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  • PART I ADMINISTRATION OF THE GOVERNMENT
  • TITLE VII CITIES, TOWNS AND DISTRICTS
  • CHAPTER 40 POWERS AND DUTIES OF CITIES AND TOWNS
  • Section 59 Tax increment financing plan

Section 59. Notwithstanding any general or special law to the contrary, any city or town by vote of its town meeting, town council, or city council with the approval of the mayor where required by law, on its own behalf or in conjunction with one or more cities or towns, and pursuant to regulations issued by the director of housing and community development, may adopt and prosecute a tax increment financing hereinafter referred to as TIF plan, and do any and all things necessary thereto; provided, however, that the TIF plan:

(i) designates one or more areas of such city or town as a TIF zone; provided, however, that each area so designated is wholly within an area designated by the director of economic development, pursuant to regulations adopted by the economic assistance coordinating council established pursuant to section three B of chapter twenty-three A, as presenting exceptional opportunities for increased economic development; provided, further, that in the case of a TIF plan adopted by more than one city or town, the areas designated as TIF zones shall be contiguous areas of such cities or towns;

(ii) describes in detail all construction and construction-related activity, public and private, contemplated for such TIF zone as of the date of adoption of the TIF plan; provided, however, that in the case of public construction as aforesaid, the TIF plan shall include a detailed projection of the costs thereof and a betterment schedule for the defrayal of such costs; provided, further, that the TIF plan shall provide that no costs of such public constructions shall be recovered through betterments or special assessments imposed on any party which has not executed an agreement in accordance with the provisions of clause (v); and provided, further, that in the case of private construction as aforesaid, the TIF plan shall include the types of industrial and commercial developments which are projected to occur within such TIF zone, with documentary evidence of the level of commitment therefor, including but not limited to architectural plans and specifications as required by said regulations;

(iii) authorizes tax increment exemptions from property taxes, under clause Fifty-first of section 5 of chapter 59, for a specified term not to exceed 20 years, for any parcel of real property which is located in the TIF zone and for which an agreement has been executed with the owner of the real property under clause (v); provided, however, that the TIF plan shall specify the level of the exemptions expressed as exemption percentages, not to exceed 100 per cent to be used in calculating the exemptions for the parcel, and for personal property situated on that parcel, as provided under said clause Fifty-first of said section 5 of said chapter 59; provided, further, that the exemption for each parcel of real property shall be calculated using an adjustment factor for each fiscal year of the specified term equal to the product of the inflation factors for each fiscal year since the parcel first became eligible for an exemption under this clause; provided, further that the inflation factor for each fiscal year shall be a ratio;

(a) the numerator of which shall be the total assessed value of all parcels of commercial and industrial real estate that are assessed at full and fair cash value for the current fiscal year minus the new growth adjustment for the current fiscal year attributable to the commercial and industrial real estate as determined by the commissioner of revenue under subsection (f) of section 21C of chapter 59; and

(b) the denominator of which shall be the total assessed value for the preceding fiscal year of all the parcels included in the numerator; provided, however, that the ratio shall not be less than 1;

(iv) establishes a maximum percentage of the costs of any public construction, referenced in clause (ii) and initiated subsequent to the adoption of the TIF plan, that can be recovered through betterments or special assessments against any parcel of real property eligible for tax increment exemptions from property taxes pursuant to clause (iii) during the period of such parcel’s eligibility for exemption from annual property taxes pursuant to clause fifty-first of section five of chapter fifty-nine, notwithstanding the provisions of chapter eighty or any other general or special law authorizing the imposition of betterments or special assessments;

(v) includes executed agreements between such city or town and each owner of a parcel of real property which is located in such TIF zone; provided, however, that each such agreement shall include: (1) all material representations of the parties which served as the basis for the descriptions contained in the TIF plan in accordance with the provisions of clause (ii); (2) a detailed recitation of the tax increment exemptions and the maximum percentage of the cost of public improvements that can be recovered through betterments or special assessments regarding such parcel of real property pursuant to clauses (iii) and (iv); (3) a detailed recitation of all other benefits and responsibilities inuring to and assumed by the parties to such agreement; and (4) a provision that such agreement shall be binding upon subsequent owners of such parcel of real property;

(vi) delegates to one board, agency or officer of the city or town the authority to execute agreements in accordance with the provisions of clause (v);

(vii) is certified as an approved TIF plan by the economic assistance coordinating council established by section three B of chapter twenty-three A pursuant to regulations adopted by said council; provided, however, that the economic assistance coordinating council shall find, based on the information submitted in support of the TIF plan by the city or town and such additional investigation as the economic assistance coordinating council shall make, and incorporate in its minutes, that the plan is consistent with the requirements of this section and will further the public purpose of encouraging increased industrial and commercial activity in the commonwealth; provided, further, that a city or town may at any time revoke its designation of a TIF zone and, as a consequence of such revocation, shall immediately cease the execution of any additional agreements pursuant to clause (v); provided, further, such revocation shall not affect agreements relative to property tax exemptions and limitations on betterments and special assessments pursuant to said clause (v) which were executed prior thereto; and provided, further, that the board, agency or officer of the city or town authorized pursuant to clause (vi) to execute agreements shall forward to the board of assessors a copy of each such agreement, together with a list of the parcels included therein; and

(viii) requires of an owner of a parcel pursuant to clause (v) to submit to the city or town clerk and the economic assistance coordinating council a report detailing the status of the construction laid out in the plan; the current value of the property; and the number of jobs created to date as a result of the plan; provided, however, that a report shall be filed every 5 years for the term of the tax increment exemption allowed under clause Fifty-first of section 5 of chapter 59; and provided further, that a final report shall be filed in the final year of the exemption.