California Code, Water Code - WAT § 81023

(a) Consistent with Division 26.7 (commencing with Section 79700), the sum of three million dollars ($3,000,000) of the proceeds of bonds authorized to be issued and available for the purposes of Section 79746 shall be transferred to the fund and used by the department, upon appropriation, for loans for water conservation and water use efficiency projects and programs to achieve urban water use targets developed pursuant to Section 10608.20.

(b) The department may implement this section by providing to a local agency a zero-interest loan.

(c) A local agency that receives a loan pursuant to this section shall exercise reasonable efforts to recover the costs of the loan. However, the department may waive up to 10 percent of the repayment amount for costs that could not be recovered by the local agency.

(d) The department and a local agency that is an urban retail water supplier and that receives a loan pursuant to this section may enter into a mutually agreeable schedule for making loan repayments into the fund.