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HOUSE DOCKET, NO. 94617        FILED ON: 4/14/2010

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 4617

 

The Commonwealth of Massachusetts

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By Mr. Murphy of Burlington, for the committee on Ways and Means, on House, No. 4444 , reported, in part, a Bill relative to debt restructuring (House, No. 4617 ). April 14 , 2010.

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An Act Relative to Debt Restructuring.

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FOR THE COMMITTEE

 

Name:

District/Address:

Charles Murphy

21st Middlesex


The Commonwealth of Massachusetts
 

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In the Year Two Thousand and Ten

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An Act Relative to Debt Restructuring.


Whereas, The deferred operation of this act would tend to defeat its purpose, which is to provide forthwith for the restructuring of certain capital obligations of the commonwealth, therefore it is hereby declared to be an emergency law, necessary for the immediate preservation of the public convenience.

 

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.  (a) Notwithstanding any provision of section 53A of chap ter 29 of the General Laws to the contrary, the state treasurer, upon the request of the governor, may issue and sell refunding bonds of the commonwealth under said section 53A of said chapter 29 in an amount sufficient to refund not more than $300,000,000 of outstanding general obligation bonds of the commonwealth, without a finding by the state treasurer that such refunding will result in present value savings to the commonwealth.  This sale shall be accomplished in a manner that is cost efficient to the commonwealth to the extent reasonably possible.  The issuance of refunding bonds under this section shall otherwise be subject to said section 53A of said chapter 29, but these bonds shall be issued for a maximum term of years, not exceeding 8 years, that the governor may recommend to the general court pursuant to Section 3 of Article 62 of the Amendments to the Constitution.

(b) Within 15 days after this refunding sale, the state treasurer and the secretary of administration and finance shall file with th e finance advisory board and the house and senate committees on ways and means a report containing statements of: (1) net present cost or savings of this refunding; (2) the costs of issuance incurred by the commonwealth pursuant to this refunding, includin g but not limited to, costs for legal counsel, payments, discounts and other incentives provided to investment bankers, underwriters and others, and costs related to credit or liquidity enhancements, if any; and (3) projected principal and interest debt se rvice costs. 

(c) The costs of issuance may, if appropriate, be paid out of the proceeds of the refunding.  The governor shall identify the portion of the debt service attributable to the costs of issuance of the refunding as part of any request for an ap propriation for debt service payments resulting from this refunding issue.  Any refunding bonds issued under this section shall not be counted as part of "issued indebtedness" for the purposes of the debt ceiling calculation.

SECTION 2 .  Notwithstanding an y general or special law to the contrary, to finance expenditures made under clauses (i) and (ii) of subsection (b) of section 2 of chapter 33 of the acts of 1991, chapter 300 of the acts of 1992, as amended, and section 1A of chapter 152 of the acts of 19 97, as amended, the state treasurer shall, upon request of the governor, issue and sell bonds of the commonwealth in amounts to be specified by the governor from time to time but not exceeding, in the aggregate, the sum of $23,700,000. Bonds issued to fin ance expenditures under said chapter 33 shall be issued f or terms not to exceed 30 years; provided, however, that all such bonds shall be payable by June 30, 2026, as recommended by the governor in a message to the g eneral c ourt dated May 22, 1991, in purs uance of Section 3 of Article LXII of the Amendments to the Constitution, and as provided in section 1 of chapter 136 of the acts of 1991, and the bond authorization contained in section 8 of said chapter 33, as amended, shall be reduced by the amount of a ny bonds so issued. Bonds issued to finance expenditures under said chapter 300 shall be issued for terms not to exceed 30 years, provided, however, that all such bonds shall be payable by December 31, 2030, as recommended by the governor in a message to the g eneral c ourt dated June 7, 1996, in pursuance of Section 3 of Article LXII of the Amendments to the Constitution, and as provided in section 1 of chapter 378 of the acts of 1996, and the bond authorization contained in section 8A of said chapter 300, as inserted by section 14 of chapter 4 of the acts of 1995, shall be reduced by the amount of any bonds so issued. Bonds issued to finance expenditures under said chapter 152 shall be issued f or terms not to exceed 30 years; provided, however, that all su ch bonds shall be payable by June 30, 2038, as recommended by the governor in a message to the g eneral c ourt dated October 27, 2003, in pursuance of Section 3 of Article LXII of the Amendments to the Constitution, and as provided in section 1 of chapter 2 of the acts of 1998, as amended, and the bond authorization contained in section 11 of said chapter 152, as amended, shall be reduced by the amount of any bonds so issued. Bonds and interest thereon issued under authority of this section shall be general obligations of the commonwealth.

SECTION 3 . The state treasurer may borrow from time to time on the credit of the commonwealth such sums as may be necessary for the purpose of meeting payments authorized by sections 2 and 2A of chapter 233 of the acts of 2 008 and may issue and renew from time to time notes of the commonwealth therefor bearing interest payable at such time and at such rates as shall be fixed by the state treasurer; provided, however, that the amount of notes outstanding at any time shall not exceed $250,000,000.  Such notes shall be issued and may be renewed one or more times for such terms, not exceeding 1 year, as the governor may recommend to the general court in accordance with Section 3 of Article LXII of the Amendments to the Constituti on, but the final maturities of the notes, whether original or renewal, shall not be later than June 30, 2011. Notwithstanding any general or special law to the contrary, notes and interest thereon issued under the authority of this section shall be genera l obligations of the commonwealth. This authorization shall be in addition to any other authorization to issue bonds or notes of the c ommonwealth for the purposes of meeting payments authorized by said sections 2 and 2A.

SECTION 4.  Section 1 shall expire on June 30, 2011.

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