(a) The Department of Transportation may loan a portion of proceeds from bonds issued under ORS 367.615 to cities and counties; and
(b) Cities and counties may borrow moneys under this section.
(2) Any loan made under this section is subject to all of the following provisions:
(a) Moneys from the loan may only be used to defray costs of location, relocation, improvements, construction and reconstruction of city and county streets and roads.
(b) The department shall establish rules concerning the making of agreements for the loans. Repayment of principal and interest by any city or county must be made according to the agreement between the department and the city or county.
(c) If a city or county defaults of repayment, the department may withhold any part of the appropriation or allocation to the city under ORS 366.785 to 366.820 or the county under ORS 366.762 to 366.768 as provided for in the agreement for repayment made under this section. [1985 c.551 §10; 2003 c.201 §29]