§ 8 — Issuance of bonds; bond reserve fund

Massachusetts § 8

• Jurisdiction: Massachusetts
• Part I: ADMINISTRATION OF THE GOVERNMENT
• Title II: EXECUTIVE AND ADMINISTRATIVE OFFICERS OF THE COMMONWEALTH
• Ch. 23G: THE MASSACHUSETTS DEVELOPMENT FINANCE AGENCY

Text

Section 8. (a) The Agency may finance industrial development facilities and pollution control facilities and waste disposal facilities and exercise the powers of an industrial development financing authority under the provisions of chapter 40D throughout the commonwealth and may issue bonds under this subsection (a) in furtherance of these purposes in the same manner provided by said chapter 40D for local authorities. For this purpose the provisions of said chapter relating to local authorities and to municipalities acting by and through them and to their bonds shall apply to the Agency and its bonds except that the following provisions of chapter 40D shall not apply to the Agency: sections 2, 3, 4, 5, 6, the third paragraph of section 8, the fourth paragraph of section 10, section 12, except the findings required to be made under clauses (a) to (k), inclusive of subsection (2), the sixth to eleventh sentences, inclusive, of section 18, section 19 and paragraphs (a) to (e), inclusive, of section 21 and the power of the Agency in this section shall be exercised notwithstanding the provisions of clause (ii) of section 8, sections 9, 10, 13 and 14 of said chapter 40D. Refunding or refinancing of outstanding costs, obligations, mortgages or advances made by an institution in connection with a facility or facilities that provide cultural or educational services prior to the authorization of bonds by the board of the Agency may be financed for any such institution.With respect to bonds issued for the foregoing purposes under this subsection (a), the Agency shall make the findings required to be made by the Massachusetts Industrial Finance Agency board in said chapter 40D, except that in the case of bond anticipation financing no findings shall be required concerning a trust agreement as specified in clauses (d) and (h) of subsection (2) of section 12 of said chapter 40D. The Agency may issue bonds under this subsection (a) to finance the improvement of any building or buildings for mixed commercial and residential use only if the Agency and the governing body of the municipality in which the project is located find, after a public hearing held not less than ten days after publication of notice thereof in a newspaper of general circulation in such municipality, with respect to the portion of the project to be used for housing, that such portion is located in, or is needed to prevent the area in which it is located from becoming, a substandard, decadent or blighted open area, as defined in section 1 of chapter 121A; that the area will not by private enterprise alone and without either governmental subsidy or the exercise of governmental powers be developed or revitalized in such a manner as will prevent, arrest or alleviate the spread of blight or decay; and that such portion of the project is consistent with the sound needs of the municipality as a whole.The Agency shall inform sponsors of projects in appropriate cases of available federal programs to guarantee or otherwise assist in financing certain types of activities and shall assist sponsors in such cases in implementing such programs through commercial and investment bankers. When the Agency receives an inquiry from a potential sponsor of a project for financing under this subsection, it shall promptly notify in writing (i) the industrial development financing authority if such an authority exists in the city or town where such project is proposed to be financed; or (ii) the mayor or board of selectmen in said city or town where no such authority exists. In the case of a city or town having an industrial development financing authority the Agency shall provide such authority with all practicable assistance in completing the said project promptly. If, however, the board of the Agency shall find in the exercise of its reasonable discretion that such local authority has not acted in a timely fashion in processing the application of the project's sponsor or other aspects of the project without reasonable grounds for such delay, the Agency may undertake the financing of the project directly with the sponsor without the intervention of the local authority. At any time a city or town may require the Agency to assume the role of an authority in financing a project under this subsection. If a city or town having an industrial development finance authority has rejected, in a timely fashion, a proposed project for financing by such authority under said chapter 40D, it shall notify the Agency of that rejection, and the Agency shall not undertake that project in the city or town. Notwithstanding any provision of this paragraph to the contrary, the agency may finance projects for institutions without meeting any of the requirements other than those contained in the first 2 sentences of this paragraph.(b) The Agency may lend money to one or more users to finance economic development projects as an alternative to its authority under subsection (a), and as an incident to any such loan the Agency may enter into financing documents and may acquire and hold any duly authorized payment obligations of such users. The Agency may issue its bonds for financing such loans, provided that no bonds issued by the Agency under the authority of this subsection shall be accompanied by a certificate or legal opinion to the effect that interest on the bonds is excludable from gross income of the recipients for federal income tax purposes. No financing shall be provided by the Agency under this subsection for any project for housing if such financing may be provided by the Agency through the intermediacy of another public body pursuant to subsection (c), and no financing shall be made by the Agency for the purposes of this subsection unless the Agency shall first have determined that:(i) the user is a responsible party;(ii) the financing of the project is reasonably expected to stimulate economic growth or stability within the commonwealth and will, as a result, confer a definite benefit on the citizens of the commonwealth, and any private benefit which may be derived from the project will not be so disproportionate as to override the public purpose of stimulating or stabilizing the economy of the commonwealth;(iii) the project will provide employment, or security against loss of employment, having a reasonable relationship to the principal amount of the Agency's loan therefor;(iv) the Agency's bonds and any financing document contain reasonable provisions and comply with the provisions of this chapter;(v) payments to be made under applicable financing documents are adequate to pay the current expenses of the Agency in connection with the project and to make payments on the bonds; and(vi) the sponsor of the project does not do business in Northern Ireland absent compliance with the McBride Principles, so-called.(c) The Agency may lend money to one or more public bodies in order to assist said public bodies in carrying out their corporate purposes and as an incident to any such loan the Agency may acquire and hold the bonds, notes or other duly authorized payment obligations of said public bodies. The Agency may issue bonds for the purpose of financing such lending. In financing documents pertaining to such lending, the Agency may require the public body to pay any fixed annual charges and any fees and expenses charged by the Agency for its services rendered in connection with the acquisition by the Agency of such obligation. Upon the issue to the Agency of any obligations of a public body for purposes of this section, the public body issuing such obligations shall be deemed to have agreed that, in the event of the failure of such public body to pay the interest and premium, if any, on, and principal of, such obligations, and notwithstanding the provisions of any other law, the Agency may thereupon avail itself of all remedies, rights and provisions of law applicable in such circumstances, and no delay or failure to exercise any such rights and remedies on the part of the Agency may be raised as a defense by such public body.No loan shall be made by the Agency for the purposes of this subsection unless the Agency shall have first received assurance satisfactory to the Agency that the payment obligations of the public body to be acquired by the Agency in connection with such loan are valid and binding obligations of the public body enforceable in accordance with their terms; provided, however, that the provisions of this act shall not be construed to expand the power or purpose of any public body except the Agency.(d) The Agency shall provide for issuance of its bonds from time to time by resolution of the board of directors. An issue of bonds of the Agency may combine more than one of the Agency's authorized purposes for borrowing money. Bonds issued by the Agency may be issued as general obligations of the Agency or as special obligations payable solely from particular revenues or funds as may be provided for in any financing document pertaining thereto. Bonds of each issue may be dated, may bear interest at such rate or rates, including rates variable from time to time, may be payable in any domestic or foreign currency and at any domestic or foreign location, and may mature or otherwise be payable at such time or times, as may be provided for by the Agency, and may be made redeemable or determinable before maturity at the option of the Agency or the holder thereof at such price or prices and under such terms and conditions as may be fixed by the Agency. The Agency shall determine the form of bonds, including interest coupons, if any, to be attached thereto, and the manner of execution of such bonds, and shall fix the denomination or denominations of such bonds and the place or places of payment of principal, redemption premium, if any, and interest thereon. In case any officer whose signature or a facsimile of whose signature shall appear on any bonds or coupons shall cease to be such officer before the delivery thereof, such signature or facsimile shall nevertheless be valid and sufficient for all purposes as if such officer had remained in office until delivery. The Agency may provide for authentication of bonds by a trustee, fiscal agent, registrar or transfer agent. Bonds may be issued in bearer or in registered form, or both, and, if notes, may be made payable to bearer or to order, as the Agency may determine, and provision may be made for the registration of any coupon bonds as to principal alone and also as to both principal and interest, for the reconversion into coupon bonds of bonds registered as to both principal and interest and for the interchange of bonds registered as to both principal and interest and for the interchange of registered and coupon bonds. The Agency may also establish and maintain a system of registration for any bonds whereby the name of the registered owners, the rights evidenced by the bonds, the transfer of the bonds and such rights and other similar matters are recorded in books or other records maintained by or on behalf of the Agency, and no instrument evidencing such bond or rights need be delivered to the registered owner by the Agency. A copy of the books or other records of the Agency pertaining to any bond registered under such registration system certified by an authorized officer of the Agency or by the agent of the Agency maintaining such system shall be admissible in any proceeding without further authentication. The board may by resolution delegate to any director or directors or officer or officers of the Agency or any combination thereof the power to determine any of the matters set forth in this section. In the discretion of the Agency, bonds of the Agency may be issued with such terms as will cause the interest thereon to be subject to federal income taxation. The Agency may sell its bonds in the manner, either at public or private sale, for the price, at the rate or rates of interest, or at discount in lieu of interest, as it determines will best effect its corporate purposes. The Agency may issue bonds for any of its authorized purposes without obtaining a certificate of convenience and necessity from the department of commerce and development. Notwithstanding the provisions of subsections (a) and (b), the bonds of any such issue may be issued prior to the making by the Agency of the findings required to be made, provided that the board makes such findings prior to the disbursement of the proceeds of a loan to a user or a public body.(e) Said Agency may issue interim receipts or temporary bonds, with or without coupons, exchangeable for definitive bonds when the bonds shall have been executed and are available for delivery. The Agency may also provide for replacement of any bonds which shall have become mutilated or shall have been destroyed or lost. The Agency, by itself or through such agent as it may select, may purchase and invite offers to tender for purchase any bonds of the Agency at any time outstanding; provided, however, that no such purchase by the Agency shall be made at a price, exclusive of accrued interest, if any, exceeding the principal amount thereof or, if greater, the redemption price of such bonds when next redeemable at the option of the Agency, and may resell any bonds so purchased in such manner and for such price as it may determine will best effect its corporate purposes.(f) Without limiting the powers of the Agency contained elsewhere in this chapter or in chapter 40D, in connection with any such issue of bonds, the Agency may create and establish one or more special funds, hereafter referred to as ''bond reserve funds'', and may establish one or more costs of issuance accounts, and shall pay into each such bond reserve fund or costs of issuance account any proceeds of sale of bonds or letter of credit or insurance policy or other financing document as may be provided in the resolution authorizing the issuance of, or financing document securing, such bonds and any other moneys which may be available to the Agency for the purpose of each such fund or account from any other source or sources. Whenever the Agency issues such bonds to fund reserves or costs of issuance, it may determine whether or not the cost of funding such reserves or costs of issuance, shall be treated as a cost of the project and whether or not a financing document shall be required to provide payments to amortize principal and interest of such bonds. In any event, the expected yield on bond reserve funds may, with the approval of the Agency, be taken into account in determining the sufficiency of payments required under a financing document to amortize bonds issued for costs of the project. All moneys held in any bond reserve fund may be pledged to, and charged with, the payment of the principal of and the interest on the bonds with respect to which such bond reserve fund may be established, as the same shall become due, and the redemption or purchase price of such bonds retired by call or purchase as therein provided. Such pledge shall be valid and binding from the time when the pledge is made. The use and disposition of moneys to the credit of such bond reserve fund shall be subject to the provisions of the resolution authorizing the issuance of, or financing document securing, such bonds. Except as may otherwise be provided in such resolution or such financing document, such bond reserve fund shall be a fund for bonds issued to finance all such projects without any distinction or priority of any bond over another; provided the Agency in any such resolution or financing document may provide that such bond reserve fund shall be the fund for a particular project and for the bonds issued to finance a particular purpose and may, additionally, permit and provide for the issuance of bonds having subordinate lien in respect of the security authorized to other bonds of the Agency and, in such case, the Agency may create separate or other similar funds in respect of such subordinate lien bonds.(g) In the discretion of the board of directors, any bonds issued hereunder may be secured by a financing document in such form and executed in such manner as may be determined by the board of directors between the Agency and the purchasers or holders of such bonds or between the Agency and a corporate trustee which may be any trust company or bank having the powers of a trust company within or without the commonwealth. Such financing document may pledge or assign, in whole or in part, the revenues and funds held or to be received by the Agency, and any contract or other rights to receive the same, whether then existing or thereafter coming into existence and whether then held or thereafter acquired by the Agency, and the proceeds thereof. Such financing document may contain such provisions for protecting and enforcing the rights, security and remedies of bondholders as may be reasonable and proper, including, without limiting the generality of the foregoing, provisions defining defaults and providing for remedies in the event thereof which may include the acceleration of maturities, restrictions on the individual right of action by bondholders and covenants setting forth duties of and limitations on the Agency in conduct of its programs and the management of its property. In addition to other security provided herein or otherwise by law, bonds issued by the Agency may be secured, in whole or in part, by financial guarantees, by insurance or by letters of credit issued to the Agency or a trustee or any other person, by any bank, trust company, insurance or surety company or other financial institution, within or without the commonwealth, and the Agency may pledge or assign, in whole or in part, the revenues and funds held or to be received by the Agency, and any contract or other rights to receive the same, whether then existing or thereafter coming into existence and whether then held or thereafter acquired by the Agency, and the proceeds thereof, as security for such guarantees or insurance or for the reimbursement by the Agency to any issuer of such letter of credit of any payments made under such letter of credit.(h) It shall be lawful for any bank or trust company to act as a depository or trustee of the proceeds of bonds, revenues or other moneys under a resolution, financing document or other agreement of the Agency and to furnish indemnification and to provide security as may be required by the Agency. Any pledge of revenues and other funds made by the Agency under the provisions of this chapter shall be valid and binding and shall be deemed continuously perfected for the purposes of the uniform commercial code and other laws when such pledge is made. The revenues and funds, rights therein and thereto and proceeds so pledged and then held or thereafter acquired or received by the Agency shall immediately be subject to the lien of such pledge without any physical delivery or segregation thereof or further act, and the lien of any such pledge shall be valid and binding against all parties having claims of any kind in tort, contract or otherwise against the Agency, whether or not such parties have notice thereof. The resolution or financing document by which a pledge is created need not be filed or recorded to perfect such pledge except in the records of the Agency and no filing need be made under the uniform commercial code. It is hereby declared that any pledge or assignment made under the authority of this chapter is an exercise of the political and governmental powers of the Agency, and revenues or funds, contract or other rights to receive the same and the proceeds thereof which are subject to the lien of a pledge or assignment created under this chapter shall not be applied to any purposes not permitted by such pledge or assignment.(i) Any holder of a bond issued by the Agency or of any of the coupons appertaining thereto and any trustee or other representative under an applicable financing document pertaining to the same, except to the extent the rights herein given may be restricted by a financing document, may bring suit upon the bonds or coupons and may, either at law or in equity, by suit, action, mandamus, or other proceeding for legal or equitable relief, including proceedings for the appointment of a receiver to take possession and control of the business and properties of the Agency, to fix, revise and collect charges, protect and enforce any and all rights under the laws of the commonwealth or granted hereunder or under a resolution or financing document, and may enforce and compel performance of all duties required by this chapter or by such bond resolution, trust agreement or other agreement, to be performed by the agent or by any officer thereof.(j) Bonds issued by the Agency shall not constitute a debt or a pledge of the faith and credit of the commonwealth, but shall be payable solely from the revenues provided for under a financing document in connection therewith or from reserve funds or other funds of the Agency or from funds derived from the issuing of duly authorized refunding bonds. All bonds issued by the Agency shall suitably state that the bonds are not an obligation of the commonwealth but are payable solely from the funds specifically pledged for their payment.(k) The Agency may issue refunding bonds for the purpose of paying any of its bonds issued under the provisions of this chapter or other applicable law at or prior to maturity or upon acceleration or redemption or purchase and retirement. Refunding bonds may be issued at such times at or prior to the maturity, redemption or purchase and retirement of the refunded bonds as the board deems to be in the interest of the Agency. Refunding bonds may be issued in sufficient amounts to pay or provide for payment of the principal of the bonds being refunded, together with any redemption premium thereon, any interest or discount accrued or to accrue to the date of payment of such bonds, the costs of issuance of the refunding bonds, the expenses of paying, redeeming or purchasing the bonds being refunded, the costs of holding and investing proceeds of refunding bonds pending such payment, redemption or purchase and such reserves for debt service or other capital or current expenses from the proceeds of such refunding bonds as may be required by a bond resolution, financing document or other agreement securing bonds. The issue and sale of refunding bonds issued pursuant to this subsection, the maturities and other details thereof, the security therefor, the rights of the holders thereof, and the rights, duties and obligations of the Agency in respect of the same shall be governed by the provisions of this chapter relating to the issue of bonds other than refunding bonds insofar as the same may be applicable. Notwithstanding any provision of this chapter to the contrary, any indebtedness of the Massachusetts Health and Educational Facilities Authority may be refunded under this subsection (k) if said indebtedness was subject to being refunded under chapter 614 of the acts of 1968.