Bill H.4300

HOUSE DOCKET, NO. 4740 FILED ON: 4/28/2016

HOUSE . . . . . . . . . . . . . . . No. 4300

By Mr. Bradley of Hingham, a petition (subject to Joint Rule 12) of Garrett J. Bradley that the Plymouth County Contributory Retirement System be authorized to issue pension funding bonds or notes. Municipalities and Regional Government.

The Commonwealth of Massachusetts

_______________

In the One Hundred and Eighty-Ninth General Court
(2015-2016)

_______________

An Act authorizing the Plymouth County Contributory Retirement System to issue pension funding bonds or notes.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:

SECTION 1. As used in this act, the following words shall, unless the context clearly requires otherwise, have the following meanings: -

“Chairman”, chairman of the Plymouth county retirement board.

“ Secretary”, secretary of administration and finance

“Plymouth county contributory retirement system” or “retirement system”, the contributory retirement system established by Plymouth county pursuant to chapter 32 of the General Laws.

“Plymouth county retirement board” or “board”, the 5 member retirement board managing the Plymouth county contributory retirement system.

SECTION 2. The Plymouth county contributory retirement system may issue bonds or notes from time to time for the purpose of funding all or a portion of the unfunded pension liability of the retirement system. The bonds or notes shall be signed by the chairman and countersigned by the manual or facsimile signature of a majority of the members of the Plymouth county retirement board. Bonds or notes issued pursuant to this act shall be outside any limit of indebtedness other than as set forth in this act, and shall be issued for terms not in excess of 20 years from their date of issue. The aggregate amount of bonds or notes that may be issued by the retirement system pursuant to this act shall not exceed the amount that the board, with the approval of the Plymouth county retirement advisory board, shall determine to be necessary to be issued to fund the unfunded pension liability of the retirement system as of a particular date and to provide for issuance costs, interest on the bonds or notes, a reserve fund to secure the bonds, if any, and other expenses necessary or incidental thereto. A determination by the board of the unfunded pension liability shall be based upon the report of a nationally recognized independent consulting firm, which shall be acceptable to the public employee retirement administration commission, and which may be the consulting actuary generally retained by the board on behalf of the retirement system.

SECTION 3. The maturities of bonds or notes issued pursuant to this act shall be arranged as determined by the chairman, with the approval of a majority of the members of the board. The bonds or notes may be sold at public or private sale, on terms approved by the chairman, with approval of a majority of the members of the board. The bonds or notes may be sold at a premium or discount and shall bear such rate or rates of interest as may be fixed by the chairman, with the approval of a majority of the members of the board. The bonds or notes may, in the discretion of the chairman, with the approval of a majority of the members of the board, be subject to prepayment at the option of the holder thereof at such times and prices and under such circumstances as the chairman with the approval of a majority of the members of the board, shall specify.

Bond or notes issued pursuant to this act may be secured in whole or in part by insurance or by letters or lines of credit or other credit facilities upon approval of the chairman, with approval of a majority of the members of the board. Any such insurance, letter or line of credit or credit facility may provide for reimbursement to be made over a period of time, not to exceed 2 years beyond the maturity date of the bonds or notes so secured, as the chairman, with the approval of a majority of the members of the board, shall deem proper, including rates variable from time to time as determined by an index, banker’s loan rate or other method as may be specified therein. For the purpose of securing the bonds or notes, the Plymouth county contributory retirement system, acting by the chairman, with the approval of a majority of the members of the board, may enter into a trust agreement between the retirement system and a corporate trustee, which shall be a bank or trust company doing business in the commonwealth.

Any trust agreement, and any remarketing or other agreements necessary or incidental to the issuance of the bonds or notes, shall be in a form as may be deemed proper by the chairman, with the approval of a majority of the members of the board, and shall be executed by the chairman.

It shall be lawful for any bank or trust company doing business in the commonwealth to act as a depository or trustee under a trust agreement and to furnish indemnification and pledge securities as may be required by the retirement system. Any trustee under a trust agreement established pursuant to this section may bring suit upon the bonds or notes and may, either at law or equity, by suit, action, mandamus or other proceedings for legal or equitable relief, 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 under the trust agreement to be performed by the retirement system or by any unit thereof.

All expenses incurred in carrying out the provisions of this act may be treated by the retirement system as a cost of issuance.

SECTION 4. Proceeds of any bonds or notes issued pursuant to this act, other than amounts to be applied for the issuance costs or other expenses, to fund a reserve fund, if needed, or to pay interest on the bonds or notes, shall be paid to the retirement system and shall be allocated solely to reduce the unfunded pension liability to which the bonds or notes relate. Proceeds of any bonds or notes pursuant to this act shall be invested in any investments which are permitted pursuant to chapter 32 of the General Laws, and shall otherwise be held and expended by the retirement system in accordance with the law.

SECTION 5. Before the issue of any bonds or notes pursuant to this act, the chairman and the executive director of the Plymouth county contributory retirement system shall submit to the members of the board and secretary a plan showing the amount of the bonds and notes to be issued, the amount of the unfunded pension liability to be funded with the proceeds of the bonds and notes, the proposed maturity schedule of the bonds and notes, the proposed allocation of, if any, and plan to finance the principal of and interest on the bonds and notes, the present value savings reasonably expected to be achieved as a result of the issue of the bonds or notes, and any other information requested by the members of the board or secretary relating to the bonds and notes and no bonds or notes shall be issued hereunder until a majority of the members of the board and the secretary have approved the plan and specifically approved the maturity schedule of the bonds or notes.

SECTION 6. Each of Plymouth county and the other governmental units that are members of the Plymouth county contributory retirement system shall annually dedicate revenue received by the governmental units in the course of its respective operations for the purposes of meeting its allocable share of the debt obligations payable upon issuance of the bonds or notes as determined in accordance with this section. Each governmental unit shall be responsible for such proportion of the annual debt service expense payable by the retirement system for bonds or notes issued hereunder as is equal to the proportion of the total unfunded pension liability to be funded with the proceeds of the bonds or notes that relates to that governmental unit, including Plymouth county. The retirement system shall have the legal rights and authority to collect any amount so assessed to any governmental unit. Notwithstanding any general or special law to the contrary, the public employee retirement administration commission shall increase the annual amount to be certified pursuant to section 22 of chapter 32 of the General Laws as the amount necessary to be paid by each governmental unit’s proportionate share of the annual debt service expense as determined herein.

SECTION 7. A governmental unit of the Plymouth county contributory retirement system shall have 60 days from the effective date of this act to affirmatively opt out of the bond issuance, but shall remain liable for any debts it owes to the retirement system. To affirmatively opt out of this bond issuance the authorized agent of the governmental unit shall confirm in writing to the board that it shall not participate in the pension funding bond program and that it acknowledges that it remains liable for any and all of the governmental unit’s debts.

SECTION 8. Notwithstanding chapter 70 of the General Laws or any other general or special law to the contrary, the portion of the annual debt service paid by the Plymouth county contributory retirement system for bonds or notes issued pursuant to this act applicable to school department personnel who are members of the retirement system shall be included in the computation of net school spending for the purposes of said chapter 70 or any other law.

SECTION 9. This act shall take effect upon its passage.

Name:	District/Address:	Date Added:
Garrett J. Bradley	3rd Plymouth	4/28/2016