(1) Before any loan will be granted by the department, the development agency must establish to the satisfaction of the department the following:

(a) that the proposed solid waste disposal/processing system or the proposed resource recovery system, or both, are compatible with the state solid waste management plan and the plan has been adopted by the development agency or all its constituents;

(b) that the solid waste upon which the development project is based will be delivered to the project;

(c) that the solid waste management system will not jeopardize the economic stability of existing solid waste disposal/processing systems or resource recovery systems which have already been approved by the department as part of an officially adopted solid waste management plan.

(d) that all federal and state permits or approvals necessary to implement the solid waste management system have been obtained; and

(e) that to the fullest extent possible private enterprise will be utilized for design, management, construction and operation of the facilities required to implement area-wide solid waste management systems.

(2) If studies indicate a type of resource recovery is more feasible than other types of solid waste management systems, a local government may choose not to implement the resource recovery alternative and still be eligible for a loan pursuant to the act provided the local government has held a public meeting to discuss its decision.

(3) Receipt of a loan by a local government under the act will not relieve the local government of the obligation of complying with all federal and state laws, regulations, and standards applicable to the project.