CA Water Code Section 12885.2

The department is authorized to make state loans to public agencies for the acquisition of interests in lands that are necessary for the construction, operation, or maintenance of proposed projects that would meet water needs of the public agencies. Such loans may be made separate and apart from loans that may be made under this chapter for the construction of proposed projects by public agencies. The making of each loan pursuant to this section shall be subject to the following conditions:

(a)

The loan may be made for all or any part of the cost of acquiring interests in lands for a proposed project but in no event shall any such loan be in an amount which is greater than the portion of such cost which the department finds to be beyond the reasonable ability of the public agency to finance from other sources.

(b)

The loan shall not exceed four hundred thousand dollars ($400,000) for any one project. A loan in excess of that amount for any one project may be made by the department only upon specific approval of the Legislature, by act enacted after the receipt of copies of the project report filed pursuant to Section 12882.4 and upon such additional terms and conditions as the Legislature may prescribe.

(c)

Each loan is subject to the provisions of Article 9 (commencing with Section 12889) of this chapter.