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Session Law

2004

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Chapter 208 AN ACT RELATIVE TO SCHOOL BUILDING ASSISTANCE.

Whereas , The deferred operation of this act would tend to defeat its purpose, which is forthwith to make certain changes to the school building assistance program, 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. Section 1 of chapter 70B of the General Laws, as appearing in the 2002 Official Edition, is hereby amended by striking out, in lines 11 and 12, the words "within the department of education a school building assistance program" and inserting in place thereof the following:- a school building assistance program. It is in the best interests of the commonwealth and its citizens to create an authority to achieve the objectives of effective management and planning of the commonwealth's investments in school building assets, promoting positive educational outcomes, ensuring the health, safety, security and well-being of students, easing and preventing overcrowding, maintaining good repair, efficient and economical construction and maintenance, financial sustainability of the school building assistance program, thoughtful community development, smart growth and accessibility.

SECTION 2. Said chapter 70B is hereby amended by inserting after section 1 the following section:-

Section 1A. (a) There is hereby created a body politic and corporate and a public instrumentality to be known as the Massachusetts School Building Authority, which shall be an independent public authority not subject to the supervision and control of any other executive office, department, commission, board, bureau, agency or political subdivision of the commonwealth except as specifically provided in any general or special law. The exercise by the authority of the powers conferred by this chapter shall be considered to be the performance of an essential public function.

(b) The authority shall consist of the state treasurer, who shall serve as chairperson, the secretary of administration and finance, the commissioner of education, and 4 additional members appointed by the state treasurer, 2 of whom shall have practical experience in educational facilities planning, school building construction, or architecture and school design, and 2 of whom shall be persons in the field of education with demonstrated knowledge of Massachusetts curriculum frameworks and other relevant federal and state educational standards, each of whom shall serve a term of 2 years; but, a person appointed to fill a vacancy shall serve only for the unexpired term. An appointed member of the authority shall be eligible for reappointment. The authority shall annually elect 1 of its members to serve as vice-chairperson. Each member of the authority serving ex officio may appoint a designee pursuant to section 6A of chapter 30.

(c) Four members of the authority shall constitute a quorum, and the affirmative vote of 4 members of the authority shall be necessary and sufficient for any action taken by the authority. No vacancy in the membership of the authority shall impair the right of a quorum to exercise all the rights and duties of the authority. Members shall serve without pay but shall be reimbursed for actual expenses necessarily incurred in the performance of their duties. The chairperson of the authority shall report to the governor and to the general court no less than annually, to assist the executive and legislative branches in coordinating educational, community development and fiscal policies of the commonwealth.

(d) Any action of the authority may take effect immediately and need not be published or posted unless otherwise provided by law. Meetings of the authority shall be subject to section 11A 1/2 of chapter 30A; but, said section 11A 1/2 shall not apply to any meeting of members of the authority serving ex officio in the exercise of their duties as officers of the commonwealth so long as no matters relating to the official business of the authority are discussed and decided at the meeting. The authority shall be subject to all other provisions of said chapter 30A, and records pertaining to the administration of the authority shall be subject to section 42 of chapter 30 and section 10 of chapter 66. All moneys of the authority shall be considered to be public funds for purposes of chapter 12A. The operations of the authority shall be subject to chapter 268A and chapter 268B and all other operational or administrative standards or requirements to the same extent as the office of the state treasurer.

SECTION 3. Section 2 of said chapter 70B, as appearing in the 2002 Official Edition, is hereby amended by striking out, in line 7, the word "board", and inserting in place thereof the following word:- authority.

SECTION 4. Said section 2 of said chapter 70B, as so appearing, is hereby further amended by striking out the definition of "Approved school project" and inserting in place thereof the following definition:-

"Approved school project", a school project approved by the authority.

SECTION 5. Said section 2 of said chapter 70B, as so appearing, is hereby further amended by striking out the definition of "Board of education" or "board" and inserting in place thereof the following definition:-

"Authority", the Massachusetts School Building Authority.

SECTION 6. Said section 2 of said chapter 70B, as so appearing, is hereby further amended by striking out the definition of "Commissioner".

SECTION 7. Said section 2 of said chapter 70B, as so appearing, is hereby further amended by striking out, in lines 47 and 56, the word "board" and inserting in place thereof, in each instance, the following word:- authority.

SECTION 8. Said section 2 of said chapter 70B, as so appearing, is hereby further amended by inserting after the definition of "Regional school district" the following definition:-

"School project", any capital construction or major reconstruction projects; the lease of buildings or modular facilities; arrangements with higher education facilities or other nonprofit or municipal entities; use of swing space between school buildings in the district; tuition arrangements with other school districts to prevent overcrowding; and other school facilities projects. The cost of tuition arrangements in existence prior to project application shall not be eligible for reimbursement as an approved school project.

SECTION 9. Said section 2 of said chapter 70B, as so appearing, is hereby further amended by inserting after the word "to", in line 58, the following words:- , the retrofitting of a school for the purpose of providing wireless or other learning technologies.

SECTION 10. Said section 2 of said chapter 70B, as so appearing, is hereby amended by striking out, in lines 67 and 72, the word "board" and inserting in place thereof, in each instance, the following word:- authority.

SECTION 11. Said section 2 of said chapter 70B, as so appearing, is hereby further amended by adding the following definition:-

"Trust", the Massachusetts School Modernization and Reconstruction Trust, established by section 35BB of chapter 10.

SECTION 12. Section 3 of said chapter 70B, as so appearing, is hereby amended by striking out, in lines 1 and 2, the words ", within the department of education,".

SECTION 13. Said section 3 of said chapter 70B, as so appearing, is hereby further amended by striking out, in lines 9, 16, 20 and 54, the word "board" and inserting in place thereof, in each instance, the following word:- authority.

SECTION 14. Said section 3 of said chapter 70B, as so appearing, is hereby further amended by striking out clauses (m) and (n), and inserting in place thereof the following 11 subparagraphs:-

(m) collect and maintain data on all the public school facilities in the commonwealth, including information on size, usage, enrollment, available facility space and maintenance;

(n) perform or commission a needs survey to ascertain the capital construction, reconstruction, maintenance and other capital needs for schools in the commonwealth;

(o) develop a long term capital plan in accordance with needs and projected funding;

(p) adopt and amend bylaws and such rules, regulations and procedures for the conduct of the business of the trust as the board shall deem necessary to carry out the provisions of this chapter;

(q) establish and maintain reserves;

(r) disburse amounts due to cities, towns and regional school districts pursuant to grants approved by the board to finance or refinance costs of approved school projects and to provide for the payment of all costs of the trust, including professional and financial services incident to the conduct of its operations;

(s) invest the funds of the trust in such investments as may be legal investments for funds of the commonwealth or any fiduciary in the commonwealth;

(t) obtain insurance and enter into agreements of indemnification necessary or convenient to the exercise of the powers of the trust;

(u) sue and be sued and to prosecute and defend actions relating to the affairs of the trust; but the trust shall not be authorized to become a debtor under the United States Bankruptcy Code;

(v) engage accounting, management, legal, financial, consulting and other professional services necessary to the operations of the trust; and

(w) do all things necessary or convenient to carry out the purposes of this chapter.

SECTION 15. Said section 3 of said chapter 70B, as so appearing, is hereby further amended by striking out the fourth paragraph and inserting in place thereof the following paragraph:-

The chairperson of the authority shall appoint an executive director, who shall supervise the administrative affairs and general management and operations of the authority and who shall also serve as secretary of the authority, ex officio. The executive director shall receive a salary commensurate with the duties of the office, and may be removed by the board for cause. The executive director may appoint other officers of the authority necessary to the functioning of the authority. The executive director shall designate no fewer than 1 employee to be a municipal liaison to assist cities and towns with concerns regarding the construction of schools. Sections 9A, 45, 46, and 46C of chapter 30, chapter 31 and chapter 150E shall not apply to the executive director or any other employees of the authority. The executive director shall, with the approval of the authority: (i) plan, direct, coordinate and execute administrative functions in conformity with the policies and directives of the authority; (ii) employ professional and clerical staff as necessary; (iii) report to the authority on all operations under his control and supervision; (iv) prepare an annual budget and manage the administrative expenses of the authority; and (v) undertake any other activities necessary to implement the powers and duties set forth in this chapter.

SECTION 16. Said chapter 70B is hereby further amended by striking out section 3A, as so appearing, and inserting in place thereof the following section:-

Section 3A. (a) There shall be a school building advisory board comprised of the state auditor or his designee, the inspector general or his designee, and the executive director of the authority, who shall serve as the secretary to the advisory board and shall be a nonvoting member of the board, and 15 members to represent the following nongovernmental organizations, to be appointed by those organizations: the Massachusetts Municipal Association, the Massachusetts Association of School Committees, the Massachusetts Mayors Association, the Massachusetts Association of School Superintendents, the Massachusetts Association of Regional Schools, the Massachusetts Building Trades Council, the Massachusetts chapter of the Associated Builders and Contractors, the Massachusetts Alliance of Small Contractors, the American Council of Engineering Companies of Massachusetts, the Associated Subcontractors of Massachusetts, the American Institute of Architects-Massachusetts, the Massachusetts Smart Growth Alliance, the Massachusetts Taxpayers Foundation, Associated General Contractors of Massachusetts and acting jointly, the Massachusetts Teachers Association and Massachusetts Federation of Teachers. The advisory board shall assist the authority in the development of general policy regarding school building construction, renovation, reconstruction, maintenance and facility space, preservation of open space and minimization of loss of open space, thoughtful community development, cost management and shall provide technical advice and input to the authority. The advisory board shall meet at least quarterly.

SECTION 17. Said chapter 70B is hereby further amended by inserting after section 3A the following 3 sections:-

Section 3B. (a) The authority 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 authority or as special obligations payable solely from particular revenues or moneys of the authority. Bonds of the authority shall not be considered to be a debt of the commonwealth or of any of its political subdivisions. 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 authority may determine. The authority shall determine the denominations of bonds, the details of their execution and authentication and their places of payment within or without the commonwealth. Before initial issuance of each series of bonds the authority shall advise the finance advisory board of the terms of the bonds and the timing of their issuance. In case any member or officer of the authority 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 authority may sell the bonds of the authority at public or private sale, at par or for such premium or discount price as it may determine. The authority may by resolution delegate to any member or officer of the authority the power to determine any of the matters set forth in this section. The aggregate principal amount of all bonds issued under this chapter shall not exceed $10,000,000,000 outstanding at any time. The principal amount of bonds for the payment or redemption of which, either at or before maturity, refunding bonds shall have been issued, shall be excluded from the aggregate principal amount of bonds issued under this chapter for purposes of computing the limit on outstanding bonds under this section.

(b) Bonds of the authority may be secured by a trust agreement between the authority 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 receipts, fees, revenues or other payments received or to be received by the authority, including without limitation amounts provided to the trust in accordance with section 35BB of chapter 10, grants, appropriations or other assistance from the commonwealth or the United States or any political subdivision or instrumentality of either, investment earnings on its funds and accounts and any other fees, charges or other income received or receivable by the authority 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 remedies by individual bondholders. A trust agreement may also contain covenants of the trust concerning the custody, investment and application of moneys, the issuance 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 authority, the state treasurer shall join in any trust agreement or to otherwise agree with the authority, any lender or any trustee for bondholders to hold the School Modernization and Reconstruction Trust Fund, established pursuant to said section 35BB of said chapter 10, in compliance with any covenants and provisions relating thereto in any trust agreement.

(c) Bonds may be issued by the authority in the form of lines of credit or other banking arrangements under terms and conditions determined by the authority. In addition to other lawful security, bonds may be secured, in whole or in part, by financial guaranties, by insurance, by letters or lines of credit or by other credit enhancement issued to the authority 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 authority may pledge or assign, in whole or in part, revenues, funds or other assets or property held or to be received by the authority, 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 authority, and the proceeds thereof, as security for any such guaranties or insurance or for the reimbursement to any issuer of a line or letter of credit.

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

(e) The authority may also provide for issuance by the authority of temporary notes in anticipation of bonds, grants, revenues or appropriations. The issuance of the notes shall be governed by this chapter relating to the issuance of bonds. The authority may also issue refunding bonds of the authority for the purpose of paying any bonds at or before maturity. Refunding bonds may be issued at any time at or before 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 authority are 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 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 of the authority shall be considered to be investment securities under chapter 106. 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 authority shall not be required to pay any taxes, assessments or excises upon its income, existence, operation, assets, moneys or revenues.

(h) It shall be lawful for any bank or trust company to act as a depository or trustee under a trust agreement, provided it furnishes such indemnification and reasonable security as the authority may require. Any assignment or pledge of revenues, funds or other assets or property made by the authority shall be valid and binding and shall be deemed continuously perfected for the purposes of chapter 106 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 authority shall immediately be subject to the lien of the pledge without any physical delivery or segregation or further act, and the lien of the pledge shall be valid and binding against all parties having claims of any kind in tort, contract or otherwise against the authority, whether or not the 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 trustees and no filing need be made pursuant to said chapter 106. Any pledge or assignment made by the authority is an exercise of its political and governmental powers, and 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 authority.

Section 3C. The authority and its existence shall continue until terminated by law, but no such law shall take effect so long as the authority shall have bonds outstanding unless adequate provision has been made for the payment or satisfaction thereof. Upon termination of the authority, the title to all properties of the authority that remain after provision for the payment or satisfaction of all bonds of the authority shall vest in the commonwealth. The obligations, debts and liabilities of the authority shall be assumed by and imposed upon the commonwealth and shall be transferred to the state treasurer or to such other successor as may be provided by law.

Section 3D. The authority, in cooperation with the state treasurer, shall at all times keep accounts of all receipts, expenditures and disbursements and all assets and liabilities of the authority, which shall be open to inspection by any officer or duly appointed agent of the commonwealth. The authority shall submit an annual report, in writing, to the governor and the clerks of the house of representatives and the senate, who shall forward the same to the president of the senate, the speaker of the house of representatives, the chairpersons of the house and senate committees on ways and means and the house and senate chairpersons of the joint committee on education, arts and humanities. The report shall include financial statements relating to the operations, assets and expenditures of the authority maintained in accordance with generally accepted accounting principles so far as applicable and audited by an independent certified public accountant firm.

SECTION 18. Section 4 of said chapter 70B, as so appearing, is hereby amended by striking out, in lines 6 and 7, the word "board" and inserting in place thereof, in each instance, the following word:- authority.

SECTION 19. Said section 4 of said chapter 70B, as so appearing, is hereby further amended by striking out the last sentence.

SECTION 20. Said chapter 70B is hereby further amended by striking out section 5, as so appearing, and inserting in place thereof the following section:-

Section 5. Any eligible applicant may apply to the authority for a school facilities grant to meet in part the cost of a school project. The costs shall include all costs and legal fees to enforce rights on any contracts for the construction of a school project. The application shall be in the form prescribed by the authority and shall be accompanied or supplemented by drawings, plans, estimates of cost and proposals for defraying the costs or any additional information the authority may require, before construction is undertaken. Notwithstanding any provision of this chapter to the contrary, in the event that an eligible applicant undertakes construction before approval is obtained, said eligible applicant shall remain subject to the authority's approval process as if the construction were not undertaken. Any eligible applicant who is eligible for aid under this chapter and establishes extended courses of instruction in a vocational school, as provided in section 37A of chapter 74, and wishes to enlarge or construct a school for the purpose of maintaining extended courses of instruction on a technical institute level shall be eligible for financial assistance in the construction or enlargement of such school in the manner and to the extent provided by this chapter. If a project application is not approved, and the sole reason for such disapproval is the limit on total facilities grants established by section 7, at the request of the eligible applicant, the application shall be retained by the authority and reviewed in the following fiscal year; provided, that in said review, the project shall be ranked and evaluated using the priorities established by section 8 of this chapter; provided, further, that the authority shall require a new application from any applicant seeking to make a substantial change in scope of the project which is the subject of the application subsequent to disapproval by the authority.

SECTION 21. Said chapter 70B is hereby further amended by striking out section 6, as amended by section 74 of chapter 46 of the acts of 2003, and inserting in place thereof the following section:-

Section 6. (a) Upon receipt of an application under section 5, from time to time, the authority may designate approved school projects. The authority shall examine forthwith the applications and any facts, estimates, or other information relative thereto, and shall make the following findings in order to designate a school project as an approved school project:

(1) The school project is in the best interests of the commonwealth and the eligible applicant, with respect to its site, type of construction, sufficiency of accommodations, open space preservation, urban development, urban sprawl, energy efficiency, and otherwise.

(2) The school project is necessary to meet educational standards of the curriculum frameworks established by the board of education pursuant to section 1E of chapter 69 for anticipated enrollment levels.

(3) The school project has a value over its useful life commensurate with the lifecycle cost of building, operating, and maintaining the project.

(4) The school project is not at a school that has been the site of an approved school project pursuant to this chapter or to chapter 645 of the acts of 1948 within the 10 years prior to the project application date, or the approved school project is unrelated to such previously approved project in the same school.

(5) The school project is within the capacity of the authority to finance within revenues projected to be available to the trust, established pursuant to section 35BB of chapter 10.

(6) The commissioner of education has certified that adequate provisions have been made in the school project for children with disabilities, as defined in section 1 of chapter 71B, and, in the case of elementary facilities, that adequate provisions consistent with local policy have been made for all-day kindergarten, pre-kindergarten classes and for extended day programs; provided, however, that no district shall be required to adopt the classes or programs.

The authority shall also consider the availability of funds projected in the trust and other financial obligations of the authority, the authority's long term capital plan, the results of needs surveys, the order of priorities under section 8 and construction procedures and standards under section 9 and otherwise as prescribed by law and regulation. With respect to a regional school district, the authority shall also consider whether the school project represents an economy of scale that benefits the commonwealth and the municipalities of the region.

(b) Within a reasonable time after receipt of the application the authority shall notify the applicant of its approval or rejection thereof, and, in the event of its rejection, of the reasons therefor. Notice of approval hereunder shall be accompanied by a statement of the estimated approved cost as determined by the authority, and an estimate of the amount of total facilities grant to which the eligible applicant may be entitled under section 10.

(c) If the authority designates a school project to be an approved school project, the authority shall compute the estimated approved cost of the project, which cost may be equal to the estimated cost furnished by the eligible applicant or a lesser amount, and compute the amount estimated of facilities grant to which the applicant would be entitled under section 10, such computation being based on said approved cost. The final approved cost shall be determined by the authority within a reasonable time after the acceptance of the completed project by the local school committee. Final audits shall be conducted promptly by the authority. Final payments shall be determined based on the final approved cost.

(d) Any city or town which has received, in accordance with subsection (b) and (c), notice of approval and an estimate of the amount of a school facilities grant to which such city or town may be entitled may borrow from time to time to finance that portion of the cost of the approved school project not being paid by such grant, in such amount approved by the board of selectmen or mayor or city manager of the city or town, and may issue bonds or notes therefor which shall bear on their face the words (name of city or town) School Project Loan, chapter 70B. Each authorized issue shall constitute a separate loan, and the loans shall be paid in not more than 25 years from their dates. Any city, town or regional school district which has received, in accordance with subsections (b) and (c), notice of approval and an estimate of the amount of a school facilities grant to which such city, town or regional school district may be entitled may issue and renew temporary notes. The authority shall issue regulations relative to issuance of temporary notes for school construction. Indebtedness incurred under this chapter shall be outside the statutory debt limit but shall, except as herein provided, be subject to chapter 44.

SECTION 22. Said chapter 70B is hereby further amended by striking out section 7, as appearing in the 2002 Official Edition, and inserting in place thereof the following section:-

Section 7. There shall be a limit on the aggregate estimated amount of total facilities grants approved by the authority during a fiscal year. For the 2008 fiscal year the limit shall be $500,000,000. For each fiscal year thereafter the limit shall be the limit for the previous fiscal year plus 4.5 per cent.

SECTION 23. Section 8 of said chapter 70B, as so appearing, is hereby amended by striking out, in lines 1, 11, 13, 16, 20, 22, 26, 36, 39, 41 and 53, the word "board" and inserting in place thereof, in each instance, the following word:- authority.

SECTION 24. Said section 8 of said chapter 70B, as so appearing, is hereby further amended by striking out the second paragraph.

SECTION 25. Section 9 of said chapter 70B, as so appearing, is hereby amended by striking out, in lines 2, 13, 19 and 28, the word "board" and inserting in place thereof, in each instance, the following word:- authority.

SECTION 26. Said section 9 of said chapter 70B, as so appearing, is hereby further amended by striking out, in line 3, the words "the following standards and procedures" and inserting in place thereof the following words:- standards and procedures as the authority considers appropriate, including, but not limited to, the following.

SECTION 27. Subsection (c) of said section 9 of said chapter 70B, as so appearing, is hereby amended by striking out the first sentence and inserting in place thereof the following sentence:- On or before March 1 in each year, the authority shall adopt interim regulations, including minimum program standards and maximum cost standards, for the implementation of this section.

SECTION 28. Said section 9 of said chapter 70B, as so appearing, is hereby further amended by striking out, in line 48, the word "commission" and inserting in place thereof the following word:- authority.

SECTION 29. Section 10 of said chapter 70B, as so appearing, is hereby amended by striking out the first paragraph and inserting in place thereof the following paragraph:-

The grant percentage for approved school projects shall be calculated based on the following formula, but no grant percentage shall be less than 50 per cent nor greater than 90 per cent.

SECTION 30. Section 10 of said chapter 70B is hereby amended by striking out the first paragraph, as amended by section 29 of this act, and inserting in place thereof the following paragraph:-

The grant percentage for approved school projects shall be calculated based on the following formula, but no grant percentage shall be less than 40 per cent nor greater than 80 per cent.

SECTION 31. Said section 10 of said chapter 70B, as appearing in the 2002 Official Edition, is hereby further amended by striking out, in line 15, the figure "39" and inserting in place thereof the following figure:- 31.

SECTION 32. Paragraph (C) of subsection (a) of said section 10 of said chapter 70B, as so appearing, is hereby amended by striking out the line reading the words "Use of Construction/Project Manager 2."

SECTION 33. Said section 10 of said chapter 70B, as so appearing, is hereby further amended by striking out, in line 39, the word "board" and inserting in place thereof the following word:- authority.

SECTION 34. Said section 10 of said chapter 70B, as so appearing, is hereby further amended by striking out subsection (c) and inserting in place thereof the following subsection:-

(c) For approved school projects in districts which have a racial desegregation plan approved by the board of education not later than June 30, 2000, the reimbursement percentage shall be the sum of: (a) the percentage calculated pursuant to subsections (a) and (b); and (b) for projects designated as approved school projects on or before June 30, 2006, 10 percentage points, or, for projects designated as approved school projects on or before June 30, 2012, 5 percentage points. Only new project applications which present clear and convincing evidence that the proposed school building project will promote the objectives of achieving racial balance expressed in sections 37C and 37D of chapter 71 for the students attending the new, renovated, or repaired school will be eligible for the added percentage points. The total reimbursement percentage shall in no circumstances exceed the maximum grant percentage under the first paragraph of this section.

SECTION 35. Said chapter 70B is hereby further amended by striking out section 11, as so appearing, and inserting in place thereof the following section:-

Section 11. Grants for approved school projects shall be paid in accordance with a disbursement schedule approved by the authority.

SECTION 36. Sections 12, 13 and 18 of said chapter 70B are hereby repealed.

SECTION 37. Section 14 of said chapter 70B, as appearing in the 2002 Official Edition, is hereby amended by striking out, in lines 2 and 7, the word "board" and inserting in place thereof, in each instance, the following word:- authority.

SECTION 38. Section 15 of said chapter 70B, as so appearing, is hereby amended by striking out subsection (a) and inserting in place thereof the following subsection:-

(a) In the event that an eligible applicant sells or leases an assisted structure or facility on account of which it is receiving grant payments for an approved school project or, in the case of an approved school project approved on or after July 1, 2004, on account of which it has received at least 1 grant payment in the preceding 20 years, pursuant to this chapter or pursuant to chapter 645 of the acts of 1948, the net proceeds from the sale or lease shall be divided between the commonwealth and the general funds of the applicable eligible applicant in proportion to the commonwealth's prior investment in the assisted structure or facility under this chapter or said chapter 645, as applicable. In the case of an approved school project approved prior to July 1, 2004, the commonwealth's share of the net proceeds shall reduce the balance of outstanding grant payments that would otherwise be payable except for this section and shall not exceed that amount. Any eligible applicant which sells, leases or otherwise removes from use by the eligible applicant as a schoolhouse any approved school project on account of which it is receiving grant payments or, in the case of an approved school project approved on or after July 1, 2004, on account of which it has received at least 1 grant payment in the preceding 20 years, pursuant to this chapter or pursuant to said chapter 645, shall report the sale, lease or removal to the authority in the form and manner and within the time prescribed by the authority. The authority may issue regulations to recapture commonwealth assistance for capital construction for any approved school facilities projects for school buildings that are removed from service.

SECTION 39. Said section 15 of said chapter 70B, as so appearing, is hereby further amended by striking out, in lines 27, 28, 32 and 33, and 46, the word "commissioner" and inserting in place thereof, in each instance, the following word:- authority.

SECTION 40. Section 16 of said chapter 70B, as so appearing, is hereby amended by striking out, in lines 1 and 4, the word "board" and inserting in place thereof, in each instance, the following word:- authority.

SECTION 41. Said chapter 70B is hereby further amended by striking out section 17, as so appearing, and inserting in place thereof the following section:-

Section 17. (a) On or before June 30 of each year, the authority shall submit a report to the governor, the house and senate committees on ways and means, the joint committee on education, arts and humanities, the joint committee on natural resources, the house and senate committees on long-term debt and capital expenditures and the joint committee on local affairs which analyzes the anticipated financial needs for school facilities projects of the kind that qualify for assistance under this chapter. The report shall include a listing of each school building within the commonwealth, together with a description of its size, capacity, age and state of maintenance and whether it is likely to require construction, enlargement, reconstruction, rehabilitation or improvement due to such factors as deterioration, lack of adequate facilities to meet educational standards and anticipated increases in school-age population.

(b) The authority shall also conduct periodic surveys of the cities, towns and regional school districts to determine the need for new school facility construction to meet demand.

(c) The authority shall develop a long-term capital plan in accordance with needs and funding projected to be available in the trust under this chapter for purposes of planning and guiding the policies of the authority.

(d) The capital plans, needs surveys and reports of the authority shall not give rise to any claim, legal or moral, or enforceable right in any party to benefits or funds from the trust or from other sources.

SECTION 42. Said chapter 70B is hereby amended by striking out section 19, as so appearing, and inserting in place thereof the following section:-

Section 19. Municipalities and school districts shall notify the authority within 30 days of refinancing any bond for which the municipality or district will receive state reimbursement under chapter 645 of the acts of 1948 or other law. The authority shall reimburse municipalities or districts at the actual interest rate obtained. The authority shall encourage municipalities and school districts to refinance any bond for which the municipality or district will receive state reimbursement where the refinancing would result in savings for the commonwealth or the municipality or school district and where the refinancing is otherwise in accordance with the law.

SECTION 43. Section 329 of chapter 159 of the acts of 2000 is hereby repealed.

SECTION 44. Chapter 26 of the acts of 2003 is hereby amended by striking out section 668 and inserting in place thereof the following section:-

Section 668. Notwithstanding any general or special law to the contrary, the board of education and the school building authority established pursuant to section 1A of chapter 70B of the General Laws shall not accept an application for the school building assistance program established in said chapter 70B until after July 1, 2007.

SECTION 45. On or before August 1, 2004, the commissioner of education shall submit to the Massachusetts School Building Authority a list of school projects consisting of: (i) all projects approved in accordance with chapter 645 of the acts of 1948 for which the state has outstanding liability as of July 1, 2004; (ii) all approved school projects that were approved by the board of education in accordance with section 6 of chapter 70B of the General Laws on or before June 30, 2004, for which the state has outstanding liability as of July 1, 2004; (iii) all projects on the school building assistance priority waiting list maintained by the department of education as of July 1, 2004; and (iv) projects in Quincy and Swampscott which, prior to the effective date of this act, were eligible for funding under section 668 of chapter 26 of the acts of 2003. The list shall identify for each project: (i) total estimated construction costs; (ii) total estimated short-term and long-term interest costs; (iii) reimbursement rate pursuant to chapter 70B of the General Laws as in effect prior to the effective date of this act, section 329 of chapter 159 of the acts of 2000 as in effect prior to the effective date of this act, and section 668 of chapter 26 of the acts of 2003 as in effect prior to the effective date of this act; (iv) year of application; (v) year of approval, if approved; (vi) rank order on the waiting list; and (vii) other information as appropriate upon the request of the Massachusetts School Building Authority.

Projects included on the list submitted pursuant to this section shall not be counted toward the limit found in section 7 of chapter 70B of the General Laws on aggregate estimated amount of total facilities grants approved.

SECTION 46. Notwithstanding any general or special law to the contrary, the Massachusetts School Building Authority may accept an application for an emergency situation capital school construction grant for the city of Springfield under chapter 70B of the General Laws and may add the project to the list submitted pursuant to section 45 of this act at the reimbursement rate in effect on June 30, 2003. For the purposes of this section, an emergency situation shall consist of: (i) a school that has been determined to be underperforming by the board of education and has lost or is at risk of losing its accreditation; and (ii) a determination by the commissioner that such project is needed to address significant deficiencies which cannot be cost-effectively addressed through major reconstruction or repair work. The application shall meet all requirements of said chapter 70B and the regulations promulgated therefor.

SECTION 47. (a) Upon the effective date of this act, the Massachusetts School Building Authority shall succeed to all powers theretofore granted to the board of education with respect to projects on the list submitted pursuant to section 45. As soon as practicable following the effective date of this act the commissioner of education shall transfer to the Authority all records and documents, or copies thereof, which immediately prior to such date are in the custody of the board of education or the department of education and which relate to or are maintained for the purpose of the school building assistance program.

(b) The amendments made in this act to chapter 70B of the General Laws shall not affect the terms of payment for any project on the list submitted pursuant to section 45, except as specifically provided in this section and sections 48 to 53, inclusive, of this act. The percentage of approved project costs paid by the commonwealth for projects on the list submitted pursuant to section 45 shall not be altered as a result of the amendments made by this act to said chapter 70B. Grants for projects on the list shall be payable by the Massachusetts School Building Authority rather than by legislative appropriations.

For projects which prior to July 1, 2004 were approved by the board of education pursuant to section 6 of chapter 70B of the General Laws, as in effect prior to the effective date of this act, approved costs shall include the entire interest payable on any indebtedness incurred to finance the projects, as well as any premiums, fees or charges for credit or liquidity enhancement facilities or services issued or rendered in connection with any such indebtedness.

For projects on the list submitted pursuant to section 45 with respect to which indebtedness shall have been incurred prior to July 1, 2004, the final approved cost of any such project shall include interest on such indebtedness and interest on any temporary notes issued on or after July 1, 2004 but prior to receipt of a grant and may, in the discretion of the board, include principal of any bonds issued prior to July 1, 2004.

For projects on the list submitted by the department of education pursuant to section 45 and not approved by the board of education pursuant to section 6 of chapter 70B of the General Laws, as in effect prior to the effective date of this act, for which no indebtedness has been incurred prior to July 1, 2004, grants shall include interest on temporary notes paid prior to the receipt of a grant, but shall not include interest on bonds.

Grants for approved projects shall be paid in accordance with a disbursement schedule approved by the authority.

SECTION 48. (a) The Massachusetts School Building Authority shall complete final audits on all projects on the list submitted pursuant to section 45 for which a final audit had not been completed as of the effective date of this act, and shall adjust payments in accordance with the result of those audits. For projects for which a final audit was complete as of the effective date of this act and for which substantial new information has become available since the completion of the audit, the authority may, at the request of a city, town, regional school district or independent agricultural and technical school, review the audit and make adjustments to approved project costs.

(b) For the purposes of expediting the payout of school building assistance grants, at the written request of a city, town, regional school district, or independent agricultural and technical school, the authority may in its discretion expedite the timing of a final audit. The requesting municipality shall assume responsibility for the cost of the expedited auditing services, if the services are authorized by the authority under this section.

(c) Any additional amounts owed to the city of Lynn as a result of audits performed shall be paid to the city by the authority in 7 annual installments. The first such installment shall be made in fiscal year 2005.

(d) For a project for which, prior to the effective date of this act, delays of 5 or more years between project completion and completion of the final audit resulted in a reduction in annual payments of greater than 35 per cent, at the request of a city, town, regional school district or independent agricultural and technical school, the authority shall return the level of annual payments to the level of annual payments for that project prior to the completion of the final audit and make payments over a shorter number of years; provided, however, that the total payment shall not exceed the amount identified in the final audit.

SECTION 49. Projects on the list submitted pursuant to section 45 shall be funded by the Massachusetts School Building Authority with no substantial changes in scope except: (i) those changes in scope which had received preliminary or final approval from the board of education prior to the effective date of this act; or (ii) those changes in scope which result in a total grant amount owed to the municipality or district equal to or less than the total grant amount owed as of the effective date of this act. The Massachusetts School Building Authority shall work with cities, towns, regional school districts and independent agricultural and technical schools to finalize modified applications for projects with preliminary approval for modification of the scope in a manner consistent with the preliminary approval granted by the commissioner of education prior to the effective date of this act.

SECTION 50. The School Building Assistance Authority shall provide financial assistance under this act for projects on the list submitted pursuant to section 45 and not yet approved by the board of education prior to the effective date of this act in the order in which they appear on the list; provided, however, that the authority may deviate from the order if it determines that it is necessary to do so in order to comply with federal income tax laws or regulations related to the tax exemption of indebtedness incurred by the authority or to provide grants to municipalities or districts whose short-term borrowing would otherwise terminate prior to the award of a grant. The authority shall notify the house and senate committees on ways and means and the joint committee on education, arts, and humanities within 30 days whenever changes in list order will result in a project getting funds more than a year earlier or later than would have been the case had the authority provided funds to districts in the order in which they appear on the list.

Projects with respect to which, in the reasonable judgment of the authority, no substantial progress has been made by July 1, 2009 may be removed by the authority from the list. Any project so removed from the list may be the subject of a new grant application to the authority under chapter 70B of the General Laws but shall have no specific entitlement to funding under this act.

SECTION 51. Notwithstanding section 17 of chapter 44 of the General Laws, the officers of a city, town or regional school district authorized to issue bonds, notes or certificates of indebtedness for a school construction project on the list submitted pursuant to section 48, may refund, by the issuance of refunding notes, a temporary loan issued in anticipation of money to be derived from the sale of the bonds, notes or certificates, but the period from the date of issue of the original temporary loan to the final maturity of any such refunding notes shall not exceed 7 years; but the period from the date of issue of the original temporary loan to the final maturity of all school construction project financing shall not exceed 30 years. The refunding notes shall not be required to be paid in part from revenue funds of the city, town or regional school district until the end of the fiscal year following the fiscal year in which the board of education or the Massachusetts School Building Authority as applicable approves the project for a school construction grant. The time within which the serial bonds, notes or certificates of indebtedness issued to pay refunding temporary notes issued hereunder shall be due and payable shall be extended by the period from the date of the original temporary loan to: (a) the date of issue of such serial bonds, notes or certificates; or (b) the end of the fiscal year in which the board of education or the Massachusetts School Building Authority as applicable approves the project for a school construction grant, whichever date is earlier.

SECTION 52. Subject to appropriation, cities and towns receiving reimbursement pursuant to section 12 of chapter 70B of the General Laws in fiscal year 2004 shall continue to be reimbursed in accordance with said section 12 of said chapter 70B, as in effect prior to the effective date of this act.

SECTION 53. Notwithstanding any general or special law to the contrary and except as specifically provided in this act, no city, town, regional school district or independent agricultural and technical school shall have any entitlement to funds under chapter 70B of the General Laws except at the discretion of the Massachusetts School Building Authority in accordance with said chapter 70B. If an eligible applicant undertakes construction for a project not included in the list submitted pursuant to section 45 or incurs indebtedness for such a project not yet designated as an approved school project, as defined in section 2 of said chapter 70B, the applicant shall remain subject to the authority's approval process as if the construction had not been undertaken or the indebtedness had not been incurred. Applications submitted subsequent to July 1, 2007, for projects which commence construction between July 1, 2004 and June 30, 2006, shall, if approved by the Massachusetts School Building Authority, be reimbursed at the rate in effect at the time of approval. In considering whether to designate such projects as approved school projects and in calculating approved costs, the Massachusetts School Building Authority may consider allowable cost standards and other pertinent department of education regulations in effect on June 30, 2004. Applications submitted subsequent to July 1, 2007, for projects which commence construction between July 1, 2006 and June 30, 2007, shall, if approved by the Massachusetts School Building Authority, be reimbursed at the rate in effect at the time of approval. In calculating approved costs for such projects, the Massachusetts School Building Authority shall use regulations promulgated by the authority pursuant to section 55. The authority may refuse to designate a project as an approved school project.

SECTION 54. The Massachusetts School Building Authority, in consultation with the advisory board established pursuant to section 3A of chapter 70B of the General Laws, shall review matters including, but not be limited to, the appropriateness of existing regulations and laws governing the School Building Assistance program, the appropriate cost and size standards, to be promulgated by the Massachusetts School Building Authority under section 9 of chapter 70B of the General Laws, the appropriate formula for facilities grants under section 10 of said chapter 70B, and all other standards and procedures established in sections 8, 9 and 10 of said chapter 70B, the best means to encourage energy-efficient schools, the advisability of allowing or requiring cities, towns and regional school districts to establish funds for building maintenance, the advisability of further changes to chapter 70B of the General Laws in accordance with construction reform, the feasibility of requiring prototype designs for school building projects, the feasibility of allowing public-private partnerships in constructing schools, or the use of lease-purchase in providing educational space, the best means to assist in meeting the building needs of charter schools and educational collaboratives, the feasibility of requiring future school buildings to be constructed so as to facilitate early education and care programs, full day kindergarten, proper tutorial space, services which may go beyond direct instructional services but which may be best provided to students in a school setting, uses that extend beyond the typical school day for extended hours, weekends and during the summer months for educational, recreational and other purposes which provide community uses, the introduction of wireless technology in the classroom, and the feasibility of providing financial incentives to communities that have adopted zoning policies or other initiatives that encourage increased affordable housing production in the commonwealth, including, but not limited to, inclusionary zoning, so-called. The authority shall file a progress report not later than December 31, 2004, and a final report, along with any regulatory and legislative proposals necessary to carry its recommendations into effect, not later than April 1, 2005, with the secretary of administration and finance, the house and senate clerks, the chairpersons of the house and senate committees on ways and means and the house and senate chairs of the joint committee on education, arts and humanities.

The secretary of administration and finance shall submit a report on recommended changes to section 10 of chapter 70B of the General Laws no later than May 1, 2005, with proposed legislation, to the clerks of the house and senate, the house and senate committees on ways and means, and the joint committee on education, arts, and humanities.

SECTION 55. Notwithstanding any general or special law to the contrary, the authority shall not issue maximum eligible cost standards nor size standards for school projects pursuant to section 9 of chapter 70B of the General Laws, nor shall it promulgate regulations pursuant to said chapter 70B prior to January 1, 2006. In drafting regulations, the authority shall review the needs analysis and capital plan required by section 17 of said chapter 70B to be completed by the board on June 30, 2005, and shall propose draft regulations based on the report, capital plan and needs analysis not later than January 1, 2006. The authority shall hold not less than 5 hearings on the draft regulations in locations reflective of the geographic diversity of the commonwealth, and shall submit the draft regulations to the joint committee on education, arts and humanities, which shall have 30 days to review and comment on the regulations. The authority shall promulgate final regulations no later than July 1, 2006.

SECTION 56. Notwithstanding any general or special law to the contrary, the Massachusetts School Building Authority, with the advice of the school building advisory committee, shall conduct a comprehensive analysis of the needs of municipal and regional school districts for projects eligible for reimbursement under chapter 70B of the General Laws beginning July 1, 2007.

SECTION 57. Sections 30 to 32, inclusive, shall take effect on August 1, 2005.

Approved July 26, 2004.

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