The General Laws are hereby amended by inserting after Chapter 40X the following chapter:-

Chapter 40Y: BANK OF MASSACHUSETTS

Section 1. For the purposes of this chapter the following words and terms shall, except where the context clearly indicates otherwise, have the following meanings: 

“Board”, the Board of Directors of the Bank of Massachusetts.

“Capital Participation Instruments”, purchase of stock, both common and preferred, convertible securities, warrants, subscriptions, options to acquire, capital loans, and working capital or inventory loans, royalties, and other lawful derivations of the foregoing. 

“Public Bank” or “Bank” or “Bank of Massachusetts”, a state-chartered financial institution able to make loans and float bond issues to protect and expand the quality of life and economic prosperity of all Massachusetts residents, as defined in section 3.

“Equity Instruments”, any of the following types of investment activity: (a) a purchase of stock; (b) a purchase of a partnership interest; (c) a purchase of a limited liability company membership interest; or (d) a loan made on such terms that it has sufficient characteristics of equity. 

“Financial Products”, loans, equity investments and other similar financing activities including, but not limited to, the purchase of loans, the provision of loan guarantees, or the provision of surety bond guarantees. 

“Small Business”, a business entity, including its affiliates, that (a) is independently owned and operated; (b) has a principal place of business in the commonwealth; and (c) would be defined as a ''small business'' under applicable federal law, as established in the United States Code and promulgated from time to time by the United States Small Business Administration. 

“Infrastructure”, financing activities related to capital projects; public buildings, structures, and public spaces and land; local roadways, bike paths, and pedestrian walkways; public services such as police, fire, emergency health and disaster-related systems; adaptation and resiliency in the face of climate change; farmland preservation; public land management; modifications of public buildings and spaces for differently-abled residents; public digital infrastructure inclusive of data, software and mechanisms including but not restricted to wireless broadband infrastructure; wired broadband infrastructure; broadband infrastructure to support other technologies, including telehealth, telemedicine, e-government, and educational opportunities at home; unless clearly indicated otherwise or as defined by the Board of Directors of the Bank of Massachusetts.

Section 2. The Bank shall foster economic development by providing capital access to underbanked populations, industries, small-business, public-private partnerships or local governments for development of infrastructure and business, incorporating broader public benefits in the climate, equity, health, clean water, and education.

The Bank will deliver outcomes to achieve the aforementioned goals including but not restricted to the following specific outcomes: 

To expand credit, liquidity and the supply of money, increasing local lending within Massachusetts communities and regions that are expanding local businesses;

To reduce costs paid by Massachusetts towns, municipalities and counties for access to capital;

To create and expand socially responsible enterprises that work toward Massachusetts community needs and goals;

To offer Massachusetts INFRASTRUCTURE including but not restricted to financing for communities’ water, sewer, transportation, road, rail, bridge, electrical, cable, broadband, telephone conduit and public utility loans;

To lessen stress on those who have to pay college loans by offering college debt refinancing at lower rates for  Massachusetts residents;

To provide growth capital for strategic, underfunded new industries in Massachusetts, 

To reduce the tax burden of debt service costs in local towns and municipalities in Massachusetts to pay for capital improvements by issuing and refinancing debt at lower interest rates;

To lower inequality in the concentration of wealth in Massachusetts;

To provide affordable financial services and guidance to small businesses to convert to inclusive employee ownership models;

To capitalize solar energy, wind energy and other renewable energy projects that reduce carbon emissions in Massachusetts;

To provide higher returns than commercial banks on investments of taxpayer funds in Massachusetts;

To provide programs to develop commercial and industrial enterprises that do not harm the environment, raise carbon emissions or increase the rate of climate change in Massachusetts;

To provide greater income opportunities and affordable housing availability to enable Massachusetts residents to obtain shelter to reduce homelessness.

Section 3. (a) The Bank shall be led by a Chief Executive Officer (CEO) and Chief Operating Officer (COO), which shall be appointed by a majority vote of the Governor, Massachusetts State Treasurer, and Secretary of the Commonwealth from a list of names submitted by the Board of Directors as established in section 4.

(b) The CEO shall have an indefinite tenure and the COO shall be appointed for a ten (10) year period, with the potential to be renewed once.

(c) The CEO and COO may only be removed from by vote of 2/3 of the members of the Board of Directors, subject to providing “legitimate business grounds” at the least, in writing by said authority including, but not limited to, insubordination, neglect of responsibilities, and lack of productivity.

(d) The CEO shall also have the power to appoint or delegate the appointment of all other Bank company employees. 

(e) The Bank shall have a Chief Financial Officer (CFO), who shall be appointed by the CEO subject to approval by the Bank Board of Directors. The CFO may only be removed only by the CEO for just cause.

Section 4. (a) The Bank shall be governed and its corporate powers exercised by a Board of Directors, which shall consist of 10 members, 1 of whom shall be the Massachusetts State Treasurer & Receiver General who shall serve as chair, and 9 of whom shall be appointed by the majority vote of a committee consisting of the governor, the senate president, the speaker of the house of representatives, who will ensure one of each appointment from a major organization representing the following groups:  Minorities, Women, Low-income populations, Historically Under-funded Towns or Municipalities, Emerging Industries, Institutions of Higher-learning and Thought-leadership in Banking and ESG investment.

(b) Each member shall serve a term of 5 years, except that in making initial appointments the committee shall appoint 2 members to serve for a term of 1 year, 2 members to serve for a term of 2 years, 1 member to serve for a term of 3 years, 2 members to serve for a term of 4 years and 2 members to serve for a term of 5 years.

(c) A person appointed to fill a vacancy in the office of a member shall be appointed in a like manner and shall serve for only the unexpired term. A member shall not be eligible for reappointment. A member may only be removed from the member’s appointment by the governor for good cause. The members shall annually elect 1 director as vice-chair and designate a secretary-treasurer who need not be a member. The secretary-treasurer shall keep a record of the proceedings of the Bank and shall be the custodian of all books, documents and papers filed with the bank, the minute books of the Bank and of its official seal.

(d) A minimum of 5 of the members of the Board shall constitute a quorum and 5 affirmative votes shall be necessary for the transaction of business or the exercise of a power or function of the Board. Each member shall be entitled to reimbursement for the director's actual and necessary expenses incurred in the performance of the director's official duties. 

(e) The Bank, its Board, officers and employees shall be subject to sections 1 to 4, inclusive, of chapter 268A except that the corporation may purchase from, sell to, borrow from, loan to, contract with or otherwise deal with a person in which a member of the Board is interested or involved; provided, however, that such interest or involvement is disclosed in advance to the Board and recorded in the minutes of the Board; provided, further, that no member having such an interest or involvement may participate in a decision of the Board relating to such person. Employment by the commonwealth or service in an agency of the commonwealth shall not be deemed to be such an interest or involvement.

(f) The Board of Directors shall meet at least quarterly. Meetings shall be open to the public and meeting minutes shall be posted publicly.

Section 5. The Bank shall operate as a capital support system. This capital support shall in general, provide capital participation instruments, equity instruments, infrastructure, and financial products. 

The Bank shall provide support for underbanked populations, industries or local governments for development of infrastructure and business, incorporating broader public benefits in the climate, equity, health, clean water, education. 

The Bank shall establish Pledge and Credit Facilities. 

The Bank shall have the authority to pledge its loans to the discount window of the Board of Governors of the Federal Reserve System.

The Secretary may, subject to amounts provided in advance by appropriation Acts, purchase obligations issued by Bank in the same manner and under the same requirements that the Secretary purchases obligations under Federal Home Loan Mortgage Corporation Act.

The Bank shall ensure prudent leverage limitation and seek to maintain risk-based capital at no less than ten (10) percent.

The Bank may also:

(a) Purchase interests in state-based participation loans made or held by other banks, other financial institutions or other entities that meet underwriting standards accepted by state or federal financial regulatory agencies; and

(b) Make participation loans to qualified entities doing business in this State when the loan originator is a private financial institution.

(c) Buy and sell securities the Bank has issued or guaranteed or in which it has invested. 

(d) Guarantee securities in which it has invested in order to facilitate their sale.

The Bank shall invest its funds in conformity with the policies of the Board and investment standards outlined in Section 8 and Section 9.

Section 6. (a) The Bank shall upon its incorporation have such capital structure as the Board shall deem adequate. Such capital structure may vary by the Board based on the application and business plan submitted. 

(b) The commonwealth or its agencies may capitalize the Bank with an initial investment of capital in the range of $2,000,000,000 as an equity investment from the pension fund or from a direct legislative appropriation.  

(c) The Massachusetts State Treasurer shall have oversight and supervisory authority over the Bank in order to ensure the safe and sound operation of the Bank. The Massachusetts State Treasurer shall oversee and supervise the issuance of bonds by the Bank, in order to ensure the safe and sound financing of the Bank. The Massachusetts State Treasurer may consult with the Massachusetts Division of Banks and other state agencies as deemed appropriate.

(d) To meet the expenditures necessary in carrying out section 5, the State Treasurer shall, upon request of the governor, issue and sell bonds of the commonwealth in an amount to be specified by the governor from time to time but not exceeding, in the aggregate, $2,000,000,000. All such bonds issued by the commonwealth shall be designated on their face, “An Act Establishing a Public Bank of Massachusetts” Bank and shall be issued for a maximum term of years, not exceeding 10 years, as the governor may recommend to the general court under section 3 of Article LXII of the Amendments to the Constitution of the Commonwealth. The bonds shall be payable not later than DATE. All interest and payments on account of principal on these obligations shall be payable from the General Fund. Bonds and interest thereon issued under this section shall, notwithstanding any other provision of this act, be general obligations of the commonwealth.

(e) The Bank may accept deposits of government assets and funds from any state public institution. The Bank may pay interest on deposits of public funds and may offer other financial products to the State Treasurer and other public institutions.

(f) The Bank shall receive as deposits all funds or property escheated to or subject to the custodial taking of that state, which have been surrendered to the State Treasurer under provisions of chapter 200A.

(g) The Bank may raise funds through a common stock offering or debt issuance to the general public for the capitalization of the Bank or to facilitate continued growth. 

(h) The Bank may receive any loan, grant, or award provided by federal or state government programs, for the capitalization of Bank banking, investment activities or to facilitate continued growth. 

Section 7.  (a) The Bank shall not undertake commercial or investment banking activities and shall not accept customer deposits nor engage in financial or investment banking activities such as trust management or underwriting securities.

(b) The Bank may not merge with any privately owned enterprise or institution;

(c) The Bank may not capitalize projects whose borrowers have histories of human rights abuse or other malfeasance.

Section 8. Within 180 days of enactment, the Board of Directors shall establish bylaws, policies, and procedures governing the operations of Bank not addressed specifically by the legislation. 

Section 9.  (a) The state auditor shall conduct an annual audit of the Bank in accordance with generally accepted government auditing standards. The state auditor shall audit annually or contract for an annual audit of the separate programs and funds administered by the Bank.

(b) The auditor shall prepare an audit report that includes financial statements presented in accordance with the audit and accounting guide for banks and savings institutions issued by the American institute of certified public accountants. The auditor also shall prepare audited financial statements for inclusion in the comprehensive annual financial report for the state. The auditor shall report the results of the audit to the State Treasurer and to the legislative assembly. The Bank shall pay the costs of the audit. 

(c) The Commissioner of Banks shall examine the Bank at least once each 24 months and conduct any investigation of the Bank which may be necessary. The Commissioner shall report the examination results, and the results of any necessary investigation, to the State Treasurer as soon as practicable and to the General Court. 

(d) In addition to its purposes under as a business corporation, the Bank shall have the purpose of creating general public benefit that achieve the identified goals of the Bank in section 2. The Board will identify benefits that it is the purpose of the Bank to create in addition to its purpose as a business corporation.  The Board shall adopt a written benefit policy that includes reporting metrics as well as procedures and file a copy of that policy with the Massachusetts State Treasurer’s office within 30 days after its adoption. Whenever a Board changes its benefit policy, it shall file a copy of the new policy with the Massachusetts State Treasurer’s office within 30 days. 

(e) The benefit policy shall include a statement that material, relevant, and decision-useful sustainability factors related to the goals of the Bank have been or are regularly considered by the PBANK, within the bounds of financial and fiduciary prudence, in evaluating investment decisions. Such factors will be derived from industry accepted public benefit guidelines such as United Nations Sustainable Development Goals and Sustainability Accounting Standards Board (SASB) standards for impact. 

(f) The Bank shall report to the Governor and the Legislature on the financial condition and performance of the Bank and provide an analysis of the bank's effect on the State to ensure that it is consistent with the bank's purposes set forth in section 1, particularly the bank's effect on the public benefit goals derived from goals of the PBANK. 

Section 10.  Notwithstanding any other provision of law, transactions, funds and property of the Bank are exempt from taxation within the State.

Section 11.  The earnings and reserves of the Bank shall be the sole property of the Bank and may not be construed to be Government funds, public funds, or appropriated money.