(b)

1. (1) The department shall expend the moneys transferred pursuant to subdivision (c) of Section 42996, and any additional moneys appropriated by the Legislature for the purposes of this subdivision, to provide loans to reduce the emissions of greenhouse gases by promoting in-state development of infrastructure or other projects to reduce organic waste or process organic and other recyclable materials into new value-added products. The moneys shall be expended consistent with the requirements of Article 9.7 (commencing with Section 16428.8) of Chapter 2 of Part 2 of Division 4 of Title 2 of the Government Code and Chapter 4.1 (commencing with Section 39710) of Part 2 of Division 26 of the Health and Safety Code.

2. (2) For a loan made pursuant to this subdivision, the department shall expend the moneys in the loan fund to provide loans to public and private entities for in-state infrastructure projects or other projects that reduce the emissions of greenhouse gases by any of the following:

   1. (A) Organics composting.
   2. (B) Organics in-vessel digestion.
   3. (C) Recyclable material manufacturing.
   4. (D) Activities that expand and improve waste diversion and recycling, including, but not limited to, food waste prevention.

3. (3) For purposes of this subdivision, eligible infrastructure projects that reduce greenhouse gas emissions include, but are not limited to, any of the following:

   1. (A) Capital investments in new facilities and increased throughput at existing facilities for activities, such as converting windrow composting to aerated-static-pile composting to use food waste as feedstock.
   2. (B) Designing and constructing organics in-vessel digestion facilities to produce products, such as biofuels, bioenergy, and soil amendments.
   3. (C) Designing and constructing facilities for processing recyclable materials.

4. (4) For a loan made pursuant to this subdivision, both of the following apply:

   1. (A) The terms and conditions of an approved loan shall be specified in a loan agreement and related documents between the borrower and the department. These terms and conditions shall include reporting requirements that include, but are not limited to, reporting the information specified in Section 16428.9 of the Government Code.
   2. (B) The department shall approve only those loan applications that demonstrate the applicant’s ability to repay the loan.
5. (5) The department may establish additional requirements that it determines to be necessary or useful to achieve the revolving loan program’s objectives, including, but not limited to, ensuring repayment ability.