2007 California Water Code Chapter 6.5. State Water Pollution Control Revolving Fund

CA Codes (wat:13475-13485)

13475.  (a) The Legislature hereby finds and declares that since the
federal Clean Water Act (33 U.S.C. Sec. 1251 et seq.) provides for
establishment of a perpetual water pollution control revolving loan
fund, which will be partially capitalized by federal contributions,
it is in the interest of people of the state, in order to ensure full
participation by the state under the federal Clean Water Act, to
enact this chapter to authorize the state to establish and implement
a state/federal water pollution control revolving fund in accordance
with federal provisions, requirements, and limitations.
   (b) The primary purpose of this chapter is to enact a statute
consistent with the provisions and requirements of the federal Clean
Water Act, as those provisions, requirements, and limitations relate
to establishment, management, and operation of a state/federal water
pollution control revolving fund.  It is the intent of the
Legislature that the terms of this chapter shall be liberally
construed to achieve this purpose.


13476.  Unless the context otherwise requires, the following
definitions govern the construction of this chapter:
   (a) "Administration fund" means the State Water Pollution Control
Revolving Fund Administration Fund.
   (b) "Board" means the State Water Resources Control Board.
   (c) "Federal Clean Water Act" or "federal act" means the federal
Water Pollution Control Act (33 U.S.C.A. Sec. 1251 et seq.) and acts
amendatory thereof or supplemental thereto.
   (d) "Fund" means the State Water Pollution Control Revolving Fund.

   (e) "Matching funds" means money that equals that percentage of
federal contributions required by the federal act to be matched with
state funds.
   (f) "Municipality" has the same meaning and construction as in the
federal act and also includes all state, interstate, and
intermunicipal agencies.
   (g) "Publicly owned" means owned by a municipality.



13477.  The State Water Pollution Control Revolving Fund is hereby
created in the State Treasury, and, notwithstanding Section 13340 of
the Government Code, all moneys in the fund are continuously
appropriated without regard to fiscal years to the board for
expenditure in accordance with this chapter.  The board is the state
agency responsible for administering the fund.  In order to
facilitate compliance with the federal Tax Reform Act of 1986 (Public
Law 99-514), there is hereby established in the fund a Federal
Revolving Loan Fund Account and a State Revolving Loan Fund Account.
From time-to-time thereafter, the board may modify existing accounts
in the fund and may establish other accounts in the fund, and in all
other funds administered by the board, which the board deems
appropriate or necessary for proper administration.



13477.5.  (a) The State Water Pollution Control Revolving Fund
Administration Fund is hereby created in the State Treasury.
   (b) The following moneys shall be deposited in the administration
fund:
   (1) Moneys transferred to the administration fund to pay the costs
incurred by the board in connection with the administration of this
chapter.
   (2) The amounts collected for loan services pursuant to
subdivision (c).
   (3) Notwithstanding Section 16475 of the Government Code, any
interest earned upon the moneys deposited in the administration fund.

   (c) (1) For any loan made pursuant to paragraph (1) of subdivision
(b) of Section 13480, the board may assess an annual charge for loan
services with regard to the loan, not to exceed 1.0 percent of the
loan balance computed according to the true interest cost method.
   (2) Any amounts collected under this subdivision shall be
deposited in the administration fund.
   (3) The loan service rate authorized by this subdivision may be
applied at any time during the term of the loan, and once applied,
shall remain unchanged for the duration of the loan and shall not
increase the loan repayment amount as set forth in the terms and
conditions imposed pursuant to clause (i) of subparagraph (D) of
paragraph (1) of subdivision (b) of Section 13480.
   (d) Moneys in the administration fund, upon appropriation by the
Legislature to the board, may be expended for payment of the
reasonable costs of administering the fund.
   (e) The board shall set the total amount of revenue collected each
year through the charges authorized by subdivision (c) at an amount
that is as equal as practicable to the revenue levels set forth in
the annual Budget Act for this activity. At least once each fiscal
year, the board shall adjust the loan service rate imposed pursuant
to subdivision (c) to conform with the revenue levels set forth in
the annual Budget Act.



13478.  The board may undertake any of the following:
   (a) Enter into agreements with the federal government for federal
contributions to the fund.
   (b) Accept federal contributions to the fund.
   (c) Enter into an agreement with, and accept matching funds from,
a municipality. A municipality that seeks to enter into an agreement
with the board and provide matching funds pursuant to this
subdivision shall provide to the board evidence of the availability
of those funds in the form of a written resolution adopted by the
governing body of the municipality before it requests a preliminary
loan commitment.
   (d) Use moneys in the fund for the purposes permitted by the
federal act.
   (e) Provide for the deposit of matching funds and any other
available and necessary moneys into the fund.
   (f) Make requests on behalf of the state for deposit into the fund
of available federal moneys under the federal act and determine on
behalf of the state appropriate maintenance of progress toward
compliance with the enforceable deadlines, goals, and requirements of
the federal act.
   (g) Determine on behalf of the state that publicly owned treatment
works that receive financial assistance from the fund will meet the
requirements of, and otherwise be treated as required by, the federal
act.
   (h) Provide for appropriate audit, accounting, and fiscal
management services, plans, and reports relative to the fund.
   (i) Take additional incidental action as appropriate for the
adequate administration and operation of the fund.
   (j) Charge municipalities that elect to provide matching funds a
fee to cover the actual cost of obtaining the federal funds pursuant
to Section 603(d)(7) of the federal act (33 U.S.C.A. Sec. 1383(d)(7))
and processing the loan application. The fee shall be waived by the
board if sufficient funds to cover those costs are available from
other sources.
   (k) Use money returned to the fund under clause (ii) of
subparagraph (D) of paragraph (1) of subdivision (b) of Section
13480, and any other source of matching funds, if not prohibited by
statute, as matching funds for the federal administrative allowance
under Section 603(d)(7) of the federal act (33 U.S.C.A. Sec. 1383(d)
(7)).
   (l) Expend money repaid by loan recipients for loan service under
clauses (i) and (ii) of subparagraph (D) of paragraph (1) of
subdivision (b) of Section 13480 to pay administrative costs incurred
by the board under this chapter.



13479.  (a) The board may enter into an agreement with the federal
government for federal contributions to the fund only if both of the
following conditions have been met:
   (1) The state has identified any required matching funds.
   (2) The board is prepared to commit to the expenditure of any
minimum amount in the fund in the manner required by the federal act.

   (b) Any agreement between the board and the federal government
shall contain those provisions, terms, and conditions required by the
federal act, and any implementing federal rules, regulations,
guidelines, and policies, including, but not limited to, agreement to
the following:
   (1) Moneys in the fund shall be expended in an expeditious and
timely manner.
   (2) All moneys in the fund as a result of federal capitalization
grants shall be used to assure maintenance of progress toward
compliance with the enforceable deadlines, goals, and requirements of
the federal act, including any applicable municipal compliance
deadlines.


13480.  (a) Moneys in the fund shall be used only for the
permissible purposes allowed by the federal act, including providing
financial assistance for the following purposes:
   (1) The construction of publicly owned treatment works, as defined
by Section 212 of the federal act (33 U.S.C.A. Sec. 1292), by any
municipality.
   (2) Implementation of a management program pursuant to Section 319
of the federal act (33 U.S.C.A. Sec. 1329).
   (3) Development and implementation of a conservation and
management plan under Section 320 of the federal act (33 U.S.C.A.
Sec. 1330).
   (4) Financial assistance, other than a loan, toward the nonfederal
share of costs of any grant-funded treatment works project, but only
if that assistance is necessary to permit the project to proceed.
   (b) Consistent with expenditure for authorized purposes, moneys in
the fund may be used for the following purposes:
   (1) Loans that meet all of the following requirements:
   (A) Are made at or below market interest rates.
   (B) Require annual payments of principal and any interest, with
repayment commencing not later than one year after completion of the
project for which the loan is made and full amortization not later
than 20 years after project completion.
   (C) Require the loan recipient to establish an acceptable
dedicated source of revenue for repayment of any loan.
   (D) (i) Contain other terms and conditions required by the board
or the federal act or applicable rules, regulations, guidelines, and
policies. To the extent permitted by federal law, the combined
interest and loan service rate shall be set at a rate that does not
exceed 50 percent of the interest rate paid by the state on the most
recent sale of state general obligation bonds and the combined
interest and loan service rate shall be computed according to the
true interest cost method. If the combined interest and loan service
rate so determined is not a multiple of one-tenth of 1 percent, the
combined interest and loan service rate shall be set at the multiple
of one-tenth of 1 percent next above the combined interest and loan
service rate so determined. Any loan from the fund used to finance
costs of facilities planning, or the preparation of plans,
specifications, or estimates for construction of publicly owned
treatment works shall comply with Section 603(e) of the federal act
(33 U.S.C.A.  Sec. 1383(e)).
   (ii) Notwithstanding clause (i), if the loan applicant is a
municipality, an applicant for a loan for the implementation of a
management program pursuant to Section 319 of the Clean Water Act (33
U.S.C. Sec. 1329), or an applicant for a loan for nonpoint source or
estuary enhancement pursuant to Section 320 of the Clean Water Act
(33 U.S.C. Sec. 1330), and the applicant provides matching funds, the
combined interest and loan service rate on the loan shall be 0
percent. A loan recipient that returns to the fund an amount of money
equal to 20 percent of the remaining unpaid federal balance of an
existing loan shall have the remaining unpaid loan balance refinanced
at a combined interest and loan service rate of 0 percent over the
time remaining in the original loan contract.
   (2) To buy or refinance the debt obligations of municipalities
within the state at or below market rates if those debt obligations
were incurred after March 7, 1985.
   (3) To guarantee, or purchase insurance for, local obligations
where that action would improve credit market access or reduce
interest rates.
   (4) As a source of revenue or security for the payment of
principal and interest on revenue or general obligation bonds issued
by the state, if the proceeds of the sale of those bonds will be
deposited in the fund.
   (5) To establish loan guarantees for similar revolving funds
established by municipalities.
   (6) To earn interest.
   (7) For payment of the reasonable costs of administering the fund
and conducting activities under Subchapter VI (commencing with
Section 601) of the federal act (33 U.S.C.A. Sec. 1381 et seq.).
Those costs shall not exceed 4 percent of all federal contributions
to the fund, except that if permitted by federal and state law,
interest repayments into the fund and other moneys in the fund may be
used to defray additional administrative and activity costs to the
extent permitted by the federal government and approved by the
Legislature in the Budget Act.
   (8) For financial assistance toward the nonfederal share of the
costs of grant-funded treatment works projects to the extent
permitted by the federal act.



13481.  The fund shall be used to provide financial assistance only
for projects which are (a) consistent with plans, if any, developed
under Sections 205(j), 208, 303(e), 319, and 320 of the federal act,
and (b) on the approved state priority list adopted under Section 216
of the federal act.


13481.5.  The board, for the purposes of administering the fund,
shall give favorable consideration to the following types of eligible
projects:  projects that address public health problems or the
pollution of impaired water bodies, projects necessary to comply with
regulatory requirements, water recycling projects, projects
undertaken to prevent or minimize water quality degradation, and
projects undertaken in response to an administrative enforcement
order.


13482.  (a) In accordance with the Clean Water Bond Law of 1984
(Chapter 13 (commencing with Section 13999)), the board, with the
approval of the Clean Water Finance Committee, may transfer funds
from the Clean Water Construction Grant Account to the fund for the
purpose of meeting federal requirements for matching moneys in the
fund.
   (b) Any repayment of fund moneys, including interest payments, and
all interest earned on, or accruing to, any moneys in the fund,
shall be deposited in the fund and shall be available, in perpetuity,
for expenditure for the purposes and uses authorized by the federal
act.
   (c) A municipality that elects to provide matching funds shall do
all of the following:
   (1) Establish an account or other funding mechanism permitted by
law for the deposit and use of those funds.
   (2) Pay the state's share of the amount of money owed to any
contractor for services rendered to that municipality and transmit
evidence of payment to that contractor to the board before the
federal matching funds become available pursuant to the federal act.

   (3) Grant to the state access to the financial records of the
account or other funding mechanism established pursuant to paragraph
(1).



13483.  (a) To the extent permitted by federal and state law, moneys
in the fund may be used to rebate to the federal government all
arbitrage profits required by the federal Tax Reform Act of 1986
(Public Law 99-514), or any amendment thereof or supplement thereto.
To the extent that this use of the moneys in the fund is prohibited
by federal or state law, any rebates required by federal law shall be
paid from the General Fund or other sources, upon appropriation by
the Legislature.
   (b) Notwithstanding any other provision of law or regulation, the
board may enter into contracts, or may procure those services and
equipment, which may be necessary to ensure prompt and complete
compliance with any provisions relating to the fund imposed by either
the federal Tax Reform Act of 1986 (Public Law 99-514) or the
federal Clean Water Act.



13485. The board may adopt rules and regulations necessary or
convenient to implement this chapter and to meet federal requirements
pursuant to the federal act.