Existing law, the Safe Drinking Water State Revolving Fund Law of 1997, establishes the Safe Drinking Water State Revolving Fund to provide grants or revolving fund loans for the design and construction of projects for public water systems that will enable those systems to meet safe drinking water standards.

This bill would, to the extent funding is made available, authorize the State Water Resources Control Board to establish a program to provide funding to counties and qualified nonprofit organizations to award low-interest loans and grants to eligible applicants for specified purposes relating to drinking water and wastewater treatment. This bill would authorize a county or qualified nonprofit organization to apply to the board for a grant to award loans or grants, or both, to residents of the county, as prescribed. To fund this program, the bill would authorize the board to use funding appropriated in an item of the Budget Act of 2016 from the State Water Quality Control Fund, or to use any other funding source consistent with the purposes of the program. By expanding the purposes of an appropriation, the bill would make an appropriation.

Existing law, the Safe Drinking Water State Revolving Fund Law of 1997, establishes the Safe Drinking Water State Revolving Fund to provide grants or revolving fund loans for the design and construction of projects for public water systems that will enable those systems to meet safe drinking water standards.

This bill would require would, to the extent funding is made available, authorize the State Water Resources Control Board to establish a program to provide funding to counties and qualified nonprofit organizations to award low-interest loans and grants to eligible applicants for specified purposes relating to drinking water and wastewater treatment. This bill would authorize a county or qualified nonprofit organization to apply to the board for a grant to award loans or grants, or both, to residents of the county, as prescribed. This bill would create the Water and Wastewater Loan and Grant Fund and provide that the moneys in this fund are available, upon appropriation by the Legislature, to the board to administer and implement the program. This bill would transfer to the Water and Wastewater Loan and Grant Fund $10,000,000 from the General Fund. To fund this program, the bill would authorize the board to use funding appropriated in an item of the Budget Act of 2016 from the State Water Quality Control Fund, or to use any other funding source consistent with the purposes of the program. By expanding the purposes of an appropriation, the bill would make an appropriation.

Existing law, the Safe Drinking Water State Revolving Fund Law of 1997, establishes the Safe Drinking Water State Revolving Fund to provide grants or revolving fund loans for the design and construction of projects for public water systems that will enable those systems to meet safe drinking water standards.

This bill would require the State Water Resources Control Board to establish a program to provide funding to counties to award low-interest loans and grants to eligible applicants for specified purposes relating to drinking water and wastewater treatment. This bill would authorize a county to apply to the board for a grant to award loans or grants, or both, to residents of the county, as prescribed. This bill would create the Water and Wastewater Loan and Grant Fund and provide that the moneys in this fund are available, upon appropriation by the Legislature, to the board to administer and implement the program. This bill would transfer to the Water and Wastewater Loan and Grant Fund $10,000,000 from the General Fund.

This bill would declare that it is to take effect immediately as an urgency statute.

Existing law, the Safe Drinking Water State Revolving Fund Law of 1997, establishes the Safe Drinking Water State Revolving Fund to provide grants or revolving fund loans for the design and construction of projects for public water systems that will enable those systems to meet safe drinking water standards.

This bill would require the State Water Resources Control Board to establish a program to provide funding to counties to award low-interest loans and grants to eligible applicants for specified purposes relating to drinking water and wastewater treatment. This bill would authorize a county to apply to the board for a grant to award loans or grants, or both, to residents of the county, as prescribed. This bill would create the Water and Wastewater Loan and Grant Fund and provide that the moneys in this fund are available, upon appropriation by the Legislature, to the board to administer and implement the program. This bill would transfer to the Water and Wastewater Loan and Grant Fund $20,000,000 $10,000,000 from the General Fund.

This bill would declare that it is to take effect immediately as an urgency statute.

Existing law, the Safe Drinking Water State Revolving Fund Law of 1997, establishes the Safe Drinking Water State Revolving Fund to provide grants or revolving fund loans for the design and construction of projects for public water systems that will enable those systems to meet safe drinking water standards.

This bill would require the State Water Resources Control Board to establish a program to provide funding to counties to award low-interest loans and grants to eligible applicants for specified purposes relating to drinking water and wastewater treatment. This bill would authorize a county to apply to the board for a grant to award loans or grants, or both, to residents of the county, as prescribed. This bill would create the Water and Wastewater Loan and Grant Fund and provide that the moneys in this fund are available, upon appropriation by the Legislature, to the board to administer and implement the program. This bill would transfer to the Water and Wastewater Loan and Grant Fund $20,000,000 from the General Fund.

This bill would declare that it is to take effect immediately as an urgency statute.

Existing law, the Safe Drinking Water State Revolving Fund Law of 1997, establishes the Safe Drinking Water State Revolving Fund to provide grants or revolving fund loans for the design and construction of projects for public water systems that will enable those systems to meet safe drinking water standards.

This bill would require the State Water Resources Control Board to establish a program to provide funding to counties to award low-interest loans and grants to eligible applicants for specified purposes relating to drinking water and wastewater treatment. This bill would authorize a county to apply to the board for a grant to award loans or grants, or both, to residents of the county, as prescribed. This bill would create the Water and Wastewater Loan and Grant Fund and provide that the moneys in this fund are available, upon appropriation by the Legislature, to the board to administer and implement the program. This bill would transfer to the Water and Wastewater Loan and Grant Fund $20,000,000 from the General Fund.

This bill would declare that it is to take effect immediately as an urgency statute.

Existing law, the Safe Drinking Water State Revolving Fund Law of 1997, establishes the Safe Drinking Water State Revolving Fund to provide grants or revolving fund loans for the design and construction of projects for public water systems that will enable those systems to meet safe drinking water standards.

This bill would require the State Water Resources Control Board to establish a program to provide funding to counties to award low-interest loans and grants to local agencies for low-interest loans and grants to eligible applicants for specified purposes relating to drinking water and wastewater treatment. This bill would authorize a county to apply to the board for a grant to award loans or grants, or both, to residents of the county, as prescribed. This bill would create the Water and Wastewater Loan and Grant Fund and provide that the moneys in this fund are available, upon appropriation by the Legislature, to the board for expenditure for to administer and implement the program. This bill would transfer to the Water and Wastewater Loan and Grant Fund $20,000,000 from the General Fund.

This bill would declare that it is to take effect immediately as an urgency statute.

Existing law, the Safe Drinking Water State Revolving Fund Law of 1997, establishes the Safe Drinking Water State Revolving Fund to provide grants or revolving fund loans for the design and construction of projects for public water systems that will enable those systems to meet safe drinking water standards.

This bill would require the State Water Resources Control Board to establish a program to provide low-interest loans and grants to local agencies for low-interest loans and grants to eligible applicants for specified purposes relating to drinking water and wastewater treatment. This bill would create the Water and Wastewater Loan and Grant Fund and provide that the moneys in this fund are available, upon appropriation by the Legislature, to the board for expenditure for the program. This bill would transfer to the Water and Wastewater Loan and Grant Fund $20,000,000 from the General Fund.

This bill would declare that it is to take effect immediately as an urgency statute.

GOVERNOR'S VETO

GV Bill Id:AB 1588

Author:(Mathis and Alejo)

As Enrolled Ver:August 30, 2016

2/3 vote

Original Committee Reference: W., P. & W.

SUMMARY: To the extent funds are available, authorizes the State Water Resources Control Board (SWRCB) to implement low-interest loan and grant programs for counties and qualified nonprofit organizations, as defined, to fund water and wastewater facilities improvements. Specifically, this bill:

1. Permits the SWRCB to use funds out of $15 million appropriated in the Budget Act of 2016 (SB 826 (Leno), Chapter 23, Statues of 2016) to fund the low-interest loan and grant programs or any other funding source consistent with the purposes of this chapter. Requires the SWRCB to use reasonable and feasible efforts to secure local matching funds for the purposes of funding projects pursuant to this chapter.
2. Authorizes the SWRCB to establish a program of low-interest loans and grants for counties and qualified nonprofit organizations to provide funds to eligible applicants for specified water or wastewater improvements.
3. Allows the SWRCB to adopt any guidelines it determines are necessary to administer the program and exempts a guideline adopted for this chapter from the Administrative Procedures Act.
4. Allows a county or qualified nonprofit organization to apply to the SWRCB for funds to award grants and/or loans to residents of the county.
5. Requires counties or qualified nonprofit organizations receiving a grant or a loan under this chapter to annually provide specified information to the board regarding projects and funding recipients.
6. Requires eligible loan applicants to meet the following specified criteria:
   1. Requires loans to be secured by a mortgage on the residence and repaid within 20 years in accordance with terms established by the SWRCB. Limits the loan interest rate to 1%. Requires loan recipients to maintain homeowners insurance during the life of the loan.
   2. Allows counties or qualified nonprofit organizations to enter into contracts with private financial institutions to provide loans consistent with the purposes of this chapter.
7. Requires eligible grant recipients to meet the following specified criteria:
   1. Requires grant recipients to repay the county or qualified nonprofit organization in full if the recipient sells the residence less than five years from signing the grant agreement. Requires the grant recipient to repay the county or qualified nonprofit organization any unused grant funds.

The Senate amendments: Permit instead of requires, the SWRCB to create the low-interest loan and grant programs. Eliminate a $10 million General Fund Transfer and replaces with the ability to access funds from a $15 million appropriation in the 2016 Budget Act, to create the low-interest loan and grant programs. Define and allows qualified nonprofit organizations in addition to counties, to apply to the SWRCB to administer low-interest loan and grant programs. Permit the SWRCB to enter into agreements to advance funds to counties or qualified nonprofit organizations. Remove an urgency clause from the bill.

EXISTING LAW:

1. Under the federal Clean Water Act:
   1. Establishes federal guidelines for surface water quality protection.
   2. Authorizes water quality programs; requires federal effluent limitations and state water quality standards; requires permits for the discharge of pollutants into navigable waters; provides enforcement mechanisms; and authorizes funding for wastewater treatment works, construction grants, and state revolving loan programs, as well as funding to states and tribes for their water quality programs.
2. Establishes the Clean Water State Revolving Fund (CWSRF) to offer financial assistance for water quality projects.
3. Under the federal Safe Drinking Water Act (SDWA):
   1. Establishes federal standards for contaminants in drinking water.
   2. Authorizes states to enter into primacy agreements with the federal United States Environmental Protection Agency (US EPA) to enforce the SDWA if the state establishes drinking water standards that are at least as stringent as those developed by the US EPA, as required by the SDWA.
   3. Establishes the Safe Drinking Water State Revolving Fund (SDWSRF) to offer financial assistance for safe drinking water projects.
4. Under the Porter-Cologne Water Quality Control Act:
   1. Establishes the State Water Resources Control Board (State Water Board) and Regional Water Quality Control Boards to regulate and protect water quality in California.
   2. Establishes the State Water Pollution Control Revolving Fund to, among other things, implement the federal CWSRF program.
5. Transferred the Drinking Water Program and the SDWSRF from the Department of Public Health to the State Water Board effective July 1, 2014.
6. Under the California Safe Drinking Water Act:
   1. Requires the State Water Board to protect the public from contaminants in drinking water.
   2. Establishes the SDWSRF which is partially capitalized by federal contributions from the federal Safe Drinking Water Act. Specifies that the SDWSRF provide funding for public water systems to correct deficiencies and problems that pose public health risks and to meet safe drinking water standards.

FISCAL EFFECT: Unknown.

COMMENTS: According to the author, Californians who are reliant on groundwater wells need access to low-interest financing and grants to undertake necessary repairs to provide safe, reliable drinking water. There are many state and federal programs that provide financial assistance, such as low-interest loans and grants, to communities to undertake water and wastewater infrastructure improvement projects. Unfortunately, there are very few resources available to individual homeowners who are reliant on their own groundwater wells.

It is the policy of the state that every human being has the right to safe, clean, affordable, and accessible water adequate for human consumption, cooking, and sanitary purposes. The CWSRF program provides low-interest loans and other financing mechanisms for publicly-owned wastewater treatment facilities, local sewers, sewer interceptors, water recycling facilities, and storm water treatment facilities. The SDWSRF provides funding for public water systems. But improvements to those parts of the water and wastewater infrastructure that are on private property such as wells, sewer laterals, or septic systems have not been funded by the CWSRF or SDWSRF programs. This bill allows for assistance on private property similar to what exists for public systems.

GOVERNOR'S VETO MESSAGE:

To the Member of the California State Assembly:

I am returning Assembly Bill 1588 without my signature.

This bill codifies the existing low-interest loans and grants being provided for local agencies, counties and qualified non-profits for drinking water or wastewater treatment projects. Unfortunately, there were some technical errors that would inadvertently limit the drought assistance we are currently providing.

I am directing the Water Board to work with the author to revised legislation next year.

Sincerely

Edmund G. Brown Jr.

Analysis Prepared by: Ryan Ojakian / W., P., & W. / (916) 319-2096 FN: 0005057

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 1588

Author:(Mathis and Alejo)

As Amended Ver:August 16, 2016

2/3 vote

Original Committee Reference: W., P., & W.

SUMMARY: To the extent funds are available, authorizes the State Water Resources Control Board (SWRCB) to implement low-interest loan and grant programs for counties and qualified nonprofit organizations, as defined, to fund water and wastewater facilities improvements. Specifically, this bill:

1. Permits the SWRCB to use funds out of $15 million appropriated in the Budget Act of 2016 (SB 826 (Leno), Chapter 23, Statues of 2016) to fund the low-interest loan and grant programs or any other funding source consistent with the purposes of this chapter. Requires the SWRCB to use reasonable and feasible efforts to secure local matching funds for the purposes of funding projects pursuant to this chapter.
2. Authorizes the SWRCB to establish a program of low-interest loans and grants for counties and qualified nonprofit organizations to provide funds to eligible applicants for specified water or wastewater improvements.
3. Allows the SWRCB to adopt any guidelines it determines are necessary to administer the program and exempts a guideline adopted for this chapter from the Administrative Procedures Act.
4. Allows a county or qualified nonprofit organization to apply to the SWRCB for funds to award grants and/or loans to residents of the county.
5. Requires counties or qualified nonprofit organizations receiving a grant or a loan under this chapter to annually provide specified information to the board regarding projects and funding recipients.
6. Requires eligible loan applicants to meet the following specified criteria:
   1. Requires loans to be secured by a mortgage on the residence and repaid within 20 years in accordance with terms established by the SWRCB. Limits the loan interest rate to 1%. Requires loan recipients to maintain homeowners insurance during the life of the loan.
   2. Allows counties or qualified nonprofit organizations to enter into contracts with private financial institutions to provide loans consistent with the purposes of this chapter.
7. Requires eligible grant recipients to meet the following specified criteria:
   1. Requires grant recipients to repay the county or qualified nonprofit organization in full if the recipient sells the residence less than five years from signing the grant agreement. Requires the grant recipient to repay the county or qualified nonprofit organization any unused grant funds.

The Senate amendments: Permits instead of requires, the SWRCB to create the low-interest loan and grant programs. Eliminates a $10 million General Fund Transfer and replaces with the ability to access funds from a $15 million appropriation in the 2016 Budget Act, to create the low-interest loan and grant programs. Defines and allows qualified nonprofit organizations in addition to counties, to apply to the SWRCB to administer low-interest loan and grant programs. Permits the SWRCB to enter into agreements to advance funds to counties or qualified nonprofit organizations. Removes an urgency clause from the bill.

EXISTING LAW:

1. Under the federal Clean Water Act:
   1. Establishes federal guidelines for surface water quality protection.
   2. Authorizes water quality programs; requires federal effluent limitations and state water quality standards; requires permits for the discharge of pollutants into navigable waters; provides enforcement mechanisms; and authorizes funding for wastewater treatment works, construction grants, and state revolving loan programs, as well as funding to states and tribes for their water quality programs.
2. Establishes the Clean Water State Revolving Fund (CWSRF) to offer financial assistance for water quality projects.
3. Under the federal Safe Drinking Water Act (SDWA):
   1. Establishes federal standards for contaminants in drinking water.
   2. Authorizes states to enter into primacy agreements with the federal United States Environmental Protection Agency (US EPA) to enforce the SDWA if the state establishes drinking water standards that are at least as stringent as those developed by the US EPA, as required by the SDWA.
   3. Establishes the Safe Drinking Water State Revolving Fund (SDWSRF) to offer financial assistance for safe drinking water projects.
4. Under the Porter-Cologne Water Quality Control Act:
   1. Establishes the State Water Resources Control Board (State Water Board) and Regional Water Quality Control Boards to regulate and protect water quality in California.
   2. Establishes the State Water Pollution Control Revolving Fund to, among other things, implement the federal CWSRF program.
5. Transferred the Drinking Water Program and the SDWSRF from the Department of Public Health to the State Water Board effective July 1, 2014.
6. Under the California Safe Drinking Water Act:
   1. Requires the State Water Board to protect the public from contaminants in drinking water.
   2. Establishes the SDWSRF which is partially capitalized by federal contributions from the federal Safe Drinking Water Act. Specifies that the SDWSRF provide funding for public water systems to correct deficiencies and problems that pose public health risks and to meet safe drinking water standards.

FISCAL EFFECT: Unknown.

COMMENTS: According to the author, Californians who are reliant on groundwater wells need access to low-interest financing and grants to undertake necessary repairs to provide safe, reliable drinking water. There are many state and federal programs that provide financial assistance, such as low-interest loans and grants, to communities to undertake water and wastewater infrastructure improvement projects. Unfortunately, there are very few resources available to individual homeowners who are reliant on their own groundwater wells.

It is the policy of the state that every human being has the right to safe, clean, affordable, and accessible water adequate for human consumption, cooking, and sanitary purposes. The CWSRF program provides low-interest loans and other financing mechanisms for publicly-owned wastewater treatment facilities, local sewers, sewer interceptors, water recycling facilities, and storm water treatment facilities. The SDWSRF provides funding for public water systems. But improvements to those parts of the water and wastewater infrastructure that are on private property such as wells, sewer laterals, or septic systems have not been funded by the CWSRF or SDWSRF programs. This bill allows for assistance on private property similar to what exists for public systems.

Analysis Prepared by: Ryan Ojakian / W., P., & W. / (916) 319-2096 FN: 0004342

 THIRD READING  

Bill No: AB 1588

Author:

:

Vote: 27

SENATE ENVIRONMENTAL QUALITY COMMITTEE: 7-0, 6/29/16

AYES: Wieckowski, Gaines, Bates, Hill, Jackson, Leno, Pavley

SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/11/16

AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen

ASSEMBLY FLOOR: 76-0, 6/2/16 - See last page for vote

SUBJECT:

SOURCE: Author

DIGEST: This bill establishes a program to provide funding for local agencies to offer low-interest loans and grants to eligible applicants for drinking water or wastewater treatment projects.

ANALYSIS:

Existing federal law:

1. Enacts the federal Clean Water Act which:
   1. Establishes federal guidelines for surface water quality protection.
   2. Authorizes water quality programs; requires federal effluent limitations and state water quality standards; requires permits for the discharge of pollutants into navigable waters; provides enforcement mechanisms; and authorizes funding for wastewater treatment works, construction grants, and state revolving loan programs, as well as funding to states and tribes for their water quality programs.
   3. Establishes the Clean Water State Revolving Fund (CWSRF) to offer financial assistance for water quality projects.
2. Enacts the federal Safe Drinking Water Act (SDWA) which:
   1. Establishes federal standards for contaminants in drinking water.
   2. Authorizes states to enter into primacy agreements with the federal United States Environmental Protection Agency (US EPA) to enforce SDWA if the state establishes drinking water standards that are at least as stringent as those developed by US EPA, as required by SDWA.
   3. Establishes the Safe Drinking Water State Revolving Fund (SDWSRF) to offer financial assistance for safe drinking water projects.

Existing state law:

1. Enacts the Porter-Cologne Water Quality Control Act which:
   1. Establishes the State Water Resources Control Board (SWRCB) and Regional Water Quality Control Boards to regulate and protect water quality in California.
   2. Establishes the State Water Pollution Control Revolving Fund to, among other things, implement the federal CWSRF program.
2. Transfers the Drinking Water Program and the Safe Drinking Water State Revolving Fund (SDWSRF) from the Department of Public Health to SWRCB effective July 1, 2014.
3. Enacts the California Safe Drinking Water Act which:
   1. Requires SWRCB to protect the public from contaminants in drinking water.
   2. Establishes the SDWSRF which is partially capitalized by federal contributions from the federal Safe Drinking Water Act. Specifies that the SDWSRF provide funding for public water systems to correct deficiencies and problems that pose public health risks and to meet safe drinking water standards.
4. Includes, in Proposition 1, the Water Quality, Supply, and Infrastructure Improvement Act of 2014 (Prop. 1), $260 million, upon appropriation by the Legislature to the SWRCB to be placed in the CWSRF and used for grants for wastewater treatment projects. Prop. 1 also includes another $260 million, upon appropriation by the Legislature (recipient agency not specified) for public water system infrastructure improvements and related actions to meet safe drinking water standards, ensure affordable drinking water, or both.
5. Appropriates under AB 91 (Budget Committee, Chapter 1, Statutes of 2015) $19 million to the SWRCB, for grants and direct expenditures for emergency drinking water projects, including hauled water, bottled water, design and construction of connections to adjacent public water systems, new wells and well rehabilitation.

This bill establishes a program to provide funding for local agencies or qualified non-profits to offer low-interest loans and grants to eligible applicants for drinking water or wastewater treatment projects and authorizes a county or qualified non-profit to apply to the board for a grant to award loans or grants, or both, to residents of the county, as prescribed.

Background

1. Privately owned property is not eligible under CWSRF or SDWSRF. The CWSRF program provides low-interest loans and other financing mechanisms for publicly owned wastewater treatment facilities, local sewers, sewer interceptors, water recycling facilities, and storm water treatment facilities. The SDWSRF provides funding for public water systems. But improvements to those parts of the water and wastewater infrastructure that are on private property such as wells, sewer laterals, or septic systems have not been funded by the CWSRF or SDWSRF programs.

Comments

1. Purpose of Bill. According to the author, Californians who are reliant on groundwater wells need access to low-interest financing and grants to undertake necessary repairs to provide safer, reliable drinking water. There are many state and federal programs that provide financial assistance, such as low-interest loans and grants, to communities to undertake water and wastewater infrastructure improvement projects. Unfortunately, there are very few resources available to individual homeowners who are reliant on their own groundwater wells.

The author states that it is the policy of the state that every human being has the right to safe, clean, affordable, and accessible water adequate for human consumption, cooking, and sanitary purposes. The CWSRF program provides low-interest loans and other financing mechanisms for publicly owned wastewater treatment facilities, local sewers, sewer interceptors, water recycling facilities, and storm water treatment facilities. The SDWSRF provides funding for public water systems. But improvements to those parts of the water and wastewater infrastructure that are on private property such as wells, sewer laterals, or septic systems have not been funded by the CWSRF or SDWSRF programs. This bill provides for assistance on private property similar to what exists for public systems.

Related/Prior Legislation

AB 954 (Mathis, 2015) was held in the Senate Appropriations Committee. This bill is substantially similar to AB 954. The difference between the two bills is the process by which the SWRCB will establish the programs and reporting requirements under the programs to the SWRCB.

AB 91 (Committee on Budget, Chapter 1, Statutes of 2015), appropriated $19 million to SWRCB, for grants and direct expenditures for emergency drinking water projects, including hauled water, bottled water, design and construction of connections to adjacent public water systems, new wells and well rehabilitation.

AB 1471 (Rendon, Chapter 188, Statutes of 2014), placed Proposition 1, a $7.545 billion general obligation bond for water-related projects and programs on the November 4, 2014, ballot where it passed with 67% of the vote.

AB 964 (Huffman, 2011) sought to improve water quality by financing the installation of onsite sewer and septic improvements on private property including the conversion of a property from a septic system to community sewer collection and treatment service. AB 964 was later gutted and amended into a water rights bill concerning Small Irrigation Registrations after the federal Environmental Protection Agency interpreted private property improvements to be ineligible for CWSRF money.

FISCAL EFFECT: Appropriation: Yes Fiscal Com.: Local:

According to the Senate Committee on Appropriations:

• Cost pressures in the millions to fund the program (Water Quality Control Fund).
• Ongoing costs of $500,000 annually for five years (General Fund) to the SWRCB to administer the grant program, if funded.

SUPPORT: (Verified 8/15/16)

Association of California Water Agencies

California Food Policy Advocates

California Association of Realtors

Clean Water Action

Community Water Center

El Quinto Sol De America

Environmental Working Group

Kings River Conservation District

Kings River Water Association

Mission Springs Water District

Pacific Water Quality Association

Trust for Public Land

OPPOSITION: (Verified 8/15/16)

None received

ASSEMBLY FLOOR: 76-0, 6/2/16

AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon

NO VOTE RECORDED: Bigelow, Frazier, Beth Gaines, Gordon

Prepared by:

8/16/16 17:38:46

**** END ****

SENATE COMMITTEE ON

Senator Ricardo Lara, Chair

2015 - 2016 Regular Session

AB 1588 (Mathis) - Water and Wastewater Loan and Grant Program

*********** ANALYSIS ADDENDUM – SUSPENSE FILE ***********

The following information is revised to reflect amendments

adopted by the committee on August 11, 2016

Bill Summary:

AB 1588 establishes a program to provide funding for local agencies to offer low-interest loans and grants to eligible applicants for drinking water or wastewater treatment projects.

Fiscal Impact:

• Cost pressures in the millions to fund the program (Water Quality Control Fund).
• Ongoing costs of $500,000 annually for five years (General Fund) to the State Water Resources Control Board (SWRCB) to administer the grant program, if funded.

Committee Amendments:

• Delete findings and declarations.
• Authorize program enactment if funding is available.
• Specify the Water Quality Control Fund as the funding source for the program.
• Deletes language creating the Water and Wastewater Loan and Grant Fund.
• Remove $10 million appropriation from the General Fund.
• Remove urgency clause.

-- END --

SENATE COMMITTEE ON APPROPRIATIONS

Senator Ricardo Lara, Chair

2015 - 2016 Regular Session

AB 1588 (Mathis) - Water and Wastewater Loan and Grant Program

This bill meets the criteria for referral to the Suspense File.

Bill Summary:

AB 1588 establishes a program to provide funding for local agencies to offer low-interest loans and grants to eligible applicants for drinking water or wastewater treatment projects. The bill also appropriates $10 million from the General Fund for this purpose.

Fiscal Impact:

• One-time appropriation of $10 million (General Fund) for the financial assistance program.
• Ongoing costs of $500,000 annually for five years (General Fund) to the State Water Resources Control Board (SWRCB) to administer the grant program.

Background:

The federal Clean Water Act. The federal Clean Water Act establishes federal guidelines for surface water quality protection, authorizes water quality programs; require quality standards and permits for discharge; provides enforcement mechanisms; and establishes the Clean Water State Revolving Fund (CWSRF) to offer financial assistance for water quality projects.

The federal Safe Drinking Water Act. The federal Safe Drinking Water Act (SDWA) establishes federal standards for contaminants in drinking water, and authorizes states to enter into primacy agreements with the federal United States Environmental Protection Agency (US EPA) to enforce SDWA if the state establishes drinking water standards that are at least as stringent as those developed by US EPA, as required by SDWA.

The Porter-Cologne Water Quality Control Act. The Porter-Cologne Water Quality Control Act establishes the State Water Resources Control Board (SWRCB) and Regional Water Quality Control Boards to regulate and protect water quality in California. It also establishes the State Water Pollution Control Revolving Fund to, among other things, implement the federal CWSRF program. In 2014, the state transferred the Drinking Water Program and the Safe Drinking Water State Revolving Fund (SDWSRF) from the Department of Public Health to SWRCB.

The California Safe Drinking Water Act. The California Safe Drinking Water Act requires SWRCB to protect the public from contaminants in drinking water. It also establishes the state SDWSRF which is partially capitalized by federal contributions from the federal Safe Drinking Water Act, and specifies that the SDWSRF provide funding for public water systems to correct deficiencies and problems that pose public health risks and to meet safe drinking water standards.

Proposition 1: The Water Quality, Supply, and Infrastructure Improvement Act of 2014. Proposition 1 included $260 million, upon appropriation by the Legislature to the SWRCB to be placed in the CWSRF and used for grants for wastewater treatment projects. It also included another $260 million, upon appropriation by the Legislature, (recipient agency not specified) for public water system infrastructure improvements and related actions to meet safe drinking water standards, ensure affordable drinking water, or both.

The Household and Small Water System Drought Assistance Program. The low-interest loans and other financing mechanisms available through the above-mentioned programs do not fund water infrastructure on private property such as wells, sewer laterals, or septic systems. However, the 2016-17 Budget allocated $15 million to the SWRCB from the Clean-up and Abatement Account for Drought-related Interim Emergency Drinking Water. The Governor directed the SWRCB to $5 million for the Household and Small Water System Drought Assistance Program.

The Household and Small Water System Drought Assistance program offers loan/grant funding to assist individual households and small water systems (that serve less than 15 connections) to address their drought-related drinking water emergencies.  The funds will be administered by three non-profit organizations: Self-Help Enterprises, Rural Community Assistance Corporation, and California Rural Water Association.  These monies will fund the following activities: new well construction, design of cost of necessary infrastructure, permit and connection fees, well rehabilitation/repair (including extending deep wells to deeper aquifers, distribution/conveyance pipelines (up to point of entry of household), limited consolidation efforts (i.e. laterals, above-ground interties), and all necessary appurtenances/equipment.  Individual households may receive up to $45,000 and small water systems may receive $100,000 in maximum funding. 

Proposed Law:

This bill:

1. Requires SWRCB to establish a program to provide funding for local agencies to offer low-interest loans and grants to eligible applicants for drinking water or wastewater treatment projects.
2. Transfers $10 million from the General Fund to the newly-created Water and Wastewater Loan and Grant Fund (LGF).
3. Allows SWRCB to adopt guidelines for administering the program exempt from the Administrative Procedures Act (APA).
4. Requires SWRCB to develop guidelines to apportion funds among the counties.
5. Allows a county to apply to SWRCB for funds to award grants and/or loans to residents within its jurisdiction.
6. Requires counties receiving LGF to annually provide specified information to the SWRCB regarding projects and funding recipients.
7. Limits loan eligibility to households with incomes below the statewide median, who have an ownership interest in the house, are unable to obtain financial assistance with reasonable terms from private lenders, and who are able to repay the loan.
8. Limits the loan interest rate to 1%, requires loans to be secured by a mortgage on the residence and repaid within 20 years, and requires loan recipients to maintain homeowners insurance during the life of the loan.
9. Allows counties to enter into contracts with private financial institutions to provide loans as specified.
10. States that the bill is an urgency statute.

Related Legislation:

1. AB 954 (Mathis, 2015), similar to AB 1588, would have established a program to provide funding for local agencies to offer low-interest loans and grants to eligible applicants for projects that provide access to drinking water or wastewater treatment. The bill was held in the Senate Appropriations Committee.

Staff Comments:

Staff notes that this bill establishes a local financial assistance program. That is, the state will be giving funds to locals who will then distribute assistance to individual homeowners. The SWRCB estimates that it would need approximately $500,000 for 3.5 positions to administer a $10 million grant program. These costs are assuming that the local agencies administering the program will be doing all of their own program development including establishing loan and grant repayment terms and vetting of homeowner applicants.

Staff notes that the bill does not establish any parameters regarding how the SWRCB will determine how much each local agency applicant can receive from the program, how the SWRCB is to prioritize local agency requests for funds assuming that the program will be oversubscribed, whether the SWRCB issues a grant or a loan to the local agencies, and whether the local agencies can use part of the financial assistance for their own administrative costs. The SWRCB costs assume that they would only issue grants to locals and grants would be issued to local agencies based on their “readiness to proceed” and the severity of the deficiencies the water systems Administrative costs may change if the author requires the SWRCB to run the program differently.

Staff notes that this bill is silent on whether the state or the local agency bears the risk if a homeowner defaults on a loan and the costs cannot be recovered from the mortgage. However, this is only an issue that needs to be resolved if the author intends for the SWRCB to issue loans instead of or in addition to grants to local agencies.

-- END --

SENATE COMMITTEE ON ENVIRONMENTAL QUALITY

Senator Wieckowski, Chair

2015 - 2016 Regular

Bill No: AB 1588

SUBJECT: Water and Wastewater Loan and Grant Program.

ANALYSIS:

Existing law:

1. Under the federal Clean Water Act:
   1. Establishes federal guidelines for surface water quality protection.
   2. Authorizes water quality programs; requires federal effluent limitations and state water quality standards; requires permits for the discharge of pollutants into navigable waters; provides enforcement mechanisms; and authorizes funding for wastewater treatment works, construction grants, and state revolving loan programs, as well as funding to states and tribes for their water quality programs.
   3. Establishes the Clean Water State Revolving Fund (CWSRF) to offer financial assistance for water quality projects.
2. Under the federal Safe Drinking Water Act (SDWA):
   1. Establishes federal standards for contaminants in drinking water.
   2. Authorizes states to enter into primacy agreements with the federal United States Environmental Protection Agency (US EPA) to enforce SDWA if the state establishes drinking water standards that are at least as stringent as those developed by US EPA, as required by SDWA.
   3. Establishes the Safe Drinking Water State Revolving Fund (SDWSRF) to offer financial assistance for safe drinking water projects.
3. Under the Porter-Cologne Water Quality Control Act:
   1. Establishes the State Water Resources Control Board (SWRCB) and Regional Water Quality Control Boards to regulate and protect water quality in California.
   2. Establishes the State Water Pollution Control Revolving Fund to, among other things, implement the federal CWSRF program.
4. Transferred the Drinking Water Program and the Safe Drinking Water State Revolving Fund (SDWSRF) from the Department of Public Health to SWRCB effective July 1, 2014.
5. Under the California Safe Drinking Water Act,
   1. Requires SWRCB to protect the public from contaminants in drinking water.
   2. Establishes the SDWSRF which is partially capitalized by federal contributions from the federal Safe Drinking Water Act. Specifies that the SDWSRF provide funding for public water systems to correct deficiencies and problems that pose public health risks and to meet safe drinking water standards.
6. Proposition 1, the Water Quality, Supply, and Infrastructure Improvement Act of 2014 (Prop. 1), includes $260 million, upon appropriation by the Legislature to the SWRCB to be placed in the CWSRF and used for grants for wastewater treatment projects. Prop. 1 also includes another $260 million, upon appropriation by the Legislature (recipient agency not specified) for public water system infrastructure improvements and related actions to meet safe drinking water standards, ensure affordable drinking water, or both.
7. AB 91 (Budget Committee, Chapter 1, Statutes of 2015) appropriates $19 million to the SWRCB, for grants and direct expenditures for emergency drinking water projects, including hauled water, bottled water, design and construction of connections to adjacent public water systems, new wells and well rehabilitation.

This bill: transfers $10 million from the General Fund to a newly created fund, and requires SWRCB to implement a low-interest loan and grant pilot program for counties to fund water and wastewaster facilities improvements. Specifically, this bill:

1. Requires SWRCB to establish a program of low-interest loans and grants for counties to provide funds to eligible applicants for specified water or wastewater improvements.
2. Establishes the Water and Wastewater Loan and Grant Fund (LGF). Transfers $10 million from the General Fund to the LGF for appropriation by the Legislature to the SWRCB for the purposes of the bill.
3. Allows SWRCB to adopt guidelines for administering the program exempt from the Administrative Procedures Act (APA). Requires SWRCB to develop guidelines to apportion funds among the counties.
4. Allows a county to apply to SWRCB for funds to award grants and/or loans to residents within its jurisdiction.
5. Requires counties receiving LGF to annually provide specified information to the board regarding projects and funding recipients.
6. Requires eligible loan applicants to meet the following specified criteria:
7. Requires loans to be secured by a mortgage on the residence and repaid within 20 years in accordance with terms established by SWRCB. Limits the loan interest rate to 1%. Requires loan recipients to maintain homeowners insurance during the life of the loan.
8. Allows counties to enter into contracts with private financial institutions to provide loans as specified.
9. Requires eligible grant recipients to meet the following specified criteria:
10. Requires grant recipients to repay the county in full if the recipient sells the residence less than five years from signing the grant agreement. Requires the grant recipient to repay the county any unused grant funds.
11. Exempts funding received from this program from certain requirements of the law that authorize the SWRCB to order consolidations and service extensions. Specifically, the provisions that prevent residents from receiving any future water-related state grant funding until written consent to consolidate or extend service is received.

Background

1. Privately owned property is not eligible under CWSRF or SDWSRF. The CWSRF program provides low-interest loans and other financing mechanisms for publicly owned wastewater treatment facilities, local sewers, sewer interceptors, water recycling facilities, and storm water treatment facilities. The SDWSRF provides funding for public water systems. But improvements to those parts of the water and wastewater infrastructure that are on private property such as wells, sewer laterals, or septic systems have not been funded by the CWSRF or SDWSRF programs.

Comments

1. Purpose of Bill. According to the author, Californians who are reliant on groundwater wells need access to low-interest financing and grants to undertake necessary repairs to provide safer, reliable drinking water. There are many state and federal programs that provide financial assistance, such as low-interest loans and grants, to communities to undertake water and wastewater infrastructure improvement projects. Unfortunately, there are very few resources available to individual homeowners who are reliant on their own groundwater wells.

The author states that it is the policy of the state that every human being has the right to safe, clean, affordable, and accessible water adequate for human consumption, cooking, and sanitary purposes. The CWSRF program provides low-interest loans and other financing mechanisms for publicly owned wastewater treatment facilities, local sewers, sewer interceptors, water recycling facilities, and storm water treatment facilities. The SDWSRF provides funding for public water systems. But improvements to those parts of the water and wastewater infrastructure that are on private property such as wells, sewer laterals, or septic systems have not been funded by the CWSRF or SDWSRF programs. This bill provides for assistance on private property similar to what exists for public systems.

1. General Fund Appropriation. This legislation identifies an unfunded water quality need for Californians and appropriates $10 million from the General Fund for this purpose. Should this legislation be approved by the Senate Environmental Quality Committee, the Senate Appropriations Committee will need to consider if this is an appropriation expenditure of General Fund and if the revenue is available to fund this new program. AB 954 (Mathis, 2015), is substantially similar to this bill and was held on the Senate suspense file. Additionally, the Assembly Appropriations has identified $700,000 to $800,000 administration costs for SWRCB to administer this program annually. Should this legislation pass, the Legislature should be prepared to address this need in the 2017-2018 and subsequent budgets.

Related/Prior Legislation

AB 954 (Mathis) of 2015 was held in the Senate Appropriations Committee. This bill is substantially similar to AB 954. The difference between the two bills is the process by which the SWRCB will establish the programs and reporting requirements under the programs to the SWRCB.

AB 91 (Committee on Budget, Chapter 1, Statutes of 2015), appropriates $19 million to SWRCB, for grants and direct expenditures for emergency drinking water projects, including hauled water, bottled water, design and construction of connections to adjacent public water systems, new wells and well rehabilitation.

AB 1471 (Rendon, Chapter 188, Statutes of 2014), placed Proposition 1, a $7.545 billion general obligation bond for water-related projects and programs on the November 4, 2014, ballot where it passed with 67% of the vote.

AB 964 (Huffman), 2011, sought to improve water quality by financing the installation of onsite sewer and septic improvements on private property including the conversion of a property from a septic system to community sewer collection and treatment service. AB 964 was later gutted and amended into a water rights bill concerning Small Irrigation Registrations after the federal Environmental Protection Agency interpreted private property improvements to be ineligible for CWSRF money.

SOURCE:

Author

SUPPORT:

Association of California Water Agencies

California Food Policy Advocates

California Association of Realtors

Clean Water Action

Community Water Center

El Quinto Sol De America

Environmental Working Group

Kings River Conservation District

Kings River Water Association

Mission Springs Water District

Pacific Water Quality Association

Trust for Public Land

OPPOSITION:

None received

-- END --

(Without Reference to File)

ASSEMBLY THIRD READING

ATR Bill Id:AB 1588

Author:(Mathis and Alejo)

As Amended Ver:May 31, 2016

2/3 vote. Urgency

SUMMARY: Transfers $10 million General Fund to a newly created fund, and requires the State Water Resources Control Board (SWRCB) to implement a low-interest loan and grant pilot program for counties to fund water and wastewaster facilities improvements. Specifically, this bill:

1. Requires SWRCB to establish a program of low-interest loans and grants for counties to provide funds to eligible applicants for specified water or wastewater improvements.
2. Establishes the Water and Wastewater Loan and Grant Fund (LGF). Transfers $10 million General Fund to the LGF for appropriation by the Legislature to the SWRCB for the purposes of the bill.
3. Allows SWRCB to adopt guidelines for administering the program exempt from the Administrative Procedures Act (APA). Requires SWRCB to develop guidelines to apportion funds among the counties.
4. Allows a county to apply to SWRCB for funds to award grants and/or loans to residents within its jurisdiction.
5. Requires counties receiving LGF to annually provide specified information to the board regarding projects and funding recipients.
6. Requires eligible loan applicants to meet the following specified criteria:
7. Requires loans to be secured by a mortgage on the residence and repaid within 20 years in accordance with terms established by SWRCB. Limits the loan interest rate to 1%. Requires loan recipients to maintain homeowners insurance during the life of the loan.
8. Allows counties to enter into contracts with private financial institutions to provide loans as specified.
9. Requires eligible grant recipients to meet the following specified criteria:
10. Requires grant recipients to repay the county in full if the recipient sells the residence less than five years from signing the grant agreement. Requires the grant recipient to repay the county any unused grant funds.
11. Exempts funding received from this program from certain requirements of the law that authorize the SWRCB to order consolidations and service extensions. Specifically, the provisions that prevent residents from receiving any future water-related state grant funding until written consent to consolidate or extend service is received.

EXISTING LAW:

1. Under the federal Clean Water Act:
   1. Establishes federal guidelines for surface water quality protection.
   2. Authorizes water quality programs; requires federal effluent limitations and state water quality standards; requires permits for the discharge of pollutants into navigable waters; provides enforcement mechanisms; and authorizes funding for wastewater treatment works, construction grants, and state revolving loan programs, as well as funding to states and tribes for their water quality programs.
2. Establishes the Clean Water State Revolving Fund (CWSRF) to offer financial assistance for water quality projects.
3. Under the federal Safe Drinking Water Act (SDWA):
   1. Establishes federal standards for contaminants in drinking water.
   2. Authorizes states to enter into primacy agreements with the federal United States Environmental Protection Agency (US EPA) to enforce SDWA if the state establishes drinking water standards that are at least as stringent as those developed by US EPA, as required by SDWA.
   3. Establishes the Safe Drinking Water State Revolving Fund (SDWSRF) to offer financial assistance for safe drinking water projects.
4. Under the Porter-Cologne Water Quality Control Act:
   1. Establishes the State Water Resources Control Board (State Water Board) and Regional Water Quality Control Boards to regulate and protect water quality in California.
   2. Establishes the State Water Pollution Control Revolving Fund to, among other things, implement the federal CWSRF program.
5. Transferred the Drinking Water Program and the SDWSRF from the Department of Public Health to the State Water Board effective July 1, 2014.
6. Under the California Safe Drinking Water Act:
   1. Requires the State Water Board to protect the public from contaminants in drinking water.
   2. Establishes the SDWSRF which is partially capitalized by federal contributions from the federal Safe Drinking Water Act. Specifies that the SDWSRF provide funding for public water systems to correct deficiencies and problems that pose public health risks and to meet safe drinking water standards.

FISCAL EFFECT: According to the Assembly Appropriations Committee:

1. Transfers $10 million General Fund to the newly created LGF for appropriation by the Legislature to the SWRCB.
2. Unknown annual costs, likely in the $500,000 to $800,000 range, for SWRCB to administer the program (General Fund) over three years.

COMMENTS: According to the author, Californians who are reliant on groundwater wells need access to low-interest financing and grants to undertake necessary repairs to provide safer, reliable drinking water. There are many state and federal programs that provide financial assistance, such as low-interest loans and grants, to communities to undertake water and wastewater infrastructure improvement projects. Unfortunately, there are very few resources available to individual homeowners who are reliant on their own groundwater wells.

It is the policy of the state that every human being has the right to safe, clean, affordable, and accessible water adequate for human consumption, cooking, and sanitary purposes. The CWSRF program provides low-interest loans and other financing mechanisms for publicly-owned wastewater treatment facilities, local sewers, sewer interceptors, water recycling facilities, and storm water treatment facilities. The SDWSRF provides funding for public water systems. But improvements to those parts of the water and wastewater infrastructure that are on private property such as wells, sewer laterals, or septic systems have not been funded by the CWSRF or SDWSRF programs. This bill provides for assistance on private property similar to what exists for public systems.

Last year, in response to the multi-year drought, and lack of safe, clean water in multiple communities throughout the state, the Legislature authorized the SWRCB to require water systems serving disadvantaged communities with unreliable and unsafe drinking water to consolidate with or receive service from public water systems with safe, reliable, and adequate drinking water. This bill exempts eligible grant or loan recipients from sanctions designed to encourage consolidation and delivery of water in disadvantaged communities. This exemption may conflict with the Legislature's intent in enacting the consolidation provisions.

Analysis Prepared by: Ryan Ojakian / W., P., & W. / (916) 319-2096 FN: 0003313

Date of Hearing: April 6, 2016

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

ABPCA Bill Id:AB 1588

Author:(Mathis) – As Amended Ver:March 16, 2016

Urgency: Yes State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill transfers $20 million GF to a newly created fund, and requires the State Water Resources Control Board (SWRCB) to implement a low-interest loan and grant pilot program for counties to fund water and wastewaster facilities and improvements. Specifically, this bill:

1. Requires SWRCB to establish a program of low-interest loans and grants for counties to provide funds to eligible applicants for any of the following:

1. Extending or connecting service lines from a water or wastewater service to the applicants' residence or plumbing.
2. Paying reasonable charges or fees for connecting to a water or wastewater system.
3. Closing abandoned septic tanks or water wells to protect health and safety.
4. Deepening an existing groundwater well.
5. Improving an existing groundwater well, including associated equipment.
6. Installing a water treatment system if the groundwater exceeds primary or secondary drinking water standards, as defined.
7. Establishes the Water and Wastewater Loan and Grant Fund (LGF). Transfers $20 million GF to the LGF for appropriation by the Legislature to the SWRCB for the purposes of the bill. Allows moneys repaid from any grant or loan under the program to be deposited in the fund as well as and any interest on those moneys.
8. Allows SWRCB to adopt guidelines for administering the program exempt from the Administrative Procedures Act (APA). Requires SWRCB to develop guidelines to apportion funds among the counties.
9. Allows a county to apply to SWRCB for funds to award grants and/or loans to residents within its jurisdiction.
10. Requires counties receiving Water and Wastewater Loan and Grant Funds to annually provide specified information to the board regarding projects and funding recipients.
11. Requires eligible loan applicants to meet the following criteria:
12. Household income is below the statewide median.
13. There is an ownership interest in the residence.
14. Applicants are unable to obtain financial assistance at reasonable terms from private lenders and lack personal resources to undertake the improvements.
15. Applicants are able to demonstrate the ability to repay the loan, including by having another party join the application as co-signer.
16. Requires loans to be secured by a mortgage on the residence and repaid within 20 years in accordance with terms established by SWRCB. Limits the loan interest rate to 1%. Requires loan recipients to maintain homeowners insurance during the life of the loan.
17. Allows counties to enter into contracts with private financial institutions to provide loans as specified.
18. Requires eligible grant recipients to meet the following criteria:
19. Household income is 80% or less of the statewide median
20. Applicants are unable to obtain financial assistance at reasonable terms from private lenders and lack personal resources to undertake the improvements.
21. Requires grant recipients to repay the county in full if the recipient sells the residence less than five years from signing the grant agreement. Requires the grant recipient to repay the county any unused grant funds.
22. Exempts funding received from this program from certain requirements of the law that authorize the SWRCB to order consolidations and service extensions. Specifically, the provisions that prevent residents from receiving any future water-related state grant funding until written consent to consolidate or extend service is received.

FISCAL EFFECT:

1. This bill transfers $20 million GF to the newly created Water and Wastewater Loan and Grant Fund for appropriation by the Legislature to the SWRCB.
2. Unknown annual costs, likely in the $500,000 to $800,000 range, for SWRCB to administer the program (GF) over three years.

COMMENTS:

1. Purpose. According to the author, Californians who are reliant on groundwater wells need access to low-interest financing and grants to undertake necessary repairs to provide safer, reliable drinking water. There are many state and federal programs that provide financial assistance, such as low-interest loans and grants, to communities to undertake water and wastewater infrastructure improvement projects. Unfortunately, there are very few resources available to individual homeowners who are reliant on their own groundwater wells.
2. Drought Water System Consolidation. Last year, in response to the multi-year drought, and lack of safe, clean water in multiple communities throughout the state, the Legislature Authorized the SWRCB to require water systems serving disadvantaged communities with unreliable and unsafe drinking water to consolidate with or receive service from public water systems with safe, reliable, and adequate drinking water. This bill exempts eligible grant or loan recipients from sanctions designed to encourage consolidation and delivery of water in disadvantaged communities. This exemption may conflict with the Legislature's intent in enacting the consolidation provisions. The author may wish to consider removing or modifying this provision.
3. Prior Legislation. AB 954 (Mathis) of 2015 passed out of this committee but was held in the Senate Appropriations Committee. This bill is similar to AB 954 but increases the amount of funding available from $10 million to $20 million.

Analysis Prepared by: Jennifer Galehouse / APPR. / (916) 319-2081

Date of Hearing: March 29, 2016

ASSEMBLY COMMITTEE ON WATER, PARKS, AND WILDLIFE

Marc Levine, Chair

ABPCA Bill Id:AB 1588 (

Author:Mathis) – As Amended Ver:March 16, 2016

SUBJECT: Water and Wastewater Loan and Grant Program

SUMMARY: Appropriates $20 million general fund dollars to a newly established program at the State Water Resources Control Board (State Water Board) and requires the State Water Board to establish a program to fund counties for the purposes of providing low-interest loans and grants to eligible applicants for water and wastewater. Specifically, this bill:

1. Requires the State Water Board to establish a program to provide funding to counties to award low-interest loans and grants to eligible applicants for any of the following:
   1. Connecting to water or wastewater service.
   2. Closing abandoned septic tanks or water wells to protect health and safety.
   3. Deepening an existing groundwater well.
   4. Installing a water treatment system if the groundwater doesn't meet primary or secondary drinking water standards.
2. Requires eligible loan applicants to:
   1. Own their own home and be unable to obtain a conventional loan.
   2. Be below the statewide median income; demonstrate an ability to repay the loan which may include having a co-signer; secure the loan on the home and repay it within 20 years.
   3. Have a household income that is less than 60% of the statewide median; repay the grant in full if the home is sold less than five years from the date of the agreement; and, repay the State Water Board any unused grant funds.
3. Provides that due to drought this act is an urgency statute in order to provide eligible households with access to safer, cleaner, and more reliable drinking water and wastewater treatment.

EXISTING LAW:

1. Under the federal Clean Water Act:
   1. Establishes federal guidelines for surface water quality protection.
   2. Authorizes water quality programs; requires federal effluent limitations and state water quality standards; requires permits for the discharge of pollutants into navigable waters; provides enforcement mechanisms; and authorizes funding for wastewater treatment works, construction grants, and state revolving loan programs, as well as funding to states and tribes for their water quality programs.
2. Establishes the Clean Water State Revolving Fund (CWSRF) to offer financial assistance for water quality projects.
3. Under the federal Safe Drinking Water Act (SDWA):
   1. Establishes federal standards for contaminants in drinking water.
   2. Authorizes states to enter into primacy agreements with the federal United States Environmental Protection Agency (US EPA) to enforce SDWA if the state establishes drinking water standards that are at least as stringent as those developed by US EPA, as required by SDWA.
   3. Establishes the Safe Drinking Water State Revolving Fund (SDWSRF) to offer financial assistance for safe drinking water projects.
4. Under the Porter-Cologne Water Quality Control Act:
   1. Establishes the State Water Resources Control Board (State Water Board) and Regional Water Quality Control Boards to regulate and protect water quality in California.
   2. Establishes the State Water Pollution Control Revolving Fund to, among other things, implement the federal CWSRF program.
5. Transferred the Drinking Water Program and the Safe Drinking Water State Revolving Fund (SDWSRF) from the Department of Public Health to the State Water Board effective July 1, 2014.
6. Under the California Safe Drinking Water Act:
   1. Requires the State Water Board to protect the public from contaminants in drinking water.
   2. Establishes the SDWSRF which is partially capitalized by federal contributions from the federal Safe Drinking Water Act. Specifies that the SDWSRF provide funding for public water systems to correct deficiencies and problems that pose public health risks and to meet safe drinking water standards.

FISCAL EFFECT: One time appropriation of $20 million from the General Fund for the financial assistance program.

COMMENTS: This bill creates an ability for the State Water Board to provide financial assistance for needed water and wastewater improvements to private home owners who otherwise cannot afford to make improvements.

1. Author’s statement: Californians who are reliant on groundwater wells need access to low-interest financing and grants to undertake necessary repairs to provide safer, reliable drinking water. There are many state and federal programs that provide financial assistance, such as low-interest loans and grants, to communities to undertake water and wastewater infrastructure improvement projects. Unfortunately, there are very few resources available to individual homeowners who are reliant on their own groundwater wells.
2. Background:
   1. Human Right to water: It is the policy of the state that every human being has the right to safe, clean, affordable, and accessible water adequate for human consumption, cooking, and sanitary purposes. All relevant state agencies, including the State Water Board, must consider this policy when revising, adopting, or establishing policies, regulations, and grant criteria when those policies, regulations, and grant criteria are pertinent.
   2. Privately-owned property is not eligible under CWSRF or SDWSRF: The CWSRF program provides low-interest loans and other financing mechanisms for publicly-owned wastewater treatment facilities, local sewers, sewer interceptors, water recycling facilities, and storm water treatment facilities. The SDWSRF provides funding for public water systems. But improvements to those parts of the water and wastewater infrastructure that are on private property such as wells, sewer laterals, or septic systems have not been funded by the CWSRF or SDWSRF programs.
   3. Expands access to assistance: The threshold for eligibility for the low-interest loans is below the statewide median income. It may appear that at level of income it would be difficult to take on a loan that must be repaid. The bill allows for co-signers, including non-profits, and creates access to loan rates that are capped at 1 percent. This rate is far below what these individuals would likely have access to through private institutions, and relative to inflation will likely make the recipient of the loan better off over the life of the loan. Moreover, if household income is at or below 80 percent of the statewide median income the bill provides access to grant funds.
3. Prior and Related Legislation:
   1. AB 954 (Mathis) of 2015 was held in the Senate Appropriations Committee. This bill is substantially similar to AB 954. The difference between the two bills is the process by which the State Water Board will establish the programs and reporting requirements under the programs to the State Water Board. AB 954 passed this committee last year 15-0.
   2. AB 91 (Committee on Budget), Chapter 1, Statutes of 2015, appropriates $19 million to the State Water Board, for grants and direct expenditures for emergency drinking water projects, including hauled water, bottled water, design and construction of connections to adjacent public water systems, new wells and well rehabilitation.
   3. AB 1471 (Rendon), Chapter 188, Statutes of 2014, placed Proposition 1, a $7.545 billion general obligation bond for water-related projects and programs on the November 4, 2014, ballot where it passed with 67% of the vote.
   4. AB 964 (Huffman), as introduced February 18, 2011, sought to improve water quality by financing the installation of onsite sewer and septic improvements on private property including the conversion of a property from a septic system to community sewer collection and treatment service. AB 964 was later gutted and amended into a water rights bill concerning Small Irrigation Registrations after the federal Environmental Protection Agency interpreted private property improvements to be ineligible for CWSRF money.
4. Supporting Arguments: While some state and federal programs provide financial assistance to communities to undertake water and wastewater infrastructure improvement projects, there are very few resources available to individual homeowners who are reliant on their own groundwater wells and septic tanks. This bill would provide funding to individual homeowners for extending service lines, pay costs to close abandoned septic tanks and water wells, deepening and improving existing wells, and installing water treatment systems.

REGISTERED SUPPORT / OPPOSITION:

Support

Association of California Water Agencies

Opposition

None of File

Analysis Prepared by: Ryan Ojakian / W., P., & W. / (916) 319-2096