Section 13976.

(a) The moneys in the fund shall be used for the purposes set forth in this section.

(b) The board is authorized to enter into contracts with municipalities having authority to construct, operate and maintain treatment works, for grants to such municipalities to aid in the construction of eligible projects, and for reclamation of water.

Grants may be made pursuant to this section to reimburse municipalities for construction for which contracts were let subsequent to July 1, 1970, and before the first sale of bonds authorized to be issued by this chapter.

Any contract pursuant to this section may include such provisions as may be agreed upon by the parties thereto, and any such contract concerning an eligible project shall include, in substance, the following provisions:

(1) An estimate of the reasonable cost of the eligible project;

(2) An agreement by the board to pay to the municipality, during the progress of construction or following completion of construction as may be agreed upon by the parties, an amount which equals at least 12¹/₂ percent of the eligible project cost determined pursuant to federal and state laws, and regulations. Notwithstanding the provisions of any existing agreements entered into pursuant to this subdivision, the board shall pay to the municipality under any contract entered into pursuant to this subdivision for a project for which the federal grant offer was made on or after October 18, 1972, an amount which equals 12¹/₂ percent of the eligible project cost determined pursuant to federal and state law and regulations;

(3) An agreement by the municipality, (i) to proceed expeditiously with, and complete, the eligible project, (ii) to commence operation of the treatment works on completion thereof, and to properly operate and maintain such works in accordance with applicable provisions of law, (iii) to apply for and make reasonable efforts to secure federal assistance for the eligible project, (iv) to secure the approval of the board before applying for federal assistance in order to maximize the amounts of such assistance received or to be received for all eligible projects in the state, and (v) to provide for payment of the municipality's share of the cost of the eligible project.

(c) The board may make direct grants to any municipality or by contract or otherwise undertake plans, surveys, research, development and studies necessary, convenient or desirable to the effectuation of the purposes and powers of the board pursuant to this division and to prepare recommendations with regard thereto, including the preparation of comprehensive statewide or areawide studies and reports on the collection, treatment and disposal of waste under a comprehensive cooperative plan.

The aggregate amount of moneys which may be advanced or granted to or committed to municipalities for the purpose of planning, research and development, whether by the board or under the direction of the board or in the form of direct grants to municipalities for such purpose, shall not exceed in the aggregate such amount as may be fixed from time to time by the committee.

(d) The board may from time to time with the approval of the committee transfer moneys in the fund to the State Water Quality Control Fund to be available for loans to public agencies pursuant to Chapter 6 (commencing with Section 13400) of this division.

(e) Not more than one-half of 1 percent of the moneys deposited in the fund may be expended by the board for costs incurred in administering the provisions of this chapter.

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

(g) The board may with the approval of the committee transfer not more than ten million dollars ($10,000,000) from the fund to a special reserve fund as additional security for the payment of the principal of and the interest on revenue bonds sold by the state as provided by law to provide funds to municipalities for needed sewage facilities. Such money shall be used for such purpose only after all other securities provided by law have been exhausted. Any money not used for such purpose shall, after retirement of the revenue bonds, be returned to the fund and be available for other purposes provided for in this section.

(h) The board may adopt rules and regulations governing the making and enforcing of contracts pursuant to this section.

(Amended by Stats. 1973, Ch. 258.)