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The 191st General Court of the Commonwealth of Massachusetts

Section 27: Program to facilitate transfer of development rights to protect conservation values and encourage development through market incentives; administration of loan program

Section 27. (a)(1) There shall be within the executive office of energy and environmental affairs a program to facilitate, through municipal ordinances or by-laws, the transfer of development rights to protect conservation values and encourage development through market incentives. For the purposes of this section, ''transfer of development rights'' shall have the same meaning as provided in section 1A of chapter 40A.

(2) The secretary, in consultation with the secretary of housing and economic development and other agencies or offices as appropriate, shall manage and oversee the program, including the administration of the Transfer of Development Rights Revolving Fund established in section 35HHH of chapter 10. The secretary may promulgate regulations to carry out this section.

(b) To be eligible for a loan from the Transfer of Development Rights Revolving Fund, a municipality shall: (i) establish a municipal transfer of development rights revolving fund under section 53E 1/2 of chapter 44 for the purchase and sale of the transfer of development rights; and (ii) enact a transfer of development rights zoning bylaw or ordinance approved by the secretary, in consultation with the secretary of housing and economic development, that, at a minimum: (A) enables the acquisition, retention and disposition of the transfer of development rights; (B) provides reasonable assurance that areas designated for preservation through the transfer of development rights have ample natural resource, agricultural, recreational, historic or other conservation value such that their protection will be of sufficient public benefit to meet the standards for approval of a conservation, agricultural preservation, watershed protection, preservation or other use restriction as provided in this section; (C) requires that the land from which development rights will be extinguished shall be subject to a permanent conservation, watershed preservation, agricultural preservation or preservation restriction pursuant to sections 31 to 33, inclusive, of chapter 184; (D) requires that the restriction described in clause (C) shall be recorded with the registry of deeds or registered in the registry district of the land court for the county or district wherein the land lies; provided, however, that if the land is submitted for approval by the appropriate state official but does not qualify or is not approved for such a restriction the land shall be subject to a restrictive covenant extended in perpetuity pursuant to sections 26 to 30, inclusive, of said chapter 184, and said covenant shall be: (1) approved by the planning board and the city council or board of selectmen, as appropriate; (2) held by the municipality or a nonprofit organization permitted to hold restrictions pursuant to section 32 of said chapter 184; and (3) duly recorded or registered, as applicable; (E) provides reasonable assurance that an area designated for receipt of transferred development rights is properly sized based on the potential increase in growth that may result from transfers to the area, and that the area is appropriate for additional growth based on its location, the availability of infrastructure or planned infrastructure development and access to municipal services; and (F) establishes a procedure for the planning board to issue development rights certificates, in a form specified by the secretary, indicating ownership of transferable development rights, and to provide for and document the creation, acquisition, disposition, exercise and redemption of transferable development rights, including: (1) procedures for the filing of development rights certificates with the municipal clerk and recording with the registry of deeds or registration in the registry district, as applicable, for both the land from which development rights are extinguished and the land to which such rights are transferred; (2) procedures for documenting the recording or registration of the original restriction or restrictive covenant as required in clause (C); and (3) procedures, including any limitations, for the exercise of transferable development rights in the event of subsequent amendments to zoning ordinances and bylaws affecting the development authorized by the transferable development right.

(c) To apply for a loan from the fund, an eligible municipality shall submit an application that certifies, at a minimum, that the municipality shall:

(i) follow the provisions of chapter 30B when acquiring or disposing of transferable development rights;

(ii) commit, through approval of the local legislative body, to repay any loan from the fund under the terms then specified;

(iii) keep permanent records of all restrictions recorded and transferable development rights created, acquired, held, sold, disposed or exercised, and report on these activities to the secretary in a manner directed by the secretary; and

(iv) keep permanent records of all financial transactions involving the municipal transfer of development rights revolving fund and report on these transactions and fund balances to the secretary in a manner directed by the secretary.

(d) Loans from the fund shall carry 0 per cent interest for the first 5 years from the date of origination, and the prime rate plus 1 per cent from the sixth to the tenth year from the date of origination. A municipality that has not repaid its loan within 10 years of the origination date shall be considered in default. In addition to other remedies specified under any loan agreement, if a municipality shall fail to pay to the fund any principal, interest or other charges payable under a loan or loan agreement, when due and after demand, the secretary may certify to the state treasurer the amount owed by the municipality to the fund and may request that the state treasurer reduce annual local aid to the recipient by the amount necessary to repay the principal, interest or other charges owed over a 10 year period. The state treasurer shall promptly pay over to the secretary for deposit in the fund, without further appropriation, local aid distributions in the amounts requested by the secretary and otherwise certified to the state treasurer as payable to the municipality.