§ 20 — Proceeds from sale of bonds; restrictions on use; disposition of premiums

Massachusetts § 20

• Jurisdiction: Massachusetts
• Part I: ADMINISTRATION OF THE GOVERNMENT
• Title VII: CITIES, TOWNS AND DISTRICTS
• Ch. 44: MUNICIPAL FINANCE

Text

Section 20. The proceeds of any sale of bonds or notes shall be used only for the purposes specified in the authorization of the loan; provided, however, that such proceeds may also be used for costs of preparing, issuing and marketing the bonds or notes, except as otherwise authorized by this section. If a balance remains after the completion of the project for which the loan was authorized, the balance may at any time be appropriated by a city, town or district for any purposes for which a loan may be incurred for an equal or longer period of time than that for which the original loan, including temporary debt, was issued. Any balance not in excess of $50,000 may be applied, with the approval of the chief executive officer, for the payment of indebtedness. If a loan has been issued for a specified purpose but the project for which the loan was authorized has not been completed and no liability remains outstanding and unpaid on account thereof, a city, by a two-thirds vote of all of the members of the city council, or a town or district, by a two-thirds vote of the voters present and voting thereon at an annual town or district meeting, may vote to abandon or discontinue the project and the unexpended proceeds of the loan may be appropriated for any purpose for which a loan may be authorized for an equal or longer period of time than that for which the original loan, including temporary debt, was issued. Any premium received upon the sale of notes, less the cost of preparing, issuing and marketing the notes, and any accrued interest received upon the delivery of the notes, shall be applied to the first payment of interest on the note. Any premium received upon the sale of bonds, less the cost of preparing, issuing and marketing the bonds, and any accrued interest received upon the delivery of bonds shall be: (i) in the case of bonds sold by a city or town that have been excluded under section 21C of chapter 59, or bonds sold by a regional school district for which 1 or more member cities or towns have so excluded their share of the bond, applied by the treasurer to pay costs of the project being financed by the bonds and to reduce the amount authorized to be borrowed for the project by like amount; or (ii) in the case of any other bonds, applied by the treasurer to pay costs of the project being financed by the bonds and to reduce the amount authorized to be borrowed for the project by like amount; provided, however, that in the case of a bond under clause (ii), if any such premium or accrued interest is not so applied, any such premium or accrued interest shall be appropriated to pay costs of a project for which the city, town or district has authorized a borrowing or may authorize a borrowing. Notwithstanding this section, any premium and accrued interest received on account of an issue of bonds, less the cost of preparing, issuing and marketing the bonds, not in excess of $50,000 may be applied, with the approval of the chief executive officer in a city of town, for the payment of indebtedness. Notwithstanding this section, no appropriation from a loan or balance thereof shall be made that would increase the amount available from borrowed money for any purpose to an amount in excess of any limit imposed by general law or special act for that purpose. Additions to the levy limit for a debt exclusion are restricted to the true interest cost incurred to finance the excluded project.