Massachusetts 2023-2024 Regular Session

Massachusetts Senate Bill S2949 Compare Versions

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

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1	1	1 of 1
2	2	SENATE DOCKET, NO. 3412 FILED ON: 9/9/2024
3	3	SENATE . . . . . . . . . . . . . . No. 2949
4	4	The Commonwealth of Massachusetts
5	5	_________________
6	6	PRESENTED BY:
7	7	Julian Cyr
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 and related capital improvements.
14	14	_______________
15	15	PETITION OF:
16	16	NAME:DISTRICT/ADDRESS :Julian CyrCape and IslandsDylan A. FernandesBarnstable, Dukes and Nantucket 1 of 13
17	17	SENATE DOCKET, NO. 3412 FILED ON: 9/9/2024
18	18	SENATE . . . . . . . . . . . . . . No. 2949
19	19	By Mr. Cyr, a petition (accompanied by bill, Senate, No. 2949) of Julian Cyr and Dylan A.
20	20	Fernandes (by the vote of the town) for legislation to authorize the town of Nantucket to impose
21	21	a real estate transfer fee for affordable and workforce housing and related capital improvements.
22	22	Revenue. [Local Approval Received.]
23	23	The Commonwealth of Massachusetts
24	24	_______________
25	25	In the One Hundred and Ninety-Third General Court
26	26	(2023-2024)
27	27	_______________
28	28	An Act authorizing the town of Nantucket to impose a real estate transfer fee for affordable and
29	29	workforce housing and related capital improvements.
30	30	Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
31	31	of the same, as follows:
32	32	1 SECTION 1. For purposes of this act, the words and phrases set forth in this section shall
33	33	2have the following meanings:
34	34	3 "Affordable Housing Restriction" is a recorded instrument held by a qualified holder
35	35	4which encumbers and/or restricts a real property interest so that the real property interest is
36	36	5perpetually or for a term of at least thirty (30) years limited to use as a residence occupied by a
37	37	6low or moderate income household which earns less than a specified income level, the upper
38	38	7limit of which may not exceed two hundred forty percent (240%) of the Nantucket median
39	39	8income. A "qualified holder" is a governmental body or charitable corporation or trust which
40	40	9qualifies under the terms of chapter one hundred eight-four of the General Laws ("Chapter 184")
41	41	10to hold an affordable housing restriction. Without limiting the generality of the foregoing,
42	42	11"Affordable Housing Restriction" includes but is not limited to any instrument which conforms 2 of 13
43	43	12to the requirements of (i) a Nantucket Housing Needs Covenant as described in Chapter 301 of
44	44	13the Acts of 2002 and defined in the Town of Nantucket Code.
45	45	14 "Housing and Community Development Fund", shall refer to a discrete fund or account,
46	46	15established by the county treasurer of the Nantucket County under the provisions of this act.
47	47	16 "Eligible Applicants", shall refer to non-profit and for-profit corporations and
48	48	17organizations, individuals, and public entities.
49	49	18 "Purchaser", shall refer to the transferee, grantee or recipient of any real property interest.
50	50	19"Purchase price", all consideration paid or transferred by or on behalf of a purchaser to a seller or
51	51	20his nominee, or for his benefit, for the transfer of any real property interest, and shall include, but
52	52	21not be limited to, all cash or its equivalent so paid or transferred; all cash or other property paid
53	53	22or transferred by or on behalf of the purchaser to discharge or reduce any obligation of the seller;
54	54	23the principal amount of all notes or their equivalent, or other deferred payments, given or
55	55	24promised to be given by or on behalf of the purchaser to the seller or his nominee; the
56	56	25outstanding balance of all obligations of the seller which are assumed by the purchaser or to
57	57	26which the real property interest transferred remains subject after the transfer, determined at the
58	58	27time of transfer, but excluding real estate taxes and other municipal liens or assessments which
59	59	28are not overdue at the time of transfer; the fair market value, at the time of transfer, of any other
60	60	29consideration or thing, of value paid or transferred by or on behalf of the purchaser, including,
61	61	30but not limited to, any property, goods or services paid, transferred or rendered in exchange for
62	62	31such real property interest.
63	63	32 "Real property interest", shall refer to any present or future legal or equitable interest in
64	64	33or to real property, and any beneficial interest therein, including the interest of any beneficiary in 3 of 13
65	65	34a trust which holds any legal or equitable interest in real property, the interest of a partner or
66	66	35member in a partnership or limited liability company, the interest of a stockholder in a
67	67	36corporation, the interest of a holder of an option to purchase real property, the interest of a buyer
68	68	37or seller under a contract for purchase and sale of real property, and the transferable development
69	69	38rights created under chapter one hundred eighty-three A of the General Laws; but shall not
70	70	39include any interest which is limited to any of the following: the dominant estate in any easement
71	71	40or right of way; the right to enforce any restriction; any estate at will or at sufferance; any estate
72	72	41for years having a term of less than 30 years; any reversionary right, condition, or right of entry
73	73	42for condition broken; and the interest of a mortgagee or other secured party in any mortgage or
74	74	43security agreement.
75	75	44 "Seller", shall refer to the transferor, grantor or immediate former owner of any real
76	76	45property interest.
77	77	46 "Time of transfer" of any real property interest shall mean the time at which such transfer
78	78	47is legally effective as between the parties thereto, and, in any event, with respect to a transfer
79	79	48evidenced by an instrument recorded with the appropriate registry of deeds or filed with the
80	80	49assistant recorder of the appropriate registry district, not later than the time of such recording or
81	81	50filing.
82	82	51 "Town" shall refer to the Town of Nantucket acting by and through the Select Board.
83	83	52 SECTION 2. There is hereby imposed a fee equal to one half per cent(½%) of the
84	84	53purchase price upon the transfer of any real property interest in any real property situated in
85	85	54Nantucket County. Said fee shall be the liability of the seller of such real property interest, and
86	86	55any agreement between the purchaser and the seller or any other person with reference to the 4 of 13
87	87	56allocation of the responsibility for bearing said fee shall not affect such liability of the seller. The
88	88	57fee shall be paid to the Town of Nantucket, or its designee, and shall be accompanied by a copy
89	89	58of the deed or other instrument evidencing such transfer, if any, and an affidavit signed under
90	90	59oath or under the pains and penalties of perjury by the purchaser or his legal representative and
91	91	60the seller or his legal representative, attesting to the true and complete purchase price and the
92	92	61basis, if any, upon which the transfer is claimed to be exempt in whole or in part from the fee
93	93	62imposed hereby. The Town, or its designee, shall promptly thereafter execute and issue a
94	94	63certificate indicating that the appropriate fee has been paid or that the transfer is exempt from the
95	95	64fee, stating the basis for the exemption.
96	96	65 The register of deeds for Nantucket County, and the assistant recorder for the registry
97	97	66district of Nantucket County, shall not record or register, or receive or accept for recording or
98	98	67registration, any deed, except a mortgage deed, to which has not been affixed such a certificate
99	99	68executed by the Town or its designee. Failure to comply with this requirement shall not affect the
100	100	69validity of any instrument. The Town shall deposit all fees received hereunder with the Town
101	101	70treasurer. The treasurer shall deposit such fees in the Affordable Housing Trust Fund. The fee
102	102	71imposed hereunder shall be due simultaneously with the time of transfer of the transfer upon
103	103	72which it is imposed.
104	104	73 Notwithstanding the foregoing, whenever there is a conveyance of real property interests
105	105	74and a conveyance of personalty related thereto at or about the same time, the allocations of
106	106	75payments between real estate and personalty agreed to by the purchaser and seller shall not
107	107	76determine the amount of the fee due pursuant to this section; instead, the Town may require
108	108	77payment of the fee referred to in real property interests so conveyed as determined by the Town. 5 of 13
109	109	78 SECTION 3. At any time within seven days following the issuance of the certificate of
110	110	79payment of the fee imposed by section two, the seller or his legal representative may return said
111	111	80certificate to the Town or its designee for cancellation, together with an affidavit signed under
112	112	81oath or under the pains and penalties of perjury that the transfer, with respect to which such
113	113	82certificate was issued, has not been consummated, and thereupon the fee paid with respect to
114	114	83such transfer shall be forthwith returned to the seller or his legal representative.
115	115	84 SECTION 4. The following transfers of real property interests shall be exempt from the
116	116	85fee established by section 10. Except as otherwise provided, the seller shall have the burden of
117	117	86proof that any transfer is exempt under this section and any otherwise exempt transfer shall not
118	118	87be exempt in the event that such transfer (by itself or as part of a series of transfers) was made
119	119	88for the primary purpose of evading the fee imposed by section 10.
120	120	89 (a)Transfers to the government of the United States, the commonwealth, and any of
121	121	90their instrumentalities, agencies or subdivisions, including but not limited to transfers to the
122	122	91Town of Nantucket, the County of Nantucket.
123	123	92 (b)Transfers which, without additional consideration, confirm, correct, modify or
124	124	93supplement a transfer previously made.
125	125	94 (c)Transfers made as gifts without consideration. In any proceedings to determine
126	126	95the amount of any fee due hereunder, it shall be presumed that any transfer for consideration of
127	127	96less than fair market value of the real property interest transferred was made as a gift without
128	128	97consideration to the extent of the difference between the fair market value of the real property
129	129	98interest transferred and the amount of consideration claimed by the seller to have been paid or
130	130	99transferred, if the purchaser shall have been at the time of transfer the spouse, the lineal 6 of 13
131	131	100descendant, or the lineal ancestor of the seller, by blood or adoption, and otherwise it shall be
132	132	101presumed that consideration was paid in an amount equal to the fair market value of the real
133	133	102property interest transferred, at the time of transfer.
134	134	103 (d)Transfer to the trustees of a trust in exchange for a beneficial interest received by
135	135	104the purchaser in such trust; distributions by the trustees of a trust to the beneficiaries of such
136	136	105trust.
137	137	106 (e)Transfers by operation of law without actual consideration, including but not
138	138	107limited to transfers occurring by virtue of the death or bankruptcy of the owner of a real property
139	139	108interest.
140	140	109 (f)Transfers made in partition of land and improvements thereto, under chapter two
141	141	110hundred and forty-one of the General Laws.
142	142	111 (g)Transfers to any charitable organization as defined in clause Third of section five
143	143	112of chapter fifty-nine of the General Laws, or any religious organization, provided that the real
144	144	113property interest so transferred will be held by the charitable or religious organization solely for
145	145	114its public charitable or religious purposes.
146	146	115 (h)Transfers to a mortgagee in foreclosure of the mortgage held by such mortgagee,
147	147	116and transfers of the property subject to a mortgage to the mortgagee in consideration of the
148	148	117forbearance of the mortgagee from foreclosing said mortgage.
149	149	118 (i)Transfers made to a corporation or partnership or limited liability company at the
150	150	119time of its formation, pursuant to which transfer no gain or loss is recognized under the
151	151	120provisions of section three hundred and fifty-one or seven hundred and twenty-one of the 7 of 13
152	152	121Internal Revenue Code of 1986, as amended; provided, however, that such transfer shall be
153	153	122exempt only in the event that (1) with respect to a corporation, the transferor retains an interest in
154	154	123the newly formed corporation which is equivalent to the interest the transferor held prior to the
155	155	124transfer, or (2) with respect to a partnership or limited liability company, the transferor retains
156	156	125after such formation rights in capital interests and profit interests within such partnership or
157	157	126limited liability company which are equivalent to the interest the transferor held prior to the
158	158	127transfer.
159	159	128 (j)Transfers made to a stockholder of a corporation in liquidation or partial
160	160	129liquidation of the corporation, and transfers made to a partner of a partnership or to a member of
161	161	130a limited liability company in dissolution or partial dissolution of the partnership or limited
162	162	131liability company; but the transfer shall be exempt only if (i) with respect to a corporation, the
163	163	132transferee receives property (including real property interests and other property received) which
164	164	133is the same fraction of the total property of the transferor corporation as the fraction of the
165	165	134corporation's stock owned by the transferee prior to the transfer or (ii) with respect to a
166	166	135partnership or limited liability company, the transferee receives property (including real property
167	167	136interests and other property received) which is the same fraction of the property of the
168	168	137partnership or limited liability company as the fraction of the capital and profit interests in the
169	169	138transferor formerly owned by the transferee.
170	170	139 (k)Transfers consisting of the division of marital assets under the provisions of
171	171	140section thirty- four of chapter two hundred and eight of the General Laws or other provisions of
172	172	141law. 8 of 13
173	173	142 (1) Transfers of property consisting in part of real property interests situated in Nantucket
174	174	143County and in part of other property interests, to the extent that the property transferred consists
175	175	144of property other than real property situated in Nantucket County; provided that the purchaser
176	176	145shall furnish the Town with such information as it shall require or request in support of the claim
177	177	146of exemption and manner of allocation of the consideration for such transfers.
178	178	147 (m) The first $2 million of the sale price of any transfer or series of transfers of real
179	179	148property interests in a single transaction. Said exemption may be adjusted as determined annually
180	180	149by the affirmative vote of two-thirds of voters at an annual or special town meeting.
181	181	150 (n) Transfers of minority interests in corporations, trusts, partnerships or limited liability
182	182	151companies which are publicly traded, which trades are not part of a series of transfers which
183	183	152together constitute a transfer of control of a corporation, trust, partnership or limited liability
184	184	153company.
185	185	154 SECTION 5. (a) The Town treasurer shall keep a full and accurate account stating when,
186	186	155from or to whom, and on what account money has been paid or received relative to the activities
187	187	156of the Trust Fund and the Housing Fund. Said account shall be subject to examination by the
188	188	157director of accounts or his agent pursuant to section forty-four of chapter thirty-five of the
189	189	158General Laws.
190	190	159 (b) Schedules of beneficiaries of trusts, list of stockholders of corporations and lists of
191	191	160partnerships filed with the Trust Fund for the purpose of determining or fixing the amount of the
192	192	161fee imposed under section ten or for the purpose of determining the existence of any exemption
193	193	162under section twelve shall not be public records for the purposes of section ten of chapter sixty-
194	194	163six of the General Laws. 9 of 13
195	195	164 SECTION 6. A seller who fails to pay all or any portion of the fee established by section
196	196	165two on or before the time when the same is due shall be liable for the following additional
197	197	166payments in addition to said fee:
198	198	167 (a) Interest: The seller shall pay interest on the unpaid amount of the fee to be calculated
199	199	168from the time of transfer at a rate equal to fourteen per cent per annum.
200	200	169 (b) Penalties: Any person who, without fraud or willful intent to defeat or evade a fee
201	201	170imposed by this chapter, fails to pay all or a portion of the fee within thirty days after the time of
202	202	171transfer, shall pay a penalty equal to five per cent of the outstanding fee as determined by the
203	203	172Town for each month or portion thereof thereafter that the fee is not paid in full; provided,
204	204	173however, that in no event shall the amount of any penalty imposed hereunder exceed twenty-five
205	205	174per cent of the unpaid fee due at the time of transfer. Whenever the Town determines that all or a
206	206	175portion of a fee due under this chapter was unpaid due to fraud with intent to defeat or evade the
207	207	176fee imposed by this chapter, a penalty equal to the amount of said fee as determined by the Town
208	208	177shall be paid by the seller in addition to said fee.
209	209	178 SECTION 7. (a) The Town shall notify the purchaser and the seller by registered or
210	210	179certified mail of any failure to discharge in full the amount of the fee due under this Act and any
211	211	180penalty or interest assessed. The Town shall grant a hearing on the matter of the imposition of
212	212	181said fee, or of any penalty or interest assessed, if a petition requesting such hearing is received by
213	213	182the Town within thirty days after the mailing of said notice. The Town shall notify the purchaser
214	214	183and the seller in writing by registered or certified mail of its determination concerning the
215	215	184deficiency, penalty or interest within fifteen days after said hearing. Any party aggrieved by a
216	216	185determination of the Town concerning a deficiency, penalty or interest may, after payment of 10 of 13
217	217	186said deficiency, appeal to the district or superior court within three months after the mailing of
218	218	187notification of the determination of the Town. Upon the failure to timely petition for a hearing, or
219	219	188appeal to said courts, within the time limits hereby established, the purchaser and seller shall be
220	220	189bound by the terms of the notification, assessment or determination, as the case may be, and shall
221	221	190be barred from contesting the fee, and any interest and penalty, as determined by the Town. All
222	222	191decisions of said courts shall be appealable. Every notice to be given under this section by the
223	223	192Town shall be effective if mailed by certified or registered mail to the purchaser or the seller at
224	224	193the address stated in a recorded or registered instrument by virtue of which the purchaser holds
225	225	194any interest in land, the transfer of which gives rise to the fee which is the subject of such notice;
226	226	195and if no such address is stated or if such transfer is not evidenced by an instrument recorded or
227	227	196registered in the public records in Nantucket County, such notice shall be effective when so
228	228	197mailed to the purchaser or seller in care of any person appearing of record to have a fee interest
229	229	198in such land, at the address of such person as set forth in an instrument recorded or registered in
230	230	199Nantucket County.
231	231	200 (b)All fees, penalties and interest required to be paid pursuant to this chapter shall
232	232	201constitute a personal debt of the seller and may be recovered in an action of contract or in any
233	233	202other appropriate action, suit or proceeding brought by the Town; said action, suit or proceeding
234	234	203shall be subject to the provisions of chapter two hundred and sixty of the General Laws.
235	235	204 (c)If any seller liable to pay the fee established by this act neglects or refuses to pay
236	236	205the same, the amount, including any interest and penalty thereon, shall be a lien in favor of the
237	237	206Town upon all property and rights to property, whether real or personal, belonging to either such
238	238	207purchaser or such seller. Said lien shall arise at the time of transfer and shall continue until the
239	239	208liability for such amount is satisfied. Said lien shall in any event terminate not later than six years 11 of 13
240	240	209following the time of transfer. Said lien shall not be valid as against any mortgagee, pledgee,
241	241	210purchaser or judgment creditor unless notice thereof has been filed by the Town (i) with respect
242	242	211to real property or fixtures, in the registry of deeds for Nantucket County, or (ii) with respect to
243	243	212personal property, in the office in which a security or financing statement or notice with respect
244	244	213to the property would be filed in order to perfect a nonpossessory security interest belonging to
245	245	214the person named in the relevant notice, subject to the same limitations as set forth in section
246	246	215fifty of chapter sixty-two C of the General Laws.
247	247	216 (d)Sellers applying for an exemption under subsections (a) through (n) of section
248	248	217four shall be required at the time of application for exemption to execute an agreement legally
249	249	218binding on sellers and separately legally binding upon any Legal Representative of the sellers (1)
250	250	219assuming complete liability for any fee, plus interest and penalties if any, waived on account of
251	251	220an allowed exemption subsequently determined to have been invalid, and (2) submitting to the
252	252	221jurisdiction of the trial court of the commonwealth sitting in Nantucket County. Fees, plus
253	253	222interest and penalties if any, shall be calculated as of the date of the initial property transfer.
254	254	223Execution of the above-described agreement shall not be required of any mortgagee, pledge,
255	255	224purchaser or judgment creditor unless notice of the agreement has been recorded or filed by the
256	256	225Town.
257	257	226 In any case where there has been a refusal or neglect to pay any fee, interest or penalties
258	258	227imposed by this act, whether or not levy has been made, the Town, in addition to other modes of
259	259	228relief, may direct a civil action to be filed in a district or superior court of the commonwealth to
260	260	229enforce the lien of the Town under this section with respect to such liability or to subject any
261	261	230property of whatever nature, of the delinquent, or in which he has any right, title or interest, to
262	262	231the payment of such liability. 12 of 13
263	263	232 The Town may issue a waiver or release of any lien imposed by this section. Such waiver
264	264	233or release shall be conclusive evidence that the lien upon the property covered by the waiver or
265	265	234release is extinguished.
266	266	235 SECTION 8. The fee described in section 2 shall be of a ten-year duration from the date
267	267	236this act shall take effect. This fee may continue for five-year periods by a majority vote at a
268	268	237Town Meeting authorizing the fee. The fee described by section 2 may be (1) decreased, or (2)
269	269	238eliminated by two- thirds vote of Town Meeting. In the event that Town Meeting votes to
270	270	239eliminate the fee, the balance of any fees previously collected shall be transferred to the Town of
271	271	240Nantucket and held by the treasurer in a separate account, and shall first be used to satisfy any
272	272	241outstanding liabilities or obligations incurred by the Town of Nantucket or the Affordable
273	273	242Housing Trust as a result of imposition of the fee, and the remainder may be expended without
274	274	243further appropriation by the Select Board for affordable housing purposes. In the event that the
275	275	244liabilities and obligations of the Town of Nantucket or the Affordable Housing Trust exceed the
276	276	245amounts transferred to the Town, the fee shall remain in full force and effect until such liabilities
277	277	246and obligations have been satisfied.
278	278	247 SECTION 9. The provisions of this act are severable, and if any provision hereof,
279	279	248including without limitation any exemption from the fee imposed hereby, shall be held invalid in
280	280	249any circumstances such invalidity shall not affect any other provisions or circumstances. This act
281	281	250shall be construed in all respects so as to meet all constitutional requirements. In carrying out the
282	282	251purposes and provisions of this act, all steps shall be taken which are necessary to meet
283	283	252constitutional requirements whether or not such steps are required by statute. 13 of 13
284	284	253 SECTION 10. If the Town has determined that a fee is due by asserting the application of
285	285	254the evasion of fee doctrine described in section 2 then the seller shall have the burden of
286	286	255demonstrating by clear and convincing evidence as determined by the Town that the transfer, or
287	287	256series of transfers, possessed both: (i) a valid, good faith business purpose other than avoidance
288	288	257of the fee set forth in section 2and (ii) economic substance apart from the asserted fee avoidance
289	289	258benefit. In all such cases, the transferee shall also have the burden of demonstrating by clear and
290	290	259convincing evidence as determined by the Town that the asserted non-fee-avoidance business
291	291	260purpose is commensurate with the amount of the fee pursuant to section 2 to be thereby avoided.
292	292	261 SECTION 11. Pursuant to state enabling legislation pending with the General Court for
293	293	262the adoption of an act providing cities and towns the option to support affordable housing with a
294	294	263fee on certain real estate transactions, the legislative body of a city or town by a majority vote
295	295	264may adopt said act upon the passage of said act by the Senate and the House of Representatives
296	296	265of the General Court, and furthermore, a favorable majority vote of this Article by this Town
297	297	266Meeting is also deemed to be a vote by Town Meeting to adopt said act providing cities and
298	298	267towns the option to support affordable housing with a fee on certain real estate transactions,
299	299	268provided the provisions contained herein are consistent with the provisions of said act.
300	300	269 SECTION 12. This act shall take effect ninety (90) days following the date of passage.