Summary of CPA Legislative Changes – HB4820

The Community Preservation Coalition (The Coalition) is in full support of HB4820, filed by Senator Cynthia Creem, which contains changes to the Massachusetts Community Preservation Act (CPA). HB 4820 is designed to broaden participation in the program, streamline its administration locally, and guarantee the long-term health of the state CPA Trust Fund, the source of funds used to match monies raised in local CPA communities.

Among the most important of the amendments in HB4820 is a proposal that would increase the annual minimum CPA trust fund match from 5% to 75%. For the past six years, each CPA community has received a dollar for dollar match to their local surcharge. Beginning in October 2008 however, the CPA trust will no longer be able to sustain the 100% match, due to the popularity of the program and declining real estate activity. The match rate will fall to 65% for many communities in October of 2008 and below 50% for most communities in October of 2009.

A second critical amendment would clarify the allowable uses of funds for outdoor parks and recreation projects under the Act, and broaden their use to allow communities to rehabilitate existing recreational resources with them. Currently, the use of the funds on such rehabilitation projects is restricted to recreational resources acquired or created with the CPA funds. This has been extremely limiting to many communities, including larger, urban communities with less open space to protect, but many older recreational facilities in need of rehabilitation.

Another component of the bill is also designed to help cities and less affluent communities, many of whom have yet to adopt CPA. It would allow communities to combine a traditional 1% CPA property tax surcharge with up to 2% of other municipal revenue in order to fund their local Community Preservation account. This alternate method of adoption relies less on the local property tax surcharge to raise revenue, and would hopefully spur more CPA adoption in urban communities.

HB 4820 is critical to the future of the CPA. The Coalition is looking forward to working with the state legislature, its allies and grassroots supporters to shepherd these amendments through the legislature.

To find out more about the CPA or HB 4820, contact The Coalition at 617-367-8998 or www.communitypreservation.org

Contents of HB 4820 - Amendments to the Community Preservation Act

Overall purpose: To broaden participation in the program, guarantee the long-term health of the CPA Trust Fund, and streamline administration.

Key proposed changes:

· Increase the deeds recording fee deposited into the Community Preservation Trust Fund in order to sustain a minimum 75% annual match rate for all adopting communities;

· Allow municipalities that adopt a conventional 1% CPA property tax surcharge to supplement receipts from the surcharge with up to another 2% of dedicated revenues from other sources of local funds such as linkage fees, hotel motel taxes or inclusionary zoning. The total amount will then be matched annually from the state CPA Trust Fund;

· Clarify the definitions of recreational use and rehabilitation to allow for improvements to existing open space, parks and recreational facilities not purchased with CPA funds, while retaining the current prohibition on use of the funds for routine maintenance.

Other proposed changes (technical amendments and clarifications):

· Direct the state treasurer to disperse a small portion of annual state CPA Trust Fund revenue to the Registries of Deeds for operating and administrative expenses related to CPA.

· Allow the 10% annual open space set-aside to be used for active or passive recreation;

· Allow communities to use CPA funds to provide an allowance to a qualified third party nonprofit organization to hold, monitor and enforce the deed restrictions that are required under the Act.

· Enable housing authorities, community development corporations, non-profit housing providers and others to assume an ownership and development role in CPA-funded housing projects in addition to municipalities;

· Create a new optional commercial exemption of up to $100,000 of taxable value for individual class three and four commercial and industrial properties that would mirror the current $100,000 residential exemption;

· Allow CPA administrative funds to be used to cover certain municipal first- year start-up CPA costs such as upgrades to tax billing software;

· Clarify that in a municipality with a city charter, CPA spending recommendations from the Community Preservation Committee are approved using the same procedures outlined in the charter for other city spending.