable Housing Contractor Tax Credit

(a) For the purposes of this section, the following words shall have the following meanings:

“Affordable housing contractor”, a housing contractor contracted to construct housing accommodations that will be designated as low or moderate income housing by the department of housing and community development on the state’s subsidized housing inventory.

designated as low or moderate income housing by the department of housing and community development on the state’s subsidized housing inventory.

(b) There shall be established an affordable housing contractor tax credit program under which an affordable housing contractor may be allowed a refundable income tax credit based on the amount of rent paid to house any workers employed by the contractor. The credit may be claimed against the taxes due pursuant to this chapter.

(c) The tax credit shall only be claimed by the contractor for rent paid to house workers contracted for work on a project to construct housing accommodations that will be designated as low or moderate income housing by the department of housing and community development on the state’s subsidized housing inventory.

(d) The commissioner of revenue shall adopt regulations for the implementation, administration and enforcement of this section.

(e) The total cumulative value of the tax credits authorized pursuant to this section shall not exceed $10,000 annually.

SECTION 14. Chapter 64G of the General Laws is hereby amended by inserting, after section 3C, the following section:-

Section 3D. Short Term Rental Business Excise

(a) An operator of a short-term rental, as defined in section 1 of this chapter, shall pay an annual assessment of 5 per cent of the operator’s gross revenues derived from operation of short-term rentals in the commonwealth.

(1) For the purposes of this section, an operator of a short-term rental shall not include any person operating an owner-occupied property.

(b) An operator shall pay the above assessment to the department of revenue annually, not later than the 30th of January in the following year.

(c) An operator shall submit to the department of revenue a full report of the revenues generated from each of the operator’s short-term rental properties and the addresses of each of said properties.

(d) All monies derived from the assessment in this section shall be credited by the department of revenue to the municipal affordable housing trust fund, as authorized by section 55C of chapter 44, of the municipality in which the person operated said short-term rentals.

(e) If the municipality in which the person operated said short-term rentals has not established a municipal affordable housing trust fund, all monies derived from monetary penalties under this section shall be credited to the General Fund of the city or town, provided, however that all monies derived from monetary penalties under this section shall not be used for any other purpose besides the development of affordable housing within the municipality.

(f) If the person operated said short-term rentals in multiple municipalities, the monies shall be distributed among the municipalities proportionally based on the percentage of the operator’s total properties in each municipality.

SECTION 15. Section 6 of Chapter 64G of the General Laws, as appearing in the 2020 Official Edition, is hereby amended by inserting, after the first sentence, the following:-

A person that operates a short-term rental without a certificate of registration shall be liable for a monetary penalty of 5 per cent of the person’s gross annual revenues derived from operating short-term rentals within the commonwealth.

A person that operates a short-term rental without a certificate of registration shall be liable for an additional monetary penalty of 1 per cent of the person’s gross annual revenues derived from operating short-term rentals within the commonwealth for each successive year after the first year that the person operates a short-term rental without a certificate of registration, such that the monetary penalty for operating a short-term rental without a certificate of registration shall be 5 per cent of the person’s gross annual revenues derived from operating short-term rentals within the commonwealth in the first year, 6 per cent in the second year, 7 per cent in the third year, and further.

A monetary penalty imposed on a person that operates a short-term rental without a certificate of registration pursuant to this section shall never exceed 15 per cent of the person’s gross annual revenues derived from operating short-term rentals within the commonwealth.

The department of revenue shall enforce this section and shall distribute all monetary penalties collected pursuant to this section.

All monies derived from monetary penalties under this section shall be credited to the municipal affordable housing trust fund, as authorized by section 55C of chapter 44, of the municipality in which the person operated said short-term rentals.

If the municipality in which the person operated said short-term rentals has not established a municipal affordable housing trust fund, all monies derived from monetary penalties under this section shall be credited to the General Fund of the city or town, provided, however that all monies derived from monetary penalties under this section shall not be used for any other purpose besides the development of affordable housing within the municipality.

If the person operated said short-term rentals in multiple municipalities, the monies shall be distributed among the municipalities proportionally based on the percentage of the operator’s total properties in each municipality.

Notwithstanding the provisions of this section, the department of revenue shall have the authority to enter into an agreement with an unregistered operator of a short-term rental that may exempt said operator from paying any monetary penalties derived from this section, provided that the terms of such agreement shall include that:

(a) said operator shall apply for a certificate of registration as detailed in section 67 of chapter 62C;

(b) said operator shall not further operate a short-term rental until said operator is granted said certificate of registration; and

(c) if said operator shall, upon obtaining a certificate of registration and resuming operations of a short term rental, fails to pay the assessment described in section 3D of chapter 64G, such failure shall constitute a violation of the terms of such agreement.

In accordance with section 1 of chapter 12, the Attorney General is authorized to enforce this section. The Attorney General may, within 7 years, bring an action to recover any unpaid assessments and monetary penalties, or enjoin the operations of any non-compliant entity, in any court of competent jurisdiction.

Any municipality or group of municipalities adversely impacted by the action, or failure to act, of any short-term rental operator under this section, may, within 10 years, bring an action to recover any unpaid assessments and monetary penalties, or enjoin the operations of any non-compliant entity, in any court of competent jurisdiction.

SECTION 16. The department of housing and community development shall conduct a study to determine the most effective and sustainable use of state funds for housing individuals and families experiencing homelessness in the commonwealth, with the goal of achieving long-term housing accommodation and supportive services for all residents of the commonwealth.

The study shall consider:

(a) the amount of state funds expended to place anyone in the commonwealth experiencing homelessness in any shelter or temporary accommodation, including but not limited to a hotel or motel;

(b) the amount of state funds expended to cover hospital stays and emergency department visits caused by chronic homelessness, including mental health emergencies or substance use disorder emergencies.

(c) the potential amount of state funding that could be expended to place anyone in the commonwealth experiencing homelessness in permanent housing accommodations, including but not limited to vacant rental units or vacant houses;

(d) whether state funds could be saved by placing individuals and families in permanent housing accommodations instead of temporary accommodations in the event that state shelters are at full capacity;

(e) any legislative or regulatory impediments to placing individuals and families experiencing homelessness in vacant rental units or vacant houses and any challenges associated with removing said impediments;

(f) any other potential alternatives to placing individuals and families experiencing homelessness in hotels and motels that would facilitate more permanent housing accommodations; and

(g) any other potential actions the state could take to achieve the goal stated above.

The department shall consult with any other state agencies or organizations within the commonwealth necessary to compile the study.

Name:	District/Address:
Susan L. Moran	Plymouth and Barnstable