1. (a) Maximum Grant Amount

   1. (1) Except as provided in subsections (a)(2)-(3), a Maximum Grant Amount of fifteen million dollars ($15,000,000) will apply to all Grant Financing Agreements awarded pursuant to this Article.
   2. (2) Any Grant for a Large-Scale Project, shall not exceed the Maximum Grant Amount of fifteen million dollars ($15,000,000) per project phase or component but only as permitted under Section 91014(c) of the Public Resources Code.
   3. (3) Any Grant awarded to a Small SDAC shall not exceed the Maximum Grant Amount of thirty-five million dollars ($35,000,000).

2. (b) Amending Maximum Grant Amounts for Certain Financing Agreements

   1. (1) Any Recipient which is not a Small SDAC, and which executed a Financing Agreement with the State Water Board on or after January 1, 2024 that was subject to a Maximum Grant Amount of less than fifteen million dollars ($15,000,000) at the time of execution, is eligible to amend such Financing Agreement to commit additional Grant funding up to a Maximum Grant Amount of fifteen million dollars ($15,000,000). Any funds committed in previous iterations of such a Financing Agreement shall reduce the amount of additional Grant funds available in an amendment under this subsection, such that the sum of any previous funds combined with any additional Grant funds committed in an amendment shall not exceed fifteen million dollars ($15,000,000).
   2. (2) Any Recipient which is a Small SDAC, and which executed a Financing Agreement with the State Water Board on or after January 1, 2024 that was subject to a Maximum Grant Amount of less than thirty-five million dollars ($35,000,000) at the time of execution, is eligible to amend such Financing Agreement to commit additional Grant funding up to a Maximum Grant Amount of thirty-five million dollars ($35,000,000). Any funds committed in previous iterations of such a Financing Agreement shall reduce the amount of additional Grant funds available in an amendment under this subsection, such that the sum of any previous funds combined with any additional Grant funds committed in an amendment shall not exceed thirty-five million dollars ($35,000,000).
   3. (3) DFA staff shall identify the Recipients which are eligible for amendments under this subsection by confirming Applicant and Project eligibility, pursuant to sections 3433 through 3435. DFA staff shall provide each of the identified Recipients with an offer to amend the Recipient's existing Financing Agreement. A Recipient may respond by accepting or rejecting the offer to amend the existing Financing Agreement, provided that the Recipient must accept an offer before available funding is exhausted pursuant to section 3438. If a Recipient notifies DFA staff that it accepts the offer to amend, then DFA staff will prepare an amended Financing Agreement and provide it to the Recipient for signature.
   4. (4) Amendments made to a Financing Agreement pursuant to this subsection shall take effect when all parties have signed the amended Financing Agreement.
   5. (5) Any additional Grant funding committed under an amendment authorized under this subsection shall not fund any Planning or Construction activities that took place before November 5, 2024.

3. (c) Maximum Percentage of Total Eligible Project Cost.

   1. (1) A Grant awarded to any Recipient for a Large-Scale Project shall fund no more than thirty-five percent (35%) of a Project's Total Eligible Project Cost.
   2. (2) Except as provided in subsection (c)(3), a Grant awarded to any Recipient for a non-Large Scale Project shall fund no more than thirty-five percent (35%) of a Project's Total Eligible Project Cost.

   3. (3) The State Water Board may award a Grant to a Small DAC or a Small SDAC that funds one hundred percent (100%) of a Project's Total Eligible Project Cost. In its decision to award such a Grant, the State Water Board will consider which Project or Projects best address the following criteria:

      1. (A) The Project supports or enables the Recipient's compliance with a National Pollutant Discharge Elimination System (NPDES) Permit and/or a Waste Discharge Requirement (WDR).
      2. (B) The Project increases the use or supply of recycled water.
      3. (C) The Project's production of recycled water offsets use of potable water from other sources.

The amount of Grant funding provided by a Financing Agreement under this Article shall be based on the reasonable estimated cost for a Project, and subject to the limits set forth in subsections (a), (b), and (c).

Note: Authority cited: Section 1058, Water Code; and Section 90135, Public Resources Code. Reference: Section 13260, Water Code; and Sections 90050, 90140, 91000, 91010 and 91014, Public Resources Code.

History

1. New section filed 2-17-2026 as an emergency; operative 2-17-2026 (Register 2026, No. 8). This filing is a deemed emergency and shall remain in effect until repealed or revised by the board pursuant to Public Resources Code section 90135(e).