(1) If a municipality is determined to have financial, technical, and managerial capabilities consistent with these rules and rules adopted by the department of environmental quality, the following types of bonds will be accepted by the department as evidence of and security for a loan under the program if Montana law authorizes the municipality to issue such bonds to finance the project and the department determines the municipality has the ability to repay the loan.  Notwithstanding compliance with the provisions of state law, the department may determine that it will not approve the loan if it determines that the loan is not likely to be repaid in accordance with its terms or in the alternative it may impose additional security requirements that in its judgment it considers necessary.