Amendment #9 to H4461

Community Benefit Districts

Representatives Crighton of Lynn, Livingstone of Boston, Tucker of Salem, Vega of Holyoke, Kulik of Worthington, Walsh of Framingham and Cahill of Lynn move to amend the bill by inserting the following section:

SECTION _.  The General Laws, as appearing in the 2012 Official Edition, are hereby amended by inserting after Chapter 40X the following chapter: -- CHAPTER 40Y              COMMUNITY BENEFIT DISTRICTS

SECTION 1. Definitions

“CBD”, a Community Benefit District formed pursuant to this chapter, which is one or more geographic areas with clearly defined boundaries.

“CBD Corporation,” the non-profit corporation designated to receive funds and otherwise implement the purposes of the CBD. References herein to the CBD Corporation shall include its 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 local municipal governing body as part of the creation of the CBD. A “Management Plan” is any subsequent, updated version of the Initial Management Plan and is a document that is approved by the Board of Directors.

“Memorandum of Understanding with the Municipality”, The MOU 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.

“Local 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 such CBD.

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

“Property owner”, the owner of record of property. . When a property is owned by other

than a natural person, a petition-signer for that property must include his or her title and aver

authority to sign as owner. When a property is owned by multiple persons, the signature of one

owner is sufficient if that owner avers authority to sign on behalf of the other owners.

“Standard government services”, governmental functions, programs, activities, facilities, improvements and other services which a municipality is authorized to perform or provide and paid for out of the local 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: Rights and Powers

The rights and powers of a CBD Corporation in a CBD approved by the municipal governing body 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 and human and environmental services as related to the enhancement of the district or other supplemental services or programs that would further the purposes of this chapter.

Section 3: Initiation of Organization; Contents of Petition

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.

Such petition shall contain:

(1) the signatures of the property owners (petition signers) in the proposed district who support the establishment of the district and who will pay more than fifty percent of the assessments proposed to be levied;

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

(3) the identity and address of the CBD Corporation, including its initial set of directors and officers and a copy of its bylaws;

(4) Initial Management Plan which shall set forth the supplemental services and programs, vision and strategy, and budget and fee structures proposed for the CBD;

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

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

Such 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 said petition shall be filed with the Director/Undersecretary of Housing and Community Development and the Secretary of Housing and Economic Development within thirty days of receipt of such petition by the clerk of the municipality

Section 4: Hearing on petition; declaration of organization; notice

The local municipal governing body shall hold a public hearing within sixty days of the receipt of a petition. Written notification of such hearing shall be sent to each property owner within the boundary of the proposed CBD at least thirty days prior to such hearing, by mailing notice to the address listed in the property tax records. Notification of the hearing shall also be published for two consecutive weeks in a newspaper of general circulation in the area at least fourteen days prior to such hearing and listed on the municipality’s website. Such public notice shall contain the proposed boundaries of the CBD, the proposed fee level, summary of supplemental programs and services and where the property owner may obtain a full copy of the Initial Management Plan.

Prior to the public hearing, the local municipal governing body shall direct the town clerk or city clerk or his or her designee to determine that the establishment criteria has been met as set forth in section Three. 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.

Within forty-five days after the public hearing, a local municipal governing body, in its sole discretion, may by a vote declare the district organized and describe the boundaries and service area of the district. Such 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 Initial Management Plan approved. Upon such declaration, the CBD may commence operations.

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 until the dissolution under 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.

Participation in the CBD shall be permanent until the dissolution of the CBD under section 10. All property owners, including public, private and nonprofit entities, shall participate, although each shall contribute based upon specified fee structures based upon the benefits anticipated to be received, as outlined in the Initial Management Plan.

Section 5: Board of Directors of the CBD Corporation

Each CBD Corporation shall have a non-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% of the Board shall be composed of property owners or their designees, and the remaining members may be a balanced set of stakeholders representing the community, including residents, municipal government, business tenants , and nonprofits.

The Initial Management Plan shall be updated at least once every three 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 local governing body.

The CBD Corporation shall conform with the Mass General Law Chapter 12 Section 8F in regards to nonprofit reporting requirements.

Section 6: Property included in the fee formula; waivers

All real property located within the proposed CBD shall be considered in the fee formula for the supplemental services and programs as outlined in the Initial Management Plan. The CBD Corporation, at its sole discretion, may grant a financial hardship waiver to any property owner, pursuant to the waiver criteria previously established within the CBD. Such waiver is not intended to be permanent and must 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: District fee structure

Upon formal approval of a CBD, the local 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 one year may not exceed one-half of one percent of the sum of the assessed valuation of the real property owned by participating members in the CBD district.

The basis of such district fee may be determined by a formula utilizing any one or a combination of the following:

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

(2) benefit zones;

(3) assessed valuation;

(4) building or parcel square footage;

(5) street frontage; or

(6) 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 up to three years, with assessments increasing over the stated period. T

he formula for determining the district fee structure shall be set forth in the original petition as required by section three.

The CBD may change the formula and/or the assessment level set forth in its Initial Management Plan (or updated Management Plan(s)) by two-thirds vote of its board of directors, ratified by vote of property owners who are required to pay more than fifty percent of the assessments. Within 30 days after amendment of the formula and/or assessment level, the CBD shall file notice of the changes with the local municipal governing body, the Director/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 shall be authorized to receive grants, donations, revenues generated from parking fees, CBD activities, or gifts on behalf of the CBD.

Section 8: Collection of fees and disbursement of funds

The collector-treasurer of the municipality is hereby authorized to collect such district fees in designated CBDs and to disburse the funds to the CBD Corporation. In addition to the items identified in Chapter 60, Section 3A, the collector-treasurer may include notices for district fees in the envelope or electronic message in which a property bill is sent.

The 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-treasurer shall disburse revenues to the CBD Corporation no later than thirty days of the collection of such fees, together with the interest earned on the holding of such fees.

Following establishment of the CBD, all fees billed by or on behalf of the CBD and unpaid after thirty 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: Amendment of district boundaries

At any time after the establishment of a CBD pursuant to the provisions of this chapter, the district boundaries upon which the establishment was based may, upon the recommendation of the CBD Corporation, be amended by the local 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 in all ways except for the signatures.

Instead, if the petition concerns an amendment to expand the district, the petition must be accompanied by signatures of the property owners who are required to pay more than fifty percent of the assessments in the expanded area only.  If the petition concerns an amendment to reduce the size of the district, it must be accompanied by signatures of the property owners who are required to pay more than fifty percent of the assessments levied in the existing district.

The local municipal governing body shall hold a public hearing within sixty days of the receipt of a petition to amend the district boundaries. In the case of an expansion petition, written notification of such hearing shall be sent to each property owner within the proposed expansion area of the CBD at least thirty days prior to such hearing, by mailing notice to the address listed in the property tax records. In the case of a reduction petition, such public notice must 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 two consecutive weeks in a newspaper of general circulation in the area at least fourteen days prior to such hearing and listed on the municipality’s website. For an expansion petition, such public notice shall contain the proposed expanded boundaries of the CBD, the fee level, summary of supplemental programs and services, and where the property owner may obtain a full copy of the Management Plan. For a reduction petition, such 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. Within 30 days of the hearing, and upon determination by the city or town clerk, or designee, that the petition has met the necessary criteria, the local governing body, in its sole discretion, may by a vote declare the district boundaries amended.

Upon the adoption of any amendment to the district boundaries which increases the size of the district, any owner of property to be added to the district shall be notified of the new boundaries of the district in accordance with section four.

Section 10: Dissolution

A CBD may be dissolved by petition to the local municipal governing body and a subsequent decision by such governing body to authorize dissolution.

In order to be considered by the local municipal governing body, a petition to dissolve a CBD shall contain the signatures of the property owners who are required to pay more than fifty percent of the assessments levied in the district.

The local municipal governing body shall hold a public hearing within thirty days of receipt of a completed petition on the issue of dissolution.

Following the public hearing, the local municipal governing body may declare the CBD dissolved; provided, however, that no CBD shall be dissolved until it has satisfied or paid in full all of its outstanding indebtedness, obligations, and liabilities; or until funds are on deposit and available therefore; or until a repayment schedule has been formulated and municipally approved therefor. In addition, the CBD shall be prohibited from incurring 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 but said 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 in which fees were charged 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 district.

Section 11: Districts with Non-Contiguous Geographic Areas Within a Municipality

A CBD may include non-contiguous geographic areas within the municipality. If the petition proposes such a district, each non-contiguous area must separately qualify by meeting the signature threshold in Section Three. Once the clerk has determined that the establishment criteria have been met, the municipality shall consider whether the CBD as a whole should be approved. A petition to reduce or dissolve a CBD with non-contiguous areas must be signed by property owners representing at least fifty percent of the assessed value in the CBD as a whole. A petition to expand such a CBD must be signed by property owners representing fifty percent of the assessed value in the expanded area only. A CBD that includes non-contiguous areas may set services, programs and fees to take into account the differing circumstances of each area.

Section 12: CBD located in more than one Municipality

A CBD may be located in more than one municipality if the petition in each municipality separately complies with the process set forth in this Chapter for the establishment of a CBD. Petitioners must state in each petition whether they will proceed with establishment if the other municipality or municipalities involved do not approve the proposed CBD. A petition to reduce a CBD located in more than one municipality must be signed by property owners with fifty percent of the assessed valuation in that municipality’s portion of the district. A petition to expand such a CBD must be signed by property owners representing fifty percent of the assessed value in the expanded area only. A petition to dissolve the entire CBD located in more than one municipality must be signed by property with fifty prevent of the assessed valuation in each municipality. A CBD is located in more than one municipality may set services, programs and fees to take into account the differing circumstances of each area.

Section 13: Effective date

This legislation will be effective immediately.