(a) Grants or loans may be awarded under this section to any State or local governmental entity responsible by law for the provision of sewerage systems in order to finance construction of those systems so as to satisfy State water quality standards and policies.

(b) (1) Except as provided in paragraph (2) and subsection (d), combined State and federal assistance shall not exceed 87 1/2 percent of federally eligible costs.

(2) Combined State and federal assistance under this section shall not exceed 77 1/2 percent if the Department has determined that:

(i) A project is eligible for federal construction grant funding before October 1, 1984; and

(ii) The information required by the federal government or the Department has not been provided by the applicant in a timely fashion to allow approval by that date.

(c) State grants or loans authorized under this section may only be used to finance projects for which construction grant funding under the federal Clean Water Act has been awarded.

(d) For projects which contain innovative or alternative technology as defined by the federal Clean Water Act, State and federal assistance may not exceed 96 1/4 percent of eligible costs for that technology.