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Session Law

2004

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Chapter 3 AN ACT RELATIVE TO PROPERTY TAX CLASSIFICATION IN CITIES AND TOWNS.

Whereas , The deferred operation of this act would tend to defeat its purpose, which is forthwith to regulate the property tax classification limits in certain cities and towns beginning in the current fiscal year, therefore it is hereby declared to be an emergency law, necessary for the immediate preservation of the public convenience.


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. (a) Notwithstanding section 1A of chapter 58 of the General Laws or any other general or special law to the contrary, the commissioner of revenue shall further adjust the minimum residential factor of any city or town determined under said section 1A of said chapter 58 for fiscal years 2004, 2005, 2006 and 2007, if adoption of such factor for any such year would result in the residential property class bearing a higher percentage of the total property tax levy than the percentage of the total property tax levy imposed on the residential property class than in the prior fiscal year. The new minimum residential factor for such year shall be (i) for fiscal year 2004, 45 per cent subject to such adjustment upward as may be required to provide that the percentage of the total tax levy imposed on any class of real or personal property shall not exceed 200 per cent of the full and fair cash valuation of the taxable property of the class divided by the full and fair cash valuation of all taxable real and personal property in the city or town, (ii) in fiscal year 2005, 47 per cent subject to such adjustment upward as may be required to provide that the percentage of the total tax levy imposed on any class of real or personal property shall not exceed 197 per cent of the full and fair cash valuation of the taxable property of the class divided by the full and fair cash valuation of all taxable real and personal property in the city or town, (iii) in fiscal year 2006, 49 per cent subject to such adjustment upward as may be required to provide that the percentage of the total tax levy imposed on any class of real or personal property shall not exceed 190 per cent of the full and fair cash valuation of the taxable property of the class divided by the full and fair cash valuation of all taxable real and personal property in the city or town, (iv) in fiscal year 2007, 50 per cent subject to such adjustment upward as may be required to provide that the percentage of the total tax levy imposed on any class of real or personal property shall not exceed 183 per cent of the full and fair cash valuation of the taxable property of that class divided by the full and fair cash valuation of all taxable real and personal property in the city or town, (v) in fiscal year 2008, 50 per cent subject to such adjustment upward as may be required to provide that the percentage of the total tax levy imposed on any class of real or personal property shall not exceed 175 per cent of the full and fair cash valuation of the taxable property of that class divided by the full and fair cash valuation of all taxable real and personal property in the city or town, (vi) in fiscal year 2009 and thereafter, in any city or town in which the percentage of the total tax levy imposed on any class of real or personal property exceeded 175 per cent of the full and fair cash valuation of the taxable property of that class divided by the full and fair cash valuation of all taxable real and personal property in the city or town in any of fiscal years 2004, 2005, 2006 or 2007, 50 per cent subject to such adjustment upward as may be required to provide that the percentage of the total tax levy imposed on any class of real or personal property shall not exceed 170 per cent of the full and fair cash valuation of the taxable property of that class divided by the full and fair cash valuation of all taxable real and personal property in the city or town. In no year after the first year in which the commissioner determines a new minimum residential factor for a city or town under this section, however, shall the adoption of such new minimum residential factor for such year result in the residential class bearing a lower percentage of the total property tax levy than the percentage imposed in the prior year. Payments made under section 38H of chapter 59 of the General Laws, and similar provisions of special acts, that are included in the tax levy for purposes of determining the minimum residential factor under said section 1A of said chapter 58 shall be so included in the determination of any factor under this section.

(b) Any city or town which makes use of this section shall include a letter from the commissioner of the department of revenue in each tax bill. The letter shall describe the divergent trends in residential and commercial property valuations, and how the general court has mitigated the negative impact of these trends on residential tax bills with this section.

SECTION 2. (a) The department of revenue, with the assistance of state agencies and political subdivisions that the department deems necessary to complete its charge, shall study the current property tax classification system and to determine sustainable and equitable methods for addressing the current and any future divergence in residential and commercial and industrial property values that result in an abrupt shift of the tax levy onto one class of property taxpayers. The department shall examine ways to provide temporary tax relief to residential ratepayers unable to pay the tax increases resulting from said shifts in the property tax burden, including increasing the residential exemption for people of limited financial means, allowing abatements for the elderly or others who can prove through income tax returns or other documents they do not have the financial resources to pay the tax increases, increasing the income tax deduction for renters, extending the period allowed for payment of property taxes, and other methods of providing targeted tax relief on a temporary basis.

(b) Each city and town for which the commissioner has determined a minimum residential factor shall provide the department with the following information on a fiscal year basis: the total tax levy of the city or town, the percentage of the total tax levy of each of the classes of property by valuation and dollar amount, the tax rate on each of the classes of property, the number of outstanding tax delinquencies by property class and the dollar amount of those delinquencies, any and all agreements relative to payments in lieu of taxes, any and all agreements pursuant to chapter 121A of the General Laws, any and all tax relief programs offered by the city or town, the efforts used to promote them, the standards for participation, the processes for applying, the number of individuals that applied and the number that were actually accepted into the tax relief program and such other information as the department deems necessary to determine if further changes to the cap are necessary and appropriate.

(c) The department shall report its findings and any recommendations for legislation to the joint committee on taxation and the clerks of the house of representatives and the senate not later than December 1, 2004.

SECTION 3. The joint committee on taxation shall study and make recommendations for targeted property tax relief to businesses disproportionately impacted by dual tax rates in communities. The committee shall hold at least 1 public hearing to take testimony concerning such relief. The committee shall file a report of its findings and recommendations with the house and senate clerks not later than April 30, 2004.

SECTION 4. The joint committee on natural resources and agriculture shall study and make recommendations for the reclassification for property tax purposes of agricultural and horticultural land, and for legislation, if any, carrying out those recommendations. The committee shall hold at least 1 public hearing to take testimony concerning reclassification. The committee shall file a report of its findings and recommendations with the house and senate clerks and the house and senate committees on ways and means not later than April 30, 2004. `tuc `t+4 ENDORSEMENTS FOLLOW ON PAGE 5 `t+99

Approved January 16, 2004.

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