Grant proceeds shall be used solely for the purpose of establishing the revolving loan fund to provide loans to eligible entities for:
Pre-development costs associated with proposed water and wastewater projects or with existing water and wastewater systems, and
Short-term costs incurred for replacement equipment, small-scale extension of services, or other small capital projects that are not part of the regular operations and maintenance activities of existing water and wastewater systems.
A grant recipient may not use grant funds in any manner inconsistent with the terms of the grant agreement.
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