(a) This section does not apply if the State would lose or be denied any federal assistance or other funds because of its application. (b) (1) If federal grants, loans, or other funds are available for sewerage systems in the Patuxent River Watershed area, the Department shall use them to upgrade and floodproof existing sewerage systems, collector lines, or facilities in the area to meet standards currently in effect under this subtitle. (2) If available funds can be used to upgrade and floodproof any existing sewerage systems, collector lines, or facilities in the Patuxent River Watershed area, the Department may not use the funds to construct any new sewerage system, collector line, or facility in the area. (c) Notwithstanding subsection (b) of this section, the Department may use available funds to construct a new sewerage system, collector line, or facility that does not discharge into a river, including a new sewerage system that incorporates land disposal of treated sewage effluent.