An Act Relative to Streamlining and Expediting the Permitting Process in the Commonwealth—HB 4968

August 04, 2006

Real Estate Law Alert

Our inaugural Real Estate Law Alert discusses newly enacted legislation expediting and streamlining the real estate development permitting process in Massachusetts. This alert is relevant to our clients and friends developing or acquiring real property in the Commonwealth and may not be directly applicable or of as much interest to those of you in other jurisdictions.

On August 2, 2006, Massachusetts Governor Mitt Romney signed into law significant new land use legislation, entitled “An Act Relative to Streamlining and Expediting the Permitting Process in the Commonwealth—HB 4968” (the “Act”). Historically, the real estate development permitting process in Massachusetts has been frustratingly complex and often fraught with lengthy delays and appeals. The Act is intended to reduce delays in the permitting process while providing incentives for cities and towns to participate in the recently created expedited permitting process.

Amended and Restated Massachusetts General Laws Chapter 43D—Expedited Permitting

The most significant changes contained in the Act relate to Massachusetts General Laws, Chapter 43D, a law enacted in 2004 and known as the “Expedited Permitting Act.” By adopting certain local options for expedited permitting found under Chapter 43D, municipalities commit to establishing a comprehensive permitting process for all permit applications. Any municipality that adopts Chapter 43D may establish its own timelines for permit review by its issuing authority, but these timelines must not exceed (i) ninety days for those reviews that do not require a public hearing, and (ii) 120 days for those reviews that do require a public hearing. Failure to act within the maximum time allotted results in an automatic grant of the relief requested unless the underlying application was incomplete, false, or misleading, or the project has substantially changed since the application was filed. Appeals from the grant of such permits may be filed by any aggrieved person and any action must be acted upon by the court as soon as reasonably practical. As a result, even a local “expedited permitting process” may be lengthy and could still result in years of litigation on appeal.

A municipality participating in the expedited permitting process also may opt into a provision that designates certain property as a “priority development site.” This designation affords these sites a number of benefits, such as consideration for community grants or public funding. To qualify, the private or publicly owned property must be commercially or industrially zoned, and eligible, under applicable zoning permits, for construction of ninety thousand square feet of gross floor area or more. A decision for a priority development site must be issued within twenty business days of the designation request, and each municipality must develop a procedure to handle these requests. As a result of this tight time constraint, coupled with the increased responsibilities allocated to the municipality and the relatively small financial benefit thereto, few, if any, municipalities have chosen to implement the expedited permitting process since the enactment of Chapter 43D.

In light of the deficiencies in the original legislation, the Act amends and restates Chapter 43D in its entirety, in an effort to improve accessibility to the financial benefits of expedited permitting. The amendments to Chapter 43D set forth in the Act afford greater access to the benefits of expedited permitting by shifting the decision to adopt the expedited permitting process from municipalities as a whole to designated governing bodies within cities and towns. The relevant municipal governing body then files formal expedited permitting proposals with a newly created Interagency Permitting Board under Massachusetts General Laws, Chapter 23A, §62, whose sole purpose is to review and approve or deny municipal priority development site proposals, and to grant and administer technical assistance grants.

The Act also makes participation in the expediting permitting process site-specific; thereby making the formerly optional priority development site provision automatic for all participating towns and cities. It also allows for the designation of single parcels of land or buildings for expedited permitting, an option not previously available under Chapter 43D. Furthermore, the time periods for review have been explicitly defined, making the priority review period of 180 days extendable only in limited circumstances.

In addition to simplifying the expedited permitting process, the requirements for priority development designation have been relaxed. Now, commercially or industrially zoned property must be eligible under applicable zoning provisions for construction of at least fifty thousand square feet, and must be designated as a priority development site solely by the Interagency Permitting Board, rather than by the relevant municipality. The Act also urges that, where possible, priority development sites should be located adjacent to areas of existing development, in underutilized buildings or facilities, or close to appropriate transit services.

Under the Act, a priority development site is eligible for the same benefits available to those sites designated under the prior law, but a new funding option is available in the form of technical assistance grants. These grants are intended to be one-time grants to those municipalities that elect to adopt expedited permitting. However, additional funding is possible if the municipality had previously identified and permitted a priority development site. Technical assistance funding would, in part, be awarded to each regional planning agency, created pursuant to Massachusetts General Laws, Chapter 40B, §30, in a uniform fixed amount of $150,000, except for the Metropolitan Area Planning Council, which has a fixed base allocation of $200,000. The remaining allocation is partly based on the population served by each agency and partly based on the percentage of Massachusetts municipalities served by each regional planning district. Any recipient of these funds is required to provide matching resources of no less than ten percent of the amount of the grant. Any request for technical assistance must be decided by the Interagency Permitting Board within sixty days of receipt of the proposal.

According to Chapter 40B, §30, the technical assistance centers in each regional planning district shall be created for “the delivery of coordinated, comprehensive, and continuing technical services to and among local governments for the purpose of expediting permitting.” Technical assistance will be available to applicants through centers located in regional planning agencies. These centers will work to provide coordinated and comprehensive services for the purpose of expedited planning at the local government level. However, participation in the expedited permitting process would not be contingent on a city or town’s willingness to receive technical assistance.

The final notable changes to Chapter 43D involve the transferability and duration of expedited permits. Historically, permits transferred automatically to successors in title, unless the permit was conditioned upon certain requisite financial capabilities of the transferee, or if the permit expressly stated that approval of the issuing authority is required for transfer. Under the Act, expedited permits do not automatically transfer to successors unless the permit itself so provides. Lastly, the Act states that unexercised permits expire five years after the date on which the relevant appeal period expires, rather than the two-year expiration period under the prior law.

Additional Streamlining of the Permitting Process

The Act includes several other changes to the development permitting process in Massachusetts, apart from those found in Chapter 43D. Of particular note, these changes (i) shorten the permitting process, (ii) improve communications between all participants in the permitting process, and (iii) modify the citizen intervention component of the permitting process.

Intervention in Massachusetts General Laws, Chapter 91 Proceedings

Before of this new legislation was adopted, under Massachusetts General Laws Chapter 30A, §10A, any ten people could intervene in any adjudicatory proceeding in which damage to the environment was arguably at issue, regardless of their geographic proximity or other nexus to the proposed project. Any intervener could present evidence of virtually any kind that was deemed to be relevant by the adjudicating authority, with such evidence only being excluded to the extent it was repetitive of other evidence in the proceeding. Any intervener was also considered a party to the original proceeding for notice purposes and possessed all procedural rights applicable to any such proceeding, including standing to appeal a permit grant. As a result, many of these "ten citizen appeals" considerably delayed or entirely defeated the permitting process for a broad category of development projects. Now, these ten citizen interventions have been severely curtailed with respect to permitting of development adjacent to waterways under Massachusetts General Laws, Chapter 91. The Act limits such interventions in Chapter 91 proceedings by requiring that at least five of the people involved in the intervention reside in the municipality in which the proposed project or activity is located. In addition, any such citizen intervention must specifically state the facts and grounds for the intervention and the relief sought, and each person must file an affidavit of intent to be part of the group and of his/her desire to be represented by its authorized representative. The proposed legislation also requires that the Department of Environmental Protection amend its regulation in accordance with these limitations.

Revisions to Massachusetts General Laws, Chapters 40A

The Act includes an amendment to Massachusetts General Laws, Chapter 40A, §9, which creates additional flexibility with respect to land development, by allowing cities and towns to adopt zoning by-law provisions allowing research and development uses in nonresidential zoning districts via the issuance of only a special permit, rather than a variance. Chapter 40A, §11, has also been amended to allow developers that have obtained a special permit the option of continuing their projects without fear of injunction, even if an appeal is pending, although a developer making such election assumes the risk that the adjudicating authority could reverse the permitting granting decision and order that all construction be subsequently undone.

Creation of Special Session of Land Court under Massachusetts General Laws, Chapter 185, §3A

The permitting process has been further simplified by the creation of a special session of the land court, pursuant to Massachusetts General Laws, Chapter 185, §3A, to exclusively deal with land use and environmental permitting appeals. The permit session will have original jurisdiction, concurrent with the superior court, over any civil actions that arise out of the appeal of any municipal, regional, or state permit or approval that concerns the use or development of real property. The session’s jurisdiction extends to any claims between parties concerning the development or use of real property and, similarly, any challenges to the interpretation of any municipal, regional, or state rules and regulations concerning the use and development of real property. However, these claims must involve either (i) twenty-five or more dwelling units, or (ii) twenty-five thousand square feet or more of development. Judges for to the permit session will be assigned by the chief justice of the land court, with a preference given to those who have particular land use and environmental expertise.

Additionally, any action not initially commenced in the permit session of the land court may be subsequently transferred there by a motion of any party to the chief justice for administration and management of the case. If any party asserts a right to a jury trial while in permit session, the action will be transferred to superior court. Cases filed in the permit session will be assign a tracking letter: “A” for average track or twelve months to trial; “F” for fast track or nine months to trial; and “X” for accelerated or six months to trial. In exceptional cases, track letters may be reassigned, either at the court’s own initiative or upon a party’s motion. The final disposition of permit session cases also must comply with a tracking system that corresponds to the initial track letter. The time period begins once the trial transcript is filed, with A track being four months, F track being three months, and X track being two months. Parties that file or transfer actions in the permit session also have the option to participate in mediation. Lastly, if a party to such action claims a valid right to a jury trial, then such action will be transferred to superior court for adjudication.

The Permit Regulatory Office & Interagency Permitting Board under Massachusetts General Laws, Chapter 23A Chapter23A

The Act also streamlines the permitting process for new and expanding businesses in Massachusetts by identifying certain individuals within the newly created Permit Regulatory Office and each regional office of the Development Financing Agency, each of whom will be tasked with assisting businesses on a local level, coordinating communications, and planning from a municipal perspective. The director of the Permit Regulatory Office will serve as the “state permit ombudsmen” to any business that is seeking any type of permit or license required by Massachusetts law. The Act also creates an “interagency permitting board” within the department of economic development that shall, among other things, monitor the development of priority development sites as provided under Chapter 43D and investigate ways in which to expedite priority development site projects.

Elevated Treatment of Public Use Restrictions under Massachusetts General Laws, Chapter 184, §32

One final noteworthy effect of this new legislation concerns the status of public use restrictions. In deference to those who may be wary of the effect that the expedited permitting process may have on open space and other natural resources, the legislature deemed conservation restrictions, preservation restrictions, agricultural restrictions, watershed preservation restrictions, and affordable-housing restrictions granted to either the government or charitable organizations to be “interests in land,” subject to judicial enforcement by the holders thereof. Now, if the court finds that there has been a violation of such a restriction, the petitioner may be awarded reasonable attorneys’ fees and costs, in addition to other relief ordered by the court. Lastly, release of such restrictions may be accomplished in the same manner as any other disposition of an interest in land; however, such a release may be accomplished only after a public hearing and only with the prior approval of the relevant governmental authorities.

The foregoing has been prepared for the general information of clients and friends of the firm. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel. If you have any questions or require any further information regarding these or other related matters, please contact your regular Nixon Peabody LLP representative. This material may be considered advertising under certain rules of professional conduct.

The foregoing has been prepared for the general information of clients and friends of the firm. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel. If you have any questions or require any further information regarding these or other related matters, please contact your regular Nixon Peabody LLP representative. This material may be considered advertising under certain rules of professional conduct.

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