AB 954, as amended, Mathis. Water and Wastewater Loan and Grant Pilot Program.
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 pilot program to provide low-interest loans and grants tobegin insert local agencies for low-interest loans and grants toend insert eligible applicants for specified purposes relating to drinking water and wastewater treatment. This bill would prohibit the board from issuing these loans or grants on or after January 1, 2026. 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 pilot program. This bill would transfer to the Water and Wastewater Loan and Grant Fund $20,000,000 from the General Fund.begin insert This bill would require moneys in the Water and Wastewater Loan and Grant Fund after January 1, 2026, to revert to the General Fund.end insert
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
The Legislature hereby finds and declares the
2following:
3(a) Many areas of the state are disproportionately impacted by
4drought because they are heavily dependent or completely reliant
5on groundwater from basins that are in overdraft and in which the
6water table declines year after year or from basins that are
7contaminated.
8(b) There are a number of state grant and loan programs that
9provide financial assistance to communities to address drinking
10water and wastewater needs. Unfortunately, there is no program
11in place to provide similar assistance to individual homeowners
12who
are reliant on their own groundwater wells and who may not
13be able to afford conventional private loans to undertake vital water
14supply, water quality, and wastewater improvements.
15(c) The program created by this act is intended to bridge that
16gap by providing low-interest loans, grants, or both, to individual
17
homeowners to undertake actions necessary to provide safer,
18cleaner, and more reliable drinking water and wastewater treatment.
19These actions may include, but are not limited to, digging deeper
20wells, improving existing wells and related equipment, addressing
21drinking water contaminants in the homeowner’s water, or
22connecting to a local water or wastewater system.
Chapter 6.6 (commencing with Section 13486) is added
24to Division 7 of the Water Code, to read:
25
(a) The board shall establish a pilot program in
30accordance with this chapter to provide low-interest loans and
31grants tobegin insert local agencies for low-interest loans and grants toend insert eligible
32applicants for any of the following purposes:
P3 1(1) Extending or connecting service lines from a water or
2wastewater system to the applicant’s residence or plumbing.
3(2) Paying reasonable charges or fees for connecting to a water
4or wastewater system.
5(3) Paying costs to close abandoned
septic tanks and water wells,
6as necessary, to protect health and safety as required by local or
7state law.
8(4) Deepening an existing groundwater well.
9(5) Improving an existing groundwater well, including associated
10equipment.
11(6) Installing a water treatment system if the groundwater
12exceeds a primary or secondary drinking standard, as defined in
13Section 116275 of the Health and Safety Code.
14(b) The board may adopt any regulation it determines is
15necessary to carry out the purposes of the chapter as an emergency
16regulation in accordance with Chapter 3.5 (commencing with
17Section 11340) of Part 1 of Division 3 of Title 2 of the Government
18Code.
19(c) The board shall not issue loans or grants pursuant to this
20chapter on or after January 1,begin delete 2026.end deletebegin insert 2026, after which time moneys
21in the Water and Wastewater Loan and Grant Fund shall revert
22to the General Fund.end insert This subdivision shall not terminate either
23of the following rights, obligations, or authorities, or any provision
24necessary to carry out these rights, obligations, or authorities:
25(1) The repayment of a loan due and payable to the board.
26(2) The resolution of a cost recovery action or the initiation of
27an action or other collection process to recover defaulted
loan
28moneys due to the board or to recover grant moneys paid.
(a) The Water and Wastewater Loan and Grant Fund
30is hereby created in the State Treasury. The moneys in the Water
31and Wastewater Loan and Grant Fund are available, upon
32appropriation by the Legislature, to the board for expenditure in
33accordance with this chapter.
34(b) The following moneys shall be deposited in the Water and
35Wastewater Loan and Grant Fund:
36(1) Moneys repaid to the board pursuant to any grant or loan
37made in accordance with this chapter, including interest payments.
38(2) Notwithstanding Section 16475 of the Government Code,
39any
interest earned upon the moneys in the Water and Wastewater
40Loan and Grant Fund.
(a) An eligible applicant for a loan shall meet all of
2the following criteria:
3(1) Have a household income below the statewide median
4household income.
5(2) Have an ownership interest in the residence.
6(3) Be unable to obtain financial assistance at reasonable terms
7and conditions from private lenders and lack the personal resources
8to undertake these improvements.
9(4) Demonstrate an ability to repay the loan. This requirement
10may be satisfied by having another party join the application as a
11
cosigner.
12(b) Any loan granted shall be secured by a mortgage on the
13residence and repaid within 20 years in accordance with terms
14established by the board. The interest rate on the loan shall not
15exceed 1 percent. While any balance on the loan is outstanding, a
16loan recipient shall furnish evidence of and continually maintain
17homeowner’s insurance on the security residence to protect the
18state’s interest in the residence.
19(c) The board may enter into a contract with a private financial
20institution to provide loans consistent with the purposes of this
21chapter. If the board exercises this authority, the board may utilize
22a portion of the moneys in the Water and Wastewater Loan and
23Grant Fund to provide a loan guarantee or similar loss mitigation
24mechanism.
(a) An eligible applicant for a grant shall meet all of
26the following criteria:
27(1) Have a household income that is 60 percent or less of the
28statewide median household income.
29(2) Have an ownership interest in the residence.
30(3) Be unable to obtain financial assistance at reasonable terms
31and conditions from private lenders and lack the personal resources
32to undertake these improvements.
33(b) A grant recipient shall repay to the board the grant amount
34in full if that recipient sells the
residence less than five years from
35the date that the grant agreement was signed.
36(c) A grant recipient shall repay to the board any unused grant
37funds.
Twenty million dollars ($20,000,000) is hereby
2transferred from the General Fund to the Water and Wastewater
3Loan and Grant Fund.
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