|Issuer:||Michael S. Dukakis|
|Mass Register:||No. 452|
|Amending:||Executive Order 245|
|Amended by:||Executive Order 261|
|Amended by:||Executive Order 262|
Table of Contents
(Amending E.O. 245)
WHEREAS, the Ninety-Eighth Congress of the United States enacted, and on July 18, 1984 the President signed into law, the "Tax Reform Act of 1984", (the "Act"), which among other things, imposes restrictions upon the issuance of certain tax-exempt industrial development bonds and student loan bonds,
WHEREAS, one such restriction establishes a ceiling (the "State Ceiling") during each calendar year on the aggregate amount of "private activity bonds", as defined by the Act, that may be issued on behalf of The Commonwealth of Massachusetts (the "Commonwealth") and its political subdivisions for the calendar year through 1986, which may not exceed an amount equal to $150 multiplied by the Commonwealth's population, as determined by the most recent census estimate published by the Bureau of the Census before the beginning of each applicable calendar year; and
WHEREAS, the most recent published census estimate of the resident population of the Commonwealth is 5,767,000, therefore the 1984 State Ceiling amount for the Commonwealth is $865,050,000; and
WHEREAS, the Act establishes an arbitrary formula for allocating the State Ceiling amount among Governmental Units with authority to issue Private Activity Bonds; and
WHEREAS, the Act also provides that a state may, by law, provide a different formula for allocating the state ceiling among Governmental Units having authority to issue Private Activity Bonds and that the Governor of any state may proclaim a different formula for allocating the State Ceiling on an interim basis; and
WHEREAS, the formula for State Ceiling allocation provided in the Act, if not modified by an interim Executive Order, would impose prohibitive constraints on the ability of the Commonwealth to provide a continuing, orderly, efficient and responsible system for the issuance of such Private Activity Bonds to best serve the important economic, environmental and educational needs of the Commonwealth; and
WHEREAS, by Executive Order No. 245 issued on August 30, 1984: (the "Original Executive Order") a different formula of State Ceiling allocation than that set forth in the Act was established; and
WHEREAS, Section 14 of the Original Executive Order provided for amendments thereto; and it is deemed desirable to amend the Original Executive Order; and
WHEREAS, as permitted by the Act and applicable Treasury Regulations, the Original Executive Order as restated and amended by this Executive Order is intended to establish a different formula of State Ceiling allocation than that set forth in the Act.
Now, THEREFORE, I, Michael S. Dukakis, Governor of the Commonwealth, by virtue of the authority vested in me as Supreme Executive Magistrate, do hereby restate and amend the Original Executive Order and proclaim as follows:
Section 1. Authorization; Definitions. This Executive Order restates and amends the Original Executive Order and shall be deemed to be effective from and including August 30, 1984; provided, however, that no allocation granted or action taken by the Massachusetts Industrial Finance Agency ("MIFA") or any other person pursuant to the Original Executive Order shall be affected by this restatement and amendment but shall remain in full force and effect. Pursuant to the provisions of section lO3(n) of the Internal Revenue Code of 1954, as amended (the "Code"), added by section 621 of the Act, I, Michael S. Dukakis, the Governor of the Commonwealth, hereby allocate the
State Ceiling to the Commonwealth and designate, as hereinafter set forth, MIFA as the implementing entity of the Private Activity Bond issuance allocation. The term Private Activity Bond shall have the same meaning herein as in subsection (7) of section lO3(n) of the Code and shall consist of (i) Industrial Development Bonds and (ii) Student Loan Bonds as those terms are used in the Code, except as excluded by the provisions of paragraphs (B), (C) and (D) of said subsection (7). All other capitalized terms used herein shall have the same meanings as in the Code, unless otherwise defined, except as the context shall otherwise clearly indicate. For purposes of this Executive Order, a Governmental Unit shall mean any entity which has the authority to issue Private Activity Bonds in the Commonwealth.
Any action required to be taken hereunder by a Governmental Unit with respect to a Private Activity Bond may be taken on its behalf by any duly constituted board, authority, or duly appointed designee thereof, or by a borrower, prospective borrower of the proceeds of such issue of bonds or a representative thereof, or by bond counsel for such issue of bonds. All references to time shall be to Boston Time as in effect on the applicable date. The term "Materials Deadline Date" shall mean a date fifteen (15) days before a Regularly Scheduled Meeting of the Board of Directors of MIFA, or in the case of a special meeting, such other date as MIFA shall determine. The term "Date Prior to" when used in connection with a meeting of the Board of Directors of MIFA shall mean 5:00 p.m. on the Business Day immediately preceding the date of such meeting. The term "Regularly Scheduled Meeting" shall mean a regularly scheduled monthly meeting of the Board of Directors of MIFA. The term "Business Day" shall mean any day other than a Saturday, Sunday or any day on which offices of the Commonwealth, banking institutions or savings and loan associations in the Commonwealth are authorized or required to close.
Section 2. Allocation formula and method. A Governmental Unit which proposes to issue Private Activity Bonds subject to the limitations imposed under the provisions of section 103(n) of the Code for a project or purpose must request an allocation of a portion of issuance capacity for a particular project or purpose by submitting the following information to MIFA in a form satisfactory to MIFA:
(a) The name and address of the Governmental Unit or board or authority thereof acting on its behalf in connection with issuance of such Private Activity Bonds;
(b) In the case of Industrial Development Bonds, the name and location (by mailing address or other definitive description) of the project for which an allocation of the issuance capacity is requested and the name and mailing address of the applicant or proposed owner or operator of the project and an appropriate person from whom information regarding the project can be obtained. For purposes of complying with the foregoing sentence, an executed copy of the MIFA Project Information Statement or local equivalent shall also be supplied to MIFA for Private Activity Bonds proposed to be issued under M.G.L.c. 40D or 23A.
(c) In the case of Student Loan Bonds, the Governmental Unit, or board or authority thereof or person acting on its behalf, shall furnish a description of the purpose for which an allocation of the issuance capacity is requested and an appropriate person from whom further information can be obtained;
(d) In the case of Industrial Development Bonds (other than bonds proposed to be issued by MIFA), the date of adoption by the Governmental Unit or board or authority thereof acting on its behalf of an inducement resolution adopted for the purpose of taking "official action", as required by the Treasury Regulations relating to section 103 of the Code, if the issue of bonds for which the allocation is requested requires the taking of "official action" under the Code;
(e) The amount of the issuance capacity which the Governmental Unit is requesting be allocated for the project or purpose which is the subject of the request.
Issuance capacity shall be allocated only if not otherwise assigned to a previous applicant, reserved or previously utilized and shall be allocated to a Governmental Unit for such project or purpose on the basis of chronological, (date and time) order of receipt of an allocation request and shall be granted as provided in Section 3, 4 or 5, as the case may be.
The grant of issuance capacity in respect of any project or purpose shall in no event exceed the specific amount granted. Notwithstanding the provisions of Section 11 of M.G.L. c. 40D or other law, any proposed increase in the amount of Private Activity Bonds to be issued in respect of such project or purpose must be made the subject of an additional and separate allocation request.
Allocated issuance capacity that expires or is forfeited pursuant to the provisions of the Executive Order, or in respect of which Private Activity Bonds are not issued, shall be treated as unallocated issuance capacity and shall be granted as provided in Section 3, 4, or 5, as the case may be.
Section 3. 1984 Industrial Development Bond Allocations. For the remainder of calendar year 1984, except as shall otherwise be expressly provided herein, in the case of a bond to be issued by MIFA or by an Industrial Development Finance Authority constituted under M.G.L. c. 40D (an "IDFA"), the request for an allocation shall be submitted to MIFA on or before the Materials Deadline Date for final MIFA approval of such bond. In the case of any Governmental Unit that does not require MIFA final approval prior to issuance of bonds, a request for an allocation must be made on or before the Date Prior to a Regularly Scheduled Meeting by notifying MIFA, in writing, and by giving evidence of a bond resolution or Some Other Similar Official Action having been taken by such Governmental Unit approving a specific project or purpose.
Provided in the case of bonds to be issued under M.G.L. c. 40D or 23A that MIFA shall have given final approval to such project, an allocation request shall be granted on the date of the Regularly Scheduled Meeting which next follows a valid request or in the case of a special meeting in connection with such request, on the date of such special meeting. The period during which an allocation shall be valid (the "Allocation Period") shall end on the Date Prior to the Regularly Scheduled Meeting next following the date of the grant. An extension may be requested in writing commencing on the Materials Deadline Date immediately prior to the expiration of such Allocation Period and ending on the Date Prior to the expiration of such Allocation Period, such extension to end on the Date Prior to the next following Regularly Scheduled Meeting. Such extension shall be granted on the date of the next Regularly Scheduled Meeting provided that all valid initial requests for allocations to be granted on such date have been granted, and provided further that no prior request for an allocation or extension has been postponed or denied due to insufficient issuance capacity. Any requests for an allocation or extension which cannot be granted due to insufficient issuance capacity shall remain pending unless withdrawn. To the extent issuance capacity becomes available, such pending requests shall be granted priority in chronological order of request without regard to whether the subject of the request is an initial allocation or an extension.
Section 4. Industrial Development Bond Allocations After December 31, 1984. Except as shall otherwise be expressly provided herein, commencing January 1, 1985, a request for an allocation shall be made to MIFA (i) in the case of a MIFA issue, on or before the Materials Deadline Date for MIFA preliminary approval, (ii) in the case of an IDFA issue, at the time MIFA is notified, in writing, and given evidence of preliminary approval having been given by an IDFA and the local Governing Body, as defined in M.G.L. c.40D, or (iii) in the case of an issue that is neither a MIFA issue nor an IDFA issue, at the time MIFA is notified , in writing, and given evidence of a bond resolution or Some Other Similar Official Action having been taken for a specific project or purpose by another Governmental Unit. An allocation shall be granted on the date of the next Regularly Scheduled Meeting following the request, or in the case of a special meeting in connection with such request, on the date of such special meeting. The Allocation Period shall end on the Date Prior to the third Regularly Scheduled Meeting following the date of the grant. An extension may be requested in writing on or prior to the Materials Deadline Date for final approval in the case of bonds which require the final approval of MIFA. Such extension shall be granted on the date of the meeting of the MIFA Board of Directors at which the application for final approval is granted provided that all valid initial requests for allocations to be granted on such date have been granted, and provided further that no prior request for an allocation or extension has been postponed or denied due to insufficient issuance capacity. The extension shall expire ten (10) Business Days after the date of the next Regularly Scheduled Meeting following the date of the meeting on which the extension is granted, and no additional extension shall be granted. Alternatively, if such final approval documents are not filed prior to the expiration of such allocation or the bonds do not require approval by MIFA, an extension shall be granted upon submission to MIFA by the Governmental Unit, on the Materials Deadline Date next preceding the expiration of the Allocation Period, of a binding commitment letter satisfactory to MIFA from a financial institution or other bond purchaser. Such extension shall be granted on the date of the meeting to which such Materials Deadline Date pertains provided that all valid initial requests for allocations to be granted on such date have been granted, and provided further that no prior request for an allocation or extension has been postponed or denied due to insufficient issuance capacity. The extension shall expire ten (10) Business Days after the date of the next Regularly Scheduled Meeting following the meeting at which the extension is granted, and no additional extension shall be granted. Any requests for an allocation or extension denied due to insufficient capacity shall remain pending unless withdrawn. To the extent issuance capacity becomes available, such pending requests shall be granted priority in chronological order without regard to whether the subject of the request is an initial allocation or an extension. If a prospective Private Activity Bond in respect of which an extension is granted is not issued prior to expiration of the extension, a new allocation may be requested as an initial allocation, but no such request may be made until after the second Regularly Scheduled Meeting following the date of expiration. For a prospective Private Activity Bond in respect of which a grant of an allocation has expired, a new allocation may be requested as an initial allocation, but no such request may be made until after the Materials Deadline Date preceding the third Regularly Scheduled Meeting following the date of the expiration.
Section 5. Allocations for Other Bonds and Special Situations. In the case of Student Loan Bonds, the Governmental Unit which proposes to issue such bonds shall submit an annual financing plan to MIFA on or before January 31 of each year stating the amount of issuance capacity requested and explaining the need therefor. Said plan may be amended after such date to respond to additional financing requirements. To the extent issuance capacity is available at the time of such request, or such amended request, the requested allocation shall be granted pursuant to the chronological basis set forth in Section 2. The Allocation Period for such Student Loan Bonds shall end August 31 of each year, unless extended for explainable market or regulatory reasons, and no further request from any Governmental Unit for an allocation with respect to Student Loan Bonds shall be considered until after September 30 of such year. In no event shall allocations be made for bonds the proceeds of which are used or to be used at any time to purchase loans from financial institutions located outside the Commonwealth unless such loan is for the benefit of a resident of the Commonwealth or a student attending an institution of higher education in the Commonwealth.
In the case of publicly underwritten issues (other than Student Loan Bonds), and in the case of general obligation bonds, the procedures set forth in Sections 3 and 4 shall be observed, except that the Allocation Period requested may be such longer period as is expected to be necessary for completion of the financing or offering. Such longer period may be granted provided such Governmental Unit certifies to MIFA and presents evidence satisfactory to MIFA that on a historical basis, similar projects or financings issued by such Governmental Unit have ordinarily required a period equal to or exceeding the requested period. If such Governmental Unit has no experience with the type of financing or project, it shall instead provide historical evidence of similar projects or financings by other issuers; such information may be supplied by a Substantial User, underwriter, financial adviser or other sponsor of the proposed financing. An extension may be granted on a chronological basis pursuant to the provisions of Section 3 and 4, as the case may be.
In the case of Private Activity Bonds which would have met the requirements of subsection (2) of Section 63l(a) of the Act if such Bonds had been issued prior to January 1, 1985 but which were not so issued, no allocation request shall be made until after the Regularly Scheduled Meeting for February, 1985.
In the case of Private Activity Bonds requiring an allocation which received final approval from MIFA but were not issued prior to the effective date of this Executive Order, or which have made application to MIFA for final approval at the Regularly Scheduled Meeting in September, 1984, allocations may be requested in writing to MIFA at any time. The grant of an allocation shall be made in such manner as MIFA shall determine. The Allocation Period and any extension thereof shall be governed by the provisions of Section 3 or 4, as the case may be.
In the case of Private Activity Bonds for which Official Action or other preliminary approval was received subsequent to June 19, 1984 and prior to December 31, 1984 and which did not receive final approval in 1984, allocation requests may be made at any Materials Deadline Date after December 31, 1984. The grant of an allocation, the Allocation Period, and any extension thereof shall be governed by the provisions of Section 4.
Private Activity Bonds that require an allocation and have been issued and delivered by a Governmental Unit prior to the effective date of the Original Executive Order shall receive an allocation of issuance capacity equal to the principal amount of such bonds upon notification by such Governmental Unit, writing, that such bonds have been issued and delivered.
Section 6. Automatic Expiration Dates. Notwithstanding anything to the contrary hereunder, except in the case of Carryforward Projects, Private Activity Bonds constituting or included within an issue of general obligation bonds of the Commonwealth, and Student Loan Bonds, any allocation outstanding for any project or purpose shall automatically expire on the Date Prior to the Regularly Scheduled Meeting for December in such year ("Automatic Expiration Date"). After such date, MIFA shall reallocate any available issuance capacity for such year to Carryforward Projects in the manner set forth in Section 7. Any available issuance capacity not so allocated shall be reallocated prior to December 31 in such year to such projects with automatically expired allocations as shall have requested reallocations in writing in chronological order of such reallocation request.
Section 7. Elective Carryforward of Unused Issuance Capacity. Any Governmental Unit having a project or projects that it wishes to have considered as a Carryforward Project as provided in subsection (10) of section 103(n) of the Code, shall submit, for each such project, a written request to the Executive Director of MIFA on or before November 1, 1984, and on or before October 1 in subsequent years, indicating with reasonable specificity and in a form satisfactory to MIFA the status and purpose of the project and the amount requested. For years beginning after December 31, 1984, each request for Carryforward Projects shall also specify the year in which it is expected that the bonds financing such project will be issued. Such request may also specify the desire to issue such bonds during the calendar year in which the request is made if issuance capacity remains available. If such Carryforward Project is approved, the request to issue bonds in the year in which the request is made shall be granted by MIFA upon the favorable recommendation by the Carryforward Advisory Committee as provided below. Prior to the Automatic Expiration Date for each year, the Executive Director of MIFA shall review and summarize the aggregate issuance capacity requested for Carryforward allocations; and said Executive Director shall convene as soon as is practicable a Carryforward Advisory Committee comprised of five members, who shall be the Executive Directors of MIFA, the Massachusetts College Student Loan Authority and the New England Education Loan Marketing Corporation, the Secretary of Environmental Affairs of the Commonwealth, and the President of the Massachusetts Economic Development Council. The Committee shall consider all of the requests for Carryforward Projects and after consultation with the Office of the Governor make its recommendations to the Executive Director of MIFA. On the date of the Regularly Scheduled Meeting of MIFA for December of such year, or at a specially scheduled meeting, Carryforward Project allocations shall be granted. A Carryforward Project allocation shall become valid when an election thereof is made at the time and in the form prescribed by Treasury Regulations issued under section 103(n) of the Code (the "Election").
To the extent that issuance capacity nevertheless remains available, MIFA shall notify Governmental Units of the remaining available issuance capacity and shall solicit additional Carryforward allocation requests which shall be reviewed in chronological order of request. After the issuance of Carryforward allocations, a reallocation of allocations which have automatically expired shall be made in the manner set forth in Section 6. To ensure that allocations shall not have exceeded issuance capacity, MIFA may designate, prior to December 31, of any year, an amount of issuance capacity to be reserved and deemed specifically allocated to such Private Activity Bonds requiring allocations which have been issued prior to December 31 of such year and which due to inadvertence or otherwise have not received a specific allocation.
To the extent that Treasury Regulations with respect to Elections are inconsistent with the foregoing procedures, such procedures shall be modified by MIFA accordingly, with the proviso that they shall be observed as closely as possible consistent with such regulations.
Section 8. Large Issues. In order to implement an "open-door" policy, whereby the issuance capacity of the Commonwealth remains available on a widespread basis for all sectors of the Commonwealth, and in the spirit of the $40,000,000 aggregate Small Issue limitation imposed in subsection (15) of section 103(b) of the Code, no bond or bonds for any project or projects for a single Principal User or Related Person thereto shall be granted an allocation in excess of $40,000,000 in any calendar year, except as a Carryforward Project. To that end, a Governmental Unit wishing to request an allocation in excess of such amount, must, prior to any other allocation request in respect of such project or projects, make a request for a Carryforward allocation, as described in Section 7.
Section 9. Priority Projects, Reserved Allocations, Utilized Capacity. A portion of issuance capacity shall be reserved for each Priority Project. A Priority Project shall mean a project which received preliminary approval before October 19, 1983 by any Governmental Unit, provided a Substantial User of such project notified such Governmental Unit on or before August 17, 1984 that it intended to claim the right to such portion of the issuance capacity and provided construction of such project began before October 19, 1983 or a Substantial User was under a binding contract on such date to incur expenditures with respect to the project equal to the lesser of $15,000,000 or twenty percent (20%) of the estimated cost of the project. As a further condition, such Substantial User shall be required to notify such Governmental Unit by December 31, 1984 as to the calendar year in which such Substantial User expects the bonds which will finance such project to be issued.
A Governmental Unit upon which such notice has been served shall promptly inform MIFA of the Priority Project, and an allocation of issuance capacity shall be made to such unit in respect of such Project in the year designated by such Governmental Unit as the calendar year during which bonds were to be issued financing such Project pursuant to the preliminary approval given by such Governmental Unit. The allocation shall be reserved for such calendar year to the extent required by Treasury Regulations. The Substantial User of such Project or the Governmental Unit shall notify MIFA of any intention not to utilize all or a portion of the allocation reserved to it. Upon such notification or upon notification under Section 10 of the issuance and delivery of bonds, any portion not used shall become part of the available issuance capacity.
Private Activity, Bonds whose allocation expired on an Automatic Expiration Date and which have not received another allocation for such year or a Carryforward allocation shall automatically receive an allocation beginning on the first business day of the year next following the year in which the Allocation Expiration Date occurred. The Allocation Period shall end on the Date Prior to the third Regularly Scheduled Meeting in the year next following the year in which such allocation expired.
Section 10. Notice to MIFA. Unless written notice (in a form approved by MIFA) of the issuance of a Private Activity Bond is given to such Governmental Unit within five (5) Business Days of the date of delivery of such Private Activity Bonds, a revocation of such allocation shall occur; provided, however, that in the event such written notice of issuance is not given as provided above, MIFA shall have the sole discretion to determine whether and under what conditions to accept a notice given after such date, thus preventing revocation.
Section 11. Certifications by MIFA. MIFA shall certify to any Governmental Unit (or a person acting on its behalf), upon request, as to the amount of available issuance capacity. MIFA shall develop and promulgate a procedure for confirmation to Governmental Units (or persons acting on their behalf) as to the grant of an allocation or extension and the date of the duration thereof and the furnishing pursuant to the provisions of subsection (12) of section 103(n) of the Code, of a Certification of No Consideration for Allocation. Until such procedures shall be instituted, or if no such confirmation or certification is received pursuant to such procedure or otherwise, MIFA shall furnish such confirmation or certification upon the request of a Governmental Unit (or a person acting on its behalf). Any certificate delivered by MIFA in connection with the allocation or amount of available issuance capacity shall be conclusive and may be relied upon by all participants in the issuance of the Private Activity Bonds which are the subject of such certificate.
Section 12. Delegation to Officers. Except as may otherwise be specifically provided herein, the functions to be carried out under this Executive Order may be carried out by MIFA through its Executive Director, Deputy Director, Vice Chairman, other officer or member of the MIFA Board of Directors authorized by such board from time to time and may be delegated by any of such authorized persons to other employees of MIFA. Further, MIFA may promulgate guidelines to implement the intent of this Executive Order, and notwithstanding the failure of any person to specifically comply with the terms and provisions of this Executive Order, may resolve all situations respecting allocations of issuance authority in any manner not inconsistent with such intent.
Section 13. No Personal Liability. It is the intention of the Governor of the Commonwealth in issuing this Executive Order that no director, officer, agent and/or employee of MIFA shall be subject to personal liability arising out of the performance of duties hereunder, and MIFA may require a waiver of any such liability as a condition of accepting any request for an allocation or the delivery of any certification hereunder.
Section 14. Reliance. This Executive Order may be relied upon by issuers of Private Activity Bonds within the Commonwealth, beneficiaries of the proceeds from and owners of such bonds, bond counsel and other participants in the issuance of such bonds. This Executive Order may be amended from time to time; provided, however, that no such amendment shall adversely affect Private Activity Bonds issued prior to such amendment or with respect to which an effective allocation had been made prior to such amendment.
Section 15. Status of Other Law. Nothing contained in this Executive Order shall require MIFA to grant an allocation in the case of Industrial Development Bonds to be issued under M.G.L. c. 40D or 23A if the project proposed to be financed with such bonds does not otherwise satisfy the requirements of M.G.L. c. 40D and/or 23A and the general requirements imposed by MIFA relating thereto.
Section 16. Expiration. Unless otherwise provided by Treasury Regulations, this Executive Order shall continue to apply until the effective date of legislation enacted by the General court with respect to allocation of the issuance capacity of the Commonwealth.
Given at the Executive Chamber in Boston this 31st day of December in the year of our Lord one thousand nine hundred and eighty-four, and of the Independence of the United States of America two hundred and nine.
Michael S. Dukakis, Governor
The Commonwealth of Massachusetts
Michael Joseph Connolly
Secretary of the Commonwealth