Author: Municipal Finance Law Bureau
This month's Ask DLS features frequently asked questions concerning transportation network companies and the accounting treatment of money received from the Commonwealth Transportation Infrastructure Fund. Please refer to LFO- 2022-3 for more information on this topic. Please let us know if you have other areas of interest or send a question to cityandtown@dor.state.ma.us. We would like to hear from you.
What is the Commonwealth Transportation Infrastructure Fund?
Under Chapter 187 of the Acts of 2016, as amended by Chapter 176 of the Acts of 2022, certain transportation network companies must submit to the Transportation Network Company Division (TNC Division) of the Department of Public Utilities (DPU) the number of rides from the previous calendar year that originated within each city or town and a per-ride assessment of $0.20. The assessment is credited to the Commonwealth Transportation Infrastructure Fund (Fund). St. 2016, c. 187, § 8(a). Each year, one half of the amount credited to the Fund is distributed by the DPU proportionately to each city and town based on the number of rides that originated in that city or town. St. 2022, c. 176, § 27.
What is the general rule related to the receipt of money by a city, town or district officer or department?
All money received or collected from any source by a city, town or district belongs to its general fund and can only be spent after appropriation unless a general or special law provides an exception, i.e., expressly restricts use for a particular purpose or allows expenditure by a department or officer without appropriation. G.L. c. 44, § 53.
How should cities and towns account for the funds received from the Commonwealth Transportation Infrastructure Fund treated?
Money distributed to cities and towns from the Fund is special revenue earmarked for use by cities and towns “to address the impact of transportation network services on municipal roads, bridges and other transportation infrastructure or any other public purpose substantially related to the operation of transportation network services in the city or town including, but not limited to, the complete streets program established in section 1 of chapter 90I of the General Laws and other programs that support alternative modes of transportation.” St. 2022, c. 176, § 27. However, the Act does not authorize any particular department or officer to spend the distributed money without “specific” or “further” appropriation for any of those statutory purposes. Therefore, the general rule requiring an appropriation to spend the money still applies. The accounting officer must establish a receipts reserved for appropriation account for this distribution and credit the money received to that account. To use the money for any allowable purpose, the legislative body must appropriate from available funds in the account.
However, starting with distributions received on or about June of 2023, if the amount of the distribution to a city or town is $25,000 or less, the chief executive officer as defined in G.L. c. 4 §7 may expend the funds for the statutory purposes without further appropriation. St. 2022, c. 176, § 27.
Are there any reporting requirements?
Yes. For fiscal year 2023, each city or town receiving a distribution from the Fund must submit a report to the TNC Division not later than December 31, 2022 that details the allowable transportation-related projects conducted, including amounts used or planned to be used for those projects.
Per St. 2022, c. 176, § 27, starting fiscal year 2024, in each year where a city or town receives a distribution of more than $25,000, the city or town must submit a report to the TNC Division not later than December 31 that details the allowable transportation-related projects conducted, including amounts used or planned to be used for those projects. Additionally, each city or town that has received a cumulative total distribution from the Fund of more than $25,000 since its last report to the TNC Division must submit a report to the TNC Division not later than December 31 of that year that details the allowable transportation-related projects conducted, including amounts used or planned to be used for those projects. Lastly, each city or town that has a cumulative total distribution from the Fund of $25,000 or less in the five years since their last report to the TNC Division must submit a report to the TNC Division not later than December 31 of that year that details the allowable transportation-related projects conducted, including amounts used or planned to be used for those projects. The TNC Division is required to compile the reports and post the projects and amounts of money used on its website. Additionally, please note that the TNC Division will withhold future disbursements until the reporting requirements are satisfied.
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Editor: Dan Bertrand
Editorial Board: Marcia Bohinc, Linda Bradley, Sean Cronin, Emily Izzo, Lisa Krzywicki and Tony Rassias
| Date published: | October 6, 2022 |
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