Amendment ID: S2899-5

Amendment 5

Temporary Residential Tax Stabilization

Ms. Miranda, Mr. Collins and Ms. Edwards move that the proposed new draft be amended by inserting the following section:-

Chapter 59 of the General Laws is hereby amended by inserting after section 2 the following section:—

Section 1. Definitions

For the purposes of this section, the following terms shall have the following meanings:

“Owner-occupied residential property”, a residential property containing one to four dwelling units, at least one of which is occupied by the owner as the owner’s principal residence.

“Stabilization year”, a fiscal year in which any of the following conditions occur, as determined by the assessors and certified by the commissioner of revenue:

(i) the residential property tax levy, excluding new growth, increases by more than [6–8 percent] over the prior fiscal year;

(ii) the assessed value of commercial property declines year-over-year; or

(iii) the residential share of the total property tax levy increases beyond a threshold established by the commissioner of revenue.

“Allowable residential increase cap”, the maximum percentage by which the tax liability of an owner-occupied residential property may increase during a stabilization year.

Section 2. Notwithstanding any general or special law to the contrary, a city or town may, during a stabilization year, adopt a temporary residential tax stabilization mechanism pursuant to this section.

Section 3. During a stabilization year, a city or town adopting this section may limit the year-over-year increase in tax liability for owner-occupied residential properties to the allowable residential increase cap.

The allowable residential increase cap shall be determined annually by the municipality and shall equal the greater of:

(i) the annual percentage change in the Consumer Price Index for All Urban Consumers (CPI-U) for the Boston-Cambridge-Newton metropolitan area; or

(ii) the percentage change in the median assessed value of owner-occupied residential properties within the municipality, provided that in no event shall the cap exceed 6%

Nothing in this subsection shall be construed to limit or alter assessed valuations determined pursuant to chapter 59.

Section 4. Any reduction in residential tax levy resulting from the application of subsection (c) shall be offset solely through adjustments permitted under existing property tax classification authority pursuant to section 38 of this chapter.

No city or town shall be required to appropriate general fund revenues, free cash, stabilization funds, or other municipal funds to implement this section.

Nothing in this section shall authorize a municipality to exceed its levy limit under chapter 59 or chapter 44B.

Section 5. A residential tax stabilization mechanism adopted pursuant to this section shall apply only for the fiscal year for which it is adopted and shall automatically expire at the conclusion of that fiscal year unless reauthorized by the municipality in a subsequent stabilization year.

Section 6. The commissioner of revenue shall promulgate regulations to implement this section, including standards for certification of stabilization years, reporting requirements, and safeguards to ensure compliance with existing tax classification limits.

Section 7. Chapter 59 of the General Laws, as appearing in the 2020 Official Edition, is hereby amended by adding after section 5N the following section:-

Section 5O. Notwithstanding the provisions of section 5 or any other general or special law to the contrary, in a city or town that votes to accept this section pursuant to section 4 of Chapter 4, an organization exempt from taxation under clause third of said section 5 owning total property valued at or above fifteen million shall make payments in lieu of taxation on all real and personal property owned by the organization in the city or town equal to 12.5 percent of the amount that would be paid if the property were not exempt from taxation.

Any city or town that accepts this section shall adopt an ordinance or bylaw to provide for agreements between the municipality and organizations that may provide for exemptions from payment, consideration of community benefits as payment and administration of payments.

Nothing in this section shall prevent municipalities from negotiating voluntary payments in lieu of taxes in either cash contributions or community benefits to be paid in addition to mandatory payments.

Section 8. This act shall take effect upon passage.