Grants may be made only for projects for domestic water systems. The department may make reasonable allowance for future water supply needs and may provide for additional capacity when excessive costs would be incurred by later enlargement. Such grants may be made for all or any part of the cost of constructing, improving, or rehabilitating any such system when, in the judgment of the State Department of Health Services, such improvement or rehabilitation is necessary to provide pure, wholesome, and potable water available in adequate quantity at sufficient pressure for health, cleanliness, and other domestic purposes. No single public agency shall receive grants pursuant to this chapter totaling more than four hundred thousand dollars ($400,000). The total amount of grants made pursuant to this chapter shall not exceed thirty million dollars ($30,000,000), of which up to fifteen million dollars ($15,000,000) may be used for grants for projects for the construction, improvement, or rehabilitation of domestic water systems which have become contaminated by organic or inorganic compounds (such as nitrates, DBCP (dibromochloropropane), TCE (trichloroethylene), and arsenic), or radiation, in such amounts as to render the water unfit or hazardous for human consumption.