USE OF INFRASTRUCTURE FUND.

(a) The board may use the infrastructure fund only:

(1) to make a loan to an eligible political subdivision at or below market interest rates for a flood project;

(2) to make a grant or loan at or below market interest rates to an eligible political subdivision for a flood project to serve a rural political subdivision in order to ensure that the flood project is implemented;

(3) to make a loan at or below market interest rates for planning and design costs, permitting costs, and other costs associated with state or federal regulatory activities with respect to a flood project;

(4) to make a grant to an eligible political subdivision to provide matching funds to enable the eligible political subdivision to participate in a federal program for a flood project;

(5) to make a grant to an eligible political subdivision for a flood project if the board determines that the eligible political subdivision does not have the ability to repay a loan;

(6) as a source of revenue or security for the payment of principal and interest on bonds issued by the board if the proceeds of the sale of the bonds will be deposited in the infrastructure fund;

(7) to pay the necessary and reasonable expenses of the board in administering the infrastructure fund; and

(8) to make transfers to the research and planning fund created under Section 15.402.

(b) Principal and interest payments on loans made under Subsection (a)(3) may be deferred for not more than 10 years or until construction of the flood project is completed, whichever is earlier.

(c) Except as provided by Subsections (a)(6)-(8), after the adoption of the initial state flood plan, the board may use the infrastructure fund to provide financing only for flood projects included in the state flood plan.

(d) Money from the infrastructure fund may be awarded to several eligible political subdivisions for a single flood project.