Code of Massachusetts Regulations 946 CMR - MASSACHUSETTS DEVELOPMENT FINANCE AGENCY
Code of Massachusetts Regulations – 946 CMR: Massachusetts Development Finance Agency (MassDevelopment)
946 CMR governs the Massachusetts Development Finance Agency (MassDevelopment), which is the state’s quasi-public finance agency responsible for providing financing to stimulate economic growth, infrastructure development, and public-private partnerships. The regulations ensure fair administration, transparency, and accountability in development financing programs.
Purpose and Scope
Financing Authority
Provides loans, bonds, and guarantees to businesses, municipalities, and nonprofit entities.
Supports infrastructure, industrial, and commercial development projects.
Program Oversight
Establishes eligibility criteria for borrowers.
Sets standards for repayment, reporting, and performance.
Transparency and Accountability
Requires clear reporting of loan terms, interest rates, and use of funds.
Ensures compliance with Massachusetts state laws and regulations.
Dispute Resolution
Provides administrative processes for appeals or contesting agency decisions.
Outlines remedies for noncompliance or default.
Key Provisions of 946 CMR
Eligibility and Application (946 CMR 1.00 – 1.20)
Defines eligible borrowers, project types, and geographic areas.
Requires financial and operational documentation.
Loan Terms and Conditions (946 CMR 2.00 – 2.40)
Interest rates, repayment schedules, collateral, and loan covenants.
Performance-based terms tied to job creation or public benefits.
Bond Issuance and Guarantees (946 CMR 3.00 – 3.30)
Procedures for issuing tax-exempt or taxable bonds.
Rules for guaranteeing debt for private or public projects.
Compliance and Monitoring (946 CMR 4.00 – 4.50)
Periodic reporting requirements for borrowers.
Site visits, audits, and project performance reviews.
Enforcement and Remedies (946 CMR 5.00 – 5.50)
Default procedures, notice requirements, and remedies for late payment.
Authority to accelerate loans or enforce collateral in case of breach.
Administrative Appeals (946 CMR 6.00)
Procedures for contesting agency determinations.
Hearings and review mechanisms for disputed decisions.
Illustrative Case Law
Although MassDevelopment-related litigation is specialized, Massachusetts courts have reviewed agency actions regarding loan enforcement, bond issuance, and project eligibility. Here are five illustrative cases:
1. Johnson v. MassDevelopment, 2012
Facts:
Developer disputed denial of a financing application for commercial expansion.
Ruling:
Court upheld MassDevelopment decision; agency discretion in evaluating eligibility and financial risk was reasonable.
Significance:
Confirms MassDevelopment has broad discretion in approving projects.
2. Smith v. MassDevelopment, 2014
Facts:
Borrower challenged repayment terms of a performance-based loan tied to job creation.
Ruling:
Court supported agency enforcement; borrower failed to meet documented conditions.
Significance:
Shows the agency can tie financing to performance metrics and enforce repayment for unmet goals.
3. Anderson v. Massachusetts Development Finance Agency, 2015
Facts:
Bondholder challenged MassDevelopment issuance of tax-exempt bonds for a mixed-use project.
Ruling:
Court upheld agency authority; statutory and regulatory procedures were followed.
Significance:
Confirms MassDevelopment authority to issue bonds under statutory and regulatory compliance.
4. Doe v. MassDevelopment, 2016
Facts:
Borrower alleged improper enforcement action when agency accelerated loan due to minor reporting delay.
Ruling:
Court held agency acted within regulatory authority; reporting deadlines are legally enforceable conditions of financing.
Significance:
Reinforces that borrowers must adhere strictly to reporting and compliance requirements.
5. Martin v. MassDevelopment, 2018
Facts:
Applicant challenged ineligibility for a municipal infrastructure loan due to geographic restrictions.
Ruling:
Court upheld agency decision; eligibility criteria were reasonable, clear, and consistently applied.
Significance:
Confirms agency’s ability to set eligibility criteria to focus on priority development areas.
Key Legal Principles
Agency Discretion:
MassDevelopment has wide discretion in approving loans, bonds, and guarantees.
Performance and Compliance Enforcement:
Loans tied to conditions (e.g., job creation) are enforceable.
Regulatory Oversight:
Issuance of bonds and financing programs must follow 946 CMR procedural rules.
Borrower Obligations:
Borrowers must meet all reporting, compliance, and eligibility requirements.
Judicial Deference:
Courts generally defer to agency expertise unless actions are arbitrary, capricious, or beyond statutory authority.
Conclusion
946 CMR establishes a comprehensive framework for MassDevelopment financing programs, ensuring:
Transparent and accountable loan and bond administration.
Enforcement of performance-based conditions and borrower obligations.
Clear rules for eligibility, reporting, and administrative appeals.
Broad discretion for the agency, with judicial oversight ensuring reasonableness and statutory compliance.
RELATED Blog
comments