§ 11 — Default on loan; remedies

Section 11. (a) In addition to other remedies of the trust under any loan agreement, if any local government unit other than a regional local governmental unit shall fail to pay to the trust when due and after demand any principal, interest or other charges payable under a loan or loan agreement, the board after applying to such payment amounts held in the fund pursuant to section six for the account of such local governmental unit, may certify to the state treasurer the amount owing to the trust by said local governmental unit. The state treasurer shall promptly pay over to the trust for deposit in the fund without further appropriation any local aid distributions otherwise certified to the state treasurer as payable to the local governmental unit. Notwithstanding the foregoing, if the local government unit is a regional local governmental unit, and if the board shall have determined (i) that the failure of the regional local government unit to pay to the trust the amount then payable is due to a failure by a city or town or other service recipient of the regional local governmental unit to pay to the regional local governmental unit any assessment or other charge attributable to said loan and (ii) that the regional local governmental unit has failed or refused after demand to exercise the remedies provided in paragraph (d) of section ten of this chapter or any similar provision of law, the board, after applying to such payment amounts held in the fund pursuant to section six for the account of such city, town or other service recipient, may certify to the state treasurer the amount owing the regional governmental unit by that city, town or other service recipient and the same payment procedures shall apply. If the board shall determine that no city, town or other service recipient is in default to the regional local governmental unit, after application by the board to such payment of amounts held in the fund pursuant to section six for the account of the regional local governmental unit pro rata in proportion to the service provided each city, town or other service recipient therein, the state treasurer, under the same procedures, shall pay to the trust any local aid distribution payable to each city and town which is, or the agency, commission or other appointed body of which is, a member or other service recipient of the regional local governmental unit, pro rata in proportion to the service provided such cities and towns. If a local governmental unit shall fail to pay to the trust any amount payable under a loan or loan agreement and shall also fail to pay any amount due to a regional local governmental unit of which it is a member or service recipient on account of any assessment thereon, local aid distributions available to remedy such failures under this paragraph and under paragraph (d) of section ten of this chapter or any similar provision of law shall be paid to the trust and the regional local governmental unit pro rata in proportion to the amounts due and unpaid. If a governmental unit or a member or other service recipient of a regional local governmental unit is an agency, commission or instrumentality of a city or town or its governing body is appointed by the governing body or chief executive officer of a city or town, payments under this section shall be made from any local aid distributions payable to such city or town. Payment by the state treasurer under this section shall continue to be made until any deficiency in the local governmental unit's payment to the trust shall have been offset by the payments from the state treasurer. In the event of a dispute between any city or town and the regional local governmental unit concerning the amount to be paid to the regional local government unit by any city or town said dispute shall be arbitrated by an appeals board consisting of the commissioner of the department of revenue or his designee, the commissioner of the department of environmental protection or his designee, and a representative nominated by the Massachusetts Municipal Association. Any amount paid to the trust by the state treasurer under this section which is later determined, upon audit, to be in excess of the actual amount due the trust shall, upon demand of the local governmental unit or city or town, be repaid from the fund to the state treasurer.(b) The trust may also recover from a local governmental unit in an action in superior court any amount due the trust together with any other actual damages the board shall have sustained from the failure or refusal of the local governmental unit to make payments owing to the trust.