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June 2009

Vol. 8

Political Outlook
After several months of political wrangling between Governor Patrick and the Legislature on a series of reform bills, taxpayers will soon face up to a billion dollars in new taxes.  Patrick had made his support for a 25% increase in the sales tax contingent on pension reform, ethics reform and transportation reform.  The higher sales tax is estimated to generate $900 million annually in revenue by 2011.  In addition to new taxes, the $27.4 billion budget includes $1.5 billion in one-time federal stimulus funds and $2.5 billion in spending cuts.  The budget also taps $199 million from the "rainy day fund" leaving only $600 million in reserves down from $2 billion just a year ago.

GBREB Supports Clarification of Data Privacy Law
GBREB is supporting SB173 "An Act Insuring the Privacy of Certain Data" sponsored by Senator Michael Morrissey (D-Quincy).  Following the passage of a data privacy law in 2007, regulators have grappled with how to develop rules for the protection of personal information without unfairly burdening the business community.  Originally set to take effect in May this year, the deadline has been extended to January 1, 2010.  GBREB has expressed concern that delaying the compliance deadline will not address fundamental issues of concern and that as a practical matter businesses may experience difficulty adhering to the new regulations. SB173 allows for flexibility in the use of specific technology to protect information, takes into account the size and scope of a business, and clarifies conflicting standards with federal law.  The legislation is currently before the Joint Committee on Consumer Protection & Professional Licensure. 

Click here to see a copy of the regulations | Click here to see a copy of the 2007 data privacy law

Expiring Use Bill Advances
Legislation establishing a right of first refusal process for the sale of so called "expiring use" properties has been reported out of the Housing Committee.  Expiring use properties were developed in the 1960's & 1970's by private developers under a contractual agreement with the federal government that required the property to remain affordable as defined by HUD. The affordability of housing units receiving subsidies is not permanently assured and after a set period of time, owners are allowed to convert their building to market rate.  Historically, GBREB has only supported the notion that the property would become market rate by operation of law, with no additional burden on the property.  The proposal reported out of committee is co-sponsored by Committee Chairs Susan Tucker and Representative Kevin Honan and is similar to legislation passed by the Senate last year.  GBREB continues to support H1201 drafted by a diverse group of owners and their attorneys sponsored by Representative David Flynn (D-Bridgewater).  GBREB testified in strong support of H1201 at a public hearing held in May and urged lawmakers to carefully consider the myriad of legal issues that these expiring contracts pose.

GBREB Opposes Deeds Excise Surcharge
GBREB recently expressed opposition to H2933 "An Act Establishing a Deed Excise Surcharge". http://www.mass.gov/legis/bills/house/186/ht02pdf/ht02933.pdf.  The proposed legislation would impose an 18% surcharge onto the existing deeds excise tax in Massachusetts (currently set at $4.56 per thousand of sale price).  By adding this surcharge onto the existing deeds excise tax owners will pay hundreds of additional dollars in tax for selling their property.  The bill is currently before the Joint Committee on Revenue.

Expansion of Hotel Motel Tax Stopped In Budget
GBREB was successful in stopping an expanded application of the hotel motel tax as part of the Commonwealths annual budgetLanguage expanding the application of the hotel motel tax to single family homes and corporate apartment rentals was adopted as an amendment to the Senate version of the budget but later rejected by the conference committee.  The victory is a temporary reprieve as other bills expanding the hotel motel tax still remain before the legislature

Earlier this year, GBREB testified before the Joint Committee on Revenue in opposition to several bills that would have expanded the tax.   GBREB expressed concern it would create substantial new tax reporting and accounting problems for property owners who would be required to comply with the same requirements currently imposed on hotels, motels and bed & breakfasts.  Current requirements mandate all persons operating a transient accommodation obtain a certificate of registration from the Department of Revenue and report monthly income-regardless of whether they generate income or not.

GBREB will be submitting an amicus brief in the matter of Hollis Hills, LLC v. Town of Lunenburg Zoning Board of Appeals, with the Housing Appeals Committee.  This is an affordable housing case under Massachusetts General Laws, chapter 40B.  In this case the municipality denied the issuance of a comprehensive permit.  Due to the severe nature of the current economic downturn, and the fact that local market rate housing had declined in values so sharply, the local municipality believed the community no longer had a need for the creation of affordable housing under 40B because the low sales prices for market rate units basically satisfied that local demand.  40B was never intended to be applied in this way.

The Greater Boston Real Estate Board Political Action Committee is vital to allowing your voice to be heard by elected officials on major legislative issues affecting the Real Estate Industry.  Please click here to find out more about GBREB PAC, and help support this vital effort.

This report describes legislative and regulatory actions and other initiatives undertaken by the Greater Boston Real Estate Board on behalf of the real estate industry.  This legislative report is intended for the internal use of GBREB members.  If you have questions or would like additional information please contact communications@gbreb.com.  Distribution outside our membership and use by the press are not permitted.

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