Massachusetts General Laws
Chapter 70b - School Building Assistance Program
Section 3b - Bonds

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 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 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.

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