Massachusetts 2023-2024 Regular Session

Massachusetts House Bill H5056 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	1 of 1
2	2	HOUSE DOCKET, NO. 5308 FILED ON: 8/11/2024
3	3	HOUSE . . . . . . . . . . . . . . . No. 5056
4	4	The Commonwealth of Massachusetts
5	5	_________________
6	6	PRESENTED BY:
7	7	Kate Donaghue
8	8	_________________
9	9	To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
10	10	Court assembled:
11	11	The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
12	12	An Act authorizing the town of Southborough to issue pension obligation bonds or notes.
13	13	_______________
14	14	PETITION OF:
15	15	NAME:DISTRICT/ADDRESS :DATE ADDED:Kate Donaghue19th Worcester6/20/2024 1 of 4
16	16	HOUSE DOCKET, NO. 5308 FILED ON: 8/11/2024
17	17	HOUSE . . . . . . . . . . . . . . . No. 5056
18	18	By Representative Donaghue of Westborough, a petition (subject to Joint Rule 12) of Kate
19	19	Donaghue (by vote of the town) that town of Southborough be authorized to issue bonds or notes
20	20	for the purpose of funding its portion of the unfunded pension liability of the Worcester regional
21	21	retirement system. Municipalities and Regional Government. [Local Approval Received.]
22	22	The Commonwealth of Massachusetts
23	23	_______________
24	24	In the One Hundred and Ninety-Third General Court
25	25	(2023-2024)
26	26	_______________
27	27	An Act authorizing the town of Southborough to issue pension obligation bonds or notes.
28	28	Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
29	29	of the same, as follows:
30	30	1 SECTION 1. The town of Southborough may issue, at 1 time or from time to time, bonds
31	31	2or notes for the purpose of funding the portion of the unfunded pension liability of the Worcester
32	32	3regional retirement system allocable to the town of Southborough. The proceeds of any such
33	33	4issuance, other than amounts to be applied to issuance costs, the establishment of reserves and
34	34	5any other expenses incidental or related thereto, shall be paid by the town of Southborough to the
35	35	6Worcester regional retirement system, shall be allocated solely to reduce the unfunded pension
36	36	7liability allocable to the town of Southborough to which the bonds or notes relate, shall be
37	37	8invested in any investments which are permitted under chapter 32 of the General Laws and shall
38	38	9otherwise be held and expended on behalf of the town by the Worcester regional retirement
39	39	10system in accordance with law. The terms of any such bonds or notes shall not exceed 30 years
40	40	11from the date of issuance and the amount of any such bonds or notes shall be outside the limit of
41	41	12indebtedness prescribed in section 10 of chapter 44 of the General Laws. Upon the authorization 2 of 4
42	42	13of the issuance of pension obligation bonds by the town, the town shall submit the vote and a
43	43	14plan demonstrating how the town will finance and allocate the debt service associated with the
44	44	15bonds or notes to the executive office for administration and finance, and no bonds or notes
45	45	16authorized to be issued by this act shall be issued until the secretary for administration and
46	46	17finance has approved the plan and the issuance of such bonds or notes. Except as otherwise
47	47	18provided in this act, such bonds or notes shall be subject to said chapter 44.
48	48	19 SECTION 2. The aggregate principal amount of the bonds or notes issued during any
49	49	20calendar year under authority of this act shall not be greater than the amount sufficient to
50	50	21extinguish the unfunded pension liability of the Worcester regional retirement system allocable
51	51	22to the town of Southborough, as of a particular date as determined in accordance with this
52	52	23section, plus an amount to provide for issuance costs, the establishment of any reserves as
53	53	24described below and any other expenses incidental or related thereto. The Worcester regional
54	54	25retirement system shall first determine the amount sufficient to extinguish the unfunded pension
55	55	26liability of the town of Southborough, in accordance with the report of a nationally recognized
56	56	27independent consulting firm, which may be the consulting actuary generally retained by the
57	57	28Worcester regional retirement system, and which amount shall be approved by the public
58	58	29employee retirement administration commission. The report shall also set forth the present value
59	59	30savings to the town reasonably expected to be achieved as a result of the issuance of such bonds
60	60	31or notes.
61	61	32 SECTION 3. The maturities of such bonds or notes shall be scheduled so that the annual
62	62	33combined payments of principal and interest for each issue shall be as nearly equal as practicable
63	63	34in the opinion of the town treasurer, in any manner that shall provide for a more rapid
64	64	35amortization of principal, or in accordance with any other manner consistent with the town's 3 of 4
65	65	36approved funding schedule, as the secretary for administration and finance shall approve. In
66	66	37granting the approval, the secretary may require the establishment of a reserve that may be
67	67	38created from a portion of the amount of the annual savings used to calculate the present value
68	68	39savings, through the issuance of bonds in accordance with this act, or otherwise, and the town of
69	69	40Southborough is authorized to establish any such reserve fund upon such terms and conditions as
70	70	41may be required by the secretary for administration and finance or, if no such reserve is required
71	71	42to be established by the secretary of administration and finance, such a reserve fund may be
72	72	43established upon such terms and conditions as the town shall determine and may be funded with
73	73	44proceeds of bonds issued pursuant to this act, or otherwise. Any such reserve shall be held and
74	74	45controlled by the town and shall be separate from any other reserve or fund of the town allowed
75	75	46or required by statute. The secretary shall establish a method to calculate both the required
76	76	47amount of annual contribution to the reserve and the minimum value to be maintained in the
77	77	48reserve and shall prescribe conditions for expenditure from the reserve, including its use if
78	78	49necessary to prevent or limit any future unfunded actuarial pension liability and the conditions
79	79	50under which all or a portion of the funds in the reserve may be available for unrestricted
80	80	51purposes in which case such funds or portions thereof shall be transferred to the town treasury.
81	81	52Any funds in the reserve fund established pursuant to this act shall be trust funds within the
82	82	53meaning of section 54 of chapter 44 of the General Laws and, except as otherwise provided in
83	83	54this act, shall be subject to the provisions of said section 54.
84	84	55 SECTION 4. If the unfunded pension liability to be funded with the proceeds of an issue
85	85	56of bonds or notes issued under this act relates in part to employees of a governmental unit other
86	86	57than the town of Southborough, each such governmental unit shall be responsible for
87	87	58reimbursing the town of Southborough for bonds or notes issued hereunder as is equal to the 4 of 4
88	88	59proportion of the total unfunded pension liability to be funded with the proceeds of the bonds or
89	89	60notes as relates to each of such entities. Notwithstanding any general or special law to the
90	90	61contrary, the public employee retirement administration commission shall increase the annual
91	91	62amount to be certified under section 22 of chapter 32 the General Laws as the amount necessary
92	92	63to be paid by each such governmental unit other than the town of Southborough by each such
93	93	64governmental unit's proportionate share of the annual debt service expense as determined herein.
94	94	65The town of Southborough shall have the same legal rights and authority as the retirement board
95	95	66of the Worcester regional retirement system to collect any amount so assessed to any such
96	96	67governmental unit.
97	97	68 SECTION 5. Notwithstanding chapter 70 of the General Laws or any other general or
98	98	69special law to the contrary, the portion of the annual debt service paid by the town of
99	99	70Southborough for bonds or notes issued under this act applicable to school department personnel
100	100	71who are members of the Worcester regional retirement system shall be included in the
101	101	72computation of net school spending for the purposes of said chapter 70 or any other law.
102	102	73 SECTION 6. This act shall take effect upon its passage.