ARTICLE 4. Local Projects [78680. - 78680.20.]

Cal. Water Code - WAT 4.

in effect

Cal. Water Code - WAT § 78680. Section 78680.

(a) (1) There is hereby created in the account the Local Projects Subaccount. (2) For the purposes of this article “subaccount” means the Local Projects Subaccount created by paragraph (1). (3) The sum of twenty-five million dollars ($25,000,000) is hereby transferred from the account to the subaccount for the purposes of implementing this article. (b) Notwithstanding Section 13340 of the Government Code, the money in the subaccount is hereby continuously appropriated, without regard to fiscal years, to the department, for grants and loans in accordance with this article, and for the administration of this article.

Cal. Water Code - WAT § 78680.2. Section 78680.2.

It is the intent of this article to finance a program to further the development, control, and conservation of the water resources of the state by assisting public agencies in the construction of eligible projects undertaken to meet local requirements in which there is a statewide interest.

Cal. Water Code - WAT § 78680.4. Section 78680.4.

The following definitions govern the construction of this article: (a) “Feasibility study” means a report on the feasibility of a project, dam, or reservoir. A feasibility study may include an environmental impact report prepared pursuant to Division 13 (commencing with Section 21000) of the Public Resources Code. (b) “Project” means any of the following: (1) The construction of a conveyance facility, pumping facility, groundwater extraction facility, clear or ranney well, or facility for diversion from existing storage or conveyance facilities undertaken by a public agency for the diversion, storage, or distribution of water primarily for domestic, municipal, agricultural, industrial, recreation, or fish and wildlife mitigation and enhancement purposes. (2) Fish and wildlife mitigation and enhancement measures undertaken by a public agency, including the acquisition of lands which may be necessary for the mitigation of significant impact on fish and wildlife resources resulting from the implementation of a project undertaken pursuant to paragraph (1). (c) “Public agency” means any city, county, city and county, special district or other political subdivision of the state, including a joint powers entity created pursuant to Chapter 5 (commencing with Section 6500) of Division 7 of Title 1 of the Government Code, in a county of the 22nd class or any county having a smaller population than a county of the 22nd class on the date on which this division becomes effective.

Cal. Water Code - WAT § 78680.6. Section 78680.6.

The department shall carry out this article and shall give preference to projects undertaken to develop new water supplies and to mitigate significant environmental impacts resulting from those projects.

Cal. Water Code - WAT § 78680.8. Section 78680.8.

Applications for grants or loans for financial assistance under this article shall be made to the department in the form and with those supporting materials that are prescribed by the department.

Cal. Water Code - WAT § 78680.10. Section 78680.10.

(a) The department may make grants to public agencies for feasibility studies. (b) The amount of the grants may not exceed five hundred thousand dollars ($500,000).

Cal. Water Code - WAT § 78680.12. Section 78680.12.

(a) The department may make loans to public agencies for projects. Loans for a single project may not exceed five million dollars ($5,000,000). (b) All loan applications shall include information relating to the public necessity of the project, the urgency of need, the engineering feasibility, the economic justification, and the financial feasibility of the project, as well as other information that the department may require. (c) All loans made pursuant to this section are subject to all of the following requirements: (1) Public agencies requesting a loan shall demonstrate, to the satisfaction of the department, 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 voters of 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 election shall be held only in that portion or portions of the agency. (3) Loan contracts may not provide for 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 of 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. 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. 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 the interest on the loans.

Cal. Water Code - WAT § 78680.14. Section 78680.14.

(a) The department may also make loans to public agencies for the acquisition of interest in lands that are necessary for the construction, operation, or maintenance of a project. (b) Loans granted pursuant to this section shall be subject to all of the following conditions: (1) The loan may be made for all or any part of the costs of acquiring interests in lands for a project that has been identified as the preferred alternative in an environmental impact report or an environmental impact statement, and the lands may become unavailable to the public agency for the purposes of developing that project. (2) The loans shall not exceed one million dollars ($1,000,000) for each acquisition under this section. (3) Each loan granted pursuant to this section is subject to subdivision (c) of Section 78680.12.

Cal. Water Code - WAT § 78680.16. Section 78680.16.

Each contract which the department enters into for a loan pursuant to Section 78680.14 shall require the sale of the interests in lands that are acquired with the loan funds if, in the department’s determination, the construction of the project has not commenced within a period of two years from the date of the first disbursement of loan funds under the contract or within any extension of such period that is granted by the department. In that event, the contract shall require that the interests in lands be offered for sale within six months from the expiration of the two-year period, or any extension thereof, and shall require that the proceeds of the sale be applied toward the repayment of the principal amount of the loan and toward the payment of the accrued interest thereon. Any remaining proceeds, after deducting the administrative costs of the public agency identified in connection with the purchase and sale of the interests in lands, shall be repaid to the department.

Cal. Water Code - WAT § 78680.18. Section 78680.18.

Notwithstanding any provision of law, any land acquired with the use of loan funds made available pursuant to Section 78680.14, that is located outside the boundaries of the public agency acquiring the land and which was subject to taxation at the time of acquisition thereof, shall remain subject to taxation.

Cal. Water Code - WAT § 78680.20. Section 78680.20.

(a) The department may adopt regulations to carry out this article. Notwithstanding any provisions of law, regulations adopted by the department pursuant to Chapter 2.3 (commencing with Section 450.1) of Division 2 of Title 23 of the California Code of Regulations that are in effect on November 6, 1996, may be used to carry out this article. (b) 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.

Source: CA Legislative Counsel Bulk DataURL: https://downloads.leginfo.legislature.ca.gov/pubinfo_2025.zipFetched: 6/27/2026