General Laws of Massachusetts - Chapter 44 Municipal Finance - Section 21B Designation of tax credit bonds; sinking fund; sale of tax credit bonds; issuance of refunding bonds

Section 21B. The city council of a city, and in the case of a city having a city manager and in the case of other cities, with the approval of the mayor the board of selectmen of a town, the school committee of a regional school district and the prudential committee, if any, otherwise, the commissioners of a district may designate any duly authorized issue of bonds or notes as tax credit bonds to the extent that any such bonds or notes are otherwise permitted to be issued in the form of bonds or notes with federal tax credits or other similar subsidies for all or any portion of their borrowing costs. Any borrowing designated as tax credit bonds may be payable without regard to any limitation as to amounts of annual installments for bonds provided in any other law.

Notwithstanding section 47 or any other general or special law to the contrary, the city council of a city, and in the case of a city having a city manager and in the case of other cities with the approval of the mayor the board of selectmen of a town, the school committee of a regional school district and the prudential committee, if any, otherwise, the commissioners of a district may establish a separate sinking fund to be held in trust solely for the payment of principal, redemption premium and interest on any tax credit bonds. Amounts held in any such sinking fund may be invested pursuant to section 55 and the income derived from such investment may be expended by the treasurer to pay the principal, redemption premium, if any, and interest on such tax credit bonds until they are paid or otherwise redeemed; provided, however, that notwithstanding the limitations on the maturity of investments under said section 55, any such investment may have a maturity not later than the date fixed for the payment or redemption of such tax credit bonds. Any earnings on proceeds of tax credit bonds may be applied to pay costs of any project for which the city, town or district is authorized to incur debt for a period of 5 years or more, or to the redemption of tax credit bonds from which such proceeds were derived, and may not be applied or appropriated for any other purpose.

Tax credit bonds may be sold at par, premium or discount, without regard to any limitation on the amount of any discount contained in any other general or special law, and may be sold as instruments the principal amount of which either remains constant or increases during the life of the instrument. When tax credit bonds are issued the amount issued shall be deemed to be the net proceeds of the issue; provided that the officers charged with the issuance of such tax credit bonds may apply all or a portion of any premium received on the sale of any such tax credit bonds, without appropriation, to the costs of issuance thereof, in which case the amount of any premium so applied shall not be included in the amount of the issue.

The city council of a city, and in the case of a city having a city manager and in the case of other cities with the approval of the mayor the board of selectmen of a town, the school committee of a regional school district and the prudential committee, if any, otherwise the commissioners of a district may provide for the issuance of refunding bonds or notes of the city, town, regional school district or district for the purpose of paying or refunding all or any designated part of an issue of tax credit bonds, other than tax credit bonds issued in accordance with section 54AA(g) of the Internal Revenue Code, without regard to the present value savings requirements set forth in section 21A. Except as provided herein, the issuance of refunding bonds for the purpose of paying or refunding tax credit bonds shall be governed by the provisions of said section 21A. Notwithstanding any general or special law to the contrary, any limitation amount that is allocated to any large local educational agency pursuant to, and as defined in, section 54F(d)(2) of the Internal Revenue Code of 1986 and that remains unused by such large local educational agency as of the end of any calendar year is hereby deemed reallocated to the commonwealth and, effective January 1 of the following calendar year, further reallocated by the commonwealth to such large local educational agency.

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Last modified: September 11, 2015