(a) Loans, grants, etc.--The commission shall, to the extent funds are available, provide financial assistance in the form of loans, loan guarantees and grants for the implementation of nutrient management plans and of odor management plans for existing agricultural operations.

(b) Criteria for eligibility.--In reviewing applications for financial assistance, the commission shall consider the following:

(1) Whether the project will improve the health, safety or environment of the people of this Commonwealth and otherwise satisfy the purposes of this chapter.

(2) The cost-effectiveness of the proposed practices in comparison with other alternatives.

(3) The applicant's ability to operate or maintain the practices in a proper manner.

(c) Issuance and terms.--Subject to this section, the commission shall issue loans and set terms applicable thereto in any manner it deems appropriate. The commission may consider such factors as it deems relevant, including current market interest rates, the financial ability of the applicant to repay and the necessity to maintain the funds created hereunder in a financially sound manner. Loans may be based on the ability to repay from future revenue to be derived from the applicant's agricultural operation, by a mortgage or other security interest or by any other fiscal manner which the commission deems appropriate. The board shall have the power to defer principal on loans for up to 12 months. The minimum rate of interest to be paid on any loan made pursuant to this section shall be 1%.

(d) Grants.--Grants shall be made available as follows:

(1) Where funds have been made available to the commission, subject to any conditions that may have accompanied the receipt of such funds.

(2) Where the commission, in its sole discretion, determines that the financial condition of the recipient is such that repayment of a loan is unlikely and that the recipient will be financially distressed by the implementation of practices without a grant.

(e) Grants and loans.--The commission shall, where it deems appropriate and to the extent financial circumstances permit, mix grant funds with loan funds.