2005 California Health and Safety Code Sections 116761-116761.40 Article 5. Project Eligibility, Funding, and Contracts

116761.  Planning and preliminary engineering studies, project
design, and construction costs eligible for funding under this
chapter shall be established by the department and may include any of
the following:
   (a) Reasonable costs for the construction, improvement, or
rehabilitation of facilities of the public water system, which may
include water supply, treatment works, and all or part of a water
distribution system, if necessary to carry out the purposes of this
chapter.
   (b) Reasonable costs associated with the consolidation of water
systems, including, but not limited to, reasonable facility fees,
connection fees, or similar charges.
   (c) Reasonable costs of purchasing water systems, water rights, or
watershed lands.
   (d) Operation and maintenance costs only to the extent they are
used in the startup and testing of the completed project.  All other
operation and maintenance costs shall be the responsibility of the
supplier and shall not be considered as part of the project costs.
   (e) Reasonable costs of establishing eligibility for funding under
this chapter that were incurred before the department entered into a
commitment to fund the project under this chapter.
   (f) The acquisition of real property or interests therein only if
the acquisition is integral to a project, and as otherwise limited in
the federal act.
116761.20.  (a) Planning and preliminary engineering studies,
project design, and construction costs may be funded under this
chapter by loans, or, in the case of public agencies or private
not-for-profit water companies, by grants or a combination of grants
and loans.
   (b) The department shall determine what portion of the full costs
the public agency or private not-for-profit water company is capable
of repaying and authorize funding in the form of a loan for that
amount.  The department shall authorize a grant only to the extent
the department finds the public agency or not-for-profit water
company is unable to repay the full costs of a loan.
   (c) At the request of the department, the Public Utilities
Commission shall submit comments concerning the ability of suppliers,
subject to its jurisdiction, to finance the project from other
sources and to repay the loan.
116761.21.  Not more than 30 percent and not less than 15 percent,
provided that there are projects eligible for funding as prescribed
in Section 116760.70, of the total amount deposited in the fund may
be expended for grants.  This amount shall be limited to
disadvantaged communities specified in Section 1452(d) of the federal
act (42 U.S.C.A. Sec. 300j-12).
116761.22.  Loans for project design and construction shall be
repaid over a term not longer than the useful life of the project
constructed or 20 years, whichever is shorter, except as provided in
the federal act.
116761.23.  (a) The maximum amount of a grant permitted under this
chapter for the planning and preliminary engineering studies, design,
and construction of a single project is one million dollars
($1,000,000).
   (b) Total funding under this article for planning and preliminary
engineering studies, project design, and construction costs of a
single project, whether in the form of a loan or a grant, or both,
shall be determined by an assessment of affordability using criteria
established by the department.
116761.24.  Not less than 15 percent of the total amount deposited
in the fund shall be expended for providing loans and grants to
public water systems that regularly serve fewer than 10,000 persons
to the extent those funds can be obligated for eligible projects.
116761.40.  The failure or inability of any public water system to
receive funds under this chapter or any other loan or grant program
or any delay in obtaining the funds shall not alter the obligation of
the system to comply in a timely manner with all applicable drinking
water standards and requirements of the California Safe Drinking
Water Act or the federal act.