QUALIFIED BOND ACT

M.G.L. pt. Part I, tit. Title VII, ch. c. 44A

in effect

M.G.L. c. 44A, § 1 Definitions

c. 44A, § 1. Definitions Section 1. For the purposes of this chapter, unless the context otherwise requires, the following words shall have the following meanings:— ''Commissioner'', the commissioner of revenue. ''Debt service'', payments of principal and interest upon qualified bonds issued pursuant to this chapter. ''Director'', the director of the bureau of accounts. ''Distributable aid'', distributions to the several cities, towns, and regional school districts under the provisions of section eighteen A and eighteen C of chapter fifty-eight. ''Municipal finance oversight board'' or ''Board'' shall mean a board composed of the attorney general, the state treasurer, the state auditor, and the director of accounts in the department of revenue, or their designees. ''Qualified bonds'', those bonds of a city, town or regional school district authorized and issued in accordance with the Qualified Bond Act. ''Qualified Bond Act'', chapter forty-four A of the General Laws.

M.G.L. c. 44A, § 2 Application to qualify bonds; investigation; costs

c. 44A, § 2. Application to qualify bonds; investigation; costs Section 2. Whenever a city, town or regional school district votes, in accordance with law, to incur debt and to issue bonds for any purpose or purposes for which it is authorized by law to borrow, the treasurer of the city, town or regional school district, with the approval of the city council and city manager, if any, or otherwise the mayor in a city, the board of selectmen in a town, or the regional district school committee, as the case may be, may file an application and certified copy of the vote as passed with the board to qualify the bonds pursuant to the provisions of this chapter. Upon receipt of the application, the board shall cause an investigation to be made, taking into consideration the need for the improvements to be financed from the proceeds of the proposed qualified bonds, the ability of the city, town or regional school district and all other entities which include all or any part of its territory to provide other essential public improvements and services and to pay when due the principal and interest on its debts, the reasonableness of the amounts to be expended for each of the purposes or improvements to be financed, the amount of state local aid payments likely to be made to the city, town or regional school district with the payments to be made on the proposed bonds, and such other factors as the board may deem necessary or advisable. The cost of the investigation shall be assessed against the city, town or regional school district and may be paid from the proceeds of the qualified bonds or of any temporary notes in anticipation of the sale of the bonds. The costs assessed shall in no case be less than two hundred and fifty dollars.

M.G.L. c. 44A, § 3 Resolution of board to authorize qualified bonds; release

c. 44A, § 3. Resolution of board to authorize qualified bonds; release Section 3. If the investigation determines to the satisfaction of the board that such city, town or regional school district should be entitled to issue qualified bonds, the board may by resolution authorize such city, town or regional school district to issue such qualified bonds. In considering any vote submitted to it and before certifying its approval thereof and authorization of qualified bonds, the board may require, in writing, the city council, town meeting or regional district school committee to adopt resolutions restricting or limiting any future proceedings with respect to the authorization of bonds or other matters deemed by the board to affect any estimate made or to be made by it as a result of the investigation made in accordance with section two. Every resolution so adopted shall constitute a valid and binding obligation of the city, town or regional school district running to and enforceable by the board; provided, however, that upon application of the city, town or regional school district, the board may, after investigation thereof, release the city, town or regional school district from any restrictions or limitations contained in the resolution, if it finds that such release is in the best interests of the city, town or regional school district and will not impair the security of the qualified bonds.

M.G.L. c. 44A, § 4 Authorization to issue bonds; time for adoption of resolution

c. 44A, § 4. Authorization to issue bonds; time for adoption of resolution Section 4. Within sixty days after the submission to it of an application under section two, the board shall authorize the issuance of qualified bonds, if it is satisfied that the issuance of qualified bonds is appropriate. The authorization shall be recorded in a resolution adopted by the board. If the board is not satisfied, it shall so indicate by the adoption within said sixty day period of a resolution stating its disapproval of the request. Failure to adopt an authorizing resolution within this sixty day period shall be a denial of the application.

M.G.L. c. 44A, § 5 Recital of issuance pursuant to this act; maturity date

c. 44A, § 5. Recital of issuance pursuant to this act; maturity date Section 5. All qualified bonds when issued shall contain a recital to the effect that they are issued pursuant to the Qualified Bond Act and are entitled to the benefits of the provisions of this chapter. The final maturity of such qualified bonds shall occur not less than ten nor more than thirty years from the date of issuance without regard to any limitation as to maturities or amounts of annual installments for bonds provided in any other law.

M.G.L. c. 44A, § 6 Temporary notes

c. 44A, § 6. Temporary notes Section 6. Any city, town or regional school district which has been authorized by the board to issue qualified bonds may issue temporary notes in anticipation of the issuance of the qualified bonds to the extent permitted by sections seventeen and seventeen A of chapter forty-four; provided, however, that such notes shall be subject to such additional terms or conditions as may be fixed or required by the board to ensure that funds are borrowed only as needed to meet required payments for construction, development, extension, improvement, or acquisition of the facilities or improvements to be financed by the issuance of the qualified bonds.

M.G.L. c. 44A, § 7 Certification to state treasurer; payment of debt service; costs assessed

c. 44A, § 7. Certification to state treasurer; payment of debt service; costs assessed Section 7. The treasurer of each city, town or regional school district which issues qualified bonds shall certify to the state treasurer the maturity schedule, interest rate, and dates of payment of debt service on the qualified bonds within ten days after the date of issuance of the qualified bonds. The state treasurer or the paying agents approved by him shall become the paying agents for the principal and interest on such qualified bonds. The state treasurer shall pay such debt service and after payment shall withhold from the distributable aid payable to the city, town or regional school district an amount which will be sufficient to pay the debt service on the qualified bonds or, if the amount of such distributable aid in any year is insufficient for this purpose, from any other amounts payable by the commonwealth to such city, town or regional school district under any provision of law. From the time withheld by the state treasurer, all such distributable aid or other amounts so withheld and paid shall be exempt from being levied upon, taken, sequestered, or applied toward paying the debts of the city, town or regional school district other than for payment of debt service on such qualified bonds. All costs accruing to the commonwealth as the result of such qualified bond issues, including administrative costs as well as loss of interest income, shall be the liability of the city, town or regional school district and shall be assessed in accordance with section twenty of chapter fifty-eight.

M.G.L. c. 44A, § 8 Covenant by commonwealth

c. 44A, § 8. Covenant by commonwealth Section 8. The commonwealth hereby covenants with the purchasers, holders and owners, from time to time, of qualified bonds that it will not repeal, revoke, rescind, modify, or amend the provisions of section seven so as to create any lien or charge on or pledge, assignment, diversion, withholding of payment, or other use of or deduction from any distributable aid or other amounts to be paid to any holder of qualified bonds which is prior in time or superior in right to the payment required by said section; provided, however, that nothing herein contained shall be deemed or construed to require the commonwealth to continue to make payments of distributable aid or other amounts or to limit or prohibit the commonwealth from repealing or amending any law heretofore or hereafter enacted for the payment or apportionment of such aid or other amounts, of the manner, time, or amount thereof.

M.G.L. c. 44A, § 9 Certification conclusive as to amount payable; estoppel

c. 44A, § 9. Certification conclusive as to amount payable; estoppel Section 9. The certification to the state treasurer as to the amount payable in any year for debt service on such qualified bonds shall be fully conclusive as to such qualified bonds from and after the time of issuance of such qualified bonds, notwithstanding any irregularity, omission, or failure as to compliance with any of the provisions of this chapter with respect to such qualified bonds; provided, however, that such qualified bonds contain a recital to the effect that they are entitled to the benefits of the provisions of the Qualified Bond Act. All persons shall be forever estopped from denying that such qualified bonds are entitled to the benefits of the provisions of this chapter.

M.G.L. c. 44A, § 10 Obligation to appropriate or levy taxes to pay bonds when due; rules and regulations

c. 44A, § 10. Obligation to appropriate or levy taxes to pay bonds when due; rules and regulations Section 10. Nothing in this chapter shall be construed to relieve any city or town of the obligation imposed on it by law to appropriate and to include in its annual tax levy amounts necessary to pay, in each year, the principal and interest maturing and becoming due on any qualified bonds issued by such city, town or regional school district; provided, however, that to the extent of the amounts of distributable aid or other amounts payable to such city, town or regional school district which have been withheld and have been or are to be forwarded to the paying agent for such qualified bonds, the state treasurer shall certify to the city auditor or town accountant, or officer having similar duties in a city or town, or to the treasurer of the regional school district, as the case may be, the amounts so withheld and thereafter such amounts shall be credited to the appropriations of the city, town or regional school district for the current fiscal year; and provided, further, that to the extent to which distributable aid is not appropriated by the commonwealth in any fiscal year, such appropriated amounts of the city, town or regional school district shall be used to pay the debt service maturing and becoming due in such year on such qualified bonds of the city, town or regional school district; and provided, further, that amounts of distributable aid and other amounts withheld and paid to a paying agent under section seven shall be included in the estimated receipts certified by the commissioner under section twenty-five A of chapter fifty-eight and used by the assessors in determining the tax rate in accordance with section twenty-three of chapter fifty-nine. The commissioner may promulgate rules and regulations which, in his judgment, ensure that the use and effect of qualified bonds is properly and adequately reported to the public.

M.G.L. c. 44A, § 11 Bonds for construction, etc. of property

c. 44A, § 11. Bonds for construction, etc. of property Section 11. The provisions of this chapter shall not be construed to prohibit any city, town or regional school district from applying for authorization to issue qualified bonds pursuant to the terms of this chapter in connection with the construction, reconstruction, development, extension, or improvement of property, notwithstanding that the construction, reconstruction, development, extension, improvement or acquisition was authorized, approved or commenced prior to the effective date of this chapter.

M.G.L. c. 44A, § 11A Covenants contained in proceedings authorizing issuance of bonds

c. 44A, § 11A. Covenants contained in proceedings authorizing issuance of bonds Section 11A. The proceedings of the city or town authorizing the issuance of qualified bonds may contain such covenants and provisions for protecting and enforcing the rights and remedies of the bondholders as may be reasonable and proper and not in violation of law, including covenants restricting the issuance of additional qualified bonds.

M.G.L. c. 44A, § 12 Commonwealth not to act as pledge or surety

c. 44A, § 12. Commonwealth not to act as pledge or surety Section 12. Nothing in this chapter shall be construed to pledge the credit and assets of the commonwealth to the support of bonds issued pursuant to this chapter or to guarantee payment or stand as surety for the payment of bonds pursuant to this chapter.

Source: Massachusetts General Court (malegislature.gov)URL: https://malegislature.gov/Laws/GeneralLaws/PartI/TitleVII/Chapter44AFetched: 10/20/2026