BILL ANALYSIS Ó AB 30 Page 1 Date of Hearing: April 10, 2013 ASSEMBLY COMMITTEE ON APPROPRIATIONS Mike Gatto, Chair AB 30 (Perea) - As Amended: January 24, 2013 Policy Committee: Environmental Safety and Toxic Materials Vote: 5-0 Urgency: No State Mandated Local Program: No Reimbursable: SUMMARY This bill revises the Small Community Grant (SCG) program administered by the State Water Resources Control Board (SWRCB). Specifically, this bill eliminates the December 31, 2013 sunset of provisions that allow SWRCB to collect an annual charge in-lieu of interest on loans from the Clean Water State Revolving Fund (CWSRF) and deposit the revenue in the SCG Fund for waste water grants in small or disadvantaged communities. This bill also removes the current $50 million limitation on the total revenue collected from the in-lieu charge and allocated to the SCG Fund. The SWRCB may stop collecting the in-lieu charge if the board determines the charge is inconsistent with federal law. FISCAL EFFECT 1)Potentially millions of dollars could shift from the CWSRF to the SCG fund. On-going, absorbable costs for the SWRCB to continue administering the SCG program that would otherwise be spent administering the CWSRF. According to the SWRCB, as of 12/31/12, there was $16,413,960 in the SCG Fund. Of that amount, $4 million was loaned to the GF and $7,308,401 is committed to wastewater projects. 2)The SWRCB collected approximately $5 million in FY 2010/11 and $7 million in FY 2011/12 from in-lieu charges. It is estimated that the SWRCB will collect a total of $30 million for the SCG fund by 2014. With the elimination of the sunset AB 30 Page 2 date, it is estimated the SCG fund will reach $50 million by the end of 2018. Annual interest from CWSRF loans is deposited back into the fund to be available for future loans. Removing the $50 million cap may at some point result in insufficient funds in the CWSRF. COMMENTS 1)Purpose. This bill provides grants for disadvantaged and small communities in need of wasterwater collection, treatment or disposal projects necessary to protect drinking water and upgrade aging systems. 2)Background. The CWSRF has historically been a loan-only program inaccessible to low-income communities that require grants to finance critical wasterwater projects. AB 2356 (Arambula) Chapter 609, Statutes of 2008, created the 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. Analysis Prepared by : Jennifer Galehouse / APPR. / (916) 319-2081