(a) The sum of twenty million dollars ($20,000,000) of the money in the fund shall be deposited in the Local Water Projects Assistance Account and shall be available for loans to local agencies to aid in the construction of eligible projects.
(b) No eligible project may receive more than five million dollars ($5,000,000) in loans from the department.
(c) In the administration of this section, the department and the California Water Commission shall give preference to projects involving the development of new basic water supplies which may include the enlargement of existing dams and reservoirs, and for projects that will remedy existing water supply problems. The department and the California Water Commission shall set priority for loans pursuant to this section on the basis of the cost-effectiveness of the proposed project, with the most cost-effective projects receiving highest priority.
(d) If the water supply function of a dam and reservoir facility is operationally limited or eliminated for dam safety purposes, pursuant to Part 1 (commencing with Section 6000) of Division 3, the department and the California Water Commission may give consideration to projects which would rehabilitate the dam and reservoir for water supply purposes. The rehabilitation of facilities may include comparable replacement facilities.
(e) The department shall not make loans pursuant to this section for otherwise eligible projects whose benefits are more than 50 percent derived from hydroelectric generation, as determined by the department.
(f) The department may make loans to local agencies, at the interest rates authorized pursuant to this chapter and pursuant to 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 pursuant to this section. No single potential project shall be eligible to receive more than five hundred thousand dollars ($500,000), and not more than 10 percent of the total amount of bonds authorized to be expended for purposes of this section may be expended for those purposes.
(Amended by Stats. 2001, Ch. 745, Sec. 230.9. Effective October 12, 2001. Note: This section, as proposed to be added by Stats. 1988, Ch. 46, was amended by Stats. 1988, Ch. 297, and approved (in amended form) in Prop. 82 on Nov. 8, 1988.)