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Text of the Senate amendment (Montigny) to House Bill, No. 100)

Senate, No. 16

[Senate, March 5, 2009 – Text of the Senate amendment (Montigny) to the House Bill to extending the Commonwealth’s power to guarantee certain obligations of the Massachusetts Turnpike Authority (House, No. 100 )]

 

The Commonwealth of Massachusetts

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IN THE YEAR OF TWO THOUSAND AND NINE

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SECTION 1.  Chapter 6 of the General Laws is hereby amended by striking out section 98, as appearing in section 3 of chapter 304 of the acts of 2008, and inserting in place thereof the following section:-

              Section 98. (a) As used in this section, “state entities” shall mean the commonwealth, state authorities, as defined in section 1 of chapter 29, and other state entities with responsibility for managing and overseeing public funds.

              (b) It shall be the duty of the board to 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.

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

              (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.

              SECTION 2.  Clause (l) of section 4 of chapter 81A of the General Laws, as amended by section 7 of chapter 304 of the acts of 2008, is hereby further amended by striking out the words “, and the joint committee” and inserting in place thereof the following words:- and the senate and house committees.

              SECTION 3.  Subsection (b) of section 26 of chapter 304 of the acts of 2008 is hereby amended by adding the following sentence:- If the authority certifies to said secretary that it has received such notice, within 15 days of such certification the chairman or executive director of the authority and said secretary shall jointly certify, in writing and under the pains and penalties of perjury, to the chairpersons of the house and senate committees on ways and means, the chairpersons of the joint committee on transportation, and the chairpersons of the senate and house committees on bonding, capital expenditures and state assets that, in their judgment, there exists no feasible alternative to a pledge of the commonwealth’s full faith and credit pursuant to  this act.  Said chairman or executive director and said secretary shall jointly report to the chairpersons of the house and senate committees on ways and means, the chairpersons of the joint committee on transportation, and the chairpersons of the senate and house committees on bonding, capital expenditures and state assets all efforts undertaken to avoid the need for a full faith and credit guaranty of the commonwealth pursuant to this act.

              SECTION 4.  Said subsection (c) of said section 26 of said chapter 304 is hereby further amended by inserting after the words “with the approval of the governor” the words “and the treasurer of the commonwealth”, in each instance. 

SECTION 5.  The third sentence of said subsection (c) of said section 26 of said chapter 304 is hereby amended by striking out the words “joint committee on bonding” and inserting in place thereof the following words:- senate and house committees on bonding.

              SECTION 6. The first sentence of subsection (a) of section 27 of said chapter 304 is hereby amended by inserting after the words “approval of the governor”, the first time they appear, the following words: - and the treasurer of the commonwealth.

SECTION 7. The second sentence of said subsection (a) of said section 27 of said chapter 304 is hereby amended by striking out the words “and without further authorization” and inserting in place thereof the following words:-  and the treasurer of the commonwealth.

              SECTION 8.  Said chapter 304 is hereby further amended by striking out section 29 and inserting in place thereof the following section: -

SECTION 29.  The state treasurer and all quasi-public entities and independent authorities shall submit a report on their borrowing practices from fiscal years 1997 to  2009, inclusive to the secretary of administration and finance, the state auditor, the chair of the finance advisory board established in section 97 of chapter 6 of the General Laws, the chairpersons of the senate and house committees on ways and means and the chairpersons of the senate and house committees on bonding, capital expenditures and state assets prior to June 30, 2009.   The report shall include all transactions entered into, including fixed-rate borrowing, during the 6 months immediately preceding the filing of the report. The report shall include: (1) a list of all transactions related to derivative financial products; (2) the terms and conditions of each derivative financial product transaction; (3) the parties involved in negotiating each derivative financial product   transaction; (4) copies of all agreements entered into between the parties relative to derivative financial product transactions; (5) the financial impact of each transaction including, but not limited to, the interest rates, fluctuation in interest rates and payments associated therewith; and (6) a written rationale for the determination to enter into any such transaction. The report shall be signed under oath by the state treasurer or by the chief financial officer of the quasi-public entity or independent authority filing the report, and the secretary of administration and finance with respect to quasi-public entities and independent authorities.  For purposes of this section, “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, an interest rate swaptions, caps, floors, collars, inverse floaters, auction rate securities or any other financial transaction, including fixed-rate, long-term borrowing.   As of the effective date of this act no quasi-public state entity or independent authority of the commonwealth shall be authorized to enter into any derivative financial transaction as defined in this act.

              SECTION 9.  Chapter 304 of the acts of 2008 is hereby amended by striking out section 32 and inserting in place thereof the following section:-

              SECTION 32.  Section 27 shall take effect as of October 1, 2008 and shall expire on June 30, 2009.

              SECTION 10.  In addition to the requirements set forth in clause (l) of section 4 of chapter 81A of the General Laws, the initial semi-annual report for fiscal year 2009 to be submitted by the Massachusetts Turnpike Authority shall include the current market value of all real property held in the name of or subject to the control of the Authority pursuant to said chapter 81A and the current market value of all real property held in the name of or under the control of the authority that was acquired, whether by purchase or otherwise, during fiscal years 1997 to year 2010, inclusive.

SECTION   11.     (a) Notwithstanding any general or special law to the contrary, there shall be a special task force to examine the structure, fiscal obligations and contracts, and continued viability of the Massachusetts Turnpike Authority. 

              (b) The task force shall be comprised of 9 members including: the state treasurer; the state auditor; the secretary of administration and finance; the secretary of transportation and public works; the executive director of the Massachusetts Turnpike Authority; and 4 members to be appointed by the governor, 1 of whom shall be a forensic accountant, 1 of whom shall be a practicing or former bond attorney who shall have no conflicts of interest as a result of participating on the task force, 1 of whom shall be a financial expert with 10 or more years of financial experience at a company with more than 100 employees and which is located in the commonwealth and 1 of whom shall be a person with expertise in transportation construction or financing and experience in complex transportation issues and toll roads. The secretary of transportation and public works shall chair the task force.

              (c) Within 60 days after the task force is established, the task force shall make a preliminary report to the secretary of administration and finance, the state treasurer, the state auditor, the attorney general, the inspector general, the chairpersons of the house and senate committees on ways and means, the chairpersons of the joint committee on transportation and the chairpersons of the senate and house committees on bonding, capital expenditures and state assets. The report shall present a preliminary analysis of the Authority’s fiscal situation. This analysis shall include, but not be limited to: the impact of the Authority’s debt and other financial obligations as they relate to the credit rating of the commonwealth; the impact of the Authority’s debt and other financial obligations as they relate to the commonwealth’s capital plan and; a full accounting of all administrative costs borne by the authority, including but not limited to, debt service, banking fees, salaries and benefits paid to employees and outside contractors, actions taken by the Authority or on its behalf to investigate legal causes of action relative to any derivative transaction entered into between fiscal years 1997 to 2010, all payments to law firms, outside consultants and legislative or executive agents, an inventory of all vehicles and rolling stock owned by the authority, a review of the authority’s real property holdings and its value and any other financial information related to the operation of the authority. 

              (d) The task force shall also study and make recommendations on stabilizing the current fiscal situation of the authority and future actions to ensure the long-term sustainability of the authority. 

              (e) The office of the treasurer and the executive office of administration and finance, in conjunction with the office of the executive director of the Authority, shall provide such staff and resources as may be necessary for the task force to perform its functions.   The task force shall convene its first meeting on or before March 31, 2009 and shall file a final report on its findings, including any legislative or regulatory recommendations relative to methods to stabilize the current and future fiscal condition of the Authority.  Said report shall be filed with the clerks of the senate and the house of  representatives and the chairpersons of the house and senate committees on ways and means, the chairpersons of the joint committee on transportation and the chairpersons of the senate and house committees on bonding, capital expenditures and state assets on or before June 30, 2009.

              SECTION 13.  Section 9 shall take effect as of January 15, 2009.

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