2007 California Water Code Article 2. Water Conservation Program

CA Codes (wat:12879.3-12879.6)

12879.3.  (a) The proceeds of bonds issued and sold pursuant to this
chapter shall be deposited in the 1988 Water Conservation Fund,
which is hereby created.  A Local Water Projects Assistance Account
shall be established in the fund for the purpose of implementing
Section 12879.5, and a Water Conservation and Groundwater Recharge
Account shall be established in the fund for the purposes of
implementing Section 12879.6.
   (b) From time to time, the department may modify existing accounts
in the fund, or may establish other accounts in the fund, and in all
other bond funds administered by the department, which the
department determines are appropriate or necessary for proper
administration.


12879.4.  (a) The department may make loans to local agencies, upon
approval of the Legislature by statute, to aid in the construction of
eligible projects  and to aid in the funding of voluntary,
cost-effective capital outlay water conservation programs and
groundwater recharge facilities, and may adopt rules and regulations
necessary to carry out this chapter.
   Notwithstanding any provision of law, existing rules and
regulations adopted by the department pursuant to Chapter 5
(commencing with Section 12880) and Chapter 6.1 (commencing with
Section 13450) that are in effect on the effective date of this
chapter may be utilized to carry out this chapter.  The department
may subsequently revise those rules and regulations pursuant to
Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3
of Title 2 of the Government Code as necessary to carry out this
chapter.
   (b) For the purpose of administering this chapter, the total
expenditures of the department through the making of any loans may
not exceed 5 percent of the total amount of the bonds authorized to
be issued under this chapter.  The department shall establish a
reasonable schedule of administrative fees for loans, which fees
shall be paid by the local agency pursuant to subdivision (c) of
Section 12879.4 to reimburse the state for the costs of state
administration of this chapter.
   Charges incurred by the Attorney General in protecting the
interests of the state in the use and repayment of funds under this
chapter shall be paid from the proceeds of bonds authorized to be
issued under this chapter.  These charges shall not be paid from
funds allocated for administrative purposes, but shall be treated as
a program expense, not to exceed 1.5 percent of the total amount of
the bonds authorized to be issued under this chapter.
   (c) Any contract entered into pursuant to this section may include
such provisions as may be determined by the department, provided
that any contract concerning an eligible project shall include, in
substance, all of the following provisions:
   (1) A finding by the department that the local agency has the
ability to repay the loan, that the eligible project is economically
justified, and that the eligible project is feasible from an
engineering and geologic standpoint.
   (2) An estimate of the reasonable cost and benefit of the eligible
project, program, or facility.
   (3) An agreement by the local agency to proceed expeditiously
with, and complete, the eligible project.
   (4) A provision that there shall be no moratorium or deferment on
payments of principal or interest.
   (5) Local agencies seeking a loan shall demonstrate, to the
satisfaction of the department, that an adequate opportunity for
public participation regarding the loan has been provided.
   (6) Any election held with respect to the loan shall include the
entire local  agency except where the agency proposes to accept the
loan on behalf of a specified portion, or portions, of the agency, in
which case the election shall be held in that portion or portions of
the agency only.
   (7) Annual principal and interest payments shall commence not
later than one year after completion of any project and all loans
shall be fully amortized not later than 50 years after project
completion.
   (8) The recipient of a loan shall establish a dedicated source of
revenue for repayment of the loan.
   (9) Any loans made pursuant to this chapter may be for a period of
up to 20 years.  The interest rate for the loans made for projects
to be funded pursuant to Section 12879.5 shall be set at a rate equal
to the interest rate paid by the state on the most recent sale of
state general obligation bonds, with that rate to be computed
according to the true interest cost method.  The interest rate for
loans made for projects to be funded pursuant to Section 12879.6
shall be set at a rate equal to 50 percent of the interest rate paid
by the state on the most recent sale of state general obligation
bonds, with that rate to be computed according to the true interest
cost method.  When the interest rate so determined is not a multiple
of one-tenth of 1 percent, the interest rate shall be set at the next
higher multiple of one-tenth of 1 percent.  The interest rate set
for each contract shall be applied throughout the repayment period of
the contract.  There shall be a level annual repayment of principal
and interest on the loans.  The amount of the principal shall include
the administrative fee described in subdivision (b).
   (d) All loans made pursuant to this chapter shall be subject to
the approval of the Legislature by statute.
   (e) Applications for loans or financial participation by the state
under this chapter shall be made to the department in the form and
with the supporting material as may be prescribed by the department.

   (f) All money repaid to the state pursuant to any contract
executed under this chapter, or under Section 13999.11, shall be
deposited in the General Fund as reimbursement for payment of
principal and interest on bonds authorized to be issued under this
chapter or Chapter 15 (commencing with Section 13999) that have been
paid from the General Fund.
   (g) As approved annually by the Legislature in the Budget Act, the
department, notwithstanding subdivision (b),  may expend money
repaid to the state pursuant to any contract executed pursuant to
this chapter as necessary for the administration of contracts entered
into by the department pursuant to this chapter.  However, the
expenditures may not in any year exceed 1.5 percent of the amount
repaid to the state in that year.  Charges incurred by the Attorney
General in protecting the state's interests in the use and repayment
of funds pursuant to this chapter may be paid by the department from
these funds.  However, the charges may not exceed 0.5 percent of the
amount repaid to the state in that year.  Any of the foregoing sums
approved by the Legislature in the Budget Act but unencumbered at the
end of any year shall automatically revert to the General Fund.



12879.5.  (a) The sum of twenty million dollars (,000,000) of the
money in the fund shall be deposited in the Local Water Projects
Assistance Account and shall be available for loans to local agencies
to aid in the construction of eligible projects.
   (b) No eligible project may receive more than five million dollars
(,000,000) in loans from the department.
   (c) In the administration of this section, the department and the
California Water Commission shall give preference to projects
involving the development of new basic water supplies which may
include the enlargement of existing dams and reservoirs, and for
projects that will remedy existing water supply problems.  The
department and the California Water Commission shall set priority for
loans pursuant to this section on the basis of the
cost-effectiveness of the proposed project, with the most
cost-effective projects receiving highest priority.
   (d) If the water supply function of a dam and reservoir facility
is operationally limited or eliminated for dam safety purposes,
pursuant to Part 1 (commencing with Section 6000) of Division 3, the
department and the California Water Commission may give consideration
to projects which would rehabilitate the dam and reservoir for water
supply purposes.  The rehabilitation of facilities may include
comparable replacement facilities.
   (e) The department shall not make loans pursuant to this section
for otherwise eligible projects whose benefits are more than 50
percent derived from hydroelectric generation, as determined by the
department.
   (f) The department may make loans to local agencies, at the
interest rates authorized pursuant to this chapter and pursuant to
any terms and conditions as may be determined necessary by the
department, for the purposes of financing feasibility studies of
projects potentially eligible for funding pursuant to this section.
No single potential project shall be eligible to receive more than
five hundred thousand dollars (0,000), and not more than 10
percent of the total amount of bonds authorized to be expended for
purposes of this section may be expended for those purposes.




12879.6.  (a) The sum of forty million dollars (,000,000) of the
money in the fund shall be deposited in the Water Conservation and
Groundwater Recharge Account and shall be available for appropriation
by the Legislature for loans to local agencies to aid in the
acquisition and construction of voluntary, cost-effective capital
outlay water conservation programs and groundwater recharge
facilities.
   (b) No eligible project may receive more than five million dollars
(,000,000) in loans from the department.
   (c) The department shall set priority for loans under this section
for voluntary, cost-effective capital outlay water conservation
programs on the basis of the cost effectiveness of the proposed
project, with the most cost-effective projects receiving the highest
priority.
   (d) The department shall set priority for loans under this section
for groundwater recharge facilities for projects in overdrafted
groundwater basins and those projects in critical need, for projects
whose feasibility studies show the greatest economic justification
and the greatest engineering and hydrogeologic feasibility, as
determined by the department, and for projects located in areas which
have existing water management programs.
   (e) The department may make loans to local agencies, at the
interest rates authorized pursuant to this chapter and under any
terms and conditions as may be determined necessary by the
department, for the purposes of financing feasibility studies of
projects potentially eligible for funding pursuant to this section.
No single potential project shall be eligible to receive more than
one hundred thousand dollars (0,000), and not more than 3 percent
of the total amount of bonds authorized to be expended for the
purposes of this section may be expended for these purposes.