(a) There is created within the corporation the Connecticut Works Fund. The state acting through the corporation may provide financial assistance for economic development projects directly or in participation with any other financial institutions, funds or other persons or other sources of financing, public or private, and may enter into any agreements or contracts it deems necessary or convenient in connection therewith. Within the Connecticut Works Fund, a loan subfund is created solely to provide any form of loan or other form of financial assistance as provided in this section except for any guarantee or contract of insurance, and a guarantee subfund is created solely to provide any form of guarantee or contract of insurance as provided in this section. No financial assistance, nor any commitment to provide financial assistance, shall be provided or entered into by the corporation pursuant to sections 32-23gg to 32-23ll, inclusive, which would cause the aggregate amount of all such financial assistance and commitments then outstanding to exceed the sum of the amounts available in the applicable subfund of the Connecticut Works Fund plus the amount of any unpaid grants authorized to be made by the Department of Economic and Community Development to the corporation for deposit in the applicable subfund of the Connecticut Works Fund which remain available for purposes of such subfund pursuant to the bond authorization in § 32-23ll, provided the amount of financial assistance in the form of any guarantee or contract of insurance shall be measured by the portion of unpaid principal which is insured or guaranteed by the corporation. Notwithstanding the above, the aggregate amount of financial assistance in the form of guarantees and contracts of insurance and commitments with respect thereto, calculated as above, may be up to four times the sum of the amounts available in the guarantee subfund of the Connecticut Works Fund plus the amount of any unpaid grants which remain available and are specifically designated by the department for purposes of such subfund pursuant to the bond authorization in § 32-23ll. Payments of insurance premiums, principal, interest or other forms of return on investment received by the corporation shall be deposited in or held on behalf of said fund and shall be either used to provide financial assistance for economic development projects or shall be returned to the state in whole or in part at the discretion of the Secretary of the Office of Policy and Management, pursuant to any such restrictions or financial obligations existing as a result of agreements entered into by the corporation under sections 32-23gg to 32-23ll, inclusive.

(b) The corporation may provide financial assistance in such amounts, in such form and under such terms and conditions as the corporation shall prescribe, in written procedures adopted in accordance with § 1-121. Such procedures shall provide for returns on investment as the corporation deems appropriate to reflect the nature of the risk, provided a single project shall not receive an amount in excess of twenty-five million dollars and shall not be for a term longer than twenty-five years.

(c) In addition to other forms of financial assistance, the corporation may insure or make advance commitments to insure all or any portion of the payments required under any loan, bond or other form of indebtedness for an economic development project upon such terms and conditions as the corporation may establish. Such financial assistance may be in such amounts, including provisions for the payment of fees, expenses or other costs, insurance, payment of taxes and assessments, delinquency charges, default remedies and other matters, as the corporation determines, except that the maximum amount paid by the corporation under any guarantee or insurance agreement for any one project under sections 32-23gg to 32-23ll, inclusive, shall not exceed fifteen million dollars.

(d) The corporation may take all reasonable steps and exercise all reasonable remedies necessary or desirable to protect the obligations or interests of the corporation, including, but not limited to, the purchase or redemption in foreclosure proceedings, bankruptcy proceedings or in other judicial proceedings of any property on which it holds a mortgage or other lien or in which it has an interest, and for such purposes and any other purposes provided in sections 32-23gg to 32-23ll, inclusive, payment may be made from the Connecticut Works Fund upon certification by the chief executive officer that payment is authorized under the provisions of said sections, or other sections of the general statutes, applicable procedures or other programs of the corporation.

(e) Any contract of insurance or guarantee agreement, including advance commitments executed by the chief executive officer, shall be conclusive evidence of eligibility and its validity shall be incontestable in the hands of an approved borrower or the party so insured or guaranteed from the date of execution and delivery of the contract, agreement or commitment, except for fraud and misrepresentation on the part of the borrower and as to commitments, noncompliance with the commitment or any rules, or procedures of the corporation or provisions of sections 32-23gg to 32-23ll, inclusive, in force at the time of issuance of the commitment.

(f) Applicants for financial assistance shall pay the costs the corporation deems reasonable and necessary incurred in processing applications made under this section, including application and commitment fees, closing costs or other costs. In carrying out the provisions of this section, any administrative expenses incurred by the corporation, to the extent not paid by the borrower or from moneys appropriated to the corporation for such purposes, may be paid from the Connecticut Works Fund.

(g) In providing financial assistance under this section, the corporation shall give priority to manufacturing projects and to projects that encourage defense dependent industries to diversify.