SECTION 60. Massachusetts office of business development; loans for environmental response actions necessary for redevelopment of properties for business purposes; redevelopment access to capital fund

(a) For the purposes of this section and section 61 the following terms shall, unless the context clearly requires otherwise, have the following meaning:

''Agency'', the Massachusetts office of business development, or its successor, or its designated agent.

''Borrower'', any business or governmental subdivision of the commonwealth that receives a loan with respect to which a reserve is created in accordance with this section.

''Business'', the carrying on of any business activity in the commonwealth for profit, or not for profit as specified under chapter 180, whether as a corporation, partnership, limited liability company, trust, sole proprietorship, or otherwise.

''Default'', a failure of a borrower to meet the obligations of a loan agreement as a result of the discovery of unanticipated environmental response costs, provided that a default shall not exist where the agency determines that there are program resources available for a project that are adequate to cover said unanticipated environmental costs and that a project would continue to be economically viable with the expenditure of such resources.

''Environmental contamination'', oil or hazardous material, as defined in section 2 of chapter 21E that is released on one or more properties located within the commonwealth.

''Environmental response action'', an action to assess, contain or remove, as those terms are defined in section 2 of chapter 21E, oil or hazardous material, in compliance with the requirements of said chapter 21E and the regulations promulgated pursuant thereto.

''Financial institution'', any bank, as defined in section 1 of chapter 167 or any national banking association, federal savings and loan association or federal savings bank or any other financial institution authorized to make loans in the commonwealth and approved by the agency for the purposes of this program.

''Fund'', Redevelopment Access to Capital Fund, established pursuant to subsection (i) and any earnings derived therefrom, held by the agency or its agent for the implementation and administration of the program.

''Loan'', without limitation, a conventional loan, a sale and lease back, a financial lease, a conditional sale or any other arrangement that is in the nature of a loan and with respect to which a reserve is created in accordance with this section.

''Participating financial institution'', any financial institution participating in the program established by this section.

''Program'', the redevelopment access to capital program.

''Site'', a place or area where oil or hazardous material has been released, as further defined in section 2 of chapter 21E.

''Unanticipated environmental costs'', new environmental costs that were not known or anticipated at the time of originating a loan to a borrower pursuant to this section, including but not limited to environmental response action costs or costs that result from a change in state or federal rules or regulations.

(b) A participating financial institution may originate a loan to a borrower pursuant to the program to be used within the commonwealth exclusively for environmental response actions necessary for the redevelopment of one or more properties for business purposes. Prior to the origination of such loan the agency shall determine that the loan to the borrower is not otherwise available on reasonable terms from private sources or other state, federal, or local programs. At the time of making such loan to a borrower, the participating financial institution shall place a specified amount into the fund in accordance with the agreement described in subsection (k). The participating financial institution may obtain all or a portion of the specified amount from its own funds, or as payment from the borrower, or may advance the specified amount to the borrower as part of the loan.

(c) At the time of making such loan to a borrower, the participating financial institution shall obtain from said borrower an amount equal to the amount specified by the agency in accordance with the agreement described in subsection (k) and shall place such specified amount into said fund. The participating financial institution may obtain all or a portion of the specified amount as payment from the borrower or may advance the specified amount to the borrower as part of the loan.

(d) After such loan to a borrower has been made, the participating financial institution shall certify to the agency, in such fashion and with such supporting information as the agency shall prescribe, that it has made such loan and has placed the specified amount required pursuant to subsection (b) and the equal specified amount required of the borrower pursuant to subsection (c) into said fund.

(e) The agency shall, after a certification is provided pursuant to paragraph (d), transfer to the fund an amount equal to the total of the specified amounts of the participating financial institution and the borrower or such additional amount, as determined by the agency.

(f) The agency may enter into contracts to insure borrowers against unanticipated environmental costs and defaults. Proceeds of such insurance may be used to pay for such unanticipated environmental costs or to pay for loan losses pursuant to subsection (h) and in accordance with the agreement described in subsection (k). The agency may use monies from the fund to purchase such insurance policies and pay deductibles for such insurance policies. The agency may require the participating financial institution to require a borrower to pay a portion of the unanticipated environmental costs, the required amount to be determined pursuant to the agreement described in said subsection (k).

(g) Upon obtaining knowledge that the borrower has incurred or will incur unanticipated environmental costs that will result in a cost overrun, the borrower shall notify the participating financial institution and the participating financial institution shall notify the agency of the anticipated amount and the reasons for the cost overrun.

(h) In the event unanticipated environmental response costs arise, the financial institution, subject to the agreement executed pursuant to subsection (f), may in its discretion and with the concurrence of the agency, draw upon the fund or access available insurance benefits, minus applicable deductions, to pay such costs. In the event the participating financial institution determines that there is a default on a loan made pursuant to this program, the financial institution, with the concurrence of the agency, may draw upon the fund or insurance to satisfy the loan. No payments from insurance or from the fund for unanticipated environmental response costs or for default loan losses shall be paid until all funds originally allocated to remediation have been spent. The agency may recover funds disbursed pursuant to this program through subrogation and may place a lien on the land remediated with fund assets, but may not commence or cause another to commence a foreclosure procedure.

(i) There is hereby established within the agency the Redevelopment Access to Capital Fund which shall be considered an expendable trust fund on the books of the commonwealth and, to which shall be credited monies contributed by the commonwealth, the borrower, and participating financial institutions pursuant to this section including any appropriations or other monies authorized by the general court and specifically designated to be credited to said fund and any grants, gifts or any other monies directed to the fund. All monies credited under this subsection shall remain in said Redevelopment Access to Capital Fund, not subject to appropriation, to meet the obligations of the program set forth in this section. The agency shall not utilize said monies for any purpose other than the redevelopment access to capital fund as established herein. Deposits to the fund shall be made in accordance with section 34 of chapter 29 in such manner as will secure the highest interest rate available consistent with safety of the fund and with the requirement that all amounts on deposit be available for immediate withdrawal at any time. The fund shall be expended only for the purposes of this section at the direction of the agency and any unexpended balances shall be redeposited, as herein provided, for future use consistent with this section. All earnings or interest on said fund account shall be added to the principal of said fund account and held as additional funds for the program, except as provided in subsection (j).

(j) The agency may require at any time and from time to time that in accordance with the provisions of paragraphs (a) and (c) of section 61, a portion of the accrued earnings or interest remaining in said fund account be paid to the agency to be used to defray the costs of administering the program.

(k) Any financial institution desiring to become a participating financial institution shall execute an agreement in such form as the agency may prescribe, which agreement shall contain the terms and provisions set forth in subsections (a) to (j), inclusive, and such other terms and provisions as the agency may deem necessary or appropriate.