[ Text of section effective until January 1, 2013. For text effective January 1, 2013, see below.]

  Section 98. (a) As used in this section, "state entities'' shall mean the commonwealth, any quasi public entities, independent authorities or other state entities with responsibility for managing and overseeing public funds.

  (b) The board shall promote transparency, public accountability and adherence to best practices by all state entities with respect to investments, borrowing or other financial transactions made or entered into by state entities and involving public funds. The board shall make an annual written report to the secretary of administration and finance, the state treasurer, the state auditor, the house and senate committees on ways and means and the senate and house committees on bonding, capital expenditures and state assets with respect to its findings regarding investments, borrowing and other financial transactions carried out by state entities and its activities to promote transparency, public accountability and best practices with respect thereto.

  The board shall conduct a review, prior to the execution thereof, of any transaction relating to derivative financial products, proposed to be entered into by any state entities. All state entities shall submit to the board the terms of the proposed transaction and any supporting documents. The board shall complete its review of the proposed transaction and notify the submitting entity of its conclusions within a reasonable period of time after receiving the proposal. As used herein, the term "derivative financial products'' shall mean financial instruments with values derived from or based upon the value of other assets or on the level of an interest rate index including, but not limited to, a call option on a bond, interest rate swaptions, caps, floors, collars, inverse floaters and auction rate securities; provided, however, that the term "derivative financial products'' shall not include fixed-rate, long-term borrowing.

  (c) In order to carry out its duty, the board may:

  (1) adopt regulations or guidelines requiring state entities to report, adopt appropriate policies and adhere to best practices with respect to investments, borrowing and other financial transactions;

  (2) make recommendations to state entities or state officers and propose legislative changes to improve the management of public funds;

  (3) employ staff and engage professionals to review and advise it on financial transactions entered into by state entities; and

  (4) conduct oversight hearings with respect to investment, borrowing and other financial transactions made or entered into by state entities.

Chapter 6: Section 98. Duties of state finance and governance board

[ Text of section as amended by 2012, 165, Sec. 17 effective January 1, 2013. See 2012, 165, Sec. 137. For text effective until January 1, 2013, see above.]

  Section 98. (a) The board shall promote transparency, public accountability and adherence to best practices by all state entities with respect to proper governance of state entities and investments, borrowing or other financial transactions made or entered into by state entities and involving public funds, including tax supported debt. The board shall make an annual written report to the secretary, the state treasurer, the state auditor, the house and senate committees on ways and means and the senate and house committees on bonding, capital expenditures and state assets with respect to its findings regarding investments, borrowing and other financial transactions carried out by state entities and its activities to promote proper governance, transparency, public accountability and best practices. If the board so requests, the secretary shall provide the board with copies of reports and other information about the accountability and transparency of state authorities, provided to the secretary under section 29K of chapter 29.

  (b) The board shall conduct a review, before its execution, of any transaction relating to derivative financial products, proposed to be entered into by a state entity. All state entities shall submit to the board the terms of the proposed transaction and any supporting documents. The board shall complete its review of the proposed transaction and notify the submitting entity of its conclusions within a reasonable period of time after receiving the proposal.

  (c) In order to carry out its duties, the board may:

[ Clause (1) of subsection (c) as amended by 2012, 165, Sec. 17 does not take effect. For text effective January 1, 2013, see below.]

  (1) adopt regulations or guidelines requiring state entities to report, adopt appropriate policies and adhere to best practices with respect to governance, investments, borrowing and other financial transactions;

[ Clause (1) of subsection (c) as amended by 2012, 165, Sec. 17 and 2012, 239, Sec. 3 effective January 1, 2013. See 2012, 165, Sec. 137 and 2012, 239, Sec. 60. For text effective until January 1, 2013, see above.]

  (1) adopt regulations or guidelines requiring state entities to report, adopt appropriate policies and adhere to best practices with respect to governance, investments, borrowing and other financial transactions, but any such regulations or guidelines shall not apply to the commonwealth;

  (2) make recommendations to state entities or state officers and propose legislative changes to improve governance practices or the management of public funds;

  (3) conduct oversight hearings with respect to governance practices, investment, borrowing and other financial transactions made or entered into by state entities; and

  (4) conduct meetings, conferences, or training sessions, maintain a website, publish materials or other activities to disseminate best practices to state officials, board members and managers of state entities and the public.