The Commonwealth borrows funds through the issuance of bonds and notes to fund the large majority of its capital investments. The issuance of bonds and notes to fund capital projects must be approved by a two-thirds vote of each house of the Legislature. The Governor determines the timing and amount of any authorized debt issuances. At the request of the Governor and with his approval, the State Treasurer is responsible for the issuance of the debt. The Governor, through the Executive Office for Administration and Finance (A&F), approves and manages the capital budget and the allocation of debt proceeds to pay the costs of authorized projects.
In addition to direct debt, the Commonwealth has a number of other debt-like, long-term liabilities. These liabilities include contract assistance payments and contingent liabilities. Contract assistance payments are made by the Commonwealth to some independent authorities and political subdivisions of the state to support all or a portion of the debt service on certain bonds issued by such entities. Some of these contract assistance payment liabilities of the Commonwealth are secured by a general obligation pledge of the Commonwealth and others are subject to annual appropriation by the Legislature. Contingent liabilities of the Commonwealth exist with respect to certain debt issued by independent authorities and agencies of the Commonwealth. These obligations are expected to be paid by the issuing entities, but the Commonwealth has guaranteed payment of debt service or replenishment of reserves if expected payment sources are inadequate.
 “Direct” debt includes general obligation debt (secured by a pledge of the full faith and credit of the Commonwealth), special obligation debt (secured by a pledge of receipts credited either to the Commonwealth Transportation Fund, formerly the Highway Fund, or to the Convention Center Fund), and federal grant anticipation notes (secured by a pledge of federal highway construction grants).
 General obligation contract assistance liabilities (which, like general obligation debt, must receive two-thirds approval of the Legislature) include payments to the Massachusetts Water Pollution Abatement Trust, the Massachusetts Development Finance Agency, and the Massachusetts Department of Transportation, as successor to the Massachusetts Turnpike Authority. Budgetary contract assistance liabilities (which are the result of certain capital leases and other contractual agreements) include payments on behalf of the Route 3 North Transportation Improvements Association, the Plymouth County Correctional Facilities Corporation, and the Saltonstall Building Redevelopment Corporation Project.
 Contingent liabilities of the Commonwealth exist with respect to certain debt obligations of the Massachusetts Bay Transportation Authority, the Woods Hole, Martha’s Vineyard and Nantucket Steamship Authority, the University of Massachusetts Building Authority, the Massachusetts State College Building Authority, the Massachusetts Housing Finance Agency and regional transit authorities.