Section 13: Local governmental obligations; issuance; interest; payment; taxation
Section 13. (a) Local governmental obligations issued by a local governmental unit shall be dated, may bear interest at such rate or rates, including rates variable from time to time subject to such minimum or maximum rate, if any, as may be determined by such index or other method of determination provided in the applicable loan agreement, shall mature in such amount or amounts and at such time or times, not later than the maximum dates, if any, provided herein, and may be made redeemable in whole or in part before maturity at the option of the local governmental unit or at the option of the trust at such price or prices and under such terms and conditions as may be fixed in the loan agreement prior to the issue of the local governmental obligations. The local governmental obligations may be issued as serial bonds or term bonds or any combination thereof with such provisions, if any, for sinking funds for the payment of bonds as the local governmental unit and the trust may agree. Local governmental obligations may be in such form, payable to the bearer thereof or the registered owner, be certificated or uncertificated, be in such denominations, payable at such place or places, within or without the commonwealth, and otherwise bear such terms and conditions, not inconsistent with this chapter and the applicable bond act, as provided in the applicable loan agreement or as the board and the local governmental unit shall otherwise agree. Local governmental obligations may be issued in principal amount equal to the loan evidenced thereby or at such discount as the board and the local governmental unit shall agree.
(b) Subject to the requirements of Title VI of the Clean Water Act, local governmental obligations shall be payable within a period not exceeding the greater of the period, if any, specified in the applicable bond act or the useful life of the water pollution abatement project financed by such obligations, as determined by the department, or, if incurred to finance more than one project, the average useful life of such projects. Except as otherwise provided in this chapter, local governmental obligations shall be payable by such installment or installments of principal, annual or otherwise, as will extinguish the same at maturity, the first installment to be payable no later than one year after the date of issuance of such obligations or one year after the date of completion of the project financed by such obligations, as determined by the department, whichever date is later, and the remaining installments of principal, if any, to be in such amounts and payable on such dates as the board and the local governmental unit shall agree.
(c) Notwithstanding the provisions of sections seventeen and seventeen A of chapter forty-four to the contrary, if a local governmental unit has authorized a loan in accordance with this chapter and the issuance of local governmental obligations under any bond act, the local governmental unit may, subject to the loan agreement and with the approval of the board, issue notes to the trust or any other person in anticipation of the receipt of the proceeds of the loan. The issue of such notes shall be governed by the provisions of this chapter relating to the issue of local governmental obligations other than notes, to the extent applicable, provided the maturity date of such notes shall not exceed three years from the date of issue of such notes or the expected date of completion of the project financed thereby, as determined by the department, if later. Notes issued for less than the maximum maturity date may be renewed by the issue of other notes maturing no later than the maximum maturity date. The second sentence of section seventeen A of chapter forty-four shall not apply to the issue of such notes.
(d) A local governmental unit may issue local governmental obligations to refund or pay at maturity or earlier redemption any local governmental obligations outstanding under any loan agreement or to refund or pay any other debt of the local governmental unit issued to finance the water pollution abatement project to which such loan agreement pertains. Local governmental obligations for refunding may be issued in sufficient amounts to pay or provide for the principal of the obligations refunded, any redemption premium thereon, any interest accrued and to accrue to the date of payment of such obligations, the costs of issuance of such refunding obligations and any reserves required by the applicable loan agreement. An issue of refunding local governmental obligations, the amount and dates of maturity or maturities and other details thereof, the security therefor and the rights, duties and obligations of the local governmental unit in respect to the same shall be governed by the provisions of this chapter relating to the issue of local governmental obligations other than refunding obligations as the same may be applicable.
(e) Except as otherwise provided in section fourteen, the applicable bond act, or by agreement between the trust and a local governmental unit, all local governmental obligations shall be general obligations of the local governmental unit issuing the same for which its full faith and credit are pledged and for the payment of which all taxable property in the local governmental unit shall be subject to ad valorem taxation without limit as to rate or amount except as otherwise provided by law.