SENATE, No. 1147

SECTION 1.   To amend or create Massachusetts General law upon the approval of two-thirds of the city or municipal corporation to issue stock (similar to preferred stock) in the municipal corporation up to 50% of the total valuation of the community or municipal entity to create a capital reserve account or municipal stock fund or whatever name is appropriate in accordance with generally accepted accounting principles the proceeds, not the principal, of which can be used to augment but not totally appropriate or fund the principal and interest payments for communities or municipal corporations expenditures for the following purposes: to augment the municipalities. School and municipal building and repair programs (not annual maintenance) including libraries, city or town halls, police and fire stations, water and sewer plants, stadiums, and swimming, health, athletic facilities or whatever can be categorized as a long term capital improvement that further the public good and health of the municipal corporation and the Commonwealth and their residents; the stock price shall be determined by the total valuation as of January 1 of the calendar year divided by the population as of the most recent decennial census (stock price may fluctuate from year to year); the proceeds may also be used to reduce short or long term debt at higher rates; no proceeds from the issue shall be used for administrative personnel salaries nor expense but rather all annual expenses other than those related to the initial issue must be borne by the municipal entity in the chief financial officer’s or treasurer’s office and or municipal budget; stock may be purchased by residents, business owners, land owners, and employees of the municipal entity or corporation in suggested share denominations of no less than 100; the amount of debt liability must not exceed the total of combined inside and outside debt allowed to the community under statute and can be exceeded only exceptional purposes deemed acceptable and only with approval by the department of revenue, division of local services and only to a level not to exceed 10% of the total valuation or whichever is greater; dividend/proceeds/interest shall be paid at a rate of 1/2 % less than the discount rate annually or at a regularity allowed by statutes and shall be exempt from federal and state taxes and the applicable local tax commitment; the Commonwealth must take the necessary steps state and or federal legislation be introduced or whatever the case may be to make the dividends or proceeds or interest exempt from federal, state and local taxes; all issued municipal stock must be held for at least one year of purchase and then may be redeemed with the appropriate applicable interest accrued to the purchaser; with the principal, municipalities or municipal corporations may or can purchase or invest securities and can invest in financial instruments and conduct financial transactions within the confines of federal and state financial statutes and the legal list promulgated by the division of banks and securities division of the secretary of state, preferably nine-tenths of issue or portfolio in government bills, notes and bonds; capital reserve account will be the responsibility of the chief financial officer and or treasurer of the municipal entity; this account shall be subject to regular audit by the department of revenue, state auditor, secretary of state securities division, and division of banks or specific agency deemed appropriate by the General Court and any expenses incurred by the agencies shall be paid by the proceeds of the principal of the capital reserve account; the expense of the initial municipal stock issuer or municipal corporation as well as any expenses incurred by the municipal corporation throughout the subscription process including bond counsel, underwriters, insurers, brokers, investment banks, rating agencies and other relevant agencies not mentioned; private auditing of the municipal stock fund must be performed on a biennial basis and may be performed annually and expensed by the proceeds; any ongoing protection of stock fund requiring insurance may be expensed by the proceeds provided it is required by the statute and or recommended by the division of insurance and or the appropriate auditing entity private and or public or both.