(1) The Environmental Quality Commission and any municipality may enter into contracts with each other concerning eligible projects. Any such contract may include such provisions as may be agreed upon by the parties thereto, and shall include the following provisions:

(a) An estimate of the reasonable cost of the eligible project as determined by the commission.

(b) An agreement by the municipality:

(A) To proceed expeditiously with, and complete, the project in accordance with plans approved by the Department of Environmental Quality;

(B) To commence operation of the sewage treatment works on completion of the project, and not to discontinue operation or dispose of the sewage treatment works without the approval of the commission;

(C) To operate and maintain the sewage treatment works in accordance with applicable provisions of ORS § 448.305, 454.010 to 454.040, 454.205 to 454.255, 454.505 to 454.535, 454.605 to 454.755 and ORS chapters 468, 468A and 468B and with the rules of the commission;

(D) To secure approval of the commission before applying for federal assistance for pollution abatement, in order to maximize the amounts of such assistance received or to be received for all projects in Oregon; and

(E) To provide for the payment of the municipality’s share of the cost of the project.

(2) The commission may adopt rules necessary for making and enforcing contracts hereunder and establishing procedures to be followed in applying for state grants authorized by ORS § 454.515 as shall be necessary for the effective administration of ORS § 454.505 to 454.535.

(3) All contracts entered into pursuant to this section shall be subject to approval by the Attorney General as to form. All payments by the state pursuant to such contracts shall be made after audit and upon warrant on vouchers approved by the commission. [Formerly 449.475]