Session Laws

Whereas, The deferred operation of this act would tend to defeat its purpose, which is to immediately establish a revolving trust fund to aid in the financing of water pollution abatement projects, therefore it is hereby declared to be an emergency law, necessary for the immediate preservation of the public health.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:

SECTION 1. The general court finds that:

(1) the construction, rehabilitation, operation, and maintenance of modern and efficient wastewater treatment works, water treatment facilities and other water pollution abatement and water supply projects are essential to protecting and improving the water resources of the commonwealth and the public health of its citizens;

(2) the United States, pursuant to the federal "Water Quality Act of 1987" amending the Clean Water Act, requires increased state and local participation in financing the cost of publicly owned treatment works and other water pollution abatement projects;

(3) the creation of a water pollution abatement revolving fund, administered by a board of trustees established as a water pollution abatement trust, will enable the commonwealth to assure maximum participation in federal funding sources under, and to comply with, the Clean Water Act, and will provide increased opportunities for local governmental units in the commonwealth to receive financial assistance for water pollution abatement projects from the commonwealth beyond that available from the federal government; and

(4) the creation of a water pollution abatement revolving fund, the powers and duties conferred on the board of trustees of the water pollution abatement trust, the state treasurer and the department of environmental quality engineering in this act and the expenditure of public funds as provided in this act are in furtherance of a public purpose and in the best interests of the commonwealth.

SECTION 2. Section 12 of chapter 286 of the acts of 1982 is hereby amended by striking out the last paragraph, added by section 2 of chapter 472 of the acts of 1984, and inserting in place thereof the following paragraph:-

From funds made available pursuant to the provisions of sections twenty-one and twenty-two, the department of environmental quality engineering is authorized to expend a sum, not to exceed one hundred million dollars, for the purposes of making grants to towns, cities, and sewerage districts and to any public entity discharging thereto for the purpose of construction projects to rehabilitate abatement facilities in order to remove infiltration and inflow therefrom; and of making grants to public entities for combined sewer overflow projects or certain other categories of abatement facility construction projects not typically funded by federal grants, identified as such in regulations promulgated by the department, in accordance with a priority system established by regulation. Such grants shall not exceed seventy-five percent of the total eligible costs of such project, as determined by the department. Payments of such grants shall be made in accordance with a payment schedule established by the department with the approval of the secretary of administration and finance. Of said one hundred million dollars the department is authorized to expend such portion of such sum as it deems appropriate and necessary as a grant or grants to the metropolitan district commission, for the purpose of funding a project or projects to study, design, construct, and conduct a program for monitoring, gauging and characterizing flows and volumes of wastewater in the metropolitan district sewer system and systems tributary thereto.

SECTION 3. Chapter 21 of the General Laws is hereby amended by inserting after section 27 the following section:-

Section 27A. (a) The department of environmental quality engineering shall cooperate with the board of trustees of the water pollution abatement trust established by chapter twenty-nine C to achieve the water pollution abatement objectives of the commonwealth intended to be advanced by the trust. As a prior necessary condition to the award of a loan by the trust to a local governmental unit to finance costs of a water pollution abatement project, the board shall receive a certificate issued by the department approving the project and certifying those costs of the project determined by the department to be eligible for assistance from the loan and those costs eligible for financial assistance pursuant to section six of chapter twenty-nine C. The department may approve a loan for costs of a project not eligible for financial assistance pursuant to section six of chapter twenty-nine C; provided, however, that the total amount of such costs shall not exceed an amount equal to fifteen percent of the total eligible costs. Any project approval by the department may require that financial assistance provided by the trust to a regional local governmental unit shall be allocated and credited to each city or town, or board, commission or agency thereof, which is a member or other service recipient of the regional local governmental unit in accordance with regulations establishing a classification system for project approvals promulgated by the department pursuant to this section. Any project approval by the department may also contain such other conditions and limitations as the division shall deem necessary to implement its powers and prerogatives under this chapter.

(b) Any water pollution abatement project or part thereof shall be eligible for a loan approval if included (i) on the priority lists pursuant to the priority systems under section thirty-three for federal fiscal year nineteen hundred and eighty-nine or any later federal fiscal year or (ii) on the priority list pursuant to the priority system under section thirty A or under section two of chapter four hundred and seventy-two of the acts of nineteen hundred and eighty-four, for the fiscal year of the commonwealth ending June thirtieth, nineteen hundred and eighty-nine or any later commonwealth fiscal year. Any water pollution abatement project listed on the fundable portion of the federal fiscal year nineteen hundred and eighty-eight construction grants priority list shall also be eligible for loan approval for costs of such project not funded from any federal grant. The department, by regulation, may adopt such modifications to the priority systems and the priority lists for purposes of this section as shall be consistent with the loan programs of the trust and necessary to comply with the requirement of law.

(c) The department shall cooperate with the trust in the development of capitalization grant agreements and other agreements for federal capitalization grants under Title VI of the Clean Water Act and may enter into such agreements and other undertakings with the trust and applicable federal agencies as necessary to secure to the commonwealth the benefits of Title VI of the Clean Water Act. The trust and department shall enter into an operating agreement for implementing their respective rights, duties and obligations with respect to the approval of water pollution abatement projects and the costs thereof and the award of loans and grants to finance such costs under chapter twenty-nine C, this section and section thirty-three E. The operating agreement shall provide that the board shall award a loan to a local governmental unit to finance all eligible costs of any water pollution abatement project approved by the department and not otherwise provided for by a grant awarded by the department.

(d) The department shall have and shall exercise all powers and duties otherwise conferred upon the division by law with respect to the regulation and supervision of water pollution control abatement projects in the commonwealth, which powers and duties shall in no respect be diminished by this section or chapter twenty-nine C. Regulations, procedures and guidelines shall be promulgated by the department for the efficient administration of its regulatory and supervisory powers in respect of the approvals and prerogatives reserved to the department concerning water pollution abatement projects for which loans are requested from the trust. Such regulations, procedures and guidelines shall include, without limitation, (1) provisions for priority systems, priority lists and the determination of eligible project costs; (2) establishment of a classification system taking into account the financial capability of the respective responsible local governmental units and, in the case of regional local governmental units, each city, town or other service recipient thereof; (3) in cooperation with the secretary of environmental affairs, such modifications to rules and regulations under sections sixty-two to sixty-two H, inclusive, of chapter thirty as may be necessary to comply with federal law applicable to projects and loan approvals; and, (4) notwithstanding any provision of special law to the contrary, provisions for compliance by local governmental units with regulatory requirements in the construction and operation of projects. Regulations adopted pursuant to clause (4) shall include, without limitation, requirements that (a) applicants for such assistance must demonstrate that these projects are consistent with existing state, regional and local water resource and wastewater planning requirements including but not limited to (1) river basin water quality plans pursuant to section 303(e) Federal Clean Water Act; (2) nonpoint source management plans pursuant to section 319, Federal Clean Water Act; (3) estuaries management plans pursuant to section 320 of the Federal Clean Water Act; (4) local water resource management plans pursuant to regulations of the water resources commission; (5) water emergency planning pursuant to chapter twenty-one G. Applicants shall certify that land use and other controls in place are consistent with the wastewater system service populations projected in the applicants facilities plan. Failure by any public entity to implement and conform with the land use and other controls upon which such certification is based and over which it has direct authority, including without limitation issuance of permits or approvals not in conformity with such controls, failure to enforce such controls, or revision of such controls without making appropriate compensation for any increased wastewater flows, shall be violations of this chapter, and the department may take enforcement action pursuant to sections forty-two, forty-four, and forty-six. In promulgating regulations under this section and approving any loan by the trust, the department shall also take into account any financial assistance provided by the local governmental unit under section thirty-three E and the regulations of the department thereunder. Regulations, procedures and guidelines respecting the financial capability of responsible local governmental units, and cities, towns and other service recipients thereof, shall be adopted by the department jointly with the secretary of administration and finance, in consultation with the Massachusetts Municipal Association. All such rules, regulations, and guidelines shall be adopted in full compliance with chapter thirty A.

(e) The department shall utilize the priority systems and priority lists as the basis for selecting projects for eligibility for loan approval. Regulations for determination of eligible project costs shall be used for purposes of approval of project cost eligibility for loans by the trust. Regulations adopted in consultation with the department of revenue relative to the financial capability of local governmental units shall be used to certify to the trust the structure and terms of financial assistance applying to loan interest payments which may be available from the trust pursuant to section six of chapter twenty-nine C and in the determination of the terms and conditions of grants made by the department pursuant to section thirty-three E.

(f) The department may by regulation establish different levels of subsidy available for projects eligible under each of the priority list.

(g) All terms defined in chapter twenty-nine C shall have the same meanings in this section as are defined in said chapter twenty-nine C, unless the context otherwise requires.

SECTION 4. The first paragraph of section 30A of chapter 21 of the General Laws, as appearing in the 1988 Official Edition, is hereby amended by striking out the last sentence and inserting in place thereof the following sentence:- The division shall not award a grant under this section to a public entity which has accepted another such grant within the previous year, unless the division determines, in accordance with the priority system and list for a given fiscal year, that all other projects which are ready to proceed have been brought to the fundable list for such fiscal year.

SECTION 5. Said chapter 21 is hereby further amended by striking out section 33D, as so appearing, and inserting in place thereof the following two sections:-

Section 33D. In order to prevent or reduce discharges to the waters of the commonwealth or to implement comprehensive basin or regional plans approved by the division of water pollution control, the director of the division may order the appropriate municipalities, districts and other competent public entities to construct the necessary facilities for which financial assistance has been authorized under chapter twenty-nine C or for which construction grants are authorized under section thirty-three or section thirty-three E in accordance with timetables for compliance specified in the orders.

Section 33E. The department of environmental quality engineering may make a grant to a local governmental unit as defined in chapter twenty-nine C for the eligible costs of planning, design or construction of water pollution abatement projects eligible for financial assistance under section six of said chapter twenty-nine C. The department may award grants for such projects in accordance with regulations of the department promulgated pursuant to section twenty-seven A, in amounts which, when added to the financial assistance provided by the local governmental unit, or each city, town or other public body which is a member or other service recipient thereof, under the provisions of section six of chapter twenty-nine C, will result in total financial assistance provided to or for the benefit of such local governmental unit, city, town or other public body, as determined by the department equivalent to a grant of up to seventy-five percent of the eligible costs of such projects. Payments of financial assistance by the commonwealth pursuant to this section shall be made in accordance with a payment schedule established by the department with the approval of the secretary of administration and finance and may, at the department's direction, be applied to the reduction of the principal balance of loans to the local governmental unit made or approved under said chapter twenty-nine C.

SECTION 6. Chapter 28 of the General Laws is hereby amended by adding the following four sections:-

Section 7. (a) The secretary of environmental affairs shall establish a program to assist the commonwealth in the acquisition of watershed preservation restrictions, as defined in section thirty-one of chapter one hundred and eighty-four, for land classified as watershed land as defined in regulations to be promulgated by the metropolitan district commission.

(b) The commissioner of the metropolitan district commission may from funds appropriated to carry out the provisions of this section, or received from other sources, pay the owner of watershed lands which he determines to be beneficial to the maintenance of the water supply of the commonwealth an amount determined to be equitable but not to exceed the difference between the fair market value of such land and the fair market value of such land restricted for watershed purposes pursuant to this section. Title to such watershed preservation restrictions shall be held in the name of the commonwealth; provided, however, that a city or town in which such land is located, which provides assistance satisfactory to the commissioner of the metropolitan district commission, including but not limited to providing of funds or portions thereof toward the purchase of such restriction, the providing of legal services and the enforcement of the preservation restriction, shall hold title to such restrictions jointly with the commonwealth.

(c) Watershed preservation restriction projects shall be administered by conservation commissions in cities and towns in which such commissions have been established, or in a city, by the city council or its delegated agency subject to the provisions of the city charter, or in a town, by the board of selectmen or its delegated agency. Said commissioner of the metropolitan district commission, subject to the approval of the secretary of environmental affairs, shall establish procedures for the management of such programs.

Section 8. There is hereby created a watershed lands preservation committee in the metropolitan district commission, the members of which shall be the commissioner of the metropolitan district commission, the secretary of environmental affairs, the director of the Massachusetts Water Resources Authority, the commissioner of the department of environmental management, the director of the division of water supply in the department of environmental quality engineering, one member appointed by the speaker of the house, one member appointed by the president of the senate, and two members appointed by the governor, one of whom shall represent an organization dedicated to conservation of natural resources and one of whom shall have expertise in the field of hydrology. The committee shall advise the commissioner of the metropolitan district commission on the evaluation of projects and shall advise the commissioner on any rules or regulations necessary to carry out the intent of the watershed preservation restriction program.

Section 9. The commissioner of the metropolitan district commission shall prepare an annual report on the watershed preservation restriction program. Such report shall include the number and geographic distribution of applicants accepted and rejected, the acreage and cost of purchase and such other information as will enable evaluation of the program.

Section 10. Land under watershed preservation restriction, while remaining under such restriction, shall be assessed for general tax purposes, to reflect the diminution of land value which may be caused by such watershed preservation restriction.

SECTION 7. Chapter 29 of the General Laws is hereby amended by inserting after section 2K the following section:-

Section 2L. There shall be established and set up on the books of the commonwealth a separate fund, to be known as the Water Pollution Abatement Revolving Fund, consisting of amounts credited to the fund in accordance with chapter twenty-nine C. The fund shall be administered in accordance with the provisions of said chapter twenty-nine C by the board of trustees of the water pollution abatement trust created thereunder and shall be held in trust exclusively for the purposes and the beneficiaries described therein. The state treasurer shall be treasurer-custodian of the fund and shall have the custody of its monies and securities.

SECTION 8. The General Laws are hereby further amended by inserting after chapter 29B the following chapter:- `tuc CHAPTER 29C. WATER POLLUTION ABATEMENT REVOLVING LOAN PROGRAM.

Section 1. As used in this chapter, the following words shall have, unless the context clearly indicates otherwise, the following meanings:

"Board", the board of trustees of the water pollution abatement trust.

"Bond act", any general or special law authorizing a local governmental unit to incur indebtedness for all or any part of the cost of a water pollution abatement project.

"Bonds", bonds, notes or other evidence of indebtedness of the trust.

"Cost", as applied to any water pollution abatement project, any or all costs, whenever incurred, approved by the department in accordance with section twenty-seven A of chapter twenty-one, of carrying out a project including, without limiting the generality of the foregoing, costs for planning, preparation of studies and surveys, design, construction, expansion, facilities, improvement and rehabilitation, acquisition of real property, personal property, materials, machinery or equipment, start-up costs, demolitions and relocations, reasonable reserves and working capital, administrative, legal and financing expenses, and other expenses necessary or incidental to the aforesaid.

"Clean Water Act", the Federal Water Pollution Control Act, Public Law 92-500, 33 USC, Secs. 1251 et seq.

"Department", the department of environmental quality engineering.

"Fund", the Water Pollution Abatement Revolving Fund, established pursuant to the provisions of section two L of chapter twenty-nine.

"General revenues", when used with reference to a local governmental unit, revenues, receipts, assessments and other monies of a local governmental unit, and all rights to receive the same including without limitation (i) revenue as defined in section one of chapter forty-four, (ii) local system revenues, (iii) assessments upon or payments received from any other local governmental unit which is a member or service recipient of the local governmental unit, (iv) proceeds of loans made in accordance with this chapter and of grants made in accordance with section thirty-three E of chapter twenty-one, (v) investment earnings, (vi) reserves for debt service or other capital or current expenses, (vii) receipts from any tax, excise or fee all or a part of the receipts of which are payable or distributable to or for the account of the local governmental unit, (viii) local aid distributions and (ix) receipts, distributions, reimbursements and other assistance from the United States; provided, however, that local general revenues shall not include any monies restricted by law to specific statutorily defined purposes inconsistent with their treatment as general revenues for purposes of this chapter.

"Loan", any form of financial assistance subject to repayment which is provided by the trust to a local governmental unit for all or any part of the cost of a water pollution abatement project. A loan may (i) provide for planning, construction, bridge or permanent financing, (ii) be disbursed in anticipation of reimbursement for or direct payment of costs of a project or take the form of a guarantee, line of credit or other form of financial assistance, and (iii) may be issued at such rate or rates of interest, including without limitation variable rates and zero interest, may mature at such time or times and be redeemable at the option of the board or the local governmental unit, all as may be determined in accordance with this chapter.

"Loan agreement", any agreement entered into between the trust and a local governmental unit pertaining to a loan or local governmental obligations. A loan agreement may contain, in addition to financial terms, provisions relating to the regulation and supervision of a water pollution abatement project or the wastewater system of which it is a part, to which provisions the department may join as a party to the agreement as authorized in section twenty-seven A of chapter twenty-one. The term "loan agreement" shall include, without limitation, a loan agreement, trust agreement, trust indenture, security agreement, reimbursement agreement, guarantee agreement, bond or note resolution, loan order or similar instrument.

"Local aid distributions", any receipts, distributions, reimbursements or other assistance payable by the commonwealth to or for the account of a local governmental unit including, without limitation, payments under sections eighteen A, eighteen B, eighteen C, eighteen D and eighteen E of chapter fifty-eight and under any other local reimbursement or assistance program described in section twenty-five A of said chapter fifty-eight.

"Local government obligations or local governmental obligations", bonds, notes or other evidence of indebtedness issued by a local government unit to evidence a loan.

"Local government unit or local governmental unit", any town, city, district, commission, agency, authority, board or other instrumentality of the commonwealth or of any of its political subdivisions, including any regional local governmental unit, which is responsible for the ownership or operation of a water pollution abatement project and is authorized by a bond act to finance all or any part of the cost thereof through the issue of bonds.

"Local system revenues", all rates, rents, fees, assessments, charges and other receipts derived or to be derived by a local governmental unit from any water pollution abatement projects, any system of which such projects are a part and any other revenue producing facilities under its ownership or control, or from the services provided thereby, including without limitation proceeds of grants, gifts, appropriations and loans, including the proceeds of loans or grants made by the trust or the department, investment earnings, reserves for capital and current expenses, proceeds of insurance or condemnation and the sale or other disposition of property; provided, however, that local system revenues shall not include any ad valorem taxes levied directly by the local governmental unit on any real and personal property.

"Regional local governmental unit", a local government unit which provides wastewater collection or treatment services either on a wholesale or retail basis to service recipients in two or more cities or towns, or designated parts thereof, and which derives all or part of its general revenues or local system revenues by assessment or other charge on such cities or towns.

"Revenues", when used with reference to the trust, any receipts, fees, revenues or other payments received or to be received by the trust, including without limitation receipts and other payments received by or deposited in the fund, payments of principal, interest or other charges on loans, grants, appropriations or other assistance from the commonwealth or the United States or any political subdivision or instrumentality of either, investment earnings on its funds and accounts including without limitation the fund, and any other fees, charges or other income received or receivable by the trust or the fund.

"Trust", the water pollution abatement trust established by this chapter.

"Trust agreement", any agreement entered into by the board providing for the issuance, security and payment of bonds. The term "trust agreement" shall include a trust agreement, trust indenture, security agreement, reimbursement agreement, currency or interest rate exchange agreement, bond or note resolution or other similar instrument.

"Water pollution abatement project", any abatement facilities, including without limitation rehabilitation of abatement facilities to remove, curtail or otherwise mitigate infiltration and inflow, collection system, treatment works and treatment facilities as defined in section twenty-six A of chapter twenty-one, and any eligible facilities for implementation of a nonpoint source pollution control management program or estuary conservation and management plan pursuant to the Clean Water Act.

Section 2. (a) An unpaid board of trustees consisting of the state treasurer, ex officio, the secretary of the executive office for administration and finance, ex officio, and the commissioner of the department of environmental quality engineering, ex officio, is hereby constituted as a public instrumentality of the commonwealth to be known as the water pollution abatement trust to administer the Water Pollution Abatement Revolving Fund established pursuant to section two L of chapter twenty-nine. The trust is hereby designated as the instrumentality of the commonwealth to establish and administer within the fund the state revolving fund pursuant to Title VI of the Clean Water Act. The exercise by the trust, and by the board of trustees thereof, of the powers conferred by this chapter shall be deemed to be the performance of an essential public function.

(b) The state treasurer shall serve as chairman of the board of trustees of the trust. The board shall annually elect one of its members as vice-chairman. Two members of the board of trustees shall constitute a quorum and the affirmative vote of two trustees shall be necessary and shall suffice for any action taken by the board. Any action of the board may take effect immediately and need not be published or posted unless otherwise provided by law. No vacancy in the membership of the board shall impair the right of a quorum to exercise the powers of the board. Meetings of the board of trustees shall be subject to section eleven A 1/2 of chapter thirty A; provided, however, that the provisions of said section eleven A 1/2 shall not apply to any meeting of trustees in the exercise of their duties as officers of the commonwealth so long as no matters relating to the official business of the trust are discussed and decided at such meeting. The trust shall be subject to all other provisions of said chapter thirty A, and records pertaining to the administration of the trust shall be subject to the provisions of section forty-two of chapter thirty and section ten of chapter sixty-six. The fund and all other monies of the trust shall be deemed to be public funds for purposes of chapter twelve A. The operations of the trust shall also be subject to the provisions of chapter two hundred and sixty-eight A and chapter two hundred and sixty-eight B to the same extent as the office of the state treasurer.

Section 3. (a) The purposes for which the trust is created and for which the fund shall be received, held, administered and disbursed by the board of trustees shall be the provision of financial assistance, in the manner contemplated by Title VI of the Clean Water Act, to local governmental units as beneficiaries of the trust to finance the costs of water pollution abatement projects as provided in, and as necessary to implement the provisions of, this chapter. In accordance with the terms of any trust agreement entered into by the trust with respect to bonds secured by monies or revenues of the fund, the holders of such bonds also shall be beneficiaries of such trust. The board shall apply and disburse monies and revenues of the fund without appropriation or allotment by the commonwealth.

(b) Without limiting the generality of the foregoing and other powers of the trust, the board of trustees shall have the power:

(i) to adopt and amend by-laws and such rules, regulations and procedures for the conduct of the business of the trust as the board shall deem necessary to carry out the provisions of this chapter;

(ii) to apply for, receive, administer and comply with the conditions and requirements respecting any grant, gift or appropriation of property, services or monies;

(iii) to borrow and repay money by issuing bonds of the trust, to apply the proceeds thereof as provided in this chapter and to pledge or assign or create security interests in the fund and the receipts thereto to secure bonds;

(iv) to make loans to local governmental units to finance costs of water pollution abatement projects, to acquire, hold and sell local governmental obligations evidencing the loans at such prices and in such manner as the board shall deem advisable, and to secure bonds of the trust with local governmental obligations;

(v) to enter into contracts, arrangements and agreements with other persons and execute and deliver all trust agreements, loan agreements and other instruments necessary or convenient to the exercise of the powers of the trust;

(vi) to obtain insurance and enter into agreements of indemnification necessary or convenient to the exercise of the powers of the trust;

(vii) to sue and be sued and to prosecute and defend actions relating to the affairs of the trust and the fund; provided, however, that the trust is not authorized to become a debtor under the United States Bankruptcy Code;

(viii) to engage accounting, management, legal, financial, consulting and other professional services necessary to the conduct of the programs of the trust.

(c) In its administration of the federal state revolving loan program as provided in this chapter, the board of trustees shall comply with applicable federal legal requirements under Title VI of the Clean Water Act. The programs of the trust also shall be subject to powers and responsibilities expressly reserved to the department under section twenty-seven A of chapter twenty-one. In addition, the trust shall not be authorized or empowered (1) to be or to constitute a bank or trust company within the jurisdiction or under the control of the department of banking and insurance of the commonwealth or the comptroller of the currency or the treasury department of the United States, or (2) to be or constitute a bank, banker or dealer in securities within the meaning of, or subject to the provisions of, any securities, securities exchange or securities dealers' law of the United States or the commonwealth.

Section 4. (a) The board of trustees shall receive in trust, hold, administer and disburse in and from the fund exclusively for the benefit of the beneficiaries thereof the following monies:

(i) notwithstanding the provisions of sections two B and two C of chapter twenty-nine, all federal capitalization grants received under Title VI of the Clean Water Act; provided, however, that the reserve required by section six hundred and four (b) of the Clean Water Act to carry out planning under sections two hundred and five (j) and three hundred and three (e) of said Clean Water Act shall not be so received by the board of trustees, but shall be received and administered by the department subject to section two B of chapter twenty-nine;

(ii) amounts appropriated by the commonwealth to the trust for purposes of the fund;

(iii) proceeds of bonds of the trust to the extent required by the board's resolution for issuance of such bonds or any applicable trust agreement;

(iv) loan repayments and other payments received by the trust in respect of loans to local governmental units;

(v) investment earnings on monies in the fund; and

(vi) any other amounts required to be credited to the fund by any law or by any resolution, loan agreement or trust agreement of the board or which the board shall otherwise determine to deposit therein.

(b) Actions by the board with respect to the fund shall be subject to the requirements of this chapter and applicable provisions of any loan agreement or trust agreement of the trust and, with respect to amounts held therein derived from capitalization grants made under Title VI of the Clean Water Act, to the applicable requirements of federal law. Whenever the board takes discretionary action, it shall be guided by the purpose of best effecting the purposes of this chapter to implement financial assistance in support of water pollution abatement practices consistent with the responsibilities of the trust to its bondholders, local governmental units and other beneficiaries of the trust. The provisions of section six B and sections seven A to seven G, inclusive, of chapter twenty-nine shall not apply to grants received by the trust for purposes of the fund from the United States. The state treasurer shall be the treasurer-custodian of the fund as provided in section two L of said chapter twenty-nine, and, subject to any applicable trust agreement, the state treasurer is authorized to invest monies held in the fund in such investments as may be legal investments for funds of the commonwealth.

(c) For necessary and convenient administration of the fund, the board shall direct the state treasurer to establish one or more accounts and sub-accounts within the fund as shall be necessary to meet any applicable federal law requirement for segregation of Title VI funds for specified purposes established by federal law or as the board shall otherwise deem necessary or desirable to segregate any monies received or derived from federal capitalization grants under Title VI of the Clean Water Act or any other source from other monies in the fund in order to implement the provisions of this chapter or to comply with any trust agreement. The trust may also establish in any trust agreement or otherwise as the board shall determine one or more other funds and accounts for revenues and other monies of the trust not required to be held in the fund and to apply and disburse such monies and revenues to the purposes of the trust.

(d) Notwithstanding the provisions of section twenty-seven of chapter twenty-one, the board, the state treasurer and the comptroller, with the approval of the governor, shall take all action necessary to transfer to the fund the sum of money constituting the commonwealth's allotment for federal fiscal year nineteen hundred and eighty-nine and each federal fiscal year thereafter for authorizations under Title II of the Clean Water Act; provided, however, that any portion of any allotment which, under the provisions of the Clean Water Act, may not be transferred to or used for the purposes of the fund shall continue to be received and administered by the department in accordance with said chapter twenty-one.

Section 5. Subject to limitations in other law respecting the use of particular monies in the fund and the provisions of any trust agreement for bonds of the trust, the board may apply and disburse monies and revenues of the fund or any segregated account therein:

(i) to make, and enter into binding commitments to make, loans approved by the department under section twenty-seven A of chapter twenty-one to local governmental units for the purpose of financing costs of water pollution abatement projects and to provide for all or any part of the interest costs on loans made by the trust during the construction of such projects;

(ii) to provide reserves for or otherwise secure bonds of the trust and to provide insurance and letters or lines of credit or other credit enhancement which it deems reasonable and appropriate for bonds;

(iii) to transfer for the benefit of the department to apply to the expenses of the department in administering the provisions of section twenty-seven A of chapter twenty-one amounts derived from proceeds of each federal capitalization grant award received by the trust to the full extent permitted by Title VI of the Clean Water Act;

(iv) to provide payment from any available source for reasonable and necessary professional and financial services incident to the conduct of the programs of the trust, including costs of issuance of its bonds.

Section 6. Subject to limitations in other law respecting the use of particular monies in the fund and the provisions of any trust agreement for bonds of the trust, the board may also apply and disburse monies and revenues in the fund, or any segregated account therein:

(i) after taking account of any grant made by the department pursuant to section thirty-three E of chapter twenty-one, to provide, and enter into binding commitments to provide, a subsidy for, or to otherwise assist local governmental units in the payment of, interest costs on loans made by the trust; and

(ii) to provide reserves for, or to otherwise secure, amounts payable by local governmental units on loans made by the trust in the event of default by a particular local governmental unit or, on a parity basis, by any local governmental unit.

Section 7. The board is authorized and directed to take all necessary or incidental actions to secure for the commonwealth the benefits of Title VI of the Clean Water Act, including exercise of the powers:

(i) to cooperate with appropriate federal agencies in all matters related to the administration of the state revolving loan fund as contemplated by Title VI of the Clean Water Act;

(ii) to prepare in cooperation with the department and submit to the appropriate federal agencies applications for capitalization grants under Title VI of the Clean Water Act and to enter into capitalization grant agreements, operating agreements and other agreements with the United States and the department relating to the purposes of the fund;

(iii) to cooperate with the department in preparing and submitting to the appropriate federal agencies intended use plans identifying the use of capitalization grant awards and other monies in the fund;

(iv) to prepare in cooperation with the department and submit to the appropriate federal agencies, the governor, the department and the clerks of the senate and the house, annual and other reports and audits, in form and content satisfying legal requirements under Title VI of the Clean Water Act, of activities of the board pertaining to the fund;

(v) to establish and collect such fees, charges and interest rates as the board shall determine to be reasonable and to hold, apply and disburse such monies within or without the fund to the implementation of the purposes of this chapter;

(vi) to establish, jointly with the state treasurer, fiscal controls and accounting procedures for the fund and the trust; and

(vii) to adopt after consultation with the department regulations, procedures and guidelines for administration of its loan programs and for maintenance of suitable accounting procedures by local government units for loan proceeds and projects. Such regulations, procedures and guidelines shall be consistent with requirements of Title VI of the Clean Water Act and all applicable rules, regulations, procedures and guidelines of the department, and may determine, without limitation, the form and content of loan applications, loan agreements and local government obligations.

Section 8. Upon the board's request, the state treasurer shall pay to the trust for deposit in the fund monies appropriated by the commonwealth to the trust for any purposes of the fund or any account therein. The state treasurer, the secretary of the executive office for administration and finance, the department and the trust shall enter into agreements establishing procedures for payment of amounts appropriated by the commonwealth to the trust. An agreement may include such covenants and undertakings of the commonwealth and the trust as the state treasurer, the secretary of the executive office for administration and finance, the department and the board may deem necessary or desirable, including without limitation provision for payments by the commonwealth in anticipation of receipt of federal capitalization grants or the execution and delivery of loan agreements by the trust. Notwithstanding any law to the contrary, unless otherwise specifically provided therein provisions contained in any act enacted by a vote, taken by the yeas and nays of two-thirds of each house of the general court present and voting thereon, and approved by the governor, authorizing the state treasurer to issue bonds or notes of the commonwealth or otherwise authorizing the commonwealth to borrow money for purposes of providing monies to meet any appropriation to the trust for purposes of the fund shall be deemed to authorize the state treasurer, with the approval of the governor, to enter into agreement or agreements with the trust pledging the full faith and credit of the commonwealth to a schedule of payments to the fund of the amounts therein appropriated including without limitation the amount, time and manner of such payments. The agreements of the commonwealth and the rights of the trust thereunder may be assigned and pledged as security for bonds of the trust. No agreement authorized by this section shall supersede or interfere with the exercise of the powers specifically reserved to the department under section twenty-seven A of chapter twenty-one.

Section 9. (a) The board may provide by resolution for the issuance from time to time of bonds for any purpose of the trust, which bonds may be issued as general obligations of the trust or as special obligations payable solely from particular revenues or monies of the trust. The bonds of each issue may be dated, may bear interest at such rate or rates, including rates variable from time to time, and may mature or otherwise be payable or redeemable at such times as the board may determine. The board shall determine the denominations of bonds, the details of their execution and authentication and their places of payment within or without the commonwealth. Prior to initial issuance of each series of bonds the board shall advise the finance advisory board of the terms of the bonds and the timing of their issuance. In case any trustee or officer whose signature appears on any bonds shall cease to be such officer before their delivery, the signature shall nevertheless be valid and sufficient as if the officer had remained in office until delivery. Bonds may be issued in certificated or uncertificated form, payable to bearer or registered owners, and, if notes, may be made payable to bearer or to order. The board may sell the bonds of the trust at public or private sale at par or for such premium or discount price as it may determine. The aggregate principal amount of bonds of the trust outstanding at any one time shall not exceed the sum of two billion six hundred fifteen million dollars; provided, however, that bonds for the payment or redemption of which refunding bonds shall have been issued shall be excluded from the computation of outstanding bonds. The board may by resolution delegate to any trustee or officer of the trust the power to determine any of the matters set forth in this section.

(b) Bonds of the trust may be secured by a trust agreement between the trust and the bond owners or a corporate trustee which may be any trust company or bank having the powers of a trust company within or without the commonwealth. A trust agreement may pledge or assign, in whole or in part, any loan agreements and local governmental obligations, and the revenues, funds and other assets or property held or to be received by the trust, including without limitation all monies and investments on deposit from time to time in the fund or any account thereof and any contract or other rights to receive the same, whether then existing or thereafter coming into existence and whether then held or thereafter acquired by the trust, and the proceeds thereof. A trust agreement may contain, without limitation, provisions for protecting and enforcing the rights, security and remedies of the bondholders, provisions defining defaults and establishing remedies, which may include acceleration and may also contain restrictions on the remedies by individual bondholders. A trust agreement may also contain covenants of the trust concerning the custody, investment and application of monies, the enforcement of loan agreements and local governmental obligations, the issue of additional or refunding bonds, the use of any surplus bond proceeds, the establishment of reserves and the regulation of other matters customarily treated in trust agreements. At the request of the board, the state treasurer shall and is hereby authorized to join in any trust agreement or to otherwise agree with the trust, any lender or any trustee for bondholders to hold the fund in compliance with any covenants and provisions relating to the fund contained in any trust agreement.

(c) Bonds may be issued by the trust in the form of lines of credit or other banking arrangements under terms and conditions determined by the board. In addition to other lawful security, bonds may be secured, in whole or in part, by financial guarantees, by insurance, by letters or lines of credit or by other credit enhancement issued to the trust or to a trustee or other person, by any bank, trust company, insurance or surety company or other financial institution, within or without the commonwealth; the trust may pledge or assign, in whole or in part, any loan agreements and local governmental obligations and the revenues, funds and other assets and property held or to be received by the trust, and any contract or other rights to receive the same, whether then existing or thereafter coming into existence and whether then held or thereafter acquired by the trust, and the proceeds thereof, as security for such guarantees or insurance or for the reimbursement to any issuer of a line or letter of credit.

(d) The board may by resolution provide for the issue by the trust of interim receipts or temporary bonds, exchangeable for definitive bonds when the bonds are executed and are available for delivery. The board may also provide for replacement of mutilated, destroyed or lost bonds. The trust may purchase and invite offers to tender for purchase any outstanding bonds; provided, however, that no purchase by the trust shall be made at a price, exclusive of accrued interest, if any, exceeding the bond's principal amount or, if greater, its redemption price when next redeemable at the option of the trust. The trust may resell any bonds it purchases in such manner and for such price as it may determine.

(e) The board may also provide for issue by the trust of temporary notes in anticipation of grants, revenues or appropriations to the fund. The issue of such notes shall be governed by the applicable provisions of this chapter relating to the issue of bonds; provided, however, that notes issued in anticipation of revenues shall mature no later than one year from their respective dates, or the date of expected receipt of such revenues, if later, and notes issued in anticipation of grants shall mature no later than six months after the expected date of receipt of such grant. The board may also issue refunding bonds of the trust for the purpose of paying any bonds at or prior to maturity. Refunding bonds may be issued at any time at or prior to the maturity or redemption or purchase of the refunded bonds. Refunding bonds may be issued in sufficient amounts to pay or provide for payment of the principal of the bonds being refunded, together with any redemption premium thereon, any interest or discount accrued or to accrue to the date of payment, costs of issuance and other expenses and reserves reasonably necessary to achieve the refunding.

(f) Bonds of the trust are (i) securities in which public officers and agencies, insurance companies, financial institutions, investment companies, executors, administrators, trustees and others may properly invest funds including capital within their control, and (ii) securities which may be deposited with any public officer or any agency for any purpose for which the deposit of bonds is authorized by law.

(g) Bonds issued by the trust shall not be deemed to be a debt or a pledge of the faith and credit of the commonwealth or of any of its political subdivisions, but shall be payable solely from the revenues and monies of the fund and other monies and rights pledged to their payment. Bonds shall recite that neither the commonwealth nor any political subdivision thereof shall be obligated to pay the same and neither the faith and credit nor the taxing power of the commonwealth or any political subdivision is pledged to their payment. Every bond shall recite whether it is a general obligation of the trust or a special obligation payable solely from particular revenues, funds, assets or other property.

(h) Bonds of the trust shall be deemed to be investment securities under chapter one hundred and six. Bonds, their transfer and the income therefrom, including any profit made on the sale thereof, shall at all times be exempt from taxation by and within the commonwealth. The trust shall not be required to pay any taxes, assessments or excises upon its income, existence, operation, or assets, monies or revenues.

(i) It shall be lawful for any bank or trust company to act as a depository of the fund or trustee under a trust agreement, provided it furnishes indemnification and reasonable security as the board may require. Any assignment or pledge of revenues, funds and other assets and property made by the trust shall be valid and binding and shall be deemed continuously perfected for the purposes of chapter one hundred and six and other laws when made. The revenues, funds and other assets and property, rights therein and thereto and proceeds so pledged and then held or thereafter acquired or received by the trust shall immediately be subject to the lien of such pledge without any physical delivery or segregation or further act, and the lien of any such pledge shall be valid and binding against all parties having claims of any kind in tort, contract or otherwise against the trust, whether or not such parties have notice thereof. The trust agreement by which a pledge is created need not be filed or recorded to perfect the pledge except in the records of the board and no filing need be made pursuant to said chapter one hundred and six. Any pledge or assignment made by the trust is an exercise of its political and governmental powers, and loan agreements, local governmental obligations, revenues, funds, assets, property and contract or other rights to receive the same and the proceeds thereof which are subject to the lien of a pledge or assignment created under this chapter shall not be applied to any purposes not permitted by the pledge or assignment. Any holder of a bond and any trustee under a trust agreement, except to the extent its rights may be restricted by the trust agreement, may bring suit upon the bonds and may pursue any other legal action to protect and enforce its rights and compel performance of all duties required to be performed by the trust and the board.

Section 10. (a) Any local governmental unit may apply to the trust for a loan to finance in whole or in part the cost of a water pollution abatement project and may issue local governmental obligations for delivery to the trust to evidence the loan. Each loan shall be made pursuant to a loan agreement between the trust and the local governmental unit acting by and through the officer or officers, board, committee or other body authorized by law, or otherwise its chief executive officer. The department may join in any loan agreement to effectuate its powers and responsibilities provided in sections twenty-seven A and thirty-three E of chapter twenty-one.

(b) A local government unit may receive, apply, pledge, assign and grant security interests in, its general revenues and local system revenues to secure its obligations under loans and local governmental obligations as provided in this chapter and may fix, revise, charge and collect fees, rates, rents, assessments and other charges of general or special application for the operation or services of any water pollution abatement project, the system of which it is a part and any other revenue producing facilities from which the local governmental unit derives local system revenues, to meet its obligations under any loan agreement or local governmental obligation or otherwise to provide for the construction, maintenance and operation of the project and the system and facilities.

(c) For entering into a loan and establishing the authorized terms and conditions thereof, and for issuing any local government obligations a local governmental unit shall be deemed to have the powers expressly granted to local governmental units in this chapter and the powers granted to that local governmental unit in any bond act applicable to it specifically or as a member of a class of governmental instrumentalities. Liberal construction shall be given in support of the broadest interpretation of local government unit powers derived from either this chapter or any bond act, provided that nothing in this chapter shall be construed as affecting the manner of voting and other procedures relating to, or otherwise required by any bond act for, the authorization of indebtedness of any local governmental unit by the governing body thereof or any limitations on indebtedness of local governmental units.

(d) If any city or town, or any board, commission, or other public instrumentality thereof or of the commonwealth, which is a service recipient of a regional local governmental unit shall fail to pay when due and after demand any certified charges of the regional local governmental unit required to meet its obligations under this chapter, the regional local governmental unit may certify to the state treasurer the amount owing to the regional local governmental unit by such city, town or other instrumentality and the state treasurer shall promptly pay over to the regional local governmental unit without further appropriation any local aid distributions otherwise certified to the state treasurer as payable to the city or town, or in the case of any other instrumentality, as payable to all cities and towns in the service area of such instrumentality, until such time as any deficiency in the amounts due the regional local governmental unit shall have been offset by such payments from the state treasurer. In the event of a dispute between any city or town and the regional local governmental unit concerning the amount to be repaid to the regional local governmental unit by any city or town said dispute shall be arbitrated by an appeal board consisting of the commissioner of the department of revenue or his designee, the commissioner of the department of environmental quality engineering or his designee, and a third member to be nominated by the Massachusetts Municipal Association. The state treasurer shall not offset any deficiency amount from the local aid distribution due to any city or town unless or until the appeal board has rendered its decision. Any amount paid to such local governmental unit by the treasurer under this section which is later determined, upon audit, to be in excess of the actual amount due the regional local governmental unit, shall upon demand of the local governmental unit or city or town, be repaid by the regional local governmental unit to the local governmental unit, city or town.

(e) In addition to authority otherwise provided by law, if all or any part of a project shall fail to be approved for financial assistance pursuant to this act, the local governmental unit may apply to the Massachusetts Industrial Finance Agency for a loan to finance all or any part of such project. For such purposes, any local governmental unit as defined in this chapter shall qualify as a public body under section thirty of chapter twenty-three A. The second sentence of paragraph (c) of section thirty-five of said chapter twenty-three A shall not apply to bonds issued by the agency.

Section 11. (a) In addition to other remedies of the trust under any loan agreement, if any local government unit other than a regional local governmental unit shall fail to pay to the trust when due and after demand any principal, interest or other charges payable under a loan or loan agreement, the board after applying to such payment amounts held in the fund pursuant to section six for the account of such local governmental unit, may certify to the state treasurer the amount owing to the trust by said local governmental unit. The state treasurer shall promptly pay over to the trust for deposit in the fund without further appropriation any local aid distributions otherwise certified to the state treasurer as payable to the local governmental unit. Notwithstanding the foregoing, if the local government unit is a regional local governmental unit, and if the board shall have determined (i) that the failure of the regional local government unit to pay to the trust the amount then payable is due to a failure by a city or town or other service recipient of the regional local governmental unit to pay to the regional local governmental unit any assessment or other charge attributable to said loan and (ii) that the regional local governmental unit has failed or refused after demand to exercise the remedies provided in paragraph (d) of section ten of this chapter or any similar provision of law, the board, after applying to such payment amounts held in the fund pursuant to section six for the account of such city, town or other service recipient, may certify to the state treasurer the amount owing the regional governmental unit by that city, town or other service recipient and the same payment procedures shall apply. If the board shall determine that no city, town or other service recipient is in default to the regional local governmental unit, after application by the board to such payment of amounts held in the fund pursuant to section six for the account of the regional local governmental unit pro rata in proportion to the service provided each city, town or other service recipient therein, the state treasurer, under the same procedures, shall pay to the trust any local aid distribution payable to each city and town which is, or the agency, commission or other appointed body of which is, a member or other service recipient of the regional local governmental unit, pro rata in proportion to the service provided such cities and towns. If a local governmental unit shall fail to pay to the trust any amount payable under a loan or loan agreement and shall also fail to pay any amount due to a regional local governmental unit of which it is a member or service recipient on account of any assessment thereon, local aid distributions available to remedy such failures under this paragraph and under paragraph (d) of section ten of this chapter or any similar provision of law shall be paid to the trust and the regional local governmental unit pro rata in proportion to the amounts due and unpaid. If a governmental unit or a member or other service recipient of a regional local governmental unit is an agency, commission or instrumentality of a city or town or its governing body is appointed by the governing body or chief executive officer of a city or town, payments under this section shall be made from any local aid distributions payable to such city or town. Payment by the state treasurer under this section shall continue to be made until any deficiency in the local governmental unit's payment to the trust shall have been offset by the payments from the state treasurer. In the event of a dispute between any city or town and the regional local governmental unit concerning the amount to be paid to the regional local government unit by any city or town said dispute shall be arbitrated by an appeals board consisting of the commissioner of the department of revenue or his designee, the commissioner of the department of environmental quality engineering or his designee, and a representative nominated by the Massachusetts Municipal Association. Any amount paid to the trust by the state treasurer under this section which is later determined, upon audit, to be in excess of the actual amount due the trust shall, upon demand of the local governmental unit or city or town, be repaid from the fund to the state treasurer.

(b) The trust may also recover from a local governmental unit in an action in superior court any amount due the trust together with any other actual damages the board shall have sustained from the failure or refusal of the local governmental unit to make payments owing to the trust.

Section 12. (a) In order to provide for the collection and enforcement of fees, rates, rents, assessments and other charges for the operation of any water pollution abatement project, the system of which it is a part and any other revenue producing facilities from which the local governmental unit derives local system revenues, in addition to any other authority provided by law or any applicable bond act, local governmental units are hereby granted all the powers and privileges granted to them by the General Laws with respect to any similar fee, rate, rent, assessment or other charge. Without limiting the generality of the foregoing, local governmental units shall have the powers and be subject to the limitations to the extent applicable and consistent with this chapter provided in sections forty-two A to forty-two F, inclusive, of chapter forty, whether or not said sections have been accepted by the local governmental unit, and chapters sixty, eighty and eighty A.

(b) Any local governmental unit may enter into agreements with the trust or the department regarding the operation of a pricing system for the services provided by any water pollution abatement project, the system of which it is a part and any other revenue producing facilities from which the local governmental unit derives local system revenues. Such agreements may include without limitation provisions defining the costs of such services, the water pollution abatement project and such local system and other facilities, and covenants or agreements regarding the fixing and collection of fees, rates, rents, assessments and other charges for such costs and the maintenance of such pricing system at levels sufficient to pay or provide for all such costs and any payments due the trust under any loan agreement or local governmental obligations.

(c) Any local governmental unit may enter into agreements with the trust and the department regarding the operation of an enterprise fund established for any water pollution abatement project, the system of which it is a part and any other revenue producing facilities from which the local governmental unit derives local system revenues. Such agreements may include without limitation fiscal and accounting controls and procedures, provisions regarding the custody, safeguarding and investment of local system revenues and other amounts credited thereto, the establishment of reserves and other accounts and funds and the application of any surplus funds.

(d) Any local governmental unit may or, in the case of a regional local governmental unit, any city, town, board, commission or other instrumentality which is a member or other service recipient thereof may (i) for furnishing wastewater services, establish rates, rents, fees, assessments and other charges on the basis of a flat rate per volume of wastewater processed or on the basis of ascending unit rates based on the quantity or strength of wastewater processed and (ii) provide for furnishing wastewater services in its charges or through abatement proceedings conducted in accordance with its regulations for assurance of service to persons who by reason of age, infirmity or poverty are unable to pay the charges otherwise applicable, provided that the aggregate liability of the local governmental unit or such member or other service recipient for amounts attributable to any loan or local governmental obligations shall be in no way diminished thereby. Any local governmental unit and any such member or other service recipient which raises all or any part of the cost of wastewater services or any assessment therefor through real and personal property taxes assessed by the local governmental body shall indicate on the tax bills furnished to each taxpayer the portion of the tax assessed for such services.

Section 13. (a) Local governmental obligations issued by a local governmental unit shall be dated, may bear interest at such rate or rates, including rates variable from time to time subject to such minimum or maximum rate, if any, as may be determined by such index or other method of determination provided in the applicable loan agreement, shall mature in such amount or amounts and at such time or times, not later than the maximum dates, if any, provided herein, and may be made redeemable in whole or in part before maturity at the option of the local governmental unit or at the option of the trust at such price or prices and under such terms and conditions as may be fixed in the loan agreement prior to the issue of the local governmental obligations. The local governmental obligations may be issued as serial bonds or term bonds or any combination thereof with such provisions, if any, for sinking funds for the payment of bonds as the local governmental unit and the trust may agree. Local governmental obligations may be in such form, payable to the bearer thereof or the registered owner, be certificated or uncertificated, be in such denominations, payable at such place or places, within or without the commonwealth, and otherwise bear such terms and conditions, not inconsistent with this chapter and the applicable bond act, as provided in the applicable loan agreement or as the board and the local governmental unit shall otherwise agree. Local governmental obligations may be issued in principal amount equal to the loan evidenced thereby or at such discount as the board and the local governmental unit shall agree.

(b) Subject to the requirements of Title VI of the Clean Water Act, local governmental obligations shall be payable within a period not exceeding the greater of the period, if any, specified in the applicable bond act or the useful life of the water pollution abatement project financed by such obligations, as determined by the department, or, if incurred to finance more than one project, the average useful life of such projects. Except as otherwise provided in this chapter, local governmental obligations shall be payable by such installment or installments of principal, annual or otherwise, as will extinguish the same at maturity, the first installment to be payable no later than one year after the date of issuance of such obligations or one year after the date of completion of the project financed by such obligations, as determined by the department, whichever date is later, and the remaining installments of principal, if any, to be in such amounts and payable on such dates as the board and the local governmental unit shall agree.

(c) Notwithstanding the provisions of sections seventeen and seventeen A of chapter forty-four to the contrary, if a local governmental unit has authorized a loan in accordance with this chapter and the issuance of local governmental obligations under any bond act, the local governmental unit may, subject to the loan agreement and with the approval of the board, issue notes to the trust or any other person in anticipation of the receipt of the proceeds of the loan. The issue of such notes shall be governed by the provisions of this chapter relating to the issue of local governmental obligations other than notes, to the extent applicable, provided the maturity date of such notes shall not exceed three years from the date of issue of such notes or the expected date of completion of the project financed thereby, as determined by the department, if later. Notes issued for less than the maximum maturity date may be renewed by the issue of other notes maturing no later than the maximum maturity date. The second sentence of section seventeen A of chapter forty-four shall not apply to the issue of such notes.

(d) A local governmental unit may issue local governmental obligations to refund or pay at maturity or earlier redemption any local governmental obligations outstanding under any loan agreement or to refund or pay any other debt of the local governmental unit issued to finance the water pollution abatement project to which such loan agreement pertains. Local governmental obligations for refunding may be issued in sufficient amounts to pay or provide for the principal of the obligations refunded, any redemption premium thereon, any interest accrued and to accrue to the date of payment of such obligations, the costs of issuance of such refunding obligations and any reserves required by the applicable loan agreement. An issue of refunding local governmental obligations, the amount and dates of maturity or maturities and other details thereof, the security therefor and the rights, duties and obligations of the local governmental unit in respect to the same shall be governed by the provisions of this chapter relating to the issue of local governmental obligations other than refunding obligations as the same may be applicable.

(e) Except as otherwise provided in section fourteen, the applicable bond act, or by agreement between the trust and a local governmental unit, all local governmental obligations shall be general obligations of the local governmental unit issuing the same for which its full faith and credit are pledged and for the payment of which all taxable property in the local governmental unit shall be subject to ad valorem taxation without limit as to rate or amount except as otherwise provided by law.

Section 14. Notwithstanding any general or special law to the contrary, when authorized by a two-thirds vote as defined in section one of chapter forty-four or by such other vote as is authorized by the applicable bond act, local governmental obligations may be issued as limited obligations payable solely from local system revenues pledged to their payment in accordance with section fifteen. Unless otherwise provided in the applicable loan agreement, local governmental obligations issued in accordance with this section shall not be general obligations of the local governmental unit or a pledge of its full faith and credit and, notwithstanding any general or special law to the contrary, the amount of principal and premium, if any, of and interest on such obligations shall not be included in the computation of any limit on the indebtedness of the local governmental unit or on the total taxes assessable by the local governmental unit in any year or on any assessment, levy or other charge made by the local governmental unit on any other political subdivision or instrumentality of the commonwealth. Any local governmental obligation issued in accordance with this section shall recite on its face that it is a limited obligation payable solely from local system revenues pledged to its payment.

Section 15. (a) Notwithstanding any general or special law to the contrary, when authorized by a two-thirds vote as defined in section one of chapter forty-four or by such other vote as is authorized by the applicable bond act, any local governmental obligations may be secured by one or more security agreements between the local governmental unit and a corporate trustee, which may be a trust company or bank having the powers of a trust company within or without the commonwealth, or directly between the trust and the local governmental unit. Any such security agreement shall be in such form and shall be executed as provided in the applicable loan agreement or as otherwise agreed to between the board and the local governmental unit.

(b) Any security agreement directly or indirectly securing local governmental obligations, other than local governmental obligations issued in accordance with section fourteen, may pledge or assign, and create security interests in, all or any part of the general revenues of the local governmental unit. Any trust agreement securing local governmental obligations issued in accordance with said section fourteen may pledge or assign, and create security interests in, all or any part of the local system revenues of the local governmental unit, but shall not otherwise pledge or assign any other general revenues of the local governmental unit unless otherwise authorized by the applicable bond act. Any security agreement may contain such provisions for protecting and enforcing the rights, security and remedies of the trust, or other holders of the local governmental obligations, as may be determined by the board and the local governmental unit, including without limitation provisions defining defaults and providing for remedies, including without limitation, the acceleration of maturities and, in the case of local governmental obligations issued under said section fourteen, the appointment of a receiver of the project financed thereby and the system of which it is a part, the covenants setting forth the duties of, and limitations on, the local governmental unit in relation to the custody, safeguarding, investment and application of monies, including general revenues and local system revenues, the issue of additional and refunding local governmental obligations and other bonds, notes or obligations on a parity or superior thereto, the establishment of reserves, the establishment of sinking funds for the payment of local governmental obligations, and the use of surplus proceeds. A security agreement securing local governmental obligations issued in accordance with said section fourteen may also include covenants and provisions not in violation of law regarding the acquisition, construction, operation and carrying out of the water pollution abatement project financed by such obligations, the system of which it is a part and any other revenue producing facilities from which the local governmental unit derives local system revenues, the fixing and collection of local system revenues and the making and amending of contracts relating thereto. Any local governmental obligations may also be secured by insurance or by letters or lines of credit or other credit facilities and a local governmental unit may pledge or assign any of its general revenues or local system revenues, as appropriate, as security for payments made thereon.

(c) Any pledge of general revenues or local system revenues made by a local governmental unit shall be valid and binding and shall be deemed continuously perfected for the purpose of chapter one hundred and six and any other law from the time made. The general revenues, local system revenues, monies, rights and proceeds so pledged and then held or thereafter acquired or received by the local governmental unit shall immediately be subject to the lien of such pledge without any physical delivery or segregation thereof or further act, and the lien of such pledge shall be valid and binding against all parties having claims of any kind in tort, contract or otherwise, regardless of whether such parties have notice thereof. Neither the security agreement or any other agreement by which a pledge is created need be filed or recorded except in the records of the local governmental unit and no filing need be made under the provisions of said chapter one hundred and six.

(d) A pledge of general revenues or local system revenues in accordance with this chapter shall constitute a sufficient appropriation thereof for the purposes of any provision for appropriation for so long as such pledge shall be in effect and, notwithstanding any general or special law to the contrary, such revenues shall be applied as required by the pledge and the security agreement evidencing the same without further appropriation.

Section 16. The trust and its existence shall continue until terminated by law; provided, however, that no such law shall take effect so long as the trust shall have bonds outstanding unless adequate provision has been made for the payment or satisfaction thereof. Upon termination of the trust, the title to the fund and all other properties of the trust which remain after provision for the payment or satisfaction of all bonds of the trust shall vest in the commonwealth. The obligations, debts and liabilities of the trust shall be assumed by and imposed upon the commonwealth, and shall be transferred to the state treasurer or to such other successor as the general court may designate.

Section 17. The board, in cooperation with the state treasurer, shall, at all times keep full and accurate accounts of all receipts, expenditures and disbursements from the fund and all assets and liabilities of the trust which shall be open to inspection by any officer or duly appointed agent of the commonwealth. The trust shall submit an annual report, in writing, to the governor, the department and the clerk of the house of representatives who shall forward the same to the president of the senate, the speaker of the house of representatives, the chairman of the senate committee on ways and means and the chairman of the house committee on ways and means. Said report shall include financial statements relating to the operations, properties, and expenditures of the trust maintained in accordance with generally accepted accounting principles so far as applicable and audited by an independent certified public accountant firm.

SECTION 9. Section 31 of chapter 184 of the General Laws, as appearing in the 1988 Official Edition, is hereby amended by adding the following paragraph:-

A watershed preservation restriction means a right, whether or not stated in the form of a restriction, easement, covenant or condition, in any deed, will or other instrument executed by or on behalf of the owner of the land appropriate to retaining land predominantly in such condition to protect the water supply or potential water supply of the commonwealth, to forbid or limit any or all (a) construction or placing of buildings; (b) excavation, dredging or removal of loam, peat, gravel, soil, rock or other mineral substance except as needed to maintain the land and (c) other acts or uses detrimental to such watershed. Such watershed preservation restrictions shall be in perpetuity except as released under the provisions of section thirty-two. All other customary rights and privileges of ownership shall be retained by the owner, including the right to privacy.

SECTION 10. Said chapter 184 is hereby further amended by striking out section 32, as so appearing, and inserting in place thereof the following section:-

Section 32. No conservation restriction, agricultural preservation or watershed preservation restriction as defined in section thirty-one, held by any governmental body or by a charitable corporation or trust whose purposes include conservation of land or water areas or of a particular such area, and no preservation restriction, as defined in section thirty-one, held by an governmental body or by a charitable corporation or trust whose purposes include preservation of buildings or sites of historical significance or of a particular such building or site, shall be unenforceable on account of lack of privity of estate or contract or lack of benefit to particular land or on account of the benefit being assignable or being assigned to any other governmental body or to any charitable corporation or trust with like purposes, provided (a) in case of a restriction held by a city or town or a commission, authority, or other instrumentality thereof, it is approved by the secretary of environmental affairs if a conservation restriction, the commissioner of the metropolitan district commission if a watershed preservation restriction, the commissioner of food and agriculture if an agricultural preservation restriction or the Massachusetts historical commission if a preservation restriction, and (b) in case of a restriction held by a charitable corporation or trust it is approved by the mayor, or in cities having a city manager the city manager, and the city council of the city, or the selectmen or town meeting of the town, in which the land is situated, and the secretary of environmental affairs if a conservation restriction, the commissioner of the metropolitan district commission if a watershed preservation restriction, the commissioner of food and agriculture if an agricultural preservation restriction or the Massachusetts historical commission if a preservation restriction.

Such conservation, preservation, agricultural preservation restrictions and watershed preservation restrictions are interests in land and may be acquired by any governmental body or such charitable corporations or trusts which have power to acquire interest in the land, in the same manner as it may acquire other interests in land. Such a restriction may be enforced by injunction or other proceeding, and shall entitle representatives of the holder to enter the land in a reasonable manner and at reasonable times to assure compliance. Such a restriction may be released, in whole or in part, by the holder for such consideration, if any, as the holder may determine, in the same manner as the holder may dispose of land or other interests in land, but only after a public hearing upon reasonable public notice, by the governmental body holding the restriction or if held by a charitable corporation or trust, by the mayor, or in cities having a city manager the city manager, the city council of the city or the selectmen of the town, whose approval shall be required, and in case of a restriction requiring approval by the secretary of environmental affairs, the Massachusetts historical commission, the commissioner of food and agriculture, or the commissioner of the metropolitan district commission only with like approval of the release.

No restriction that has been purchased with state funds shall be released unless it is repurchased by the land owner at its then current fair market value. Funds so received shall revert to the fund sources from which the original purchase was made, or, lacking such source, shall be made available to acquire similar interests in other land. Agricultural preservation restrictions shall be released by the holder only if the land is no longer deemed suitable for agricultural or horticultural purposes or unless two-thirds of both branches of the general court, by a vote taken by yeas and nays, vote that the restrictions shall be released for the public good. Watershed preservation restrictions shall be released by the holder only if the land is deemed by the commissioner of the metropolitan district commission and the secretary of environmental affairs to no longer be of any importance to the water supply or potential water supply of the commonwealth or unless two-thirds of both branches of the general court, by a vote taken by yeas and nays, vote that the restrictions shall be released for the public good.

Approvals of restrictions and releases shall be evidenced by certificates of the secretary of environmental affairs, the chairman, clerk or secretary of the Massachusetts historical commission, the commissioner of food and agriculture, the commissioner of the metropolitan district commission, city council, or selectmen of the town, duly recorded or registered.

In determining whether the restriction or its continuance is in the public interest, the governmental body acquiring, releasing or approving shall take into consideration the public interest in such conservation, preservation, watershed preservation or agricultural preservation, and any national, state, regional and local program in furtherance thereof, and also any public, state, regional or local comprehensive land use or developmental body for use of the land.

This section shall not be construed to imply that any restriction, easement, covenant or condition which does not have the benefit of this section shall, on account of any provisions hereof, be unenforceable. Nothing in this section or section thirty-one and section thirty-three shall diminish the powers granted by any general or special law to acquire by purchase, gift, eminent domain or otherwise to use land for public purposes.

Nothing in this section shall prohibit the department of public utilities from authorizing the taking of easements for the purpose of utility services, provided that (a) said department shall require the minimum practicable interference with farming operations with respect to width of easement, pole locations and other pertinent matters, (b) the applicant has received all necessary licenses, permits, approvals and other authorizations from the appropriate state agencies, (c) the applicant shall compensate the owner of the property in the same manner and at the same fair market value as if the land were not under restriction.

SECTION 11. The first paragraph of section 33 of said chapter 184, as so appearing, is hereby amended by striking out, in line 4, the words "and agricultural" and inserting in place thereof the word:- , agricultural,- and by inserting after the word "restrictions", the first time it appears, in line 5, the words:- and watershed preservation restrictions.

SECTION 12. The third paragraph of said section 33 of said chapter 184, as so appearing, is hereby amended by inserting after the word "agricultural", in lines 42 and 43, the words:- or watershed.

SECTION 13. Paragraph (a) of section 12 of chapter 372 of the acts of 1984 is hereby amended by striking out the fifth sentence and inserting in place thereof the following sentence:- The aggregate principal amount of all bonds issued under the authority of this act, shall not exceed the sum of one billion two hundred million dollars outstanding at any one time, provided however, that bonds for the payment of redemption of which, either at or prior to maturity, refunding bonds shall have been issued, shall be excluded in the computation of outstanding bonds.

SECTION 14. Section 16 of said chapter 372 is hereby amended by striking out the fourth sentence and inserting in place thereof the following sentence:- The aggregate principal amount of all bonds issued under the authority of this act shall not exceed the sum of one billion two hundred million dollars outstanding, provided however, that bonds for the payment of redemption of which, either at or prior to maturity, refunding bonds shall have been issued, shall be excluded in the computation of outstanding bonds.

SECTION 15. (a) On and after July first, nineteen hundred and ninety-one, the department of environmental quality engineering shall not approve a loan or grant to a local governmental unit to finance costs of a water pollution abatement project under section twenty-seven A or section thirty-three E of chapter twenty-one of the General Laws unless the local governmental unit receiving such loan or grant shall have adopted a pricing system for wastewater services by ordinance, rule, regulation, vote or other appropriate action effective for fiscal years beginning not later than July first, nineteen hundred and ninety-two which provides for assurance of service to households who by reason of low income are unable to pay the charge for service otherwise applicable, whether the costs of such services are included in an annual tax levy or are collected by rates, charges, fees, assessments or other charges. The foregoing requirements shall not apply to a regional local governmental unit, provided that each city, town, commission, board or other instrumentality which is a member or other service recipient thereof shall adopt a pricing system satisfying the foregoing requirements or such member or other service recipient shall be ineligible to receive its allocable share of any financial or grant assistance provided the regional local governmental unit under chapter twenty-nine C or section thirty-three E of chapter twenty-one of the General Laws. On or before July first, nineteen hundred and ninety, the secretary of administration and finance and the secretary of the executive office for environmental affairs shall prepare and deliver to the governor and the clerk of the house of representatives who shall forward the same to the president of the senate and the speaker of the house a report, including proposed legislation if any, which shall address the provisions of this section and the application thereof to those low income households, including renters, which are not billed directly for the provision of wastewater services but are indirectly charged amounts for such services, in excess of one and one-half percent of household annual income for households with annual income at or below one hundred and fifty percent of the poverty level as established from time to time by the federal government.

(b) On and after June thirtieth, nineteen hundred and ninety-one, the department of environmental quality engineering shall not approve a loan or grant to a local governmental unit to finance costs of a water pollution abatement project under section twenty-seven A or section thirty-three E of chapter twenty-one of the General Laws unless the local governmental unit receiving such loan or grant shall have adopted by ordinance, rule, regulation, vote or other appropriate action, to take effect within ninety days of the award of the loan or grant, a pricing system for wastewater services which reflects the true cost of such services to the local governmental unit, and which is based on a flat rate per volume of wastewater process or on the basis of ascending unit rates based on the quantity or strength of wastewater processed, whether the costs of such services are included in an annual tax levy or are collected by rates, charges, fees, assessments or other charges. The foregoing requirements shall not apply to a regional local governmental unit, provided that each city, town, commission, board, or other instrumentality which is a member or other service recipient thereof shall adopt a pricing system satisfying the foregoing requirements or such member or other service recipient shall be ineligible to receive its allocable share of any financial or grant assistance provided the regional local governmental unit under chapter twenty-nine C or section thirty-three E of chapter twenty-one of the General Laws. On and after June thirtieth, nineteen hundred and ninety, the department of environmental quality engineering shall not approve a loan or grant to a local governmental unit to finance costs of a construction of a drinking water filtration plant or similar construction project unless the local governmental unit receiving such loan or grant shall have adopted by ordinance, rule, regulation, vote or other appropriate action, to take effect within ninety days of the award of the loan or grant, a pricing system for drinking water services which reflects the true cost of such services to the local governmental unit, and which is based on a flat rate per volume or on the basis of ascending unit rates per volume, whether the cost of such services are included in an annual tax levy or are collected by rates, charges, fees, assessments or other charges.

SECTION 16. (a) The state treasurer is hereby authorized and directed to transfer the sum of seventy-five million dollars to the water pollution abatement trust created pursuant to the provisions of chapter twenty-nine C of the General Laws for deposit in the Water Pollution Abatement Revolving Fund established pursuant to the provisions of section two L of chapter twenty-nine of the General Laws for application by the trust to the purposes specified in section five of said chapter twenty-nine C any portion of which may be used as a matching grant by the commonwealth to federal capitalization grants received under Title VI of the Federal Clean Water Act.

(b) The state treasurer is hereby authorized and directed to transfer the sum of one hundred and twenty-five million dollars to the water pollution abatement trust created pursuant to the provisions of said chapter twenty-nine C for deposit in the Water Pollution Abatement Revolving Fund established pursuant to the provisions of section two L of said chapter twenty-nine for application by the trust to the purposes specified in section five of said chapter twenty-nine C.

(c) The state treasurer is hereby authorized and directed to transfer the sum of seven hundred million dollars to the water pollution abatement trust created pursuant to the provisions of said chapter twenty-nine C for deposit in the Water Pollution Abatement Revolving Fund established pursuant to the provisions of said section two L of said chapter twenty-nine for application by the trust to the purposes specified in section six of said chapter twenty-nine C, on account of loans to local governmental units for costs of water pollution abatement projects as defined in said chapter twenty-nine C.

SECTION 17. Amounts transferred to the water pollution abatement trust by section sixteen of this act shall be paid to the trust by the state treasurer and deposited in the Water Pollution Abatement Revolving Fund in accordance with a payment schedule approved by the state treasurer, the secretary for administration and finance, the department of environmental quality engineering and the trust pursuant to section eight of chapter twenty-nine C of the General Laws.

SECTION 18. The department of environmental quality engineering is hereby authorized and directed to expend a sum, not to exceed four hundred and thirty million dollars, for the purpose of providing grants to local governmental units for costs of water pollution abatement projects as authorized by section thirty-three E of chapter twenty-one of the General Laws. This amount shall be in addition to any amounts previously appropriated for the same or similar purposes. Payments on such grants shall be made in accordance with a payment schedule established by the department with the approval of the secretary of administration and finance. Notwithstanding the provisions of chapter twenty-nine C or section twenty-seven A or thirty-three E of chapter twenty-one of the General Laws or the provisions of this act to the contrary, not more than eighteen million dollars shall be used for such grants to local governmental units for projects on the federal fiscal year nineteen hundred and eighty-eight federal construction grants priority list that received a federal grant in that fiscal year but did not receive a state grant, such that the total financial assistance provided to the applicable local governmental unit under this act, together with such federal grant, is the financial equivalent of a grant of up to ninety percent of the eligible costs thereof as determined by the department; and not more than sixty million dollars shall be used for such grants to local governmental units for other projects on the fundable portion of the federal construction grants priority lists for federal fiscal years nineteen hundred and eighty-eight and nineteen hundred and eighty-nine such that the total financial assistance provided to such local governmental unit pursuant to the provisions of this act is the financial equivalent of a grant of seventy-five percent of the eligible costs thereof as determined by the department; provided that no local governmental unit shall receive no more than fifty percent of such amounts. Notwithstanding any other provision of this act, a sum not to exceed thirty-two million dollars shall be used for grants to local governmental units for the costs of planning and design of water pollution abatement projects pursuant to section thirty-three of chapter twenty-one of the General Laws; provided, however, that such grants shall not exceed seventy-five percent of the eligible costs as determined by the department.

SECTION 19. (a) Notwithstanding the provisions of chapter twenty-nine C of the General Laws or this act to the contrary, on or before June thirtieth, nineteen hundred and ninety-two, the water pollution abatement trust created pursuant to the provisions of said chapter twenty-nine C is authorized to make loans to local governmental units for the costs of water pollution abatement projects approved by the department of environmental quality engineering pursuant to section twenty-seven A of chapter twenty-one of the General Laws in an aggregate principal amount not to exceed two billion two hundred ten million dollars; provided, however, that not more than two hundred million dollars of such amount shall be applied to loans to finance costs of constructing collection systems as defined in section twenty-six A of said chapter twenty-one; provided, however, that no local governmental unit shall receive in any fiscal year more than ten percent of the dollar value of such loans made in that fiscal year; not more than three hundred twenty million dollars of such amount shall be applied to loans to finance costs of projects to rehabilitate abatement facilities to remove infiltration therefrom the costs of combined sewer overflow projects or certain other categories of abatement facility construction projects not typically funded by federal grants, identified as such in regulations promulgated by the department and in accordance with a priority system established by regulation, provided that no local governmental unit shall receive in any fiscal year more than twenty-five percent of the dollar value of such loans made in that fiscal year; not more than one billion two hundred million dollars shall be applied to loans to finance the costs of constructing other abatement facilities as defined in section twenty-six A of chapter twenty-one of the General Laws; provided, however, that no local governmental unit shall receive in any fiscal year more than fifty percent of the dollar value of such loans made in that fiscal year; not more than two hundred million dollars of such amount shall be applied to loans to finance costs of planning or design of abatement facilities and collection systems; provided, further, that no local governmental unit shall receive in any fiscal year more than twenty-five percent of the dollar value of such loans made in that fiscal year unless all other applicants for such loans in that fiscal year shall receive such loans; and not more than two hundred ninety million dollars shall be applied to loans to finance costs of abatement projects not eligible for financial assistance pursuant to section six of chapter twenty-nine C of the General Laws but approved by the department pursuant to section twenty-seven A of chapter twenty-one of the General Laws. No more than one-quarter of the total authorization of such loans in each category may be made prior to June thirtieth, nineteen hundred and eighty-nine; no more than one-half of the total authorization of such loans in each category may be made prior to June thirtieth, nineteen hundred and ninety; and no more than three-quarters of the total authorization of such loans in each category may be made prior to June thirtieth, nineteen hundred and ninety-one.

(b) Notwithstanding the provisions of chapter twenty-nine C or section twenty-seven A of chapter twenty-one of the General Laws to the contrary, loans made by the water pollution abatement trust to finance costs of any water pollution abatement project listed on the fundable portion of the federal construction grants priority list for federal fiscal year nineteen hundred and eighty-eight or nineteen hundred and eighty-nine and approved by the department for assistance pursuant to section six of said chapter twenty-nine C shall provide for no interest to be paid thereon by the applicable local governmental unit.

(c) Notwithstanding the provisions of section twenty-seven A or section thirty-three E of chapter twenty-one of the General Laws to the contrary, the department may approve the provision of financial assistance under section six of chapter twenty-nine C of the General Laws for eligible costs of any water pollution abatement project and may award a grant under section thirty-three E of said chapter twenty-one for eligible costs of such project in amounts which in the aggregate will result in total financial assistance provided to the applicable local governmental unit or, in the case of a regional local governmental unit, provided, however, that in the aggregate to all cities, towns, and other public bodies which are members or other service recipients thereof, equivalent to a grant of up to seventy-five percent, of the eligible costs of such project under section thirty-three or section thirty A of said chapter twenty-one or under section two of chapter four hundred and seventy-two of the acts of nineteen hundred and eighty-four, as applicable, but not less than the equivalent of fifty percent of the grant for which such project would have been eligible under such sections as applicable prior to the passage of this act.

SECTION 20. (a) There shall be established and set up on the books of the commonwealth a separate fund, to be known as the Water Treatment Facilities Revolving Fund, consisting of amounts credited to the fund in accordance with this section. The fund shall be administered in accordance with the provisions of this section by the board of trustees of the water pollution abatement trust created under chapter twenty-nine C of the General Laws and shall be held in trust exclusively for the purposes described herein and for the beneficiaries described herein and in said chapter twenty-nine C. The state treasurer shall be treasurer-custodian of the fund and shall have the custody of its monies and securities.

(b) In addition to the powers and duties of the board of trustees the water pollution abatement trust provided in chapter twenty-nine C of the General Laws, the board shall receive, hold, apply and disburse monies and revenues in the water treatment facilities revolving fund for the purpose of providing financial assistance, including grants as provided in this section, loans with or without interest, to local governmental units, as beneficiaries of the fund, to finance costs of eligible water treatment projects approved by the department of environmental quality engineering to carry out the provisions of sections one hundred and fifty-nine, one hundred and sixty and one hundred and sixty-two of chapter one hundred and eleven of the General Laws. As used in this section, the term "water treatment project" shall mean the planning, including facility study, piloting, value engineering, preliminary and final design and preconstruction activity, and construction, including construction supervision, operator training and facility start-up, of publicly owned drinking water filtration plants for the treatment of public water supplies.

(c) In the implementation of the provisions of this section and the administration of the water treatment facilities revolving fund, all provisions of chapter twenty-nine C and paragraphs (a), (d), (e) and (f) of section twenty-seven A of chapter twenty-one of the General Laws applicable to the water pollution abatement revolving fund and the provision of financial assistance by the trust to local governmental units for costs of water pollution abatement projects shall be equally applicable, to the extent consistent with this section, to the water treatment facilities revolving fund and to the provision of financial assistance for costs of water treatment projects, and the board, the department and local governmental units shall have the powers, and be subject to the applicable limitations, provided in said chapter twenty-nine C and section twenty-seven A of chapter twenty-one to carry out the provisions of this section. The powers and duties otherwise conferred upon the department by law with respect to the regulation and supervision of public water supplies shall in no respect be diminished by this section. Except to the extent prohibited by the requirements of Title VI of the Clean Water Act or other applicable federal law, the board may secure bonds of the trust by pledging as reserves monies held for that purpose in either or both of said funds, where the board determines that doing so will reasonably promote the purposes of both funds. The department, with the approval of the water resources commission, and the board shall establish standards, guidelines, criteria and other rules and regulations for the administration and implementation of their powers under this section including without limitation a priority system and priority list for the approval of projects, a classification system for the provision of financial assistance by the trust, the determination of eligible costs of projects and the terms and conditions of loans by the trust. No water treatment project shall be approved for financial assistance under this section unless the applicable local governmental unit has adopted or is in the process of adopting a local water resources management plan pursuant to regulations promulgated by the water resources commission.

(d) In addition to the authority provided in section nine of chapter twenty-nine C of the General Laws, the board may provide by resolution for the issuance of bonds of the trust to carry out the purposes of this section, provided the aggregate principal amount of bonds outstanding for such purposes shall not exceed the sum of two hundred million dollars. The holders of such bonds shall also be beneficiaries of the fund. Notwithstanding any other provision of this act to the contrary, the trust is authorized to make loans to local governmental units for the costs of water treatment projects approved by the department in an aggregate principal amount not to exceed two hundred million dollars. Any financial assistance provided by the trust under authority of this section shall bear such terms and conditions approved by the department including without limitation such terms relative to the interest payable thereon as will result in total financial assistance provided to the applicable local governmental unit equivalent to a grant of up to seventy-five percent of the eligible costs of planning the water treatment project and up to fifty percent of the eligible costs of constructing such project, including costs of constructing associated transmission systems; provided that if the water treatment project will serve regional needs as determined by the department, financial assistance provided under this section for the total eligible costs of the associated transmission systems to implement the regional solution shall be the equivalent of a grant of up to sixty percent. Upon receipt by any local governmental unit receiving financial assistance under this section of federal funds granted expressly for the purpose of constructing a drinking water treatment plant for the treatment of public water supply, such local governmental unit shall reimburse the fund for such assistance in the amount by which financial assistance provided under this section and from any such federal grant exceeds the equivalent of a grant of ninety percent of the eligible costs of such project. In addition to water treatment projects eligible for financial assistance hereunder on the basis of the priority system and priority lists established by the department, any otherwise eligible water treatment project under construction as of January first, nineteen hundred and eighty-seven which has not received a state grant under any other provision of law shall be eligible for financial assistance under this section equivalent to a grant of up to fifty percent of the eligible costs of construction thereof.

(e) In addition to other amounts in this act, the state treasurer is hereby authorized and directed to transfer the sum of one hundred million dollars to the water treatment facilities revolving fund for application by the trust to the purposes of this section. Amounts so transferred shall be paid to the trust for deposit in the fund in accordance with a payment schedule approved by the state treasurer, the secretary for administration and finance, the department and the trust pursuant to section eight of chapter twenty-nine C of the General Laws. A portion of the funds provided in this paragraph, not to exceed in the aggregate twenty percent, shall be used by the trust, when so directed by the department, to make grants for such water treatment projects; provided, that such grants shall be applied to the reduction of the principal balance of loans to local governmental units in accordance with this section. A portion of the funds provided in this paragraph, not to exceed four percent of the total amount authorized, shall be transferred to the department and may be used for the costs of the department associated with the administration of the programs set forth in this section, including consultant services or salaries of employees. The department, with the approval of the secretary of environmental affairs, shall annually submit to the secretary of administration and finance and the house and senate committees on ways and means, on or before October fifteenth, a plan for the use of any such funds for administrative costs.

(f) The department and the trust shall provide a report to the house and senate committees on ways and means and to the joint subcommittee on natural resources and agriculture by January first, nineteen hundred and ninety-one detailing all encumbrances, expenditures and projected expenditures of the funds provided under this section and providing projections for treatment needs and associated costs for the period nineteen hundred and ninety-one through nineteen hundred and ninety-six.

(g) All terms defined in chapter twenty-nine C of the General Laws shall have the same meanings in this section as are defined in said chapter twenty-nine C, unless the context otherwise requires.

SECTION 21. To meet the expenditures necessary in carrying out the provisions of sections sixteen, eighteen, nineteen and twenty of this act, the state treasurer, upon request of the governor, may issue and sell bonds of the commonwealth in an amount to be specified by the governor from time to time, but not exceeding, in the aggregate, the sum of one billion four hundred and thirty million dollars. All bonds issued by the commonwealth, as aforesaid, shall be designated on their face, Local Water Pollution Abatement Facilities Capitalization Grant, Act of 1989, and shall be issued for such maximum term of years, not exceeding twenty years, as the governor may recommend to the general court pursuant to Section 3 of Article LXII of the Amendments to the Constitution of the commonwealth; provided, however, that all such bonds shall be payable not later than June thirtieth, two thousand twenty-five. All interest and payments on account of the principal of such obligations shall be payable from the Local Aid Fund. Bonds and the interest thereon issued under the authority of this section, notwithstanding any other provision of this act, shall be general obligations of the commonwealth.

SECTION 22. To meet the expenditures necessary in carrying out the provisions of section six of this act, the state treasurer shall, upon request of the governor, issue and sell bonds of the commonwealth, to an amount to be specified by the governor from time to time, but not exceeding, in the aggregate, the sum of twenty million dollars. All bonds issued by the commonwealth, as aforesaid, shall be designated on their face, Watershed Preservation Restriction Outlay Loan, Act of 1989, and shall be issued for such maximum term of years, not exceeding twenty years, as the governor may recommend to the general court pursuant to Section 3 of Article LXII of the Amendments to the Constitution of the commonwealth; provided, however, that all such bonds shall be payable not later than June thirtieth, two thousand twenty-five.

One-half of the interest and payments on account of principal of such obligation shall be payable from the General Fund.

One-half of the interest and payment on account of principal of such obligation shall annually be deemed debt service of the Massachusetts water resources authority, and such amounts shall annually be paid to the treasurer by said authority for the purpose of meeting such obligations.

SECTION 23. The state treasurer may borrow from time to time on the credit of the commonwealth such sums of money as may be necessary for the purposes of meeting payments as authorized by sections six, sixteen, eighteen and twenty of this act, and may issue and renew from time to time notes of the commonwealth therefor, bearing interest payable at such time and at such rate as shall be fixed by the state treasurer. Such notes shall be issued and may be renewed one or more times for such terms, not exceeding one year, as the governor may recommend to the general court in accordance with Section 3 of Article LXII of the Amendments to the Constitution of the commonwealth. Notes and the interest thereon issued under the authority of this act, notwithstanding any other provisions of this act, shall be general obligations of the commonwealth.

SECTION 24. In order to defray a portion of the expenses of the department under this act, the treasurer shall transfer to the department for application without further appropriation a portion of the funds provided in sections sixteen and eighteen not to exceed four percent of the total funds authorized to be used for the costs of the department associated with the termination of the federal construction grants program and the transition to and administration of the program established in those sections, including consultant services or salaries of employees. The department shall include among such administrative costs not more than twenty-two positions assigned to the water pollution control regulatory program and previously funded by a federal grant under section 205(g) of the Federal Water Pollution Control Act effective October first, nineteen hundred and eighty-eight. No such funds shall be transferred or used for administrative costs until said department, with the approval of the secretary of environmental affairs and the secretary of administration and finance, shall have submitted to the house and senate committees on ways and means, on or before June first, nineteen hundred and eighty-nine, and on or before October fifteenth annually thereafter, a plan for the use of any such funds to be expended for the department's administrative costs in the next twelve months.

SECTION 25. Funds provided in this act shall be in addition to funds authorized by chapter six hundred and eighty-seven of the acts of nineteen hundred and sixty-six, chapter seven hundred and forty-seven of the acts of nineteen hundred and seventy, chapter seven hundred and ninety-eight of the acts of nineteen hundred and seventy-nine, chapter two hundred and eighty-six of the acts of nineteen hundred and eighty-two, chapter four hundred and seventy-two of the acts of nineteen hundred and eighty-four, chapter seven hundred and eighty-six of the acts of nineteen hundred and eighty-five, chapter four hundred and six of the acts of nineteen hundred and seventy-nine, chapter seven hundred and seventy-one of the acts of nineteen hundred and seventy-nine, chapter six hundred and thirty-four of the acts of nineteen hundred and eighty-two, chapter one hundred and sixty-seven of the acts of nineteen hundred and eighty-three and any other sums appropriated for the same or similar purposes.

SECTION 26. Chapter 516 of the acts of 1969 is hereby further amended by striking out section 9 and inserting in place thereof the following section:-

Section 9. No actual construction work under this act shall commence until federal and state grants or loans in a substantial portion, as determined by said board, of the costs of said construction have been authorized.