Section 2IIII. (a) There shall be established and set upon the books of the commonwealth a separate fund to be known as the Dam and Seawall Repair or Removal Fund into which shall be deposited amounts credited or transferred to the fund by the general court or any other source including, without limitation, federal grants; loan repayments; investment earnings on monies in the fund; and any other amounts required to be credited to the fund by operation of law, resolution or agreement entered into by the department of conservation and recreation. The fund shall be administered by the secretary of energy and environmental affairs. Monies deposited into the fund that are unexpended at the end of the fiscal year shall not revert to the General Fund and shall be available for expenditure in the subsequent fiscal year.

(b) Amounts credited to the fund shall be used, without further appropriation, to provide grants or loans to local governmental bodies, charitable organizations and private dam owners to finance or refinance costs of coastal and inland waterway infrastructure inspection, repair and removal projects including, but not limited to, projects related to dams, seawalls, jetties, revetments, retaining walls, levies and other means of flood control; provided, however, that 50 per cent of the total funds expended shall be on projects related to dams and 50 per cent of the total funds expended shall be on infrastructure projects related to other means of flood or wave control including, but not limited to, seawalls, jetties, revetments, retaining walls and levies. Grants from the fund shall only be available to local government bodies and charitable organizations. For the purposes of this section, a local governmental body shall include a town, city, district, commission, board and any regional local governmental unit.

(c) On or before September 1 of each year, a local governmental body, charitable organization or private dam owner may apply to the secretary of energy and environmental affairs for assistance in financing the cost of a coastal or inland waterway infrastructure project. The secretary shall promulgate rules and regulations for the administration and implementation of this section including, but not limited to, a priority system for the approval of projects; provided, however, that priority shall be given to projects that are owned or operated by cities, towns and charitable organizations which are tax-exempt; and (i) have been classified by the department of conservation and recreation as a high hazard or significant hazard dam; (ii) have been designated by the office of coastal zone management as a critical or poor seawall; or (iii) have been identified by the United States Army Corps of Engineers as requiring imminent infrastructure improvement.