(1)(a) The department shall transfer the funds required by RCW 77.60.160
to the appropriate local governments. Pacific and Grays Harbor counties and Puget Sound shall manage their established shellfish—
on-site sewage grant program. The local governments, in consultation with the department of health, shall use the provided funds as grants or loans to individuals for repairing or improving their on-site sewage systems. The grants or loans may be provided only in areas that have the potential to adversely affect water quality in commercial and recreational shellfish growing areas.
(b) A recipient of a grant or loan shall enter into an agreement with the appropriate local government to maintain the improved on-site sewage system according to specifications required by the local government.
(c) The department shall work closely with local governments and it shall be the goal of the department to attain geographic equity between Grays Harbor, Willapa Bay, and Puget Sound when making funds available under this program.
(d) For the purposes of this subsection, "geographic equity" means issuing on-site sewage grants or loans at a level that matches the funds generated from the oyster reserve lands in that area.
(2) In Puget Sound, the local governments shall give first priority to areas that are:
(a) Identified as "areas of special concern" under *WAC 246-272-01001;
(b) Included within a shellfish protection district under chapter 90.72
(c) Identified as a marine recovery area under **chapter 70.118A
(3) In Grays Harbor and Pacific counties, the local governments shall give first priority to preventing the deterioration of water quality in areas where commercial or recreational shellfish are grown.
(4) The department and each participating local government shall enter into a memorandum of understanding that will establish an applicant income eligibility requirement for individual grant applicants from within the jurisdiction and other mutually agreeable terms and conditions of the grant program.
(5) For the 2007-2009 biennium, from the funds received under this section, Pacific county shall transfer up to two hundred thousand dollars to the department. Upon receiving the funds from Pacific county, the department and the appropriate oyster reserve advisory committee under RCW 77.60.160
shall identify and execute specific research projects with those funds.