SECTIONS 13450-13469 - California Statutes

WATER CODE

SECTION 13450-13469

13450. This chapter shall be known and may be cited as the Water
Conservation and Water Quality Bond Law of 1986.

13451. The Legislature finds and declares all of the following:
(a) An abundant supply of clean water is essential to the public
health, safety, and welfare.
(b) An abundant supply of clean water fosters the beauty of
California's environment, the expansion of industry and agriculture,
maintains fish and wildlife, and supports recreation.
(c) The state's growing population has increasing needs for clean
water supplies and adequate treatment facilities.
(d) It is of paramount importance that the water resources of the
state be protected from pollution and conserved, and that the
groundwater basins of the state be recharged whenever possible to
ensure continued economic, community, and social growth.
(e) The chief cause of water pollution is the discharge of
inadequately treated waste into the waters of the state.
(f) Local agencies have the primary responsibility for the
construction, operation, and maintenance of facilities to cleanse our
waters, to conserve water, and recharge groundwater basins.
(g) Rising costs of construction have pushed the costs of
constructing treatment facilities and facilities to conserve water
and recharge groundwater basins beyond the ability of local agencies
to pay.
(h) Because water knows no political boundaries, it is desirable
for the state to contribute to the construction of these facilities
in order to meet its obligations to protect and promote the health,
safety, and welfare of its people and the environment.
(i) Voluntary, cost-effective capital outlay water conservation
programs can help meet growing demand for clean and abundant water
supplies.
(j) Recharge of groundwater basins is an effective way to maximize
availability of scarce water supplies throughout the state.
(k) California's abundant streams, rivers, bays, estuaries, and
groundwater are threatened with pollution from agricultural drainage
water which could threaten public health and fish and wildlife
resources and impede economic and social growth if left unchecked.
Proper containment structures and treatment facilities could provide
for the handling of agricultural drainage water in an environmentally
sensitive manner.
(l) (1) It is the intent of this chapter to provide funds for the
construction of cost-effective containment structures and treatment
facilities for the treatment, storage and disposal of agricultural
drainage water.
(2) It is the further intent of this chapter to provide funds for
voluntary, cost-effective capital outlay water conservation programs
and groundwater recharge facilities cooperatively carried out by
local agencies and the department.

13452. 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 words have the following
meanings:
(a) "Board" means the State Water Resources Control Board.
(b) "Committee" means the Water Conservation and Water Quality
Finance Committee created by Section 13454.
(c) "Department" means the Department of Water Resources.
(d) "Drainage water management units" mean land and facilities for
the treatment, storage, or disposal of agricultural drainage water
which, if discharged untreated, would pollute or threaten to pollute
the waters of the state.
(1) Drainage water management units may include any of the
following:
(A) A surface impoundment which is a natural topographic
depression, artificial excavation, or diked area formed primarily of
earthen materials, which is designed to hold an accumulation of
drainage water, including, but not limited to, holding, storage,
settling, and aeration pits, evaporation ponds, percolation ponds,
other ponds, and lagoons. Surface impoundment does not include a
landfill, a land farm, a pile, an emergency containment dike, tank,
or injection well.
(B) Conveyance facilities to the treatment or storage site,
including devices for flow regulation.
(C) Facilities or works to treat agricultural drainage water to
remove or substantially reduce the level of constituents which
pollute or threaten to pollute the waters of the state, including,
but not limited to, processes utilizing ion exchange, desalting
technologies like reverse osmosis, and biological treatment.
(D) An injection well.
(2) Any or all of the drain water management units, including the
land under the unit, may consist of separable features, or an
appropriate share of multipurpose features, of a larger system, or
both.
(e) "Fund" means the 1986 Water Conservation and Water Quality
Bond Fund.
(f) "Groundwater recharge facilities" mean land and facilities for
artificial groundwater recharge through methods which include, but
are not limited to, (1) percolation using basins, pits, ditches and
furrows, modified streambed, flooding, and well injection or (2)
in-lieu recharge. "Groundwater recharge facilities" also mean capital
outlay expenditures to expand, renovate, or restructure land and
facilities already in use for the purpose of groundwater recharge.
Groundwater recharge facilities may include any of the following:
(1) Instream facilities for regulation of water levels, but not
regulation of streamflow by storage to accomplish diversion from the
waterway.
(2) Agency-owned facilities for extraction.
(3) Conveyance facilities to the recharge site, including devices
for flow regulation and measurement of recharge waters.
Any part or all of the project facilities, including the land
under the facilities, may consist of the separable features, or an
appropriate share of multipurpose features, of a larger system, or
both.
(g) "In-lieu recharge" means accomplishing increased storage of
groundwater by providing interruptible surface water to a user who
relies on groundwater as a primary supply, to accomplish groundwater
storage through the direct use of that surface water in lieu of
pumping groundwater. In-lieu recharge would be used rather than
continuing pumping while artificially recharging with the
interruptible surface waters. However, bond proceeds shall not be
used to purchase surface water for use in lieu of pumping
groundwater.
(h) "Local agency" or "agency" means any city, county, district,
joint powers authority, or other political subdivision of the state
involved with water management.
(i) "Project" means all of the following:
(1) Groundwater recharge facilities.
(2) Voluntary, cost-effective capital outlay water conservation
programs.
(3) Drainage water management units.
(j) "Voluntary, cost-effective capital outlay water conservation
programs" mean those feasible capital outlay measures to improve the
efficiency of water use through benefits which exceed their costs.
The programs include, but are not limited to, lining or piping of
ditches; improvements in water distribution system controls such as
automated canal control, construction of small reservoirs within
distribution systems which conserve water that has already been
captured for use, and related physical improvements; tailwater
pumpback recovery systems; major improvements or replacements of
distribution systems to reduce leakage; and capital changes in
on-farm irrigation systems which improve irrigation efficiency such
as sprinkler or subsurface drip. In each case, the department shall
determine that there is a net savings of water as a result of each
proposed project and that the project is cost effective.

13453. There is hereby created the 1986 Water Conservation and
Water Quality Bond Fund in the State Treasury. There shall be
established in the fund a Water Conservation and Groundwater Recharge
Account for the purpose of implementing Section 13458, and an
Agricultural Drainage Water Account for the purpose of implementing
Section 13459.

13454. (a) There is a Water Conservation and Water Quality Finance
Committee consisting of the Governor or the Governor's designated
representative, the Controller, the Treasurer, the Director of
Finance, the Director of the Department of Water Resources, and the
Executive Director of the State Water Resources Control Board.
(b) The Water Conservation and Water Quality Finance Committee is
the "committee" as that term is used in the State General Obligation
Bond Law.

13455. (a) The committee may create a debt or debts, liability or
liabilities, of the State of California in the aggregate amount of
one hundred fifty million dollars ($150,000,000), in the manner
provided in this chapter. The debt or debts, liability or
liabilities, shall be created for the purpose of providing the fund
to be used for the object and work specified in this section and in
Sections 13458 and 13459.
(b) The department may enter into contracts and may adopt rules
and regulations necessary to carry out the purposes of Section 13458.
(c) The department may expend not more than 2 1/2 percent of the
total amount of the bonds authorized to be issued under this chapter
for the administration of Section 13458.
(d) The board may enter into contracts and may adopt rules and
regulations necessary to carry out the purposes of Section 13459.
(e) The board may expend not more than 2 1/2 percent of the total
amount of the bonds authorized to be issued under this chapter for
the administration of Section 13459.
(f) The department or the board may expend funds necessary to
reimburse the General Obligation Bond Expense Revolving Fund pursuant
to Section 16724.5 of the Government Code.

13456. All bonds which have been duly sold and delivered constitute
valid and legally binding general obligations of the State of
California, and the full faith and credit of the State of California
is pledged for the punctual payment of both principal and interest.
There shall be collected annually in the same manner, and at the
same time as other state revenue is collected, the amount, in
addition to the ordinary revenues of the state, required to pay the
principal of, and interest on, the bonds. It is the duty of all
officers charged by law with any duty in regard to the collection of
that revenue to perform each and every act which is necessary to
collect this additional amount.
All money deposited in the fund which has been derived from
premium and accrued interest on bonds sold is available for transfer
to the General Fund as a credit to expenditures for bond interest.

13457. The State General Obligation Bond Law is adopted for the
purpose of the issuance, sale, and repayment of, and other matters
with respect to, the bonds authorized by this chapter. The provisions
of that law are included in this chapter as though set out in full
in this chapter, except that, notwithstanding any provision in the
State General Obligation Bond Law, the bonds authorized under this
chapter shall bear the rates of interest, or maximum rates, fixed
from time to time by the Treasurer with the approval of the
committee. The maximum maturity of the 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.

13458. (a) The sum of seventy-five million dollars ($75,000,000) of
the money in the fund shall be deposited in the Water Conservation
and Groundwater Recharge Account and, notwithstanding Section 13340
of the Government Code, is appropriated for expenditure in the
1986-87 fiscal year for loans to local agencies to aid in the
acquisition and construction of voluntary, cost-effective capital
outlay water conservation programs and groundwater recharge
facilities and the purposes set forth in this section. Loans made in
the 1986-87 fiscal year may not be authorized sooner than 30 days
after notification in writing of the necessity therefor to the
chairperson of the committee in each house which considers
appropriations, to the policy committee of the Assembly as designated
by the Speaker of the Assembly and the policy committee of the
Senate designated by the Senate Rules Committee, and the Chairperson
of the Joint Legislative Budget Committee.
(b) Any contract entered into pursuant to this section may include
provisions as may be determined by the department. However, any
contract concerning an eligible, voluntary, cost-effective capital
outlay water conservation program shall be supported by or shall
include, in substance, all of the following:
(1) An estimate of the reasonable cost and benefit of the program.
(2) An agreement by the local agency to proceed expeditiously
with, and complete, the program.
(3) A provision that there shall be no moratorium or deferment on
payments of principal or interest.
(4) A loan period of up to 20 years with an interest rate set
annually by the department at 50 percent of the interest rate
computed by the true interest cost method on bonds most recently
issued pursuant to this chapter. The interest rate set for each
contract shall be applied throughout the contract's repayment period.
There shall be a level annual repayment of principal and interest on
the loans.
(5) A provision that the project shall not receive any more than
five million dollars ($5,000,000) in loan proceeds from the
department.
The department shall set priority for loans under this subdivision
on the basis of the cost effectiveness of the proposed project, with
the most cost-effective projects receiving the highest priorities.
(c) Any contract concerning an eligible project for groundwater
recharge shall be supported by or shall include, in substance, all of
the following:
(1) A finding by the department that the agency has the ability to
repay the requested loan, that the project is economically
justified, and that the project is feasible from an engineering and
hydrogeologic viewpoint.
(2) An estimate of the reasonable cost and benefit of the project,
including a feasibility report which shall set forth the economic
justification and the engineering, hydrogeologic, and financial
feasibility of the project, and shall include explanations of the
proposed facilities and their relation to other water-related
facilities in the basin or region.
(3) An agreement by the agency to proceed expeditiously to
complete the project in conformance with the approved plans and
specifications and the feasibility report and to operate and maintain
the project properly upon completion throughout the repayment
period.
(4) A provision that there shall be no moratorium or deferment on
payment of principal or interest.
(5) A loan period of up to 20 years with an interest rate set
annually by the department at 50 percent of the interest rate
computed by the true interest cost method on bonds most recently
issued pursuant to this chapter. The interest rate set for each
contract shall be applied throughout the contract's repayment period.
There shall be a level annual repayment of principal and interest on
the loans.
(6) A provision that the project shall not receive any more than
five million dollars ($5,000,000) in loan proceeds from the
department.
The department shall give priority under this subdivision to
projects of agencies located in overdrafted groundwater basins and
those projects of critical need, to projects whose feasibility
studies show the greatest economic justification and the greatest
engineering and hydrogeologic feasibility as determined by the
department, and to projects located in areas which have existing
water management programs.
(d) The department may make loans to local agencies, at the
interest rates authorized under this section and under any terms and
conditions as may be determined necessary by the department, for the
purposes of financing feasibility studies of projects potentially
eligible for funding under this section. No single potential project
shall be eligible to receive more than one hundred thousand dollars
($100,000), and not more than 3 percent of the total amount of bonds
authorized to be expended for purposes of this section may be
expended for this purpose. A loan for a feasibility study shall not
decrease the maximum amount of any other loan which may be made under
this section.

13459. (a) The sum of seventy-five million dollars ($75,000,000) of
the money in the fund shall be deposited in the Agricultural
Drainage Water Account is appropriated for expenditure in the 1986-87
fiscal year for loans to agencies to aid in the construction of
drainage water management units for the treatment, storage, or
disposal of agricultural drainage water and the purposes set forth in
this section. The board may loan an agency up to 100 percent of the
total eligible costs of design and construction of an eligible
project. Loans made in the 1986-87 fiscal year may not be authorized
sooner than 30 days after notification in writing of the necessity
therefor to the chairperson of the committee in each house which
considers appropriations, to the policy committee of the Assembly as
designated by the Speaker of the Assembly and the policy committee of
the Senate designated by the Senate Rules Committee, and the
Chairperson of the Joint Legislative Budget Committee.
(b) Any contract for an eligible project entered into pursuant to
this section may include such provisions as determined by the board
and shall include, in substance, all of the following provisions:
(1) An estimate of the reasonable cost of the eligible project.
(2) An agreement by the agency to proceed expeditiously with, and
complete, the eligible project; commence operation of the containment
structures or treatment works upon completion and to properly
operate and maintain the works in accordance with applicable
provisions of law; provide for payment of the agency's share of the
cost of the project, including principal and interest on any state
loan made pursuant to this section; and, if appropriate, apply for
and make reasonable efforts to secure federal assistance for the
state-assisted project.
(c) All loans pursuant to this section are subject to all of the
following provisions:
(1) Agencies seeking a loan shall demonstrate, to the satisfaction
of the board, that an adequate opportunity for public participation
regarding the loan has been provided.
(2) Any election held with respect to the loan shall include the
entire agency except where the agency proposes to accept the loan on
behalf of a specified portion, or portions, of the agency, in which
case the referendum shall be held in that portion or portions of the
agency only.
(3) Loan contracts may not provide a moratorium on payment of
principal or interest.
(4) Loans shall be for a period of up to 20 years. The interest
rate for the loans shall be set 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, with that rate to be computed according to
the true interest cost method. When 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. The
interest rate set for each contract shall be applied throughout the
contract's repayment period. There shall be a level annual repayment
of principal and interest on loans.
(5) The board in considering eligible projects shall give
preference to technologies which treat drainage water where the board
finds that the technology is readily available and economically
feasible for the agency.
(6) No single project may receive more than twenty million dollars
($20,000,000) in loan proceeds from the board.
(d) The board may make loans to local agencies, at the interest
rates authorized under this section and under any terms and
conditions as may be determined necessary by the board, for purposes
of financing feasibility studies of projects potentially eligible for
funding under this section. No single potential project shall be
eligible to receive more than one hundred thousand dollars
($100,000), and not more than 3 percent of the total amount of bonds
authorized to be expended for purposes of this section may be
expended for this purpose. A loan for a feasibility study shall not
decrease the maximum amount of any other loan which may be made under
this section.

13459.5. Unallocated money remaining in the Agricultural Drainage
Water Account in the 1986 Water Conservation and Water Quality Bond
Fund on November 6, 1996, and any unallocated money deposited into
that account from the sale of any bonds that are sold after November
6, 1996, shall be transferred to the Drainage Management Subaccount,
created by Section 78641, of the Clean Water and Water Recycling
Account in the Safe, Clean, Reliable Water Supply Fund for the
purposes of subdivision (b) of Section 78645. For the purpose of this
section, "unallocated money" means money not committed or
appropriated as of November 6, 1996, which is not less than six
million one hundred seventy-seven thousand dollars ($6,177,000).

13460. Money deposited in the fund pursuant to any provision of law
requiring repayments to the state for assistance financed by the
proceeds of the bonds authorized by this chapter shall be available
for transfer to the General Fund as a reimbursement for payment of
bond principal and interest.

13461. There is hereby appropriated from the General Fund, for the
purpose of this chapter, an amount equal to the sum of the following:
(a) The amount necessary annually 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 13462, which is
appropriated without regard to fiscal years.

13462. For the purpose of carrying out this chapter, the Director
of Finance may, by executive order, authorize the withdrawal from the
General Fund of amounts not to exceed the amount of the unsold bonds
which the committee has authorized to be sold for the purpose of
carrying out this chapter.
The amounts withdrawn shall be deposited in the fund and shall be
disbursed by the department or the board in accordance with this
chapter. Any money made available under this section to the
department or the board shall be returned to the General Fund from
money received from the sale of bonds. The withdrawals from the
General Fund shall be returned to the General Fund with interest at
the rate which would have otherwise been earned by those withdrawals
in the Pooled Money Investment Fund.

13462.5. 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.

13463. Upon request of the department or the board, the committee
shall determine whether or not it is necessary or desirable to issue
bonds authorized under this chapter.

13464. The committee may authorize the Treasurer to sell all, or
any part, of the bonds at times fixed by the Treasurer.

13465. Notwithstanding Sections 13458 and 13459, the committee may
prescribe further terms and conditions for loan contracts to
authorize a deferment on payment of all or part of the principal.

13466. For the 1987-88 fiscal year and each year thereafter, a loan
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 13467.

13468. It is the intent of language in Section 13998.8(i)(3),
Section 13999.10(d), and Section 13999.11(d) of the Water Code which
was enacted by the voters in the Clean Water Bond Law of 1984 that
"the average interest rate paid by the state on general obligation
bonds in the calendar year immediately preceding the year in which
the loan agreement is made" means the interest rate computed by the
true interest cost method on the bonds most recently issued pursuant
to the Clean Water Bond Law of 1984.

13469. If any provision of this chapter or the application thereof
to any person or circumstance is held invalid, that invalidity shall
not affect other provisions or applications of the chapter which can
be given effect without the invalid provision or application, and to
this end the provisions of this chapter are severable.