Welcome to 2019! Come visit your friends at Miyares and Harrington LLP this Friday and Saturday (January 18-19) at our booth in the Exhibitors Hall at the MMA Conference at the Hynes Convention Center. We are at Booth 102, so stop by, say hello, and help yourself to candy, some useful information and (of course) swag. Back by popular demand this year: Our coveted PopSockets!
While you are there, be sure to take in the Friday afternoon workshop on “Hot Topics in Municipal Law” featuring our own Donna Brewer and other prominent municipal lawyers.
This month's newsletter features:
  • Meeting Disrupters Have Rights

  • What to Know about the new Short-Term Rental Law

  • Federal Regulation (and Preemption) of Small Wireless Facilities

  • Rapid Fire Update – Cannabis Control Commission Adopts Regulations Governing Medical Use of Marijuana

  • Trivia – Open Book This Month

Meeting Disrupters Have Rights
Municipal boards and committees may feel beleaguered by citizens who are thought to be abusing their right to petition the government and are disrupting their meetings. However, public speech at such meetings is limited at the government’s peril.
In Spaulding v. Natick School Committee, Middlesex Super. Ct. (November 21, 2018), individuals were prohibited from airing complaints at a School Committee meeting about the school system and the impact on specific students. The School Committee had adopted a “Public Speak” policy that permitted anyone to speak for a few minutes at one of its meeting, but only if the speaker was addressing a school-related topic. Shortly after the speaker started, the Chair cut the speaker off and suspended the meeting, stating that the speakers were in violation of the Public Speak policy. The speakers sued, claiming that the Committee’s action was a violation of Article 16 of the Massachusetts Constitution and the First Amendment to the U.S. Constitution.
The Superior Court considered the constitutionality of the policy under the “strict scrutiny” standard of review, because it found that the Committee meeting was a public forum and the policy was a content-based governmental restriction on speech. The Court stated that a School Committee policy could properly limit public comments to matters within the Committee’s responsibilities. It could also prohibit threats, adjudicated defamatory comments, and obscenities. As applied to the speakers, however, the Court found that the policy had been invoked before the Committee Chair could properly ascertain whether the speaker had violated constitutionally permissible parameters of the policy, or whether the policy was unconstitutionally applied. Summary judgment was therefore awarded to the plaintiffs.

What to Know about the new Short-Term Rental Law
On December 26, 2018, Governor Baker signed into law Chapter 337 of the Acts of 2018, which regulates the operation of short-term rental units within Massachusetts. The law will take effect on July 1, 2019. The major components of the law applicable to municipalities include:
Rental Registry
  • State Rental Registry: The law requires operators of short-term rental units to register with the Executive Office of Housing and Economic Development. Operators must identify the City or Town and street, but not the street number, where the rental until is located.
  • Municipal Rental Registry: Municipalities may also establish a local registry for all short-term rental accommodations. The City or Town is empowered to determine what relevant information may be listed in the registry, including where the accommodation is located.
Taxations and Fees
  • State Excise Tax: The law mandates that homeowners collect a 5.7% state room occupancy excise tax on the transfer of short-term rentals – the same excise tax that currently applies to the transfer of rooms in traditional lodging establishments.

  • Municipal Excise Tax: The law also extends the local option room excise tax on short-term rentals. If a City or Town has already adopted a local option room occupancy excise (M.G.L.c.64G, §3A), the local option automatically applies to a short-term rental starting July 1, 2019 for which a rental contract was entered into on or after January 1, 2019. No further action is required by these Cities or Towns to impose the local option on short-term rentals. See Department of Revenue’s Guidance, here.

  • Community Impact Fee: Municipalities may impose a Community Impact Fee of not more than 3% on the transfer of a “professionally managed short-term unit,” defined as “1 of 2 or more short-term rental units that are located in the same city or town, operated by the same operator and are not located within a single-family, two-family or three-family dwelling that includes the operator’s primary residence.”If a municipality elects to impose the Community Impact Fee on professionally managed short-term units, then the City or Town may also impose the Community Impact Fee on the transfer of a short-term rental unit that is located within a two-family or three-family dwelling that includes the operator’s primary residence. A separate vote of Town Meeting is required to impose each type of Community Impact Fee. Municipalities must dedicate not less than 35% of any Community Impact Fees collected to affordable housing or local infrastructure projects.

  • Exemption: Generally, the state excise tax, the local option tax, and the Community Impact Fee do not apply to properties rented for fewer than 15 days per calendar year. The operators of tax-exempt units must still register in the state registry and notify the state of their intention to rent the unit for fewer than 15 days in order to be exempt from the obligation to collect the applicable taxes.
Licensure and Regulation
  • State Certificate of Registration: Operators must obtain a certificate of registration from the Department of Revenue prior to operation.
  • Municipal Licensure and Regulations: Cities and Towns may, by ordinance or bylaw, regulate the operation of short-term rentals, as well as bed and breakfast establishments, hotels, lodging houses, and motels. Specifically, an ordinance or bylaw may:

  • Regulate the existence or location of operators, including regulating the class of operators and number of local licenses or permits issued, and the number of days a person may operate and rent out an accommodation in a calendar year;

  • Require the licensing or registration of operators;

  • Require operators to demonstrate that any properties subject to the excise tax requirements are not subject to any outstanding building, electrical, plumbing, mechanical, fire, health, housing or zoning code enforcement, including any notices of violation, notices to cure, orders of abatement, cease and desist orders or correction notices;

  • Require properties subject to the excise tax requirements to undergo health and safety inspections;

  • Establish a civil penalty for violation of the ordinance or bylaw; and

  • Establish a reasonable licensing or registration fee to cover the costs associated with the local administration and enforcement of regulating operators and accommodations.
Operators of short-term rentals must maintain liability insurance of not less than $1 million to cover each short-term rental unit, unless the short-term rental is offered through a hosting platform that maintains equal or greater coverage.
Perhaps unsurprisingly, short-term rental companies are not happy about the new Legislation, especially the registry requirement. On January 3, 2019, the US District Court of the Southern District of New York granted AirBnB’s and other hosting platforms’ request for a preliminary injunction, stopping a requirement that hosting platforms share property registration data with New York City. Airbnb v. City of New York, 2019 WL 91990 (S.D. New York, 2019). A lawsuit is also pending over Boston’s ordinance, which similarly mandates data sharing and imposes fines against hosting platforms companies for illegal listings. This is certainly a hot button issue and one that municipalities should certainly keep an eye on as these cases progress through the courts.

Federal Regulation (and Preemption) of Small Wireless Facilities
On September 27, 2018, the Federal Communications Commissionissued its Declaratory Ruling and Third Report and Order, which interprets the federal Telecommunications Act, 47 U.S.C. §§253 and 332(c)(7), to limit significantly municipal regulation of cell towers and wireless facilities. It is effective January 14, 2019. The Ruling and Third Report and Order are lengthy, but here are the highlights for municipalities:
  • All local government approvals for small wireless facilities (SWFs) must be acted upon within the applicable shot clock deadline.
  • This means zoning, wetlands, and even building permits.
  • Shot clock deadlines are short. For example, there is a 60-day deadline from application to approval for collocation on existing structures (no longer just existing towers).
  • Shot clock deadlines can be tolled by mutual agreement.
  • A permit-granting Board or Committee may avoid the shot clock deadline if the application is incomplete and the applicant is notified shortly after filing.
  • The applicant has 30 days to appeal any decision or failure to act.
  • Application fees are limited to reasonable costs, not reasonable compensation of the permit-granting Board or Committee.
  • Fees are presumed reasonable if , they are less than or equal to $500 for up to five SWFs.
  • A municipality that wants to charge more must create a record in support of its decision. Such a municipality should assume that the SWF applicant will challenge the as unreasonable
  • The fee cap is for all local governmental approvals (Planning Board filing fees, Conservation Commission filing fees, building permits, etc.) combined.
  • The fee must apply to all SWF applications, not just those located in municipal rights of way.
  • Recurring fees for use of municipal land and rights of way, or to attach to a government-owned fixture or structure must be non-discriminatory and represent a reasonable approximation of the reasonable costs specifically related to and caused by the deployment.
  • Recurring fees will be deemed to be reasonable if they do not exceed $270/year per SWF.
  • Gross revenue-based fees are not cost-based and therefore are not allowed.
  •  Agreements for annual payments to a municipality that pre-exist this Order are not grandfathered; so the FCC can preempt them on a case-by-case basis. Expect existing agreements to be challenged.
  •  If the municipality wants to apply aesthetic standards to SWFs, the standards must be reasonable, “no more burdensome than those imposed on similar infrastructure,” “incorporate clearly-defined and ascertainable standards” and must be published before an application is received.
Tips for Municipalities
➢ Amend your application forms for SWFs to include at a minimum:
  • A requirement that all other Town permits (except for building permits) must be in hand before an application will be accepted as complete.
  • A requirement that applicants specifically identify what statutory provision they are applying under, so that the applicable shot clock can be identified and adhered to.
  • A requirement that the applicant state whether the application Is under this Order, the §6409/Wireless Siting Order (which mandates local approval of certain wireless broadband facilities on existing structures if the new equipment does not result in a substantial change to the structure), or neither.
-- For §6409 applications, a requirement that documentation be submitted as to why the project comes under that Section
  • A requirement that construction drawings be included with each application.
  • A prohibition against emailed applications.
➢ Revise fee schedules
  • Do not accept an application without the fee payment.
➢ Require wet stamps and wet signatures on all drawings so as to avoid “cookie-cutter” plans.
➢ Establish and publish aesthetic standards by policy or regulation (not in a bylaw or ordinance), and have the permitting board delegate the power to approve changes in the proposed design to the Planning Director
➢ Consider hiring an expert to do your cost studies to justify your fees; count everything!
➢ If the SWF is placed on a building or facility that was financed with municipal bonds or grant agreements, check with bond counsel to see if private entity use of the facility causes the bond or grant agreement to be in default.
➢ If the approvals cannot be issued by the shot clock deadline, seek a tolling agreement.
If that is not possible, the municipal board should consider denying the application without prejudice, compiling a record of extenuating circumstances and all municipal actions taken within the time allowed, and identify all public health, safety, and welfare reasons for the board’s failure to meet the applicable shot clock deadline.

Rapid Fire Update – Cannabis Control Commission Adopts Regulations Governing Medical Use of Marijuana
The administration and oversight of the Medical Use of Marijuana Program transferred to the Cannabis Control Commission on December 23, 2018. To effectuate the transfer, the Commission promulgated new regulations for medical marijuana (935 CMR 501) and the colocation of adult-use and medical-use establishments (935 CMR 502).

This is not really trivia, but a call for mystery solving skills.
For about 30 years, we have included, in our annual holiday greeting, a quote that we have attributed to Ralph Waldo Emerson:
                      The Sun shines after every storm;
                     there is a solution for every problem,
                     and the soul’s highest duty is to be of good cheer.
A quick Google search indicates that others have made the same attribution, but without identifying where or when it was written. This year, however, a potential rival to America’s favorite transcendental poet, has surfaced—one William Rounseville Alger, another Massachusetts favorite son and Unitarian minister. A variation of our holiday greeting quote seems to have been attributed to him:
                     After every storm the sun will smile;
                    for every problem there is a solution,
                    and the soul's indefeasible duty is to be of good cheer.
But, alas, this attribution also comes without any corroborating information—a publication date or title.
So which is it? Emerson? Alger? A mystery third person? You may use any resource, but must offer proof!
Last issue's question: As of 2017, what port is the highest-valued port in the United States? NB: “highest-valued” means it brings in more revenue than any other.
Answer: New Bedford. Your esteemed editor can already hear the screams of protest. Save it. You may find confirmation here. It has held the record for 17 straight years. A reminder – all trivia questions are Massachusetts-related.
Winner: Congratulations to Bill Bowler, Chairman of Hamilton’s Zoning Board of Appeals, for knowing such important trivia. Mind like a steel trap!

Local options at work.
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THIS NEWSLETTER MAY BE CONSIDERED ADVERTISING UNDER MASSACHUSETTS SUPREME JUDICIAL COURT RULES. This newsletter is intended for clients and friends of Miyares and Harrington LLP. It provides general information about legal developments and should not be used as a substitute for professional advice on your particular legal situation.

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