Massachusetts 2025-2026 Regular Session

Massachusetts House Bill H1114 Compare Versions

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

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1	1	1 of 1
2	2	HOUSE DOCKET, NO. 2541 FILED ON: 1/16/2025
3	3	HOUSE . . . . . . . . . . . . . . . No. 1114
4	4	The Commonwealth of Massachusetts
5	5	_________________
6	6	PRESENTED BY:
7	7	Mike Connolly and Antonio F. D. Cabral
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 to establish a Massachusetts public bank.
13	13	_______________
14	14	PETITION OF:
15	15	NAME:DISTRICT/ADDRESS :DATE ADDED:Mike Connolly26th Middlesex1/16/2025Antonio F. D. Cabral13th Bristol1/16/2025Samantha Montaño15th Suffolk2/3/2025 1 of 24
16	16	HOUSE DOCKET, NO. 2541 FILED ON: 1/16/2025
17	17	HOUSE . . . . . . . . . . . . . . . No. 1114
18	18	By Representatives Connolly of Cambridge and Cabral of New Bedford, a petition (accompanied
19	19	by bill, House, No. 1114) of Mike Connolly, Antonio F. D. Cabral and Samantha Montaño for
20	20	legislation to establish a Massachusetts public bank. Financial Services.
21	21	[SIMILAR MATTER FILED IN PREVIOUS SESSION
22	22	SEE HOUSE, NO. 975 OF 2023-2024.]
23	23	The Commonwealth of Massachusetts
24	24	_______________
25	25	In the One Hundred and Ninety-Fourth General Court
26	26	(2025-2026)
27	27	_______________
28	28	An Act to establish a Massachusetts public bank.
29	29	Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
30	30	of the same, as follows:
31	31	1 SECTION 1. The General Laws are hereby amended by inserting after chapter 10 the
32	32	2following chapter:-
33	33	3 CHAPTER 10A
34	34	4 MASSACHUSETTS PUBLIC BANK
35	35	5 Section 1. Declarations.
36	36	6 (a) There shall be a Massachusetts public bank (the Bank), wholly owned by the
37	37	7commonwealth, to provide a safe depository for a portion of the public funds in the
38	38	8commonwealth and to support the economic well-being of the commonwealth, its cities and 2 of 24
39	39	9towns, its residents, its businesses and its state and municipal institutions, with an accountable
40	40	10and responsive governance structure that ensures community input.
41	41	11 (b) In order to obtain these benefits, the Massachusetts public bank (the Bank) shall:
42	42	12 1) hold a portion of the commonwealth’s funds as deposits in the Bank and invest those
43	43	13funds within the commonwealth in a manner designed to be self-sustaining so as to further the
44	44	14Bank’s goals as detailed below;
45	45	15 2) promote economic development and job creation within the commonwealth by
46	46	16providing affordable financing to small and medium-sized businesses, especially in under-served
47	47	17communities;
48	48	18 3) assist businesses and municipalities in recovering from the economic repercussions of
49	49	19external shocks, including pandemics, recessions, and natural disasters;
50	50	20 4) respond to the unmet affordable financing needs of cities and towns in the
51	51	21commonwealth;
52	52	22 5) address the historic and current disadvantages experienced by the state’s minority and
53	53	23women-owned enterprises by providing affordable financing;
54	54	24 6) assist workers and communities in creating jobs by supporting cooperative business
55	55	25models including worker-owned coops;
56	56	26 7) increase available affordable housing options for all residents of the commonwealth;
57	57	27 8) promote sustainable agriculture and address food insecurity, particularly by providing
58	58	28financing to family-owned farms and rural businesses that serve them; 3 of 24
59	59	29 9) lend to non-profit and community-based organizations that work to address the results
60	60	30of racial injustice and/or to promote women’s economic and social equity;
61	61	31 10) finance the expansion and development of public and private measures to mitigate the
62	62	32grave dangers that climate change poses to the public and local enterprises, and to promote
63	63	33reductions in greenhouse gas emissions;
64	64	34 11) provide economic support to state-based public or quasi-public agencies including
65	65	35community development financial institutions, community development corporations and
66	66	36economic development corporations;
67	67	37 12) strengthen state-chartered private banks, particularly through participatory loan
68	68	38programs;
69	69	39 13) enable the commonwealth to share in the methods of monetary support the federal
70	70	40government provides to commercial banks;
71	71	41 14) be supervised for safety and soundness by the commissioner of banks.
72	72	42 Section 2. Definitions.
73	73	43 The following words as used in this chapter, unless the context otherwise requires, shall
74	74	44have the following meanings:
75	75	45 “Affiliate”, a company that controls, is controlled by, or is under common control with
76	76	46another company.
77	77	47 “Affordable financing”, as defined in section 13 below. 4 of 24
78	78	48 “Affordable housing”, housing that: (1) satisfies the definition in section 1 of chapter 60
79	79	49or section 38D of chapter 121B; (2) is a qualified low-income housing project as defined in 26
80	80	50U.S.C. 42(g); or (3) is owned by families that (i) reside in a census tract in which the median
81	81	51income does not exceed 80 per cent of the area median income or (ii) have an income that does
82	82	52not exceed area median income and that resides in a minority census tract.
83	83	53 “Business plan”, a public document that lays out the Bank’s strategy for accomplishing
84	84	54its statutory directives through safe and sound operations of the Bank.
85	85	55 “Commissioner”, as defined in section 1 of chapter 167.
86	86	56 “Community development corporation”, as defined in section 2 of chapter 40H.
87	87	57 “Community development financial institution”, a private financial entity dedicated to
88	88	58delivering non-predatory affordable lending to help low-income, low-wealth and other
89	89	59disadvantaged people and communities that shall have the meaning ascribed to it under 12
90	90	60U.S.C. 472(5)(a), including, but not limited to, those institutions that are not certified by the
91	91	61United States Treasury Community Development Financial Institution Fund.
92	92	62 “Eligible recipients”, as defined in section 12.
93	93	63 “Land trust”, a private, non-profit corporation or organization that acquires, manages,
94	94	64develops or maintains land or easements to promote the preservation or restoration of land in the
95	95	65commonwealth either for recreational, agricultural, scenic, residential or commercial use
96	96	66including, but not limited to, affordable housing, climate security or water resource protection
97	97	67uses. 5 of 24
98	98	68 “Massachusetts bank”, an association or corporation chartered by the commonwealth
99	99	69under chapter 168, 170, 171 or 172.
100	100	70 “Massachusetts Public Bank” or “Bank”, a bank chartered by the commonwealth and
101	101	71wholly owned by the commonwealth to accept deposits of public funds and provide affordable
102	102	72financing to eligible recipients so as to enhance the economic health of the commonwealth and to
103	103	73benefit its local businesses and communities.
104	104	74 “Participation loan”, a loan in which the Bank shares funding or overseeing an advance
105	105	75of credit under a written agreement between the originator of the loan and the Bank.
106	106	76 “Rural area”, a municipality with population density of less than 500 residents per square
107	107	77mile, according to the latest decennial census of the United States.
108	108	78 “Rural business concern”, a business that (1) is a smaller business entity; (2) has its
109	109	79principal business operations in 1 or more rural areas in the commonwealth; and (3) is engaged
110	110	80in an occupation that directly supports the economy of the rural area or areas in which it is
111	111	81located.
112	112	82 “Underserved neighborhood”, a neighborhood that meets 1 or more of the following
113	113	83criteria: (1) the annual median household income is not more than 65 per cent of the statewide
114	114	84annual median household income; (2) minorities comprise 40 per cent or more of the population;
115	115	85(3) 25 per cent or more of households lack English language proficiency; or (4) minorities
116	116	86comprise 25 per cent or more of the population and the annual median household income of the
117	117	87municipality in which the neighborhood is located does not exceed 150 per cent of the statewide
118	118	88annual median household income. 6 of 24
119	119	89 “Smaller business entity”, a business that has 40 per cent or less of the employee count of
120	120	90a small business as defined under section 57 of chapter 23A.
121	121	91 Section 3. Authorities and Examinations.
122	122	92 (a) Unless explicitly provided otherwise under this chapter, the Bank shall have all the
123	123	93powers under the provisions of chapter 167F, as well as the other powers available to
124	124	94Massachusetts banks under the law.
125	125	95 (b) The Bank is authorized, but not required, to become a member of the Federal Reserve
126	126	96System.
127	127	97 (c) The Bank is authorized, but not required, to become a member of the Federal Deposit
128	128	98Insurance Corporation.
129	129	99 (d) To the extent convenient for its operations, the Bank may pursue its goals through
130	130	100subsidiaries, to be established under the same rules and regulations applying to other state-
131	131	101chartered depository institutions. These subsidiaries shall be subject to the same restrictions
132	132	102applying to the Bank with respect to deposits, eligible recipients and affordable financing as set
133	133	103forth in sections 9, 12 and 13.
134	134	104 (e) The Bank may accept and solicit property, including any gifts, donations, grants or
135	135	105bequests or any public funds for any of the purposes of this chapter.
136	136	106 (f) Beginning 1 year after the Bank has commenced operations and at least annually
137	137	107thereafter, the commissioner of banks shall examine the bank under its authority to examine
138	138	108Massachusetts banks. The Bank shall be subject to the provisions of chapter 167 and section 13 7 of 24
139	139	109of chapter 167J; provided, however, that sections 2I, 14, 14A, 14C, 15-15K, 19, 20, 34, 37, 37A,
140	140	11037B, 40, 41, 42, 43, 44, 45 and 46 of chapter 167 shall not apply to the Bank.
141	141	111 (g) In examining the Bank, the commissioner shall pay special attention to transaction
142	142	112testing the Bank’s compliance with its Business Plan. This part of the examination shall become
143	143	113public 6 months after the conclusion of the examination.
144	144	114 Section 4. Governance Structure of the Bank.
145	145	115 The provisions of this section are subject to the initial organization provisions of section
146	146	1166.
147	147	117 (a) There shall be a board of directors to govern the Bank consisting of 9 members,
148	148	118including the state treasurer or the state treasurer’s designee, and 8 members who bring
149	149	119professional experience, across their number, in the following fields. Four individuals, to be
150	150	120appointed by the state treasurer, who collectively represent expertise in the operation of (1)
151	151	121community development financial institutions, (2) state-chartered depository institutions doing
152	152	122business primarily in the state, (3) credit unions or cooperative banks chartered under chapter
153	153	123170 or chapter 171, and (4) public finance. Four individuals, to be appointed by the governor,
154	154	124who collectively represent expertise in (5) small business enterprises located in the
155	155	125commonwealth, (6) economic development, (7) local government and administration and (8)
156	156	126environmentally-conscious financing.
157	157	127 The members of the board of directors, including the state treasurer, or its designee, may
158	158	128be reimbursed for travel and other expenses incurred in preparing for and attending the meetings. 8 of 24
159	159	129 (b) Board representation shall reflect the geographical, racial and gender diversity of the
160	160	130commonwealth as periodically determined by the state secretary as the commonwealth’s chief
161	161	131census officer. The members of the board of directors shall represent all geographic areas of the
162	162	132commonwealth, including urban, rural and suburban areas.
163	163	133 (c) A board member shall be a resident of the commonwealth at least 90 days before
164	164	134appointment and, with the exception of the state treasurer or the state treasurer’s designee, while
165	165	135serving on the board, shall not: (1) hold or be a candidate for federal, state or local elected office;
166	166	136(2) hold an appointed office in a federal, state or local government; (3) serve as an official in a
167	167	137political party; or (4) have served in any such office in the previous 4 years. The board members
168	168	138shall take an oath to faithfully and impartially execute their duties as board members. The
169	169	139members of the board shall be compensated for work performed for the board at such rate as the
170	170	140secretary of administration and finance shall determine.
171	171	141 (d) The board of directors shall elect its own chair by majority vote. This election shall
172	172	142take place whenever (1) a chair’s term on the board of directors ends without reappointment or
173	173	143(2) 2 or more members of the board of directors shall call for an election. Seven board members
174	174	144shall constitute a quorum and the affirmative vote of a majority of board members present and
175	175	145voting shall be required for any action of the board of directors. The board shall meet quarterly
176	176	146and at other times as it shall deem necessary or upon the written request of 4 board members or
177	177	147the chair. The chair of the board of advisors as established under section 7, the chair’s designee
178	178	148or both may attend all such meetings as a nonvoting participant. Notice of all meetings shall be
179	179	149given to the board members, the chair of the board of advisors and to other persons who request
180	180	150such notice. The board shall adopt regulations establishing procedures related to its meetings,
181	181	151which may include electronic meetings and communications. 9 of 24
182	182	152 (e) All board meetings shall be staffed with a bank officer to serve as secretary. The
183	183	153secretary shall keep a record of the proceedings of the board and shall be the custodian and
184	184	154keeper of the records of all books, documents and papers filed by the board and of its minute
185	185	155book. The secretary shall cause copies to be made of all minutes and other records and
186	186	156documents of the board and shall certify that such copies are true copies, and all persons dealing
187	187	157with the board may rely upon such certification.
188	188	158 (f) The board shall appoint a chief executive officer of the Bank with at least 6
189	189	159affirmative votes. At the discretion of the chair of the board, the board may utilize a form of
190	190	160ranked-choice voting to ensure that the 6-vote threshold is satisfied. The chief executive officer
191	191	161shall not be a member of the board. If at any time, six board members shall declare a vote of no
192	192	162confidence in the current chief executive officer, the chief executive officer shall be terminated,
193	193	163and the board shall initiate the process of hiring a new chief executive officer immediately. In the
194	194	164case of an absence or vacancy in the office of the chief executive officer, or in the case of
195	195	165disability as determined by the board, the board may designate an acting chief executive officer
196	196	166by a 5-vote majority to serve as chief executive officer until the vacancy is filled, or the absence
197	197	167or disability ceases. Notwithstanding the provisions of any general or special law to the contrary,
198	198	168all board meetings regarding the hiring or termination of the chief executive officer or acting
199	199	169chief executive officer shall be executive sessions, and the voting records of the directors at these
200	200	170meetings shall be kept confidential. The chief executive officer, acting chief executive officer,
201	201	171the chair of the board of advisors or any designee thereof shall not attend executive sessions.
202	202	172 The chief executive officer shall serve at the pleasure of the board, shall receive such
203	203	173salary as may be determined by the board and shall devote full time and attention to the duties of
204	204	174the office. The chief executive officer shall be a person with skill and experience in management 10 of 24
205	205	175and banking, shall be the executive and administrative head of the Bank and shall be responsible
206	206	176for administering and enforcing the provisions of law relative to the Bank and to the
207	207	177administrative units of the Bank. The acting chief executive officer shall have all of the powers
208	208	178and duties of the chief executive officer and shall have similar qualifications as the chief
209	209	179executive officer. The chief executive officer may employ other employees, consultants, agents
210	210	180and advisors, including legal counsel and shall attend meetings of the board. The chief executive
211	211	181officer shall be responsible for all aspects of the Bank’s management, including its physical
212	212	182facilities, investments, loan portfolio, accounting, risk management and regulatory compliance,
213	213	183as well as the drafting and subsequent execution of its Business Plan. The chief executive officer
214	214	184shall manage the Bank consistently with the Business Plan.
215	215	185 (g) (1) The Business Plan shall be effective for four years and such further time as may
216	216	186be needed to approve a new Business Plan after that period or the termination or departure of a
217	217	187chief executive officer.
218	218	188 (2) The chief executive officer shall send a draft Business Plan to the chair of the board
219	219	189of advisors concomitantly with conveying it to the board of directors, but at least 30 days before
220	220	190the board of advisors' next scheduled quarterly meeting. The board of advisors shall immediately
221	221	191make it publicly accessible via the internet and publicly announce that it is available for public
222	222	192comment through the board of advisors’ internet-based comments portal. Within 30 days after
223	223	193said meeting, the chair of the board of advisors shall combine the board of advisors members’
224	224	194comments and suggestions, along with any public input that the board deems pertinent, into a
225	225	195concise list of recommended modifications to the Business Plan and distribute those
226	226	196recommendations to the members of the board of advisors and of the board of directors. The
227	227	197board of directors shall promptly convey these recommendations, together with any comments of 11 of 24
228	228	198its own, to the chief executive officer. The chief executive officer shall then prepare a new draft
229	229	199Business Plan taking these recommendations into account as the chief executive officer sees fit
230	230	200and convey it to the board of directors and board of advisors within 30 days of the
231	231	201recommendations’ receipt. This updated draft Business Plan shall be voted upon by the board of
232	232	202directors within 30 days of receiving the updated draft from the chief executive officer, at an ad
233	233	203hoc board of directors meeting if necessary. The board of advisors’ comments and
234	234	204recommendations, together with the public’s input from the board of advisors’ meetings and
235	235	205from the comments portal and the approved Business Plan itself, shall be made publicly available
236	236	206via the internet.
237	237	207 (3) A Business Plan, once approved, may not be overridden by the board of directors
238	238	208except through a declaration of emergency, as described in section 5. If the board of directors
239	239	209disapproves a draft Business Plan, this process shall begin anew and be repeated until a Business
240	240	210Plan is approved. Upon the third consecutive disapproval of a draft Business Plan, the chief
241	241	211executive officer who drafted those Business Plans shall be deemed to have been terminated by
242	242	212the board of directors, and the board of directors shall hire a new chief executive officer before a
243	243	213further draft Business Plan may be considered.
244	244	214 (h) Employees of the Bank determined eligible by the Massachusetts State Board of
245	245	215Retirement shall be members of the Massachusetts State Employees Retirement System pursuant
246	246	216to the provisions of Chapter 32.
247	247	217 Section 5. Powers and Duties of the Board of Directors
248	248	218 Subject to Section 3(a), the board of directors shall have all powers necessary or
249	249	219convenient to carry out and effectuate its purposes, including, but not limited to, the power to: 12 of 24
250	250	220 (a) approve of the Business Plan of the Bank, to ensure that the Plan pays due attention to
251	251	221the recommendations of the Bank’s board of advisors and to monitor the Bank’s subsequent
252	252	222compliance with the currently operative Plan. Approval of the Business Plan by the board
253	253	223requires six votes.
254	254	224 (b) keep the board of advisors of the Bank fully informed of the Bank’s operations and
255	255	225loan portfolio and to convey the recommendations of the advisors to the chief executive officer.
256	256	226To this end, there shall be an annual joint meeting of the board of directors, the board of advisors
257	257	227and the chief executive officer. The chair of the board of directors shall preside over the joint
258	258	228meeting. When requested by a majority of the board of advisors as established in section 7, the
259	259	229board of directors shall schedule and hold a second joint meeting within the year.
260	260	230 (c) regularly review the Bank’s financial statements and other records to ensure that it is
261	261	231in compliance with all applicable laws and regulations and with all reporting requirements under
262	262	232section 11.
263	263	233 (d) in the event of a natural or man-made disaster, to declare a state of emergency that
264	264	234requires the chief executive officer to override the currently operative Business Plan, in such
265	265	235manner as the board of directors shall deem necessary to address and assist in recovery from the
266	266	236disaster. Seven members of the board of directors shall approve the declaration of emergency,
267	267	237following consultation with the chair of the board of advisors and shall specify a duration for the
268	268	238emergency of no more than 1 year. At the conclusion of a 1-year declaration of emergency, the
269	269	239board shall only approve an extension of the declaration of emergency by unanimous re-
270	270	240approval.
271	271	241 Section 6. Initial Organization Development 13 of 24
272	272	242 (a) The initial board of directors members shall be appointed within 120 days of the
273	273	243effective date of this Act.
274	274	244 (b) Four of the 8 initially-appointed members of the board of directors shall serve 2-year
275	275	245terms.
276	276	246 (c) The board shall elect its officers at its first meeting. Initial board meetings shall be
277	277	247staffed by an interim board employee acting as secretary.
278	278	248 (d) The board chair shall publicly solicit applications for the chief executive officer
279	279	249immediately upon the board’s appointment. The board shall expeditiously determine the
280	280	250applicant to hire.
281	281	251 (e) The chief executive officer shall cause to be drafted the initial Business Plan within 1
282	282	252year of being hired by the board of directors.
283	283	253 (f) The initial board of advisors shall be appointed within 90 days of the appointment of
284	284	254the initial board of directors. Of the advisors initially appointed by the governor, 8 shall serve 2-
285	285	255year terms and the remaining 8 shall serve 4-year terms, with half the appointees from each
286	286	256category to serve each length term. The board of advisors shall elect its own chair at its first
287	287	257meeting for a term of two years.
288	288	258 (g) Members of the board of directors and the board of advisors shall serve for a term of 2
289	289	259or 4 years, depending on the term of their initial appointment, and shall be eligible for a single
290	290	260reappointment to that board.
291	291	261 Section 7. Appointment and Duties of the Board of Advisors. 14 of 24
292	292	262 The board of advisors shall consist of 18 members, 1 of whom shall be the lieutenant
293	293	263governor or the lieutenant governor’s designee and 1 of whom may be designated by the Federal
294	294	264Reserve Bank of Boston by its community development experts. The governor shall appoint the
295	295	265remaining 16 members for 4-year terms. The governor shall make appointments from persons
296	296	266nominated by organizations representing the following stakeholder communities, taking 2
297	297	267persons from each category except where 1 person is indicated, with a limit of 1 candidate per
298	298	268nominating entity: (1) state-chartered depository institutions or credit unions that derive over 90
299	299	269per cent of their deposits in-state, or associations representing predominately these organizations;
300	300	270(2) community development finance institutions and community development organizations that
301	301	271focus primarily on supporting economic development in the commonwealth, including, but not
302	302	272limited to, rural and economic cooperative models and worker-owned enterprises; (3)
303	303	273organizations recognized under 26 U.S.C. 501(c)(3) to support underserved neighborhoods; (4)
304	304	274associations representing the interests of small business entities, particularly businesses owned
305	305	275by cognizable groups currently receiving less credit than proportional to their size or serving in
306	306	276areas operating in underserved neighborhoods; (5) 1 appointee each from the following
307	307	277organizations recognized under 26 U.S.C. 501(c)(3) to support the following ends: (i) sustainable
308	308	278agriculture; (ii) food security; (iii) climate change amelioration and environmental finance and
309	309	279(iv) environmental justice; (6) municipalities, as represented singly, by state-based associations
310	310	280of municipalities or by state-based chapters of municipal planners or professionals; (7)
311	311	281organizations in which employees or workers participate and which exist for the purpose, in
312	312	282whole or in part, of representing the interests of workers concerning grievances, labor disputes,
313	313	283wages, rates of pay, hours of employment or conditions of work, at least one organization of
314	314	284which represents the interests of low-income workers. 15 of 24
315	315	285 The terms of members of the board of advisors who are gubernatorial appointees shall be
316	316	286staggered: one-half of the board’s membership, consisting of 1 nomination from each category
317	317	287above shall terminate at 2-year intervals. In order to submit a nomination, an entity or
318	318	288organization shall have been in existence for at least 4 years. All nominations and determinations
319	319	289shall be public consistent with state law, and the Bank shall post them on the Bank’s website.
320	320	290 (b) An election for chair of the board of advisors shall take place whenever a chair’s term
321	321	291on the board of advisors ends or when a majority of those currently serving on the board of
322	322	292advisors shall call for an election. The board of advisors shall meet quarterly to review the
323	323	293Bank’s activities. The board of advisors’ meetings shall be open to the public consistent with the
324	324	294state’s open meeting law and publicized at least 30 days in advance. The chair of the board of
325	325	295advisors may attend all board of directors’ meetings and be recognized to speak.
326	326	296 (c) The public shall further be able to provide input to the board of advisors on an
327	327	297ongoing basis through an internet-based comments portal. The board of advisors shall make the
328	328	298establishment of the comments portal its first order of business and shall provide the board of
329	329	299directors, as well as the chief executive officer and staff, full access to the portal. The chair of the
330	330	300board of advisors shall be responsible for managing the comments portal and shall ensure that
331	331	301the comments on the portal are fully accessible to the public.
332	332	302 (d) The responsibilities of the board of advisors shall include (1) establishing its rules of
333	333	303procedure; (2) scheduling and publicizing its quarterly meetings and providing minutes on a
334	334	304timely basis to the public; (3) establishing an internet-based comments portal in which the public
335	335	305can review and comment on the bank’s activities and make proposals regarding future initiatives
336	336	306for the Bank’s consideration; (4) reviewing the bank’s draft business plan prepared by the chief 16 of 24
337	337	307executive officer and providing feedback; and (5) communicating policy recommendations and
338	338	308any significant concerns that may arise from quarterly meetings or the portal to the board of
339	339	309directors and chief executive officer.
340	340	310 (e) The members of the board of advisors may be reimbursed for travel and other
341	341	311expenses incurred in preparing for and attending the meetings. This reimbursement may include
342	342	312a stipend for members not otherwise compensated for their time by an employer. These and all
343	343	313other expenses incurred by the board of advisors in fulfilling its obligations, including the
344	344	314comments portal, shall be paid for from the Bank’s operating budget.
345	345	315 Section 8. Capitalization.
346	346	316 (a) The commonwealth shall make a $200,000,000 initial equity investment for the Bank
347	347	317under the schedule set forth in subsection (b).
348	348	318 (b) The general court shall appropriate $50,000,000 to the Bank in fiscal year 2026,
349	349	319$50,000,000 in fiscal year 2027, $50,000,000 in fiscal year 2028 and $50,000,000 in fiscal year
350	350	3202029.
351	351	321 (c) The board of directors may decide to allocate a portion of the Bank’s initial capital
352	352	322and retained earnings between the Bank and its subsidiaries, established under section 3(e) under
353	353	323the same terms governing other state-chartered depository institutions.
354	354	324 Section 9. Deposits.
355	355	325 (a) The state treasurer, along with the Bank’s board of directors and its chief executive
356	356	326officer, shall determine when the Bank has sufficient capacity after the first appropriation of
357	357	327capital to receive public funds. On or near that date, the state treasurer shall deposit $350 million 17 of 24
358	358	328dollars of state funds in the bank. For each additional appropriation of Bank capital pursuant to
359	359	329Sections 8(a)-(b), the state treasurer shall deposit an additional $350 million of state funds,
360	360	330within three months of the effective date of such appropriation. After that date, the state treasurer
361	361	331shall so allocate state funds to ensure that the Bank maintains a minimum average annual deposit
362	362	332balance of $1,400,000,000.
363	363	333 (b) The state treasurer shall fund the minimum average deposit balance from state
364	364	334revenues held with the Massachusetts Municipal Deposit Trust; provided, however, that the state
365	365	335treasurer shall not withdraw funds from the “Move Money” program.
366	366	336 (c) The state treasurer shall use deposits in the Bank to make any payments, provided
367	367	337further that the state treasurer shall not take action that (1) disrupts the public bank’s liquidity
368	368	338position, or (2) reduces the size of the Bank’s minimum average annual deposit balance of
369	369	339$1,400,000,000.
370	370	340 (d) Given that the commonwealth is the sole shareholder of the Bank, the Bank shall not
371	371	341pay interest on the commonwealth’s deposits; provided, however, that the Bank shall pay interest
372	372	342to cities and towns with deposits held at the Bank at rates that the Bank sets.
373	373	343 (e) After the Bank is well established, has a record of sound operation, and the state
374	374	344treasurer, the board of directors and its chief executive officer have deemed the Bank to have the
375	375	345requisite capacity, the board of directors and chief executive officer may agree to accept deposits
376	376	346of funds from the commonwealth, cities, towns and quasi-public entities that have a maturity of
377	377	347over 180 days. 18 of 24
378	378	348 (g) Nothing in this provision shall derogate from the Bank’s powers to incur non-deposit
379	379	349liabilities, including, but not limited to, money market borrowing, Federal Reserve borrowing,
380	380	350capital market borrowing or its other powers under section 3.
381	381	351 Section 10. State Guarantee.
382	382	352 All deposits and other liabilities of the Bank shall be guaranteed by the full faith and
383	383	353credit of the commonwealth.
384	384	354 Section 11. Sound Operation and Reporting.
385	385	355 The board of directors shall operate the Bank to ensure its soundness and sustainability.
386	386	356According to the board of directors’ determination, the Bank’s annual monetary return may be
387	387	357provided to the commonwealth or reinvested in the capital of the Bank.
388	388	358 (a) Annually, the Bank shall publicly issue its financial reports to the governor and to the
389	389	359clerks of the house of representatives and senate. An external party shall audit these reports
390	390	360 (b) Annually, the state treasurer shall publicly report the current and average amount of
391	391	361cash and cash equivalents held by the commonwealth to the governor and to the clerks of the
392	392	362house of representatives and senate.
393	393	363 (c) The Bank shall maintain records of all banking transactions and amounts throughout
394	394	364the year.
395	395	365 (d) The Bank shall submit an annual public report to the state treasurer, describing the
396	396	366benefits of its activities to the commonwealth. In the report, the Bank shall include:
397	397	367 (1) Analysis of the extent to which it was able to meet priorities listed in section 13. 19 of 24
398	398	368 (2) For each type of eligible recipients specified under section 12 subsections (a) through
399	399	369(l), the number of recipients to whom the bank extended affordable financing and the total
400	400	370amount of the Bank’s regulatory capital dedicated to each type of eligible recipient.
401	401	371 (3) A description of the main forms of affordable finance extended by the Bank in the 14
402	402	372counties of the commonwealth.
403	403	373 (e) The Bank shall file an annual report on the compensation paid by the Bank to the
404	404	374board of directors, the chief executive officer and other bank employees and consultants.
405	405	375 (f) The Bank shall be subject to public record requirements set forth in chapter 66;
406	406	376provided however, that the Bank shall not be required to reveal the identity of an eligible
407	407	377recipient as defined in section 12 or information containing an eligible recipient’s financial data.
408	408	378 Section 12. Eligible Recipients.
409	409	379 The Bank shall use its powers to extend affordable financing to the following eligible
410	410	380recipients:
411	411	381 (a) Public or quasi-public entities, including, but not limited to, cities or towns located
412	412	382within the commonwealth, enterprises managed in whole or in part by cities or towns and public
413	413	383or quasi-public entities located in and primarily serving the commonwealth;
414	414	384 (b) Nonprofit organizations that are exempt from federal taxation under 26 U.S.C.
415	415	385501(c)(3), whose primary goal is to benefit the commonwealth or its residents through
416	416	386community development;
417	417	387 (c) Land trusts; 20 of 24
418	418	388 (d) Entities operating as, or transitioning to be cooperatives, including, but not limited to,
419	419	389housing, worker and consumer cooperatives, employee stock ownership plans and worker-owned
420	420	390cooperative enterprises;
421	421	391 (e) Entities created by financial institutions that pool funds to lend for affordable housing
422	422	392development;
423	423	393 (f) Developers of housing or preservation projects, only when entities financing the
424	424	394project invite the Bank to participate with financing;
425	425	395 (g) State-chartered depository institutions, to the extent that the affordable financing
426	426	396extended to these institutions is used to support the other eligible recipients in this provision;
427	427	397 (h) Community development corporations that operate in Massachusetts;
428	428	398 (i) Community development financial institutions that operate in Massachusetts;
429	429	399 (j) Investment vehicles established by the eligible recipients set forth in subsection (h) or
430	430	400(i);
431	431	401 (k) Smaller business enterprises, defined as in section 2 and doing business primarily in
432	432	402the commonwealth, that offer sustainable business plans and merit credit but are unable to
433	433	403procure affordable financing from other Massachusetts banks with or without participation by the
434	434	404Bank;
435	435	405 (l) Small- and medium-sized farms and related industries;
436	436	406 (m) Conduits or investment vehicles created for the primary purpose of supporting other
437	437	407eligible recipients listed in this section. 21 of 24
438	438	408 Section 13. Affordable Financing.
439	439	409 The term “affordable financing” shall include the following types of finance, all to the
440	440	410extent consistent with the Bank’s authorities in section 3(a) and subject to general banking
441	441	411regulations set by the commissioner:
442	442	412 (a) For all eligible recipients listed in section 12:
443	443	413 (1) The provision of credit and loans, including long-term loans and unsecured loans. The
444	444	414Bank may
445	445	415 employ underwriting methods which are flexible in their criteria, terms and uses and shall
446	446	416provide loans at affordable rates;
447	447	417 (2) The provision of letters of credit, guarantees, subordinate loans and other forms of de-
448	448	418risking for the purpose of crowding-in additional financing by non-Bank sources;
449	449	419 (3) The provision of technical assistance;
450	450	420 (b) For the eligible recipients listed in Section 12, subsections (c), (e), (h) and (m), the
451	451	421term “affordable financing” shall additionally include the following:
452	452	422 (1) The provision of equity financing, including preferred stock, common stock, equity
453	453	423equivalent capital and other hybrid instruments;
454	454	424 (2) The provision of grants, donations and contributions, including grants given over a
455	455	425period of years (such as those for technical assistance) to provide predictability for eligible
456	456	426recipients;
457	457	427 (3) The other activities permissible to the Bank under section 3(a). 22 of 24
458	458	428 (c) Nothing in this provision is meant to derogate from the Bank’s powers under section
459	459	4293(a) to hold assets necessary for its liquidity management.
460	460	430 Section 14. Bank Priorities.
461	461	431 In formulating its Business Plan, the Bank shall give priority to the following
462	462	432considerations:
463	463	433 (a) Supporting eligible recipients subject to the historic and current economic inequities
464	464	434by communities in underserved neighborhoods, including, but not limited to, enterprises
465	465	435established by residents there, as well as eligible recipients working to remedy those inequities;
466	466	436 (b) Supporting eligible recipients subject to the historic and current economic inequities
467	467	437experienced by women throughout the commonwealth;
468	468	438 (c) Supporting rural business and farming concerns;
469	469	439 (d) Supporting businesses with compensation structures that provide a livable wage,
470	470	440establish an equitable ratio between the least- and highest-paid members of the business or
471	471	441otherwise demonstrate a commitment to equitable pay.
472	472	442 (e) Supporting entities that address the impacts of climate change and the reduction of
473	473	443greenhouse gases.
474	474	444 (f) Funding the need of cities and towns in the commonwealth to update and build safe
475	475	445and sustainable infrastructure.
476	476	446 (g) The Bank shall seek to complement and support the operation of public and quasi-
477	477	447public agencies, non-profit organizations, Massachusetts banks and community development 23 of 24
478	478	448financial institutions and community development corporations. The Bank shall partner rather
479	479	449than compete with those entities to strengthen them and to expand affordable financing in the
480	480	450commonwealth.
481	481	451 (h) When appropriate, the Bank’s provision of lending and de-risking under section 13(a)
482	482	452shall be conducted through participation lending programs with state-chartered depository
483	483	453institutions, with these institutions originating and servicing the loans.
484	484	454 (i) The bank shall promote equitable distribution of Bank resources across the
485	485	455commonwealth, including ensuring that rural areas of the commonwealth are given full and fair
486	486	456consideration.
487	487	457 (j) Provided that certain smaller towns in the commonwealth have scant resources for
488	488	458administrative staff, the Bank shall make every effort to make the application process for these
489	489	459towns as simple and affordable as possible.
490	490	460 Section 15. Conflicts of Interests.
491	491	461 (a)The Bank shall not transact with or extend financing to a member of the board of
492	492	462directors, the chief executive officer or an officer of the Bank, including an immediate family
493	493	463member of that person as defined in section 1 of chapter 268A or an entity in which that person
494	494	464has an interest. This prohibition shall remain in effect for 4 years after the conclusion of the term
495	495	465of the board member, chief executive officer or another officer of the Bank.
496	496	466 (b) The Bank shall not transact with or extend financing to a member of the board of
497	497	467advisors, including an immediate family member of that person as defined in section 1 of chapter 24 of 24
498	498	468268. Nothing in this provision shall prevent the Bank from transacting with or extending
499	499	469financing to an entity with which a member of the board of advisors is associated.
500	500	470 Section 16. Liberal Construction.
501	501	471 The provisions of this chapter shall be interpreted and construed liberally in aid of its
502	502	472declared purpose.
503	503	473 SECTION 2. Section 38 of chapter 29 of the General Laws is hereby amended by adding
504	504	474the following subsection:-
505	505	475 (j) In the Massachusetts Public Bank established under chapter 10A.
506	506	476 SECTION 3. Notwithstanding any general or special law to the contrary, the
507	507	477capitalization amounts set forth in section 8 of this act shall be available to the Bank by fiscal
508	508	478year 2025, subject to appropriation.