Section 3. (a) The department may provide financial assistance to public bodies for up to one hundred per cent of the costs of the clean up of existing and potential, as determined by the department, drinking water supplies that have been contaminated by leachate from landfills or for the costs of containment projects at landfills when leachate contamination exists or poses an imminent threat to an existing or a potential, as determined by the department, source of drinking water. Said costs may include study and assessment of the extent and nature of the actual or potential water supply contamination caused by the landfill and the costs of assessments to plan, manage, and direct containment and clean up of such contamination. Ninety per cent of the financial assistance provided to any one recipient pursuant to this subsection shall be in the form of a grant; ten per cent of such assistance shall be in the form of a no interest loan. In establishing priorities for making financial assistance available for the assessment and clean up of contaminated drinking water supplies or containment projects pursuant to this section, the department shall consider the extent to which such contamination poses a threat to a public resource or to the public health and safety. For the limited purposes of awarding financial assistance for the clean up of contaminated water supplies, such clean up shall be declared a public purpose.

(b)(1) The department may provide financial assistance to public bodies for up to ninety per cent of the costs of closure of an existing landfill or other solid waste facility; provided, however, that such closure project is related to an applicant's subsequent disposal of solid waste in a landfill, resource recovery facility or recycling facility involved in the general disposal of solid waste on a regional basis. Eighty per cent of the financial assistance provided to any one recipient pursuant to this subsection shall be in the form of a no interest loan; twenty per cent of such assistance shall be in the form of a grant.

(2) The department may provide loans with interest to public bodies for up to ninety per cent of the costs associated with containment or closure of any landfill or other solid waste facility.

(3) The secretary of the executive office of environmental affairs, in consultation with the division of conservation services and the department, shall establish and implement a landfill closure and conversion grant program. Eligible applicants shall include any municipality which owns and operates a solid waste landfill which is scheduled to close, cease operation, and be capped pursuant to the fifteenth paragraph of section one hundred and fifty A of chapter one hundred and eleven; provided, however, that in order to be eligible to receive assistance pursuant to this section the municipality shall, at the time of applying, recycle at least thirty-five percent of their solid waste. Eligible expenses of any such project shall include ordinary and necessary costs associated with eligible projects, including, but not limited to, site design planning, surveys, construction, reconstruction, alteration, and improvement of the property relative to the creation of a recreational facility upon the site. Grants provided by said secretary pursuant to this section shall be made in accordance with procedures and a priority system established by said secretary, in consultation with said division of conservation services and the department, pursuant to rules and regulations adopted pursuant to chapter thirty A after public hearing.

(c)(1) The department may provide financial assistance to public bodies for up to ninety per cent of the costs of construction of landfills or other solid waste facilities which serve as regional facilities and which accept both residential and commercial waste. Said costs may include the costs of any necessary containment done in conjunction with the construction. Sixty per cent of the financial assistance provided to any one recipient pursuant to this subsection shall be in the form of a no interest loan; forty per cent of such assistance shall be in the form of a grant.

(2) The department may provide financial assistance to public bodies for up to ninety per cent of the costs of construction of landfills or other solid waste facilities which serve as regional facilities but which accept only residential waste. Said costs may include the costs of any necessary containment done in conjunction with the construction. Seventy per cent of the financial assistance provided to any one recipient pursuant to this subsection shall be in the form of a no interest loan; thirty per cent of such assistance shall be in the form of a grant.

(d) The department shall reimburse public bodies that own and operate refuse burning facilities for the cost of emissions testing required by clause (c) of section five.

(e) Loans and grants provided by the department pursuant to this section shall be made in accordance with procedures and a priority system established by the department pursuant to rules and regulations adopted pursuant to chapter thirty A after public hearing. In establishing priorities for making financial assistance available pursuant to this chapter, the department shall consider the following:

(1) the extent to which the applicant's plan involves construction of new landfill or other waste disposal facility capacity which permits the closure of existing landfills or facilities determined by the department to constitute a significant, present or foreseeable threat to the environment;

(2) the extent to which such construction project will provide landfill or other waste disposal facility capacity for the general disposal of solid waste on a regional basis or for regional use in connection with resource recovery or recycling facilities or programs as determined in each such case by the department to be in conformance with its statewide plan prepared under section twenty-one of chapter sixteen;

(3) the extent to which the applicant's plan involves the closure or containment of an existing landfill or other waste disposal facility determined by the department to constitute a significant, present or foreseeable threat to the environment;

(4) the extent to which such a closure project is related to the applicant's subsequent disposal of solid waste in a landfill, resource recovery or recycling facility involved in the general disposal of solid waste on a regional basis or for regional use as determined in each such case by the department to be in conformance with its statewide plan proposed under section twenty-one of chapter sixteen;

(5) whether the landfill or other waste disposal facility construction, containment or closure project as proposed by the applicant is found to be environmentally safe by the department;

(6) the extent to which the applicant or any person whom the applicant proposes to construct or operate the proposed project has complied with existing rules and regulations of the department in relation to the construction or operation of other waste disposal facility landfills, including without limitation rules and regulations related to air and water quality and to the siting of landfills under section one hundred and fifty A of chapter one hundred and eleven. Without limitation of the foregoing, nothing in this section shall be construed to prevent the department from conditioning the provision of financial assistance under this chapter upon the compliance of the applicant or of any other person to be responsible for operation of the facility with existing or amended laws, rules and regulations or policies or procedures of any public body charged with the implementation and enforcement of laws for the protection of the environment;

(7) the extent to which private industry is willing and able to provide facilities or services to municipalities at a total cost less than or equal to the size of the requested financial assistance considering the entire life of the proposed project as defined in section eight of chapter forty-four;

(8) the extent to which the applicant has adopted user fees for municipal solid waste disposal services designed to cover construction and operation costs, prevention of pollution, clean up, repairs, improvements, and closure of disposal facilities;

(9) the extent to which a municipality has planned or implemented a department approved recycling program;

(10) the extent to which a community has planned or implemented a department approved composting program;

(11) the extent to which a municipality has planned or implemented a department approved household hazardous waste separation program; and

(12) the extent to which any owner or operator of a landfill facility refuses to allow a small business interest engaged in collecting solid waste to unload or dispose of solid waste generated within the city, town or district in a landfill or other solid waste facility.

(f) Eligible projects for which money may be distributed pursuant to this section shall be those approved by the department on or after January first, nineteen hundred and eighty-six.

(g) Every public body shall, as a condition of receiving financial assistance under this chapter, except assistance under subsection (a) of section three, have implemented a plan providing for the periodic collection of household hazardous wastes and a plan for the recycling or composting of not less than twenty per cent of the solid waste generated within the area served by such public body. The department may modify the requirements of this subsection upon a determination that it would not be feasible for a public body to meet those requirements.

(h) Public bodies which apply for financial assistance under this chapter shall submit an application and comply with such other requirements as the department shall prescribe. Such applications shall, to the extent considered necessary by the department:

(1) describe how the applicant's project relates to the statewide plan adopted by the department pursuant to section twenty-one of chapter sixteen;

(2) set forth plans and designs for the applicant's project and describe the specific steps which the applicant will take to prevent or minimize damage to the environment which may otherwise be associated with the construction or closure of a landfill or other solid waste facility;

(3) describe the means by which the applicant proposes to finance costs of construction of facilities which will not be funded with financial assistance provided hereunder, and how the applicant proposes to finance operating expenses over the projected useful life of the facility.

(i) No application for financial assistance under this chapter shall be approved by the department unless (1) such applicant has provided such information as is reasonably available to the applicant in connection with the preparation or revision, as the case may be, of the statewide plan by the department pursuant to section twenty-one of chapter sixteen, and (2) the applicant's proposed construction or closure project is in conformance with such statewide plan.

(j) Without limitation of the foregoing, the department may, in furtherance of the purposes of this chapter enter into contracts or agreements with any person including without limitation federal, state or local bodies, and private persons, with respect to any and all matters and on terms and conditions which the department determines to be necessary or convenient to the exercise and performance of its powers and responsibilities under this chapter.

(k) For the purposes of this section, the terms ''regional'' and ''regional basis'' shall be deemed to include facilities servicing a county, a municipality which has a population in excess of three hundred thousand or two or more municipalities.

(l) Any loan authorized pursuant to this section shall be repaid under such terms as the secretary of administration shall establish; provided, however, that, unless such loans are specifically designated as interest free, interest shall be charged at a rate on such loans which is no less than the rate at which the commonwealth sold the bonds or notes which have been authorized to provide the monies for such loan; provided, further, that in the event that no notes or bonds are sold prior to the execution of such loans, said secretary shall make an estimate of the likely interest rate based on prevailing bond market conditions; and provided, further, that the term of years of any such loan shall be established such that it does not exceed the term of years for the general obligation bonds the proceeds of which are utilized to fund such loan program. In the event that any city, town, or district defaults on any such loan, said secretary is hereby authorized and directed to recover the amounts owed under the terms of such loan by reducing the amounts of any distribution by the commonwealth of financial assistance for any fiscal year or fiscal years as appearing on the notification to the assessors required by section twenty-five A of chapter fifty-eight which would otherwise be distributed to such city, town, or district; provided, however, that in the event that a district is found to be in default, said secretary is authorized to proportionately reduce such financial assistance to the member cities and towns in such district. All monies paid to the commonwealth in repayment of such loans shall be deposited into the Local Aid Fund.