Massachusetts 2023-2024 Regular Session

Massachusetts House Bill H4151 Compare Versions

Only one version of the bill is available at this time.

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2	2	HOUSE DOCKET, NO. 4135 FILED ON: 2/3/2023
3	3	HOUSE . . . . . . . . . . . . . . . No. 4151
4	4	The Commonwealth of Massachusetts
5	5	_________________
6	6	PRESENTED BY:
7	7	Dylan A. Fernandes
8	8	_________________
9	9	To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
10	10	Court assembled:
11	11	The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
12	12	An Act authorizing the town of Nantucket to impose a real estate transfer fee for affordable and
13	13	workforce housing.
14	14	_______________
15	15	PETITION OF:
16	16	NAME:DISTRICT/ADDRESS :DATE ADDED:Dylan A. FernandesBarnstable, Dukes and Nantucket2/3/2023Julian CyrCape and Islands2/3/2023 1 of 13
17	17	HOUSE DOCKET, NO. 4135 FILED ON: 2/3/2023
18	18	HOUSE . . . . . . . . . . . . . . . No. 4151
19	19	By Representative Fernandes of Falmouth, a petition (subject to Joint Rule 7B) of Dylan A.
20	20	Fernandes and Julian Cyr relative to authorizing the town of Nantucket to impose a real estate
21	21	transfer fee for affordable and workforce housing. Revenue.
22	22	[SIMILAR MATTER FILED IN PREVIOUS SESSION
23	23	SEE HOUSE, NO. 4201 OF 2021-2022.]
24	24	The Commonwealth of Massachusetts
25	25	_______________
26	26	In the One Hundred and Ninety-Third General Court
27	27	(2023-2024)
28	28	_______________
29	29	An Act authorizing the town of Nantucket to impose a real estate transfer fee for affordable and
30	30	workforce housing.
31	31	Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
32	32	of the same, as follows:
33	33	1 SECTION 1. For purposes of this act, the words and phrases set forth in this section shall
34	34	2have the following meanings:
35	35	3 “Affordable Housing Restriction" is a recorded instrument held by a qualified holder
36	36	4which encumbers and/or restricts a real property interest so that the real property interest is
37	37	5perpetually or for a term of at least thirty (30) years limited to use as a residence occupied by a
38	38	6low or moderate income household which earns less than a specified income level, the upper
39	39	7limit of which may not exceed one hundred seventy-five percent (175%) of the Nantucket
40	40	8median income. A “qualified holder” is a governmental body or charitable corporation or trust
41	41	9which qualifies under the terms of Massachusetts General Laws Chapter 184 (“Chapter 184”) to 2 of 13
42	42	10hold an affordable housing restriction. Without limiting the generality of the foregoing,
43	43	11“Affordable Housing Restriction” includes but is not limited to any instrument which conforms
44	44	12to the requirements of (i) a Nantucket Housing Needs Covenant as described in Chapter 301 of
45	45	13the Acts of 2002 and defined in the Town of Nantucket Code.
46	46	14 "Eligible Applicants", shall refer to non-profit and for-profit corporations and
47	47	15organizations, individuals, and public entities.
48	48	16 "Purchaser", shall refer to the transferee, grantee or recipient of any real property interest.
49	49	17 "Purchase price", all consideration paid or transferred by or on behalf of a purchaser to a
50	50	18seller or his nominee, or for his benefit, for the transfer of any real property interest, and shall
51	51	19include, but not be limited to, all cash or its equivalent so paid or transferred; all cash or other
52	52	20property paid or transferred by or on behalf of the purchaser to discharge or reduce any
53	53	21obligation of the seller; the principal amount of all notes or their equivalent, or other deferred
54	54	22payments, given or promised to be given by or on behalf of the purchaser to the seller or his
55	55	23nominee; the outstanding balance of all obligations of the seller which are assumed by the
56	56	24purchaser or to which the real property interest transferred remains subject after the transfer,
57	57	25determined at the time of transfer, but excluding real estate taxes and other municipal liens or
58	58	26assessments which are not overdue at the time of transfer; the fair market value, at the time of
59	59	27transfer, of any other consideration or thing of value paid or transferred by or on behalf of the
60	60	28purchaser, including, but not limited to, any property, goods or services paid, transferred or
61	61	29rendered in exchange for such real property interest.
62	62	30 "Real property interest", shall refer to any present or future legal or equitable interest in
63	63	31or to real property, and any beneficial interest therein, including the interest of any beneficiary in 3 of 13
64	64	32a trust which holds any legal or equitable interest in real property, the interest of a partner or
65	65	33member in a partnership or limited liability company, the interest of a stockholder in a
66	66	34corporation, the interest of a holder of an option to purchase real property, the interest of a buyer
67	67	35or seller under a contract for purchase and sale of real property, and the transferable development
68	68	36rights created under chapter 183A of the General Laws; but shall not include any interest which
69	69	37is limited to any of the following: the dominant estate in any easement or right of way; the right
70	70	38to enforce any restriction; any estate at will or at sufferance; any estate for years having a term of
71	71	39less than 30 years; any reversionary right, condition, or right of entry for condition broken; and
72	72	40the interest of a mortgagee or other secured party in any mortgage or security agreement.
73	73	41 "Seller", shall refer to the transferor, grantor or immediate former owner of any real
74	74	42property interest.
75	75	43 "Time of transfer" of any real property interest shall mean the time at which such transfer
76	76	44is legally effective as between the parties thereto, and, in any event, with respect to a transfer
77	77	45evidenced by an instrument recorded with the appropriate registry of deeds or filed with the
78	78	46assistant recorder of the appropriate registry district, not later than the time of such recording or
79	79	47filing.
80	80	48 “Town” shall refer to the Town of Nantucket acting by and through the Board of
81	81	49Selectmen.
82	82	50 SECTION 2. There is hereby imposed a fee equal to one half per cent (1/2%) of the
83	83	51purchase price upon the transfer of any real property interest in any real property situated in
84	84	52Nantucket County. Said fee shall be the liability of the seller of such real property interest, and
85	85	53any agreement between the purchaser and the seller or any other person with reference to the 4 of 13
86	86	54allocation of the responsibility for bearing said fee shall not affect such liability of the seller. The
87	87	55fee shall be paid to the Town of Nantucket, or its designee, and shall be accompanied by a copy
88	88	56of the deed or other instrument evidencing such transfer, if any, and an affidavit signed under
89	89	57oath or under the pains and penalties of perjury by the purchaser or his legal representative and
90	90	58the seller or his legal representative, attesting to the true and complete purchase price and the
91	91	59basis, if any, upon which the transfer is claimed to be exempt in whole or in part from the fee
92	92	60imposed hereby. The Town, or its designee, shall promptly thereafter execute and issue a
93	93	61certificate indicating that the appropriate fee has been paid or that the transfer is exempt from the
94	94	62fee, stating the basis for the exemption. The register of deeds for Nantucket County, and the
95	95	63assistant recorder for the registry district of Nantucket County, shall not record or register, or
96	96	64receive or accept for recording or registration, any deed, except a mortgage deed, to which has
97	97	65not been affixed such a certificate executed by the Town or its designee. Failure to comply with
98	98	66this requirement shall not affect the validity of any instrument. The Town shall deposit all fees
99	99	67received hereunder with the Town treasurer. The treasurer shall deposit such fees in the
100	100	68Affordable Housing Trust Fund. The fee imposed hereunder shall be due simultaneously with the
101	101	69time of transfer of the transfer upon which it is imposed. Notwithstanding the foregoing,
102	102	70whenever there is a conveyance of real property interests and a conveyance of personalty related
103	103	71thereto at or about the same time, the allocations of payments between real estate and personalty
104	104	72agreed to by the purchaser and seller shall not determine the amount of the fee due pursuant to
105	105	73this section; instead, the Town may require payment of the fee referred to in real property
106	106	74interests so conveyed as determined by the Town.
107	107	75 SECTION 3. At any time within seven days following the issuance of the certificate of
108	108	76payment of the fee imposed by section two, the seller or his legal representative may return said 5 of 13
109	109	77certificate to the Town or its designee for cancellation, together with an affidavit signed under
110	110	78oath or under the pains and penalties of perjury that the transfer, with respect to which such
111	111	79certificate was issued, has not been consummated, and thereupon the fee paid with respect to
112	112	80such transfer shall be forthwith returned to the seller or his legal representative.
113	113	81 SECTION 4. The following transfers of real property interests shall be exempt from the
114	114	82fee established by section 10. Except as otherwise provided, the seller shall have the burden of
115	115	83proof that any transfer is exempt under this section and any otherwise exempt transfer shall not
116	116	84be exempt in the event that such transfer (by itself or as part of a series of transfers) was made
117	117	85for the primary purpose of evading the fee imposed by Section 10.
118	118	86 (a) Transfers to the government of the United States, the commonwealth, and any of their
119	119	87instrumentalities, agencies or subdivisions, including but not limited to transfers to the Town of
120	120	88Nantucket, the County of Nantucket.
121	121	89 (b) Transfers which, without additional consideration, confirm, correct, modify or
122	122	90supplement a transfer previously made.
123	123	91 (c) Transfers made as gifts without consideration. In any proceedings to determine the
124	124	92amount of any fee due hereunder, it shall be presumed that any transfer for consideration of less
125	125	93than fair market value of the real property interest transferred was made as a gift without
126	126	94consideration to the extent of the difference between the fair market value of the real property
127	127	95interest transferred and the amount of consideration claimed by the seller to have been paid or
128	128	96transferred, if the purchaser shall have been at the time of transfer the spouse, the lineal
129	129	97descendant, or the lineal ancestor of the seller, by blood or adoption, and otherwise it shall be 6 of 13
130	130	98presumed that consideration was paid in an amount equal to the fair market value of the real
131	131	99property interest transferred, at the time of transfer.
132	132	100 (d) Transfer to the trustees of a trust in exchange for a beneficial interest received by the
133	133	101purchaser in such trust; distributions by the trustees of a trust to the beneficiaries of such trust.
134	134	102 (e) Transfers by operation of law without actual consideration, including but not limited
135	135	103to transfers occurring by virtue of the death or bankruptcy of the owner of a real property
136	136	104interest.
137	137	105 (f) Transfers made in partition of land and improvements thereto, under chapter two
138	138	106hundred and forty-one of the General Laws.
139	139	107 (g) Transfers to any charitable organization as defined in clause Third of section five of
140	140	108chapter fifty-nine of the General Laws, or any religious organization, provided that the real
141	141	109property interest so transferred will be held by the charitable or religious organization solely for
142	142	110its public charitable or religious purposes.
143	143	111 (h) Transfers to a mortgagee in foreclosure of the mortgage held by such mortgagee, and
144	144	112transfers of the property subject to a mortgage to the mortgagee in consideration of the
145	145	113forbearance of the mortgagee from foreclosing said mortgage.
146	146	114 (i) Transfers made to a corporation or partnership or limited liability company at the time
147	147	115of its formation, pursuant to which transfer no gain or loss is recognized under the provisions of
148	148	116section three hundred and fifty-one or seven hundred and twenty-one of the Internal Revenue
149	149	117Code of 1986, as amended; provided, however, that such transfer shall be exempt only in the
150	150	118event that (1) with respect to a corporation, the transferor retains an interest in the newly formed 7 of 13
151	151	119corporation which is equivalent to the interest the transferor held prior to the transfer, or (2) with
152	152	120respect to a partnership or limited liability company, the transferor retains after such formation
153	153	121rights in capital interests and profit interests within such partnership or limited liability company
154	154	122which are equivalent to the interest the transferor held prior to the transfer.
155	155	123 (j) Transfers made to a stockholder of a corporation in liquidation or partial liquidation of
156	156	124the corporation, and transfers made to a partner of a partnership or to a member of a limited
157	157	125liability company in dissolution or partial dissolution of the partnership or limited liability
158	158	126company; but the transfer shall be exempt only if (i) with respect to a corporation, the transferee
159	159	127receives property (including real property interests and other property received) which is the
160	160	128same fraction of the total property of the transferor corporation as the fraction of the
161	161	129corporation's stock owned by the transferee prior to the transfer or (ii) with respect to a
162	162	130partnership or limited liability company, the transferee receives property (including real property
163	163	131interests and other property received) which is the same fraction of the property of the
164	164	132partnership or limited liability company as the fraction of the capital and profit interests in the
165	165	133transferor formerly owned by the transferee.
166	166	134 (k) Transfers consisting of the division of marital assets under the provisions of section
167	167	135thirty-four of chapter two hundred and eight of the General Laws or other provisions of law.
168	168	136 (l) Transfers of property consisting in part of real property interests situated in Nantucket
169	169	137County and in part of other property interests, to the extent that the property transferred consists
170	170	138of property other than real property situated in Nantucket county; provided that the purchaser
171	171	139shall furnish the Town with such information as it shall require or request in support of the claim
172	172	140of exemption and manner of allocation of the consideration for such transfers. 8 of 13
173	173	141 (m) The first $2 million of the sale price of any transfer or series of transfers of real
174	174	142property interests in a single transaction. Said exemption may be adjusted as determined by the
175	175	143affirmative vote of two-thirds of voters at an annual or special town meeting.
176	176	144 (n) Transfers of minority interests in corporations, trusts, partnerships or limited liability
177	177	145companies which are publicly traded, which trades are not part of a series of transfers which
178	178	146together constitute a transfer of control of a corporation, trust, partnership or limited liability
179	179	147company.
180	180	148 SECTION 5. (a) The Town treasurer shall keep a full and accurate account stating when,
181	181	149from or to whom, and on what account money has been paid or received relative to the activities
182	182	150of the Trust Fund and the Housing Fund. Said account shall be subject to examination by the
183	183	151director of accounts or his agent pursuant to section forty four of chapter thirty five of the
184	184	152General Laws.
185	185	153 (b) Schedules of beneficiaries of trusts, list of stockholders of corporations and lists of
186	186	154partnerships filed with the Trust Fund for the purpose of determining or fixing the amount of the
187	187	155fee imposed under section ten or for the purpose of determining the existence of any exemption
188	188	156under section twelve shall not be public records for the purposes of section ten of chapter sixty-
189	189	157six of the General Laws.
190	190	158 SECTION 6. A seller who fails to pay all or any portion of the fee established by section
191	191	159two on or before the time when the same is due shall be liable for the following additional
192	192	160payments in addition to said fee:
193	193	161 (a) Interest: The seller shall pay interest on the unpaid amount of the fee to be calculated
194	194	162from the time of transfer at a rate equal to fourteen per cent per annum. 9 of 13
195	195	163 (b) Penalties: Any person who, without fraud or willful intent to defeat or evade a fee
196	196	164imposed by this chapter, fails to pay all or a portion of the fee within thirty days after the time of
197	197	165transfer, shall pay a penalty equal to five per cent of the outstanding fee as determined by the
198	198	166Town for each month or portion thereof thereafter that the fee is not paid in full; provided,
199	199	167however, that in no event shall the amount of any penalty imposed hereunder exceed twenty five
200	200	168per cent of the unpaid fee due at the time of transfer. Whenever the Town determines that all or a
201	201	169portion of a fee due under this chapter was unpaid due to fraud with intent to defeat or evade the
202	202	170fee imposed by this chapter, a penalty equal to the amount of said fee as determined by the Town
203	203	171shall be paid by the seller in addition to said fee.
204	204	172 SECTION 7. (a) The Town shall notify the purchaser and the seller by registered or
205	205	173certified mail of any failure to discharge in full the amount of the fee due under this Act and any
206	206	174penalty or interest assessed. The Town shall grant a hearing on the matter of the imposition of
207	207	175said fee, or of any penalty or interest assessed, if a petition requesting such hearing is received by
208	208	176the Town within thirty days after the mailing of said notice. The Town shall notify the purchaser
209	209	177and the seller in writing by registered or certified mail of its determination concerning the
210	210	178deficiency, penalty or interest within fifteen days after said hearing. Any party aggrieved by a
211	211	179determination of the Town concerning a deficiency, penalty or interest may, after payment of
212	212	180said deficiency, appeal to the district or superior court within three months after the mailing of
213	213	181notification of the determination of the Town. Upon the failure to timely petition for a hearing, or
214	214	182appeal to said courts, within the time limits hereby established, the purchaser and seller shall be
215	215	183bound by the terms of the notification, assessment or determination, as the case may be, and shall
216	216	184be barred from contesting the fee, and any interest and penalty, as determined by the Town. All
217	217	185decisions of said courts shall be appealable. Every notice to be given under this section by the 10 of 13
218	218	186Town shall be effective if mailed by certified or registered mail to the purchaser or the seller at
219	219	187the address stated in a recorded or registered instrument by virtue of which the purchaser holds
220	220	188any interest in land, the transfer of which gives rise to the fee which is the subject of such notice;
221	221	189and if no such address is stated or if such transfer is not evidenced by an instrument recorded or
222	222	190registered in the public records in Nantucket County, such notice shall be effective when so
223	223	191mailed to the purchaser or seller in care of any person appearing of record to have a fee interest
224	224	192in such land, at the address of such person as set forth in an instrument recorded or registered in
225	225	193Nantucket County.
226	226	194 (b) All fees, penalties and interest required to be paid pursuant to this chapter shall
227	227	195constitute a personal debt of the seller and may be recovered in an action of contract or in any
228	228	196other appropriate action, suit or proceeding brought by the Town; said action, suit or proceeding
229	229	197shall be subject to the provisions of chapter two hundred and sixty of the General Laws.
230	230	198 (c) If any seller liable to pay the fee established by this act neglects or refuses to pay the
231	231	199same, the amount, including any interest and penalty thereon, shall be a lien in favor of the Town
232	232	200upon all property and rights to property, whether real or personal, belonging to either such
233	233	201purchaser or such seller. Said lien shall arise at the time of transfer and shall continue until the
234	234	202liability for such amount is satisfied. Said lien shall in any event terminate not later than six years
235	235	203following the time of transfer. Said lien shall not be valid as against any mortgagee, pledgee,
236	236	204purchaser or judgment creditor unless notice thereof has been filed by the Town (i) with respect
237	237	205to real property or fixtures, in the registry of deeds for Nantucket County, or (ii) with respect to
238	238	206personal property, in the office in which a security or financing statement or notice with respect
239	239	207to the property would be filed in order to perfect a nonpossessory security interest belonging to 11 of 13
240	240	208the person named in the relevant notice, subject to the same limitations as set forth in section
241	241	209fifty of chapter sixty two C of the General Laws.
242	242	210 (d) Sellers applying for an exemption under subsections (a) through (o) of section four
243	243	211shall be required at the time of application for exemption to execute an agreement legally
244	244	212binding on sellers and separately legally binding upon any Legal Representative of the sellers (1)
245	245	213assuming complete liability for any fee, plus interest and penalties if any, waived on account of
246	246	214an allowed exemption subsequently determined to have been invalid, and (2) submitting to the
247	247	215jurisdiction of the trial court of the commonwealth sitting in Nantucket County. Fees, plus
248	248	216interest and penalties if any, shall be calculated as of the date of the initial property transfer.
249	249	217Execution of the above-described agreement shall not be required of any mortgagee, pledge,
250	250	218purchaser or judgment creditor unless notice of the agreement has been recorded or filed by the
251	251	219Town.
252	252	220 In any case where there has been a refusal or neglect to pay any fee, interest or penalties
253	253	221imposed by this act, whether or not levy has been made, the Town, in addition to other modes of
254	254	222relief, may direct a civil action to be filed in a district or superior court of the commonwealth to
255	255	223enforce the lien of the Town under this section with respect to such liability or to subject any
256	256	224property of whatever nature, of the delinquent, or in which he has any right, title or interest, to
257	257	225the payment of such liability.
258	258	226 The Town may issue a waiver or release of any lien imposed by this section. Such waiver
259	259	227or release shall be conclusive evidence that the lien upon the property covered by the waiver or
260	260	228release is extinguished. 12 of 13
261	261	229 SECTION 8. The fee described by Section 2 shall be of ten-year duration from the date
262	262	230this legislation take effect. This fee may continue for five-year periods by a majority vote at
263	263	231Town Meeting reauthorizing the fee. The fee described by Section 2 may be 1) decreased, or 2)
264	264	232eliminated by a two-thirds vote of Town Meeting. The threshold exemption described in Section
265	265	2334 (m) may similarly be raised by an affirmative two-thirds vote of Town Meeting. In the event
266	266	234that Town Meeting does not renew the fee at the ten-year anniversary, or any subsequent five
267	267	235year anniversary, or Town Meeting votes to eliminate the fee, the balance of any fees previously
268	268	236collected shall be transferred to the Town of Nantucket and held by the Treasurer in a separate
269	269	237account, and shall first be used to satisfy any outstanding liabilities or obligations incurred by the
270	270	238Town of Nantucket or the Affordable Housing Trust as a result of imposition of the fee, and the
271	271	239remainder may be expended without further appropriation by the Board of Selectmen for
272	272	240affordable housing purposes. In the event that the liabilities and obligations of the Town of
273	273	241Nantucket or the Affordable Housing Trust exceed the amounts transferred to the Town, the fee
274	274	242shall remain in full force and effect until such liabilities and obligations have been satisfied.
275	275	243 SECTION 9. The provisions of this act are severable, and if any provision hereof,
276	276	244including without limitation any exemption from the fee imposed hereby, shall be held invalid in
277	277	245any circumstances such invalidity shall not affect any other provisions or circumstances. This act
278	278	246shall be construed in all respects so as to meet all constitutional requirements. In carrying out the
279	279	247purposes and provisions of this act, all steps shall be taken which are necessary to meet
280	280	248constitutional requirements whether or not such steps are required by statute.
281	281	249 SECTION 10. If the Town has determined that a fee is due by asserting the application of
282	282	250the evasion of fee doctrine described in Section 2, then the seller shall have the burden of
283	283	251demonstrating by clear and convincing evidence as determined by the Town that the transfer, or 13 of 13
284	284	252series of transfers, possessed both: (i) a valid, good faith business purpose other than avoidance
285	285	253of the fee set forth in Section 2 and (ii) economic substance apart from the asserted fee avoidance
286	286	254benefit. In all such cases, the transferee shall also have the burden of demonstrating by clear and
287	287	255convincing evidence as determined by the Town that the asserted non-fee-avoidance business
288	288	256purpose is commensurate with the amount of the fee pursuant to Section 2 to be thereby avoided.
289	289	257 SECTION 11. This act shall take effect ninety (90) days following the date of passage.