There is a newer version of the California Code
2010 California Code
Health and Safety Code
Article 6. Contracts For Project Funding
HEALTH AND SAFETY CODE
SECTION 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.
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