2007 California Health and Safety Code Article 6. Contracts For Project Funding

CA Codes (hsc:116761.50-116761.60)

116761.50.  (a) The department may enter into contracts with
applicants for grants or loans for the purposes set forth in this
chapter.  Any contract entered into pursuant to this section shall
include only terms and conditions consistent with this chapter and
the regulations established under this chapter.
   (b) The contract shall include all of the following terms and
conditions that are applicable:
   (1) An estimate of the reasonable cost of the project or study.
   (2) An agreement by the department to loan or grant, or loan and
grant, the applicant an amount that equals the portion of the costs
found by the department to be eligible for a state loan or grant.
The agreement may provide for disbursement of funds during the
progress of the study or construction, or following completion of the
study or construction, as agreed by the parties.
   (3) An agreement by the applicant to proceed expeditiously with
the project or study.
   (4) An agreement by the applicant to commence operations of the
project upon completion of the project, and to properly operate and
maintain the project in accordance with the applicable provisions of
law.
   (5) In the case of a loan, an agreement by the applicant to repay
the state, over a period not to exceed the useful life of the project
or 20 years, whichever is shorter, except as provided in the federal
act, or in the case of a study, over a period not to exceed five
years, all of the following:
   (A) The amount of the loan.
   (B) The administrative fee specified in subdivision (a) of Section
116761.70.
   (C) Interest on the principal, which is the amount of the loan
plus the administrative fee.
   (6) In the case of a grant, an agreement by the public agency or
private not-for-profit water company to operate and maintain the
water system for a period of 20 years, unless otherwise authorized by
the department.
   (c) The contract may include any of the following terms and
conditions:
   (1) An agreement by the supplier to adopt a fee structure that
provides for the proper maintenance and operations of the project and
includes a sinking fund for repair and replacement of the facilities
in cases where appropriate.  The fee structure shall also provide an
acceptable dedicated source of revenue for the repayment of the
amount of the loan, and the payment of administrative fees and
interest.
   (2) If the entire project is not funded pursuant to this chapter,
the department may include a provision requiring the applicant to
share the cost of the project or obtain funding from other sources.
   (d) The department may require applicants to provide security for
loan contracts.



116761.60.  All funding received under this chapter shall be
expended by the applicant within three years of the execution of the
contract with the department or its designee.  The three-year period
may be extended, with the approval of the department, until five
years after the date the original contract, not including amendments,
was executed.