Section 6. 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 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.

The board shall apply and disburse monies in the fund, including contract assistance provided in this section and in section 6A, or shall otherwise structure the debt service costs on loans and other forms of financial assistance made by the trust, 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 equivalent to a grant of 25 per cent of the eligible costs on the water pollution abatement project financed by the loan or other financial assistance. Notwithstanding the foregoing but subject to the limit on contract assistance provided in this section, all permanent loans and other forms of financial assistance to finance costs of water pollution abatement projects for which the trust shall execute and deliver loan agreements on and after October 1, 1995 shall provide a subsidy or other assistance equivalent to a grant of 50 per cent of the eligible costs of the project financed thereby. Notwithstanding the foregoing but subject to the limit on contract assistance provided in this section, all permanent loans and other forms of financial assistance made by the trust to finance the costs of water pollution abatement projects on the department’s intended use plan for calendar year 2002 and any subsequent calendar year shall provide for a subsidy or other assistance in the payment of debt service thereon 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 2 per cent. To provide for such subsidy or assistance, in addition to the contract assistance provided in section 6A, the state treasurer acting on behalf of the commonwealth shall enter into an agreement with the trust that the commonwealth shall provide contract assistance for debt service obligations on loans and other forms of financial assistance made by the trust up to a maximum amount of $45,000,000 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 there under as security for payment of 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 agree mentor of amounts to be received by the trust under such agreement.