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The Town of Marshfield accepted the Community Preservation Act at the polls on April 28, 2001 at the 3% level.
Original Source: state.ma.us/envir/cpa/cpaqa
For updates see:
Community Preservation Act - Question and Answers
On September 14, 2000, Governor Paul Cellucci and Lieutenant Governor Jane Swift signed the Community Preservation Act into law. This landmark statute, now codified in the Massachusetts General Laws as Chapter 44B, provides Massachusetts cities and towns with an additional tool to conserve open space, preserve historic buildings and sites and create affordable income housing. The following are some commonly asked questions and answers on the Community Preservation Act.
What is the Community Preservation Act?
The Community Preservation Act (CPA) is an enabling statute that provides the authority for communities to establish a local Community Preservation Fund that derives its revenue primarily from a surcharge on the community’s local property tax. The Act allows communities to create by local referendum, a Community Preservation Fund financed by a surcharge of up to 3% of the local property tax. Monies accrued in the local Community Preservation Fund are to be spent on open space, historic preservation and low-income housing, with at least 10% of the annual receipts going to each category and the remaining 70% for any one or more of these 3 purposes in accordance with their own priorities. The Act also establishes a state Community Preservation Trust Fund to provide financial matches to communities and increase the dollars that can be
spent on community preservation. The annual state matching fund is expected to be approximately $26 million annually.
Local implementation:
How does my community establish a Community Preservation Fund by referendum?
There are two methods. First, the local legislative body (City Council, Board of Aldermen, Town Council, Town Meeting, etc.) can vote to place the question of adopting the Community Preservation Act before the voters as a referendum at least 35 days before the next city or town election or 60 days before the next state election. Second, if the legislative body does not adopt the CPA language at least 90 days before a city or town regular election or 120 days before a state election, then a petition signed by 5% of the registered voters in the community can be filed with the registrars to place the question before the voters.* The Community Preservation Act will be adopted if the referendum passes by
a majority vote.
* Certification of the signatures must occur more than 35 days before the next regular city or town election or more than 60 days before the state election. Since the Law allows the registrar to have 7 days to review the petition and certify its signature petitions must be submitted to registrars between 43 and 89 days before a city or town election and between 68 and 119 days before the next state election.
What does the referendum question look like?
The referendum question must read:
"Shall this (city or town) accept sections 3 to 7 inclusive of Chapter 44B of the General Laws, as approved by its legislative body, a summary of which appears below?"
The question shall be followed by a fair and concise summary and purpose of the Community Preservation Act, the percentage amount of the surcharge and the exemptions as allowed by law.
How much will the surcharge be on my property tax?
The law allows a community to adopt a surcharge of up to 3% of the local property tax. This surcharge may vary in each community depending upon its needs and goals.
Are there any exemptions to this surcharge?
Yes. All exemptions and abatements of real property authorized under M.G.L. c. 59 or any other law shall not be affected by the Community Preservation Act. Therefore, taxpayers that receive an exemption of real property tax pursuant to M.G.L. c. 59 or any other law will also be exempt from the surcharge. If a taxpayer receives an abatement pursuant to M.G.L. c. 59 or any other law, the
surcharge shall be reduced in proportion to the amount of the abatement. In addition, a community may choose to exempt the following: $100,000 of the value of each taxable residential parcel property owned by persons who qualify for low income, or low or moderate income senior housing; and commercial or industrial properties in cities or towns with classified tax rates.
Community Preservation Committee
What is the composition of the Community Preservation Committee?
The Community Preservation Committee will consist of between 5 to 9 members, including one member form each of the following: Conservation Commission, Historic Commission, Planning Board, Board of Park Commissioners and Housing Authority. The Community Preservation Committee must be established by a local ordinance or bylaw that specifies the number of members, method of selection (elected, appointed or combination), length of term, and the names of positions or boards “acting in the capacity of,” or “performing like duties” of the boards designated should these entities not exist in the community.
What are the duties of the Community Preservation Committee?
The Committee will make recommendations to the local legislative body for use of monies in the local Community Preservation Fund. At least ten percent (10%) of the monies must be used for each of the categories: open space, historic preservation and affordable housing, allowing the community flexibility to spend the remaining seventy percent (70%) however it choses within these 3 categories. The Committee may make recommendations about the acquisition, creation and preservation of open space and/or land for recreational use, the acquisition and preservation of historic resources, and creation, preservation and support of community housing.
Community Preservation Fund:
What can be deposited in the Community Preservation Fund (CPF)?
The following may be deposited into the local Community Preservation Fund:
Funds collected from the property tax surcharge;
Funds received from the Commonwealth or any other source for Community Preservation purposes;
Proceeds from bonds issued in anticipation of the Community Preservation Fund revenue;
Proceeds from the disposal of property acquired with funds from the Community Preservation Fund;
Damages penalties, costs or interest recovered by the city or town for damage to real property purchased with community preservation funds.
How can my community use its community preservation dollars?
The Act specifies that 10% of the monies must be spent in each of the 3 following categories: open space, historic preservation and affordable housing (see below for specifics). The remaining 70% of funds can be spent in any of the 3 categories in accordance with a community’s particular priorities.
Open Space:
Community Preservation funds may be used to purchase land, easements or restrictions to protect existing and future water supply areas, agricultural and forest land, coastal lands, frontage to inland water bodies, wildlife habitat, nature preserves and scenic vistas. If the community is only spending 10% of its funds on open space, the open space cannot be purchased for recreational use.
Recreational Use:
Land can also be purchased from the pool for active and passive recreational uses, including land for community gardens, trails and non-commercial youth and adult sports and the use of land as a park, playground or athletic field. Funds cannot be used for land used for horse or dog racing or a stadium, gymnasium or similar structure.
Historic preservation:
Community Preservation funds may be used to purchase, restore and rehabilitate historic structures and landscapes that have been determined by the local historic preservation commission to be significant in the history, archeology, architecture or culture of a city or town, or that is listed or eligible for listing on the state register of historic places.
Affordable housing:
Community Preservation funds may be used to create and preserve community housing defined as housing for low and moderate income individuals and families, including low or moderate income senior housing. The Act requires the Committee to recommend, wherever possible, the adaptive reuse of existing buildings or construction of new buildings on previously developed sites.
Note: Individual and family incomes shall be based on the areawide median income as determined by the United States Department of Housing and Urban Development. Low income is defined as an annual income of less than 80% of the areawide median income. Moderate income is defined as less than 100% of the areawide median income. Low or moderate senior income is defined as low or moderate income for persons over 60.
Once a community acquires land through the Community Preservation Fund, does the community have to own and manage it?
Property interests acquired through the CPF must be owned by a city or town. Property may be managed by the city or town itself or delegated to the Conservation Commission, Historical Commission, Board of Park Commissioners, Housing Authority, Water District or Fire District. Property management may also be delegated to a non-profit organization.
Are there any restrictions on the use of the Community Preservation Fund?
At least 10% of the funds must be spent on each of three categories (open space, historic preservation and affordable housing). See above for detail.
Monies cannot replace existing operating funds. Monies from the Fund may be expended anywhere in Massachusetts. For example, the community may wish to purchase watershed land to protect their water supply that resides in a neighboring town. The local legislative body may authorize no more than 5% of the annual Fund revenues for the administrative and operating expenses of the Committee.
Can communities issue bonds in anticipation of future monies for the Community Preservation Fund?
Yes. Communities may issue bonds in anticipation of Community Preservation Fund receipts. Communities are encouraged to work together to issue bonds to limit administrative costs through retention of common bond counsel and insurance and other means.
How much money would my community receive for Community Preservation if we adopted the Community Preservation Act locally?
For an estimate of how much money your community would receive (based on FY2000 statistics) if it passed a local referendum to establish a Community Preservation Fund at the maximum surcharge of 3% of the real property, please log on to EOEA’s website at http://commpres.env.state.ma.us/content/cpa.asp
The community would also receive a state match ranging from of 5% to 100% of the monies collected in the fund for the fiscal year ending June 30. If the community adopts the maximum 3% surcharge, it is also eligible for the Equity Distribution and the Surplus Distribution (discussed below) unless and until the total amount from the state match(es) reaches 100% of the community’s contribution.
The State Match:
Are state matching funds available?
State Matching funds are available to all communities that adopt the Community Preservation Act locally. Distributions will be made to communities on October 15th of each year based upon the monies received by the state Community Preservation Trust Fund by June 30 of that year. Matching funds are distributed in three rounds: Match Distribution, Equity Distribution and Surplus Distribution (explained below).
How is the first round Match Distribution calculated?
The Match Distribution is the first round of the state matching dollars and could be the only distribution round should less than ten percent (10%) of the 351 Commonwealth communities adopt the Act. Eighty percent of the monies in the Community Preservation Trust Fund are distributed proportionally among the communities that have locally adopted the Act. Communities will receive between 5% and 100% of the amount raised locally by its surcharge. The actual amount will vary depending on the amount of communities drawing from the Fund. All communities will receive the same percentage, although the total dollars will vary depending on the amount raised by the community. If the first round Match Distribution equals 100% of each community’s contribution, there will be no additional rounds of distribution.
How is the second round Equity Distribution, calculated?
If more than ten percent (10%) of the 351 communities of Massachusetts adopt the Act, a second round of matching funds can be distributed. Only communities that have adopted the maximum 3% surcharge will be eligible for the Equity Distribution. Distributions will be made in accordance with a Community Preservation Rank assigned to each community. (See below).
How is the Community Preservation Rank calculated?
Determining the Community Preservation Rank is a six-step process:
Step one: Communities are ranked from highest to lowest according to their equalized property valuation per capita ranking.
Step two: Communities are ranked by population from largest to smallest.
Step three: The community’s rank in step one is added to the community’s rank in step two. The sum is divided by 2 to receive the Community Preservation Raw Score.
Step four: communities are ranked by the Community Preservation Raw Score from highest to lowest. If more than one community has the same Raw Score, the community with the higher equalized property value rank will receive the higher rank.
Step five: communities are divided into deciles with approximately an equal number in each decile. Communities with the highest rank shall be in the lowest decile category.
Step six: multiply percentage assigned to the decile by the base figure.
Equity Distribution Deciles:
Decile figure % of the base
Decile 1 140%
Decile 2 130%
Decile 3 120%
Decile 4 110%
Decile 5 100%
Decile 6 90%
Decile 7 80%
Decile 8 70%
Decile 9 60%
Decile 10 50%
What is the third round Surplus Round?
If funds remain after the Match Distribution, Equity Distribution and any administrative expenses have been paid, the Commissioner of the Department of Revenue may disperse a 3rd round. Only those communities that have adopted the maximum 3% surcharge are eligible. Funds will be distributed according to Equity Distribution formula.
Where does the money come from that is used for the state match?
The Community Preservation Act, M.G.L. c. 44B, created a Community Preservation Trust Fund. The CPTF contains the following: fees collected by the Registrar of Deeds and Assistant Recorders, public and private gifts, grants and donations, damages, penalties, costs or interest received on account of litigation or settlement for violation of Section 15 of the Community Preservation Act or other monies credited or transferred to the Trust from any other fund or source.
How is the Community Preservation Act related to the Community Development Plan process outlined under Executive Order 418?
In January 2000, Governor Cellucci signed Executive Order 418, Assisting Communities in Addressing the Housing Shortage, which established a program for community planning and provided incentives to communities providing additional housing needs. All 351 Massachusetts cities and towns are eligible for up to $30,000 worth of planning services and technical assistance to help them complete a Community Development Plan that depicts the community’s future growth. The final Plan is a GIS (geographical information system) based map that addresses housing, open space and resource protection, economic development and transportation issues. The Community Preservation Act, if adopted locally, may help communities implement portions of their Community Development Plans.
In addition, the development of a local or intercommunity Community Development Plan will likely involve the work of a local committee. The composition of this committee may overlap with the Community Preservation Committee, thus providing a community with the possibility of combining time, agendas and priority setting purposes of each committee.
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