Cal. Health and Safety Code § 80420

(a) Except as provided in subdivision (b) and in Section 80425, upon approval of the loan application by the department, the loan recipient shall execute an agreement with the department to repay the loan over a period not to exceed three years. (b) If the loan is to a local government entity, or to a developer or prospective purchaser acting together with a local government entity pursuant to an enforceable agreement, the department may delay the beginning of the loan repayment period. (c) Except as provided in subdivision (d), the agreement made pursuant to subdivision (a) shall require that if the loan recipient recovers from a responsible party any costs incurred in taking a response action at the site that is the subject of the loan application, any money so recovered, except for reasonable costs and the fees incurred to recover that money, shall be used first to repay the loan or repay the grant. (d) Notwithstanding subdivision (c), a loan recipient is not required to first use the money recovered to repay the loan or grant, if the recipient can demonstrate, to the satisfaction of the department, that the recovered money is necessary to, and is being applied to, the total environmental remediation of the property, and that the total of the recovered money and the loan amount does not exceed the cost of remediation.