AB 2060: Water: grants: advanced payments.

(1)Existing law, the Porter-Cologne Water Quality Control Act, establishes the State Water Pollution Control Revolving Fund program pursuant to which state and federal funds are continuously appropriated from the State Water Pollution Control Revolving Fund to the State Water Resources Control Board for loans and other financial assistance for the construction of publicly owned treatment works by a municipality, the implementation of a management program, the development and implementation of a conservation and management plan, and other related purposes in accordance with the federal Clean Water Act. Existing law authorizes the board to assess a specified annual charge in connection with any financial assistance made pursuant to the revolving fund program in lieu of interest that otherwise would be charged and requires the proceeds generated from the imposition of that charge to be deposited in the State Water Pollution Control Revolving Fund Small Community Grant Fund, along with any interest earned upon the moneys in that grant fund. Existing law authorizes the board to expend the moneys in the grant fund, upon appropriation by the Legislature, for grants for eligible projects under the revolving fund program that serve small communities, as defined.

Existing law, the Water Quality, Supply, and Infrastructure Improvement Act of 2014, approved by the voters as Proposition 1 at the November 4, 2014, statewide general election, authorizes the issuance of general obligation bonds in the amount of $7,545,000,000 to finance a water quality, supply, and infrastructure improvement program. The bond act provides that the sum of $520,000,000 is to be available, upon appropriation by the Legislature, for expenditures, grants, and loans for projects that improve water quality or help provide clean, safe, and reliable drinking water to all Californians. The bond act provides that $260,000,000 is available for deposit in the grant fund for grants for wastewater treatment projects.

This bill would require the board, within 60 days of awarding a grant from the grant fund, to provide a project proponent that requests an advanced payment and satisfies certain criteria with the requested advanced payment, up to a maximum of $500,000 or 50% of the grant award, whichever is less, for projects in which the project proponent is a nonprofit organization or a disadvantaged community, or the project benefits a disadvantaged community. The bill would require the advanced funds to be handled as prescribed. The bill would authorize the board to adopt additional requirements for the recipient regarding the use of the advanced payment to ensure that the funds are used properly. The bill would authorize the board to impose penalties for misuse of advanced payments, as specified, and would require the penalty moneys collected to be deposited in the State Water Pollution Revolving Fund Small Community Grant Fund.

(2)Proposition 1 provides that of the $520,000,000 available for projects that improve water quality or help provide clean, safe, and reliable drinking water to all Californians, the sum of $260,000,000 is available for grants and loans for public water system infrastructure improvements and related actions to meet safe drinking water standards, ensure affordable drinking water, or both. The bond act requires that eligible recipients serve disadvantaged communities and are public water systems or public agencies. The bond act prohibits more than 25% of the grant from being awarded in advance of actual expenditures.

This bill would require the board, within 60 days of awarding a grant for these purposes under the bond act, to provide a project proponent that requests an advanced payment and satisfies certain criteria with the requested advanced payment, up to a maximum of $500,000 or 25% of the grant award, whichever is less. The bill would require the advanced funds to be handled as prescribed. The bill would authorize the board to adopt additional requirements for the recipient regarding the use of the advanced payment to ensure that the funds are used properly. The bill would authorize the board to impose penalties for misuse of advanced payments, as specified, and would require the penalty moneys collected to be available, upon appropriation by the Legislature, for the above-described grants and loans for public water system infrastructure improvements.