New Legislation Affects CPA Transfers to Housing Trusts and CPA Exemption Deadlines

New Legislation Affecting CPAJuly 28, 2016: Legislation was passed at the end of last month that includes two amendments that will affect the Community Preservation Act. An Act Modernizing Municipal Finance and Government (H.4565), will change the ways in which CPA funds are transferred and used by Municipal Affordable Housing Trusts and also clarifies the procedure municipalities use to issue the CPA exemptions for low income households and low/moderate income seniors in communities that have adopted those two exemptions.

CPA and Municipal Affordable Housing Trusts

Many communities use Municipal Affordable Housing Trusts (MAHTs) as a tool to create affordable housing, and it is common for these local trusts across the state to receive funding from CPA. Previously, the CPA and Housing Trust statutes were not aligned in how the funding could be used, and it was not clear that all of the rules of CPA followed as the money was placed into MAHTs. In addition, it was difficult to track how much housing was created across the state with the CPA funding that had been transferred to MAHTs.

The new legislation makes the following changes to how housing trusts function with CPA funding:

  • Expands the allowable uses for Municipal Affordable Housing Trust expenditures to match those of CPA. Provided that the transfer of funds is not restricted by the CPC recommendation, trusts can now expend funds for any community housing activity that is allowable under CPA; 
  • Clarifies that all rules and restrictions of Chapter 44b, the Community Preservation Act, remain in force even after CPA funds are transferred to a Municipal Affordable Housing Trust; 
  • Requires that trusts track CPA funds separately from other funding sources and annually report on the use of those funds in the municipalities' CP-3 reporting to the Department of Revenue; and 
  • Authorizes MAHTs to execute grant agreements. Most communities require a grant agreement between the municipality and the trust to establish conditions for the transfer of CPA funds. Trusts currently do not have explicit authority to execute grant agreements.

All of the above changes will take effect in approximately 90 days. All CPA funds contained in MAHTs as of that date, and all new funds transferred after that date, are subject to the new rules. We've included the final language of the relevant sections here:

  • SECTION 95. Subsection (a) of section 55C of said chapter 44, as so appearing, is hereby amended by inserting after the word “households”, in line 7, the following words:- and for the funding of community housing, as defined in and in accordance with the provisions of chapter 44B.
  • SECTION 96. Said section 55C of said chapter 44, as so appearing, is hereby amended by inserting after the figure “44B”, in line 33, the following words:- ; provided, however, that any such money received from chapter 44B shall be used exclusively for community housing and shall remain subject to all the rules, regulations and limitations of that chapter when expended by the trust, and such funds shall be accounted for separately by the trust; and provided further, that at the end of each fiscal year, the trust shall ensure that all expenditures of funds received from said chapter 44B are reported to the community preservation committee of the city or town for inclusion in the community preservation initiatives report, form CP-3, to the department of revenue;
  • SECTION 97. Said section 55C of said chapter 44, as so appearing, is hereby amended by inserting after the word “releases”, in line 44, the following words:- , grant agreements.
  • SECTION 246. Sections 95 to 97, inclusive, shall apply to all funds held in trust under chapter 44B of the General Laws on or after the effective date of this act.

For more information on these changes affecting CPA and Municipal Affordable Housing Trusts, please contact Shelly Goehring at the Massachusetts Housing Partnership (MHP):  857-317-8525 / sgoehring@mhp.net

CPA Exemption Procedure

In this same piece of legislation, Section 100 sets submission deadlines for taxpayers who want to apply for the low income/moderate income senior exemption in communities that have adopted CPA with that exemption. The new deadline corresponds with the same deadline used by municipalities for filing abatements for property taxes.  The legislation also provides a process by which taxpayers can appeal the decision of the assessors on their exemption application and cites the privacy laws that govern public access to inspection of those applications.

The text of the legislation inserts the following paragraph into subsection (e) of section 3 of the CPA legislation:

A person claiming an exemption provided under this subsection may apply to the board of assessors, in writing, on a form approved by the commissioner of revenue, on or before the deadline for an application for exemption under section 59 of chapter 59. Any person aggrieved by the decision of the assessors, or by their failure to act, upon such application, may appeal as provided in sections 64 to 65B, inclusive, of chapter 59. Applications for exemption under this chapter shall be open for inspection only as provided in section 60 of chapter 59.