SECTION 34B. Commonwealth guaranteed temporary notes; authorization and execution; sale and refunding limitations; terms

Any contract for state financial assistance entered into by the commonwealth with a housing authority pursuant to section thirty-four may provide for additional state financial assistance in the form of a guarantee by the commonwealth of notes of the housing authority issued to finance temporarily the development cost of a housing project or projects for which a grant is to be made, by the amount of notes so guaranteed on account of any project shall not exceed the amount of the grant for that project. The total amount of all notes guaranteed pursuant to this section shall not exceed one hundred and twenty-eight million dollars exclusive of any such notes which may be issued for refunding purposes. The guarantee by the commonwealth of the notes of a housing authority shall be executed on each note by the director or an associate director of housing and community development. It shall be sufficient if the signature of said director or associate director upon such note is an engraved, printed or stamped facsimile signature provided that he has, by a writing bearing his written signature and filed in the office of said director, authorized his facsimile signature to be placed thereon. The facsimile signature of said director or associate director so engraved, printed or stamped thereon shall have the same validity and effect as his written signature. If any said director or associate director shall cease to be such officer before the delivery of such note, his signature or facsimile signature shall nevertheless be valid and sufficient for all purposes as if he had remained in office until such delivery.

A housing authority may sell commonwealth guaranteed temporary notes to finance a project; provided, that the total amount outstanding at any time, exclusive of any notes which may be issued for refunding purposes, shall not be in excess of the development cost of the project. Any such notes, whether original or refunding, may at any time be refunded through the issue and sale of notes hereunder but in no event for a term more than one year after completion of the project, as determined by the department. No notes may be issued on account of any project which cause the total amount of notes outstanding for that project, exclusive of notes which may be issued for refunding purposes, to exceed the amount of grant to be received thereafter under the contract relating thereto.

Notwithstanding the provisions of section seventeen the payment of the principal of, and interest on, all such notes shall be guaranteed by the commonwealth, and the full faith and credit of the commonwealth is hereby pledged for any such guarantee. Any excess between the completed cost of a project as determined by the department and the notes outstanding for such project may be retired from the proceeds of the notes, and if so retired, shall not be used in computing the total amount of notes guaranteed by the commonwealth under this section.

No housing authority shall sell or offer for sale any such notes without receiving from the department approval of the amount, the term, the time of sale, and other conditions which the department may deem relevant in connection with the sale of such notes.

Notes issued hereunder prior to the execution and delivery of a contract for the construction or acquisition of the project shall be payable not later than twelve months after such issuance and shall not exceed in aggregate principal amount outstanding at any time, exclusive of renewals, fifteen per cent of the development cost of the project as estimated by the department at the time of issuance. Except for notes described in the following paragraph, notes issued hereunder after the date of execution and delivery of a contract for the construction or acquisition of the project shall be payable in not more than ten months from such date or on such date or other notes for the same project shall be payable, whichever date shall later occur.

Notes issued after the execution and delivery of a contract for the construction or acquisition of the project, and after a grant under section thirty-four has been made to pay all or a portion of the costs of said project, shall not exceed in aggregate principal amount outstanding at any time, exclusive of renewals, ten per cent of the development cost of the project as determined by the department at the time of issuance; provided that said limitation shall not apply to notes issued to finance that portion of the development cost which is in excess of the development cost as estimated by the department at the time such grant was made. If the department determines that notes are outstanding which if renewed by the issuance of other notes would exceed the periods or amounts of notes permitted to be issued or outstanding by this section and if the department is advised by the state treasurer that in his best judgment bond market conditions are adverse and, therefore, it is not feasible to issue bonds in order to make a grant to retire such notes, then the department may authorize refunding notes which shall be payable not later than twelve months after their issuance without regard to the other limitations of this section; provided, however, that so long as any note which could not have been issued but for the provisions of this sentence is outstanding for any project, the department shall not approve under section thirty-one any housing project which requires the issuance of bonds or notes by or guaranteed by the commonwealth as part of the financing thereof.