14010. The proceeds of bonds issued and sold pursuant to this
chapter shall be deposited in the California Safe Drinking Water
Fund, which is hereby created.
14011. (a) Notwithstanding Section 13340 of the Government Code, an
aggregate amount of seventy-five million dollars ($75,000,000) of
the moneys in the fund are hereby continuously appropriated and shall
be used for the purposes set forth in this section and Section
14029.
(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 14022, 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).
(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)), the
California Safe Drinking Water Bond Law of 1984 (Chapter 10.2
(commencing with Section 13810)), and the California Safe Drinking
Water Bond Law of 1986 (Chapter 10.7 (commencing with Section 13895))
that are unissued and uncommitted on the effective date of this
chapter, shall be used for loans and grants to suppliers in
accordance with the terms, conditions, and purposes of this chapter.
(f) The Treasurer shall determine the interest rate to be paid on
loans issued under the Safe Drinking Water Bond Law of 1976 (Chapter
10.5 (commencing with Section 13850)), as required under Section
13867, equal to the average interest rate, computed by the true
interest cost method, paid by the state on general obligation bonds
sold pursuant to that chapter up to the effective date of this
chapter.
14012. (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
14011, 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.
(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.
14013. Applications for loans and grants under this chapter shall
be made to the department in the form and with the supporting
material as prescribed by the department.
14015. (a) Loans and grants may be made only for projects for
domestic water systems. The State Department of Health Services 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. The State Department of Health Services shall
determine and notify applicants of eligibility of components
requested to be included in the proposed project. The department
shall use this determination as a basis for disbursing funds. 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.
14016. An application for a grant pursuant to this chapter shall
not be approved by the department, unless the State Department of
Health Services 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 written approval by the State Department of
Health Services that the proposed project is consistent with Chapter
4 (commencing with Section 116275) of Part 12 of Division 104 of the
Health and Safety Code.
14017. 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.
14018. 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.
14019. 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.
14020. 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.
14021. 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.
14022. For the purpose of administering this chapter, the total
expenditures of the department and the State Department of Health
Services 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 supplier pursuant to Section 14011,
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 shall be paid from the proceeds of bond sales 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 sold under this chapter.
14023. 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.
14024. The department shall establish the interest rate for loans
made pursuant to this chapter at 50 percent of the true interest cost
to the state of general obligation bonds issued most recently prior
to the loan being executed. All loans made pursuant to this chapter
shall carry the established interest rate for the calendar year in
which the funds are committed to the loan, as of the date of the
letter of commitment from the department, and shall remain at that
interest rate for the duration of the loan.
14025. (a) 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.
(b) The department shall adopt rules and regulations that, in its
judgment, will most effectively carry out 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.
(c) Notwithstanding subdivision (a) or any other provision of law,
existing rules and regulations adopted by the department pursuant to
the California Safe Drinking Water Bond Law of 1984 (Chapter 10.2
(commencing with Section 13810)) which are in effect on the effective
date of this chapter, may, at the option of the department, be
utilized upon voter approval of this chapter for purposes of
implementing this chapter. The department, with the concurrence of
the State Department of Health Services, 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 implement provisions of this chapter which
differ from Chapter 10.2 (commencing with Section 13810) or Chapter
10.7 (commencing with Section 13895) or for any other reason to carry
out the purposes of this chapter.
14026. 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.
14027. (a) 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 projects to be considered
for financing.
(b) Notwithstanding subdivision (a) or any other provision of law,
the priority list established by the State Department of Health
Services pursuant to the California Safe Drinking Water Bond Law of
1986 (Chapter 10.7 (commencing with Section 13895)) in effect on the
effective date of this chapter may, at the option of the State
Department of Health Services, be utilized upon voter approval of
this chapter until the State Department of Health Services adopts a
new priority list.
14028. Not more than twenty-five million dollars ($25,000,000) 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.
14029. (a) As approved annually by the Legislature in the Budget
Act, the department, notwithstanding Section 14022, may expend money
repaid to the state pursuant to any contract executed under Section
14011 as necessary for the administration of contracts entered into
by the department under this chapter, but those 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 interest in the use and repayment of grant and loan funds
under this chapter may be paid by the department from these funds,
but those charges may not exceed one-half of 1 percent of the amount
repaid to the state in that year. Any of the above sums approved by
the Legislature, but unexpended by the department at the end of any
year, shall automatically revert to the General Fund.
(b) Except as provided in subdivision (a), all money repaid to the
state pursuant to any contract executed under Section 14011 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.
(c) The department may enter into contracts with suppliers of
water for grants or short-term loans for the purpose of investigating
and identifying alternatives for system improvements. Any loans or
grants pursuant to this section shall be made from the fund. No
supplier may receive for a single investigation more than twenty-five
thousand dollars ($25,000) in the form of a loan or grant pursuant
to this section. The State Department of Health Services shall review
all proposed investigations and shall determine if they are
necessary and appropriate.
(d) Any contract entered into pursuant to this section shall
include terms and conditions consistent with this chapter, and any
loan contract shall provide for a repayment period not to exceed 24
months.
(e) Not more than six million dollars ($6,000,000) may be expended
for the purposes of this section, of which not more than two million
dollars ($2,000,000) may be used for grants to public agencies. A
loan or grant made for the purposes of this section shall not
decrease the maximum amount of any other loan or grant which may be
made under this chapter, Chapter 10.2 (commencing with Section
13810), Chapter 10.5 (commencing with Section 13850), Chapter 10.6
(commencing with Section 13880), or Chapter 10.7 (commencing with
Section 13895).
14010. The proceeds of bonds issued and sold pursuant to this
chapter shall be deposited in the California Safe Drinking Water
Fund, which is hereby created.
14011. (a) Notwithstanding Section 13340 of the Government Code, an
aggregate amount of seventy-five million dollars ($75,000,000) of
the moneys in the fund are hereby continuously appropriated and shall
be used for the purposes set forth in this section and Section
14029.
(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 14022, 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).
(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)), the
California Safe Drinking Water Bond Law of 1984 (Chapter 10.2
(commencing with Section 13810)), and the California Safe Drinking
Water Bond Law of 1986 (Chapter 10.7 (commencing with Section 13895))
that are unissued and uncommitted on the effective date of this
chapter, shall be used for loans and grants to suppliers in
accordance with the terms, conditions, and purposes of this chapter.
(f) The Treasurer shall determine the interest rate to be paid on
loans issued under the Safe Drinking Water Bond Law of 1976 (Chapter
10.5 (commencing with Section 13850)), as required under Section
13867, equal to the average interest rate, computed by the true
interest cost method, paid by the state on general obligation bonds
sold pursuant to that chapter up to the effective date of this
chapter.
14012. (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
14011, 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.
(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.
14013. Applications for loans and grants under this chapter shall
be made to the department in the form and with the supporting
material as prescribed by the department.
14015. (a) Loans and grants may be made only for projects for
domestic water systems. The State Department of Health Services 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. The State Department of Health Services shall
determine and notify applicants of eligibility of components
requested to be included in the proposed project. The department
shall use this determination as a basis for disbursing funds. 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.
14016. An application for a grant pursuant to this chapter shall
not be approved by the department, unless the State Department of
Health Services 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 written approval by the State Department of
Health Services that the proposed project is consistent with Chapter
4 (commencing with Section 116275) of Part 12 of Division 104 of the
Health and Safety Code.
14017. 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.
14018. 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.
14019. 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.
14020. 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.
14021. 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.
14022. For the purpose of administering this chapter, the total
expenditures of the department and the State Department of Health
Services 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 supplier pursuant to Section 14011,
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 shall be paid from the proceeds of bond sales 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 sold under this chapter.
14023. 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.
14024. The department shall establish the interest rate for loans
made pursuant to this chapter at 50 percent of the true interest cost
to the state of general obligation bonds issued most recently prior
to the loan being executed. All loans made pursuant to this chapter
shall carry the established interest rate for the calendar year in
which the funds are committed to the loan, as of the date of the
letter of commitment from the department, and shall remain at that
interest rate for the duration of the loan.
14025. (a) 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.
(b) The department shall adopt rules and regulations that, in its
judgment, will most effectively carry out 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.
(c) Notwithstanding subdivision (a) or any other provision of law,
existing rules and regulations adopted by the department pursuant to
the California Safe Drinking Water Bond Law of 1984 (Chapter 10.2
(commencing with Section 13810)) which are in effect on the effective
date of this chapter, may, at the option of the department, be
utilized upon voter approval of this chapter for purposes of
implementing this chapter. The department, with the concurrence of
the State Department of Health Services, 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 implement provisions of this chapter which
differ from Chapter 10.2 (commencing with Section 13810) or Chapter
10.7 (commencing with Section 13895) or for any other reason to carry
out the purposes of this chapter.
14026. 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.
14027. (a) 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 projects to be considered
for financing.
(b) Notwithstanding subdivision (a) or any other provision of law,
the priority list established by the State Department of Health
Services pursuant to the California Safe Drinking Water Bond Law of
1986 (Chapter 10.7 (commencing with Section 13895)) in effect on the
effective date of this chapter may, at the option of the State
Department of Health Services, be utilized upon voter approval of
this chapter until the State Department of Health Services adopts a
new priority list.
14028. Not more than twenty-five million dollars ($25,000,000) 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.
14029. (a) As approved annually by the Legislature in the Budget
Act, the department, notwithstanding Section 14022, may expend money
repaid to the state pursuant to any contract executed under Section
14011 as necessary for the administration of contracts entered into
by the department under this chapter, but those 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 interest in the use and repayment of grant and loan funds
under this chapter may be paid by the department from these funds,
but those charges may not exceed one-half of 1 percent of the amount
repaid to the state in that year. Any of the above sums approved by
the Legislature, but unexpended by the department at the end of any
year, shall automatically revert to the General Fund.
(b) Except as provided in subdivision (a), all money repaid to the
state pursuant to any contract executed under Section 14011 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.
(c) The department may enter into contracts with suppliers of
water for grants or short-term loans for the purpose of investigating
and identifying alternatives for system improvements. Any loans or
grants pursuant to this section shall be made from the fund. No
supplier may receive for a single investigation more than twenty-five
thousand dollars ($25,000) in the form of a loan or grant pursuant
to this section. The State Department of Health Services shall review
all proposed investigations and shall determine if they are
necessary and appropriate.
(d) Any contract entered into pursuant to this section shall
include terms and conditions consistent with this chapter, and any
loan contract shall provide for a repayment period not to exceed 24
months.
(e) Not more than six million dollars ($6,000,000) may be expended
for the purposes of this section, of which not more than two million
dollars ($2,000,000) may be used for grants to public agencies. A
loan or grant made for the purposes of this section shall not
decrease the maximum amount of any other loan or grant which may be
made under this chapter, Chapter 10.2 (commencing with Section
13810), Chapter 10.5 (commencing with Section 13850), Chapter 10.6
(commencing with Section 13880), or Chapter 10.7 (commencing with
Section 13895).
14010. The proceeds of bonds issued and sold pursuant to this
chapter shall be deposited in the California Safe Drinking Water
Fund, which is hereby created.
14011. (a) Notwithstanding Section 13340 of the Government Code, an
aggregate amount of seventy-five million dollars ($75,000,000) of
the moneys in the fund are hereby continuously appropriated and shall
be used for the purposes set forth in this section and Section
14029.
(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 14022, 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).
(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)), the
California Safe Drinking Water Bond Law of 1984 (Chapter 10.2
(commencing with Section 13810)), and the California Safe Drinking
Water Bond Law of 1986 (Chapter 10.7 (commencing with Section 13895))
that are unissued and uncommitted on the effective date of this
chapter, shall be used for loans and grants to suppliers in
accordance with the terms, conditions, and purposes of this chapter.
(f) The Treasurer shall determine the interest rate to be paid on
loans issued under the Safe Drinking Water Bond Law of 1976 (Chapter
10.5 (commencing with Section 13850)), as required under Section
13867, equal to the average interest rate, computed by the true
interest cost method, paid by the state on general obligation bonds
sold pursuant to that chapter up to the effective date of this
chapter.
14012. (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
14011, 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.
(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.
14013. Applications for loans and grants under this chapter shall
be made to the department in the form and with the supporting
material as prescribed by the department.
14015. (a) Loans and grants may be made only for projects for
domestic water systems. The State Department of Health Services 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. The State Department of Health Services shall
determine and notify applicants of eligibility of components
requested to be included in the proposed project. The department
shall use this determination as a basis for disbursing funds. 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.
14016. An application for a grant pursuant to this chapter shall
not be approved by the department, unless the State Department of
Health Services 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 written approval by the State Department of
Health Services that the proposed project is consistent with Chapter
4 (commencing with Section 116275) of Part 12 of Division 104 of the
Health and Safety Code.
14017. 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.
14018. 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.
14019. 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.
14020. 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.
14021. 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.
14022. For the purpose of administering this chapter, the total
expenditures of the department and the State Department of Health
Services 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 supplier pursuant to Section 14011,
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 shall be paid from the proceeds of bond sales 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 sold under this chapter.
14023. 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.
14024. The department shall establish the interest rate for loans
made pursuant to this chapter at 50 percent of the true interest cost
to the state of general obligation bonds issued most recently prior
to the loan being executed. All loans made pursuant to this chapter
shall carry the established interest rate for the calendar year in
which the funds are committed to the loan, as of the date of the
letter of commitment from the department, and shall remain at that
interest rate for the duration of the loan.
14025. (a) 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.
(b) The department shall adopt rules and regulations that, in its
judgment, will most effectively carry out 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.
(c) Notwithstanding subdivision (a) or any other provision of law,
existing rules and regulations adopted by the department pursuant to
the California Safe Drinking Water Bond Law of 1984 (Chapter 10.2
(commencing with Section 13810)) which are in effect on the effective
date of this chapter, may, at the option of the department, be
utilized upon voter approval of this chapter for purposes of
implementing this chapter. The department, with the concurrence of
the State Department of Health Services, 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 implement provisions of this chapter which
differ from Chapter 10.2 (commencing with Section 13810) or Chapter
10.7 (commencing with Section 13895) or for any other reason to carry
out the purposes of this chapter.
14026. 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.
14027. (a) 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 projects to be considered
for financing.
(b) Notwithstanding subdivision (a) or any other provision of law,
the priority list established by the State Department of Health
Services pursuant to the California Safe Drinking Water Bond Law of
1986 (Chapter 10.7 (commencing with Section 13895)) in effect on the
effective date of this chapter may, at the option of the State
Department of Health Services, be utilized upon voter approval of
this chapter until the State Department of Health Services adopts a
new priority list.
14028. Not more than twenty-five million dollars ($25,000,000) 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.
14029. (a) As approved annually by the Legislature in the Budget
Act, the department, notwithstanding Section 14022, may expend money
repaid to the state pursuant to any contract executed under Section
14011 as necessary for the administration of contracts entered into
by the department under this chapter, but those 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 interest in the use and repayment of grant and loan funds
under this chapter may be paid by the department from these funds,
but those charges may not exceed one-half of 1 percent of the amount
repaid to the state in that year. Any of the above sums approved by
the Legislature, but unexpended by the department at the end of any
year, shall automatically revert to the General Fund.
(b) Except as provided in subdivision (a), all money repaid to the
state pursuant to any contract executed under Section 14011 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.
(c) The department may enter into contracts with suppliers of
water for grants or short-term loans for the purpose of investigating
and identifying alternatives for system improvements. Any loans or
grants pursuant to this section shall be made from the fund. No
supplier may receive for a single investigation more than twenty-five
thousand dollars ($25,000) in the form of a loan or grant pursuant
to this section. The State Department of Health Services shall review
all proposed investigations and shall determine if they are
necessary and appropriate.
(d) Any contract entered into pursuant to this section shall
include terms and conditions consistent with this chapter, and any
loan contract shall provide for a repayment period not to exceed 24
months.
(e) Not more than six million dollars ($6,000,000) may be expended
for the purposes of this section, of which not more than two million
dollars ($2,000,000) may be used for grants to public agencies. A
loan or grant made for the purposes of this section shall not
decrease the maximum amount of any other loan or grant which may be
made under this chapter, Chapter 10.2 (commencing with Section
13810), Chapter 10.5 (commencing with Section 13850), Chapter 10.6
(commencing with Section 13880), or Chapter 10.7 (commencing with
Section 13895).
