BILL ANALYSIS Ó AB 954 Page 1 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 Page 2 | | | | | | | | | | ------------------------------------------------------------------- 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 AB 954 Page 3 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, AB 954 Page 4 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. AB 954 Page 5 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 AB 954 Page 6 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 AB 954 Page 7 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