Mass. Gen. Laws ch. 44, sec. 16 — MA Code / Part I / Title VII / Chapter 44 / Section 16
Issuance of bonds, notes and certificates of indebtedness; procedure; form; contracts with banking or financial institutions
Status: in_force

Section 16. A city, town or district which has authorized a debt to be incurred within the limitations, as to amount and time of payment, prescribed by this chapter may issue therefor bonds or notes, or, in the case of a city, certificates of indebtedness, all of which shall be properly denominated on the face thereof, signed by its treasurer, and, if issued by a city, countersigned by its mayor, unless its charter otherwise provides, or, if issued by a town, by a majority of its selectmen, or, if issued by a district, by a majority of the prudential committee, if any, otherwise by a majority of the commissioners, and by any other officers, boards or commissioners of a city, town or district whose counter-signatures may be required by law, at such rate or rates of interest as may be deemed proper; and such city, town or district may, except as provided in section eighteen, sell such bonds, notes or certificates of indebtedness at not less than ninety-eight per cent of their face amount, at public or private sale, or may use the same in payment of such debts; provided, that if the amount of the annual payment and the period of the loan are not specified by the vote authorizing the debt to be incurred, the officers authorized to issue bonds or notes therefor may issue the same subject to the provisions and limitations of this chapter; provided, further, that unless it is otherwise specified in the vote authorizing the debt, such officers may, subject to said limitations and provisions issue such bonds or notes at one time or from time to time and each such issue shall constitute a separate loan. Any bonds or notes issued under the authority of this chapter, if properly executed by the officers of a city, town or district in office on the date such securities are actually executed, shall be valid and binding according to their terms notwithstanding that before the delivery thereof and payment therefor any or all such officers shall have for any reason ceased to hold office. The auditor or similar officer in cities, the town accountant in towns having such an officer, the treasurer in all other towns, or the prudential committee, if any, otherwise the commissioners in a district, shall, not later than May first of each year, notify the board of assessors in writing of the amount of debt falling due during the next financial year, the sinking fund requirements, if any, and what provision has been made for meeting such requirements; and the board shall make such provision for meeting said debt and sinking fund requirements in the tax levy of that year as in its judgment may be necessary. Notwithstanding any contrary provision of any general or special law, bonds, notes and certificates of indebtedness for different purposes and under different authorizations, whether or not subject to any debt limit, may be consolidated and issued at the same time; and, if they bear on their face the words ''Municipal Purpose Loan of ___'' followed by the year of issue in figures, they need not bear any title otherwise required but shall be conclusively presumed to be properly denominated on their face. The treasurer of the city, town or district shall maintain records showing the portion of each consolidated issue, and of each maturity thereof, allocable to each authorization and subject to any applicable debt limit and shall forward a copy of such records to the director of the bureau of accounts within thirty days of the sale of the bonds, notes or certificates of indebtedness. Each such portion of the issue shall comply with the maturity requirements applicable thereto. Except as otherwise provided by law or by the vote authorizing the debt, the officers authorized to issue bonds or notes of a city, town or district shall determine the form and details of the bonds or notes, and may provide for a system of registration and exchange or transfer of registered bonds or notes. Any bonds or notes issued in exchange for bonds or notes originally issued in registered form shall be signed by the officers authorized to sign the original bonds or notes, and the provisions of section four of chapter one hundred and seven shall not apply to any such exchange. In connection with the issuance by a city, town or district of original or replacement bonds or notes in registered form, the treasurer of the city, town or district, with the approval of the other officer or officers authorized to sign such bonds or notes, is authorized to contract for and engage the services of any banks, trust companies, or other banking or financial institutions within or without the state to perform authentication, registration, transfer, exchange, record and paying agent functions, including without limitation the preparation, signing and issuance of checks in payment of such bonds or notes, the preparation and maintenance of records, reports and accounts and the performance of such related duties as may be necessary or desirable in connection with such bonds or notes. The treasurer, with such approval, may also enter into agreements with banks, trust companies, or other banking or financial institutions to act as custodian or financial intermediary in connection with the establishment and maintenance by others of a central depository system for the transfer of interests in such bonds or notes. Any agreement entered into under this section shall include provisions for indemnifying the city, town or district for losses sustained by it on account of the negligence of a designated bank, trust company, or other banking or financial institution or on account of the failure of such designated bank, trust company, or other banking or financial institution to perform faithfully its duties and obligations under the agreement. Such agreement may include additional provisions necessary or desirable to protect the city, town or district and may provide for the limitation of liabilities of the parties, indemnification or payment of liquidated damages.

Section 16. A city, town or district which has authorized a debt to be incurred within the limitations, as to amount and time of payment, prescribed by this chapter may issue therefor bonds or notes, or, in the case of a city, certificates of indebtedness, all of which shall be properly denominated on the face thereof, signed by its treasurer, and, if issued by a city, countersigned by its mayor, unless its charter otherwise provides, or, if issued by a town, by a majority of its selectmen, or, if issued by a district, by a majority of the prudential committee, if any, otherwise by a majority of the commissioners, and by any other officers, boards or commissioners of a city, town or district whose counter-signatures may be required by law, at such rate or rates of interest as may be deemed proper; and such city, town or district may, except as provided in section eighteen, sell such bonds, notes or certificates of indebtedness at not less than ninety-eight per cent of their face amount, at public or private sale, or may use the same in payment of such debts; provided, that if the amount of the annual payment and the period of the loan are not specified by the vote authorizing the debt to be incurred, the officers authorized to issue bonds or notes therefor may issue the same subject to the provisions and limitations of this chapter; provided, further, that unless it is otherwise specified in the vote authorizing the debt, such officers may, subject to said limitations and provisions issue such bonds or notes at one time or from time to time and each such issue shall constitute a separate loan. Any bonds or notes issued under the authority of this chapter, if properly executed by the officers of a city, town or district in office on the date such securities are actually executed, shall be valid and binding according to their terms notwithstanding that before the delivery thereof and payment therefor any or all such officers shall have for any reason ceased to hold office. The auditor or similar officer in cities, the town accountant in towns having such an officer, the treasurer in all other towns, or the prudential committee, if any, otherwise the commissioners in a district, shall, not later than May first of each year, notify the board of assessors in writing of the amount of debt falling due during the next financial year, the sinking fund requirements, if any, and what provision has been made for meeting such requirements; and the board shall make such provision for meeting said debt and sinking fund requirements in the tax levy of that year as in its judgment may be necessary.

Notwithstanding any contrary provision of any general or special law, bonds, notes and certificates of indebtedness for different purposes and under different authorizations, whether or not subject to any debt limit, may be consolidated and issued at the same time; and, if they bear on their face the words ''Municipal Purpose Loan of ___'' followed by the year of issue in figures, they need not bear any title otherwise required but shall be conclusively presumed to be properly denominated on their face. The treasurer of the city, town or district shall maintain records showing the portion of each consolidated issue, and of each maturity thereof, allocable to each authorization and subject to any applicable debt limit and shall forward a copy of such records to the director of the bureau of accounts within thirty days of the sale of the bonds, notes or certificates of indebtedness. Each such portion of the issue shall comply with the maturity requirements applicable thereto.

Except as otherwise provided by law or by the vote authorizing the debt, the officers authorized to issue bonds or notes of a city, town or district shall determine the form and details of the bonds or notes, and may provide for a system of registration and exchange or transfer of registered bonds or notes. Any bonds or notes issued in exchange for bonds or notes originally issued in registered form shall be signed by the officers authorized to sign the original bonds or notes, and the provisions of section four of chapter one hundred and seven shall not apply to any such exchange.

In connection with the issuance by a city, town or district of original or replacement bonds or notes in registered form, the treasurer of the city, town or district, with the approval of the other officer or officers authorized to sign such bonds or notes, is authorized to contract for and engage the services of any banks, trust companies, or other banking or financial institutions within or without the state to perform authentication, registration, transfer, exchange, record and paying agent functions, including without limitation the preparation, signing and issuance of checks in payment of such bonds or notes, the preparation and maintenance of records, reports and accounts and the performance of such related duties as may be necessary or desirable in connection with such bonds or notes. The treasurer, with such approval, may also enter into agreements with banks, trust companies, or other banking or financial institutions to act as custodian or financial intermediary in connection with the establishment and maintenance by others of a central depository system for the transfer of interests in such bonds or notes. Any agreement entered into under this section shall include provisions for indemnifying the city, town or district for losses sustained by it on account of the negligence of a designated bank, trust company, or other banking or financial institution or on account of the failure of such designated bank, trust company, or other banking or financial institution to perform faithfully its duties and obligations under the agreement. Such agreement may include additional provisions necessary or desirable to protect the city, town or district and may provide for the limitation of liabilities of the parties, indemnification or payment of liquidated damages.