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• Introduction
• What is the Community Preservation Act?
• When does CPA go into effect?
• What is the process for approving CPA in a community?
• How long will CPA remain in effect?
• Can the level of the CPA surcharge be amended?
• Who determines how the funds raised through CPA will be spent?
• What elements must comprise the bylaw or ordinance establishing the CPA Committee?
• Does CPA contain specific requirements on how the money must be spent?
• Are there any special provisions regarding property purchased with the Community Preservation Fund?
• Can a municipality issue bonds in anticipation of CPA proceeds?
• Can money in the Community Preservation Fund be used to match state or federal grants?
• Are any exemptions from the CPA surcharge allowed?
• What is the relationship between CPA and Proposition 2½?
• Are state matching funds available?
• How will state matching funds be allocated among municipalities?
• When and how will these funds be disbursed?

Introduction
The Trust for Public Land has developed this bulletin on the Community Preservation Act, in conjunction with Palmer & Dodge LLP, our legal counsel. This information is subject to change based on pending regulatory clarification by the Department of Revenue.

Please note that the enclosed information should not be used without the advice of legal counsel or outside the context of an overall political assessment of the electoral options available to any municipality. The City Solicitor or Town Counsel should be involved at the earliest practical moment to provide legal advice.

The Trust for Public Land is also available to provide municipalities and community groups with technical assistance. For more information, contact visit www.tpl.org/CPA.

Questions and Answers about the Community Preservation Act

Q: What is the Community Preservation Act?
The Community Preservation Act (CPA) is enabling legislation designed to help communities plan ahead for sustainable growth and raise funds to achieve their goals. CPA allows towns and cities to approve a referendum allowing them to levy a community-wide property tax surcharge of up to 3 percent for the purpose of creating a local Community Preservation Fund and qualifying for state matching funds. The Fund must be used to acquire and protect open space, preserve historic buildings and landscapes, and create and maintain affordable housing. The state will provide matching funds to communities approving CPA.

Q: When does CPA go into effect?
CPA was signed into law on September 14, 2000 and became effective 90 days later, on December 13, 2000. As a result, December 13, 2000 is the earliest date on which a city or town’s legislative body (city council or town meeting) may accept the terms of CPA and schedule a referendum.

Q: What is the process for approving CPA in a community?
A municipality may accept CPA through passage by the legislative body (town meeting or city council) or through a citizen initiative. In either case, CPA must subsequently be approved by a simple majority of local voters in an election.

Legislative:

1.) The municipal legislative body (town meeting or city council) must approve, with a simple majority, a warrant article (town) or motion (city) to accept the provisions of the Community Preservation Act. (See pages 9-11 for sample warrant/motion and ballot language.)

2.) The acts of the town meeting/city council are then referred for voter approval at the next regularly scheduled municipal election (See page 13 for a schedule of elections) or general state election (November of even-numbered years), whichever comes first. A CPA referendum may not be scheduled for a special election.

3.) The legislative body must accept CPA and submit the ballot question to the municipal clerk at least 35 days prior to a regularly scheduled municipal election or 60 days prior to a general state election. For a state election, ballot questions must be submitted to the Secretary of State. Municipalities cannot submit a CPA ballot question to the clerk for placement at an election until it has been accepted by the local legislative body (or approved through a citizen initiative process).

4.) In many towns, regular town meeting does not take place 35 days before municipal elections (in some cases elections precede town meeting). As a result, to avoid delaying the referendum, a town may accept CPA at a special town meeting.

Citizen Initiative:

1.) If a municipal legislative body fails to approve or does not consider CPA 90 days prior to a local election or 120 days before a state election, citizens may circulate an initiative petition seeking to place the question directly on the ballot.

2.) The petition must be signed by 5 percent of the registered voters in the municipality.

3.) The municipal clerk (or Secretary of State for state elections) has 7 days to certify the petitions. The approved question must be placed on the ballot 35 days prior to the municipal election and 60 days prior to a state election. To ensure adequate time to correct problems that may be uncovered during certification, it is advisable for citizens to submit petitions in advance of these deadlines.

Q: How long will CPA remain in effect?
CPA remains in effect for a minimum of five years from the date of voter approval in a municipality. After five years, it can be revoked in the same manner-legislative body acceptance (simple majority) or initiative petition followed by voter approval-used to approve CPA originally.

Q: Can the level of the CPA surcharge be amended?
Yes. The level of the surcharge (and the optional exemptions) can be changed at any time after the surcharge is imposed, through a simple majority vote of the legislative body followed by voter approval. At no time can the surcharge exceed 3 percent.

Q: Who determines how the funds raised through CPA will be spent?
If a municipality approves CPA, it must also establish a Community Preservation Committee that will make annual recommendations to the legislative body on how the money shall be spent. The Community Preservation Committee is established by a separate municipal ordinance or bylaw that must be passed with majority support of the legislative body.
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This can be done at the same time that the legislative body accepts CPA, with a separate motion (city council) provided that the vote includes language that the bylaw or ordinance will not go into effect unless voters approve the CPA referendum at the next election. It can also be done after the election.

Under the terms of CPA, the Community Preservation Committee shall consist of 5-9 members, and must include one representative each from the local conservation, parks, and historical commissions; planning board; and housing authority. If a municipality has not established one or more of these boards or commissions, a representative serving in a similar capacity can be appointed to the committee.

Q: What elements must comprise the bylaw or ordinance establishing the CPA Committee?
The bylaw or ordinance must spell out the following information:

-The number of members on the committee (between 5 and 9 members)
-The officeholders designated as part of the committee (see previous question)
-The length of the term
-The method for selecting committee members, whether by election or appointment or both

Beyond these requirements, the specific construction of the bylaw or ordinance should be crafted with local counsel to ensure that it conforms with local legislative practice. Click for sample wording.

Q: Does CPA contain specific requirements on how the money must be spent?
Yes. Each fiscal year, upon recommendation of the committee, the legislative body must spend, or set aside for future spending, the following share of annual Community Preservation Fund revenues:

10 percent for open space (cannot include active recreation fields or playgrounds)
10 percent for historic resources
10 percent for community housing

Beyond these required disbursements, the municipal legislative body will be guided by the recommendations of the Committee on how the remaining 70 percent of annual CPA revenues shall be divided among the three purposes. For example, a municipality could allocate the remaining 70 percent of the annual revenue to one purpose, spread it evenly among all three, or set the funds aside for future spending. Each year, the municipality can modify the spending mix for the remaining 70 percent of the fund.

Q: Are there any special provisions regarding property purchased with the Community Preservation Fund?
Yes. Any property purchased with the Fund must be subject to a permanent deed restriction limiting the use of the property to its CPA-related purpose. The municipality (or the state or a nonprofit organization designated by the municipality) must enforce the deed restriction. The municipality can delegate the property’s management to a local board or nonprofit organization.

The municipality may also use the Fund to pay for land takings through eminent domain, if they are recommended by the Community Preservation Committee and approved by a 2/3-majority vote of the legislative body.

Q: Can a municipality issue bonds in anticipation of CPA proceeds?
Yes. A municipality may issue general obligation bonds or notes in anticipation of the municipality’s CPA property tax surcharge revenue proceeds. Such bonds or notes must be repaid as soon after such revenues are collected as is expedient, and may be used for any of the three purposes under CPA. If a municipality issues bonds or notes, the surcharge necessary to pay debt service must remain in effect, even if the rest of the surcharge is otherwise revoked after five years.

Q: Can a municipality allocate CPA proceeds to cover operating expenses of the Community Preservation Committee?
Yes, as long as such funds are used in a manner consistent with the recommendations of the municipality’s Community Preservation Committee, and do not exceed 5 percent of the annual revenues in the Community Preservation Fund.

Q: Can money in the Community Preservation Fund be used to match state or federal grants?
Yes, as long as the municipality’s Community Preservation Committee recommends such a purpose to the legislative body.

Q: Are any exemptions from the CPA surcharge allowed?
Yes. Taxpayers currently exempt from real property taxes under Chapter 59 of Massachusetts General Laws are exempt from the new CPA surcharge. In addition, the municipal legislative body, as part of the warrant or motion to create CPA, may allow several additional exemptions to the CPA surcharge for:

1) Property owned and occupied by a person who would qualify for low income housing or low or moderate-income senior housing in the city or town,
2) The first $100,000 of taxable value of residential real estate, and
3) Class three commercial or class four industrial properties in cities or towns with classified tax rates.

A municipality may make changes to these exemptions at any time with approval of the legislative body and subsequent voter approval.

Q: What is the relationship between CPA and Proposition 2 ½?
Property taxes collected under CPA are not counted as part of a municipality’s total taxes assessed for the purposes of calculating the tax limitations imposed by Proposition 2 ½.

Q: Are state matching funds available?
Yes. Through the newly created Community Preservation Trust Fund (CPTF), the state will provide matching grants to communities that have adopted CPA. The CPTF will receive funds through a surcharge of $20 on most filings at the Registry of Deeds and land filings at the Land Court. Municipal liens will be assessed a $10 surcharge, and homestead declarations will be exempt from the surcharge. Based on filings in 1999, the CPTF’s revenues are estimated at upwards of $25 million annually.

Q: How will state matching funds be allocated among municipalities?
The state Community Preservation Trust Fund provides allocations only to municipalities in which voters have approved CPA. The Commissioner of Revenue will allocate the Fund’s proceeds annually in several distribution rounds, but the total distribution to a municipality cannot exceed 100 percent of the local CPA property tax surcharge collected (a 1:1 ratio). No state funds will be allocated until the municipality not only accepts CPA, but actually collects tax revenue.

During the first round, 80 percent of the Fund balance will be allocated equally (on a percentage basis of the amount collected by each municipality) to all municipalities that have adopted the property tax surcharge. The match must be at least 5 percent but not more than 100 percent of the amount raised by the surcharge in the municipality.

The remaining 20 percent will be distributed solely among municipalities that have adopted the maximum 3 percent property tax surcharge. The funds will be allocated based on a community’s “preservation rank,” with communities divided into 10 equal sized decile groups. Their rank is a function of a community’s property tax valuation per capita and population. Communities with high tax values per capita and low populations will have the lowest ranking and receive the lowest grants, and vice versa.

If there is money left in the state Trust Fund after a second round, there will be another equity distribution only for those that have accepted a 3 percent property tax surcharge.

If fewer than 10 percent of the state’s 351 municipalities have approved CPA, the Commissioner of Revenue may conduct only one round of distributions or distribute the state funds in any equitable manner.

Q: When and how will these funds be disbursed?
Every year on October 15, the Commissioner of Revenue will disburse local grants to communities that have notified the Commissioner of its acceptance. The community must also certify to the Commissioner on June 30 annually the amount of revenue raised through the CPA surcharge and the rate imposed.