(a) There is hereby created a special fund in the Treasury Department, to be known as the Local Government Capital Project Loan Fund, to which shall be credited all appropriations made by the General Assembly, other than appropriations for expenses of administering this article, or grants from other sources to the department as well as repayment of principal and interest on loans made pursuant to this article.

(b) The department shall routinely requisition from the fund such amounts as shall be allocated by the department for loans to municipalities pursuant to this article. When and as the amounts so allocated by the department as loans to municipalities are repaid to the department pursuant to the terms of the agreements made and entered into with the department, the department shall pay such amounts into the fund. It is the intent of this article that the fund shall operate as a revolving fund whereby all appropriations and payments made thereto may be applied and reapplied for the purposes of this article.