(1) The State of Oregon may make grants, as funds are available, to any municipality to assist the municipality in the construction of sewage treatment works.

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(2) The Environmental Quality Commission shall be the agency for administration of funds granted by this state pursuant to subsection (1) of this section.

(3) In allocating state grants under ORS § 454.505 to 454.535, the commission shall give consideration to the following criteria:

(a) Public benefits to be derived from the construction;

(b) Ultimate cost of constructing and maintaining the sewage treatment works;

(c) Public interest in and public necessity for the sewage treatment works;

(d) Adequacy of the provisions made or proposed by the municipality for assuring proper and efficient operation and maintenance of the sewage treatment works after the completion of construction thereof;

(e) The municipality’s readiness to start construction, including financing and planning; and

(f) The municipality’s financial need.

(4) The commission shall establish a list of priority projects based upon the criteria established in subsection (3) of this section and the list shall be used as the basis for allocation of funds granted under ORS § 454.505 to 454.535. However, a project shall not be placed on the list of priority projects if the total cost to the Sewage Treatment Works Construction Account established by ORS § 454.535 of all such projects on the list of priority projects would exceed the funds available in the Sewage Treatment Works Construction Account. [Formerly 449.465]