The department shall use the moneys in the water pollution control revolving fund to provide financial assistance as provided in the clean water act and as provided in RCW
90.50A.040:
(1) To make loans, on the condition that:
(a) Such loans are made at or below market interest rates, including interest free loans, at terms not to exceed the lesser of thirty years or the projected useful life, as determined by the state, of the project to be financed with the proceeds of the loan;
(b) Annual principal and interest payments will commence not later than one year after completion of any project and all loans will be fully amortized upon the expiration of the term of the loan;
(c) The recipient of a loan will establish a dedicated source of revenue for repayment of loans; and
(d) The fund will be credited with all payments of principal and interest on all loans.
(2) Loans may be made for the following purposes:
(a) To public bodies for the construction or replacement of water pollution control facilities as defined in the clean water act, including publicly owned industrial wastewater treatment facilities that reduce the burden on a municipal wastewater facility;
(b) For the implementation of a management program established under the clean water act relating to the management of nonpoint sources of pollution, subject to the requirements of that act; and
(c) For development and implementation of a conservation and management plan under the clean water act relating to the national estuary program, subject to the requirements of that act.
(3) The department may also use the moneys in the fund for the following purposes:
(a) To buy or refinance the water pollution control facilities' debt obligations of public bodies at or below market rates, if such debt was incurred after March 7, 1985;
(b) To guarantee, or purchase insurance for, public body obligations for water pollution control facility construction or replacement or activities if the guarantee or insurance would improve credit market access or reduce interest rates, or to provide loans to a public body for this purpose;
(c) As a source of revenue or security for the payment of principal and interest on revenue or general obligation bonds issued by the state if the proceeds of the sale of such bonds will be deposited in the fund;
(d) To earn interest on fund accounts; and
(e) To pay the expenses of the department in administering the water pollution control revolving fund according to administrative reserves authorized by federal and state law.
(4) The department shall present a biennial progress report on the use of moneys from the account to the appropriate committees of the legislature. The report shall consist of a list of each recipient, project description, and amount of the grant, loan, or both.
(5) The department may not use the moneys in the water pollution control revolving fund for grants.