Section 27A. (a) The department of environmental protection shall cooperate with the board of trustees of the Massachusetts Clean Water Trust established by chapter twenty-nine C to achieve the water pollution abatement objectives of the commonwealth intended to be advanced by the trust. As a prior necessary condition to the award of a loan by the trust to a local governmental unit to finance costs of a water pollution abatement project, the board shall receive a certificate issued by the department approving the project and certifying those costs of the project determined by the department to be eligible for financial assistance pursuant to section 6 of chapter 29C. The department may approve a loan for costs of a project not eligible for financial assistance pursuant to said section 6; provided, however, that no federal capitalization grants or associated matching grants from the commonwealth shall be applied to fund or secure a loan for any such costs unless otherwise approved by the board. Any project approval by the department may require that financial assistance provided by the trust to a regional local governmental unit shall be allocated and credited to each city or town, or board, commission or agency thereof, which is a member or other service recipient of the regional local governmental unit in accordance with regulations establishing a classification system for project approvals promulgated by the department pursuant to this section. Any project approval by the department may also contain such other conditions and limitations as the division shall deem necessary to implement its powers and prerogatives under this chapter.

(b) Any water pollution abatement project or part thereof shall be eligible for loan approval if included on the priority lists pursuant to the priority systems under section thirty A, thirty-three and the last paragraph of section twelve of chapter two hundred and eighty-six of the acts of nineteen hundred and eighty-two, for commonwealth fiscal year nineteen hundred and ninety-one or any later commonwealth fiscal year. The department, by regulation, may adopt such modifications to the priority systems and the priority lists for purposes of this section, including limitations on the amount of total financial assistance that a local governmental unit is authorized to receive in any fiscal year, as shall be consistent with the loan programs of the trust and necessary to comply with the requirements of law.

(c) The department shall cooperate with the trust in the development of capitalization grant agreements and other agreements for federal capitalization grants under Title VI of the Clean Water Act and may enter into such agreements and other undertakings with the trust and applicable federal agencies as necessary to secure to the commonwealth the benefits of Title VI of the Clean Water Act. The trust and department shall enter into an operating agreement for implementing their respective rights, duties and obligations with respect to the approval of water pollution abatement projects and the costs thereof and the award of loans and grants to finance such costs under chapter twenty-nine C, this section and section thirty-three E. The operating agreement shall provide that the board shall award a loan to a local governmental unit to finance all eligible costs of any water pollution abatement project approved by the department and not otherwise provided for by a grant awarded by the department.

(d) The department shall have and shall exercise all powers and duties otherwise conferred upon the division by law with respect to the regulation and supervision of water pollution control abatement projects in the commonwealth, which powers and duties shall in no respect be diminished by this section or chapter twenty-nine C. Regulations, procedures and guidelines shall be promulgated by the department for the efficient administration of its regulatory and supervisory powers in respect of the approvals and prerogatives reserved to the department concerning water pollution abatement projects for which loans are requested from the trust. Such regulations, procedures and guidelines shall include, without limitation, (1) provisions for priority systems, priority lists and the determination of eligible project costs; (2) establishment of a classification system taking into account the financial capability of the respective responsible local governmental units and, in the case of regional local governmental units, each city, town or other service recipient thereof; (3) in cooperation with the secretary of environmental affairs, such modifications to rules and regulations under sections sixty-two to sixty-two H, inclusive, of chapter thirty as may be necessary to comply with federal law applicable to projects and loan approvals; and, (4) notwithstanding any provision of special law to the contrary, provisions for compliance by local governmental units with regulatory requirements in the construction and operation of projects. Regulations adopted pursuant to clause (4) shall include, without limitation, requirements that (a) applicants for such assistance must demonstrate that these projects are consistent with existing state, regional and local water resource and wastewater planning requirements including but not limited to (1) river basin water quality plans pursuant to section 303(e) Federal Clean Water Act; (2) nonpoint source management plans pursuant to section 319, Federal Clean Water Act; (3) estuaries management plans pursuant to section 320 of the Federal Clean Water Act; (4) local water resource management plans pursuant to regulations of the water resources commission; (5) water emergency planning pursuant to chapter twenty-one G. Applicants shall certify that land use and other controls in place are consistent with the wastewater system service populations projected in the applicants facilities plan. Failure by any public entity to implement and conform with the land use and other controls upon which such certification is based and over which it has direct authority, including without limitation issuance of permits or approvals not in conformity with such controls, failure to enforce such controls, or revision of such controls without making appropriate compensation for any increased wastewater flows, shall be violations of this chapter, and the department may take enforcement action pursuant to sections forty-two, forty-four, and forty-six. In promulgating regulations under this section and approving any loan by the trust, the department shall also take into account any financial assistance provided by the local governmental unit under section thirty-three E and the regulations of the department thereunder. Regulations, procedures and guidelines respecting the financial capability of responsible local governmental units, and cities, towns and other service recipients thereof, shall be adopted by the department jointly with the secretary of administration and finance, in consultation with the Massachusetts Municipal Association. All such rules, regulations, and guidelines shall be adopted in full compliance with chapter thirty A.

(e) The department shall utilize the priority systems and priority lists as the basis for selecting projects for eligibility for loan approval. Regulations for determination of eligible project costs shall be used for purposes of approval of project cost eligibility for loans by the trust.

(f) The department may by regulation establish different levels of subsidy available for projects eligible under each of the priority list.

(g) All terms defined in chapter twenty-nine C shall have the same meanings in this section as are defined in said chapter twenty-nine C, unless the context otherwise requires.