(1) State funds may be used only for projects approved by the Secretary under this subtitle.

(2) (i) Any federal grant that is available for this purpose shall be applied first to a project approved under this subtitle; or

(ii) In this subtitle, community development block grants shall be considered as local matching funds and may not be considered as federal grant funds.

(b) A State grant shall provide up to 50% of the eligible cost remaining after the federal grant has been applied, except as provided in subsection (c) of this section.

(c) For projects designated under federal regulations, State plans, or departmental regulations as eligible for poverty area funding, a State grant may cover up to 75% of the eligible cost remaining after any federal grants have been applied.

(d) The amount of the State grant for any project shall be determined after consideration of:

(1) All eligible applications;

(2) The total amount of unallocated State funds available at the time the application is received; and

(3) The priorities of area need established by the Department.

(e) (1) No portion of the proceeds of a State grant may be used:

(i) To further sectarian religious instruction; or

(ii) In connection with the design, acquisition, or construction of any buildings used or to be used as a place of sectarian religious worship or instruction.

(2) Upon the request of the Board of Public Works, the applicant shall submit evidence satisfactory to the Board of Public Works that none of the proceeds of the grant have been or are being used for a purpose prohibited by this subtitle.