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SENATE DOCKET, NO. 1589 FILED ON: 1/19/2023
SENATE . . . . . . . . . . . . . . No. 632
The Commonwealth of Massachusetts
_________________
PRESENTED BY:
James B. Eldridge
_________________
To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:
The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
An Act to establish a Massachusetts public bank.
_______________
PETITION OF:
NAME:DISTRICT/ADDRESS :James B. EldridgeMiddlesex and WorcesterLiz MirandaSecond Suffolk1/27/2023Jack Patrick Lewis7th Middlesex1/31/2023Carmine Lawrence Gentile13th Middlesex2/3/2023Rebecca L. RauschNorfolk, Worcester and Middlesex2/6/2023Jason M. LewisFifth Middlesex2/15/2023Julian CyrCape and Islands2/22/2023 1 of 24
SENATE DOCKET, NO. 1589 FILED ON: 1/19/2023
SENATE . . . . . . . . . . . . . . No. 632
By Mr. Eldridge, a petition (accompanied by bill, Senate, No. 632) of James B. Eldridge, Liz
Miranda, Jack Patrick Lewis, Carmine Lawrence Gentile and other members of the General
Court for legislation to establish a Massachusetts public bank. Financial Services.
[SIMILAR MATTER FILED IN PREVIOUS SESSION
SEE SENATE, NO. 665 OF 2021-2022.]
The Commonwealth of Massachusetts
_______________
In the One Hundred and Ninety-Third General Court
(2023-2024)
_______________
An Act to establish a Massachusetts public bank.
Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
of the same, as follows:
1 SECTION 1. The General Laws are hereby amended by inserting after chapter 10 the
2following chapter:-
3 CHAPTER 10A
4 MASSACHUSETTS PUBLIC BANK
5 Section 1. Declarations.
6 (a) There shall be a Massachusetts public bank (the Bank), wholly owned by the
7commonwealth, to provide a safe depository for a portion of the public funds in the
8commonwealth and to support the economic well-being of the commonwealth, its cities and 2 of 24
9towns, its residents, its businesses and its state and municipal institutions, with an accountable
10and responsive governance structure that ensures community input.
11 (b) In order to obtain these benefits, the Massachusetts public bank (the Bank) shall:
12 (1) hold a portion of the commonwealth’s funds as deposits in the Bank and invest those
13funds within the commonwealth so as to further the Bank’s goals as detailed below;
14 (2) promote economic development and job creation within the commonwealth by
15providing affordable financing to small and medium-sized businesses, especially in under-served
16communities;
17 (3) assist businesses and municipalities in recovering from the economic repercussions of
18external shocks, including pandemics, recessions, and natural disasters;
19 (4) respond to the unmet affordable financing needs of cities and towns in the
20commonwealth;
21 (5) address the historic and current disadvantages experienced by the state’s minority and
22women-owned enterprises by providing affordable financing;
23 (6) assist workers and communities in creating jobs by supporting cooperative business
24models including worker-owned coops;
25 (7) increase available affordable housing options for all residents of the commonwealth;
26 (8) promote sustainable agriculture and address food insecurity, particularly by providing
27financing to family-owned farms and rural businesses that serve them; 3 of 24
28 (9) support non-profit and community-based organizations that work to address the
29results of racial injustice and/or to promote women’s economic and social equity;
30 (10) support the expansion and development of public and private measures to mitigate
31the grave dangers that climate change poses to the public and local enterprises, and to promote
32reductions in greenhouse gas emissions;
33 (11) provide economic support to state-based public or quasi-public agencies including
34community development financial institutions, community development corporations and
35economic development corporations;
36 (12) strengthen state-chartered private banks, particularly through participatory loan
37programs;
38 (13) enable the commonwealth to share in the methods of monetary support the federal
39government provides to commercial banks;
40 (14) be supervised for safety and soundness by the commissioner of banks.
41 Section 2. Definitions.
42 The following words as used in this chapter, unless the context otherwise requires, shall
43have the following meanings:
44 “Affiliate”, a company that controls, is controlled by, or is under common control with
45another company.
46 “Affordable financing”, as defined in section 13 below. 4 of 24
47 “Affordable housing”, housing that: (1) satisfies the definition in section 1 of chapter 60
48or section 38D of chapter 121B; (2) is a qualified low-income housing project as defined in 26
49U.S.C. 42(g); or (3) is owned by families that (i) reside in a census tract in which the median
50income does not exceed 80 per cent of the area median income or (ii) have an income that does
51not exceed area median income and that resides in a minority census tract.
52 “Business plan”, a public document that lays out the Bank’s strategy for accomplishing
53its statutory directives through safe and sound operations of the Bank.
54 “Commissioner”, as defined in section 1 of chapter 167.
55 “Community development corporation”, as defined in section 2 of chapter 40H.
56 “Community development financial institution”, a private financial entity dedicated to
57delivering non-predatory affordable lending to help low-income, low-wealth and other
58disadvantaged people and communities that shall have the meaning ascribed to it under 12
59U.S.C. 472(5)(a), including, but not limited to, those institutions that are not certified by the
60United States Treasury Community Development Financial Institution Fund.
61 “Eligible recipients”, as defined in section 12.
62 “Land trust”, a private, non-profit corporation or organization that acquires, manages,
63develops or maintains land or easements to promote the preservation or restoration of land in the
64commonwealth either for recreational, agricultural, scenic, residential or commercial use
65including, but not limited to, affordable housing, climate security or water resource protection
66uses. 5 of 24
67 “Massachusetts bank”, an association or corporation chartered by the commonwealth
68under chapter 168, 170, 171 or 172.
69 “Massachusetts Public Bank” or “Bank”, a bank chartered by the commonwealth and
70wholly owned by the commonwealth to accept deposits of public funds and provide affordable
71financing to eligible recipients so as to enhance the economic health of the commonwealth.
72 “Participation loan”, a loan in which the Bank shares funding or overseeing an advance
73of credit under a written agreement between the originator of the loan and the Bank.
74 “Rural area”, a municipality with population density of less than 500 residents per square
75mile, according to the latest decennial census of the United States.
76 “Rural business concern”, a business that (1) is a smaller business entity; (2) has its
77principal business operations in 1 or more rural areas in the commonwealth; and (3) is engaged
78in an occupation that directly supports the economy of the rural area or areas in which it is
79located.
80 “Underserved neighborhood”, a neighborhood that meets 1 or more of the following
81criteria: (1) the annual median household income is not more than 65 per cent of the statewide
82annual median household income; (2) minorities comprise 40 per cent or more of the population;
83(3) 25 per cent or more of households lack English language proficiency; or (4) minorities
84comprise 25 per cent or more of the population and the annual median household income of the
85municipality in which the neighborhood is located does not exceed 150 per cent of the statewide
86annual median household income. 6 of 24
87 “Smaller business entity”, a business that has 40 per cent of the employee count of a
88small business as defined under section 57 of chapter 23A.
89 Section 3. Authorities and Examinations.
90 (a) Unless explicitly provided otherwise under this chapter, the Bank shall have all the
91powers under the provisions of chapter 167F, as well as the other powers available to
92Massachusetts banks under the law.
93 (b) The Bank is authorized, but not required, to become a member of the Federal Reserve
94System.
95 (c) The Bank is authorized, but not required, to become a member of the Federal Deposit
96Insurance Corporation.
97 (d) To the extent convenient for its operations, the Bank may pursue its goals through
98subsidiaries, to be established under the same rules and regulations applying to other state-
99chartered depository institutions. These subsidiaries shall be subject to the same restrictions
100applying to the Bank with respect to deposits, eligible recipients and affordable financing as set
101forth in sections 9, 12 and 13.
102 (e) The Bank may accept and solicit property, including any gifts, donations, grants or
103bequests or any public funds for any of the purposes of this chapter.
104 (f) Beginning 1 year after the Bank has commenced operations and at least annually
105thereafter, the commissioner of banks shall examine the bank under its authority to examine
106Massachusetts banks. The Bank shall be subject to the provisions of chapter 167 and section 13 7 of 24
107of chapter 167J; provided, however, that sections 2I, 14, 14A, 14C, 15-15K, 19, 20, 34, 37, 37A,
10837B, 40, 41, 42, 43, 44, 45 and 46 of chapter 167 shall not apply to the Bank.
109 (g) In examining the Bank, the commissioner shall pay special attention to transaction
110testing the Bank’s compliance with its Business Plan. This part of the examination shall become
111public 6 months after the conclusion of the examination.
112 Section 4. Governance Structure of the Bank.
113 The provisions of this section are subject to the initial organization provisions of section
1146.
115 (a) There shall be a board of directors to govern the Bank consisting of 9 members,
116including the state treasurer or the state treasurer’s designee, and 8 members who bring
117professional experience, across their number, in the following fields. Four individuals, to be
118appointed by the state treasurer, who collectively represent expertise in the operation of (1)
119community development financial institutions, (2) state-chartered depository institutions doing
120business primarily in the state, (3) credit unions or cooperative banks chartered under chapter
121170 or chapter 171, and (4) public finance. Four individuals, to be appointed by the governor,
122who collectively represent expertise in (5) small business enterprises located in the
123commonwealth, (6) economic development, (7) local government and administration and (8)
124environmentally-conscious financing.
125 The members of the board of directors, including the state treasurer, or its designee, may
126be reimbursed for travel and other expenses incurred in preparing for and attending the meetings. 8 of 24
127 (b) Board representation shall reflect the geographical, racial and gender diversity of the
128commonwealth as periodically determined by the state secretary as the commonwealth’s chief
129census officer. The members of the board of directors shall represent all geographic areas of the
130commonwealth, including urban, rural and suburban areas.
131 (c) A board member shall be a resident of the commonwealth at least 90 days before
132appointment and, with the exception of the state treasurer or the state treasurer’s designee, while
133serving on the board, shall not: (1) hold or be a candidate for federal, state or local elected office;
134(2) hold an appointed office in a federal, state or local government; (3) serve as an official in a
135political party; or (4) have served in any such office in the previous 4 years. The board members
136shall take an oath to faithfully and impartially execute their duties as board members. The
137members of the board shall be compensated for work performed for the board at such rate as the
138secretary of administration and finance shall determine.
139 (d) The board of directors shall elect its own chair by majority vote. This election shall
140take place whenever (1) a chair’s term on the board of directors ends without reappointment or
141(2) 2 or more members of the board of directors shall call for an election. Seven board members
142shall constitute a quorum and the affirmative vote of a majority of board members present and
143voting shall be required
144 for any action of the board of directors. The board shall meet quarterly and at other times
145as it shall deem necessary or upon the written request of 4 board members or the chair. The chair
146of the board of advisors as established under section 7, the chair’s designee or both may attend
147all such meetings as a nonvoting participant. Notice of all meetings shall be given to the board
148members, the chair of the board of advisors and to other persons who request such notice. The 9 of 24
149board shall adopt regulations establishing procedures related to its meetings, which may include
150electronic meetings and communications. (e) All board meetings shall be staffed with a bank
151officer to serve as secretary. The secretary shall keep a record of the proceedings of the board
152and shall be the custodian and keeper of the records of all books, documents and papers filed by
153the board and of its minute book. The secretary shall cause copies to be made of all minutes and
154other records and documents of the board and shall certify that such copies are true copies, and
155all persons dealing with the board may rely upon such certification.
156 (f) The board shall appoint a chief executive officer of the Bank with at least 6
157affirmative votes. At the discretion of the chair of the board, the board may utilize a form of
158ranked-choice voting to ensure that the 6-vote threshold is satisfied. The chief executive officer
159shall not be a member of the board. If at any time, six board members shall declare a vote of no
160confidence in the current chief executive officer, the chief executive officer shall be terminated,
161and the board shall initiate the process of hiring a new chief executive officer immediately. In the
162case of an absence or vacancy in the office of the chief executive officer, or in the case of
163disability as determined by the board, the board may designate an acting chief executive officer
164by a 5-vote majority to serve as chief executive officer until the vacancy is filled, or the absence
165or disability ceases. Notwithstanding the provisions of any general or special law to the contrary,
166all board meetings regarding the hiring or termination of the chief executive officer or acting
167chief executive officer shall be executive sessions, and the voting records of the directors at these
168meetings shall be kept confidential. The chief executive officer, acting chief executive officer,
169the chair of the board of advisors or any designee thereof shall not attend executive sessions.
170 The chief executive officer shall serve at the pleasure of the board, shall receive such
171salary as may be determined by the board and shall devote full time and attention to the duties of 10 of 24
172the office. The chief executive officer shall be a person with skill and experience in management
173and banking, shall be the executive and administrative head of the Bank and shall be responsible
174for administering and enforcing
175 the provisions of law relative to the Bank and to the administrative units of the Bank. The
176acting chief executive officer shall have all of the powers and duties of the chief executive
177officer and shall have similar qualifications as the chief executive officer. The chief executive
178officer may employ other employees, consultants, agents and advisors, including legal counsel
179and shall attend meetings of the board. The chief executive officer shall be responsible for all
180aspects of the Bank’s management, including its physical facilities, investments, loan portfolio,
181accounting, risk management and regulatory compliance, as well as the drafting and subsequent
182execution of its Business Plan. The chief executive officer shall manage the Bank consistently
183with the Business Plan.
184 (g) (1) The Business Plan shall be effective for four years, and such further time as may
185be needed to draft a new Business Plan.
186 (2) The chief executive officer shall send a draft Business Plan to the chair of the board
187of advisors concomitantly with conveying it to the board of directors, but at least 30 days before
188the board of advisors' next scheduled quarterly meeting. The board of advisors shall immediately
189make it publicly accessible via the internet and publicly announce that it is available for public
190comment through the board of advisors’ internet-based comments portal. Within 30 days after
191said meeting, the chair of the board of advisors shall combine the board of advisors members’
192comments and suggestions, along with any public input that the board deems pertinent, into a
193concise list of recommended modifications to the Business Plan and distribute those 11 of 24
194recommendations to the members of the board of advisors and of the board of directors. The
195board of directors shall promptly convey these recommendations, together with any comments of
196its own, to the chief executive officer. The chief executive officer shall then prepare a new draft
197Business Plan taking these recommendations into account as the chief executive officer sees fit
198and convey it to the board of directors and board of advisors within 30 days of the
199recommendations’ receipt. This updated draft Business Plan shall be voted upon by the board of
200directors within 30 days of receiving the updated draft from the chief executive officer, at an ad
201hoc board of directors meeting if necessary. The board of advisors’ comments and
202recommendations, together with the public’s input from the board of advisors’ meetings and
203from the comments portal and the approved Business Plan itself, shall be made publicly available
204via the internet. (3) A Business Plan, once approved, may not be overridden by the board of
205directors except through a declaration of emergency, as described in section 5. If the board of
206directors disapproves a draft Business Plan, this process shall begin anew and be repeated until a
207Business Plan is approved. Upon the third consecutive disapproval of a draft Business Plan, the
208chief executive officer who drafted those Business Plans shall be deemed to have been
209terminated by the board of directors, and the board of directors shall hire a new chief executive
210officer before a further draft Business Plan may be considered.
211 (h) Employees of the Bank determined eligible by the Massachusetts State Board of
212Retirement shall be members of the Massachusetts State Employees Retirement System pursuant
213to the provisions of Chapter 32.
214 Section 5. Powers and Duties of the Board of Directors 12 of 24
215 Subject to Section 3(a), the board of directors shall have all powers necessary or
216convenient to carry out and effectuate its purposes, including, but not limited to, the power to: (a)
217approve of the Business Plan of the Bank, to ensure that the Plan pays due attention to the
218recommendations of the Bank’s board of advisors and to monitor the Bank’s subsequent
219compliance with the currently operative Plan. Approval of the Business Plan by the board
220requires six votes. (b) keep the board of advisors of the Bank fully informed of the Bank’s
221operations and loan portfolio and to convey the recommendations of the advisors to the chief
222executive officer. To this end, there shall be an annual joint meeting of the board of directors, the
223board of advisors and the chief executive officer. The chair of the board of directors shall preside
224over the joint meeting. When requested by a majority of the board of advisors as established in
225section 7, the board of directors shall schedule and hold a second joint meeting within the year.
226(c) regularly review the Bank’s financial statements and other records to ensure that it is in
227compliance with all applicable laws and regulations and with all reporting requirements under
228section 11. (d) in the event of a natural or man-made disaster, to declare a state of emergency that
229requires the chief executive officer to override the currently operative Business Plan, in such
230manner as the board of directors shall deem necessary to address and recover from the disaster.
231Seven members of the board of directors shall approve the declaration of emergency, following
232consultation with the chair of the board of advisors and shall specify a duration for the
233emergency of no more than 1 year. At the conclusion of a 1-year declaration of emergency, the
234board shall only approve an extension of the declaration of emergency by unanimous re-
235approval.
236 Section 6. Initial Organization Development 13 of 24
237 (a) The initial board of directors members shall be appointed within 120 days of the
238effective date of this Act.
239 (b) Four of the 8 initially-appointed members of the board of directors shall serve 2-year
240terms.
241 (c) The board shall elect its officers at its first meeting. Initial board meetings shall be
242staffed by an interim board employee acting as secretary.
243 (d) The board chair shall publicly solicit applications for the chief executive officer
244immediately upon the board’s appointment. The board shall expeditiously determine the
245applicant to hire.
246 (e) The chief executive officer shall cause to be drafted the initial Business Plan within 1
247year of being hired by the board of directors.
248 (f) The initial board of advisors shall be appointed within 90 days of the appointment of
249the initial board of directors. Of the advisors initially appointed by the governor, 8 shall serve 2-
250year terms and the remaining 8 shall serve 4-year terms, with half the appointees from each
251category to serve each length term. The board of advisors shall elect its own chair at its first
252meeting for a term of two years.
253 (g) Members of the board of directors and the board of advisors shall serve for a term of 2
254or 4 years, depending on the term of their initial appointment, and shall be eligible for a single
255reappointment to that board.
256 Section 7. Appointment and Duties of the Board of Advisors. 14 of 24
257 The board of advisors shall consist of 18 members, 1 of whom shall be the lieutenant
258governor or the lieutenant governor’s designee and 1 of whom may be designated by the Federal
259Reserve Bank of Boston by its community development experts. The governor shall appoint the
260remaining 16 members for 4-year terms. The governor shall make appointments from persons
261nominated by organizations representing the following stakeholder communities, taking 2
262persons from each category except where 1 person is indicated, with a limit of 1 candidate per
263nominating entity: (1) state-chartered depository institutions or credit unions that derive over 90
264per cent of their deposits in-state, or associations representing predominately these organizations;
265(2) community development finance institutions and community development organizations that
266focus primarily on supporting economic development in the commonwealth, including, but not
267limited to, rural and economic cooperative models and worker-owned enterprises; (3)
268organizations recognized under 26 U.S.C. 501(c)(3) to support underserved neighborhoods; (4)
269associations representing the interests of small business entities, particularly businesses owned
270by cognizable groups currently receiving less credit than proportional to their size or serving in
271areas operating in underserved neighborhoods; (5) 1 appointee each from the following
272organizations recognized under 26 U.S.C. 501(c)(3) to support the following ends: (i) sustainable
273agriculture; (ii) food security; (iii) climate change amelioration and environmental finance and
274(iv) environmental justice; (6) municipalities, as represented singly, by state-based associations
275of municipalities or by state-based chapters of municipal planners or professionals; (7)
276organizations in which employees or workers participate and which exist for the purpose, in
277whole or in part, of representing the interests of workers concerning grievances, labor disputes,
278wages, rates of pay, hours of employment or conditions of work, at least one organization of
279which represents the interests of low-income workers. The terms of members of the board of 15 of 24
280advisors who are gubernatorial appointees shall be staggered: one-half of the board’s
281membership, consisting of 1 nomination from each category above shall terminate at 2-year
282intervals. In order to submit a nomination, an entity or organization shall have been in existence
283for at least 4 years. All nominations and determinations shall be public consistent with state law,
284and the Bank shall post them on the Bank’s website.
285 (b) An election for chair of the board of advisors shall take place whenever a chair’s term
286on the board of advisors ends or when a majority of those currently serving on the board of
287advisors shall call for an election. The board of advisors shall meet quarterly to review the
288Bank’s activities. The board of advisors’ meetings shall be open to the public consistent with the
289state’s open meeting law and publicized at least 30 days in advance. The chair of the board of
290advisors may attend all board of directors’ meetings and be recognized to speak.
291 (c) The public shall further be able to provide input to the board of advisors on an
292ongoing basis through an internet-based comments portal. The board of advisors shall make the
293establishment of the comments portal its first order of business and shall provide the board of
294directors, as well as the chief executive officer and staff, full access to the portal. The chair of the
295board of advisors shall be responsible for managing the comments portal and shall ensure that
296the comments on the portal are fully accessible to the public.
297 (d) The responsibilities of the board of advisors shall include (1) establishing its rules of
298procedure; (2) scheduling and publicizing its quarterly meetings and providing minutes on a
299timely basis to the public;(3) establishing an internet-based comments portal in which the public
300can review and comment on the bank’s activities and make proposals regarding future initiatives
301for the Bank’s consideration; (4) reviewing the bank’s draft business plan prepared by the chief 16 of 24
302executive officer and providing feedback; and (5) communicating policy recommendations and
303any significant concerns that may arise from quarterly meetings or the portal to the board of
304directors and chief executive officer.
305 (e) The members of the board of advisors may be reimbursed for travel and other
306expenses incurred in preparing for and attending the meetings. This reimbursement may include
307a stipend for members not otherwise compensated for their time by an employer. These and all
308other expenses incurred by the board of advisors in fulfilling its obligations, including the
309comments portal, shall be paid for from the Bank’s operating budget.
310 Section 8. Capitalization.
311 (a) The commonwealth shall make a $200,000,000 initial equity investment for the Bank
312under the schedule set forth in subsection (b). That amount shall be funded by direct legislative
313appropriation. (b) The general court shall appropriate $50,000,000 to the Bank in fiscal year
3142024, $50,000,000 in fiscal year 2025, $50,000,000 in fiscal year 2026 and $50,000,000 in fiscal
315year 2027.
316 (c) The board of directors may decide to allocate a portion of the Bank’s initial capital
317and retained earnings between the Bank and its subsidiaries, established under section 3(e) under
318the same terms governing other state-chartered depository institutions.
319 Section 9. Deposits.
320 (a) The state treasurer, along with the Bank’s board of directors and its chief executive
321officer, shall determine when the Bank has sufficient capacity after the first appropriation of
322capital to receive public funds. On or near that date, the state treasurer shall deposit $350 million 17 of 24
323dollars of state funds in the bank. For each additional appropriation of Bank capital pursuant to
324Sections 8(a)-(b), the state treasurer shall deposit an additional $350 million of state funds,
325within three months of the effective date of such appropriation. After that date, the state treasurer
326shall so allocate state funds to ensure that the Bank maintains a minimum average annual deposit
327balance of $1,400,000,000.
328 (b) The state treasurer shall fund the minimum average deposit balance from state
329revenues held with the Massachusetts Municipal Deposit Trust; provided, however, that the state
330treasurer shall not withdraw funds from the “Move Money” program.
331 (c) The state treasurer shall use deposits in the Bank to make any payments, provided
332further that the state treasurer shall not take action that (1) disrupts the public bank’s liquidity
333position, or (2) reduces the size of the Bank’s minimum average annual deposit balance of
334$1,400,000,000.
335 (d) Given that the commonwealth is the sole shareholder of the Bank, the Bank shall not
336pay interest on the commonwealth’s deposits; provided, however, that the Bank shall pay interest
337to cities and towns with deposits held at the Bank at rates that the Bank sets.
338 (e) After the Bank is well established, has a record of sound operation, and the state
339treasurer, the board of directors and its chief executive officer have deemed the Bank to have the
340requisite capacity, the board of directors and chief executive officer may agree to accept deposits
341of funds from the commonwealth, cities, towns and quasi-public entities that have a maturity of
342over 180 days. 18 of 24
343 (g) Nothing in this provision shall derogate from the Bank’s powers to incur non-deposit
344liabilities, including, but not limited to, money market borrowing, Federal Reserve borrowing,
345capital market borrowing or its other powers under section 3.
346 Section 10. State Guarantee.
347 All deposits and other liabilities of the Bank shall be guaranteed by the full faith and
348credit of the commonwealth.
349 Section 11. Sound Operation and Reporting.
350 The board of directors shall operate the Bank to ensure its soundness and sustainability.
351According to the board of directors’ determination, the Bank’s annual monetary return may be
352provided to the commonwealth or reinvested in the capital of the Bank.
353 (a) Annually, the Bank shall publicly issue its financial reports to the governor and to the
354clerks of the house of representatives and senate. An external party shall audit these reports
355 (b) Annually, the state treasurer shall publicly report the current and average amount of
356cash and cash equivalents held by the commonwealth to the governor and to the clerks of the
357house of representatives and senate. Under section 2 the reported amounts shall be used in the
358calculation of the updated MAAB.
359 (c) The Bank shall maintain records of all banking transactions and amounts throughout
360the year.
361 (d) The Bank shall submit an annual public report to the state treasurer, describing the
362benefits of its activities to the commonwealth. In the report, the Bank shall include: 19 of 24
363 (1) Analysis of the extent to which it was able to meet priorities listed in section 13.
364 (2) For each type of eligible recipients specified under section 12 subsections (a) through
365(l), the number of recipients to whom the bank extended affordable financing and the total
366amount of the Bank’s regulatory capital dedicated to each type of eligible recipient.
367 (3) A description of the main forms of affordable finance extended by the Bank in the 14
368counties of the commonwealth.
369 (e) The Bank shall file an annual report on the compensation paid by the Bank to the
370board of directors, the chief executive officer and other bank employees and consultants.
371 (f) The Bank shall be subject to chapter 66; provided however, that the Bank shall not be
372required to reveal the identity of an eligible recipient as defined in section 12 or information
373containing an eligible recipient’s financial data.
374 Section 12. Eligible Recipients.
375 The Bank shall use its powers to extend affordable financing to the following eligible
376recipients:
377 (a) Public or quasi-public entities, including, but not limited to, cities or towns located
378within the commonwealth, enterprises managed in whole or in part by cities or towns and public
379or quasi-public entities located in and primarily serving the commonwealth;
380 (b) Nonprofit organizations that are exempt from federal taxation under 26 U.S.C.
381501(c)(3), whose primary goal is to benefit the commonwealth or its residents through
382community development; 20 of 24
383 (c) Land trusts;
384 (d) Entities operating as, or transitioning to be cooperatives, including, but not limited to,
385housing, worker and consumer cooperatives, employee stock ownership plans and worker-owned
386cooperative enterprises;
387 (e) Entities created by financial institutions that pool funds to lend for affordable housing
388development; (f) Developers of housing or preservation projects, only when entities financing
389the project invite the Bank to participate with financing;
390 (g) State-chartered depository institutions, to the extent that the affordable financing
391extended to these institutions is used to support the other eligible recipients in this provision;
392 (h) Community development corporations that operate in Massachusetts;
393 (i) Community development financial institutions that operate in Massachusetts;
394 (j) Investment vehicles established by the eligible recipients set forth in subsection (h) or
395(i);
396 (k) Smaller business enterprises, defined as in section 2 and doing business primarily in
397the commonwealth, that offer sustainable business plans and merit credit but are unable to
398procure affordable financing from other Massachusetts banks with or without participation by the
399Bank;
400 (l) Small- and medium-sized farms and related industries;
401 (m) Conduits or investment vehicles created for the primary purpose of supporting other
402eligible recipients listed in this section. 21 of 24
403 Section 13. Affordable Financing.
404 The term “affordable financing” shall include the following types of finance, all to the
405extent consistent with the Bank’s authorities in section 3(a) and subject to general banking
406regulations set by the commissioner:
407 (a) For all eligible recipients listed in section 12:
408 (1) The provision of credit and loans, including long-term loans and unsecured loans. The
409Bank may employ underwriting methods which are flexible in their criteria, terms and uses and
410shall provide loans at affordable rates;
411 (2) The provision of letters of credit, guarantees, subordinate loans and other forms of de-
412risking for the purpose of crowding-in additional financing by non-Bank sources;
413 (3) The provision of technical assistance;
414 (b) For the eligible recipients listed in Section 12, subsections (c), (e), (h) and (m), the
415term “affordable financing” shall additionally include the following:
416 (1) The provision of equity financing, including preferred stock, common stock, equity
417equivalent capital and other hybrid instruments;
418 (2) The provision of grants, donations and contributions, including grants given over a
419period of years (such as those for technical assistance) to provide predictability for eligible
420recipients;
421 (3) The other activities permissible to the Bank under section 3(a). 22 of 24
422 (c) Nothing in this provision is meant to derogate from the Bank’s powers under section
4233(a) to hold assets necessary for its liquidity management.
424 Section 14. Bank Priorities.
425 In formulating its Business Plan, the Bank shall give priority to the following
426considerations:
427 (a) Supporting eligible recipients subject to the historic and current economic inequities
428by communities in underserved neighborhoods, including, but not limited to, enterprises
429established by residents there, as well as eligible recipients working to remedy those inequities;
430 (b) Supporting eligible recipients subject to the historic and current economic inequities
431experienced by women throughout the commonwealth; (c) Supporting rural business and
432farming concerns;
433 (d) Supporting businesses with compensation structures that provide a livable wage,
434establish an equitable ratio between the least- and highest-paid members of the business or
435otherwise demonstrate a commitment to equitable pay.
436 (e) Supporting entities that address the impacts of climate change and the reduction of
437greenhouse gases.
438 (f) Funding the need of cities and towns in the commonwealth to update and build safe
439and sustainable infrastructure.
440 (g) The Bank shall seek to complement and support the operation of public and quasi-
441public agencies, non-profit organizations, Massachusetts banks and community development
442financial institutions and community development corporations. The Bank shall partner rather 23 of 24
443than compete with those entities to strengthen them and to expand affordable financing in the
444commonwealth.
445 (h) When appropriate, the Bank’s provision of lending and de-risking under section 13(a)
446shall be conducted through participation lending programs, with these institutions originating and
447servicing the loans.
448 (i) The bank shall promote equitable distribution of Bank resources across the
449commonwealth, including ensuring that rural areas of the commonwealth are given full and fair
450consideration.
451 (j) Provided that certain smaller towns in the commonwealth have scant resources for
452administrative staff, the Bank shall make every effort to make the application process for these
453towns as simple and affordable as possible.
454 Section 15. Conflicts of Interests.
455 (a)The Bank shall not transact with or extend financing to a member of the board of
456directors, the chief executive officer or an officer of the Bank, including an immediate family
457member of that person as defined in section 1 of chapter 268A or an entity in which that person
458has an interest. This prohibition shall remain in effect for 4 years after the conclusion of the term
459of the board member, chief executive officer or another officer of the Bank.
460 (b) The Bank shall not transact with or extend financing to a member of the board of
461advisors, including an immediate family member of that person as defined in section 1 of chapter
462268. Nothing in this provision shall prevent the Bank from transacting with or extending
463financing to an entity with which a member of the board of advisors is associated. 24 of 24
464 Section 16. Liberal Construction. The provisions of this chapter shall be interpreted and
465construed liberally in aid of its declared purpose.
466 SECTION 2. Section 38 of chapter 29 of the General Laws is hereby amended by adding
467the following subsection:- (j) In the Massachusetts Public Bank established under chapter 10A.
468 SECTION 3. Notwithstanding any general or special law to the contrary, the
469capitalization amounts set forth in section 8 of this act shall be available to the Bank by fiscal
470year 2027, subject to appropriation.