HD Tax Increment Exemptions

In addition to the standards and requirements of M.G.L. c. 59, § 5M, HD Tax Increment Exemptions shall meet the following requirements. (1) Calculation of Exemption. The amount of the HD Tax Increment Exemption to be given to a Sponsor of a HD Project shall be determined by applying the Exemption Percentage to the property tax on the Increment. (a) The Exemption Percentage. The Exemption Percentage shall be not less than 10% and not more than 100%, negotiated by the Municipality and each Sponsor and shall be specified in each HD Tax Increment Exemption Agreement. The Exemption Percentage need not be the same for all Sponsors and may change from year to year during the term of the HD Tax Increment Exemption pursuant to a schedule set forth in the Tax Increment Exemption Agreement. (b) The Increment. 1. With respect to a HD Project in which the residential portion is rental housing, the Increment is the assessed value of the residential portion of the HD Project after construction or Substantial Rehabilitation less the Base Value, the sum of which is multiplied by the percentage of useable square footage comprising the Market Rate Residential Units to the total useable square footage of the residential portion of the HD Project. 2. With respect to a HD Project in which the residential portion is for-sale housing units, the Increment for a given Market Rate Residential Unit is the assessed value of the residential portion of the HD Project after construction or Substantial Rehabilitation less the Base Value, the sum of which is multiplied by the percentage of useable square footage comprising all of the Market Rate Residential Units to the total useable square footage of the residential portion of the HD Project, the product of which is multiplied by the percentage of useable square footage comprising the given Market Rate Residential Unit to the total useable square footage of all Market Rate Residential Units. 3. With respect to a HD Project in which the residential portion is a mix of rental and for-sale housing, the Increment is determined as follows: a. For the rental portion, the assessed value attributed to the rental housing less the Base Value for the rental portion, the sum of which is multiplied by the percentage of useable square footage comprising the rental Market Rate Residential Units to the total useable square footage of the rental residential portion of the HD Project. b. For a given unit in the for-sale portion, the assessed value attributed to the for-sale portion less the Base Value for the for-sale portion, the sum of which is multiplied by the percentage of useable square footage comprising all of the for-sale Market Rate Residential Units to the total useable square footage of the for-sale portion of the HD Project, the product of which is multiplied by the percentage of useable square footage comprising the given for-sale Market Rate Residential Unit to the total useable square footage of all for-sale Market Rate Residential Units. (c) Base Value. The Base Value is the assessed value of the parcel of the property as of the fiscal year in which a HD Tax Increment Exemption Agreement is executed by the Sponsor and the Municipality with respect to that parcel, and prior to the start of any new construction or Substantial Rehabilitation activities, including demolition minus the assessed value attributable to any portion of the property that was assessed as other than residential in the applicable fiscal year and remains non residential after completion of new construction or Substantial Rehabilitation. In the case of HD Projects in which the residential housing is a mix of rental and for sale units, the Base Value shall be apportioned between the rental and for sale units based upon their respective proportion of the usable square footage upon the completion of new construction or Substantial Rehabilitation. (2) HD Tax Increment Exemption Agreements. The terms of a HD Tax Increment Exemption shall be set forth in a HD Tax Increment Exemption Agreement executed by the Sponsor and the Municipality. (a) Effective Date of the Agreement. HD Tax Increment Exemption Agreements shall provide that they shall not go into effect unless and until: 1. The Department approves the Tax Increment Exemption Agreement; and 2. The Department has issued a Final Certificate for the HD Project. Upon approval by the Department, HD Tax Increment Exemption Agreements shall be made part of the appropriate HD Zone Plan. (b) Effective Date of Exemption. HD Tax Increment Exemption Agreements shall provide that the Tax Increment Exemption shall be effective as of the first fiscal year subsequent to the completion of new construction or Substantial Rehabilitation. (c) Increment and Base Value Calculations. HD Tax Increment Agreement shall contain an explanation in support of any assumptions or calculations related to the Increment and Base Value. (d) Department Approval. Provided that the Tax Increment Exemption meets the standards and requirements of 760 CMR 66.06 and the Department's approval of the applicable HD Agreement has not been suspended or revoked, the Department shall approve a Tax Increment Exemption Agreement.