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 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 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. This bill would require moneys in the Water and Wastewater Loan and Grant Fund after January 1, 2026, to revert to the General Fund.
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
P3 1grants to local agencies for low-interest loans and grants to eligible
2applicants for any of the following purposes:
3(1) Extending or connecting service lines from a water or
4wastewater system to the applicant’s residence or plumbing.
5(2) Paying reasonable charges or fees for connecting to a water
6or wastewater system.
7(3) Paying costs to close abandoned septic tanks and water wells,
8as necessary, to protect health and safety as required
by local or
9state law.
10(4) Deepening an existing groundwater well.
11(5) Improving an existing groundwater well, including associated
12equipment.
13(6) Installing a water treatment system if the groundwater
14exceeds a primary or secondary drinking standard, as defined in
15Section 116275 of the Health and Safety Code.
16(b) The board may adopt any regulation it determines is
17necessary to carry out the purposes of the chapter as an emergency
18regulation in accordance with Chapter 3.5 (commencing with
19Section 11340) of Part 1 of Division 3 of Title 2 of the Government
20Code.
21(c) The board shall not issue
loans or grants pursuant to this
22chapter on or after January 1, 2026, after which time moneys in
23the Water and Wastewater Loan and Grant Fund shall revert to
24the General Fund. This subdivision shall not terminate either of
25the following rights, obligations, or authorities, or any provision
26necessary to carry out these rights, obligations, or authorities:
27(1) The repayment of a loan due and payable to the board.
28(2) The resolution of a cost recovery action or the initiation of
29an action or other collection process to recover defaulted loan
30moneys due to the board or to recover grant moneys paid.
(a) The Water and Wastewater Loan and Grant Fund
32is hereby created in the State Treasury. The moneys in the Water
33and Wastewater Loan and Grant Fund are available, upon
34appropriation by the Legislature, to the board for expenditure in
35accordance with this chapter.
36(b) The following moneys shall be deposited in the Water and
37Wastewater Loan and Grant Fund:
38(1) Moneys repaid to the board pursuant tobegin delete anyend deletebegin insert aend insert grant or loan
39made in
accordance with this chapter, including interest payments.
P4 1(2) Notwithstanding Section 16475 of the Government Code,
2any interest earned upon the moneys in the Water and Wastewater
3Loan and Grant Fund.
(a) An eligible applicant for a loan shall meet all of
5the following criteria:
6(1) Have a household income below the statewide median
7household income.
8(2) Have an ownership interest in the residence.
9(3) Be unable to obtain financial assistance at reasonable terms
10and conditions from private lenders and lack the personal resources
11to undertake these improvements.
12(4) Demonstrate an ability to repay the loan. This requirement
13may be satisfied by having another party join the application
as a
14
cosigner.
15(b) Any loan granted shall be secured by a mortgage on the
16residence and repaid within 20 years in accordance with terms
17established by the board. The interest rate on the loan shall not
18exceed 1 percent. While any balance on the loan is outstanding, a
19loan recipient shall furnish evidence of and continually maintain
20homeowner’s insurance on the security residence to protect the
21state’s interest in the residence.
22(c) The board may enter into a contract with a private financial
23institution to provide loans consistent with the purposes of this
24chapter. If the board exercises this authority, the board may utilize
25a portion of the moneys in the Water and Wastewater Loan and
26Grant Fund to provide a loan guarantee or similar loss mitigation
27mechanism.
(a) An eligible applicant for a grant shall meet all of
29the following criteria:
30(1) Have a household income that is 60 percent or less of the
31statewide median household income.
32(2) Have an ownership interest in the residence.
33(3) Be unable to obtain financial assistance at reasonable terms
34and conditions from private lenders and lack the personal resources
35to undertake these improvements.
36(b) A grant recipient shall repay to the board the grant amount
37in full if that recipient sells the
residence less than five years from
38the date that the grant agreement was signed.
39(c) A grant recipient shall repay to the board any unused grant
40funds.
Twenty million dollars ($20,000,000) is hereby
2transferred from the General Fund to the Water and Wastewater
3Loan and Grant Fund.
O
96