SECTION 27. Emerging Technology Fund

(a) There shall be within the agency an Emerging Technology Fund, to which shall be credited appropriations, bond proceeds or other monies authorized by the general court and specifically designated to be credited to the fund, such additional funds as are subject to the direction and control of the agency, pension funds, federal grants or loans or private investment capital which may properly be applied in furtherance of the objectives of the fund, proceeds from the sale of qualified investments secured or held by the fund, fees and charges imposed relative to the making of qualified investments, as defined and approved under rules approved by the advisory committee created in section 28 for the fund, secured or held by the fund and other monies which may be available to the agency or the advisory committee for the purposes of the fund from another source or sources. The agency shall hold the fund in an account or accounts separate from other funds or accounts and shall manage the fund on behalf of the advisory committee, under rules and policies established by the advisory committee.

(b) The agency, on behalf of the advisory committee, shall invest and reinvest the fund and the income of the fund as follows:

(1) in the making of qualified investments, under rules approved by the advisory committee;

(2) in defraying the ordinary and necessary expenses of administration and operation associated with the fund;

(3) in the investment of funds not required for immediate disbursement in the purchase of such securities as may be lawful investments for fiduciaries in the commonwealth;

(4) for the payment of binding obligations associated with such qualified investments which are secured by the fund as the obligations become payable; and

(5) for the payment of principal or interest on qualified investments secured by the fund or the payment of a redemption premium required to be paid when such qualified investments are redeemed prior to maturity; provided, however, that monies in the fund shall not be withdrawn at any time in such an amount as would reduce the amount of the fund to less than the minimum requirement established jointly by the agency and advisory committee, except for the purpose of paying binding obligations associated with qualified investments which are secured by the fund as the obligations become payable.

(c) The fund shall be held and applied by the agency, on behalf of the advisory committee, to make qualified investments designed to advance the following public purposes:

(1) to stimulate increased financing for new, renovated or improved manufacturing, research and development and related facilities and financing for the operations of emerging technology companies in the commonwealth by leveraging private financing for highly, productive state-of-the-art facilities or for the operations of emerging technology companies, which will lead to increased and more rewarding employment opportunities in the commonwealth by providing financing related to such facilities including, without limitation, financing of the construction or expansion of such facilities, including specialized real estate improvements and specialized equipment for those facilities; and financing for the operations of emerging technology companies; and

(2) to make matching grants to universities, colleges, public instrumentalities, companies and other entities to induce the federal government, industry and other grant-funding sources to fund advanced research and development activities in new and emerging technologies and new application of existing technologies in the commonwealth, so as to serve to increase and strengthen the commercial and industrial base of the commonwealth and the economic development and employment opportunities related to the commercial and industrial base;

(3) to provide bridge financing to universities, colleges, public instrumentalities, companies and other entities in anticipation of the receipt of grants of the type described in clause (2) awarded or to be awarded by the federal government, industry or other sources;

(4) to provide low or no interest equipment loans targeted to companies within the defense technology and homeland security sector particularly those that are seeking to become more competitive against out-of-state companies;

(5) to make grants to the Massachusetts Technology Transfer Center, established by section 45 of chapter 75, to fund activities that facilitate the transfer of technology from the commonwealth's research institutions to the commonwealth's emerging technology industries, for productive use by such industries and to make targeted investments in proof of concept funding for emerging technologies; and

(6) to provide matching grants in the field of marine science technology for companies in the commonwealth that receive small business innovation research or small business technology transfer grants from the small business administration. The matching award amount shall be the lesser of $20,000 or 15 per cent of the small business innovation research or small business technology transfer grant. There shall be a maximum of $60,000 available per company, including affiliates, per calendar year allocated on a competitive basis, contingent upon the availability of funds. The matching funds shall be used for product development and commercialization.

The agency shall make no such qualified investment under clause (1) of subsection (b) unless the advisory committee finds that, to the extent possible, said qualified investment is such that a definite benefit to the economy of the commonwealth may reasonably be expected as a result. In addition, the agency shall make no such qualified investment under said clause (1) of said subsection (b) unless such qualified investment complies with rules approved by the advisory committee.

Said rules shall define which industries within the commonwealth shall be considered emerging technology industries for purposes of this section; provided, however, that ''emerging technology industries'' shall include industries employing new or state-of-the-art technology in biotechnology, marine science technology, pharmaceuticals, clean and renewable energy technology; vehicles powered by clean and renewable energy, defense and homeland security-related technologies, advanced materials, electronics, nanotechnology, environmental, medical device, information technology, plastics and polymers, telecommunications industries involved in the research and development of state-of-the-art medication delivery devices or any other technological field or industry which the advisory committee has classified or shall classify as an emerging technology. Said rules shall also set the terms and conditions for investments which are to constitute qualified investments, which may include, without limitation, loans, working capital and contract based loans, guarantees, loan insurance or reinsurance, equity investments, grants made only under clauses (2) and (5) of subsection (c), or other financing or credit enhancing devices, as made by the agency directly or on its own behalf or in conjunction with other public instrumentalities, or private institutions, or the federal government; provided, however, that said rules shall provide that each such qualified investment made under clause (1) of said subsection (c) shall involve a transaction with the participation of at least 2 at-risk private parties.

Said rules shall, in addition, set forth the terms, procedures, standards and conditions which the agency shall employ to identify qualified applications, process applications, make investment determinations, safeguard the fund, advance the objective of increasing employment opportunities, oversee the progress of qualified investments and secure the participation of other public instrumentalities, private institutions or the federal government in such qualified investments; provided, however, that said rules shall provide that each recipient of a qualified investment shall be required to pay a fee as a condition of such receipt, which fee may take the form of points, an interest rate premium or a contribution of warrants or other form of equity or consideration to the fund as prescribed by the advisory committee; and provided, further, that said rules shall provide for negotiated agreements between the agency and each recipient of a qualified investment regarding the terms and conditions by which the fund's support of a recipient could be reduced or withdrawn.

(d) The agency may solicit investments by private institutions or investors in the activities of the fund and may reach agreements with such private institutions or investors regarding the terms of such investments including, without limitation, the rights of such investors to participate in the income or appropriation of the fund. To help secure investments by private institutions or investors in the activities of the fund, the advisory committee may develop a proposal relative to the creation of a separate investment entity which would allow for the commingling of the resources of the fund with the maximum participation by such private institutions or investors in a manner which is consistent with the public purpose of the fund and under terms and conditions calculated to protect and preserve the assets of the fund; provided, however, that if the creation or operation of such a separate entity as proposed by the advisory committee would require additional or clarifying amendments to this chapter, said proposal shall include proposed statutory language.

(e) Copies of the approved rules and modifications to the rules shall be submitted to the chairs of the house and senate committees on ways and means and the joint committee on economic development and emerging technologies and the clerks of the house of representatives and the senate.

(f) Qualified investment transactions undertaken by the agency on behalf of the advisory committee under this section shall not, except as specified in this section, be subject to chapter 175, and shall be payable solely from the fund and shall not constitute a debt or pledge of the faith and credit of the commonwealth, the agency or any subdivision of the commonwealth.

(g) The agency, on behalf of the advisory committee, shall not make an expenditure from or commitment of the assets of the fund, including, without limitation, the making of qualified investments secured by the fund, if making such a qualified investment would reduce the amount of the fund below the minimum requirement established by law, unless the agency, at the time of making of such qualified investment, deposits in the fund from the proceeds of that qualified investment or from any fees and charges imposed relative to the making of qualified investments, or otherwise, an amount which, together with the amount in the fund, shall not be less than the minimum requirement; provided, however, that at no time shall the minimum requirement of the fund be less than the maximum amount of principal and interest becoming due in the current and succeeding fiscal year of the agency on all outstanding bonds and other obligations which are secured by the fund or such greater amount as may be set forth in the rules governing the fund.