PETITION OF:

SECTION 1. Section 1 of chapter 29C of the General Laws, as appearing in the 2004 Official Edition, is hereby amended by striking out the definition of “Board” in line 3 and inserting in place thereof the following definition: - “Board”, the board of trustees of the environmental facilities trust.

SECTION 2. Section 1 of said chapter 29C, as so appearing, is hereby further amended by inserting on line 35 the following definition: - “Drinking Water Revolving Fund”, the fund so designated established pursuant to the provisions of section 2QQ of chapter 29.

SECTION 3. Section 1 of said chapter 29C, as so appearing, is hereby further amended by striking out the definition of “eligible borrower” in lines 35 through 40 and inserting in place thereof the following definition: - "Eligible borrower", with respect to a water pollution abatement project, a local governmental unit authorized to own, operate, finance or otherwise implement such water pollution abatement project and, with respect to a drinking water project or an environmental facilities project, a local governmental unit or any other person, public or private, authorized to own, operate, finance or otherwise implement such drinking water project or environmental facilities project.

SECTION 4. Section 1 of said chapter 29C, as so appearing, is hereby further amended by inserting on line 41 the following definition: - “Environmental facilities project”, the planning, design, acquisition, construction, rehabilitation or other improvement of lands, structures, machinery, equipment and other facilities and undertakings for the prevention, reduction, control, abatement or monitoring of pollution of the lands, waters, air and other natural resources of the commonwealth, and for the preservation of the agricultural lands and open space of the state, including without limitation air pollution control facilities, water pollution abatement projects, drinking water projects, noise abatement facilities, water management facilities, the restoration and renewal of brownfield sites, the capping and restoration of landfills and other solid waste disposal sites, the acquisition of lands and easements thereto for watershed protection and other open space and agricultural purposes, the repair, restoration or removal of dams and other water impoundments, renewable energy facilities and programs including facilities described in paragraph (f)(1) of chapter40J, and any and all property, rights, franchises and facilities necessary or desirable in connection therewith or incidental thereto.

SECTION 5. Section 1 of said chapter 29C, as so appearing, is hereby further amended by striking out the definition of “fund” in lines 46 and 47 and inserting in place thereof the following definition: - “Fund”, as the context requires, the Water Pollution Abatement Revolving Fund, the Drinking Water Revolving Fund and any other fund established and set up on the books of the commonwealth by the state treasurer at the request of the trust in accordance with section 21.

SECTION 6. Section 1 of said chapter 29C, as so appearing, is hereby further amended by striking out the definition of “Loan” in lines 65 through 84 and inserting in place thereof the following definition: - "Loan", any form of financial assistance subject to repayment in whole or in part which is provided by the trust to a local governmental unit or other eligible borrower for all or any part of the cost of a project. A loan may (i) provide for planning, construction, bridge or permanent financing; (ii) be disbursed in anticipation of reimbursement of or direct payment of costs of a project or take the form of a guarantee, line of credit, bond purchase agreement, or other form of financial assistance; and (iii) may be issued at such rates of interest including, without limitation, variable rates and zero interest, may mature at such times and be redeemable at the option of the board or the local governmental unit or other eligible borrower, all as may be determined in accordance with this chapter.

SECTION 7. Section 1 of said chapter 29C, as so appearing, is hereby further amended by inserting on line 124 the following definition: - “Project”, a water pollution abatement project, drinking water project or environmental facilities project.

SECTION 8. Section 1 of said chapter 29C, as so appearing, is hereby further amended by inserting after line 156 the following definition: “Water Pollution Abatement Revolving Fund”, the fund so designated established pursuant to the provisions of section two L of chapter 29.

SECTION 9. Section 2 of said chapter 29C, as so appearing, is hereby amended by striking out said section and inserting in place thereof the following section:-

Section 2. (a) There is hereby created a body politic and corporate and public instrumentality of the commonwealth to be known as the Massachusetts Environmental Facilities Trust, which shall be an independent public authority not subject to the supervision and control of any other executive office, department, commission, board, bureau, agency or political subdivision of the commonwealth except as specifically provided in any general or special law. . 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 trust shall be governed by a board of trustees consisting of the state treasurer, ex officio, the secretary of the executive office for administration and finance, ex officio, the secretary of the executive office of environmental affairs, ex officio, and two additional trustees, one appointed by the governor and one appointed by the state treasurer, who have practical experience in environmental science, the construction or financing of environmental facilities or open space planning. The trustee first appointed by the governor shall serve a term of three years and the trustee first appointed by the state treasurer shall serve a term of two years. Thereafter each appointed trustee shall serve a term of three years. An appointed trustee shall serve until his successor is appointed and qualified, and a person appointed to fill a vacancy shall serve only for the unexpired term. An appointed trustee shall be eligible for reappointment. The trustees shall serve without pay but shall be reimbursed for actual expenses incurred in the performance of their duties.

(c) The state treasurer shall serve as chairman of the board of the trust. The board shall annually elect one of its members as vice-chairman. Each ex officio member of the board may appoint a designee pursuant to section six A of chapter thirty. Three members of the board of trustees shall constitute a quorum and the affirmative vote of three members 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 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 the ex officio members of the board 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; provided, however, that the provisions of said chapter thirty A shall not apply to rules, regulations, procedures and guidelines adopted by the board pursuant to section seven, 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.

(d) The state treasurer shall appoint an executive director, subject to the approval of the board, who shall supervise the administrative affairs and general management and operations of the trust and who shall also serve as secretary of the trust, ex officio. The executive director shall receive a salary commensurate with the duties of the office as determined by the board. The executive director shall, with the approval of the board: (i) plan, direct, coordinate and execute administrative functions in conformity with the policies and directives of the board; (ii) appoint other officers of the trust necessary to the functioning of the trust; (iii) employ professional and clerical staff as necessary; (iv) report to the board on all operations under his control and supervision; (v) prepare an annual budget and manage the administrative expenses of the trust; and (vi) undertake any other activities necessary to implement the powers and duties set forth in this chapter. Sections 9A, 45, 46, and 46C of chapter 30, chapter 31 and chapter 150E shall not apply to the executive director or any other employees of the trust.

SECTION 10. Paragraph (a) of section 3 of said chapter 29C, as so appearing, is hereby amended by inserting in line 1 the following sentence:- The trust is hereby designated as the instrumentality of the commonwealth to establish and administer within the Water Pollution Abatement Revolving Fund the state revolving fund pursuant to Title VI of the Clean Water Act.

SECTION 11. Clause (i) of section 5 of said chapter 29C, as so appearing, is hereby amended by inserting at the end thereof in line 12 the following words; - provided that no such loan or other form of financial assistance shall have a term in excess if thirty years or, if less, the useful life of the water pollution abatement project financed by such loan or other form of financial assistance.

SECTION 12. Section 6 of said chapter 29C, as so appearing, is hereby amended by striking out said section and inserting in place thereof the following section: -

Section 6. (a) Subject to limitations in other laws 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 water pollution abatement revolving fund or segregated accounts therein:

(i) after taking account of any grant made by the department pursuant to section 33E of chapter 21, to provide, and enter into binding commitments to provide, a subsidy for, or to otherwise assist local governmental units in the payment of, debt service costs on loans and other forms of financial assistance made by the trust; and

(ii) to provide reserves for, or to otherwise secure, amounts payable by local governmental units on loans and other forms of financial assistance made by the trust pursuant to this chapter.

(b) Except as otherwise provided in any other general or special law, the board shall apply and disburse monies in the water pollution abatement revolving fund, including contract assistance provided in section 19, or shall otherwise structure the debt service costs on loans and other forms of financial assistance made by the trust pursuant to section 5, to provide a subsidy or other assistance to local governmental units in the payment of debt service costs on such loans and other forms of financial assistance such that such loans and other forms of financial assistance shall be the financial equivalent of a loan made at an interest rate equal to two per cent if the term of such loan or other form of financial assistance is twenty years or less and the financial equivalent of a loan made at an interest rate equal to two and one half per cent, or such lesser rate not lower than two percent as the board shall approve, if the term of such loan or other form of financial assistance is greater than twenty years. Any approval granted by the department for a subsidy or other assistance for a project in an amount greater than the levels provided in this paragraph shall expire on December 31, 2007, or on such later date as the department shall have established on or prior to December 31, 2006, if not permanently financed by the trust by that date and any loan thereafter made by the trust for any such project shall provide for a subsidy or other assistance as provided in this paragraph.

SECTION 13. Said chapter 29C, as so appearing, is hereby further amended by striking out section 6A.

SECTION 14. Paragraph (c) of section 9 of said chapter 29C, as so appearing, is hereby amended by adding in line 61 the following sentence: - In connection with the issuance of bonds, the trust may enter into one or more interest rate exchange, cap, floor, collar or similar agreements and may secure its obligations thereunder by such pledge or assignment of any loan agreements and local governmental obligations, and such revenues and other assets and property, as may be determined by the board, including without limitation amounts held in the funds.

SECTION 15. Paragraph (g) of section 18 of said chapter 29C, as so appearing, is hereby amended by striking out said paragraph (g) and inserting in place thereof the following paragraph: -

(g) In addition to the purposes set forth in subsection (c), the board shall apply and disburse monies in the Drinking Water Revolving Fund, including contract assistance as provided in section 19, or shall otherwise structure the debt service costs on loans and other forms of financial assistance made by the trust pursuant to this section, to provide a subsidy or other assistance to local governmental units and other eligible borrowers in the payment of debt service costs on such loans and other forms of financial such that such loans and other forms of financial assistance shall be the financial equivalent of a loan made at an interest rate equal to two per cent if the term of such loan or other form of financial assistance is twenty years or less and the financial equivalent of a loan made at an interest rate equal to two and one half per cent, or such lesser rate not lower than two percent as the board shall approve, if the term of such loan or other form of financial assistance is greater than twenty years. Any approval granted by the department for a subsidy or other assistance for a project in an amount greater than the levels provided in this paragraph shall expire on December 31, 2007, or on such later date as the department shall have established on or prior to December 31, 2006, if not permanently financed by the trust by that date and any loan thereafter made by the trust for any such project shall provide for a subsidy or other assistance as provided in this paragraph.

SECTION 16. Said chapter 29C, as so appearing, is hereby further amended by adding at the end thereof the following three sections: -

Section 19. To provide for the subsidy or other assistance authorized by section 6 and section 18, and by section twenty-six and twenty-seven of chapter two hundred and three of the acts of nineteen hundred and ninety-two and section one hundred ninety of chapter sixty of the acts of nineteen hundred and ninety-four, the state treasurer acting on behalf of the commonwealth shall enter into an agreement with the trust that the commonwealth shall provide contract assistance to defray all or a portion of the debt service on debt obligations issued by the trust or the loans and other forms of financial assistance funded by such debt obligations up to a maximum amount of $88,000,000 per fiscal year of the commonwealth. Such contract assistance agreement shall provide for payments by the commonwealth to the trust at such times during each fiscal year and upon such terms and under such conditions as the trust may stipulate. The trust may pledge such agreement and the rights of the trust to receive amounts thereunder as security for payment of the debt obligations issued to the trust. Such agreement shall constitute a general obligation of the commonwealth for which the faith and credit of the commonwealth shall be pledged for the benefit of the trust and of the holders of any debt obligations of the trust which may be secured by the pledge of such agreement or of amounts to be received by the trust under such agreement.

Section 20. Notwithstanding any general or special law to the contrary, the trust may transfer amounts held in the Drinking Water Revolving Fund to the Water Pollution Abatement Revolving Fund for application by the trust to the purposes specified in section 5, and may transfer amounts held in the Water Pollution Abatement Revolving Fund to the Drinking Water Revolving Fund for application by the trust to the purposes specified in section 18, in each case to the extent authorized by the Clean Water Act and the Safe Drinking Water Act.

Section 21. (a) In addition to the powers and duties of the board otherwise provided in this chapter, the trust is hereby authorized to finance or refinance costs of eligible environmental facilities projects approved by the board which are undertaken by local governmental units and other eligible borrowers and to provide by resolution for the issuance from time to time of bonds of the trust for such purposes. To carry out such powers, the board may direct the state treasurer to set up on the books of the commonwealth one or more special funds and accounts therein as shall be necessary or desirable to segregate any monies held or received by the trust for such purposes including without limitation (i) revenues of the trust; (ii) amounts appropriated by the commonwealth to the trust for purposes of such funds; (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) investment earnings on monies in the funds; and (v) any other amounts required to be credited to such funds 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. The state treasurer shall be the custodian of any such funds and shall have the custody of the monies and securities therein, provided that the funds shall be administered by the board in accordance with this chapter and shall be held in trust exclusively for the purposes, and administered, held and disbursed by the board for the beneficiaries, described herein. The board shall establish standards, guidelines, criteria and other rules and regulations for the administration and implementation of its powers under this section including, without limitation, the determination of eligible borrowers and environmental facilities projects and the eligible costs thereof and the terms and conditions of loans by the trust to finance or refinance the same.

(b) In the implementation of this section, all provisions of this chapter applicable to the provision of financial assistance by the trust to local governmental units and other eligible borrowers for costs of water pollution abatement projects and drinking water projects and the issuance of bonds of the trust for such purposes shall be equally applicable, to the extent consistent with this section, to the provision of financial assistance and the issuance of bonds for costs of environmental facilities projects, and the board shall have the powers and shall be subject to the applicable limitations provided in this chapter to carry out the provisions of this section. Without limiting the generality of the foregoing, the board may apply and disburse monies and revenues in any fund established in accordance with this section or otherwise held or received by it: (i) to make, and enter into binding commitments to make, loans and other forms of financial assistance to local governmental units and other eligible borrowers for the purpose of financing or refinancing costs of environmental facilities projects or portions thereof, and to provide for all or any part of the debt service costs on loans and other forms of financial assistance made by the trust during the construction of such projects and for such period thereafter as the board shall determine; (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 provide, and enter into binding commitments to provide, a subsidy for, or to otherwise assist local governmental units and other eligible borrowers in the payment of, debt service costs on loans and other forms of financial assistance made by the trust pursuant to this section; (iv) to provide reserves for, or to otherwise secure, amounts payable by local governmental units and other eligible borrowers on, loans and other forms of financial assistance made by the trust pursuant to this section; and (v) 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.

(c) Any local governmental unit and any other eligible borrower may apply to the trust for a loan or other financial assistance authorized by this section to assist in financing or refinancing the cost of an environmental facilities project approved by the board. For entering into a loan or other financial assistance for financing or refinancing an environmental facilities project and establishing the authorized terms and conditions thereof and for issuing any local governmental obligations to secure the same, a local governmental unit shall be deemed to have all of the same powers expressly granted to local governmental units by this chapter with respect to loans or other financial assistance for financing or refinancing water pollution abatement projects and drinking water projects and the powers granted to any such local governmental unit in any bond act applicable to it specifically or as a member of a class of governmental instrumentalities. Without limiting the generality of the foregoing, all local governmental units shall have the powers and shall be subject to the limitations with respect to such loans and local government obligations set forth in sections 10 to 15, inclusive.

SECTION 17. Notwithstanding any general or special law to the contrary, amounts appropriated to the water pollution abatement trust established by chapter 29C of the General Laws by section 16 of chapter 275 of the acts of 1989, as amended by section 19 and section 20 of chapter 203 of the acts of 1992, item 2200-9959 of section 2 of chapter 85 of the acts of 1994 and item 22090-8969 of section 2 of chapter 15 of the acts of 1996, after the first use of such amounts for the purposes for which appropriated, and loan repayments related thereto and investment earnings thereon and other revenues therefrom, including any such amounts which are no longer required as a matching grant to a federal capitalization grant, may be applied to any of the purposes provided in section 5, section 18 or section 21 of said chapter 29C as determined by the board of the trust.

SECTION 18. Section 420 of chapter 194 of the acts of 1998 is hereby repealed.