The department may, when specifically authorized by law to do so, enter into a commitment, without regard to fiscal years, with any public agency, as defined in subdivision (b) of Section 12881.2, to make a loan to such public agency for the purpose of paying the difference between the amount the public agency is able to raise to make any payment of the principal and interest on general obligation bonds issued by such public agency for the construction of a project utilizing water from the State Water Resources Development System or water obtained through an exchange of water from the system and the amount due on such principal and interest. For the purposes of this chapter, the term “general obligation bonds” shall be deemed to include bonds, but not direct assessment warrants, issued by a California water storage district pursuant to Part 8 (commencing with Section 45100) of Division 14 of this code.

The balance of the appropriation made by Chapter 1435, Statutes of 1963, not required for the purposes of that chapter, as determined by the director, is hereby appropriated to the department for expenditure, without regard to fiscal years, as follows:

(a) Not to exceed ten thousand dollars ($10,000) may be expended by the department in carrying out the provisions of Section 12894.2.

(b) The remainder shall be available for the purpose of making loan commitments pursuant to this section, when specifically authorized by law.

Said balance of the appropriation made by Chapter 1435, Statutes of 1963, shall constitute the sole and exclusive source of payment of such loans, and any commitment to make such a loan shall not constitute a debt, liability, or obligation of the state, except to the extent that money may be available from said balance to make a loan. The purpose of such commitments shall be to assist public agencies in the sale of such bonds at a reasonable charge. An application for such a commitment may be approved only if it is determined that the commitment is needed for that purpose, that there is reasonable assurance that the public agency can repay any sums paid out by the department under the commitment, and that the project for which the bonds are to be issued substantially conforms to the California Water Plan and is financially feasible. Approval of such bonds by the State Treasurer for certification shall constitute a finding that the project is financially feasible.

(Amended by Stats. 1970, Ch. 911.)