BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                       AB 954


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          ASSEMBLY THIRD READING


          AB  
          954 (Mathis)


          As Amended  June 2, 2015


          2/3 vote.  Urgency


           ------------------------------------------------------------------- 
          |Committee       |Votes |Ayes                |Noes                  |
          |                |      |                    |                      |
          |                |      |                    |                      |
          |----------------+------+--------------------+----------------------|
          |Water           |15-0  |Levine, Bigelow,    |                      |
          |                |      |Dababneh, Dahle,    |                      |
          |                |      |Dodd, Beth Gaines,  |                      |
          |                |      |Cristina Garcia,    |                      |
          |                |      |Gomez, Harper,      |                      |
          |                |      |Lopez, Mathis,      |                      |
          |                |      |Medina, Rendon,     |                      |
          |                |      |Salas, Williams     |                      |
          |                |      |                    |                      |
          |----------------+------+--------------------+----------------------|
          |Appropriations  |17-0  |Gomez, Bigelow,     |                      |
          |                |      |Bonta, Calderon,    |                      |
          |                |      |Chang, Daly,        |                      |
          |                |      |Eggman, Gallagher,  |                      |
          |                |      |                    |                      |
          |                |      |                    |                      |
          |                |      |Eduardo Garcia,     |                      |
          |                |      |Gordon, Holden,     |                      |
          |                |      |Jones, Quirk,       |                      |
          |                |      |Rendon, Wagner,     |                      |
          |                |      |Weber, Wood         |                      |








                                                                       AB 954


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          |                |      |                    |                      |
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          SUMMARY:  Appropriates $10 million dollars to a newly-created fund  
          at the State Water Resources Control Board (State Water Board) to  
          provide low-interest loans and grants to eligible applicants for  
          water and wastewater.  Specifically, this bill:  


          1)Makes findings including, but not limited to, the impacts of  
            drought and the need to establish a program to provide  
            assistance to individual homeowners who are reliant on their own  
            groundwater wells and may not be able to afford conventional  
            private loans to take care of vital water supply, water quality,  
            and wastewater improvements.


          2)Requires the State Water Board to establish a pilot program of  
            low-interest loans and grants to eligible applicants for any of  
            the following: 


             a)   Connecting to water or wastewater service.


             b)   Closing abandoned septic tanks or water wells to protect  
               health and safety.


             c)   Deepening an existing groundwater well.


             d)   Installing a water treatment system if the groundwater  
               doesn't meet primary or secondary drinking water standards.


          3)Allows the State Water Board to adopt regulations implementing  








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            the program and makes such regulations exempt from the  
            requirements of the California Administrative Procedures Act.


          4)Establishes the Water and Wastewater Loan and Grant Program  
            (Program) at the State Water Board with a Water and Wastewater  
            Loan and Grant Fund (LGF).


          5)Appropriates $10 million of General Fund into the LGF and allows  
            moneys repaid from any grant or loan under the Pilot Program to  
            be deposited in the fund as well as and any interest on those  
            moneys.


          6)Specifies that all loan or grant applicants must own their own  
            home and be unable to obtain a conventional loan.


          7)Requires eligible loan applicants to: be below the statewide  
            median income; demonstrate an ability to repay the loan which  
            may include having a co-signer; secure the loan on the home and  
            repay it within 20 years.


          8)Requires the State Water Board to set interest rates under the  
            pilot program at 1% or less and allows the State Water Board to  
            administer the program through a private financial institution.


          9)Requires eligible grant applicants to:  have a household income  
            that is less than 60% of the statewide median; repay the grant  
            in full if the home is sold less than five years from the date  
            of the agreement; and, repay the State Water Board any unused  
            grant funds. 


          10)Provides that due to drought the act is an urgency statute in  
            order to provide eligible households with access to safer,  








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            cleaner, and more reliable drinking water and wastewater  
            treatment.


          EXISTING LAW:  


          1)Under the federal Water Pollution Control Act (Clean Water Act)  
            Amendments of 1972 and 1987: 


             a)   Establishes federal guidelines for surface water quality  
               protection. 


             b)   Authorizes water quality programs; requires federal  
               effluent limitations and state water quality standards;  
               requires permits for the discharge of pollutants into  
               navigable waters; provides enforcement mechanisms; and  
               authorizes funding for wastewater treatment works,  
               construction grants, and state revolving loan programs, as  
               well as funding to states and tribes for their water quality  
               programs. 


             c)   Establishes the Clean Water State Revolving Fund (CWSRF)  
               to offer low interest financing agreements for water quality  
               projects. 


          2)Under the Porter-Cologne Water Quality Control Act, establishes  
            the State Water Pollution Control Revolving Fund to, among other  
            things, implement the federal CWSRF program.


          3)Transferred the Safe Drinking Water Program and the Safe  
            Drinking Water State Revolving Fund (SDWSRF) from the Department  
            of Public Health to the State Water Board, effective July 1,  
            2014.








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          4)Under the California Safe Drinking Water Act, requires the State  
            Water Board, in administering programs to fund improvements and  
            expansions of small community water systems, to give priority to  
            funding projects in disadvantaged communities and encourage the  
            consolidation of small community water systems that serve  
            disadvantaged communities in instances where consolidation will  
            help the affected agencies and the state to meet specified goals


          5)Establishes the SDWSRF which is partially capitalized by federal  
            contributions from the federal Safe Drinking Water Act.   
            Specifies that the SDWSRF provide funding for public water  
            systems to correct deficiencies and problems that pose public  
            health risks and to meet safe drinking water standards.


          FISCAL EFFECT:  According to the Assembly Appropriations  
          Committee:


          1)Appropriates $10 million (General Fund (GF)).


          2)Unknown costs, likely in the $600,000 to $800,000 range for  
            SWRCB to administer the program (GF).


          COMMENTS: This bill creates a State Water Board program to provide  
          water and waste water project grants and loans for owners of  
          private homes who cannot afford conventional loans for needed  
          water and wastewater improvements.


          The author states that while catastrophic drought continues to  
          ravage the state, Californians who are reliant on groundwater  
          wells need access to low-interest financing and grants to  
          undertake necessary repairs to provide safer, reliable drinking  








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          water.  The author adds that this bill is needed because while  
          there are many state and federal programs that provide financial  
          assistance, such as low-interest loans and grants, to communities  
          to undertake water and wastewater infrastructure improvement  
          projects there are very few resources available to individual  
          homeowners who are reliant on their own groundwater wells.  The  
          author highlights that many individual homeowners who rely upon  
          private groundwater wells are often in disadvantaged communities  
          and economically distressed areas, and so may not be able to  
          afford conventional private financing to undertake vital water  
          supply, water quality, and wastewater improvements


          The CWSRF program provides low-interest loans and other financing  
          mechanisms for publicly-owned wastewater treatment facilities,  
          local sewers, sewer interceptors, water recycling facilities, and  
          storm water treatment facilities. The SDWSRF provides funding for  
          public water systems.  But improvements to those parts of the  
          water and wastewater infrastructure that are on private property  
          such as wells, sewer laterals, or septic systems have not been  
          funded by  the CWSRF or SDWSRF programs. 

          Proposition 1, the Water Quality, Supply, and Infrastructure  
          Improvement Act of 2014 (Prop. 1), includes $260 million, upon  
          appropriation by the Legislature to the State Water Board to be  
          placed in the CWSRF and used for grants for wastewater treatment  
          projects.  Prop. 1 also includes another $260 million, upon  
          appropriation by the Legislature (recipient agency not specified)  
          for public water system infrastructure improvements and related  
          actions to meet safe drinking water standards, ensure affordable  
          drinking water, or both.  But, again, the funding is focused on  
          the public water system or public agency solution, not the  
          individual homeowner's property.

          AB 91 (Budget Committee), Chapter 1, Statutes of 2015 appropriates  
          $19 million to the State Water Board, for grants and direct  
          expenditures for emergency drinking water projects, including  
          hauled water, bottled water, design and construction of  
          connections to adjacent public water systems, new wells and well  








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          rehabilitation. However, these funds are only available until June  
          30, 2016, and are intended to address drought-related drinking  
          water emergencies or threatened emergencies as opposed to  
          long-term solutions.

          Supporters state that there are no programs to provide assistance  
          to individual homeowners who rely on their own groundwater wells  
          and cannot afford conventional loans.  Supporters advise that this  
          bill would bridge the gap by providing low-interests loans,  
          grants, or both to low-income homeowners to undertake vital water  
          supply, water quality, and wastewater treatment improvements.

          There is not opposition on file.



          Analysis Prepared by:                                               
                          Tina Leahy / W., P., & W. / (916) 319-2096  FN:  
          0000841