(1) The commission may award contracts to public, tribal, or private owned marinas, boat launches, or boater destination sites. The commission shall designate a marina, boat launch, or boater destination as eligible to apply for funding for the installation of a sewage pumpout or sewage dump station based on the following criteria:

(a) The marina, boat launch, or boater destination is located in an environmentally sensitive or polluted area; or

(b) The marina, boat launch, or boater destination site has one hundred twenty-five slips or more and there is a lack of sewage pumpouts within one-quarter mile.

(2) The commission may at its discretion designate a marina, boat launch, or boater destination as eligible to apply for funding for the installation of a sewage pumpout and/or sewage dump station if it meets the following criteria:

(a) There is a demonstrated need for a sewage pumpout or sewage dump station at the marina, boat launch, or boater destination based on professionally conducted studies undertaken by federal, state, or local government, or the private sector; and

(b) The marina, boat launch, or boater destination provides commercial services, such as sales of food, fuel, or supplies, or overnight or live-aboard moorage opportunities; or

(c) The marina, boat launch, or boater destination site is located at a heavily used boater destination or on a heavily traveled route as determined by the commission; or

(d) There is a lack of adequate sewage pumpout station capacity within one-quarter mile.

(3) The commission may make exceptions to the eligibility to apply for funding for the installation of sewage pumpout and/or sewage dump station requirements under subsection (2) of this section if the marina, boat launch, or boater destination lacks available sewer, septic, water, or electrical services.

(4) State parks shall notify owners or operators of marinas, boat launches, and destination sites of the availability of funding to support installation of appropriate sewage pumpout or sewage dump stations. State parks shall also notify such operators or owners of which waters of the state have been designated as environmentally sensitive or polluted for the purpose of this program.

(5) State parks will provide all financial recipients with a set of financial guidelines for contract administration. These guidelines will include all state forms and will describe in detail state procedures for recordkeeping, reporting, reimbursement, and auditing.