PETITION OF:

SECTION 1. Chapter 40G of the General Laws, as appearing in the 1998 Official Edition, is hereby amended by adding the following new section 4C:—
Section 4C. Establishment and administration of an environmental technology fund. The MTDC is hereby authorized to establish a separate fund to be called the Massachusetts Environmental Ventures Fund (the “Fund”) to be managed by the corporation to finance early stage companies engaged in the development and manufacture of innovative environmental and energy efficiency products referred to as “Envirotechnology”. Envirotechnology is environmental and energy-efficiency technologies that offer potentially greater environmental protection, or that at least offer comparable results at lower cost in terms of energy, economics, or environmental impacts. The purpose of the Fund is to provide a variety of financing options related to the development and commercialization of the product, including loans and investments leading to product commercialization and additional investment capital. The Fund may support proof of concept, pilot development, prototype development, demonstrations and commercial introduction of the product. The initial capitalization of the fund shall be a $5 million appropriation from the General Fund and the Fund may be increased by subsequent appropriations or by contributions to it by other public or private organizations. The MTDC shall hold the Fund as a separate account to be managed, invested and reinvested by the corporation in the same manner as its other assets, except as follows:
(1) Investments shall be limited to Envirotechnology projects which have been designated as “innovative envirotechnology” by the State Strategic Envirotechnology Partnership (“STEP”) program, or if the STEP program is terminated or is unable to participate by any successor organization operating in the Commonwealth which reflects an appropriate public-private industry partnership as designated by the MTDC, and which have been reviewed for technical and commercial merit and recommended by an advisory committee at the Environmental Business and Technology Center located at the University of Massachusetts. The University of Massachusetts shall be entitled to charge the fund with its direct expenses incurred in connection with its advisory committee.
(2) Investments by the Fund in a project need not be accompanied by an equal or greater investment of other public or private funds in the same project, but there shall be a reasonable expectation that other investment will be made.
(3) The determination by the board to invest the Fund in a particular Envirotechnology project shall be subject to section 4 except as follows:
(a) Investments shall not be limited to the seed capital needs of an enterprise;
(b) It is not necessary that funding be unavailable in the traditional capital markets or be offered by others on terms that substantially hinder the success of the enterprise;
(c) There shall be no dollar limitation on the amount of any initial investment or subsequent investment; and
(d) Limitations on the percent of assets of the MTDC invested in enterprises in target areas defined in chapter 40F shall be inapplicable.
(4) If there are contributions to the Fund by other public or private organizations, such contributions and their proceeds shall be held in separate accounts within the Fund, the earnings and losses of investment of said accounts shall be credited or charged to them, and the expenses of the MTDC in administering the Fund shall be charged pro rata to each of said accounts.
(5) In making investments of the Fund in Envirotechnology projects, the board shall not be subject to any limitations on lawful investments for fiduciaries in the Commonwealth or to any provisions of law governing the investment of state pension funds or other public monies.
Assets of the Fund which have not been invested in Envirotechnology projects shall be invested in such securities and may be lawful investments for fiduciaries in the Commonwealth.
The MTDC shall not charge fees for the management of the Fund, but shall be permitted to charge the Fund with its direct expenses and a pro rata share of its indirect expenses incurred in connection with the investment, reinvestment and administration of the Fund. In addition, MTDC shall receive a success fee equal to 20% of net gains from investments of the Fund. If at any time after three years from the date on which the Fund was established, it shall be determined by the General Court by amendment to this section that it is no longer appropriate for investments of the Fund to be limited to Envirotechnology projects approved under the STEP program, unless otherwise specified in such amendment, the MTDC shall have the authority to determine whether to continue the Fund without requiring approval of projects by a STEP panel or a successor program whether to liquidate the Fund and transfer its remaining assets held in separate accounts, if any, to the owners of said accounts and the balance of said assets to the general accounts of the corporation.