SECTIONS 12894-12894.8 - California Statutes

WATER CODE

SECTION 12894-12894.8

12894. 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.

12894.1. 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.

12894.2. 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.

12894.3. 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.

12894.4. 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.

12894.5. 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.

12894.6. 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.

12894.7. 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.

12894.8. 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.