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State
California Regulations
TITLE 14. NATURAL RESOURCES DIVISION 4. DEPARTMENT OF BOATING AND WATERWAYS
database is current through 08/11/06, Register 2006, No. 32.

s 5000. Short Title.

This article shall be known and may be cited as the Boating and Waterways Planning Loan Regulations under which the Department of Boating and Waterways may make planning loans to eligible applicants in accordance with the provisions of section 71.4 of the Harbors and Navigation Code.


Note: Authority cited: Sections 63.9(e) and 71.4, Harbors and Navigation Code. Reference: Sections 71.4 and 85.2, Harbors and Navigation Code.


s 5001. Loan Conformity.

Any loan made to a county, city, or district for the purpose of planning for the acquisition, construction, improvement, maintenance or operation of small craft harbors shall be in conformity with this article.


Note: Authority cited: Sections 63.9(e) and 71.4, Harbors and Navigation Code. Reference: Sections 71.4 and 85.2, Harbors and Navigation Code.



s 5002. Application.

No planning loan shall be made unless written application therefor is filed with the Department of Boating and Waterways. All such applications shall contain a statement of facts certified as true by the governing body of the applicant showing that the loan in the amount requested, if made, will not be in violation of the California Constitution, Article XVI, Section 18, or of the Harbors and Navigation Code, Section 71.6.


Note: Authority cited: Sections 63.9(e) and 71.4, Harbors and Navigation Code. Reference: Sections 71.6 and 85.2, Harbors and Navigation Code.


s 5003. Terms of Loan.

Planning loans shall be for a period not to exceed ten years.


Note: Authority cited: Sections 63.9(e) and 71.4, Harbors and Navigation Code. Reference: Sections 71.4 and 85.2, Harbors and Navigation Code.


s 5004. Approval.


Note: Authority cited: Section 38, Harbors and Navigation Code. Reference: Section 71.6, Harbors and Navigation Code.



s 5100. Short Title.

This article shall be known and may be cited as the Boating and Waterways Public Small Craft Harbor Loan Regulations under which the Department of Boating and Waterways may make construction loans to eligible applicants for small craft harbor facilities and connecting waterways in accordance with the provisions of section 71.4 of the Harbors and Navigation Code.


Note: Authority cited: Sections 63.9(e) and 71.4, Harbors and Navigation Code. Reference: Sections 71.4 and 85.2, Harbors and Navigation Code.


s 5101. Definitions.

As used in this article:

(a) "Applicant." A city, county, or district which requests or receives a loan and has the statutory authority to undertake the development of a small craft harbor, described in Section 71.4 of the Harbors and Navigation Code.

(b) "Collateral." Property, both real and personal, whether tangible or not, pledged as security for repayment of a debt, including but not limited to any or all of the following: an interest in real property; a mortgage or security interest (deed of trust) in real estate, including buildings or property of the applicant, a deed of trust or lease and leaseback of the project area; an irrevocable letter of credit in an amount equal to the principal and estimated accrued interest; a collateral assignment of rents and leases equal to not less than 125 percent of applicant's total annual debt service to the department; a security agreement; a Uniform Commercial Code financing statement (UCC-1).

(c) "Commission." The Boating and Waterways Commission.

(d) "Contract." A contract to implement the disbursement of loan funds.

(e) "Default":

(1) The failure of an applicant to make any payment required by the contract within 30 days of the due date of the payment,

(2) the failure of an applicant to comply with any other requirement of the contract. Such defaults, for failure to comply with terms of contract other than payments, may be cured by complying with the requirement within 180 days after receipt of written notice from the department specifying such failure,

(3) the provision of false representations or false warranties by the applicant in response to any obligations under the contract,

(4) the failure of an applicant to conduct appropriate proceedings in good faith to contest any levy or proceeding against the collateral or applicant's interest therein; or

(5) the filing of a petition by an applicant under the provisions of the Bankruptcy Code, or the failure of an applicant to conduct appropriate proceedings in good faith to contest a bankruptcy filing by a third party when such action affects the collateral.

(f) "Department." The Department of Boating and Waterways.

(g) "Loan." A loan for the purpose of acquisition, construction, and/or improvement, maintenance or operation of small craft harbors, related facilities, or connecting waterways, pursuant to Harbors and Navigation Code Section 71.4.

(h) "Project." Any construction, improvement, acquisition, maintenance or operation of small craft harbors, related facilities, or connecting waterways.

(i) "Project Area." A delineated area in which the project is to be located.

(j) "Project Costs." Those contract, equipment, labor, material and construction costs which are incurred by the applicant for the purpose of completing the project; however, such project costs shall not include indirect or overhead charges incurred by the applicant for its own personnel.

(k) "Reserve Fund." A separate and independent fund for the exclusive purpose of providing extraordinary, non-routine maintenance, repair or replacement during the loan period.

( l) "Surplus Revenues." Revenues received by an applicant from any source within a project area less the applicant's expenses for (1) loan repayment, and (2) operation and maintenance (including the Reserve Fund) of the project; tax revenues may be considered as a revenue source.

(m) "Unpaid Balance." Total outstanding debt, including principal, interest and penalties, if applicable.


Note: Authority cited: Sections 63.9(e) and 71.4, Harbors and Navigation Code. Reference: Sections 71.4 and 85.2, Harbors and Navigation Code.


s 5102. Application.

(a) Preliminary Coordination: Loans will be processed in accordance with departmental guidelines and criteria. The applicant may seek departmental assistance in formulating the project.

(b) Preliminary Study: The applicant's formal request for a loan will not be submitted until the department's reconnaissance survey of the proposed project area has determined the initial acceptability of the project and the applicant has been so notified.

(c) Formal Application: Upon receipt of a favorable preliminary report from the department, the applicant may make a formal loan application which shall include:

(1) Feasibility Study: A report containing sufficient information and detail to demonstrate that the project is both engineeringly and financially feasible. The report shall include, but not be limited to:

(A) A project plan and map which establishes the project area and location.

(B) Preliminary project layout and designs of project features in sufficient detail to develop accurate cost estimates.

(C) A plan for operational and fiscal management of the project throughout the loan period.

(D) The proposed method and means of retiring the loan, meeting other financial obligations of the project, and, if the project is to be undertaken with funds in addition to the loan applied for, a funding plan indicating the sources of such additional construction funds.

(E) A report on the effect the project would have on the environment. The department will provide the applicant with a copy of the latest law on this subject.

(F) A plan to capitalize a reserve fund in an amount specified by the department.

(G) Collateral acceptable to the department.

(2) A designation of a representative authorized to act for the applicant to sign any necessary papers or to otherwise act as the representative of the applicant.


Note: Authority cited: Sections 63.9(e) and 71.4, Harbors and Navigation Code. Reference: Sections 71.4 and 85.2, Harbors and Navigation Code.


s 5103. Feasibility Review.

The applicant's formal application will be judged as to the following considerations:

(a) Engineering feasibility, including a determination as to whether or not the project can be developed within the total amount of funds to be made available.

(b) Financial feasibility, including an analysis of the availability of capital to finance construction to completion, users' willingness and ability to pay anticipated berthing and other charges used in estimating revenues, and evaluation of the sufficiency of revenues to cover annual cost on a year-by-year basis, including maintenance of a reserve fund and the amortization of the applied for loan.


Note: Authority cited: Sections 63.9(e) and 71.4, Harbors and Navigation Code. Reference: Sections 71.4 and 85.2, Harbors and Navigation Code.


s 5104. Priority.

When considering applications, the department shall, in addition to priorities set forth in the Harbors and Navigation Code, rank applications based upon the following:

(a) First priority shall be given to projects based upon issues of the health and safety of boaters using the facilities.

(b) Next, priority shall be given to projects currently receiving phased funding from the department.

(c) Next, priority shall be given based upon availability of matching funds.

(d) Next, priority shall be given based upon relative demand for facilities in the same market area, as determined by the department. Consideration shall be given to:

(1) Population size of the market area.

(2) Similar facilities in the market area.

(3) Boating activity in the market area.

(e) In the event that a priority between applications cannot be established by Subsections (a) through (d), priority shall be given to applicants with greatest ability to repay the loan.

(1) Evaluation of the applicant's ability to repay shall be based on the applicant's audited financial statements for the previous three years, if available.

(2) If financial statements are not available, the applicant will provide other information acceptable to the department which establishes a financial ability to repay the loan.


Note: Authority cited: Sections 63.9(e) and 71.4, Harbors and Navigation Code. Reference: Sections 71.4, 85.2 and 87, Harbors and Navigation Code.


s 5105. Loan Terms and Conditions.

The agreement between the department and the applicant shall include but not be limited to the following provisions:

(a) A provision to the effect that the loan will be used for the purpose of developing the project in a continuous and expeditious manner to completion and that the project when completed will be made available and open to all on equal and reasonable terms.

(b) A provision specifying that no loan funds for construction purposes shall be released to an applicant until final plans and specifications for the project (or a particular portion thereof to be constructed with such funds) are approved in writing by the department.

(c) A provision requiring applicant to comply with department approved construction plans and specifications and change orders thereto.

(d) A repayment plan setting forth the provisions for repayment of principal and interest until the loan is repaid in full.

(e) A provision permitting inspection of the project by the department or its agents at any time during construction or after completion, and permitting the inspection and audit of all records of the applicant relating to the project until the loan is paid in full.

(f) A provision that the applicant will provide fire and extended coverage insurance to ninety percent of the value of insurable structures within the project area with the department named as additional insured.

(g) A provision that the applicant will provide insurance, with the department named as additional insured, to cover liability arising from design, planning, construction, maintenance or operation of the project in the following minimum amounts:

(1) Bodily injury $300,000 each person $1,000,000 each occurrence

(2) Property and product damage $500,000 each occurrence $1,000,000 each aggregate

(h) A provision allowing applicant to provide self-insurance in the amounts prescribed in subsection (g), above.

(i) A provision that during the loan repayment period applicant shall not sell, lease, transfer, exchange, mortgage or hypothecate in any manner all or any portion of the real property or improvements within the project area without prior written approval of the department.

(j) A provision requiring applicant to establish and capitalize a reserve fund in an amount and under terms and conditions specified by the department.

(1) The reserve fund shall be an interest-bearing account.

(2) In order to withdraw funds from the reserve fund, the signature of the director, or his or her designee shall be required.

(3) All funds remaining in the reserve fund account shall be returned to the borrower upon full performance of the loan contract. However, unless and until all reserve funds, including accumulated interest, are first committed to improvements at the marina, the borrower may not apply for additional department funding for any project within the marina for a period of five years beginning on the last date any reserve funds are returned to the borrower.

(k) A statement that surplus revenues shall be administered as follows:

(1) The applicant shall retain and invest in reasonable liquid assets all surplus revenues;

(2) Except for the purpose of making capital improvements and at the discretion of the department, no expenditure of surplus revenues other than for the advance repayment of the loan will be permitted until the loan is paid in full;

(3) The applicant shall record all surplus revenues in a separate account and such account shall reflect all receipts by the applicant of revenues originating within the project area.

(l ) A provision that the department, the Department of General Services, the Bureau of State Audits, or their designated representative shall have the right to review and copy any records for possible audit for a minimum of three years after final payment, unless a longer period of records retention is stipulated.

(m) A provision that the borrower agrees to allow the auditor(s) access to such records during normal business hours and to allow interviews of any employees who might reasonably have information related to such records.


Note: Authority cited: Sections 63.9(e) and 71.4, Harbors and Navigation Code. Reference: Sections 71.4 and 85.2, Harbors and Navigation Code; and General Services, Standard Agreement Language, as found in GTC 699 (as amended 6/99).


s 5106. Project Development.

(a) All plans and specifications shall be prepared by persons licensed by the State of California to undertake the type of design work required by the project. All design plans, specifications and reports shall be signed by the licensee. The designer's license number shall appear on the documents. Plans and specifications for work to be accomplished by force account shall be in final form to permit immediate undertaking of the project.

(b) Property Control. Land and water area to be acquired with the loan funds shall be acquired promptly after execution of the loan agreement. No loan funds for strictly construction purposes shall be released until all land and water areas necessary for the construction of the project have been acquired as evidenced by a title insurance policy or other evidence satisfactory to the department. If the loan is based upon a leasehold estate, applicant's leasehold estate (including renewal options) as specified by contract and with finite time periods, must extend at least to the end of the loan period.


Note: Authority cited: Sections 63.9(e) and 71.4, Harbors and Navigation Code. Reference: Sections 71.4 and 85.2, Harbors and Navigation Code.


s 5107. Default Remedies.

Upon the occurrence of a default, the department:

(a) May exercise all rights and remedies accorded to the department by law, including, but not limited to, those rights established in the Harbors and Navigation Code;

(b) May declare all unperformed obligations, in whole or in part, of the applicant immediately due and payable without demand or notice.

(c) May deposit funds obtained from the sale of collateral, less reasonable cost of recovery or maintenance of property, in the Harbors and Watercraft Revolving Fund. Any remaining funds shall be provided to the borrower, in accordance with California law.


Note: Authority cited: Sections 63.9(e) and 71.4, Harbors and Navigation Code. Reference: Sections 71.4 and 85.2, Harbors and Navigation Code.


s 5150. Short Title.

This article shall be known and may be cited as the Boating and Waterways Launching Facility Grant Regulations under which the Department of Boating and Waterways may make grants to eligible applicants in accordance with the provisions of Section 72.5 of the Harbors and Navigation Code.


Note: Authority cited: Sections 63.9(e) and 72.5, Harbors and Navigation Code. Reference: Sections 72.5 and 85.2, Harbors and Navigation Code.


s 5151. Grant Conformity.

Any grant made to a county, city, or district for the purpose of construction and development of small craft launching facilities shall be in conformity with this article.


Note: Authority cited: Sections 63.9(e) and 72.5, Harbors and Navigation Code. Reference: Sections 72.5 and 85.2, Harbors and Navigation Code.


s 5152. Application.

Applications for launching facility grants shall be in accordance with procedures established by the department, and shall include a feasibility report, prepared at applicant's expense, containing demonstrations of site suitability, engineering and financial feasibility, and economic justification.


Note: Authority cited: Sections 63.9(e) and 72.5, Harbors and Navigation Code. Reference: Sections 72.6 and 85.2, Harbors and Navigation Code.


s 5153. Approval of Grant.


Note: Authority cited: Section 38, Harbors and Navigation Code. Reference: Sections 72.6 and 82, Harbors and Navigation Code.


s 5154. Construction and Operation Agreement.

A construction and operation agreement between the applicant and the department will be entered into after funds are appropriated, specifying that applicant will carry insurance as required by the department and that the completed facility will be operated and maintained for a period of 20 years at no cost to the department. If the applicant fails to construct, maintain or operate the facility in accrdance with the terms of the agreement, he may be required, at the option of the department, to reimburse the department for the State's share of the costs of development on a prorated unexpired term basis.


Note: Authority cited: Sections 63.9(e) and 72.5, Harbors and Navigation Code. Reference: Sections 72.5 and 85.2, Harbors and Navigation Code.


s 5160. Short Title.

This article shall be known and may be cited as the Boating and Waterways Floating Rest Room Grant Regulations under which the Department of Boating and Waterways may make grants to eligible applicants in accordance with the provisions of Section 72.7 of the Harbors and Navigation Code.


Note: Authority cited: Sections 63.9(e) and 72.7, Harbors and Navigation Code. Reference: Sections 72.7 and 85.2, Harbors and Navigation Code.


s 5161. Grant Conformity.

Any grant made to a county, city, district, or other public agency for the purpose of construction and development of floating rest room facilities shall be in conformity with this article.


Note: Authority cited: Sections 63.9(e) and 72.7, Harbors and Navigation Code. Reference: Sections 72.7 and 85.2, Harbors and Navigation Code.



s 5162. Application.

Applications for floating rest room grants shall include:

(a) A demonstration that the body of water on which the rest room would be located is affected by significant seasonal fluctuation in water surface elevation and/or a lack of conveniently located and accessible landside sanitary facilities; and

(b) A finding that due to either or both of the aforesaid conditions, conventional rest rooms cannot meet the needs of boaters and the presence of floating rest rooms may lessen environmental degradation of the body of water.


Note: Authority cited: Sections 63.9(e) and 72.7, Harbors and Navigation Code. Reference: Sections 72.7 and 85.2, Harbors and Navigation Code.


s 5163. Construction and Operation Agreement.

A construction and operation agreement between the applicant and the Department will be entered into after funds are appropriated, specifying that applicant will carry insurance as required by the Department, and that the completed rest room will be operated and maintained for a period of ten years at no cost to the Department. If the applicant fails to construct, maintain or operate the rest room in accordance with the terms of the agreement, the applicant may be required, at the option of the Department, to reimburse the Department for the State's share of the costs of development on a prorated unexpired term basis.


Note: Authority cited: Sections 63.9(e) and 72.7, Harbors and Navigation Code. Reference: Sections 72.7 and 85.2, Harbors and Navigation Code.


s 5170. Short Title.

This article shall be known and may be cited as the Boating and Waterways Recreational Marina Loan Regulations under which the Department of Boating and Waterways may make loans to private marina owners in accordance with the provisions of section 76.3 of the Harbors and Navigation Code.


Note: Authority cited: Sections 63.9(e) and 76.8, Harbors and Navigation Code. Reference: Sections 76.3 and 85.2, Harbors and Navigation Code.


s 5171. Definitions.

For the purposes of this article, the definitions found in Harbors and Navigation Code Sections 30 through 40 and 76 through 76.8 shall apply unless otherwise indicated. The following supplementary definitions shall also govern the construction of this article:

(a) "Collateral." Property, both real and personal, whether tangible or intangible, pledged as security for repayment of a debt, including but not limited to: a mortgage or security interest in real estate, buildings, equipment accounts, contract rights and chattel paper of the borrower or any third party legally bound as a surety with the knowledge that the surety is bound.

(b) "Commission." The Boating and Waterways Commission.

(c) "Contract." The Recreational Marina Loan agreement to implement the disbursement of loan funds.

(d) "Default":

(1) the failure of a borrower to make any payment required by the contract within 30 days of the due date of the payment,

(2) the failure of a borrower to comply with any other requirement of the contract. Such default may be cured by complying with the requirement within 30 days after receipt of written notice from the department specifying such failure,

(3) the provision of false representations or false warranties by the borrower in response to any obligations under the contract,

(4) the failure of a borrower to conduct appropriate proceedings in good faith to contest any levy or proceeding against the collateral or borrower's interest therein; or

(5) the filing of a petition by a borrower under the provisions of the Bankruptcy Code, or the failure of a borrower to conduct appropriate proceedings in good faith to contest a bankruptcy filing by a third party when such action affects the collateral.

(e) "Department." The Department of Boating and Waterways.

(f) "Loan" A loan made pursuant to Section 76.3 of the Harbors and Navigation Code.

(g) "Project." The development of boating facilities specified in the contract.

(h) "Project Area." A delineated area in which the project is to be located.

(i) "Project Costs." Those equipment, labor, material and construction costs that are incurred by the borrower for the purpose of completing the project; however, such project costs shall not include indirect or overhead charges incurred by the borrower for its own personnel and shall not include any expenses incurred prior to the effective date of the contract.

(j) "Reserve Fund." A separate and independent fund for the exclusive purpose of providing extraordinary, non-routine, maintenance, repair or replacement during the loan period.

(k) "Unpaid Balance." Total outstanding debt, including principal, interest and penalties, if applicable.


Note: Authority cited: Sections 63.9(e) and 76.8, Harbors and Navigation Code. Reference: Sections 76.3 and 85.2, Harbors and Navigation Code.


s 5172. Application.

(a) Loan Application: An application for any loan under Section 76.3 of the Harbors and Navigation Code shall be filed with the department and shall include a copy of:

(1) Federal income tax returns for the business and/or owners and partners, as requested by the department, for the three years immediately preceding an application for a loan. Federal income tax returns shall not be released by the department, except with permission of an applicant or borrower, unless ordered, as specified by court order.

(2) All land and water use permits required such as by federal, state and local planning agencies needed to develop the project.

(3) An "as is" or current appraisal of any assets to be used as loan collateral required by the department.

(4) Preliminary construction plans, including a site plan and any normally required engineering.

(5) Preliminary title report for any property used as loan collateral.

(6) A feasibility study containing sufficient information and detail to demonstrate that the project is engineeringly and financially feasible.

(7) Evidence of compliance with the California Environmental Quality Act [Division 13 (commencing with Section 21000) of the Public Resources Code].

(8) A list of all costs incurred by the borrower in processing and obtaining loan proceeds.

(9) The proposed method and means of retiring the loan, meeting other financial obligations of the project, and, if the project is to be undertaken with funds in addition to the construction loan applied for, a funding plan indicating the sources of such additional construction funds.


Note: Authority cited: Sections 63.9(e) and 76.8, Harbors and Navigation Code. Reference: Sections 76.3, 76.4 and 85.2, Harbors and Navigation Code.


s 5173. Application Review.

(a) The borrower's formal application will be judged as to the following principal considerations:

(1) Engineering feasibility, including a determination as to whether or not the project can be developed within the total amount of funds to be made available.

(2) Financial feasibility, including an analysis of the availability of capital to finance construction to completion, market analysis or market survey to determine the financial feasibility of the project, anticipated berthing and other charges used in estimating revenues, and evaluation of the sufficiency of revenues to cover annual costs on a year-by-year basis, including the amortization of the applied-for loan.

(b) Upon request of the applicant, the department may issue a letter of intent, explaining the availability of State funds, the status of the loan application and other requirements necessary for the approval of the loan.


Note: Authority cited: Sections 63.9(e) and 76.8, Harbors and Navigation Code. Reference: Sections 76.3, 76.4, 76.5 and 85.2, Harbors and Navigation Code.


s 5174. Priority.

When considering applications, the department shall, in addition to priorities set forward in Sections 76 through 77.1 of the Harbors and Navigation Code, rank borrowers based upon the following; however, in no case shall the department make a loan to any recreational marina that restricts access or bars the public other than in ways that are lawful and consistent with general commercial business practices:

(a) First priority shall be given to projects based upon issues of the health and safety of boaters using the facilities.

(b) Next, priority will be given for completion of projects that are being phase-funded.

(c) Next, priority shall be given to projects that are receiving significant capital investment funds from borrowers in addition to loan funds.

(d) Next, priority shall be given based upon relative demand for facilities in the market area. Consideration shall be given to:

(1) Population size of the market area.

(2) Similar facilities in the market area.

(3) Boating activity in the market area.

(e) In the event that a priority between applications cannot be established by subsections (a) through (c), priority will be given to borrowers with the greatest ability to repay the loan. Evaluation of the borrower's ability to repay shall be based on:

(1) The department's relative security position.

(2) The loan-to-value (LTV) ratio.

(3) The borrower's audited financial statements for the three years immediately preceding the application, if available.

i. Each of these statements shall consist of a balance sheet, an income statement, and a statement of changes in financial position, all of which shall have been prepared according to generally accepted accounting principles.

ii. If the latest complete financial statement is more than six months old, an interim financial statement not older than sixty days shall be included.

(4) Other information acceptable to the department, if financial statements are not available, which establishes a financial ability to repay the loan, such as:

i. Federal income tax returns, filed with the application, and

ii. Credit reports from credit reporting agencies.

(5) An appraisal report showing the current market value of real and personal property which is suitable as collateral.

(6) The type and liquidity of the collateral.

(f) In the event that a priority between applications cannot be established by subsections (a) through (d), priority will be given to those applications with the smallest dollar value, in order to allow the maximum number of projects to be made within the limits of the Recreational Marina Loan Program.


Note: Authority cited: Sections 63.9(e) and 76.8, Harbors and Navigation Code. Reference: Sections 76.3, 76.4, 76.5 and 85.2, Harbors and Navigation Code.


s 5175. Loan Terms and Conditions.

Loan Terms and conditions, in addition to those specified in Sections 76 through 77.1 of the Harbors and Navigation Code, shall also include the following provisions:

(a) The borrower shall establish and capitalize a reserve fund in an amount and under terms and conditions specified by the department.

(1) The reserve fund shall be an interest-bearing account.

(2) In order to withdraw funds from the reserve fund, the signature of the director, or his or her designee, shall be required.

(3) All funds remaining in the reserve fund account shall be returned to the borrower upon full performance of the loan contract. However, unless and until all reserve funds, including accumulated interest, are first committed to improvements at the marina, the borrower may not apply for additional department funding for any project within the marina for a period of five years beginning on the last date any reserve funds are returned to the borrower.

(b) The loan shall be secured by collateral equal to or greater than 110 percent of the loan amount, such as, but not limited to, a mortgage or security interest in real estate, and buildings or personal property of the borrower. These items may only be subject to encumbrances that the department may approve, such as, assignment or pledges of leases, and personal or corporate guarantees. Only the unencumbered equity portion of the property accepted as collateral shall be considered as collateral. Personal guarantees of the principals shall be required, unless reasons satisfactory to the department are presented that justify not requiring such guarantees. The value of the collateral shall be subject to reappraisal as requested by the department from time to time at its discretion, and if, as a result of such reappraisal, it is determined that the value of the collateral has dropped below 110 percent of the then-outstanding loan amount, the borrower shall provide additional collateral as security as required by the department.

(c) Real estate or stationary machinery or equipment pledged as a significant portion of collateral for repayment of a guaranteed loan shall be located within the State of California. Real estate pledged as collateral shall not include land that has been used as a solid waste disposal site. Any appraisal of property shall be conducted by a licensed appraiser acceptable to the borrower and the department.

(d) The borrower shall obtain and maintain, throughout the duration of the loan, fire and extended coverage insurance in an amount equal to 100 percent of the current replacement cost of all improvements which are part of the collateral, with the department named as additional insured.

(e) The borrower will obtain insurance to cover liability arising from design, planning, construction, maintenance or operation of the project, with the department named as additional insured, in the following minimum amounts:

(1) Bodily injury $300,000 each person, $1,000,000 each occurrence.

(2) Property and product damage $500,000 each occurrence, $1,000,000 each aggregate.

(f) The loan shall become due and payable in full upon transfer of the marina, unless such transfer is:

(1) By reason of death of the borrower, and the marina is transferred to the borrower's heirs.

(2) Transfer is to another business entity controlled by the borrower, provided that the transaction does not result in a material change in control or ownership of the recreational marina and collateral associated with the loan.

(g) The loan shall not be subordinated to any future loans obtained by a private marina owner except in those cases involving loans acquired for refinancing previous senior loans.

(h) A provision that the department, the Department of General Services, the Bureau of State Audits, or their designated representative shall have the right to review and copy any records for possible audit for a minimum of three years after final payment, unless a longer period of records retention is stipulated.

(i) A provision that the borrower agrees to allow the auditor(s) access to such records during normal business hours and to allow interviews of any employees who might reasonably have information related to such records.


Note: Authority cited: Sections 63.9(e) and 76.8, Harbors and Navigation Code. Reference: Sections 76.3, 76.6 and 85.2, Harbors and Navigation Code; and Department of General Services (DGS), Standard Agreement Language, as found in GTC 699 (and as may be subsequently amended by DGS).


s 5176. Default Remedies.

Upon the occurrence of a default, the department:

(a) Has and may exercise all rights and remedies accorded to the department by law, including but not limited to the provisions and remedies contained in the California Uniform Commercial Code;

(b) May declare all unperformed obligations, in whole or in part, of borrower immediately due and payable without demand or notice;

(c) May require borrower to take any and all action necessary to transfer the collateral in an amount equal to the unpaid balance of the loan to the secured party;

(d) May deposit all funds obtained from the sale of collateral, less reasonable costs of recovery or maintenance of property, to the Harbors and Watercraft Revolving Fund.


Note: Authority cited: Sections 63.9(e) and 76.8, Harbors and Navigation Code. Reference: Sections 76.3, 77.1 and 85.2, Harbors and Navigation Code.


s 5200. Shoreside Facilities for Removing Waste from Vessel Holding Tank.


Note: Authority cited: Sections 38, 63.9 and 669, Harbors and Naigation Code. Reference: Section 654.1, Harbors and Navigation Code.



s 6500. Purpose.


s 6501. Applicability.

(a) This article applies to each vessel used on waters subject to the jurisdiction of the State of California and on the high seas for vessels whose last port of call was within the State of California that:

(1) Is used by its operator for recreational purposes; or

(2) Is required to be numbered under Section 9850 of the California Vehicle Code.

(b) This article does not apply to a vessel required to have a certificate of inspection under Chapter 1 of Title 46, Code of Federal Regulations.


Note: Authority cited: Section 656, Harbors and Navigation Code. Reference: Section 656, Harbors and Navigation Code.


s 6502. Immediate Notification of Death or Disappearance.

(a) When, as a result of an occurrence that involves a vessel or its equipment, a person dies or disappears from a vessel, the operator shall, without delay, by the quickest means available, notify the Department of Boating and Waterways and the nearest enforcement agency having jurisdiction over the waterbody of:

(1) The date, time, and exact location of the occurrence;

(2) The name of each person who died or disappeared;

(3) The registration number or name of the vessel as documented, and

(4) The names and addresses of the owner and operator.

(b) When the operator of a vessel cannot give the notice required by paragraph (a) of this section, each person on board the vessel shall notify the Department of Boating and Waterways and the enforcement agency having jurisdiction over the waterbody or determine that the notice has been given.


Note: Authority cited: Section 656, Harbors and Navigation Code. Reference: Section 656, Harbors and Navigation Code.


s 6503. Peace Officer Reports to Department.

Pursuant to section 656(d) of the Harbors and Navigation Code, a peace officer or harbor policeman, upon receiving an initial report of a casualty involving the death or disappearance of a person as a result of a boating occurrence, shall immediately forward such report, by quickest means available, to the Department of Boating and Waterways in Sacramento.


Note: Authority cited: Section 656, Harbors and Navigation Code. Reference: Section 656, Harbors and Navigation Code.


s 6504. Boat Accident Reports in Writing.

(a) The operator(s) or owner(s) of the boat(s) shall, in addition to the report required by section 6502, submit a written report(s) on forms provided by the Department of Boating and Waterways, directly to the State of California, Department of Boating and Waterways, to the address shown on the forms when, as a result of an occurrence that involves the vessel or its equipment:

(1) A person dies;

(2) A person is injured and requires medical treatment beyond first aid;

(3) Damage to the vessel and other property damage totals more than $500, or there is a complete loss of a vessel; or

(4) A person disappears from the vessel under circumstances that indicate death or injury.

(b) A report required by this section must be made within forty-eight hours of the occurrence if:

(1) A person dies within twenty-four hours of the occurrence;

(2) A person disappears;

(3) A person is injured and receives medical treatment beyond first aid.

(c) A report required by this section must be made within ten days of the occurrence if an earlier report is not required by this section if:

(1) A person dies more than twenty-four hours after the occurrence;

(2) Damage to the vessel and other property damage totals more than $500, or there is a complete loss of a vessel.


Note: Authority cited: Section 656, Harbors and Navigation Code. Reference: Section 656, Harbors and Navigation Code.


s 6505. Content.

Each accident report must be in writing, dated upon completion, and signed by the person who prepared it, and must contain, if available, at least the following information about the accident:

(a) The registration numbers or names as documented of each vessel involved.

(b) The name and address of each owner of each vessel involved.

(c) The name of the nearest city or town, the county, the state, and the body of water.

(d) The time and date the casualty or accident occurred.

(e) The location on the water.

(f) The visibility, weather, and water conditions.

(g) The estimated air and water temperatures.

(h) The name, address, age, or date of birth, telephone number, vessel operating experience, and boating safety training of the operator making the report.

(i) The name and address of each operator of each vessel involved.

(j) The number of persons on board and towed on skis by each vessel.

(k) The name, address, and date of birth of each person who died, was injured or disappeared.

( l) The cause of each death.

(m) Weather forecasts available to, and weather reports used by, the operator before and during the use of each vessel.

(n) The name and address of each owner of property involved.

(o) The number, availability, and use of personal flotation devices.

(p) The type and size of each fire extinguisher used.

(q) The nature and extent of each injury.

(r) A description of all property damage and vessel damage with an estimate of the cost of all repairs.

(s) A description of each equipment failure that caused or contributed to the cause of the casualty or accident.

(t) A description of the vessel casualty or accident.

(u) The type of vessel operation (cruising, drifting, fishing, hunting, skiing, racing or other) and the type of accident (capsizing, sinking, fire, explosion, or other).

(v) The opinion of the person making the report as to the cause of the accident.

(w) The make, model, type (open, cabin, house, or other), beam width at widest point, length, depth from transom to keel, horsepower, propulsion (outboard, inboard, inboard/outdrive, sail, or other), fuel (gas, diesel, or other), construction (wood, steel, aluminum, plastic, fiberglass, or other), and year built (model year) of the reporting operator's vessel.

(x) The name, address, and telephone number of each witness.

(y) The manufacturer's hull identification number, if any, of reporting operator's vessel.

(z) The name, address, and telephone number of the person submitting the report.


Note: Authority cited: Section 656, Harbors and Navigation Code. Reference: Section 656, Harbors and Navigation Code.



s 6550. Purpose.



s 6550.5. Scope of Articles 4 and 5.

(a) The regulations in this article and in Article 5 apply to vessels operating on the waters of this State that are defined in Government Code Section 170. All vessels complying with the construction and equipment requirements of the International Regulations for Preventing Collisions at Sea, 1972, are considered to be in compliance with these Rules.

(b) Where federal law, including the United States Coast Guard regulations, provides an exemption to any of the provisions of the federal equipment or operation requirements which conform to the state requirements set forth in Articles 4 and 5 of this chapter, such exemption shall also apply to the state requirements.

(c) Any peace officer or harbor policeman authorized to enforce the provisions of Chapter 5 of the Harbors and Navigation Code may inspect a vessel using California waterways for compliance with safety laws, rules, and/or regulations where he has probable cause or a reasonable suspicion to believe that a violation of such laws, rules, or regulations exists.

(d) Any peace officer authorized to enforce the provisions of Chapter 5 of the Harbors and Navigation Code may order the operator of an unsafe vessel to remove such vessel to the shore or to a safe moorage or anchorage in accordance with the requirements of this subsection. An officer may order an unsafe vessel so removed where it is being operated with one or more of the following hazardous conditions, where such conditions cannot be corrected on the spot, and where, in the judgment of the officer, continued operation of the vessel would create an immediate danger to life, limb, or property.

(1) Boat being used without sufficient personal flotation devices, as prescribed by Section 6565 of this chapter;

(2) Boat being used without sufficient firefighting devices, as prescribed by Section 6569 of this chapter;

(3) Boat does not display required navigation lights between sunset and sunrise, as prescribed by Section 6600.1 of this Chapter;

(4) Boat has fuel leakage from either the fuel system or engine, or both;

(5) Boat has accumulation of fuel in bilges or compartment other than a fuel tank;

(6) Boat does not have legal and serviceable ventilation system, as prescribed by Section 6575 of this chapter;

(7) Boat does not have proper backfire flame control system, as prescribed by Section 6574 of this chapter;

(8) Boat is overloaded to such an extent that there exists so little freeboard the danger of sinking or capsizing may be imminent.

Any person operating an unsafe vessel, as specified in this subsection, shall remove it to the shore or to a safe moorage or anchorage as directed by the peace officer.


Note: Authority cited: Sections 662 and 655, Harbors and Navigation Code. Reference: Sections 652, 655, 663, 663.5, and 663.6, Harbors and Navigation Code; and PL 96-591, Rule 1(b)(ii).


s 6551. Invalidity of Provision or of Application to Particular Person or Circumstance.

If any provision of this article, or its application to any person or circumstance, is held invalid the remainder of this article, and the application of its provisions to any other person or circumstance, is not affected.


Note: Authority cited: Section 652, Harbors and Navigation Code. Reference: Sections 650 and 652, Harbors and Navigation Code.



s 6552. Definitions.

As used in Articles 4 and 5:

(a) "Approved" means approved by the Commandant of the United States Coast Guard.

(b) "Barge" means any nonself-propelled vessel.

(c) "Carrying passengers for hire" means the carriage of a person by a vessel for a valuable consideration, whether directly or indirectly flowing to the owner, charterer, operator, agent, or any other person interested in the vessel.

(d) "Ferry" includes a vessel having provisions only for deck passengers and/or vehicles, operating on a short run on a frequent schedule between two points over the most direct water route, and offering a public service of a type normally attributed to a bridge or tunnel. "Ferry" does not include a vessel navigating the water of the ocean.

(e) "Fire extinguisher" means a marine-type fire extinguisher, as approved by the Commandant of the Coast Guard.

(f) "High Seas" means:

(1) Crescent City Harbor. Those waters outside of a line drawn from Crescent City Entrance Light to the southeasternmost extremity of Whaler Island.

(2) Arcata-Humboldt Bay. Those waters outside of a line drawn from Humboldt Bay Entrance Light 4 to Humboldt Bay Entrance Light 3.

(3) Noyo River. Those waters outside of a line drawn from Noyo River Entrance Daybeacon 4 to Noyo River Entrance Light 5.

(4) Albion River. Those waters outside of a line drawn on an axis of 030 true through Albion River Light 1 across Albion Cove.

(5) Bodega Bay. Those waters outside of a line drawn from the seaward extremity of Bodega Harbor North Breakwater to Bodega Harbor Entrance Light 1.

(6) Tomales Bay. Those waters outside of an east-west line drawn from Sand Point to Avalis Beach.

(7) San Francisco Harbor. Those waters outside of a straight line drawn from Point Bonita Light through Mile Rocks Light to the shore.

(8) Pillar Point Harbor. Those waters outside of a line drawn from Pillar Point Harbor Light 6 to Pillar Point Harbor Entrance Light.

(9) Santa Cruz Harbor. Those waters outside of a line drawn from the seaward extremity of the Santa Cruz Harbor East Breakwater to Santa Cruz Harbor West Breakwater Light; thence to Santa Cruz Light.

(10) Moss Landing Harbor. Those waters outside of a line drawn from the seaward extremity of the pier located 0.3 mile south of Moss Landing Harbor entrance to the seaward extremity of the Moss Landing Harbor North Breakwater.

(11) Monterey Harbor. Those waters outside of a line drawn from Monterey Harbor Light 6 to the northern extremity of Monterey Municipal Wharf 2.

(12) Estero-Morro Bay. Those waters outside of a line drawn from the seaward extremity of the Morro Bay East Breakwater to the Morro Bay West Breakwater Light.

(13) San Luis Obispo Bay. Those waters outside of a line drawn from the southernmost extremity of Fossil Point to the seaward extremity of Whaler Island Breakwater.

(14) Santa Barbara Harbor. Those waters outside of a line drawn from Santa Barbara Harbor Light 4 to Santa Barbara Harbor Breakwater Light.

(15) Ventura Marina. Those waters outside of a line drawn from Ventura Marina South Jetty Light 6 to Ventura Marina Breakwater South Light 3; thence to Ventura Marina North Jetty Light 7.

(16) Channel Islands Harbor.

(A) Those waters outside of a line drawn from Channel Islands Harbor South Jetty Light 2 to Channel Islands Harbor Breakwater South Light 1.

(B) Those waters outside of a line drawn from Channel Islands Harbor Breakwater North Light to Channel Islands Harbor North Jetty Light 5.

(17) Port Hueneme. Those waters outside of a line drawn from Port Hueneme East Jetty Light 4 to Port Hueneme West Jetty Light 3.

(18) Marina del Rey.

(A) Those waters outside of a line drawn from Marina del Rey Breakwater South Light 1 to Marina del Rey Light 4.

(B) Those waters outside of a line drawn from Marina del Rey Breakwater North Light 2 toMarina del Rey Light 3. (continued)