(1) The following water program projects shall be eligible for state grants, loans, or combination of grants and loans in an amount not to exceed seventy-five percent of the total eligible cost of the project as determined by the department and subject to the special provisions contained in this chapter.

(a) Wastewater treatment projects.

(b) Lake restoration projects.

(c) Agricultural pollution control projects.

(2) Loans may be authorized by the director, provided:

(a) The loan repayment period does not exceed five years.

(b) The cumulative total of all loans authorized during any biennium does not exceed ten percent of the cumulative total of funds appropriated by the legislature for that biennium, excluding any special appropriation authorized by WAC 173-80-050(6).

(c) The director considers and documents why it is in the best interest of the state's citizens to provide a loan.

(d) The director considers and documents how the loan will be repaid.

(3) The wastewater treatment program will establish an accounting procedure to identify the money which is spent on projects that are capable of producing renewable energy or energy savings as a result of the management of the wastes.