1. (a) The authority may make grants or loans or provide other financial assistance from the supplemental fund for the benefit of a participant under the following conditions:

   1. (1) A grant, loan, or other financial assistance may be used:

      1. (A) for planning, designing, acquiring, constructing, renovating, improving, or expanding public water systems, and other activities necessary or convenient to complete these tasks;

      2. (B) to:

         1. (i) establish guaranties, reserves, or sinking funds, including guaranties, reserves, or sinking funds to secure and pay, in whole or in part, loans or other financial assistance made from sources other than the fund (including financial institutions) for a purpose permitted by clause (A); or
         2. (ii) provide interest subsidies;
      3. (C) to pay financing charges, including interest on the loan during construction and for a reasonable period after the completion of construction; or

      4. (D) to pay the following:

         1. (i) Consultant, advisory, and legal fees.
         2. (ii) Other costs or expenses necessary or incident to the grant, loan, or other financial assistance or the administration of the supplemental fund or the supplemental program.
   2. (2) The authority must establish the terms and conditions that the authority considers necessary or convenient to make grants or loans or provide other financial assistance under this chapter.

2. (b) In addition to its powers under subsection (a), the authority may also make grants or loans or provide other financial assistance from the supplemental fund to or for the benefit of a participant under the following conditions:

   1. (1) A grant, loan, or other financial assistance may be used:

      1. (A) for planning, designing, acquiring, constructing, renovating, improving, or expanding wastewater or storm water collection and treatment systems, and other activities necessary or convenient to complete these tasks;

      2. (B) to:

         1. (i) establish guaranties, reserves, or sinking funds, including guaranties, reserves, or sinking funds to secure and pay, in whole or in part, loans or other financial assistance made from sources other than the fund (including financial institutions) for a purpose permitted by clause (A); or
         2. (ii) provide interest subsidies;
      3. (C) to pay financing charges, including interest on the loan during construction and for a reasonable period after the completion of construction; or

      4. (D) to pay the following:

         1. (i) Consultant, advisory, and legal fees.
         2. (ii) Other costs or expenses necessary or incident to the grant, loan, or other financial assistance or the administration of the supplemental fund or the supplemental program.

   2. (2) A grant may be used for tasks associated with the development and preparation of:

      1. (A) long term control plans;
      2. (B) use attainability analyses; and
      3. (C) storm water management programs.
   3. (3) The authority must establish the terms and conditions that the authority considers necessary or convenient to make grants or loans or provide other financial assistance under this chapter.

As added by P.L.126-1997, SEC.30. Amended by P.L.132-1999, SEC.28; P.L.55-2001, SEC.3; P.L.235-2005, SEC.167.