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APPROPRIATION COMMITTEE—2.020 ATM 25 March 2020 Proposed Legislation The special legislation proposed in the motion under this article6 would not eliminate the 16%interest rate but would mitigate its impact by delaying its imposition for one year after the death of a person whose taxes have been deferred if the property has not yet been sold or conveyed. During that one-year delay, interest would not be waived altogether but would continue to accrue for each year's deferral at the original CMT rate applied to that deferral. If the property is sold or conveyed, either before or after the death of the person whose taxes have been deferred, but the full amount of the deferrals plus accrued interest is not immediately paid, then the 16% interest rate would take effect. Committee Recommendation The goal of the 41A deferral program is to alleviate the property tax burden on low-to moderate-income homeowners, and the low interest rate system adopted by the Town in 2006 is an integral component of that program. This Committee believes it is sensible and appropriate to delay any increase in interest rates on deferred taxes for up to a year after death if the property has not yet been sold or conveyed. This delay would allow a reasonable time for the estate to arrange a sale or conveyance. The income that would oth- erwise be generated with a higher interest rate is not a significant revenue source for the Town,and its delay for one year would have no material impact on the Town's finances. The Committee recommends approval by a vote of(8-0). Article 8 Short Term Rental Impact Fee Funds Requested Funding Source Committee Recommendation None N/A Approve (7-0-1) This article proposes that the Town accept the entirety of Massachusetts General Laws Chapter 64G, Sec- tions 3A&3D. In combination with new zoning legislation proposed under Article 36,this would regulate the types of units that can be used for short term rentals in Lexington and impose a 3%community impact fee for such rentals. Our report focuses on the financial implications of these proposed legislative changes. Town Meeting voted to accept M.G.L. c. 64G, §3A at a special town meeting in November 2009. If Town Meeting accepts both M.G.L. c. 64G, § 31)(a) and § 31)(b), which requires a separate vote for each sub- section,then a 3%community impact fee will be imposed on short term rentals of any unit in a two-family or three-family dwelling in Lexington. The zoning bylaw change proposed under Article 36 would further limit short term rentals to units in owner-occupied dwellings only. The state-wide room occupancy excise tax rate is 5.7%. Beginning July 1, 2010, per the local adoption of c. 64G, §3A, Lexington imposed a 6% local option room occupancy tax, which is paid in addition to the state tax, for a total room occupancy tax of 11.7%. This tax applies to room rentals of 90 days or less in 6 The proposed legislation would amend the special act previously obtained by Lexington, Chapter 190 of the Acts of 2008, which allowed Lexington to vary the eligibility provisions of Clause 41A. For a description of the 2008 Act, see the discussion of Article 6 above. The language in the motion differs somewhat from the language contained in the Warrant but has the same objective.A similar amendment of Clause 4I that would apply generally to all munic- ipalities was proposed last year by our State Representative but did not advance out of committee,hence the need for special legislation. 25