Section 19 Issuance of notes payable on demand forbidden; procedure for repaying debts; consolidated municipal purpose loans; repayment schedule for approved school project loans
Section 19. Cities, towns and districts shall not issue any notes payable on demand, and they shall provide for the payment of all debts, except temporary loans incurred under sections four, six, six A, eight C, seventeen and seventeen A, or under section three of chapter seventy-four of the acts of nineteen hundred and forty-five, by such annual payments as will extinguish the same at maturity, and so that the first of such annual payments on account of any serial loan shall be made not later than the end of the next complete fiscal year commencing after the date of the bonds or notes issued for the serial loan, and so that the amount of such annual payments in any year on account of such debts, so far as issued, shall not be less than the amount of principal payable in any subsequent year; and such annual amounts, together with the interest on all debts, shall, without further vote, be assessed until the debt is extinguished; provided, however, that in the case of bonds or notes issued for establishing or purchasing a water supply system for its inhabitants, the first of such annual payments shall be made not later than three years after the date thereof. Notwithstanding the aforesaid provisions, the maturities of each issue of bonds or notes, (a) sold to the Farmers Home Administration, Department of Agriculture of the United States, (b) issued for costs relating to an enterprise for which an enterprise fund has been established under the provisions of section thirty-nine K of chapter forty or other comparable provisions of law; provided however, that the accountant or auditor or other officer having similar duties in the city, town or district, shall have certified to the treasurer that rates and charges have been set at a sufficient level to cover the estimated operating expenses and debt service of the enterprise, including debt service on the bonds or notes to be issued or (c) issued for any purpose approved by the voters under paragraph (k) of section twenty-one C of chapter fifty-nine, shall be arranged so that for each issue the amounts payable in the several years for principal and interest combined shall be as nearly equal as practicable in the opinion of the officers authorized to issue said bonds or, in the alternative, in accordance with a schedule providing a more rapid amortization of principal.
The limitations imposed by the first paragraph or by other applicable provision of law with respect to annual payments of bonds or notes shall apply to consolidated municipal purpose loans issued pursuant to the second paragraph of section sixteen; provided, however, that any separate portion of the consolidated issue need not comply with such limitations as long as each portion of the consolidated issue matures over a period not longer than that permitted by law for such portion; and provided further that the minimum principal payment in any one year for each purpose be equal to or greater than the principal payment required if the debt for each purpose was issued for the maximum allowable period for that purpose.
Any maturities of each issue of bonds or notes issued for an approved school project as defined in chapter six hundred and forty-five of the acts of nineteen hundred and forty-eight for which the construction grant is to be paid annually in equal parts, may be arranged so that for each issue the amounts payable in the several years for principal and interest combined shall be as nearly equal as practicable in the opinion of the officers authorized to issue said bonds or notes, or, in the alternative, in accordance with a schedule providing a more rapid amortization of principal, provided however, for the purposes of computing the construction grant, the cost of any such approved project shall not include interest paid or payable on account of any issue of serial bonds or notes in excess of the amount of interest that would be payable if the annual maturities of the serial bonds or notes were in equal principal amounts bearing interest at the same rate or rates as actually borne by such serial bonds or notes.