Be it enacted by the Senate and House of Representatives
in General Court assembled, and by the authority of the same,
SECTION 1. It is hereby found and declared that certain activities undertaken from time to time by the Massachusetts Bay Transportation Authority, hereinafter referred to as "the authority", in order to construct, reconstruct, renovate, repair, remove, replace, or expand transportation facilities in the public interest, may provide opportunities to stabilize, develop, and revitalize the economy of the areas in which such activities are undertaken; that the stabilization, development, or revitalization of small businesses in such areas would improve the general health, safety, and welfare of such areas while also increasing the value and use of the public investment in the transportation facilities in such areas; that to achieve these benefits it may be necessary to stimulate private investment in such areas; that the stabilization, development, or revitalization of such areas may not be dealt with effectively by the ordinary operations of private enterprise without the aids provided herein; that without such aids the construction or other activities may have a significantly harmful impact on the economic stability and growth of small businesses in such areas; and that the use of public funds to stimulate private investment in such businesses and areas as provided herein is a valid public purpose.
SECTION 2. (a) There is hereby established a board to oversee a pilot program to assist businesses affected by transportation enhancements, hereinafter referred to as "the board". The board shall consist of the secretary of transportation and construction, or his designee, the secretary of economic affairs, or his designee, and the commissioner of banks and banking, or his designee. All official actions of the board must be approved by a majority of its members. The board is hereby authorized and directed to promulgate rules or regulations pursuant to section two of chapter thirty A of the General Laws to establish standards or criteria for the designation of transportation activity affected areas pursuant to paragraph (b), under which business entities may be qualified small businesses pursuant to paragraph (c), and for the evaluation of proposals for and performance under agreements entered into pursuant to paragraph (d), or for any other purpose necessary to implement the provisions of this section.
(b) The board may designate a specific geographic area to be a "transportation activity affected area". An area may be so designated if: (1) the authority is undertaking transportation enhancement activities including the construction, reconstruction, renovation, repair, removal, replacement, or expansion of its transportation facilities within the area; (2) such activities have had or are likely to have a significantly harmful impact upon the economic stability and growth of small businesses within such area; and (3) the area meets such other standards and criteria as the board may establish.
(c) A "qualifying small business" shall mean a for profit or non-profit business entity that is located, wholly or partially, within a designated transportation activity affected area; that alone or in combination with any affiliated business entity had average gross sales of less than two million five hundred thousand dollars per year for its most recent two fiscal years and that has fewer than fifty full-time equivalent employees; that has been doing business within a transportation activity affected area for at least one year prior to the commencement of transportation enhancement activities by the authority within the designated area; that has been or is likely to be significantly harmed by the transportation enhancement activities of the authority within the transportation activity affected area; and that meets such other standards and criteria as the board may establish. For the purposes of this section, business entities shall be considered to be affiliated if they are controlled, either through ownership or management, by the same party or parties.
(d) The authority is hereby authorized to enter into agreements with banks to stimulate loans to qualifying small businesses. For the purposes of this section, banks shall be deemed to include any bank subject to taxation under section two of chapter sixty-three of the General Laws. Banks shall be selected by the authority for participation in this pilot program after a competitive bidding process which shall include public advertisement and the receipt of written bids. The actual selections shall be based upon standards and criteria that shall include the interest rate the bank will pay the authority for its deposits, the interest rate the bank will charge to participating qualifying small businesses, and such other standards and criteria as the board may establish. Such agreements shall provide that: (1) the authority shall deposit in such bank, pursuant to paragraph (f), funds which may earn no interest, below market rate interest, or market rate interest during periods when such funds are used to stimulate loans to qualifying small businesses as provided herein; (2) in consideration of such deposits such bank shall make loans to qualifying small business pursuant to paragraph (e) at interest rates below the rates such bank would otherwise charge on such loans; (3) such deposits and loans as a whole shall be structured in such a way that the total value of any reduction in interest earnings to the authority resulting from the deposit of funds at no interest or at below market rate interest, minus any extraordinary administrative costs incurred by such bank beyond the costs that would normally be incurred in making such a loan other than pursuant to this section, shall not be greater than the total value of any reduction in interest costs to qualifying small businesses resulting from the receipt of any such loan at below market rate interest; (4) if the total value of any such reduction in interest earnings, minus any such extraordinary administrative costs, exceeds the total value of any such reduction in interest costs, such excess shall be rebated to the authority; (5) such bank may secure the payment of principal and interest on any loan granted pursuant to this section by mortgage, security interest, or any other method; (6) upon the finding by the board that such bank has substantially failed to meet the conditions of the agreement, the board may rescind such agreement and shall require the rebate of any excess owed the authority at that time under clause (4) and the return of any deposits made under clause (1).
(e) Banks entering into an agreement under paragraph (d) shall make loans to qualifying small businesses pursuant to such agreement. Such businesses may use the proceeds of any such loan for the costs of renovation, modernization, expansion, maintenance, inventory purchases or related capital improvements but may not use such proceeds for any operating costs. The factors to be considered by a bank in granting a loan pursuant to this section shall include, but need not be limited to (i) the degree and severity of the impact of the transportation construction activity of the authority on the economic stability and growth of the applicant qualifying small business and the resulting effect on the use of mass transportation facilities in such area, (ii) the degree to which the loan will assure the economic stability and growth of the applicant qualifying small business and of the designated area and will increase the value and use of mass transportation facilities in such area, (iii) the ability of the applicant qualifying small business otherwise to obtain financing at reasonable rates and upon reasonable terms, and (iv) the period of time the business has operated in the area and the period of time it has been owned by the applicant.
(f) Notwithstanding any general or special law to the contrary, the authority is hereby authorized to deposit any of its funds with banks at no interest or below market rate interest for the purposes and in the manner set forth in this section; provided, however, that no funds that were in any way made available because of a pledge of the credit of the commonwealth may be so deposited for said purposes; provided, further that in no event shall funds of the authority be used as security for loans granted pursuant to this section and no such loan shall be guaranteed by the authority. At no time shall the authority have on deposit with such banks in excess of seven million five hundred thousand dollars for said purposes.
(g) Within sixty days from the end of each calendar year after nineteen hundred and eighty-six, the authority shall submit a report relative to said pilot program that has been approved by the board to the clerks of the senate and of the house of representatives, to the house and senate committees on ways and means, to the commissioner of administration, and to the inspector general, who is hereby authorized thereafter similarly to submit his comments on such report. The report shall include, but need not be limited to: (1) a listing of any designated transportation activity affected area; (2) an accounting of any funds deposited by the authority pursuant to this section and of the value of any reduced interest earnings to the authority resulting from each deposit of authority funds at no interest or at below market rate interest; (3) an accounting of the value of any reduced interest costs to qualifying small businesses resulting from receiving loans stimulated by each such deposit at below market rate interest; (4) an accounting of any extraordinary administrative costs allowed to a bank for each deposit; and (5) an accounting of an excess rebated for each deposit to the authority pursuant to clause (4) of paragraph (d) of section two.
SECTION 3. The provisions of sections one and two shall cease to be in effect as of July first, nineteen hundred and ninety. No loans shall be made pursuant to paragraph (e) of section two after December thirty-first, nineteen hundred and eighty-nine. Nothing in this section shall be construed to prevent the collection of any outstanding principal or interest on loans made pursuant to said paragraph (e) on or before December thirty-first, nineteen hundred and eighty-nine or of any outstanding excess owed to the authority under clause (4) of paragraph (d) of section two.