No application for a grant may be made pursuant to this chapter unless the public agency has also applied for a loan pursuant to the California Safe Drinking Water Bond Law of 1976. No public agency whose loan application has been rejected on the basis of lack of financial need shall be eligible for a grant.

If the department has determined that the applicant is unable to repay the full costs of a loan, the applicant may also file for a grant. Upon receipt of a grant application, the department shall determine that portion of the full costs that the applicant is capable of repaying. Grant funds shall only be provided for that portion that the applicant is not capable of repaying.

(Added by Stats. 1978, Ch. 322.)