Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:

SECTION 1. Notwithstanding the provisions of any general or special law to the contrary, the town of Sterling is hereby authorized to establish and maintain a special fund to be known as the Capital Investment Fund.

Said town may appropriate to said fund by a majority vote of an annual or special town meeting in any year an amount not to exceed 10 per cent of the amount raised on the preceding year by taxation of real estate and tangible personal property. The aggregate amount of the Capital Investment Fund at any one time shall not exceed 10 per cent of the equalized valuation of the town of Sterling as defined in section 1 of chapter 44 of the General Laws. Any interest shall be added to and become part of the fund.

The treasurer of said town shall be the custodian of the fund and may deposit the proceeds in national banks or invest the proceeds by deposit in savings banks, co-operative banks or trust companies organized under the laws of the commonwealth or invest the same in such securities as are legal for the investment of savings banks under the laws of the commonwealth or in federal savings and loan associations situated in the commonwealth. These funds shall be protected by an insured investment vehicle.

The Capital Investment Fund may be appropriated at any annual town meeting or a special meeting by a two-thirds vote. Said fund may be appropriated for any purpose for which said town would be authorized to borrow money under section 7 or 8 of chapter 44 of the General Laws, and to pay the debt service on any project, including but not limited to, the payment of capital improvement assessments by regional school districts. Any proposal for appropriation from said fund shall be submitted to the capital budget committee established under section 2 for their review at least one month prior to the town meeting at which such appropriation is to be considered. The committee may make its recommendation at said town meeting.

SECTION 2. There shall be a capital budget committee of the town of Sterling consisting of seven voters of said town four of whom shall be members of the finance committee of said town. Said committee shall choose its own officers, set its own rules and shall serve without pay except the clerk who may receive reasonable compensation for his services. The clerk of said committee may or may not be a member of the committee.

Said committee shall be appointed jointly by the moderator, board of selectmen and finance committee, each entity having one vote. When the committee is first established, the terms of the members shall be for one, two and three years and so arranged that the terms of approximately one-third of the members shall expire each year and their successors shall be appointed for terms of three years. Said committee shall meet at the call of the moderator of said town or its chairman and shall choose its chairman and clerk. Jointly the moderator, board of selectmen and finance committee each having only one vote shall forthwith fill any vacancy and said appointee shall serve for the unexpired term of office.

Said committee shall consider matters relating to appropriations from the Capital Investment Fund and may but shall not be required to make recommendation to the town of Sterling or to any board, committee or official thereof, relative to such matters and establish policies relative to the funding of capital projects of the town and set priorities and schedules for such capital projects.