(a) Any loan agreement entered into pursuant to this chapter may include provisions determined to be necessary by the department.
(b) Any loan agreement pursuant to this chapter shall include all of the following:
(1) A finding by the department that the agency has the ability to repay the loan, that the project is cost-effective, and that the project is feasible from an engineering or hydrologic standpoint, or both.
(2) An agreement by the agency to proceed expeditiously with, and complete, the project in conformance with approved plans and specifications and to operate and maintain the project properly upon completion throughout the repayment period.
(3) A provision that there shall be no moratorium on, or deferment of, payments of principal or interest.
(4) (A) A loan period of not more than 20 years with an interest rate set at a rate 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.
(B) If the interest rate so determined is not a multiple of 1 percent, the interest rate shall be set at the next multiple of one-tenth of 1 percent.
(C) The interest rate for each loan agreement shall be applied throughout the repayment period of the contract. There shall be a level annual repayment of principal and interest on the loans.
(Added by Stats. 1999, Ch. 725, Sec. 1. Approved in Proposition 13 at the March 7, 2000, election.)
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