13810. This chapter shall be known and may be cited as the
California Safe Drinking Water Bond Law of 1984.
13811. The Legislature hereby finds and declares that it is
necessary for the preservation of the health, safety, and welfare of
the people of California that water supplied for domestic purposes be
pure, wholesome, and potable and does not endanger the health or
lives of human beings and that water is available in adequate
quantity at sufficient pressure for health, cleanliness, and other
domestic purposes.
13812. The Legislature further finds and declares that a number of
domestic water supply systems are inadequate and do not meet minimum
bacteriological, chemical, or other basic health standards for
domestic water supplies, and that it is in the interest of the people
that the State of California provide technical and financial
assistance to the end that the people of California are assured a
safe, dependable, and potable supply of water for domestic purposes
and that water is available in adequate quantity at sufficient
pressure for health, cleanliness, and other domestic purposes.
13813. The Legislature further finds and declares that it is the
intent of the Legislature to provide for the upgrading of domestic
water supply systems to assure that all domestic water supplies at
least meet minimum domestic water supply standards established under
Chapter 4 (commencing with Section 116275) of Part 12 of Division 104
of the Health and Safety Code.
13814. The State General Obligation Bond Law (Chapter 4 (commencing
with Section 16720) of Part 3 of Division 4 of Title 2 of the
Government Code) is adopted for the purpose of the issuance, sale,
and repayment of, and otherwise providing with respect to, the bonds
authorized to be issued pursuant to this chapter, and the provisions
of that law are included in this chapter as though set out in full in
this chapter, except that notwithstanding anything in the State
General Obligation Bond Law, the bonds authorized hereunder shall
bear the rates of interest, or maximum rates, as may, from time to
time, be fixed by the Treasurer, with the approval of the committee,
and the maximum maturity of bonds shall not exceed 50 years from the
date of the bonds, or from the date of each respective series. The
maturity of each respective series shall be calculated from the date
of the series.
13815. As used in this chapter, and for purposes of this chapter as
used in the State General Obligation Bond Law (Chapter 4 (commencing
with Section 16720) of Part 3 of Division 4 of Title 2 of the
Government Code), the following terms shall have the following
meanings:
(a) "Committee" means the Safe Drinking Water Finance Committee
created by Section 13816.
(b) "Department" means the Department of Water Resources.
(c) "Domestic water system" means a system for the provision to
the public of piped water for human consumption, if the system has at
least 15 service connections or regularly supplies water to at least
25 individuals. The term includes any water supply, treatment,
storage, and distribution facilities under the control of the
operator of the system.
(d) "Fund" means the California Safe Drinking Water Fund.
(e) "Supplier" or "supplier of water" means any person,
partnership, corporation, association, or other entity or political
subdivision of the state which owns or operates a domestic water
system.
(f) "Federal assistance" means funds available, or which may
become available, to a supplier either directly or through allocation
by the state from the federal government as grants or loans for the
improvement of domestic water systems.
(g) "Treatment works" means any devices or systems used in the
treatment of water supplies, including necessary lands, which render
water supplies pure, wholesome, and potable for domestic purpose.
(h) "Project" means proposed facilities for the construction,
improvement, or rehabilitation of the domestic water system, and may
include water supply, treatment works, and all or part of a water
distribution system, if necessary to carry out the purpose of this
chapter.
13816. The Safe Drinking Water Finance Committee is hereby created.
The committee shall consist of the Governor, the Treasurer, the
Director of Finance, the Director of Water Resources, and the State
Director of Health Services or their designated representatives. A
majority of the committee may act for the committee.
13817. There is in the State Treasury the California Safe Drinking
Water Fund, which fund is hereby created.
13818. The committee may create a debt or debts, liability or
liabilities, of the State of California, in an aggregate amount of
seventy-five million dollars ($75,000,000) in the manner provided in
this chapter. The debt or debts, liability or liabilities, shall be
created for the purpose of providing the money to be used for the
objects and works specified in Section 13819.
13819. (a) The moneys in the fund are hereby continuously
appropriated and shall be used for the purposes set forth in this
section.
(b) The department may enter into contracts with suppliers having
authority to construct, operate, and maintain domestic water systems,
for loans to suppliers to aid in the construction of projects that
will enable the supplier to meet, at a minimum, safe drinking water
standards established pursuant to Chapter 4 (commencing with Section
116275) of Part 12 of Division 104 of the Health and Safety Code.
(c) Any contract entered into pursuant to this section may include
provisions as agreed by the parties thereto, and the contract shall
include, in substance, all of the following provisions:
(1) An estimate of the reasonable cost of the project.
(2) An agreement by the department to loan to the supplier, during
the progress of construction or following completion of construction
as agreed by the parties, an amount that equals the portion of
construction costs found by the department to be eligible for a state
loan.
(3) An agreement by the supplier to repay the state over a period
not to exceed 50 years, (A) the amount of the loan, (B) the
administrative fee as described in Section 13830, and (C) interest on
the principal, that is the amount of the loan plus the
administrative fee.
(4) An agreement by the supplier, (A) to proceed expeditiously
with, and complete, the project, (B) to commence operation of the
project upon completion thereof, and to properly operate and maintain
the project in accordance with the applicable provisions of law, (C)
to apply for, and make reasonable efforts, to secure federal
assistance for the project, (D) to secure approval of the department
and of the State Department of Health Services before applying for
federal assistance in order to maximize and best utilize the amounts
of that assistance available, and (E) to provide for payment of the
supplier's share of the cost of the project, if any.
(d) Bond proceeds may be used for a grant program in accordance
with this chapter, with grants provided to suppliers that are
political subdivisions of the state that are otherwise unable to meet
minimum safe drinking water standards established pursuant to
Chapter 4 (commencing with Section 116275) of Part 12 of Division 104
of the Health and Safety Code. The total amount of grants made
pursuant to this chapter shall not exceed twenty-five million dollars
($25,000,000). The Legislative Analyst shall review the grant
program and report to the Legislature not later than June 1, 1987.
(e) Notwithstanding any other provision, the proceeds of any bonds
authorized to be issued under the California Safe Drinking Water
Bond Law of 1976 (Chapter 10.5 (commencing with Section 13850)), that
are unissued and uncommitted on the effective date of this chapter,
shall be used for loans to suppliers in accordance with the terms,
conditions, and purposes of this chapter.
13820. (a) The department may make state grants to suppliers that
are political subdivisions of the state, from moneys in the fund
available for that purpose pursuant to subdivision (d) of Section
13819, to aid in the construction of projects that will enable the
public agency to meet, at a minimum, safe drinking water standards
established pursuant to Chapter 4 (commencing with Section 116275) of
Part 12 of Division 104 of the Health and Safety Code. A grant may
be made by the department only upon the specific approval of the
Legislature, by an act enacted after the receipt of a report filed
pursuant to Section 13822.
(b) Any contract for a grant entered into pursuant to this chapter
may include provisions as agreed by the parties thereto, and the
contract shall include, in substance, all of the following
provisions:
(1) An estimate of the reasonable cost of the project.
(2) An agreement by the department to grant to the public agency,
during the progress of construction or following completion of
construction as agreed by the parties, an amount that equals the
portion of construction costs found by the department to be eligible
for a state grant.
(3) An agreement by the public agency, (A) to proceed
expeditiously with, and complete, the project, (B) to commence
operation of the project upon completion thereof, and to properly
operate and maintain the project in accordance with the applicable
provisions of law, (C) to apply for, and make reasonable efforts to
secure, federal assistance for the project, (D) to secure approval of
the department and of the State Department of Health Services before
applying for federal assistance in order to maximize and best
utilize the amounts of that assistance available, and (E) to provide
for payment of the public agency's share of the cost of the project,
if any.
13821. Applications for grants under this chapter shall be made to
the department in the form and with the supporting material as
prescribed by the department.
13822. The department shall prepare a report on each grant
application pursuant to this chapter. The report shall be filed with
the Legislature, if it is in session or, if it is not in session,
with the Rules Committee of the Assembly and Senate. The department
shall be authorized to make the grant only upon the specific approval
of the grant by the Legislature, by an act enacted after the receipt
of the report from the department.
13823. (a) Loans and grants may be made only for projects for
domestic water systems. The department may make reasonable allowance
for future water supply needs and may provide for additional capacity
when excessive costs would be incurred by later enlargement. The
loans and grants may be made for all, or any part, of the cost of
constructing, improving, or rehabilitating any system when, in the
judgment of the State Department of Health Services, improvement or
rehabilitation is necessary to provide pure, wholesome, and potable
water in adequate quantity at sufficient pressure for health,
cleanliness, and other domestic purposes. No single public agency
shall receive grants pursuant to this chapter totaling more than four
hundred thousand dollars ($400,000). Loans may be made to provide
for the purchase of a water system or the purchase of watershed
lands. No loan to an individual supplier shall exceed the sum of five
million dollars ($5,000,000), unless the Legislature by an act
raises the limit specified in this section.
(b) Upon receipt of an application for a grant or loan pursuant to
this chapter, the department shall propose to the applicant
improvements to the applicant's water development, distribution, and
utilization system which will conserve water in a cost-effective
manner. These improvements may include, but need not be limited to,
leak detection and repair programs, valve repair and replacement,
meter calibration and replacement, physical improvements to achieve
corrosion control, distribution and installation of water
conservation devices and fixtures, and other capital improvements
which can be demonstrated to conserve water in a cost-effective
manner. The department and applicant may agree to include these
capital improvements in the grant or loan. Failure by the applicant
to include water conservation capital improvements in the grant or
loan application shall not be sufficient cause for the department to
refuse to make the grant or loan.
13824. An application for a grant pursuant to this chapter shall
not be approved by the department, unless the department determines
that the public agency is otherwise unable to meet minimum safe
drinking water standards established pursuant to Chapter 4
(commencing with Section 116275) of Part 12 of Division 104 of the
Health and Safety Code.
No grant shall be made by the department except upon approval by
the State Department of Health Services of project plans submitted by
the applicant and upon issuance to the public agency of a permit or
amended permit as specified in Chapter 4 (commencing with Section
116275) of Part 12 of Division 104 of the Health and Safety Code.
13825. First priority for grants shall be granted to public
agencies having immediate health related problems, as certified by
the State Department of Health Services. Additional high priority
shall be granted to projects to correct immediate problems, as
opposed to grants for construction of projects to meet future growth
needs.
13826. First priority for loans shall be given to suppliers with
the most critical public health problems. Priority for loans shall
also be given to suppliers which have a lesser capability to
reasonably finance system improvements.
13827. Preliminary design work, including a cost estimate for the
project, shall be completed before a loan or grant is awarded.
Operation and maintenance costs shall be the responsibility of the
supplier and may not be considered as part of the project cost. Costs
for planning and preliminary engineering studies may be reimbursed
following the receipt of a loan or grant subject to approval by the
department and the State Department of Health Services.
13828. No application for a grant may be made pursuant to this
chapter unless the public agency has also applied for a loan pursuant
to this chapter. A public agency shall be eligible for a grant only
to the extent that the department finds that the agency is found
unable to repay the full costs of a loan.
If the department has determined that the applicant is unable to
repay the full costs of a loan, the applicant may also file for a
grant. Upon receipt of a grant application, the department shall
determine that portion of the full costs that the applicant is
capable of repaying. Grant funds shall only be provided for that
portion that the applicant is not capable of repaying.
13829. Grant funds shall be expended by the public agency within
three years of the making of the grant. No grant funds may be
expended by the public agency unless the public agency is able to
demonstrate to the department, within one year of the making of the
grant, supported by an acceptable bid, that the amount to be expended
for the project will be within 20 percent of the public agency's
cost estimate for the project.
13830. For the purpose of administering of this chapter, the total
expenditures of the department and the State Department of Health
Services may not exceed 4 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 supplier pursuant to Section 13819,
to reimburse the state for the costs of state administration of this
chapter.
Charges incurred by the Attorney General in protecting the state's
interests in the use and repayment of grant and loan funds under
this chapter, and under the California Safe Drinking Water Bond Law
of 1976 (Chapter 10.5 (commencing with Section 13850)), shall be paid
from the proceeds of bond sales under this chapter. These charges
shall not be paid be from the 4 percent 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 sold under
this chapter.
13831. As much of the moneys in the fund as may be necessary shall
be used to reimburse the General Obligation Bond Expense Revolving
Fund pursuant to Section 16724.5 of the Government Code.
13832. Repayment of all or part of the principal, which is the loan
plus the administrative fee, may be deferred during a development
period not exceeding 10 years within the maximum 50-year repayment
period, when, in the department's judgment, the development period is
justified under the circumstances. Interest on the principal shall
not be deferred. Repayment of principal which is deferred during a
development period may, at the option of the supplier, be paid in
annual installments during the remainder of the loan repayment
period.
13833. The department shall require the payment of interest on each
loan that is made pursuant to this chapter at a rate equal to the
average, as determined by the Treasurer, of the net interest cost to
the state on the sales of general obligation bonds pursuant to this
chapter. However, when the applicable average of the net interest
costs to the state is not a multiple of one-tenth of 1 percent, the
interest rate shall be at the multiple of one-tenth of 1 percent next
above the applicable average of the net interest costs.
13834. The department, after public notice and hearing and with the
concurrence of the State Department of Health Services, shall adopt
rules and regulations necessary to carry out the purposes of this
chapter. The regulations shall include, but not be limited to,
criteria and procedures for establishing the eligibility of a
supplier.
It is the duty of the department to adopt rules and regulations
that, in its judgment, will most effectively carry out the provisions
of this chapter in the public interest, to the end that the people
of California are most efficiently and most economically provided
supplies of pure, wholesome, and potable domestic water. The rules
and regulations may provide for the denial of funds when the purposes
of this chapter may most economically and efficiently be attained by
means other than the construction of the proposed project.
13835. The State Department of Health Services shall notify
suppliers that may be eligible for loans pursuant to this chapter of
(a) the purposes of this chapter and (b) the rules and regulations
adopted by the department.
13836. The State Department of Health Services, after public notice
and hearing and with the advice of the department, shall, from time
to time, establish a priority list of suppliers to be considered for
financing.
13837. Upon approval by the State Department of Health Services of
project plans submitted by a supplier on the priority list and upon
issuance to the supplier of a permit or amended permit as specified
in Chapter 4 (commencing with Section 116275) of Part 12 of Division
104 of the Health and Safety Code, the department may enter into a
contract with the supplier.
13838. Not more than twenty million dollars ($20,000,000) of state
loans for projects shall be authorized by the department in a single
calendar quarter. No contract shall be approved by the department,
unless the department finds that the supplier has the capacity to
repay the loan amounts specified in the contract.
At the request of the department, the Public Utilities Commission
shall furnish comments concerning the ability of suppliers subject to
its jurisdiction to finance the project from other sources and the
ability to repay the loan.
13839. All bonds authorized, which have been duly sold and
delivered pursuant to this chapter, shall constitute valid and
legally binding general obligations of the State of California, and
the full faith and credit of the State of California is hereby
pledged for the punctual payment of both principal and interest
thereon.
There shall be collected annually in the same manner, and at the
same time as other state revenue is collected, a sum, in addition to
the ordinary revenues of the state, that is required to pay the
principal and interest on the bonds, and it is hereby made the duty
of all officers charged by law with any duty in regard to the
collection of that revenue, to do and perform each and every act
which shall be necessary to collect that additional sum.
All money deposited in the fund which has been derived from
premium on bonds sold is available for transfer to the General Fund
as a credit to expenditures for bond interest.
13840. All money repaid to the state pursuant to any contract
executed under Section 13819 shall be deposited in the General Fund
and, when so deposited, shall be applied as a reimbursement to the
General Fund on account of principal and interest on bonds issued
pursuant to this chapter which has been paid from the General Fund.
13841. There is hereby appropriated from the General Fund in the
State Treasury, for the purpose of this chapter, an amount equal to
the sum of the following:
(a) The amount annually necessary to pay the principal of, and the
interest on, the bonds issued and sold pursuant to this chapter, as
the principal and interest become due and payable.
(b) The amount necessary to carry out Section 13842, which amount
is appropriated without regard to fiscal years.
13842. For the purpose of carrying out this chapter, the Director
of Finance may, by executive order, authorize the withdrawal from the
General Fund of an amount or amounts not to exceed the amount of the
unsold bonds which the committee has, by resolution, authorized to
be sold for the purpose of carrying out this chapter.
Any amounts withdrawn shall be deposited in the fund and shall be
disbursed by the department in accordance with this chapter. Any
money made available under this section to the department shall be
returned by the department to the General Fund from money received
from the first sale of bonds sold for the purpose of carrying out
this chapter subsequent to the withdrawal.
13842.5. Notwithstanding any other provision of this bond act, or
of the State General Obligation Bond Law (Chapter 4 (commencing with
Section 16720) of Part 3 of Division 4 of Title 2 of the Government
Code), if the Treasurer sells bonds pursuant to this bond act that
include a bond counsel opinion to the effect that the interest on the
bonds is excluded from gross income for federal tax purposes under
designated conditions, the Treasurer may maintain separate accounts
for the bond proceeds invested and the investment earnings on those
proceeds, and may use or direct the use of those proceeds or earnings
to pay any rebate, penalty, or other payment required under federal
law, or take any other action with respect to the investment and use
of those bond proceeds, as may be required or desirable under federal
law in order to maintain the tax-exempt status of those bonds and to
obtain any other advantage under federal law on behalf of the funds
of this state.
13843. Upon request of the department, supported by a statement of
the proposed arrangements to be made pursuant to Section 13819 for
the purposes stated therein, the committee shall determine whether or
not it is necessary or desirable to issue any bonds authorized under
this chapter in order to make those arrangements, and, if so, the
amount of bonds then to be issued and sold. Successive issues of
bonds may be authorized and sold to make those arrangements
progressively, and it shall not be necessary that all of the bonds
authorized to be issued shall be sold at any one time.
13844. The committee may authorize the Treasurer to sell all or any
part of the bonds authorized at the time or times as fixed by the
Treasurer.
13845. All proceeds from the sale of bonds, except those derived
from premiums and accrued interest, are available for the purpose
provided in Section 13819, but are not available for transfer to the
General Fund to pay principal and interest on bonds. The money in the
fund may be expended only as provided in this chapter.
13810. This chapter shall be known and may be cited as the
California Safe Drinking Water Bond Law of 1984.
13811. The Legislature hereby finds and declares that it is
necessary for the preservation of the health, safety, and welfare of
the people of California that water supplied for domestic purposes be
pure, wholesome, and potable and does not endanger the health or
lives of human beings and that water is available in adequate
quantity at sufficient pressure for health, cleanliness, and other
domestic purposes.
13812. The Legislature further finds and declares that a number of
domestic water supply systems are inadequate and do not meet minimum
bacteriological, chemical, or other basic health standards for
domestic water supplies, and that it is in the interest of the people
that the State of California provide technical and financial
assistance to the end that the people of California are assured a
safe, dependable, and potable supply of water for domestic purposes
and that water is available in adequate quantity at sufficient
pressure for health, cleanliness, and other domestic purposes.
13813. The Legislature further finds and declares that it is the
intent of the Legislature to provide for the upgrading of domestic
water supply systems to assure that all domestic water supplies at
least meet minimum domestic water supply standards established under
Chapter 4 (commencing with Section 116275) of Part 12 of Division 104
of the Health and Safety Code.
13814. The State General Obligation Bond Law (Chapter 4 (commencing
with Section 16720) of Part 3 of Division 4 of Title 2 of the
Government Code) is adopted for the purpose of the issuance, sale,
and repayment of, and otherwise providing with respect to, the bonds
authorized to be issued pursuant to this chapter, and the provisions
of that law are included in this chapter as though set out in full in
this chapter, except that notwithstanding anything in the State
General Obligation Bond Law, the bonds authorized hereunder shall
bear the rates of interest, or maximum rates, as may, from time to
time, be fixed by the Treasurer, with the approval of the committee,
and the maximum maturity of bonds shall not exceed 50 years from the
date of the bonds, or from the date of each respective series. The
maturity of each respective series shall be calculated from the date
of the series.
13815. As used in this chapter, and for purposes of this chapter as
used in the State General Obligation Bond Law (Chapter 4 (commencing
with Section 16720) of Part 3 of Division 4 of Title 2 of the
Government Code), the following terms shall have the following
meanings:
(a) "Committee" means the Safe Drinking Water Finance Committee
created by Section 13816.
(b) "Department" means the Department of Water Resources.
(c) "Domestic water system" means a system for the provision to
the public of piped water for human consumption, if the system has at
least 15 service connections or regularly supplies water to at least
25 individuals. The term includes any water supply, treatment,
storage, and distribution facilities under the control of the
operator of the system.
(d) "Fund" means the California Safe Drinking Water Fund.
(e) "Supplier" or "supplier of water" means any person,
partnership, corporation, association, or other entity or political
subdivision of the state which owns or operates a domestic water
system.
(f) "Federal assistance" means funds available, or which may
become available, to a supplier either directly or through allocation
by the state from the federal government as grants or loans for the
improvement of domestic water systems.
(g) "Treatment works" means any devices or systems used in the
treatment of water supplies, including necessary lands, which render
water supplies pure, wholesome, and potable for domestic purpose.
(h) "Project" means proposed facilities for the construction,
improvement, or rehabilitation of the domestic water system, and may
include water supply, treatment works, and all or part of a water
distribution system, if necessary to carry out the purpose of this
chapter.
13816. The Safe Drinking Water Finance Committee is hereby created.
The committee shall consist of the Governor, the Treasurer, the
Director of Finance, the Director of Water Resources, and the State
Director of Health Services or their designated representatives. A
majority of the committee may act for the committee.
13817. There is in the State Treasury the California Safe Drinking
Water Fund, which fund is hereby created.
13818. The committee may create a debt or debts, liability or
liabilities, of the State of California, in an aggregate amount of
seventy-five million dollars ($75,000,000) in the manner provided in
this chapter. The debt or debts, liability or liabilities, shall be
created for the purpose of providing the money to be used for the
objects and works specified in Section 13819.
13819. (a) The moneys in the fund are hereby continuously
appropriated and shall be used for the purposes set forth in this
section.
(b) The department may enter into contracts with suppliers having
authority to construct, operate, and maintain domestic water systems,
for loans to suppliers to aid in the construction of projects that
will enable the supplier to meet, at a minimum, safe drinking water
standards established pursuant to Chapter 4 (commencing with Section
116275) of Part 12 of Division 104 of the Health and Safety Code.
(c) Any contract entered into pursuant to this section may include
provisions as agreed by the parties thereto, and the contract shall
include, in substance, all of the following provisions:
(1) An estimate of the reasonable cost of the project.
(2) An agreement by the department to loan to the supplier, during
the progress of construction or following completion of construction
as agreed by the parties, an amount that equals the portion of
construction costs found by the department to be eligible for a state
loan.
(3) An agreement by the supplier to repay the state over a period
not to exceed 50 years, (A) the amount of the loan, (B) the
administrative fee as described in Section 13830, and (C) interest on
the principal, that is the amount of the loan plus the
administrative fee.
(4) An agreement by the supplier, (A) to proceed expeditiously
with, and complete, the project, (B) to commence operation of the
project upon completion thereof, and to properly operate and maintain
the project in accordance with the applicable provisions of law, (C)
to apply for, and make reasonable efforts, to secure federal
assistance for the project, (D) to secure approval of the department
and of the State Department of Health Services before applying for
federal assistance in order to maximize and best utilize the amounts
of that assistance available, and (E) to provide for payment of the
supplier's share of the cost of the project, if any.
(d) Bond proceeds may be used for a grant program in accordance
with this chapter, with grants provided to suppliers that are
political subdivisions of the state that are otherwise unable to meet
minimum safe drinking water standards established pursuant to
Chapter 4 (commencing with Section 116275) of Part 12 of Division 104
of the Health and Safety Code. The total amount of grants made
pursuant to this chapter shall not exceed twenty-five million dollars
($25,000,000). The Legislative Analyst shall review the grant
program and report to the Legislature not later than June 1, 1987.
(e) Notwithstanding any other provision, the proceeds of any bonds
authorized to be issued under the California Safe Drinking Water
Bond Law of 1976 (Chapter 10.5 (commencing with Section 13850)), that
are unissued and uncommitted on the effective date of this chapter,
shall be used for loans to suppliers in accordance with the terms,
conditions, and purposes of this chapter.
13820. (a) The department may make state grants to suppliers that
are political subdivisions of the state, from moneys in the fund
available for that purpose pursuant to subdivision (d) of Section
13819, to aid in the construction of projects that will enable the
public agency to meet, at a minimum, safe drinking water standards
established pursuant to Chapter 4 (commencing with Section 116275) of
Part 12 of Division 104 of the Health and Safety Code. A grant may
be made by the department only upon the specific approval of the
Legislature, by an act enacted after the receipt of a report filed
pursuant to Section 13822.
(b) Any contract for a grant entered into pursuant to this chapter
may include provisions as agreed by the parties thereto, and the
contract shall include, in substance, all of the following
provisions:
(1) An estimate of the reasonable cost of the project.
(2) An agreement by the department to grant to the public agency,
during the progress of construction or following completion of
construction as agreed by the parties, an amount that equals the
portion of construction costs found by the department to be eligible
for a state grant.
(3) An agreement by the public agency, (A) to proceed
expeditiously with, and complete, the project, (B) to commence
operation of the project upon completion thereof, and to properly
operate and maintain the project in accordance with the applicable
provisions of law, (C) to apply for, and make reasonable efforts to
secure, federal assistance for the project, (D) to secure approval of
the department and of the State Department of Health Services before
applying for federal assistance in order to maximize and best
utilize the amounts of that assistance available, and (E) to provide
for payment of the public agency's share of the cost of the project,
if any.
13821. Applications for grants under this chapter shall be made to
the department in the form and with the supporting material as
prescribed by the department.
13822. The department shall prepare a report on each grant
application pursuant to this chapter. The report shall be filed with
the Legislature, if it is in session or, if it is not in session,
with the Rules Committee of the Assembly and Senate. The department
shall be authorized to make the grant only upon the specific approval
of the grant by the Legislature, by an act enacted after the receipt
of the report from the department.
13823. (a) Loans and grants may be made only for projects for
domestic water systems. The department may make reasonable allowance
for future water supply needs and may provide for additional capacity
when excessive costs would be incurred by later enlargement. The
loans and grants may be made for all, or any part, of the cost of
constructing, improving, or rehabilitating any system when, in the
judgment of the State Department of Health Services, improvement or
rehabilitation is necessary to provide pure, wholesome, and potable
water in adequate quantity at sufficient pressure for health,
cleanliness, and other domestic purposes. No single public agency
shall receive grants pursuant to this chapter totaling more than four
hundred thousand dollars ($400,000). Loans may be made to provide
for the purchase of a water system or the purchase of watershed
lands. No loan to an individual supplier shall exceed the sum of five
million dollars ($5,000,000), unless the Legislature by an act
raises the limit specified in this section.
(b) Upon receipt of an application for a grant or loan pursuant to
this chapter, the department shall propose to the applicant
improvements to the applicant's water development, distribution, and
utilization system which will conserve water in a cost-effective
manner. These improvements may include, but need not be limited to,
leak detection and repair programs, valve repair and replacement,
meter calibration and replacement, physical improvements to achieve
corrosion control, distribution and installation of water
conservation devices and fixtures, and other capital improvements
which can be demonstrated to conserve water in a cost-effective
manner. The department and applicant may agree to include these
capital improvements in the grant or loan. Failure by the applicant
to include water conservation capital improvements in the grant or
loan application shall not be sufficient cause for the department to
refuse to make the grant or loan.
13824. An application for a grant pursuant to this chapter shall
not be approved by the department, unless the department determines
that the public agency is otherwise unable to meet minimum safe
drinking water standards established pursuant to Chapter 4
(commencing with Section 116275) of Part 12 of Division 104 of the
Health and Safety Code.
No grant shall be made by the department except upon approval by
the State Department of Health Services of project plans submitted by
the applicant and upon issuance to the public agency of a permit or
amended permit as specified in Chapter 4 (commencing with Section
116275) of Part 12 of Division 104 of the Health and Safety Code.
13825. First priority for grants shall be granted to public
agencies having immediate health related problems, as certified by
the State Department of Health Services. Additional high priority
shall be granted to projects to correct immediate problems, as
opposed to grants for construction of projects to meet future growth
needs.
13826. First priority for loans shall be given to suppliers with
the most critical public health problems. Priority for loans shall
also be given to suppliers which have a lesser capability to
reasonably finance system improvements.
13827. Preliminary design work, including a cost estimate for the
project, shall be completed before a loan or grant is awarded.
Operation and maintenance costs shall be the responsibility of the
supplier and may not be considered as part of the project cost. Costs
for planning and preliminary engineering studies may be reimbursed
following the receipt of a loan or grant subject to approval by the
department and the State Department of Health Services.
13828. No application for a grant may be made pursuant to this
chapter unless the public agency has also applied for a loan pursuant
to this chapter. A public agency shall be eligible for a grant only
to the extent that the department finds that the agency is found
unable to repay the full costs of a loan.
If the department has determined that the applicant is unable to
repay the full costs of a loan, the applicant may also file for a
grant. Upon receipt of a grant application, the department shall
determine that portion of the full costs that the applicant is
capable of repaying. Grant funds shall only be provided for that
portion that the applicant is not capable of repaying.
13829. Grant funds shall be expended by the public agency within
three years of the making of the grant. No grant funds may be
expended by the public agency unless the public agency is able to
demonstrate to the department, within one year of the making of the
grant, supported by an acceptable bid, that the amount to be expended
for the project will be within 20 percent of the public agency's
cost estimate for the project.
13830. For the purpose of administering of this chapter, the total
expenditures of the department and the State Department of Health
Services may not exceed 4 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 supplier pursuant to Section 13819,
to reimburse the state for the costs of state administration of this
chapter.
Charges incurred by the Attorney General in protecting the state's
interests in the use and repayment of grant and loan funds under
this chapter, and under the California Safe Drinking Water Bond Law
of 1976 (Chapter 10.5 (commencing with Section 13850)), shall be paid
from the proceeds of bond sales under this chapter. These charges
shall not be paid be from the 4 percent 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 sold under
this chapter.
13831. As much of the moneys in the fund as may be necessary shall
be used to reimburse the General Obligation Bond Expense Revolving
Fund pursuant to Section 16724.5 of the Government Code.
13832. Repayment of all or part of the principal, which is the loan
plus the administrative fee, may be deferred during a development
period not exceeding 10 years within the maximum 50-year repayment
period, when, in the department's judgment, the development period is
justified under the circumstances. Interest on the principal shall
not be deferred. Repayment of principal which is deferred during a
development period may, at the option of the supplier, be paid in
annual installments during the remainder of the loan repayment
period.
13833. The department shall require the payment of interest on each
loan that is made pursuant to this chapter at a rate equal to the
average, as determined by the Treasurer, of the net interest cost to
the state on the sales of general obligation bonds pursuant to this
chapter. However, when the applicable average of the net interest
costs to the state is not a multiple of one-tenth of 1 percent, the
interest rate shall be at the multiple of one-tenth of 1 percent next
above the applicable average of the net interest costs.
13834. The department, after public notice and hearing and with the
concurrence of the State Department of Health Services, shall adopt
rules and regulations necessary to carry out the purposes of this
chapter. The regulations shall include, but not be limited to,
criteria and procedures for establishing the eligibility of a
supplier.
It is the duty of the department to adopt rules and regulations
that, in its judgment, will most effectively carry out the provisions
of this chapter in the public interest, to the end that the people
of California are most efficiently and most economically provided
supplies of pure, wholesome, and potable domestic water. The rules
and regulations may provide for the denial of funds when the purposes
of this chapter may most economically and efficiently be attained by
means other than the construction of the proposed project.
13835. The State Department of Health Services shall notify
suppliers that may be eligible for loans pursuant to this chapter of
(a) the purposes of this chapter and (b) the rules and regulations
adopted by the department.
13836. The State Department of Health Services, after public notice
and hearing and with the advice of the department, shall, from time
to time, establish a priority list of suppliers to be considered for
financing.
13837. Upon approval by the State Department of Health Services of
project plans submitted by a supplier on the priority list and upon
issuance to the supplier of a permit or amended permit as specified
in Chapter 4 (commencing with Section 116275) of Part 12 of Division
104 of the Health and Safety Code, the department may enter into a
contract with the supplier.
13838. Not more than twenty million dollars ($20,000,000) of state
loans for projects shall be authorized by the department in a single
calendar quarter. No contract shall be approved by the department,
unless the department finds that the supplier has the capacity to
repay the loan amounts specified in the contract.
At the request of the department, the Public Utilities Commission
shall furnish comments concerning the ability of suppliers subject to
its jurisdiction to finance the project from other sources and the
ability to repay the loan.
13839. All bonds authorized, which have been duly sold and
delivered pursuant to this chapter, shall constitute valid and
legally binding general obligations of the State of California, and
the full faith and credit of the State of California is hereby
pledged for the punctual payment of both principal and interest
thereon.
There shall be collected annually in the same manner, and at the
same time as other state revenue is collected, a sum, in addition to
the ordinary revenues of the state, that is required to pay the
principal and interest on the bonds, and it is hereby made the duty
of all officers charged by law with any duty in regard to the
collection of that revenue, to do and perform each and every act
which shall be necessary to collect that additional sum.
All money deposited in the fund which has been derived from
premium on bonds sold is available for transfer to the General Fund
as a credit to expenditures for bond interest.
13840. All money repaid to the state pursuant to any contract
executed under Section 13819 shall be deposited in the General Fund
and, when so deposited, shall be applied as a reimbursement to the
General Fund on account of principal and interest on bonds issued
pursuant to this chapter which has been paid from the General Fund.
13841. There is hereby appropriated from the General Fund in the
State Treasury, for the purpose of this chapter, an amount equal to
the sum of the following:
(a) The amount annually necessary to pay the principal of, and the
interest on, the bonds issued and sold pursuant to this chapter, as
the principal and interest become due and payable.
(b) The amount necessary to carry out Section 13842, which amount
is appropriated without regard to fiscal years.
13842. For the purpose of carrying out this chapter, the Director
of Finance may, by executive order, authorize the withdrawal from the
General Fund of an amount or amounts not to exceed the amount of the
unsold bonds which the committee has, by resolution, authorized to
be sold for the purpose of carrying out this chapter.
Any amounts withdrawn shall be deposited in the fund and shall be
disbursed by the department in accordance with this chapter. Any
money made available under this section to the department shall be
returned by the department to the General Fund from money received
from the first sale of bonds sold for the purpose of carrying out
this chapter subsequent to the withdrawal.
13842.5. Notwithstanding any other provision of this bond act, or
of the State General Obligation Bond Law (Chapter 4 (commencing with
Section 16720) of Part 3 of Division 4 of Title 2 of the Government
Code), if the Treasurer sells bonds pursuant to this bond act that
include a bond counsel opinion to the effect that the interest on the
bonds is excluded from gross income for federal tax purposes under
designated conditions, the Treasurer may maintain separate accounts
for the bond proceeds invested and the investment earnings on those
proceeds, and may use or direct the use of those proceeds or earnings
to pay any rebate, penalty, or other payment required under federal
law, or take any other action with respect to the investment and use
of those bond proceeds, as may be required or desirable under federal
law in order to maintain the tax-exempt status of those bonds and to
obtain any other advantage under federal law on behalf of the funds
of this state.
13843. Upon request of the department, supported by a statement of
the proposed arrangements to be made pursuant to Section 13819 for
the purposes stated therein, the committee shall determine whether or
not it is necessary or desirable to issue any bonds authorized under
this chapter in order to make those arrangements, and, if so, the
amount of bonds then to be issued and sold. Successive issues of
bonds may be authorized and sold to make those arrangements
progressively, and it shall not be necessary that all of the bonds
authorized to be issued shall be sold at any one time.
13844. The committee may authorize the Treasurer to sell all or any
part of the bonds authorized at the time or times as fixed by the
Treasurer.
13845. All proceeds from the sale of bonds, except those derived
from premiums and accrued interest, are available for the purpose
provided in Section 13819, but are not available for transfer to the
General Fund to pay principal and interest on bonds. The money in the
fund may be expended only as provided in this chapter.
13810. This chapter shall be known and may be cited as the
California Safe Drinking Water Bond Law of 1984.
13811. The Legislature hereby finds and declares that it is
necessary for the preservation of the health, safety, and welfare of
the people of California that water supplied for domestic purposes be
pure, wholesome, and potable and does not endanger the health or
lives of human beings and that water is available in adequate
quantity at sufficient pressure for health, cleanliness, and other
domestic purposes.
13812. The Legislature further finds and declares that a number of
domestic water supply systems are inadequate and do not meet minimum
bacteriological, chemical, or other basic health standards for
domestic water supplies, and that it is in the interest of the people
that the State of California provide technical and financial
assistance to the end that the people of California are assured a
safe, dependable, and potable supply of water for domestic purposes
and that water is available in adequate quantity at sufficient
pressure for health, cleanliness, and other domestic purposes.
13813. The Legislature further finds and declares that it is the
intent of the Legislature to provide for the upgrading of domestic
water supply systems to assure that all domestic water supplies at
least meet minimum domestic water supply standards established under
Chapter 4 (commencing with Section 116275) of Part 12 of Division 104
of the Health and Safety Code.
13814. The State General Obligation Bond Law (Chapter 4 (commencing
with Section 16720) of Part 3 of Division 4 of Title 2 of the
Government Code) is adopted for the purpose of the issuance, sale,
and repayment of, and otherwise providing with respect to, the bonds
authorized to be issued pursuant to this chapter, and the provisions
of that law are included in this chapter as though set out in full in
this chapter, except that notwithstanding anything in the State
General Obligation Bond Law, the bonds authorized hereunder shall
bear the rates of interest, or maximum rates, as may, from time to
time, be fixed by the Treasurer, with the approval of the committee,
and the maximum maturity of bonds shall not exceed 50 years from the
date of the bonds, or from the date of each respective series. The
maturity of each respective series shall be calculated from the date
of the series.
13815. As used in this chapter, and for purposes of this chapter as
used in the State General Obligation Bond Law (Chapter 4 (commencing
with Section 16720) of Part 3 of Division 4 of Title 2 of the
Government Code), the following terms shall have the following
meanings:
(a) "Committee" means the Safe Drinking Water Finance Committee
created by Section 13816.
(b) "Department" means the Department of Water Resources.
(c) "Domestic water system" means a system for the provision to
the public of piped water for human consumption, if the system has at
least 15 service connections or regularly supplies water to at least
25 individuals. The term includes any water supply, treatment,
storage, and distribution facilities under the control of the
operator of the system.
(d) "Fund" means the California Safe Drinking Water Fund.
(e) "Supplier" or "supplier of water" means any person,
partnership, corporation, association, or other entity or political
subdivision of the state which owns or operates a domestic water
system.
(f) "Federal assistance" means funds available, or which may
become available, to a supplier either directly or through allocation
by the state from the federal government as grants or loans for the
improvement of domestic water systems.
(g) "Treatment works" means any devices or systems used in the
treatment of water supplies, including necessary lands, which render
water supplies pure, wholesome, and potable for domestic purpose.
(h) "Project" means proposed facilities for the construction,
improvement, or rehabilitation of the domestic water system, and may
include water supply, treatment works, and all or part of a water
distribution system, if necessary to carry out the purpose of this
chapter.
13816. The Safe Drinking Water Finance Committee is hereby created.
The committee shall consist of the Governor, the Treasurer, the
Director of Finance, the Director of Water Resources, and the State
Director of Health Services or their designated representatives. A
majority of the committee may act for the committee.
13817. There is in the State Treasury the California Safe Drinking
Water Fund, which fund is hereby created.
13818. The committee may create a debt or debts, liability or
liabilities, of the State of California, in an aggregate amount of
seventy-five million dollars ($75,000,000) in the manner provided in
this chapter. The debt or debts, liability or liabilities, shall be
created for the purpose of providing the money to be used for the
objects and works specified in Section 13819.
13819. (a) The moneys in the fund are hereby continuously
appropriated and shall be used for the purposes set forth in this
section.
(b) The department may enter into contracts with suppliers having
authority to construct, operate, and maintain domestic water systems,
for loans to suppliers to aid in the construction of projects that
will enable the supplier to meet, at a minimum, safe drinking water
standards established pursuant to Chapter 4 (commencing with Section
116275) of Part 12 of Division 104 of the Health and Safety Code.
(c) Any contract entered into pursuant to this section may include
provisions as agreed by the parties thereto, and the contract shall
include, in substance, all of the following provisions:
(1) An estimate of the reasonable cost of the project.
(2) An agreement by the department to loan to the supplier, during
the progress of construction or following completion of construction
as agreed by the parties, an amount that equals the portion of
construction costs found by the department to be eligible for a state
loan.
(3) An agreement by the supplier to repay the state over a period
not to exceed 50 years, (A) the amount of the loan, (B) the
administrative fee as described in Section 13830, and (C) interest on
the principal, that is the amount of the loan plus the
administrative fee.
(4) An agreement by the supplier, (A) to proceed expeditiously
with, and complete, the project, (B) to commence operation of the
project upon completion thereof, and to properly operate and maintain
the project in accordance with the applicable provisions of law, (C)
to apply for, and make reasonable efforts, to secure federal
assistance for the project, (D) to secure approval of the department
and of the State Department of Health Services before applying for
federal assistance in order to maximize and best utilize the amounts
of that assistance available, and (E) to provide for payment of the
supplier's share of the cost of the project, if any.
(d) Bond proceeds may be used for a grant program in accordance
with this chapter, with grants provided to suppliers that are
political subdivisions of the state that are otherwise unable to meet
minimum safe drinking water standards established pursuant to
Chapter 4 (commencing with Section 116275) of Part 12 of Division 104
of the Health and Safety Code. The total amount of grants made
pursuant to this chapter shall not exceed twenty-five million dollars
($25,000,000). The Legislative Analyst shall review the grant
program and report to the Legislature not later than June 1, 1987.
(e) Notwithstanding any other provision, the proceeds of any bonds
authorized to be issued under the California Safe Drinking Water
Bond Law of 1976 (Chapter 10.5 (commencing with Section 13850)), that
are unissued and uncommitted on the effective date of this chapter,
shall be used for loans to suppliers in accordance with the terms,
conditions, and purposes of this chapter.
13820. (a) The department may make state grants to suppliers that
are political subdivisions of the state, from moneys in the fund
available for that purpose pursuant to subdivision (d) of Section
13819, to aid in the construction of projects that will enable the
public agency to meet, at a minimum, safe drinking water standards
established pursuant to Chapter 4 (commencing with Section 116275) of
Part 12 of Division 104 of the Health and Safety Code. A grant may
be made by the department only upon the specific approval of the
Legislature, by an act enacted after the receipt of a report filed
pursuant to Section 13822.
(b) Any contract for a grant entered into pursuant to this chapter
may include provisions as agreed by the parties thereto, and the
contract shall include, in substance, all of the following
provisions:
(1) An estimate of the reasonable cost of the project.
(2) An agreement by the department to grant to the public agency,
during the progress of construction or following completion of
construction as agreed by the parties, an amount that equals the
portion of construction costs found by the department to be eligible
for a state grant.
(3) An agreement by the public agency, (A) to proceed
expeditiously with, and complete, the project, (B) to commence
operation of the project upon completion thereof, and to properly
operate and maintain the project in accordance with the applicable
provisions of law, (C) to apply for, and make reasonable efforts to
secure, federal assistance for the project, (D) to secure approval of
the department and of the State Department of Health Services before
applying for federal assistance in order to maximize and best
utilize the amounts of that assistance available, and (E) to provide
for payment of the public agency's share of the cost of the project,
if any.
13821. Applications for grants under this chapter shall be made to
the department in the form and with the supporting material as
prescribed by the department.
13822. The department shall prepare a report on each grant
application pursuant to this chapter. The report shall be filed with
the Legislature, if it is in session or, if it is not in session,
with the Rules Committee of the Assembly and Senate. The department
shall be authorized to make the grant only upon the specific approval
of the grant by the Legislature, by an act enacted after the receipt
of the report from the department.
13823. (a) Loans and grants may be made only for projects for
domestic water systems. The department may make reasonable allowance
for future water supply needs and may provide for additional capacity
when excessive costs would be incurred by later enlargement. The
loans and grants may be made for all, or any part, of the cost of
constructing, improving, or rehabilitating any system when, in the
judgment of the State Department of Health Services, improvement or
rehabilitation is necessary to provide pure, wholesome, and potable
water in adequate quantity at sufficient pressure for health,
cleanliness, and other domestic purposes. No single public agency
shall receive grants pursuant to this chapter totaling more than four
hundred thousand dollars ($400,000). Loans may be made to provide
for the purchase of a water system or the purchase of watershed
lands. No loan to an individual supplier shall exceed the sum of five
million dollars ($5,000,000), unless the Legislature by an act
raises the limit specified in this section.
(b) Upon receipt of an application for a grant or loan pursuant to
this chapter, the department shall propose to the applicant
improvements to the applicant's water development, distribution, and
utilization system which will conserve water in a cost-effective
manner. These improvements may include, but need not be limited to,
leak detection and repair programs, valve repair and replacement,
meter calibration and replacement, physical improvements to achieve
corrosion control, distribution and installation of water
conservation devices and fixtures, and other capital improvements
which can be demonstrated to conserve water in a cost-effective
manner. The department and applicant may agree to include these
capital improvements in the grant or loan. Failure by the applicant
to include water conservation capital improvements in the grant or
loan application shall not be sufficient cause for the department to
refuse to make the grant or loan.
13824. An application for a grant pursuant to this chapter shall
not be approved by the department, unless the department determines
that the public agency is otherwise unable to meet minimum safe
drinking water standards established pursuant to Chapter 4
(commencing with Section 116275) of Part 12 of Division 104 of the
Health and Safety Code.
No grant shall be made by the department except upon approval by
the State Department of Health Services of project plans submitted by
the applicant and upon issuance to the public agency of a permit or
amended permit as specified in Chapter 4 (commencing with Section
116275) of Part 12 of Division 104 of the Health and Safety Code.
13825. First priority for grants shall be granted to public
agencies having immediate health related problems, as certified by
the State Department of Health Services. Additional high priority
shall be granted to projects to correct immediate problems, as
opposed to grants for construction of projects to meet future growth
needs.
13826. First priority for loans shall be given to suppliers with
the most critical public health problems. Priority for loans shall
also be given to suppliers which have a lesser capability to
reasonably finance system improvements.
13827. Preliminary design work, including a cost estimate for the
project, shall be completed before a loan or grant is awarded.
Operation and maintenance costs shall be the responsibility of the
supplier and may not be considered as part of the project cost. Costs
for planning and preliminary engineering studies may be reimbursed
following the receipt of a loan or grant subject to approval by the
department and the State Department of Health Services.
13828. No application for a grant may be made pursuant to this
chapter unless the public agency has also applied for a loan pursuant
to this chapter. A public agency shall be eligible for a grant only
to the extent that the department finds that the agency is found
unable to repay the full costs of a loan.
If the department has determined that the applicant is unable to
repay the full costs of a loan, the applicant may also file for a
grant. Upon receipt of a grant application, the department shall
determine that portion of the full costs that the applicant is
capable of repaying. Grant funds shall only be provided for that
portion that the applicant is not capable of repaying.
13829. Grant funds shall be expended by the public agency within
three years of the making of the grant. No grant funds may be
expended by the public agency unless the public agency is able to
demonstrate to the department, within one year of the making of the
grant, supported by an acceptable bid, that the amount to be expended
for the project will be within 20 percent of the public agency's
cost estimate for the project.
13830. For the purpose of administering of this chapter, the total
expenditures of the department and the State Department of Health
Services may not exceed 4 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 supplier pursuant to Section 13819,
to reimburse the state for the costs of state administration of this
chapter.
Charges incurred by the Attorney General in protecting the state's
interests in the use and repayment of grant and loan funds under
this chapter, and under the California Safe Drinking Water Bond Law
of 1976 (Chapter 10.5 (commencing with Section 13850)), shall be paid
from the proceeds of bond sales under this chapter. These charges
shall not be paid be from the 4 percent 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 sold under
this chapter.
13831. As much of the moneys in the fund as may be necessary shall
be used to reimburse the General Obligation Bond Expense Revolving
Fund pursuant to Section 16724.5 of the Government Code.
13832. Repayment of all or part of the principal, which is the loan
plus the administrative fee, may be deferred during a development
period not exceeding 10 years within the maximum 50-year repayment
period, when, in the department's judgment, the development period is
justified under the circumstances. Interest on the principal shall
not be deferred. Repayment of principal which is deferred during a
development period may, at the option of the supplier, be paid in
annual installments during the remainder of the loan repayment
period.
13833. The department shall require the payment of interest on each
loan that is made pursuant to this chapter at a rate equal to the
average, as determined by the Treasurer, of the net interest cost to
the state on the sales of general obligation bonds pursuant to this
chapter. However, when the applicable average of the net interest
costs to the state is not a multiple of one-tenth of 1 percent, the
interest rate shall be at the multiple of one-tenth of 1 percent next
above the applicable average of the net interest costs.
13834. The department, after public notice and hearing and with the
concurrence of the State Department of Health Services, shall adopt
rules and regulations necessary to carry out the purposes of this
chapter. The regulations shall include, but not be limited to,
criteria and procedures for establishing the eligibility of a
supplier.
It is the duty of the department to adopt rules and regulations
that, in its judgment, will most effectively carry out the provisions
of this chapter in the public interest, to the end that the people
of California are most efficiently and most economically provided
supplies of pure, wholesome, and potable domestic water. The rules
and regulations may provide for the denial of funds when the purposes
of this chapter may most economically and efficiently be attained by
means other than the construction of the proposed project.
13835. The State Department of Health Services shall notify
suppliers that may be eligible for loans pursuant to this chapter of
(a) the purposes of this chapter and (b) the rules and regulations
adopted by the department.
13836. The State Department of Health Services, after public notice
and hearing and with the advice of the department, shall, from time
to time, establish a priority list of suppliers to be considered for
financing.
13837. Upon approval by the State Department of Health Services of
project plans submitted by a supplier on the priority list and upon
issuance to the supplier of a permit or amended permit as specified
in Chapter 4 (commencing with Section 116275) of Part 12 of Division
104 of the Health and Safety Code, the department may enter into a
contract with the supplier.
13838. Not more than twenty million dollars ($20,000,000) of state
loans for projects shall be authorized by the department in a single
calendar quarter. No contract shall be approved by the department,
unless the department finds that the supplier has the capacity to
repay the loan amounts specified in the contract.
At the request of the department, the Public Utilities Commission
shall furnish comments concerning the ability of suppliers subject to
its jurisdiction to finance the project from other sources and the
ability to repay the loan.
13839. All bonds authorized, which have been duly sold and
delivered pursuant to this chapter, shall constitute valid and
legally binding general obligations of the State of California, and
the full faith and credit of the State of California is hereby
pledged for the punctual payment of both principal and interest
thereon.
There shall be collected annually in the same manner, and at the
same time as other state revenue is collected, a sum, in addition to
the ordinary revenues of the state, that is required to pay the
principal and interest on the bonds, and it is hereby made the duty
of all officers charged by law with any duty in regard to the
collection of that revenue, to do and perform each and every act
which shall be necessary to collect that additional sum.
All money deposited in the fund which has been derived from
premium on bonds sold is available for transfer to the General Fund
as a credit to expenditures for bond interest.
13840. All money repaid to the state pursuant to any contract
executed under Section 13819 shall be deposited in the General Fund
and, when so deposited, shall be applied as a reimbursement to the
General Fund on account of principal and interest on bonds issued
pursuant to this chapter which has been paid from the General Fund.
13841. There is hereby appropriated from the General Fund in the
State Treasury, for the purpose of this chapter, an amount equal to
the sum of the following:
(a) The amount annually necessary to pay the principal of, and the
interest on, the bonds issued and sold pursuant to this chapter, as
the principal and interest become due and payable.
(b) The amount necessary to carry out Section 13842, which amount
is appropriated without regard to fiscal years.
13842. For the purpose of carrying out this chapter, the Director
of Finance may, by executive order, authorize the withdrawal from the
General Fund of an amount or amounts not to exceed the amount of the
unsold bonds which the committee has, by resolution, authorized to
be sold for the purpose of carrying out this chapter.
Any amounts withdrawn shall be deposited in the fund and shall be
disbursed by the department in accordance with this chapter. Any
money made available under this section to the department shall be
returned by the department to the General Fund from money received
from the first sale of bonds sold for the purpose of carrying out
this chapter subsequent to the withdrawal.
13842.5. Notwithstanding any other provision of this bond act, or
of the State General Obligation Bond Law (Chapter 4 (commencing with
Section 16720) of Part 3 of Division 4 of Title 2 of the Government
Code), if the Treasurer sells bonds pursuant to this bond act that
include a bond counsel opinion to the effect that the interest on the
bonds is excluded from gross income for federal tax purposes under
designated conditions, the Treasurer may maintain separate accounts
for the bond proceeds invested and the investment earnings on those
proceeds, and may use or direct the use of those proceeds or earnings
to pay any rebate, penalty, or other payment required under federal
law, or take any other action with respect to the investment and use
of those bond proceeds, as may be required or desirable under federal
law in order to maintain the tax-exempt status of those bonds and to
obtain any other advantage under federal law on behalf of the funds
of this state.
13843. Upon request of the department, supported by a statement of
the proposed arrangements to be made pursuant to Section 13819 for
the purposes stated therein, the committee shall determine whether or
not it is necessary or desirable to issue any bonds authorized under
this chapter in order to make those arrangements, and, if so, the
amount of bonds then to be issued and sold. Successive issues of
bonds may be authorized and sold to make those arrangements
progressively, and it shall not be necessary that all of the bonds
authorized to be issued shall be sold at any one time.
13844. The committee may authorize the Treasurer to sell all or any
part of the bonds authorized at the time or times as fixed by the
Treasurer.
13845. All proceeds from the sale of bonds, except those derived
from premiums and accrued interest, are available for the purpose
provided in Section 13819, but are not available for transfer to the
General Fund to pay principal and interest on bonds. The money in the
fund may be expended only as provided in this chapter.
