Amended in Assembly June 2, 2015

Amended in Assembly May 5, 2015

Amended in Assembly May 4, 2015

Amended in Assembly March 26, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 954

Introduced by Assembly Member Mathis

(Principal coauthor: Assembly Member Alejo)

February 26, 2015

An act to add Chapter 6.6 (commencing with Section 13486) to Division 7 of the Water Code, relating to water begin insert , and declaring the urgency thereof, to take effect immediately end insert .

LEGISLATIVE COUNSEL’S DIGEST

AB 954, as amended, Mathis. Water and Wastewater Loan and Grant begin delete Pilot end delete 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 begin delete pilot end delete 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. begin delete This bill would prohibit the board from issuing these loans or grants on or after January 1, 2026. end delete 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 begin delete pilot end delete program. This bill would transfer to the Water and Wastewater Loan and Grant Fund begin delete $20,000,000 end delete begin insert $10,000,000 end insert from the General Fund. begin delete 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 delete

begin insert

This bill would declare that it is to take effect immediately as an urgency statute.

end insert

Vote:  begin delete majority end delete begin insert ²⁄₃ end insert . Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

The Legislature hereby finds and declares the
following:

(a) Many areas of the state are disproportionately impacted by
drought because they are heavily dependent or completely reliant
on groundwater from basins that are in overdraft and in which the
water table declines year after year or from basins that are
contaminated.

(b) There are a number of state grant and loan programs that
provide financial assistance to communities to address drinking
water and wastewater needs. Unfortunately, there is no program
in place to provide similar assistance to individual homeowners
who are reliant on their own groundwater wells and who may not
be able to afford conventional private loans to undertake vital water
supply, water quality, and wastewater improvements.

(c) The program created by this act is intended to bridge that
gap by providing low-interest loans, grants, or both, to individual
homeowners to undertake actions necessary to provide safer,
cleaner, and more reliable drinking water and wastewater treatment.
These actions may include, but are not limited to, digging deeper
wells, improving existing wells and related equipment, addressing
drinking water contaminants in the homeowner’s water, or
connecting to a local water or wastewater system.

SEC. 2.  

Chapter 6.6 (commencing with Section 13486) is added
to Division 7 of the Water Code, to read:

 

Chapter  6.6. Water and Wastewater Loan and Grant
begin delete Pilot end delete Program

 

13486.  

(a) The board shall establish a begin delete pilot end delete program in
accordance with this chapter to provide low-interest loans and
grants to local agencies for low-interest loans and grants to eligible
applicants for any of the following purposes:

(1) Extending or connecting service lines from a water or
wastewater system to the applicant’s residence or plumbing.

(2) Paying reasonable charges or fees for connecting to a water
or wastewater system.

(3) Paying costs to close abandoned septic tanks and water wells,
as necessary, to protect health and safety as required by local or
state law.

(4) Deepening an existing groundwater well.

(5) Improving an existing groundwater well, including associated
equipment.

(6) Installing a water treatment system if the groundwater
exceeds a primary or secondary drinking standard, as defined in
Section 116275 of the Health and Safety Code.

(b) The board may adopt any regulation it determines is
necessary to carry out the purposes of the begin delete chapter as an emergency
regulation in accordance with end delete begin insert chapter. A regulation adopted
pursuant to this subdivision shall not be subject to the rulemaking
requirements of end insert Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code.

begin delete

(c) The board shall not issue loans or grants pursuant to this
chapter on or after January 1, 2026, after which time moneys in
the Water and Wastewater Loan and Grant Fund shall revert to
the General Fund. This subdivision shall not terminate either of
the following rights, obligations, or authorities, or any provision
necessary to carry out these rights, obligations, or authorities:

(1) The repayment of a loan due and payable to the board.

(2) The resolution of a cost recovery action or the initiation of
an action or other collection process to recover defaulted loan
moneys due to the board or to recover grant moneys paid.

end delete

13487.  

(a) The Water and Wastewater Loan and Grant Fund
is hereby created in the State Treasury. The moneys in the Water
and Wastewater Loan and Grant Fund are available, upon
appropriation by the Legislature, to the board for expenditure in
accordance with this chapter.

(b) The following moneys shall be deposited in the Water and
Wastewater Loan and Grant Fund:

(1) Moneys repaid to the board pursuant to a grant or loan made
in accordance with this chapter, including interest payments.

(2) Notwithstanding Section 16475 of the Government Code,
any interest earned upon the moneys in the Water and Wastewater
Loan and Grant Fund.

13488.  

(a) An eligible applicant for a loan shall meet all of
the following criteria:

(1) Have a household income below the statewide median
household income.

(2) Have an ownership interest in the residence.

(3) Be unable to obtain financial assistance at reasonable terms
and conditions from private lenders and lack the personal resources
to undertake these improvements.

(4) Demonstrate an ability to repay the loan. This requirement
may be satisfied by having another party join the application as a
cosigner.

(b) Any loan granted shall be secured by a mortgage on the
residence and repaid within 20 years in accordance with terms
established by the board. The interest rate on the loan shall not
exceed 1 percent. While any balance on the loan is outstanding, a
loan recipient shall furnish evidence of and continually maintain
homeowner’s insurance on the security residence to protect the
state’s interest in the residence.

(c) The board may enter into a contract with a private financial
institution to provide loans consistent with the purposes of this
chapter. If the board exercises this authority, the board may utilize
a portion of the moneys in the Water and Wastewater Loan and
Grant Fund to provide a loan guarantee or similar loss mitigation
mechanism.

13489.  

(a) An eligible applicant for a grant shall meet all of
the following criteria:

(1) Have a household income that is 60 percent or less of the
statewide median household income.

(2) Have an ownership interest in the residence.

(3) Be unable to obtain financial assistance at reasonable terms
and conditions from private lenders and lack the personal resources
to undertake these improvements.

(b) A grant recipient shall repay to the board the grant amount
in full if that recipient sells the residence less than five years from
the date that the grant agreement was signed.

(c) A grant recipient shall repay to the board any unused grant
funds.

SEC. 3.  

begin delete Twenty million dollars ($20,000,000) end delete begin insert Ten million
dollars ($10,000,000) end insert is hereby transferred from the General Fund
to the Water and Wastewater Loan and Grant Fund.

begin insert

begin insert SEC. 4. end insert   

end insert begin insert

This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:

end insert begin insert

In order to provide eligible households with access to safer,
cleaner, and more reliable drinking water and wastewater
treatment during California’s prolonged drought, it is necessary
that this act take effect immediately.

end insert