SECTIONS 13850-13875 - California Statutes

WATER CODE

SECTION 13850-13875

13850. This chapter shall be known and may be cited as the
California Safe Drinking Water Bond Law of 1976.

13851. The Legislature hereby finds and declares that it is
necessary for the preservation of the health, safety, and welfare of
the people of California that water supplied for domestic purposes be
pure, wholesome, and potable and does not endanger the health or
lives of human beings and that water is available in adequate
quantity at sufficient pressure for health, cleanliness, and other
domestic purposes.

13854. The Legislature further finds and declares that a number of
domestic water supply systems are inadequate and do not meet minimum
bacteriological, chemical, or other basic health standards for
domestic water supplies, and that it is in the interest of the people
that the State of California provide technical and financial
assistance to the end that the people of California are assured a
safe, dependable, and potable supply of water for domestic purposes
and that water is available in adequate quantity at sufficient
pressure for health, cleanliness, and other domestic purposes.

13855. The Legislature further finds and declares that it is the
intent of the Legislature to provide for the upgrading of domestic
water supply systems to assure that all domestic water supplies at
least meet minimum domestic water supply standards established under
Chapter 4 (commencing with Section 116275) of Part 12 of Division 104
of the Health and Safety Code.

13856. The State General Obligation Bond Law is adopted for the
purpose of the issuance, sale, and repayment of, and otherwise
providing with respect to, the bonds authorized to be issued by this
chapter, and the provisions of that law are included in this chapter
as though set out in full in this chapter, except that
notwithstanding anything in the State General Obligation Bond Law,
the bonds authorized hereunder shall bear such rates of interest, or
maximum rates, as may from time to time be fixed by the State
Treasurer, with the approval of the committee, and the maximum
maturity of 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 such
series.

13857. As used in this chapter, and for purposes of this chapter as
used in the State General Obligation Bond Law, the following words
shall have the following meanings:
(a) "Committee" means the Safe Drinking Water Finance Committee,
created by Section 13858.
(b) "Department" means the Department of Water Resources.
(c) "Domestic water system" means a system for the provision to
the public of piped water for human consumption, if such system has
at least 15 service connections or regularly supplies water to at
least 25 individuals. Such term includes any water supply, treatment,
storage, and distribution facilities under the control of the
operator of such system.
(d) "Fund" means the California Safe Drinking Water Fund.
(e) "Supplier" or "supplier of water" means any person,
partnership, corporation, association or other entity or political
subdivision of the state which owns or operates a domestic water
system.
(f) "Federal assistance" means funds available or which may become
available to a supplier either directly or through allocation by the
state, from the federal government as grants or loans for the
improvement of domestic water systems.
(g) "Treatment works" means any devices or systems used in the
treatment of water supplies, including necessary lands, which render
such supplies pure, wholesome, and potable for domestic purpose.
(h) "Project" means proposed facilities for the construction,
improvement, or rehabilitation of the domestic water system, and may
include water supply, treatment works, and all or part of a water
distribution system, if such inclusions are necessary to carry out
the purpose of this chapter.

13858. The Safe Drinking Water Finance Committee is hereby created.
The committee shall consist of the Governor, the State Treasurer,
the Director of Finance, the Director of Water Resources, and the
State Director of Health Services or their designated
representatives. A majority of the committee may act for the
committee.

13859. There is in the State Treasury the California Safe Drinking
Water Fund which fund is hereby created.

13860. The committee is hereby empowered to create a debt or debts,
liability or liabilities, of the State of California, in an
aggregate amount of one hundred seventy-five million dollars
($175,000,000) in the manner provided in this chapter. Such debt or
debts, liability or liabilities, shall be created for the purpose of
providing the fund to be used for the objects and works specified in
Section 13861.

13861. (a) The moneys in the fund are hereby continuously
appropriated and shall be used for the purposes set forth in this
section.
(b) The department is authorized to enter into contracts with
suppliers having authority to construct, operate, and maintain
domestic water systems, for loans to the 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 pursuant to this section may include provisions
as may be agreed upon by the parties thereto, and the contract shall
include, in substance, 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 may be agreed upon 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, (i) over a
period not to exceed 50 years, (ii) the amount of the loan, (iii) the
administrative fee as described in Section 13862, and (iv) interest
on the principal, that is the amount of the loan plus the
administrative fee.
(4) An agreement by the supplier, (i) to proceed expeditiously
with, and complete, the project, (ii) 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,
(iii) to apply for and make reasonable efforts to secure federal
assistance for the project, (iv) 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 the assistance available, and (v) to provide for payment of the
supplier's share of the cost of the project, if any.
(d) By statute, the Legislature may authorize bond proceeds to be
used for a grant program, with grants provided to suppliers that are
political subdivisions of the state, if it is determined that the
suppliers 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 shall not exceed thirty million dollars
($30,000,000), of which up to fifteen million dollars ($15,000,000)
may be used for grants for projects for the construction,
improvement, or rehabilitation of domestic water systems that have
become contaminated by organic or inorganic compounds (such as
nitrates, DBCP (dibromochloropropane), TCE (trichloroethylene), and
arsenic), or radiation, in amounts as to render the water unfit or
hazardous for human consumption, and no one supplier may receive more
than four hundred thousand dollars ($400,000) in total. Any of the
moneys made available pursuant to this subdivision, for grants for
projects, that have not been encumbered within two years after the
effective date of amendments to this subdivision made by Assembly
Bill No. 2404 of the 1979-80 Regular Session shall be available only
for loans pursuant to this section.
The Legislative Analyst shall review the grant programs and report
to the Legislature not later than February 1, 1981.

13862. For the purpose of administering this chapter, the total
expenditures of the department and the State Department of Health
Services may not exceed 3 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, which fees
shall be paid by the supplier pursuant to Section 13861, to reimburse
the state for the costs of state administration of this chapter.
The amendment to this section enacted at the 1981-82 Regular
Session of the Legislature does not constitute a change in, but is
declaratory of, the existing law.

13863. As much of the moneys in the fund as may be necessary shall
be used to reimburse the General Obligation Bond Expense Revolving
Fund pursuant to Section 16724.5 of the Government Code.

13864. Loans may be made only for projects for domestic water
systems. The department may make reasonable allowance for future
water-supply needs and may provide for additional capacity when
excessive costs would be incurred by later enlargement. Such loans
may be made for all or any part of the cost of constructing,
improving, or rehabilitating any such system when, in the judgment of
the State Department of Health Services, such improvement or
rehabilitation is necessary to provide pure, wholesome, and potable
water available in adequate quantity at sufficient pressure for
health, cleanliness, and other domestic purposes. No loan to an
individual supplier shall be more than one million five hundred
thousand dollars ($1,500,000), unless the Legislature by an act
raises the limit specified in this section.

13865. 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.

13866. 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 such 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.

13867. The department shall require the payment of interest on each
loan that is made pursuant to the provisions of this chapter at a
rate equal to the average, as determined by the State Treasurer, of
the net interest cost to the state on the sales of general obligation
bonds pursuant to the provisions of this chapter. However, when the
applicable average of the net interest costs to the state is not a
multiple of one-tenth of 1 percent the interest rate shall be at the
multiple of one-tenth of 1 percent next above the applicable average
of the net interest costs.

13868. The department, after public notice and hearing and with the
advice of the State Department of Health Services, shall adopt rules
and regulations necessary to carry out the purposes of this chapter.
Such regulations shall include, but not be limited to, criteria and
procedures for establishing the eligibility of a supplier and a
project for assistance commensurate with the need for the project and
the ability of the supplier to reasonably finance the project from
other sources. It shall be the duty of the department to adopt such
rules and regulations as in its judgment will most effectively carry
out the provisions of 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. Such 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.

13868.1. 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.

13868.3. 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 suppliers to be considered
for financing.

13868.5. Upon approval by the State Department of Health Services
of project plans submitted by a supplier on the priority list and
upon issuance to the supplier of a permit or amended permit as
specified in Chapter 4 (commencing with Section 116275) of Part 12 of
Division 104 of the Health and Safety Code, the department may enter
into a contract with the supplier.

13868.7. No more than twenty million dollars ($20,000,000) 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.
The Public Utilities Commission shall furnish comments at the
request of the department concerning the ability of suppliers subject
to their jurisdiction to finance the project from other sources and
the ability to repay the loan.

13869. All bonds herein authorized, which shall have been duly sold
and delivered as herein provided, shall constitute valid and legally
binding general obligations of the State of California, and the full
faith and credit of the State of California is hereby pledged for
the punctual payment of both principal and interest thereon.
There shall be collected annually in the same manner and at the
same time as other state revenue is collected such a sum, in addition
to the ordinary revenues of the state, as shall be required to pay
the principal and interest on such bonds as herein provided, and it
is hereby made the duty of all officers charged by law with any duty
in regard to the collection of such revenue, to do and perform each
and every act which shall be necessary to collect such additional
sum.
All money deposited in the fund which has been derived from
premium on bonds sold shall be available for transfer to the General
Fund as a credit to expenditures for bond interest.

13870. All money repaid to the state pursuant to any contract
executed under the provisions of Section 13861 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.

13871. There is hereby appropriated from the General Fund in the
State Treasury for the purpose of this chapter such an amount as will
equal the following:
(a) Such sum annually as will be necessary to pay the principal of
and the interest on the bonds issued and sold pursuant to the
provisions of this chapter, as such principal and interest become due
and payable.
(b) Such sum as is necessary to carry out the provisions of
Section 13872, which sum is appropriated without regard to fiscal
years.

13872. For the purpose of carrying out the provisions of this
chapter, the Director of Finance may by executive order authorize the
withdrawal from the General Fund of an amount or amounts not to
exceed the amount of the unsold bonds which the committee has by
resolution authorized to be sold for the purpose of carrying out this
chapter. Any amounts withdrawn shall be deposited in the fund and
shall be disbursed by the department in accordance with this chapter.
Any moneys made available under this section to the department shall
be returned by the department to the General Fund from moneys
received from the first sale of bonds sold for the purpose of
carrying out this chapter subsequent to such withdrawal.

13872.5. 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.

13873. Upon request of the department, supported by a statement of
the proposed arrangements to be made pursuant to Section 13861 for
the purposes therein stated, the committee shall determine whether or
not it is necessary or desirable to issue any bonds authorized under
this chapter in order to make such arrangements, and, if so, the
amount of bonds then to be issued and sold. Successive issues of
bonds may be authorized and sold to make such arrangements
progressively, and it shall not be necessary that all of the bonds
herein authorized to be issued shall be sold at any one time.

13874. The committee may authorize the State Treasurer to sell all
or any part of the bonds herein authorized at such time or times as
may be fixed by the State Treasurer.

13875. All proceeds from the sale of bonds, except those derived
from premiums and accrued interest, shall be available for the
purpose provided in Section 13861, but shall not be available for
transfer to the General Fund to pay principal and interest on bonds.
The money in the fund may be expended only as herein provided.