Code Section Group

Water Code - WAT


  ( Heading of Division 6 amended by Stats. 1957, Ch. 1932. )


  ( Part 6 added by Stats. 1953, Ch. 196. )

CHAPTER 7.6. Groundwater Recharge Facilities Financing [12925 - 12928.6]

  ( Chapter 7.6 added by Stats. 1985, Ch. 1034, Sec. 1. )

ARTICLE 4. Loans [12928 - 12928.6]
  ( Article 4 added by Stats. 1985, Ch. 1034, Sec. 1. )


(a) The money in the 1985 Water Conservation and Groundwater Recharge Bond Fund shall be available for appropriation by the Legislature for loans to local agencies to aid in the conduct of projects for artificial groundwater recharge and the purposes set forth in this section. The loan program shall be administered by the department. Administrative costs of the loan program shall be paid from moneys available therefor in the 1985 Water Conservation and Groundwater Recharge Bond Fund as appropriated by the Legislature in the annual Budget Bill.

(b) The department may enter into a contract for a loan if it finds 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. However, any contract concerning an eligible project for artificial groundwater recharge shall include, in substance, all of the following:

(1) 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.

(2) 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.

(3) Loan contracts may not provide a moratorium on payment of principal or interest.

(4) Loans shall be for a period of up to 25 years with an interest rate set annually by the department at 50 percent of 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 executed.

(5) No single project may receive more than five million dollars ($5,000,000) from the department.

(Added by Stats. 1985, Ch. 1034, Sec. 1.)


The department shall give priority 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.

(Added by Stats. 1985, Ch. 1034, Sec. 1.)


A contract for a loan pursuant to Section 12928 shall require the prior approval of the California Water Commission.

(Added by Stats. 1985, Ch. 1034, Sec. 1.)


The department shall adopt rules and regulations necessary to carry out the purposes of this chapter. The rules and regulations shall include, but not be limited to, criteria and procedures for establishing the eligibility of an agency and a project to qualify for loans, and any terms and conditions necessary to protect the investment of the state and to carry out the purposes of this chapter.

(Added by Stats. 1985, Ch. 1034, Sec. 1.)


As a part of the contract for a loan, the agency shall agree to indemnify and hold and save the state, the department, and its employees free from any and all liability for damages that may arise out of the work performed on projects financed under this chapter.

(Added by Stats. 1985, Ch. 1034, Sec. 1.)


Groundwater recharge projects developed pursuant to this chapter shall be eligible for funding pursuant to any bond law previously or subsequently approved by the voters if the projects are otherwise eligible for funding under the bond law.

(Added by Stats. 1985, Ch. 1034, Sec. 1.)

WATWater Code - WAT4.