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General Laws

Section 9. (a) The board may provide by resolution for the issuance from time to time of bonds for any purpose of the trust, which bonds may be issued as general obligations of the trust or as special obligations payable solely from particular revenues or monies of the trust. The bonds of each issue may be dated, may bear interest at such rate or rates, including rates variable from time to time, and may mature or otherwise be payable or redeemable at such times as the board may determine. The board shall determine the denominations of bonds, the details of their execution and authentication and their places of payment within or without the commonwealth. Prior to initial issuance of each series of bonds the board shall advise the state finance and governance board established under section 97 of chapter 6 of the terms of the bonds and the timing of their issuance. In case any trustee or officer whose signature appears on any bonds shall cease to be such officer before their delivery, the signature shall nevertheless be valid and sufficient as if the officer had remained in office until delivery. Bonds may be issued in certificated or uncertificated form, payable to bearer or registered owners, and, if notes, may be made payable to bearer or to order. The board may sell the bonds of the trust at public or private sale at par or for such premium or discount price as it may determine. The board may by resolution delegate to any trustee or officer of the trust the power to determine any of the matters set forth in this section.

(b) Bonds of the trust may be secured by a trust agreement between the trust and the bond owners or a corporate trustee which may be any trust company or bank having the powers of a trust company within or without the commonwealth. A trust agreement may pledge or assign, in whole or in part, any loan agreements and local governmental obligations, and the revenues, funds and other assets or property held or to be received by the trust, including without limitation all monies and investments on deposit from time to time in the fund or any account thereof and any contract or other rights to receive the same, whether then existing or thereafter coming into existence and whether then held or thereafter acquired by the trust, and the proceeds thereof. A trust agreement may contain, without limitation, provisions for protecting and enforcing the rights, security and remedies of the bondholders, provisions defining defaults and establishing remedies, which may include acceleration and may also contain restrictions on the remedies by individual bondholders. A trust agreement may also contain covenants of the trust concerning the custody, investment and application of monies, the enforcement of loan agreements and local governmental obligations, the issue of additional or refunding bonds, the use of any surplus bond proceeds, the establishment of reserves and the regulation of other matters customarily treated in trust agreements. At the request of the board, the state treasurer shall and is hereby authorized to join in any trust agreement or to otherwise agree with the trust, any lender or any trustee for bondholders to hold the fund in compliance with any covenants and provisions relating to the fund contained in any trust agreement.

(c) Bonds may be issued by the trust in the form of lines of credit or other banking arrangements under terms and conditions determined by the board. In addition to other lawful security, bonds may be secured, in whole or in part, by financial guarantees, by insurance, by letters or lines of credit or by other credit enhancement issued to the trust or to a trustee or other person, by any bank, trust company, insurance or surety company or other financial institution, within or without the commonwealth; the trust may pledge or assign, in whole or in part, any loan agreements and local governmental obligations and the revenues, funds and other assets and property held or to be received by the trust, and any contract or other rights to receive the same, whether then existing or thereafter coming into existence and whether then held or thereafter acquired by the trust, and the proceeds thereof, as security for such guarantees or insurance or for the reimbursement to any issuer of a line or letter of credit.

(d) The board may by resolution provide for the issue by the trust of interim receipts or temporary bonds, exchangeable for definitive bonds when the bonds are executed and are available for delivery. The board may also provide for replacement of mutilated, destroyed or lost bonds. The trust may purchase and invite offers to tender for purchase any outstanding bonds; provided, however, that no purchase by the trust shall be made at a price, exclusive of accrued interest, if any, exceeding the bond’s principal amount or, if greater, its redemption price when next redeemable at the option of the trust. The trust may resell any bonds it purchases in such manner and for such price as it may determine.

(e) The board may also provide for issue by the trust of temporary notes in anticipation of grants, revenues or appropriations to the fund. The issue of such notes shall be governed by the applicable provisions of this chapter relating to the issue of bonds; provided, however, that notes issued in anticipation of revenues shall mature no later than one year from their respective dates, or the date of expected receipt of such revenues, if later, and notes issued in anticipation of grants shall mature no later than six months after the expected date of receipt of such grant. The board may also issue refunding bonds of the trust for the purpose of paying any bonds at or prior to maturity. Refunding bonds may be issued at any time at or prior to the maturity or redemption or purchase of the refunded bonds. Refunding bonds may be issued in sufficient amounts to pay or provide for payment of the principal of the bonds being refunded, together with any redemption premium thereon, any interest or discount accrued or to accrue to the date of payment, costs of issuance and other expenses and reserves reasonably necessary to achieve the refunding.

(f) Bonds of the trust are (i) securities in which public officers and agencies, insurance companies, financial institutions, investment companies, executors, administrators, trustees and others may properly invest funds including capital within their control, and (ii) securities which may be deposited with any public officer or any agency for any purpose for which the deposit of bonds is authorized by law.

(g) Bonds issued by the trust shall not be deemed to be a debt or a pledge of the faith and credit of the commonwealth or of any of its political subdivisions, but shall be payable solely from the revenues and monies of the fund and other monies and rights pledged to their payment. Bonds shall recite that neither the commonwealth nor any political subdivision thereof shall be obligated to pay the same and neither the faith and credit nor the taxing power of the commonwealth or any political subdivision is pledged to their payment. Every bond shall recite whether it is a general obligation of the trust or a special obligation payable solely from particular revenues, funds, assets or other property.

(h) Bonds of the trust shall be deemed to be investment securities under chapter one hundred and six. Bonds, their transfer and the income therefrom, including any profit made on the sale thereof, shall at all times be exempt from taxation by and within the commonwealth. The trust shall not be required to pay any taxes, assessments or excises upon its income, existence, operation, or assets, monies or revenues.

(i) It shall be lawful for any bank or trust company to act as a depository of the fund or trustee under a trust agreement, provided it furnishes indemnification and reasonable security as the board may require. Any assignment or pledge of revenues, funds and other assets and property made by the trust shall be valid and binding and shall be deemed continuously perfected for the purposes of chapter one hundred and six and other laws when made. The revenues, funds and other assets and property, rights therein and thereto and proceeds so pledged and then held or thereafter acquired or received by the trust shall immediately be subject to the lien of such pledge without any physical delivery or segregation or further act, and the lien of any such pledge shall be valid and binding against all parties having claims of any kind in tort, contract or otherwise against the trust, whether or not such parties have notice thereof. The trust agreement by which a pledge is created need not be filed or recorded to perfect the pledge except in the records of the board and no filing need be made pursuant to said chapter one hundred and six. Any pledge or assignment made by the trust is an exercise of its political and governmental powers, and loan agreements, local governmental obligations, revenues, funds, assets, property and contract or other rights to receive the same and the proceeds thereof which are subject to the lien of a pledge or assignment created under this chapter shall not be applied to any purposes not permitted by the pledge or assignment. Any holder of a bond and any trustee under a trust agreement, except to the extent its rights may be restricted by the trust agreement, may bring suit upon the bonds and may pursue any other legal action to protect and enforce its rights and compel performance of all duties required to be performed by the trust and the board.

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