Chapter 5.5. Local Agency Bond Payments of California Water Code >> Division 6. >> Part 6. >> Chapter 5.5.

The department may, when specifically authorized by law to do so, enter into a commitment, without regard to fiscal years, with any public agency, as defined in subdivision (b) of Section 12881.2, to make a loan to such public agency for the purpose of paying the difference between the amount the public agency is able to raise to make any payment of the principal and interest on general obligation bonds issued by such public agency for the construction of a project utilizing water from the State Water Resources Development System or water obtained through an exchange of water from the system and the amount due on such principal and interest. For the purposes of this chapter, the term "general obligation bonds" shall be deemed to include bonds, but not direct assessment warrants, issued by a California water storage district pursuant to Part 8 (commencing with Section 45100) of Division 14 of this code. The balance of the appropriation made by Chapter 1435, Statutes of 1963, not required for the purposes of that chapter, as determined by the director, is hereby appropriated to the department for expenditure, without regard to fiscal years, as follows:
  (a) Not to exceed ten thousand dollars ($10,000) may be expended by the department in carrying out the provisions of Section 12894.2.
  (b) The remainder shall be available for the purpose of making loan commitments pursuant to this section, when specifically authorized by law. Said balance of the appropriation made by Chapter 1435, Statutes of 1963, shall constitute the sole and exclusive source of payment of such loans, and any commitment to make such a loan shall not constitute a debt, liability, or obligation of the state, except to the extent that money may be available from said balance to make a loan. The purpose of such commitments shall be to assist public agencies in the sale of such bonds at a reasonable charge. An application for such a commitment may be approved only if it is determined that the commitment is needed for that purpose, that there is reasonable assurance that the public agency can repay any sums paid out by the department under the commitment, and that the project for which the bonds are to be issued substantially conforms to the California Water Plan and is financially feasible. Approval of such bonds by the State Treasurer for certification shall constitute a finding that the project is financially feasible.

Notwithstanding any provision of law to the contrary, every public agency empowered by law to contract with the state for a water supply is hereby granted, in addition to and not in derogation or limitation of the powers conferred upon the public agency by any other law, the power to enter into a contract with the department for a commitment in accordance with this chapter and to comply with the provisions of any such contract and the same powers with regard to such a loan commitment as are granted to public agencies under Sections 12887.1, 12887.2, 12887.3, 12887.6, 12887.7, and 12887.8.

The Department of Water Resources shall notify all public agencies which have contracted for water from the State Water Resources Development System of its intention to conduct an investigation of the need for loan commitments to public agencies under Section 12894. The department shall investigate all public agencies which indicate a desire for such a loan commitment. Any agency indicating such a desire shall, upon request, furnish to the department such information as may be required by the department in the conduct of the investigation and the preparation of the report to be submitted to the Legislature pursuant to this section. The department shall submit to the Legislature by the fifth legislative day of the 1968 Regular Session, a report which shall include, but not necessarily be limited to, the following: (1) the total amount of assistance requested by all public agencies pursuant to this chapter; (2) the loan commitments which the department proposes to make; (3) the period for which each loan commitment is proposed to be made; (4) the interest rate on any such loan; (5) the terms which will govern the repayment of loans made pursuant to this chapter; and (6) the terms and conditions upon which the department would propose to make such commitments.

If the department determines that a loan commitment pursuant to Section 12894 will not enable any eligible public agency specified in Section 1 of Chapter 842 of the Statutes of 1968 to obtain the funds necessary to construct projects utilizing water from the State Water Resources Development System or water obtained through an exchange of water from the system, the department may make loans from the funds appropriated by Section 12894 for the construction of such projects. Such loans shall be made upon the terms and conditions specified in Sections 12894.4, 12894.5 and 12894.6.

A loan pursuant to Section 12894.3 shall not exceed 25 percent of the total cost of the project, or two million five hundred thousand dollars ($2,500,000), whichever is the lesser. Such loan shall be repayable over a period not to exceed 40 years. A period of development, not exceeding five years, may be allowed during which no payments on the principal of or the interest on such loan shall be required, when in the department's judgment such development period is justified under the circumstances. If the payment of interest is deferred pursuant to this section, no interest shall be charged on the interest amount for which payment is deferred. The accrued interest shall be paid in annual installments during the remainder of the loan repayment period.

Annual payments on the loan, including both principal repayment and interest, shall be in substantially equal amounts over the term of the loan, excluding the initial deferment, if any.

In making loans pursuant to Section 12894.3, the department shall impose such terms and conditions as are necessary to protect the state's investment and carry out the purposes of this chapter.

The department shall require the payment of interest on each loan that is made pursuant to Section 12894.3 at a rate equal to the weighted average of the interest rates paid by the state on bonds issued under the California Water Resources Development Bond Act (Chapter 8 (commencing with Section 12930) of this part), without regard to any premiums received on the sale of such bonds, as of the date of the loan.

Prior approval by the voters of an eligible district of a project described in Section 12894.3 and bonds therefor shall constitute approval of a loan pursuant to Section 12894.3 to the extent that the loan proceeds will be utilized to construct the project in lieu of the approved bonds.