California Code, Health and Safety Code - HSC § 4894

Pursuant to a resolution adopted by its board of supervisors, a county may lend any of its available funds to a county sewer maintenance district located wholly within the county for use by the district in emergency situations for the construction, reconstruction, and repair of sewer systems, for replacement of obsolete equipment, or to defray unusual maintenance costs within the district. Any such loan may be restricted for use in a temporary zone formed under the provisions of Section 4894.1 in a district. The loan shall not exceed 100 percent of the total revenues of the district or zone for the year in which the loan is made.

The board of supervisors in the resolution shall specify the date and manner in which the funds shall be repaid. The resolution may provide for the payment of interest on the loan and the loan shall be repaid at the times and in the manner specified in the resolution which time shall not in any event exceed 10 years.

Funds so loaned shall be deemed to have been appropriated by the district or temporary zone in a district for the purposes for which the loan was made. Any area of a district, or of a temporary zone in a district, which is included in a city by annexation or incorporation after a loan has been made shall continue to be taxed for the repayment of its proportionate part of the unpaid balance of the loan.

If a zone is formed to be responsible for the loan, the board of supervisors shall, in the first fiscal year in which a special tax may be levied in said zone, and in each succeeding year of the duration of the zone, levy a special tax upon the taxable property in the zone for the purpose of repaying the amount lent to the district by the county. When the loan has been repaid, the zone shall terminate.

The board may also borrow funds from another sewer maintenance district, and the board may lend available district funds to another sewer maintenance district, subject to the same terms and conditions as apply to loans of county funds.