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SD 3995

FY25 MCRC Annual Report and Statement of Financial Condition

194th Legislature (2025-2026)

The bill requires submission of the FY25 MCRC annual financial report, including audited GAAP financial statements, distributions, and related-party disclosures to the Massachusett

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Bill Summary · SD 3995

Summary of SD 3995 (Session 194th, Massachusetts)

Purpose and intent

  • The bill appears to authorize or report on the FY25 Massachusetts Comprehensive Annual Report and Statement of Financial Condition for the Massachusetts Capital Resource Company (MCRC), a Massachusetts limited partnership established under Chapter 816 of 1977. The accompanying materials provide detailed financial statements and notes for the year ended December 31, 2025.
  • The document is presented as an annual report required by Section 18 of Chapter 816, including information for the Commissioner of Insurance.

Key provisions and changes

  • Financial reporting: The bill/filed materials include:
    • Independent auditor’s report confirming the financial statements present fairly the partnership’s financial position, results of operations, and cash flows in accordance with GAAP.
    • Balance sheets as of December 31, 2025 and 2024.
    • Statements of income, comprehensive income, changes in partners’ equity, and cash flows for 2025 and 2024.
    • Notes to financial statements detailing accounting policies, investments, risk management, leases, pension plan, related parties, and other significant matters.
  • Investments and assets:
    • Available-for-sale securities (U.S. Treasuries and Massachusetts obligations) and equity securities (fair value and measurement alternative) are reported with fair value and related unrealized gains/losses.
    • Notes receivable totaling substantial amounts with a reserve for credit losses (allowance for credit losses of $8.06 million for 2025).
    • Right-of-use assets and lease liabilities recognized for operating leases under ASC 842 (office lease through 2032).
    • Pension asset and defined benefit pension plan with funded status and OCI impacts.
  • Distributions and distributable income:
    • The partnership computes distributable income for distributions to partners, subject to executive committee discretion.
    • 2016 amendments extended the term to 2033 with subsequent extension options; a schedule outlines distributions of 5% of capital contributions annually from 2029 through 2033, with a 75% final distribution in 2033 unless extended.
  • Governance and related-party transactions:
    • MCRC provides management and administrative services to Life Initiative; intercompany charges totaled approximately $1.85 million in 2025.
    • Amounts owed to/from the Life Initiative are disclosed.
  • Financial condition and risk:
    • Concentration of risk is primarily Massachusetts-based borrowers in sectors including basic manufacturing, consumer products, healthcare/biotech, high technology equipment, and services/engineering.
    • No single security or note receivable exceeded 5% of partners’ equity.
    • Off-balance-sheet commitments: no commitments to originate loans as of year-end.
  • Compliance and timing:
    • Subsequent events reviewed through May 26, 2026, with readiness to issue the financial statements.
    • The report is filed with the Massachusetts Commissioner of Insurance as part of the statutory annual reporting.

Who would be affected

  • Massachusetts Capital Resource Company (MCRC) and its partners/end beneficiaries.
  • The Massachusetts Commissioner of Insurance receives this annual financial report for regulatory/oversight purposes.
  • Life Insurance Community Investment Initiative (Life Initiative) as a related party receiving management services from MCRC.

Procedural and timeline aspects

  • Reporting period covered: December 31, 2025 and 2024, with an audit dated May 26, 2026.
  • The report references ongoing governance and potential future distributions under the Partnership Agreement amendments, including term extensions and distribution mechanics.
  • The document notes a vacancy on MCRC’s Investment Committee Governor appointee position at the time of writing.

If you’d like, I can extract specific figures (e.g., net income, distributable income, total assets, or key pension and lease numbers) into a concise data sheet.

Compiled from official sources — confirm details with the bill’s official record.

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