CA Health & Safety Code Section 116761.65

(a)

The board shall establish, and may periodically adjust, the interest rate for repayable financing made pursuant to this chapter at a rate not to exceed 50 percent of the average interest rate, computed by the true interest cost method, paid by the state on general obligation bonds issued in the prior calendar year, rounded up to the closest one-tenth of 1 percent.

(b)

Notwithstanding subdivision (a), if the financing is for a public water system that serves a disadvantaged community with a financial hardship as determined by the board or if the financing is for a public water system that provides matching funds, the interest rate shall be 0 percent.