Mass. Gen. Laws ch. 40, sec. 60 — MA Code / Part I / Title VII / Chapter 40 / Section 60
Urban center housing tax increment financing zone (UCH&ndash;TIF)
Status: in_force

Section 60. (a) Notwithstanding any general or special law to the contrary, a 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 1 or more cities or towns and under regulations issued by the executive office of housing and livable communities, in consultation with the department of revenue, may adopt and prosecute an urban center housing tax increment financing plan, in this section referred to as a UCH–TIF plan, intended to encourage increased residential growth, affordable housing and commercial growth in urban center housing zones and do all things necessary thereto; provided, however, that the UCH–TIF plan shall:— (i) designate any area of the city or town as an urban center housing tax increment financing zone, in this section referred to as a UCH–TIF zone, which shall be defined as a commercial center located within an area of concentrated development, as that term is defined in section 2 of chapter 40R, characterized by a predominance of commercial land uses and a need for multi-unit residential properties; provided, however, that the designation of a UCH–TIF zone shall be subject to the approval of the executive office of housing and livable communities under regulations adopted by the executive office consistent with this section; provided further, that a city or town may not enter into any UCH–TIF agreement, as defined in clause (v), unless the area governed by the UCH–TIF agreement is so designated and approved by the executive office of housing and livable communities; and provided further, that in the case of a UCH–TIF plan adopted by more than 1 city or town, the areas designated as UCH–TIF zones shall be contiguous areas of those cities and towns; (ii) describe the construction, reconstruction, rehabilitation and related activities, public and private, contemplated for such UCH–TIF zone as of the date of the adoption of the UCH–TIF plan; provided, however, that in the case of public construction, the UCH–TIF plan shall include a detailed projection of the costs and a betterment schedule for the defrayal of such costs; provided, further, that the UCH–TIF plan shall provide that no costs of such public construction shall be recovered through betterments or special assessments imposed on a party which has not executed an UCH–TIF agreement in accordance with clause (v); and provided, further, that in the case of private construction, the UCH–TIF plan shall include the types of affordable housing and residential and commercial growth which are projected to occur within such UCH–TIF zone together with such documentary evidence of the projected public benefits as are required by the regulations; (iii) authorize 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 UCH–TIF zone and for which an agreement has been executed under clause (v); provided, however, that the UCH–TIF plan shall specify the level of 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 such exemption under this clause; provided, further, that the inflation factor for each fiscal year shall be a ratio: (1) the numerator of which shall be: (A) in an UCH–TIF zone where the property includes primarily residential uses, the total assessed value of all parcels of all residential real estate that are assessed at full and fair cash value for the current fiscal year minus the new growth adjustment factor for the current fiscal year attributable to the residential real estate as determined by the commissioner of revenue pursuant to paragraph (f) of section 21C of said chapter 59; or (B) in an UCH–TIF zone where the property includes a mix of residential and commercial uses, the total assessed value of all parcels of all residential and commercial real estate that are assessed at full and fair cash value for the current fiscal year minus the new growth adjustment factor for the current fiscal year attributable to the residential and commercial real estate as determined by the commissioner of revenue pursuant to said paragraph (f) of said section 21C of said chapter 59; and (2) 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 such ratio should not be less than 1. (iv) establish a maximum percentage of the costs of any public construction, referenced in clause (ii) and initiated subsequent to the adoption of the UCH–TIF plan, that can be recovered through betterments or special assessments against real property eligible for tax increment exemptions from property taxes under clause (iii) during the period of the parcel's eligibility for exemption from annual property taxes under said clause Fifty-first of said section 5 of said chapter 59, notwithstanding chapter 80 or any other general or special law authorizing the imposition of betterments or special assessments; (v) state that each owner of property located in an UCH–TIF zone seeking to establish eligibility for tax increment exemptions from annual property taxes pursuant to clause (iii) shall execute an agreement, referred to as an UCH–TIF agreement, with the city or town, the form of which shall be included as an attachment to the UCH–TIF plan. The UCH–TIF agreement shall include, but not be limited to, the following: (1) all material representations of the parties which served as a basis for the granting of a UCH–TIF exemption; (2) any terms deemed appropriate by the city or town relative to compliance with the UCH–TIF agreement including, but not limited to, what shall constitute a default by the property owner and what remedies shall be allowed between the parties for any such defaults, including an early termination of the agreement; (3) provisions requiring that one of the affordability thresholds described in subsection (b) is met; (4) provisions stating that housing units that meet the affordability requirements of subsection (b) shall be subject to use restrictions as defined in this section; (5) 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 a parcel of real property pursuant to clauses (iii) and (iv); (6) a detailed recitation of all other benefits and responsibilities inuring to and assumed by the parties to an agreement; and (7) a provision that the agreement shall be binding upon subsequent owners of the parcel of real property; and. (vi) delegate to a board, agency or officer of the city or town, the authority to execute agreements in accordance with clause (v). (b) As a condition of the granting of an UCH–TIF exemption, a property owner must satisfy 1 of the following affordability thresholds: (i) At least 15 per cent of the housing units assisted by the UCH–TIF agreement shall be affordable to occupants or families with incomes at or below 80 per cent of the area median income where the city or town is located, as defined by the United States Department of Housing and Urban Development, hereinafter referred to as AMI; or (ii) At least 25 per cent of the housing units assisted by the UCH–TIF agreement shall be affordable to occupants or families with incomes at or below 110 per cent of the AMI; or (iii) The property shall satisfy the requirements of an existing inclusionary zoning ordinance or by-law in the city or town, under which the property owner is required to make a portion of the housing units assisted by the UCH–TIF agreement affordable to low- and moderate-income households. In addition, to support a finding of public benefit based on residential and commercial growth in an urban center, at least one of the following conditions must be met: (i) The UCH–TIF zone has either: (1) an unemployment rate that exceeds the statewide average by at least 25 per cent, (2) a commercial vacancy rate of 15 per cent or more; or (3) an average household income below 115 per cent of the AMI; (ii) At least 51 per cent of the land area within the UCH–TIF zone is located within a qualified census tract, as defined in Section 42(d)(5) of the Internal Revenue Code; or (iii) At least 51per cent of the land area within the UCH–TIF zone constitutes a: (1) blighted open area, (2) decadent area or (3) sub-standard area, as defined in section 1 of chapter 121A. (c) The executive office of housing and livable communities shall review each UCH–TIF plan to determine whether it complies with the terms of this section and any regulations adopted by the executive office; provided further, that the department shall certify, based upon the information submitted in support of the UCH–TIF plan by the city or town and through such additional investigation as the executive office may make, that the plan is consistent with the requirements of this section and will further the public purpose of encouraging increased residential growth, affordable housing and commercial growth in the commonwealth; provided further, that a city or town may, at any time, revoke its designation of a UCH–TIF zone and, as a consequence of such revocation, shall immediately cease the execution of any additional agreements pursuant to clause (v) of subsection (a); provided, further, that a revocation shall not affect agreements relative to property tax exemptions and limitations on betterments and special assessments pursuant to said clause (v) of said subsection (a), use restrictions or options to purchase and rights of first refusal required by this section which were executed before the revocation. (d) The board, agency, or officer of the city or town authorized pursuant to clause (vi) of said subsection (a) to execute UCH–TIF agreements shall submit each executed UCH–TIF agreement to the executive office of housing and livable communities for approval. The executive office shall, as a condition of such approval, certify that the UCH–TIF agreement complies with the terms of this section and furthers the public purpose of encouraging increased residential growth, affordable housing and commercial growth in the commonwealth. Upon receipt of the executive office's certification, the board, agency or officer of the city or town authorized pursuant to said clause (vi) of said subsection (a) to execute UCH–TIF agreements shall forward to the board of assessors a copy of the approved UCH–TIF agreement, together with a list of the parcels included therein. An executed and approved UCH–TIF shall be recorded in the registry of deeds or the registry district of the land court wherein the land lies. (e) Notwithstanding any other general or special law to the contrary, an affordable housing development that benefits from a real estate tax exemption pursuant to this section that meets the affordability requirements of subsection (b) and subclause (3) of clause (v) of subsection (a) shall continue to meet those requirements for 30 years or for the term of any municipal bonds issued to finance the construction, reconstruction or rehabilitation of such development, whichever is shorter as may be specified in the recorded restriction. Such restriction shall be approved by the executive office of housing and livable communities in accordance with section 32 of chapter 184 and shall be recorded in the registry of deeds or the registry district of the land court wherein the land lies. (f) The owner of property subject to an UCH–TIF agreement shall certify to the city or town the incomes of the families or occupants, upon initial occupancy, of the affordable housing units designated in the UCH–TIF agreement and such certification shall be provided to the executive office of housing and livable communities on an annual basis. If the owner fails to provide certification or otherwise fails to comply with the UCH–TIF agreement, including failing to maintain the affordability of housing units assisted pursuant to this section, the city or town may place a lien on the property in the amount of the real estate tax exemptions granted pursuant to the UCH–TIF agreement for any year in which the owner is not in compliance with this subsection. If the city or town determines, with the approval of the executive office of housing and livable communities, that the owner is unlikely to come into compliance with the affordability requirements of said subsection (b) and said subclause (3) of said clause (v) of said subsection (a), the city or town may place a lien on the property in the amount of the total real estate tax exemption granted pursuant to the UCH–TIF agreement. Any such lien shall be recorded in the registry of deeds or the registry district of the land court wherein the land lies.

Section 60. (a) Notwithstanding any general or special law to the contrary, a 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 1 or more cities or towns and under regulations issued by the executive office of housing and livable communities, in consultation with the department of revenue, may adopt and prosecute an urban center housing tax increment financing plan, in this section referred to as a UCH–TIF plan, intended to encourage increased residential growth, affordable housing and commercial growth in urban center housing zones and do all things necessary thereto; provided, however, that the UCH–TIF plan shall:—

(i) designate any area of the city or town as an urban center housing tax increment financing zone, in this section referred to as a UCH–TIF zone, which shall be defined as a commercial center located within an area of concentrated development, as that term is defined in section 2 of chapter 40R, characterized by a predominance of commercial land uses and a need for multi-unit residential properties; provided, however, that the designation of a UCH–TIF zone shall be subject to the approval of the executive office of housing and livable communities under regulations adopted by the executive office consistent with this section; provided further, that a city or town may not enter into any UCH–TIF agreement, as defined in clause (v), unless the area governed by the UCH–TIF agreement is so designated and approved by the executive office of housing and livable communities; and provided further, that in the case of a UCH–TIF plan adopted by more than 1 city or town, the areas designated as UCH–TIF zones shall be contiguous areas of those cities and towns;

(ii) describe the construction, reconstruction, rehabilitation and related activities, public and private, contemplated for such UCH–TIF zone as of the date of the adoption of the UCH–TIF plan; provided, however, that in the case of public construction, the UCH–TIF plan shall include a detailed projection of the costs and a betterment schedule for the defrayal of such costs; provided, further, that the UCH–TIF plan shall provide that no costs of such public construction shall be recovered through betterments or special assessments imposed on a party which has not executed an UCH–TIF agreement in accordance with clause (v); and provided, further, that in the case of private construction, the UCH–TIF plan shall include the types of affordable housing and residential and commercial growth which are projected to occur within such UCH–TIF zone together with such documentary evidence of the projected public benefits as are required by the regulations;

(iii) authorize 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 UCH–TIF zone and for which an agreement has been executed under clause (v); provided, however, that the UCH–TIF plan shall specify the level of 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 such exemption under this clause; provided, further, that the inflation factor for each fiscal year shall be a ratio:

(1) the numerator of which shall be: (A) in an UCH–TIF zone where the property includes primarily residential uses, the total assessed value of all parcels of all residential real estate that are assessed at full and fair cash value for the current fiscal year minus the new growth adjustment factor for the current fiscal year attributable to the residential real estate as determined by the commissioner of revenue pursuant to paragraph (f) of section 21C of said chapter 59; or (B) in an UCH–TIF zone where the property includes a mix of residential and commercial uses, the total assessed value of all parcels of all residential and commercial real estate that are assessed at full and fair cash value for the current fiscal year minus the new growth adjustment factor for the current fiscal year attributable to the residential and commercial real estate as determined by the commissioner of revenue pursuant to said paragraph (f) of said section 21C of said chapter 59; and

(2) 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 such ratio should not be less than 1.

(iv) establish a maximum percentage of the costs of any public construction, referenced in clause (ii) and initiated subsequent to the adoption of the UCH–TIF plan, that can be recovered through betterments or special assessments against real property eligible for tax increment exemptions from property taxes under clause (iii) during the period of the parcel's eligibility for exemption from annual property taxes under said clause Fifty-first of said section 5 of said chapter 59, notwithstanding chapter 80 or any other general or special law authorizing the imposition of betterments or special assessments;

(v) state that each owner of property located in an UCH–TIF zone seeking to establish eligibility for tax increment exemptions from annual property taxes pursuant to clause (iii) shall execute an agreement, referred to as an UCH–TIF agreement, with the city or town, the form of which shall be included as an attachment to the UCH–TIF plan. The UCH–TIF agreement shall include, but not be limited to, the following: (1) all material representations of the parties which served as a basis for the granting of a UCH–TIF exemption; (2) any terms deemed appropriate by the city or town relative to compliance with the UCH–TIF agreement including, but not limited to, what shall constitute a default by the property owner and what remedies shall be allowed between the parties for any such defaults, including an early termination of the agreement; (3) provisions requiring that one of the affordability thresholds described in subsection (b) is met; (4) provisions stating that housing units that meet the affordability requirements of subsection (b) shall be subject to use restrictions as defined in this section; (5) 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 a parcel of real property pursuant to clauses (iii) and (iv); (6) a detailed recitation of all other benefits and responsibilities inuring to and assumed by the parties to an agreement; and (7) a provision that the agreement shall be binding upon subsequent owners of the parcel of real property; and.

(vi) delegate to a board, agency or officer of the city or town, the authority to execute agreements in accordance with clause (v).

(b) As a condition of the granting of an UCH–TIF exemption, a property owner must satisfy 1 of the following affordability thresholds:

(i) At least 15 per cent of the housing units assisted by the UCH–TIF agreement shall be affordable to occupants or families with incomes at or below 80 per cent of the area median income where the city or town is located, as defined by the United States Department of Housing and Urban Development, hereinafter referred to as AMI; or

(ii) At least 25 per cent of the housing units assisted by the UCH–TIF agreement shall be affordable to occupants or families with incomes at or below 110 per cent of the AMI; or

(iii) The property shall satisfy the requirements of an existing inclusionary zoning ordinance or by-law in the city or town, under which the property owner is required to make a portion of the housing units assisted by the UCH–TIF agreement affordable to low- and moderate-income households.

In addition, to support a finding of public benefit based on residential and commercial growth in an urban center, at least one of the following conditions must be met:

(i) The UCH–TIF zone has either: (1) an unemployment rate that exceeds the statewide average by at least 25 per cent, (2) a commercial vacancy rate of 15 per cent or more; or (3) an average household income below 115 per cent of the AMI;

(ii) At least 51 per cent of the land area within the UCH–TIF zone is located within a qualified census tract, as defined in Section 42(d)(5) of the Internal Revenue Code; or

(iii) At least 51per cent of the land area within the UCH–TIF zone constitutes a: (1) blighted open area, (2) decadent area or (3) sub-standard area, as defined in section 1 of chapter 121A.

(c) The executive office of housing and livable communities shall review each UCH–TIF plan to determine whether it complies with the terms of this section and any regulations adopted by the executive office; provided further, that the department shall certify, based upon the information submitted in support of the UCH–TIF plan by the city or town and through such additional investigation as the executive office may make, that the plan is consistent with the requirements of this section and will further the public purpose of encouraging increased residential growth, affordable housing and commercial growth in the commonwealth; provided further, that a city or town may, at any time, revoke its designation of a UCH–TIF zone and, as a consequence of such revocation, shall immediately cease the execution of any additional agreements pursuant to clause (v) of subsection (a); provided, further, that a revocation shall not affect agreements relative to property tax exemptions and limitations on betterments and special assessments pursuant to said clause (v) of said subsection (a), use restrictions or options to purchase and rights of first refusal required by this section which were executed before the revocation.

(d) The board, agency, or officer of the city or town authorized pursuant to clause (vi) of said subsection (a) to execute UCH–TIF agreements shall submit each executed UCH–TIF agreement to the executive office of housing and livable communities for approval. The executive office shall, as a condition of such approval, certify that the UCH–TIF agreement complies with the terms of this section and furthers the public purpose of encouraging increased residential growth, affordable housing and commercial growth in the commonwealth. Upon receipt of the executive office's certification, the board, agency or officer of the city or town authorized pursuant to said clause (vi) of said subsection (a) to execute UCH–TIF agreements shall forward to the board of assessors a copy of the approved UCH–TIF agreement, together with a list of the parcels included therein. An executed and approved UCH–TIF shall be recorded in the registry of deeds or the registry district of the land court wherein the land lies.

(e) Notwithstanding any other general or special law to the contrary, an affordable housing development that benefits from a real estate tax exemption pursuant to this section that meets the affordability requirements of subsection (b) and subclause (3) of clause (v) of subsection (a) shall continue to meet those requirements for 30 years or for the term of any municipal bonds issued to finance the construction, reconstruction or rehabilitation of such development, whichever is shorter as may be specified in the recorded restriction. Such restriction shall be approved by the executive office of housing and livable communities in accordance with section 32 of chapter 184 and shall be recorded in the registry of deeds or the registry district of the land court wherein the land lies.

(f) The owner of property subject to an UCH–TIF agreement shall certify to the city or town the incomes of the families or occupants, upon initial occupancy, of the affordable housing units designated in the UCH–TIF agreement and such certification shall be provided to the executive office of housing and livable communities on an annual basis. If the owner fails to provide certification or otherwise fails to comply with the UCH–TIF agreement, including failing to maintain the affordability of housing units assisted pursuant to this section, the city or town may place a lien on the property in the amount of the real estate tax exemptions granted pursuant to the UCH–TIF agreement for any year in which the owner is not in compliance with this subsection. If the city or town determines, with the approval of the executive office of housing and livable communities, that the owner is unlikely to come into compliance with the affordability requirements of said subsection (b) and said subclause (3) of said clause (v) of said subsection (a), the city or town may place a lien on the property in the amount of the total real estate tax exemption granted pursuant to the UCH–TIF agreement. Any such lien shall be recorded in the registry of deeds or the registry district of the land court wherein the land lies.