Section 71.8.

(a) A contract or agreement for a transfer pursuant to Section 70 or a loan pursuant to Section 71.4, for which gross revenues of a small craft harbor are made the security for repayment shall include, but is not limited to, provisions requiring the governing body of the city, county, or district to perform all the following:

(1) Punctually pay all installments of principal and interest on money owed to the state.

(2) Continuously operate in an efficient and economical manner all small craft harbor facilities acquired, constructed, improved, or completed in full or in part as a result of transfers or loans by the state.

(3) Make all repairs, renewals, and replacements necessary to the efficient operation of the small craft harbor facilities and to keep the facilities in good repair at all times.

(4) Preserve and protect the security interest of the state in all respects by procuring insurance on the facilities in an amount and of the type approved by the department.

(5) Subject to subdivision (c), periodically fix, prescribe, and collect fees, rentals, or other charges for services and facilities of the small craft harbor facilities sufficient to produce gross revenues adequate for payment of the following amounts in the order set forth:

(A) All installments of principal and interest on money owed the state as they come due.

(B) All expenses of operation, maintenance, and repair of the small craft harbor facilities.

(C) Any additional sums as may be required by the department for any sinking fund, reserve fund, or other special fund established for the further security of the loan or transfer or as a depreciation or other charge in connection with the small craft harbor facilities.

(6) Repay loans with regard to the revenue-producing features, as determined by the department, constructed under the loan over a period not to exceed 30 years.

(7) Repay loans with regard to the non-revenue-producing features, as determined by the department, constructed under the loan over a period not to exceed 50 years.

(b) The department may require the contract or agreement to include a requirement that installments of principal and interest on money owed the state shall be paid from gross revenues prior to any other expenditures from those revenues. No loan of funds shall be made to a city, county, or district unless the loan is approved by the department as conforming to the policies established by the department. A contract or agreement shall not be effective until approved by the Department of General Services for legality, form, and completeness.

(c) The fees for the use of launching ramps in a small craft harbor shall not exceed the sum of the following:

(1) The costs of operation and maintenance of the launching ramp and related harbor facilities, including, but not limited to, access to the ramp from the shore and the ocean.

(2) The prorated capital costs of that portion of the facility which is determined by the governing body of the small craft harbor or boating facility to be necessary to pay amounts specified in paragraph (5) of subdivision (a).

(d) If the city, county, or district defaults on the payment of money owed the state, or otherwise fails to perform in accordance with the terms and conditions of the contract or agreement, the state shall recover the defaulted loan and the department may assume the operation and maintenance of the harbor or facility or enter into one or more contracts for its operation and maintenance.

(Amended by Stats. 2009, Ch. 610, Sec. 7. Effective January 1, 2010.)