Whereas, The deferred operation of this act would tend to defeat its purpose, which is to immediately change the method of taxation of thrift institutions and establishing a Thrift Institutions Fund for Capital and Economic Development, 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,
SECTION 1. Section 12 of chapter 62C of the General Laws is hereby amended by striking out paragraph (b), as appearing in section 22 of chapter 415 of the acts of 1976.
SECTION 2. Section 1 of chapter 63 of the General Laws is hereby amended by striking out the definition of "Bank", as most recently amended by section 44A of chapter 698 of the acts of 1966, and inserting in place thereof the following definition:-
"Bank", any bank, banking association, trust company or federal or state savings and loan association, including all banks for cooperatives organized under the United States Farm Credit Act of nineteen hundred and thirty-three doing business within the commonwealth, whether of issue or not, existing by authority of the United States or of a foreign country, or of any law of the commonwealth not contained in chapter one hundred and sixty-nine or chapter one hundred and seventy-one, and any corporation authorized by section one of chapter one hundred and seventy-two A to do the business of a banking company.
SECTION 3. Section eleven of said chapter sixty-three is hereby repealed.
SECTION 4. Section fifteen of said chapter sixty-three is hereby repealed.
SECTION 5. Section sixteen of said chapter sixty-three is hereby repealed.
SECTION 6. Section seventeen of said chapter sixty-three is hereby repealed.
SECTION 6A. Section 1 of chapter 63B of the General Laws, as appearing in section 5 of chapter 714 of the acts of 1963, is hereby amended by striking out the definition of "Corporation" and inserting in place thereof the following definition:-
"Corporation", every corporation, company or association subject to taxation under the provisions of chapter sixty-three, or under any special act which is in lieu of the provisions of said chapter sixty-three.
SECTION 7. All savings banks and cooperative banks organized under the laws of the commonwealth and all federal savings banks and federal savings and loan associations organized under the laws of the United States, which are subject to taxation under chapter sixty-three of the General Laws, hereinafter referred to as the member thrift institutions, are hereby constituted an association under the name of the Thrift Institutions Fund for Economic Development, hereinafter referred to as the fund. It shall be the purpose of the fund to provide funds within the limits and in the manner hereinafter described, to certain economic development projects which will serve a public purpose and fill a public need and which are unable to obtain capital in the usual manner, hereinafter referred to as "economic development projects".
For purposes of this act, "economic development projects" shall mean (1) industrial or residential development projects within the commonwealth eligible for assistance under the federal Urban Development Action Grant program, and commercial development projects located within commercial area revitalization districts, as designated by the secretary of communities and development pursuant to subsection one of section twelve of chapter forty D of the General Laws; loans for the development of small business as defined by the secretary of the executive office of manpower affairs within the commonwealth; loans to industrial firms for purposes consistent with the stabilization and advancement of muture industries within the commonwealth as defined by the secretary of the executive office of manpower affairs, including but not limited to investment in new product development and the financing of corporate restructuring intended to promote the viability of mature industrial firms; and (2) loans for the development of projects which it financed under tax exempt financing would be covered by the provision of 26 U.S.C.A. 103(n) of the Internal Revenue Code.
SECTION 8. The fund shall be organized and managed as follows: (a) There shall be fifteen members of the board of directors, including two minority persons, the word "minority" being as defined in subsection (2) of chapter forty C, as appearing in section seven of chapter five hundred and seventy-nine of the acts of nineteen hundred and eighty, which shall govern the operations of the fund. Seven members of the board shall be appointed by the governor as follows: one of whom shall be the secretary of consumer affairs and business regulation, ex officio, or his designee, one of whom shall be the chairman of the Massachusetts Industrial Finance Agency, two of whom shall be representatives of small business, as defined by the United States Small Business Administration, and three of whom shall be persons not affiliated with any banks as previously defined in section two of this act, six of whom shall be appointed by the Savings Banks Association of Massachusetts, one of whom shall be appointed by the Massachusetts Cooperative Bank League, and one of whom shall be appointed by the Massachusetts Federal Savings Council. Each such appointment shall be made by letter to the appointee with a copy to the secretary of consumer affairs and business regulation and each person so appointed shall serve at the pleasure of the governor or organization which made the appointment and until his successor has been appointed in a like manner.
(b) The initial organizational meeting of the board of directors shall be held at a date and time to be determined by the secretary of the executive office of consumer affairs and business regulation; provided, however, that at least two weeks prior notice shall be given to the other members of such meeting. At such meeting, said board shall elect a chairman, vice-chairman and secretary from among the members.
(c) The board of directors shall have the authority to exercise all the powers of the fund. Said board shall have the authority to make, amend, and repeal by-laws, rules and regulations to govern the management and affairs of the fund. A majority of the members of said board shall constitute a quorum for the purpose of conducting the business of said board and said board shall act by a majority vote of the whole board in exercising its authority. A meeting of said board shall be held at least monthly and at such other times as may be provided in its by-laws.
(d) Said board of directors shall have the authority to enter into such service and other contracts as it deems necessary or incidental to the performance of its duty to conduct the management and affairs of the fund.
(e) The members of said board of directors shall serve without compensation but shall be paid their necessary expenses incurred in the discharge of their official duties.
(f) Said board of directors shall file a certificate with the state secretary to the effect that the Thrift Institutions Fund for Economic Development has been organized and listing the names and addresses of its officers and members. A copy of its by-laws and rules and regulations adopted by the board of directors shall be filed with the state secretary. Amendments to such certificate, by-laws or rules and regulations shall be filed with the state secretary.
(g) Said board of directors shall file a report of the activities and accomplishments of the fund including a summary of the terms and characteristics of loans and investments and the number of employment opportunities created and retained with the governor and the commissioner of administration, and the house and senate committees on ways and means on or before January first, nineteen hundred and eighty-six and each year thereafter until the termination of the fund as provided in section nine. Said board shall file copies of said report with the clerk of the house of representatives.
(h) All reasonable expenses incurred pursuant to this section and section eleven of this act shall be considered to be incidental administrative expenses of the fund.
SECTION 9. The fund shall remain in existence until such time as the total amount of the loans required to be made pursuant to this act shall have been amortized and a final report of the fund shall have been filed with the commissioner of administration and the house and senate committees on ways and means. Upon dissolution of the fund, the remaining surplus or deficit, if any, in the fund, after the amortization of such loans, shall be returned or charged, as the case may be, to the member thrift institutions on the same prorated basis as the call for loans provided for in section eleven.
SECTION 10. Beginning January first, nineteen hundred and eighty-five, the fund shall have the power to (a) borrow funds for the purpose of making loans pursuant to sections twelve, twelve A, and thirteen from every savings bank as defined in chapter one hundred and sixty-eight of the General Laws, every cooperative bank as defined in chapter one hundred and seventy of the General Laws, every state or federal savings and loan association and every federal savings bank, located in the commonwealth; and (b) issue therefore its bonds, debentures, notes, or other evidences of indebtedness, subject to the provisions of section eight.
The banks and associations listed in this section shall make loans to the fund when called upon by it to do so, subject to the provisions of section eleven.
SECTION 11. Borrowing by the fund pursuant to section ten of this act shall be subject to the following provisions:
(a) In order to borrow funds pursuant to said section ten, the fund shall issue a call to the banks and associations listed in sections seven and ten to make loans to it at such times as the board of directors of the fund may determine are necessary for carrying out the purposes of the fund.
(b) Each such call for loans to the fund shall be prorated among the banks and associations listed in said sections seven and ten in the same proportion that the amount of total assets, as of the April thirtieth preceding the call, of each institution bears to the aggregate of the amounts of total assets, as of the April thirtieth preceding the call, of all such institutions.
(c) In the aggregate, borrowing by the fund pursuant to said section ten shall be in such amounts as the board of directors of the fund may determine are necessary for carrying out the purposes of the fund; provided, however, that one hundred million dollars shall be borrowed during the existence of the fund and all such borrowing shall occur on or before July first, nineteen hundred and ninety-four.
(d) All loans made to the fund by the banks and associations listed in said sections seven and ten shall be made on terms and other conditions established by the board of directors of the fund; provided, however that (1) such loans shall be evidenced by bonds, debentures, notes, or other evidence of indebtedness of the fund, which shall bear interest at rates approved by the commissioner of banks which are based upon the costs incurred by the bank in making funds available to the fund; and (2) no loan to the fund shall be secured in any manner unless all outstanding loans to the fund shall be secured equally and ratably in proportion to the unpaid balance of such loans and in the same manner.
(e) All loans made to the fund by the banks and associations listed in said sections seven and ten shall be deemed to be legal investments for said banks and associations.
SECTION 12. Beginning February first, nineteen hundred and eighty-five, the fund shall have the power (a) to make loans of the funds borrowed pursuant to sections ten and eleven for any of its purposes to any economic development project; and (b) to establish and regulate the terms and conditions with respect to such loans, subject to the provisions of section thirteen.
SECTION 13. Lending by the fund shall be subject to the following provisions:
(a) The fund shall make loans at such times and in such amounts as the board of directors of the fund may determine are necessary for carrying out the purposes of the fund and shall be made in the amount or amounts requested and for a term or terms agreed upon by the parties. If no agreement can be reached the commissioner of banks shall set the term or terms of such loans.
(b) In determining the rates of interest for loans, said board of directors shall (1) take into account the cost incurred by the fund in obtaining funds, the reasonable cost of servicing such loans, including a bad debt reserve, and any other incidental administrative costs incurred directly or indirectly by the fund. The commissioner of banks shall make a determination that all such costs and expenditures were necessary and proper for the operation of the fund.
(c) No member of said board and no bank or association listed in section ten or officer thereof shall be a recipient of any loan made pursuant to this act.
(d) The operation of the fund shall be examined annually by an independent certified public accounting firm. The results of such examination shall be filed with the clerk of the house of representatives in conjunction with the annual reporting requirement of paragraph (b) of this section.
(e) The fund, in making loans, shall give preference to those economic development projects located in cities and towns whose annual unemployment rate is greater than one hundred fifty per cent of the statewide average in three of the last four years.
(f) Loans made by the fund shall be made in accordance with reasonable lending practices to be established by the board of directors consistent with the overall purposes of this act.
SECTION 14. The fund shall file with the commissioner of banks a report subsequent to any call to borrow funds pursuant to section eleven. Such report shall contain the total amount of the call, the allocation of the call to each bank and association, and the amount loaned by each bank and association to the fund. Such report shall be filed within sixty days of any such call.
SECTION 15. The commissioner of banks shall include in the annual report filed pursuant to section thirteen of chapter one hundred and sixty-seven of the General Laws a listing of banks and associations where the amount of the call issued pursuant to section eleven exceeds the amount loaned to the fund.
SECTION 16. Sections one to six A, inclusive, shall apply to tax years commencing on or after October thirty-first, nineteen hundred and eighty-four. All other sections shall take effect upon passage.