MMA outlines municipal positions on a number of bills before the Revenue Committee

The Honorable Adam G. Hinds, Senate Chair
The Honorable Mark J. Cusack, House Chair
Joint Committee on Revenue
State House, Boston

Submitted Electronically

Dear Chair Hinds, Chair Cusack and Distinguished Members of the Joint Committee on Revenue:

On behalf of cities and towns across the Commonwealth, we are writing to submit comments on a number of measures that will be heard at your July 22 public hearing. With a wide range of revenue topics up for consideration at the hearing, we are providing broader statements of interest in the following categories:

Real Estate Transfer Fees
As you are aware, the MMA has long been an advocate for local options to provide greater decision-making authority at the municipal level. Our Fiscal Policy Committee and Municipal and Regional Administration Policy Committee have started an initial review of the legislative initiatives before you today, which would provide municipalities with the local option to charge a real estate fee to support affordable housing programs, including H. 2895, An Act empowering cities and towns to impose a fee on home sales over one million dollars to support affordable housing, and S. 1804, An Act authorizing a local affordable housing surcharge. This review is ongoing and we look forward to weighing in on these proposals in the coming months.

Property Tax Abatements
Along with the Massachusetts Association of Assessing Officers, we support, H. 2997, An Act relative to interest on abated bills, sponsored by Rep. Paul Mark, which would modernize the interest rate charged to municipalities for abatement payments. Presently, if a property owner has paid their property taxes and subsequently files for a tax abatement and receives approval for the abatement, the community is charged an arbitrary 8% interest on the amount to be abated. This bill would change that percentage rate to match the U.S. Prime rate instead.

Collection of Delinquent Property Tax Revenue
We respectfully urge the Committee to create a special commission to examine current law and practice around the collection of delinquent property tax revenue, prior to the Committee advancing any legislation that would alter this fundamental municipal function. To that end, we urge you to delay action on several legislative items before you today, to allow time for further study, including: H. 2994, An Act relative to the improvement in the process for collecting delinquent property taxes (S. 1887 is a related bill not before the Committee today); H. 3026, An Act relative to providing better notices and protections in the process for collecting delinquent property taxes (S. 1802 is a related bill not before the Committee today); S. 1825, An Act relative to the surplus from a tax title sale; S. 1926, An Act protecting homeowners from unfair tax lien practices by cities and towns; and H. 3053, An Act relative to tax deeds.

These measures would mandate several changes to the way municipal treasurers or collectors pursue the collection of property taxes from those property owners who fail to pay in response to quarterly or semi-annual tax bills.

Due to the complexity and significance of these proposed legislative changes, we urge the Committee to form a special commission to examine current law and practice around the collection of delinquent property taxes and the sale of liens to third-party investors prior to advancing these bills. This special commission should include a representative of the Massachusetts Municipal Association, a representative of the Office of the Attorney General, a representative of consumer advocates, and a representative of third-party investors, among others.

The commission could examine and assess current local property tax collection processes, including property owner notification and communication, property tax deferral options or exemptions that exist for special classes, the laws governing the purchase of tax liens by a third-party investor and any subsequent foreclosure proceedings, the consumer outcomes associated with the purchase of tax liens by third-party investors, and the potential impacts of the proposed legislation on municipalities.

Thank you very much for the opportunity to submit testimony on these important issues. If you have any questions or require additional information, please do not hesitate to contact us at any time. Your office may reach out to me or MMA Legislative Analyst Jackie Lavender Bird at jlavenderbird@mma.org.

Sincerely,

Geoffrey C. Beckwith
MMA Executive Director & CEO