A municipality or regional housing authority that owns a harbor facility may submit to the Department of Transportation and Public Facilities an application for a harbor facility grant to be used for construction, expansion, major repair, or major maintenance of a harbor facility. The application must include information about the project requested by the department. For a proposed project to be eligible for a grant, the municipality or regional housing authority must provide evidence acceptable to the department that the

(1) proposed project is a capital improvement project and not part of a preventive maintenance program or regular custodial care program;

(2) municipality or regional housing authority will provide 50 percent of the total project cost as matching funds for the state grant and that money received by the municipality or regional housing authority from the state will not be used for the matching funds except money received under

(A) AS 29.60.850 - 29.60.879 (community assistance program);

(B) AS 29.60.450, AS 43.75.130, and 43.75.137 (shared fisheries business taxes);

(C) AS 43.52.200 - 43.52.295 (excise tax on overnight accommodations on commercial passenger vessels); and

(D) a transfer agreement between the state and a municipality for a sale under AS 35.10.120;

(3) municipality or regional housing authority has secured and will maintain adequate property loss insurance for the replacement cost of the harbor facility or has an adequate program of insurance;

(4) municipality or regional housing authority has a preventive maintenance plan for the harbor facility and will be adequately adhering to the preventive maintenance plan after completion of the proposed project.