(1) The department shall administer the program in accordance with the federal Act, the Act, the trust indenture regarding the program, and these rules.� If there is a conflict among the Act, the trust indenture, or these rules, the department shall resolve the conflict by applying the following order of precedence:

(a) the Act;

(b) the trust indenture;

(c) these rules.

(2) The revolving fund may be used, without limitation, to:

(a) provide financial assistance to municipalities for construction, renovation, rehabilitation, expansion, improvement, or acquisition of publicly owned treatment works including, but not limited to:

(i) preliminary planning to determine the feasibility of the treatment works, engineering or architectural designs, plans and working drawings; or

(ii) construction and construction management of treatment works, including devices and systems used in the storage, conveyance, treatment, recycling and reclamation of municipal waste, storm water runoff, or combined sewer overflows.

(b) make loans to municipalities and private persons for projects that are consistent with the nonpoint source management plan and that have qualified as nonpoint source projects.� These projects may include, but are not limited to:

(i) preliminary planning to determine the feasibility of the nonpoint source project, engineering or architectural plans and working drawings; or

(ii) acquisition of land and equipment and construction of facilities relating to nonpoint source projects;

(c) earn interest prior to disbursement, although the revolving fund may not be managed primarily for this purpose; and

(d) pay reasonable expenses incurred in administering the fund, except that funds used for this purpose may not exceed 4%, or the maximum amount allowed under the federal Act, of the capitalization grants received from the EPA.

�