Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:

The town of Reading may establish a separate fund to be known as the Affordable Housing Trust Fund for the purpose of creating or preserving affordable housing by the town of Reading, the Reading Housing Authority or a housing trust, community development corporation or similar entity created under the laws of the commonwealth for the purpose of creating, maintaining or operating affordable housing.

All expenditures from the fund shall be used for low or moderate income housing as defined in section 20 of chapter 40B of the General Laws. The funds may specifically be used to:

(a) purchase and improve land;

(b) purchase dwelling units;

(c) develop new or rehabilitate existing dwelling units for purchase or rental by low and moderate income housing purchasers or tenants; and

(d) preserve existing subsidized housing inventory as maintained by the department of housing and community development pursuant to said chapter 40B.

Expenditures shall follow an allocation plan submitted by the board of selectmen annually to town meeting at the annual town meeting, and approved by town meeting. The allocation plan may be amended by town meeting at any special town meeting. The board of selectmen may request the advice of the Reading Housing Authority, the community planning and development commission, and others in developing any allocation plan. The allocation plan shall be a general plan of how funds from the fund will be expended over the next fiscal year, and a report on how funds were spent during the previous fiscal year.

All expenditures from the fund, including funds for capital purchases of land or buildings, shall be in accordance with the allocation plan and approved by a majority vote of the full combined memberships of the board of selectmen and the Reading Housing Authority.

The fund may also be the repository of any allocation for affordable housing purposes made under chapter 44B of the General Laws, if the town votes to accept sections 3 to 7, inclusive of said chapter 44B.

The town treasurer shall be the custodian of the fund and shall invest the funds in the manner authorized by sections 55, 55A and 55B of chapter 44 of the General Laws. Any income or proceeds received from the investment of funds shall be credited to and become part of the fund.