I an surprised that you do not support local initiatives that fill gaps in financing infrastructure to lower housing costs. If you carefully read the legislation you would see the numerous errors in your report. One of your main points is that 40T is the "privitization of local government." Nothing could be more untrue. A Chapter 40T District would be a body politic and corporate and a political subdivision of the Commonwealth. It is not a private entity. It is created by the municiplality and not the property owners. You are confusing the concept that the process begins with a petition of the property owners. The city or town can refuse to create a 40T District for any reason. Moreover, its directors are appointed by the local municipality. In 2002, according to the US Census Bureau, there were more than 402 districts of one type or another functioning in Massachusetts.
Most of your readers are familiar with betterment or assessment districts whereby property benefited by a road or sewer, for example, are assessed betterment fees. A Chapter 40T District is basically a voluntary betterment district. If a city or town assesses betterment fees, the propery owners have no choice.
Chapter 40T provides an alternative method to finance infrastructure for communities lacking the financial resources to do so themselves. The municipality and the local taxpayers are not liable for the debts of the District.
You failed to point out that the Prudential Committee that governs the District is appointed by the municipality and can be removed for cause. A detailed Improvement Plan must be submitted with the petition. This would list the proposed powers of ther District, its activities and how it will finance these activities. Again for whatever reason, a community, after a fully noticed public hearing, can turn down the petition should it believe that it is not in the best interests of the community.
Any eminent domain powers for such things as widening a road must be listed in the Improvement Plan. After a public hearing it is up to the City Council or Selectmen if they wish to approve the establishment of the District. if a District is created and, it in fact needs to make a taking, the taking must be approved by the Mayor and City council or Selectmen. This is a much more diifcult process than needs to be followed by a city or town. The District has no redevelopment powers and cannot transfer property to private parties. All infrastructure must be owned by a governmantal entitiy.
The District is limited to raising funds through assessments or betterment fees.
You are in total error saying that the community looses any rights to tax the real estate or persons within the District. The city or town has unfettered taxing rights within the District and all local and state laws apply.
You state that this legislation is only of interest to developers. I suggest you speak to the 30% of the Massachusetts households on septic systems. Many of them cannot sell their homes becuase of Title V problems. Chapter 40T allows neighbors to band to together to create a District to provide long-term tax-exempt financing to solve theri problem. Home buyers would have the option of paying off the betterment fees or assuming the financing and thus reducing their down payments.

Hal Davis

I an surprised that you do not support local initiatives that fill gaps in financing infrastructure to lower housing costs. If you carefully read the legislation you would see the numerous errors in your report. One of your main points is that 40T is the "privitization of local government." Nothing could be more untrue. A Chapter 40T District would be a body politic and corporate and a political subdivision of the Commonwealth. It is not a private entity. It is created by the municiplality and not the property owners. You are confusing the concept that the process begins with a petition of the property owners. The city or town can refuse to create a 40T District for any reason. Moreover, its directors are appointed by the local municipality. In 2002, according to the US Census Bureau, there were more than 402 districts of one type or another functioning in Massachusetts.
Most of your readers are familiar with betterment or assessment districts whereby property benefited by a road or sewer, for example, are assessed betterment fees. A Chapter 40T District is basically a voluntary betterment district. If a city or town assesses betterment fees, the propery owners have no choice.
Chapter 40T provides an alternative method to finance infrastructure for communities lacking the financial resources to do so themselves. The municipality and the local taxpayers are not liable for the debts of the District.
You failed to point out that the Prudential Committee that governs the District is appointed by the municipality and can be removed for cause. A detailed Improvement Plan must be submitted with the petition. This would list the proposed powers of ther District, its activities and how it will finance these activities. Again for whatever reason, a community, after a fully noticed public hearing, can turn down the petition should it believe that it is not in the best interests of the community.
Any eminent domain powers for such things as widening a road must be listed in the Improvement Plan. After a public hearing it is up to the City Council or Selectmen if they wish to approve the establishment of the District. if a District is created and, it in fact needs to make a taking, the taking must be approved by the Mayor and City council or Selectmen. This is a much more diifcult process than needs to be followed by a city or town. The District has no redevelopment powers and cannot transfer property to private parties. All infrastructure must be owned by a governmantal entitiy.
The District is limited to raising funds through assessments or betterment fees.
You are in total error saying that the community looses any rights to tax the real estate or persons within the District. The city or town has unfettered taxing rights within the District and all local and state laws apply.
You state that this legislation is only of interest to developers. I suggest you speak to the 30% of the Massachusetts households on septic systems. Many of them cannot sell their homes becuase of Title V problems. Chapter 40T allows neighbors to band to together to create a District to provide long-term tax-exempt financing to solve theri problem. Home buyers would have the option of paying off the betterment fees or assuming the financing and thus reducing their down payments.

Hal Davis

FINANCING NEEDED INFRASTRUCTURE UNDER PROPOSED CHAPTER 40T (H. 159, and S. 146)

WHY WE NEED THE LEGISLATION

• The Commonwealth’s and municipal budgets cannot fully support the roads, water, sewer and other infrastructure needed for quality residential and commercial development. Recent studies have revealed that the Commonwealth has been under funding its own infrastructure maintenance, further reducing future resources for local needs.

• At least 35% of Massachusetts homes rely on septic systems. Many neighborhoods have replacement or repair needs. New sewer system needs are not being fully financed by the State’s Revolving Loan Fund and traditional bond financing issued by our cities and towns. Mass DEP has long recommended the use of “Management Districts” (similar to Chapter 40T) as one method to finance waste water treatment improvements.

• Taxpayers in many communities are more and more reluctant to finance the infrastructure needed for both existing and new real estate developments through local property taxes.

• Housing construction costs are increased by the difficulty and cost of financing new infrastructure.

• The Commonwealth and local governments are looking for new ways to finance growth without increasing income or property taxes.

• New programs such as More Jobs, District Improvement Financing and I-Cubed, designed to fund infrastructure have only limited funding and applicability.

• Special assessment financing (the basis of Chapter 40T) is a popular method already used by at least 35 other states, to avoid increasing property taxes, particularly in jurisdictions subject to stringent debt or tax limitations.

• Massachusetts is missing out on billions of dollars in land secured, tax-exempt bond financing that states OTHER THAN Massachusetts currently access on a regular basis.


SPECIFIC POINTS ABOUT CHAPTER 40T

• Chapter 40T would be a voluntary program requiring the written consent of at least 80% of the owners of the tax parcels within the proposed Development Zone who must also own at least 80% of the acreage. The petition addressed to the local municipality, must be accompanied by a detailed Improvement Plan describing the infrastructure project, its costs and the proposed financing in detail. The approval of the host city or town after a fully noticed public hearing is required.

• Bonds under Chapter 40T would be issued by either MassDevelopment or a Local Improvement District. Such a District would ONLY be created if a District is needed to issue the bonds or the local community does not choose to own the infrastructure that is being financed.

• The General Laws currently permit cities and towns, on their own (and without property owner petition), to establish districts for fire prevention, sewer and water, regional waste disposal and other purposes. At least twenty districts have been created by special act in the last fifty years. The most recent was the Taunton Industrial Improvement District, Chapter 423 of the Acts of 2004. It operates in the same manner and serves the same purposes as Chapter 40T.

• Chapter 40T is not a new concept in Massachusetts. For example, Chapter 40, Section 44, enacted in 1870, permits towns to create “improvement districts” in an area with 1000 or more people to fund a limited list of improvements such as street lighting. Many communities already use betterments or assessment to fund the cost of roads, sidewalks, sewer and water needs.

• Chapter 40T, expands the type of infrastructure permitted under Chapter 40, Section 44 and provides a Twenty-First Century, workable framework so that bonds can be marketed to cover these costs

• The members of the Prudential Committee that acts as the directors of the District, if one is required, are appointed by, and can be removed by the selectmen or city council.

• The financial affairs of the District can be audited by property owners, the municipality and the Commonwealth.

• Any development within a Development Zone is subject to all local zoning and local or State land use laws or regulations

• The improvements financed under Chapter 40T must be owned by the District, the local municipality or other governmental body.

• Under Chapter 40T, revenues would be raised through special assessments and betterment fees on the real estate within the Development Zone and not local property taxes. Governmental property is exempt.

• The local municipality and the Commonwealth are specifically excluded from any responsibility for the debt or expenses under the legislation.

• Any property owner aggrieved by a special assessment has the right to appeal to Superior Court following the same procedures as if the municipality levied the assessments

• Special assessments and betterment fees in general are outside the provisions of Proposition 2 ½

• Property owners can assume or pay off, at their option, special assessments on real estate they purchase within the Development Zone.


BENEFITS OF CHAPTER 40T


• Municipalities that are unable to finance infrastructure themselves, will be able to provide an efficient mechanism to construct, administer, operate and repair project infrastructure without increasing local real estate taxes.

• Chapter 40T would provide a 35 year pay back for property owners as opposed to a maximum of 20 years under existing laws for betterments and assessments.

• Home and commercial buyers will have the option of paying off, or of assuming assessments that will provide long term financing at tax-exempt rates.

• Property owners will be able to reduce down payments by assuming a special assessment.

• Chapter 40T will enhance stretch the funding for the existing programs of DIF, I-Cubed and More Jobs.

• Chapter 40T could be used for a broad range of public infrastructure projects, with the consent of the municipality and petition of property owners, such as the repair of dams, environmental remediation and electric co-generation.

• Over $4 billion in new construction projects are awaiting the enactment of Chapter 40T.