Mass. Gen. Laws ch. 23L, sec. 5 — MA Code / Part I / Title II / Chapter 23L / Section 5
Borrowing money and issuance of bonds to finance improvements
Status: reserved

Section 5. (a) In addition to the powers granted under chapters 23G and 40D, the agency may borrow money and issue and secure its bonds for financing improvements as provided in and subject to this chapter; provided, however, that said chapters 23G and 40D shall apply to bonds issued under this section, except that subsection (b) of section 8 of said chapter 23G and section 12 of said chapter 40D shall not apply to bonds issued under this chapter or the improvements financed thereby; and provided further, that the improvements financed by the agency under this chapter shall constitute a project within the meaning of section 1 of said chapter 23G and section 1 of said chapter 40D, but shall not be considered facilities to be used in a commercial enterprise. With respect to the issuance of bonds or notes for the purposes of this chapter in the event of a conflict between this chapter and chapter 23G, this chapter shall control. Nothing in this chapter shall be construed to limit or otherwise diminish the power of the agency to finance the costs of projects authorized under said chapters 23G and 40D within the development zone or the municipality upon compliance with said chapters 23G and 40D. (b) The agency may provide by resolution of its board of directors for the issuance of bonds or notes of the agency for any of the purposes set forth in this chapter. Bonds issued hereunder shall be special obligations payable solely from particular funds and revenues generated from infrastructure assessments levied under this chapter as provided in the resolution. No bonds or notes shall be issued by the agency under this chapter until the agency's board of directors has determined that the bonds or notes trust agreement and any related financing documents are reasonable and proper and comply with this chapter. The agency may charge a reasonable fee in connection with the review of such documentation by its staff and board of directors. Without limiting the generality of the foregoing, such bonds may be issued to pay or refund notes issued under this chapter, to pay the cost of acquiring, laying, constructing and reconstructing the improvements. The bonds of each issue shall be dated, shall bear interest at the rates, including rates variable from time to time, and shall mature at such times not exceeding 25 years from the dates of the bonds, as determined by the agency, and may be redeemable before maturity, at the option of the agency or the holder thereof, at such price and under such terms and conditions as may be fixed by the agency before the issuance of the bonds. The agency shall determine the form of the bonds and the manner of execution of the bonds and shall fix the denomination of the bonds and the place of payment of principal and interest, which may be at any bank or trust company within or without the commonwealth and such other locations as designated by the agency. In the event an officer whose signature or a facsimile of whose signature shall appear on any bonds shall cease to be an officer before the delivery of the bonds, the signature or facsimile shall be valid and sufficient for all purposes to the same extent as if the officer had remained in office until the delivery. The bonds shall be issued in registered form. The agency may sell the bonds in a manner and for a price, either at public or private sale, as it may determine to be for the best interests of the development zone. Before the preparation of definitive bonds, the agency may, under like restrictions, issue interim receipts or temporary bonds exchangeable for definitive bonds when the bonds have been executed and are available for delivery. The agency may also provide for the replacement of any bonds that shall become mutilated, destroyed or lost. The issuance of the bonds, the maturities, and other details thereof, the rights of the holders thereof, and the agency in respect of the same, shall be governed by this chapter insofar as the same may be applicable. While any bonds or notes of the agency remain outstanding, its powers, duties or existence shall not be diminished or impaired in any way that will affect adversely the interests and rights of the holders of such bonds or notes. Bonds or notes issued under this chapter, unless otherwise authorized by law, shall not be deemed to constitute a debt of the commonwealth or the municipality or a pledge of the faith and credit of the commonwealth or of the municipality, but the bonds or notes shall be payable solely by the agency as special obligations payable from particular funds collected from infrastructure assessments levied under this chapter and any revenues derived from the operation of the improvements. Any bonds or notes issued by the agency under this chapter shall contain on their face a statement to the effect that neither the commonwealth, nor the municipality, shall be obliged to pay the same or the interest thereon, and that the faith and credit or taxing power of the commonwealth, the municipality or the agency is not pledged to the payment of the bonds or notes. All bonds or notes issued under this chapter shall have all the qualities and incidents of negotiable instruments as defined in section 3–104 of chapter 106. Issuance by the agency of bonds or notes for any purpose shall not preclude the agency from issuing other bonds or notes in connection with the same project or any other project; provided, however, that the resolution or trust indenture wherein any subsequent bonds or notes may be issued shall recognize and protect any prior pledge made for any prior issue of bonds or notes unless, in the resolution or trust indenture authorizing such prior issue, the right is reserved to issue subsequent bonds on a parity with such prior issue. (c) In the discretion of the agency, bonds issued under this chapter may be secured by a trust agreement between the agency and the bond owners or a corporate trustee which may be any trust company or bank having the powers of a trust company within or without the commonwealth. A trust agreement may pledge or assign, in whole or in part, the revenues, funds and other assets or property held or to be received by the assessing party or the agency including, without limitation, all monies and investments on deposit from time to time in any fund of the assessing party or the agency or any account thereof 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 assessing party or the agency, and the proceeds thereof. A trust agreement may pledge or assign, in whole or in part, assessments, development zone revenues, funds and other assets or property relating to the development zone held or to be received by the assessing party or the agency. A trust agreement may contain, without limitation, provisions for protecting and enforcing the rights, security and remedies of the bondholders, provisions defining defaults and establishing remedies, which may include acceleration, and may also contain restrictions on the remedies by individual bondholders. A trust agreement may contain covenants of the agency concerning the custody, investment and application of monies, the issue of additional or refunding bonds, the use of any surplus bond proceeds, the establishment of reserves and the regulation of other matters customarily treated in trust agreements. A bank or trust company may act as a depository of any fund of the assessing party or the agency or trustee under a trust agreement if the bank or trust company furnishes such indemnification and reasonable security as the agency may require. Any assignment or pledge of revenues, funds and other assets and property made by the assessing party or the agency shall be valid and binding and shall be deemed continuously perfected for the purposes of chapter 106 and other laws when made. The revenues, funds and other assets and property, rights therein and thereto and proceeds so pledged and then held or thereafter acquired or received by the assessing party or the agency shall immediately be subject to the lien of such pledge without any physical delivery or segregation 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 trust, whether or not such parties have notice thereof. The trust agreement by which a pledge is created shall not be required to be filed or recorded to perfect the pledge except in the records of the agency and no filing shall be required under said chapter 106. Any pledge or assignment made by the agency shall be an exercise of its political and governmental powers, and revenues, funds, assets, property and 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 the pledge or assignment. (d) The agency may issue notes of the agency in anticipation of federal, state or local grants for the cost of acquiring, constructing or improving the development zone's improvements or in anticipation of bonds to be issued under this chapter. Such notes shall be authorized, issued and sold in the same manner as, and shall otherwise be subject to, the other provisions of this chapter. Such notes shall mature at such times as provided by the issuing resolution of the agency and may be renewed from time to time; provided, however, that all such notes and renewals thereof shall mature on or before 20 years from their date of issuance. (e) In addition to other security provided herein, or otherwise provided by law, bonds, notes or obligations issued by the agency under this chapter may be secured, in whole or in part, by a letter of credit, line of credit, bond insurance policy, liquidity facility or other credit facility for the purpose of providing funds for payments in respect of bonds, notes or other obligations required by the holder thereof to be redeemed or repurchased prior to maturity or for providing additional security for such bonds, notes or other obligations. In connection therewith, the agency may enter into reimbursement agreements, remarketing agreements, standby bond purchase agreements and any other necessary or appropriate agreements. The assessing party may pledge or assign any of its revenues as security for the reimbursement by it to the agencies or providers of such letters of credit, lines of credit, bond insurance policies, liquidity facilities or other credit facilities of any payments made under the letters of credit, lines of credit, bond insurance policies, liquidity facilities or other credit facilities. (f) In connection with, or incidental to, the issuance of bonds, notes or other obligations, the agency may enter into such contracts as the agency may determine to be necessary or appropriate relative to the issuance thereof and the interest payable thereon or to place the bonds, notes or other obligations of the agency, as represented by the bonds or notes, or other obligations in whole or in part, on such interest rate or cash flow basis as the agency may determine appropriate including, without limitation, interest rate swap agreements, insurance agreements, forward payment conversion agreements, futures contracts, contracts providing for payments based on levels of, or changes in, interest rates or market indices, contracts to manage interest rate risk including, without limitation, interest rate floors or caps, options, puts, calls and similar arrangements. Such contracts shall contain such payment, security, default, remedy and other terms and conditions as the agency may deem appropriate and shall be entered into with such parties as the agency may select, after giving due consideration, where applicable, for the creditworthiness of any counter party, including any rating by a nationally recognized rating agency, the impact on any rating on outstanding bonds, notes or other obligations or any other criteria the agency may deem appropriate. (g) The agency may use any funds available therefor to purchase its bonds or notes. The agency may hold, pledge, cancel or resell such bonds or notes, subject to and in accordance with agreements with bondholders. The agency may issue refunding bonds for the purpose of paying any of its bonds at maturity or upon acceleration or redemption. Refunding bonds may be issued at such times prior to the maturity or redemption of the refunded bonds as the agency deems to be in the public interest. Refunding bonds may be issued in sufficient amounts to pay or provide for the principal of the bonds being refunded, together with any redemption premium thereon, any interest accrued or to accrue to the date of payment of such bonds, the expense of issuing the refunding bonds, the expense of redeeming bonds being refunded and such reserves for debt service or other capital from the proceeds of such refunding bonds as may be required by a trust agreement or resolution securing the bonds and, if considered advisable by the agency, for the additional purpose of the acquisition, construction or reconstruction and extension or improvement of improvements. All other provisions relating to the issuance of refunding bonds shall be as set forth in this chapter insofar as the same may be applicable. (h) All moneys received under this chapter, whether as proceeds from the issue of bonds or notes or as revenue or otherwise, shall be deemed trust funds to be held and applied solely as provided in this chapter. (i) Bonds or notes issued under this chapter shall be securities in which all public officers and public bodies of the commonwealth and its political subdivisions, all insurance companies, trust companies in their commercial departments and within the limits set by the General Laws, banking associations, investment companies, executors, trustees and other fiduciaries, and all other persons whatsoever who are now or may hereafter be authorized to invest in bonds or other obligations of a similar nature may properly and legally invest funds, including capital in their control and belonging to them and the bonds shall be obligations that may properly and legally be made eligible for the investment of savings deposits and income thereof in the manner provided in section 2 of chapter 167E. The bonds or notes shall be securities that may properly and legally be deposited with and received by any state or municipal officer or any agency or political subdivision of the commonwealth for any purpose for which the deposit of bonds or other obligations of the commonwealth is now or may hereafter be authorized by law. Notwithstanding any general or special law to the contrary or any provision in their respective charters, agreements of associations, articles or organization or trust indentures, domestic corporations organized for the purpose of carrying on business within the commonwealth including, without limitation, any electric or gas company as defined in section 1 of chapter 164, railroad corporation as defined in section 1 of chapter 160, financial institutions, trustees and the municipality may acquire, purchase, hold, sell, assign, transfer or otherwise dispose of any bonds, notes, securities or other evidences of indebtedness of the agency provided that they are rated similarly to other governmental bonds or notes and make contributions to the agency, all without the approval of any regulatory authority of the commonwealth. (j) Any holder of bonds or notes issued under this chapter, and a trustee under a trust agreement, except to the extent its rights may be restricted by the trust agreement, may, either at law or in equity, by suit, action, mandamus or other proceeding, protect and enforce all rights under the laws of the commonwealth or granted hereunder or under the trust agreement and may enforce and compel the performance of all duties required by this chapter or by the trust agreement, to be performed by the agency or by any officer thereof. (k) Notwithstanding this chapter or any recitals in any bonds or notes issued under this chapter, all such bonds or notes shall be deemed to be investment securities under chapter 106. (l) Bonds or notes may be issued under this chapter without obtaining the consent of any department, division, commission, board, bureau or agency of the commonwealth or the municipality, and without any proceedings or the happening of any other conditions or things other than those proceedings, conditions or things that are specifically required by this chapter, and the validity of and security for any bonds or notes issued by the agency shall not be affected by the existence or nonexistence of any such consent or other proceedings, conditions or things.

Section 5. (a) In addition to the powers granted under chapters 23G and 40D, the agency may borrow money and issue and secure its bonds for financing improvements as provided in and subject to this chapter; provided, however, that said chapters 23G and 40D shall apply to bonds issued under this section, except that subsection (b) of section 8 of said chapter 23G and section 12 of said chapter 40D shall not apply to bonds issued under this chapter or the improvements financed thereby; and provided further, that the improvements financed by the agency under this chapter shall constitute a project within the meaning of section 1 of said chapter 23G and section 1 of said chapter 40D, but shall not be considered facilities to be used in a commercial enterprise. With respect to the issuance of bonds or notes for the purposes of this chapter in the event of a conflict between this chapter and chapter 23G, this chapter shall control.

Nothing in this chapter shall be construed to limit or otherwise diminish the power of the agency to finance the costs of projects authorized under said chapters 23G and 40D within the development zone or the municipality upon compliance with said chapters 23G and 40D.

(b) The agency may provide by resolution of its board of directors for the issuance of bonds or notes of the agency for any of the purposes set forth in this chapter. Bonds issued hereunder shall be special obligations payable solely from particular funds and revenues generated from infrastructure assessments levied under this chapter as provided in the resolution. No bonds or notes shall be issued by the agency under this chapter until the agency's board of directors has determined that the bonds or notes trust agreement and any related financing documents are reasonable and proper and comply with this chapter. The agency may charge a reasonable fee in connection with the review of such documentation by its staff and board of directors. Without limiting the generality of the foregoing, such bonds may be issued to pay or refund notes issued under this chapter, to pay the cost of acquiring, laying, constructing and reconstructing the improvements. The bonds of each issue shall be dated, shall bear interest at the rates, including rates variable from time to time, and shall mature at such times not exceeding 25 years from the dates of the bonds, as determined by the agency, and may be redeemable before maturity, at the option of the agency or the holder thereof, at such price and under such terms and conditions as may be fixed by the agency before the issuance of the bonds. The agency shall determine the form of the bonds and the manner of execution of the bonds and shall fix the denomination of the bonds and the place of payment of principal and interest, which may be at any bank or trust company within or without the commonwealth and such other locations as designated by the agency. In the event an officer whose signature or a facsimile of whose signature shall appear on any bonds shall cease to be an officer before the delivery of the bonds, the signature or facsimile shall be valid and sufficient for all purposes to the same extent as if the officer had remained in office until the delivery. The bonds shall be issued in registered form. The agency may sell the bonds in a manner and for a price, either at public or private sale, as it may determine to be for the best interests of the development zone.

Before the preparation of definitive bonds, the agency may, under like restrictions, issue interim receipts or temporary bonds exchangeable for definitive bonds when the bonds have been executed and are available for delivery. The agency may also provide for the replacement of any bonds that shall become mutilated, destroyed or lost. The issuance of the bonds, the maturities, and other details thereof, the rights of the holders thereof, and the agency in respect of the same, shall be governed by this chapter insofar as the same may be applicable.

While any bonds or notes of the agency remain outstanding, its powers, duties or existence shall not be diminished or impaired in any way that will affect adversely the interests and rights of the holders of such bonds or notes. Bonds or notes issued under this chapter, unless otherwise authorized by law, shall not be deemed to constitute a debt of the commonwealth or the municipality or a pledge of the faith and credit of the commonwealth or of the municipality, but the bonds or notes shall be payable solely by the agency as special obligations payable from particular funds collected from infrastructure assessments levied under this chapter and any revenues derived from the operation of the improvements. Any bonds or notes issued by the agency under this chapter shall contain on their face a statement to the effect that neither the commonwealth, nor the municipality, shall be obliged to pay the same or the interest thereon, and that the faith and credit or taxing power of the commonwealth, the municipality or the agency is not pledged to the payment of the bonds or notes. All bonds or notes issued under this chapter shall have all the qualities and incidents of negotiable instruments as defined in section 3–104 of chapter 106.

Issuance by the agency of bonds or notes for any purpose shall not preclude the agency from issuing other bonds or notes in connection with the same project or any other project; provided, however, that the resolution or trust indenture wherein any subsequent bonds or notes may be issued shall recognize and protect any prior pledge made for any prior issue of bonds or notes unless, in the resolution or trust indenture authorizing such prior issue, the right is reserved to issue subsequent bonds on a parity with such prior issue.

(c) In the discretion of the agency, bonds issued under this chapter may be secured by a trust agreement between the agency and the bond owners or a corporate trustee which may be any trust company or bank having the powers of a trust company within or without the commonwealth. A trust agreement may pledge or assign, in whole or in part, the revenues, funds and other assets or property held or to be received by the assessing party or the agency including, without limitation, all monies and investments on deposit from time to time in any fund of the assessing party or the agency or any account thereof 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 assessing party or the agency, and the proceeds thereof. A trust agreement may pledge or assign, in whole or in part, assessments, development zone revenues, funds and other assets or property relating to the development zone held or to be received by the assessing party or the agency. A trust agreement may contain, without limitation, provisions for protecting and enforcing the rights, security and remedies of the bondholders, provisions defining defaults and establishing remedies, which may include acceleration, and may also contain restrictions on the remedies by individual bondholders. A trust agreement may contain covenants of the agency concerning the custody, investment and application of monies, the issue of additional or refunding bonds, the use of any surplus bond proceeds, the establishment of reserves and the regulation of other matters customarily treated in trust agreements. A bank or trust company may act as a depository of any fund of the assessing party or the agency or trustee under a trust agreement if the bank or trust company furnishes such indemnification and reasonable security as the agency may require. Any assignment or pledge of revenues, funds and other assets and property made by the assessing party or the agency shall be valid and binding and shall be deemed continuously perfected for the purposes of chapter 106 and other laws when made. The revenues, funds and other assets and property, rights therein and thereto and proceeds so pledged and then held or thereafter acquired or received by the assessing party or the agency shall immediately be subject to the lien of such pledge without any physical delivery or segregation 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 trust, whether or not such parties have notice thereof. The trust agreement by which a pledge is created shall not be required to be filed or recorded to perfect the pledge except in the records of the agency and no filing shall be required under said chapter 106. Any pledge or assignment made by the agency shall be an exercise of its political and governmental powers, and revenues, funds, assets, property and 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 the pledge or assignment.

(d) The agency may issue notes of the agency in anticipation of federal, state or local grants for the cost of acquiring, constructing or improving the development zone's improvements or in anticipation of bonds to be issued under this chapter. Such notes shall be authorized, issued and sold in the same manner as, and shall otherwise be subject to, the other provisions of this chapter. Such notes shall mature at such times as provided by the issuing resolution of the agency and may be renewed from time to time; provided, however, that all such notes and renewals thereof shall mature on or before 20 years from their date of issuance.

(e) In addition to other security provided herein, or otherwise provided by law, bonds, notes or obligations issued by the agency under this chapter may be secured, in whole or in part, by a letter of credit, line of credit, bond insurance policy, liquidity facility or other credit facility for the purpose of providing funds for payments in respect of bonds, notes or other obligations required by the holder thereof to be redeemed or repurchased prior to maturity or for providing additional security for such bonds, notes or other obligations. In connection therewith, the agency may enter into reimbursement agreements, remarketing agreements, standby bond purchase agreements and any other necessary or appropriate agreements. The assessing party may pledge or assign any of its revenues as security for the reimbursement by it to the agencies or providers of such letters of credit, lines of credit, bond insurance policies, liquidity facilities or other credit facilities of any payments made under the letters of credit, lines of credit, bond insurance policies, liquidity facilities or other credit facilities.

(f) In connection with, or incidental to, the issuance of bonds, notes or other obligations, the agency may enter into such contracts as the agency may determine to be necessary or appropriate relative to the issuance thereof and the interest payable thereon or to place the bonds, notes or other obligations of the agency, as represented by the bonds or notes, or other obligations in whole or in part, on such interest rate or cash flow basis as the agency may determine appropriate including, without limitation, interest rate swap agreements, insurance agreements, forward payment conversion agreements, futures contracts, contracts providing for payments based on levels of, or changes in, interest rates or market indices, contracts to manage interest rate risk including, without limitation, interest rate floors or caps, options, puts, calls and similar arrangements. Such contracts shall contain such payment, security, default, remedy and other terms and conditions as the agency may deem appropriate and shall be entered into with such parties as the agency may select, after giving due consideration, where applicable, for the creditworthiness of any counter party, including any rating by a nationally recognized rating agency, the impact on any rating on outstanding bonds, notes or other obligations or any other criteria the agency may deem appropriate.

(g) The agency may use any funds available therefor to purchase its bonds or notes. The agency may hold, pledge, cancel or resell such bonds or notes, subject to and in accordance with agreements with bondholders. The agency may issue refunding bonds for the purpose of paying any of its bonds at maturity or upon acceleration or redemption. Refunding bonds may be issued at such times prior to the maturity or redemption of the refunded bonds as the agency deems to be in the public interest. Refunding bonds may be issued in sufficient amounts to pay or provide for the principal of the bonds being refunded, together with any redemption premium thereon, any interest accrued or to accrue to the date of payment of such bonds, the expense of issuing the refunding bonds, the expense of redeeming bonds being refunded and such reserves for debt service or other capital from the proceeds of such refunding bonds as may be required by a trust agreement or resolution securing the bonds and, if considered advisable by the agency, for the additional purpose of the acquisition, construction or reconstruction and extension or improvement of improvements. All other provisions relating to the issuance of refunding bonds shall be as set forth in this chapter insofar as the same may be applicable.

(h) All moneys received under this chapter, whether as proceeds from the issue of bonds or notes or as revenue or otherwise, shall be deemed trust funds to be held and applied solely as provided in this chapter.

(i) Bonds or notes issued under this chapter shall be securities in which all public officers and public bodies of the commonwealth and its political subdivisions, all insurance companies, trust companies in their commercial departments and within the limits set by the General Laws, banking associations, investment companies, executors, trustees and other fiduciaries, and all other persons whatsoever who are now or may hereafter be authorized to invest in bonds or other obligations of a similar nature may properly and legally invest funds, including capital in their control and belonging to them and the bonds shall be obligations that may properly and legally be made eligible for the investment of savings deposits and income thereof in the manner provided in section 2 of chapter 167E. The bonds or notes shall be securities that may properly and legally be deposited with and received by any state or municipal officer or any agency or political subdivision of the commonwealth for any purpose for which the deposit of bonds or other obligations of the commonwealth is now or may hereafter be authorized by law.

Notwithstanding any general or special law to the contrary or any provision in their respective charters, agreements of associations, articles or organization or trust indentures, domestic corporations organized for the purpose of carrying on business within the commonwealth including, without limitation, any electric or gas company as defined in section 1 of chapter 164, railroad corporation as defined in section 1 of chapter 160, financial institutions, trustees and the municipality may acquire, purchase, hold, sell, assign, transfer or otherwise dispose of any bonds, notes, securities or other evidences of indebtedness of the agency provided that they are rated similarly to other governmental bonds or notes and make contributions to the agency, all without the approval of any regulatory authority of the commonwealth.

(j) Any holder of bonds or notes issued under this chapter, and a trustee under a trust agreement, except to the extent its rights may be restricted by the trust agreement, may, either at law or in equity, by suit, action, mandamus or other proceeding, protect and enforce all rights under the laws of the commonwealth or granted hereunder or under the trust agreement and may enforce and compel the performance of all duties required by this chapter or by the trust agreement, to be performed by the agency or by any officer thereof.

(k) Notwithstanding this chapter or any recitals in any bonds or notes issued under this chapter, all such bonds or notes shall be deemed to be investment securities under chapter 106.

(l) Bonds or notes may be issued under this chapter without obtaining the consent of any department, division, commission, board, bureau or agency of the commonwealth or the municipality, and without any proceedings or the happening of any other conditions or things other than those proceedings, conditions or things that are specifically required by this chapter, and the validity of and security for any bonds or notes issued by the agency shall not be affected by the existence or nonexistence of any such consent or other proceedings, conditions or things.