MA Gen L ch 59 § 38h (2021)
2021 Massachusetts General Laws|Part I - Administration of the Government|Title IX - Taxation|Chapter 59 - Assessment of Local Taxes|Section 38h - Transition Payments to Municipalities in Which an Affiliated Generation Facility Is Located

  Section 38H. (a) For the purposes of this section, the term department shall refer to the department of telecommunications and energy.  Any electric company as defined in section 1 of chapter 164 which generates electricity or any distribution company as defined in said section 1 which is authorized by the commonwealth or the department to recover transition cost amounts associated with past investments in generation facilities, or any generation company or wholesale generation company as defined in said section 1 or such company's affiliate, subsidiary, or parent company which currently has no binding agreement for tax payments or payments in lieu of taxes to municipalities in which the company's generation facilities are located shall be required to make transition payments to any municipality in which an affiliated generation facility, as defined in said section 1, or part thereof, is located and has been devalued for property tax payment purposes; provided, however, that where such a binding agreement for the payment of real and personal property taxes or the binding agreement for payment in lieu of such taxes has been entered into on or after the effective date of this section, such agreement shall govern, and such generation facility shall be exempt from the provisions of this section. Said payments shall offset any reductions of property taxes as a result of any devaluation of said generation facility. This section does not provide for any exemption from property tax and is in addition to such tax obligation.  For the purposes of this section, "fiscal year'' shall be determined by sections 56 and 56A of chapter 44. For fiscal years 1998, 1999 and 2000, such payments shall be the difference between the property taxes for fiscal years 1998, 1999 and 2000, respectively, and the property taxes for fiscal year 1997. From fiscal year 2001 to fiscal year 2009, inclusive, such future payments shall be calculated as follows:  (i) For fiscal year 2001, such amount shall be equivalent to 90 per cent of the difference between the local property tax value of the property as of January 1, 1996 and the fair cash value of the property as of January 1, 2000, multiplied by the applicable commercial tax rate for the fiscal year 2001;  (ii) For fiscal year 2002, the calculated amount shall be equivalent to 80 per cent of the difference between the local property tax value of the property as of January 1, 1996 and the fair cash value of the property as of January 1, 2001, multiplied by the applicable commercial tax rate for the fiscal year 2002;  (iii) For fiscal year 2003, the calculated amount shall be equivalent to 70 per cent of the difference between the local property tax value of the property as of January 1, 1996 and the fair cash value of the property as of January 1, 2002, multiplied by the applicable commercial tax rate for the fiscal year 2003;  (iv) For fiscal year 2004, the calculated amount shall be equivalent to 60 per cent of the difference between the local property tax value of the property as of January 1, 1996 and the fair cash value of the property as of January 1, 2003, multiplied by the applicable commercial tax rate for the fiscal year 2004;  (v) For fiscal year 2005, the calculated amount shall be equivalent to 50 per cent of the difference between the local property tax value of the property as of January 1, 1996 and the fair cash value of the property as of January 1, 2004, multiplied by the applicable commercial tax rate for the fiscal year 2005;  (vi) For fiscal year 2006, the calculated amount shall be equivalent to 40 per cent of the difference between the local property tax value of the property as of January 1, 1996 and the fair cash value of the property as of January 1, 2005, multiplied by the applicable commercial tax rate for the fiscal year 2006;  (vii) For fiscal year 2007, the calculated amount shall be equivalent to 30 per cent of the difference between the local property tax value of the property as of January 1, 1996 and the fair cash value of the property as of January 1, 2006, multiplied by the applicable commercial tax rate for the fiscal year 2007;  (viii) For fiscal year 2008, the calculated amount shall be equivalent to 20 per cent of the difference between the local property tax value of the property as of January 1, 1996 and the fair cash value of the property as of January 1, 2007, multiplied by the applicable commercial tax rate for the fiscal year 2008;  (ix) For fiscal year 2009, the calculated amount shall be equivalent to 10 per cent of the difference between the local property tax value of the property as of January 1, 1996 and the fair cash value of the property as of January 1, 2008, multiplied by the applicable commercial tax rate for the fiscal year 2009.  Any such transition payments shall be included in the tax base for purposes of determining the levy ceiling and levy limit under section 21C of this chapter and in determining minimum residential factor and classification of property under section 1A of chapter 58 and section 56 of chapter 40. The department of revenue may issue guidelines for implementing the provisions of this subsection consistent with preserving the transition payment amounts in the local tax base for such purposes.[ First paragraph of subsection (b) effective until June 24, 2021. For text effective June 24, 2021, see below.]  (b) A generation company or wholesale generation company which does not qualify for a manufacturing classification exemption pursuant to paragraph (3) of the clause Sixteenth of said section 5 may, in order to comply with its property tax liability obligation, execute an agreement for the payment in lieu of taxes with the municipality in which such generation facility is sited, and said company shall be exempt from property taxes, in whole or in part, as provided in any such agreements during the terms thereof. Any such agreement shall be the result of good faith negotiations and shall be the equivalent of the property tax obligation based on full and fair cash valuation. Any such negotiated amount shall be included in the tax base for purposes of determining the levy ceiling and levy limit under section 21C and in determining minimum residential factor and classification of property under section 1A of chapter 58 of the General Laws and section 56 of chapter 40 of the General Laws. The department of revenue may issue guidelines for implementing the provisions of this subsection consistent with preserving the negotiated payment amount in the local tax base for such purpose.[ First paragraph of subsection (b) as amended by 2021, 8, Sec. 63 effective June 24, 2021. See 2021, 8, Sec. 114. For text effective until June 24, 2021, see above.]  (b) A generation company or wholesale generation company which does not qualify for a manufacturing classification exemption pursuant to paragraph (3) of the clause Sixteenth of said section 5 may, in order to comply with its property tax liability obligation, execute an agreement for the payment in lieu of taxes with the municipality in which such generation facility is sited, and said company shall be exempt from property taxes, in whole or in part, as provided in any such agreements during the terms thereof; provided, however, that for the purposes of this subsection, a generation facility shall not include a facility that generates electricity through solar or wind power, nor shall it include a facility that generates electricity by a qualified fuel cell powered system, as defined in clause Forty-fifth B of section 5; and provided further, that a facility that generates electricity through solar or wind may execute an agreement for the payment in lieu of taxes under clause Forty-fifth of said section 5. Any such agreement shall be the result of good faith negotiations and shall be the equivalent of the property tax obligation based on full and fair cash valuation. Any such negotiated amount shall be included in the tax base for purposes of determining the levy ceiling and levy limit under section 21C and in determining minimum residential factor and classification of property under section 1A of chapter 58 of the General Laws and section 56 of chapter 40 of the General Laws. The department of revenue may issue guidelines for implementing the provisions of this subsection consistent with preserving the negotiated payment amount in the local tax base for such purpose.  A city or town, acting by and through its governing body and board of assessors, is hereby authorized to enter into an agreement with the New England Power Company concerning the assessed valuation of all real and personal property presently owned by said company in said city or town for the fiscal years 1997 to 2001, inclusive; provided, however, that said agreement shall constitute a good faith attempt to value said property at its fair market value. Any such agreement as described herein executed prior to and in effect on December 1, 1997, is hereby ratified, validated, and confirmed in all respects and as though this act had been in full force and effect at the time of the execution of said agreement.  (c) In the case of a nuclear-powered electric generation facility in the commonwealth which exceeds 250 megawatts in size and which was owned in whole or in part by an electric company as of July 1, 1997, whether or not such generation facility is in service as of the date of the collection in rates of the transition costs as defined pursuant to section 1 of chapter 164, such electric company shall not be subject to the provisions of subsections (a) and (b) and, in order to be eligible to collect the full amount of transition costs as approved by the department pursuant to section 1G of said chapter 164, shall enter into an agreement to pay the host community payments in addition to taxes. Such payments in addition to taxes shall be made in equal payments on or before July 31, October 31, January 31 and April 30 of each year by such electric company in the following amounts: for fiscal years 1999, 2000 and 2001, in an amount which, when added to the amount of taxes due for each year, equals the amount of tax payments remitted to such host community in fiscal year 1998. Such electric company shall, by the commencement of fiscal year 2002, have entered into an agreement to pay the host community payments in lieu of taxes for such generation facility; provided, however, that such agreement shall be executed as a result of good faith negotiations between the electric company and the host community; provided further, that such agreement shall cover a period of time the greater of which is the time until the licensed termination date of such facility, as included in the original license or in a renewal of such license or 15 years beginning with fiscal year 1998. For the purposes of this subsection, the standard of good faith shall not require either party to agree to a proposal or require the making of concessions but shall require active participation in negotiations and a willingness to make reasonable concessions and to provide justification for proposals and a sincere effort to reach agreement. In the event that an agreement on such payment in lieu of taxes cannot be effected through such good faith negotiations on or before January 1, 1999, the parties shall submit to arbitration and such arbitration shall be performed by the department of telecommunications and energy or by a state-certified professional arbitrator or arbitration firm appointed by said department and operating in accordance with any applicable rules and regulations. The department shall not approve any plan submitted by such electric company to utilize the provisions of securitization pursuant to section 1H of chapter 164 if such tax agreement has not been executed pursuant to the provisions of this subsection. Such payments in addition to and in lieu of taxes, whether determined by the provisions of this subsection or by negotiation or by arbitration, shall be included in the tax levy and the attributed valuation related to such payments in addition to and in lieu of taxes, which shall be calculated by dividing the payments in addition to taxes by the current tax rate expressed as a decimal, and shall be included in the total assessed valuation for the purposes of determining the levy ceiling and levy limit under said section 21C and in determining the minimum residential factor and classification of property under section 1A of chapter 58 and section 56 of chapter 40. The department of revenue may issue guidelines for implementing the provisions of this subsection consistent with preserving the payment in addition to and in lieu of taxes in the local tax base for such purpose.  Notwithstanding the provisions of any general or special law to the contrary, the town of Plymouth, acting through its board of selectmen, may enter into a certain agreement dated March 16, 1999 with the Boston Edison Company relating to property taxes, payments in addition to property taxes, payments in lieu of property taxes for the Pilgrim Nuclear Power Station, as that property is defined in the agreement, for the fiscal years 1998 to 2012, inclusive. Such agreement is hereby authorized, ratified, validated and confirmed in all respects as satisfying all of Boston Edison Company's obligations under this section with respect to agreements relating to property taxes, payments in addition to property taxes and payments in lieu of property taxes for the Pilgrim Nuclear Power Station.