Article 4. Water Recycling Program of California Water Code >> Division 26. >> Chapter 7. >> Article 4.

Unless the context otherwise requires, the following definitions govern the construction of this article:
  (a) "Municipality" has the same meaning as that set forth in subdivision (c) of Section 79120.
  (b) "Subaccount" means the Water Recycling Subaccount created by Section 79136.
  (c) "Water recycling project" means a water recycling project that meets applicable reclamation criteria and water reclamation requirements and that complies with applicable water quality standards, policies, and plans.

There is hereby created in the account the Water Recycling Subaccount.

(a) The sum of forty million dollars ($40,000,000) is hereby transferred from the account to the subaccount for the purposes of this article.
  (b) (1) Sixty percent of the money in the subaccount shall be allocated to projects in the Counties of Riverside, Ventura, Los Angeles, San Diego, Orange, or San Bernardino.
  (2) Forty percent of the money in the subaccount shall be allocated to projects in counties not described in paragraph (1).

Unallocated funds remaining in the Water Recycling Subaccount in the Clean Water and Water Recycling Account in the Safe, Clean, Reliable Water Supply Fund on March 8, 2000, and any funds deposited into that subaccount after that date, shall be transferred to, and all money repaid to the state pursuant to any loan contract executed under Chapter 17 (commencing with Section 14050) of Division 7 or Article 3 (commencing with Section 78620) of Chapter 5 of Division 24 shall be deposited in, the subaccount for the purposes of this article.

The board may enter into an agreement with the federal government for federal contributions to the subaccount if all of the following conditions have been met:
  (a) The board has identified any required matching funds.
  (b) The board is prepared to commit to the expenditure of any minimum amount in the subaccount in the manner required by the Clean Water Act.
  (c) Any agreement between the board and the federal government is consistent with the purposes of this article.

(a) Notwithstanding Section 13340 of the Government Code, 50 percent of the money in the subaccount is hereby continuously appropriated, without regard to fiscal years, to the board for loans to municipalities for the design and construction of water recycling projects in accordance with Section 79141, and for the purposes described in Sections 79143, 79144, and 79145.
  (b) Fifty percent of the money in the subaccount, upon appropriation by the Legislature to the board, may be used by the board for grants to municipalities for the design and construction of water recycling projects in accordance with Section 79141.

The board may enter into agreements with municipalities for loans and grants for projects to recycle water in accordance with this article. Criteria to be considered by the board in determining whether to enter into an agreement under this article may include, but are not limited to, whether the project is a cost-effective means to meet the state or local water supply needs, when compared to other sources of water supply that may be available to the municipality, whether the project is necessary to protect water quality, the readiness of the municipality to proceed with the design and construction of water recycling projects, the degree to which the recycled water improves water supply reliability, water quality, ecosystem restoration, and other environmental benefits, the net water savings benefit, the degree to which the recycled water would reduce water supply demands on the bay-delta system, the Colorado River, or other water systems critical to regional or statewide water supply, the ability to encourage development of new water recycling projects, and the amount of funding that the municipality is requesting under this article. The cost effectiveness of a project when compared to other sources of state or local water supply shall not be the sole factor in determining whether to enter into an agreement.

An agreement entered into pursuant to Section 79141 may include those provisions determined by the board to be necessary for the purposes of this article.

(a) A contract for a loan made pursuant to this article may not provide for a moratorium on, or the deferment of, the payment of the principal of, or interest on, the loan.
  (b) Any loan made pursuant to Section 79141 shall be for a period not to exceed 20 years.
  (c) The board may enter into a contract for a loan that equals up to 100 percent of the total eligible cost of design and construction of an eligible recycling project.

(a) The board may establish the interest rate for a loan made pursuant to this article at a rate equal to 50 percent of the interest rate paid by the state on the most recent sale of state general obligation bonds, to be computed according to the true interest cost method.
  (b) If the interest rate so determined is not a multiple of one-tenth of 1 percent, the interest rate shall be set at the next higher multiple of one-tenth of 1 percent.
  (c) The interest rate set for each contract shall be applied throughout the repayment period of the contract. There shall be a level annual repayment of principal and interest on the loans.

All principal and interest payments received pursuant to loan contracts executed pursuant to this article shall be deposited in the subaccount for the purposes of this article, and shall not be transferred to the General Fund.

All interest earned by assets in the subaccount shall be deposited in the subaccount.

The board may make grants to municipalities for facility planning studies for water recycling projects. The amount of the grants may not exceed seventy-five thousand dollars ($75,000) per study.

The board may, by contract or otherwise, undertake plans, surveys, research, development, and studies necessary or desirable to carry out this article, and may prepare recommendations with regard thereto, including the preparation of comprehensive statewide or areawide studies and reports on the collection, treatment, and disposal of waste and wastewater recycling. For the purposes of this section, "research" may include the design, acquisition, installation, or construction of monitoring and testing equipment and related facilities.

(a) Not more than 3 percent of the total amount deposited in the subaccount may be used to pay the costs incurred in connection with the administration of this article.
  (b) Not more than 3 percent of the total amount deposited in the subaccount may be used for the purposes of Section 79144.

Notwithstanding any other provision of this article, the money in the subaccount may not be used to provide financial assistance to any water recycling project used to augment water supplies by discharging recycled water into a surface water reservoir that supplies water directly to a treatment facility for a water supply system that serves domestic uses.

(a) The board may adopt regulations to carry out this article.
  (b) The board is encouraged to expedite the review and processing of agreements to carry out the purposes of this article. The board shall report to the Legislature on the progress of implementing this article on or before June 30, 2001.