BILL ANALYSIS Ó
AB 30
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Date of Hearing: February 12, 2013
ASSEMBLY COMMITTEE ON ENVIRONMENTAL SAFETY AND TOXIC MATERIALS
Luis A. Alejo, Chair
AB 30 (Perea) - As Amended: January 24, 2013
SUBJECT : Water Quality: Small Community Grant Fund.
SUMMARY : Removes the sunset date for the Small Community Grant
(SCG) Fund, which provides grants to small communities for the
construction of wastewater collection, treatment, or disposal
projects. Specifically, this bill :
1) Eliminates the sunset date of December 31, 2013, from
the State Water Resources Control Board's (SWRCB's)
authorization to collect a charge on specified loans in
lieu of interest that provides revenue to the SCG Fund.
2) Removes the current $50 million limitation on the total
revenue that can be allocated to the SCG Fund.
EXISTING LAW:
1) Authorizes SWRCB to assess a surcharge on loans issued
from the Clean Water State Revolving Fund, in lieu of
interest on the loans (Water Code § 13477.6).
2) Requires revenue from the surcharge to be deposited into
the SCG fund for the purpose of providing grants to small
communities for the construction of wastewater collection,
treatment, or disposal projects.
3) Provides that grants from the SCG fund will give
priority to projects that serve severely disadvantaged
communities.
3) Limits the total revenue to be deposited into the SCG
fund at $50 million.
4) Provides that the authorization to charge a surcharge in
lieu of interest sunsets December 31, 2013.
FISCAL EFFECT : Not Known
AB 30
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COMMENTS :
Need for the bill . According to sponsors of the bill, a
coalition of community and environmental groups, "Many
disadvantaged communities are in dire need of new wastewater
facilities to protect drinking water and deal with an aging
wastewater system. These small communities lack sufficient
funds needed to independently finance wastewater projects and
are dependent upon the timely disbursement of approved state and
federal grant and loan funds to improve and replace inadequate
wastewater systems.
"Unfortunately, there is little funding available to assist
these communities. The Clean Water State Revolving Fund (CWSRF)
has historically been a loan-only program, and therefore
inaccessible to low-income communities. To address those
community needs, the State Water Board created the Small
Community Wastewater Grant Fund in 1984. Over the years, bond
funding was made available to address projects in the fund, but
no funding has been made available since the passage of
Proposition 50 in 2002, and more than $1 billion in projects are
currently on the waiting list."
The SWRCB, in its June 16, 2008, Water Boards' Draft Small
Community Wastewater Strategy, reported that, "? Small
communities face specific challenges related to their drinking
water and wastewater systems. Many are currently on failing
septic systems or have old and undersized wastewater treatment
plants that cannot meet current water quality standards. Such
systems can cause significant health and safety problems,
endanger surface water uses, and pose a threat to groundwater
supplies. Many small communities lack the resources and
in-house expertise necessary to apply for grants and loans to
help make wastewater projects more feasible. Even if
communities are able to secure financial assistance, they often
do not have access to technical expertise to determine the best
project alternative or to appropriately plan for long-term
operations and maintenance needs. Therefore, more financial,
technical, and regulatory assistance is needed to bring small
communities into compliance." The current SCG provides the
SWRCB a tool to help small disadvantaged communities rectify
their critical wastewater system needs.
AB 2356 (Arambula) Chapter 609, Statutes of 2008, created the
AB 30
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Clean Water State Revolving Fund (CWSRF) Small Community Grant
(SCG) Fund, which authorized the SWRCB to assess an annual
charge on existing CWSRF financing agreements for deposit into
the SCG Fund. The annual charge is in lieu of interest that
would otherwise be charged in association with a CWSRF financing
agreement. AB 2356 authorizes the SWRCB to deposit up to $50
million into the SCG Fund by 2014.
Due to restrictions on federal funding and bond revenues,
provisions regarding collection of the annual charge can only be
incorporated into CWSRF financing agreements funded solely by
CWSRF repayments resulting in approximately $12 million in
deposits through the end of 2011/12, and approximately $30
million in deposits projected by the December 2014 sunset date.
The SWRCB will be unable to collect the full $50 million without
legislative action to extend the deadline.
Status of the SCG program: According to the SWRCB, as of
12/31/12, there was a total of $16,413,960 in the Small
Community Wastewater Grant Fund. Of that amount, $4 million was
earmarked for a loan to the General Fund, and $1,163,100 is
going to impending disbursements. In addition, $6,145,301 is
committed to projects, but has not yet been disbursed.
The SWRCB had the authority to spend $1 million in SCG funds
during 2010/11, plus $1 million in 2011/12. The SWRCB is
authorized to commit $12 million in SCG funds during fiscal year
(FY) 2012/13.
The SWRCB collected approximately $5 million in FY 2010/11 and
$7 million in FY 2011/12 in fees. The SWRCB is projected to
collect a total of approximately $30 million by the end of 2014.
With the assumption of collecting at least $5 million per year
in 2015 and subsequent years, the fund will reach $50 million at
the end of 2018.
Prior legislation
AB 2208 (Perea) of 2012, proposed to extend the sunset date for
the SCG fund from 2014 to 2019. The provisions to extent the
SCG program were amended into the bill in August of 2012 and the
bill was held in the Senate Rules Committee.
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REGISTERED SUPPORT / OPPOSITION :
Support
California Rural Legal Assistance Foundation
Clean Water Action
Community Water Center
Environmental Justice Coalition for Water
Environmental Working Group
Pesticide Action Network
Policy Link
Sierra Club California
Winnemem Wintu Tribe
Opposition
None on file.
Analysis Prepared by : Bob Fredenburg / E.S. & T.M. / (916)
319-3965