California Legislature—2015–16 Regular Session

Assembly BillNo. 1588


Introduced by Assembly Member Mathis

January 6, 2016


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

LEGISLATIVE COUNSEL’S DIGEST

AB 1588, as introduced, Mathis. Water and Wastewater Loan and Grant 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 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 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 program. This bill would transfer to the Water and Wastewater Loan and Grant Fund $20,000,000 from the General Fund.

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

Vote: 23. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

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

P2    1

SECTION 1.  

The Legislature hereby finds and declares as
2follows:

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 distressed communities and
10individuals to address drinking water and wastewater needs.
11Unfortunately, there is no program in place to provide similar
12assistance to individual homeowners and renters who are reliant
13on their own groundwater wells and who may not be able to afford
14conventional private loans to undertake vital water supply, water
15quality, and wastewater improvements.

16(c) The program created by this act is intended to bridge that
17gap by providing assistance to individual homeowners and renters
18to undertake actions necessary to provide safer, cleaner, and more
19reliable drinking water and wastewater treatment. These actions
20may include, but are not limited to, digging deeper wells,
21improving existing wells and related equipment, addressing
22drinking water contaminants in the homeowner’s water, or
23connecting to a local water or wastewater system.

24

SEC. 2.  

Chapter 6.6 (commencing with Section 13486) is added
25to Division 7 of the Water Code, to read:

26 

27Chapter  6.6. Water and Wastewater Loan and Grant
28Program
29

 

30

13486.  

(a) The board shall establish a program in accordance
31with this chapter to provide low-interest loans and grants to local
32agencies for low-interest loans and grants to eligible applicants
33for any of the following purposes:

34(1) Extending or connecting service lines from a water or
35wastewater system to the applicant’s residence or plumbing.

36(2) Paying reasonable charges or fees for connecting to a water
37or wastewater system.

P3    1(3) Paying costs to close abandoned septic tanks and water wells,
2as necessary, to protect health and safety as required by local or
3state law.

4(4) Deepening an existing groundwater well.

5(5) Improving an existing groundwater well, including associated
6equipment.

7(6) Installing a water treatment system if the groundwater
8exceeds a primary or secondary drinking standard, as defined in
9Section 116275 of the Health and Safety Code.

10(b) The board may adopt any regulation it determines is
11necessary to carry out the purposes of the chapter. A regulation
12adopted pursuant to this subdivision shall not be subject to the
13rulemaking requirements of Chapter 3.5 (commencing with Section
1411340) of Part 1 of Division 3 of Title 2 of the Government Code.

15

13487.  

(a) The Water and Wastewater Loan and Grant Fund
16is hereby created in the State Treasury. The moneys in the Water
17and Wastewater Loan and Grant Fund are available, upon
18appropriation by the Legislature, to the board for expenditure in
19accordance with this chapter.

20(b) The following moneys shall be deposited in the Water and
21Wastewater Loan and Grant Fund:

22(1) Moneys repaid to the board pursuant to a grant or loan made
23in accordance with this chapter, including interest payments.

24(2) Notwithstanding Section 16475 of the Government Code,
25any interest earned upon the moneys in the Water and Wastewater
26Loan and Grant Fund.

27

13488.  

(a) An eligible applicant for a loan shall meet all of
28the following criteria:

29(1) Have a household income below the statewide median
30household income.

31(2) Have an ownership interest in the residence.

32(3) Be unable to obtain financial assistance at reasonable terms
33and conditions from private lenders and lack the personal resources
34to undertake these improvements.

35(4) Demonstrate an ability to repay the loan. This requirement
36may be satisfied by having another party join the application as a
37cosigner.

38(b) Any loan granted shall be secured by a mortgage on the
39residence and repaid within 20 years in accordance with terms
40established by the board. The interest rate on the loan shall not
P4    1exceed 1 percent. While any balance on the loan is outstanding, a
2loan recipient shall furnish evidence of and continually maintain
3homeowner’s insurance on the security residence to protect the
4state’s interest in the residence.

5(c) The board may enter into a contract with a private financial
6institution to provide loans consistent with the purposes of this
7chapter. If the board exercises this authority, the board may utilize
8a portion of the moneys in the Water and Wastewater Loan and
9Grant Fund to provide a loan guarantee or similar loss mitigation
10mechanism.

11

13489.  

(a) An eligible applicant for a grant shall meet both of
12the following criteria:

13(1) Have a household income that is 60 percent or less of the
14statewide median household income.

15(2) Be unable to obtain financial assistance at reasonable terms
16and conditions from private lenders and lack the personal resources
17to undertake these improvements.

18(b) A grant recipient shall repay to the board the grant amount
19in full if that recipient sells the residence less than five years from
20the date that the grant agreement was signed.

21(c) A grant recipient shall repay to the board any unused grant
22funds.

23

SEC. 3.  

Twenty million dollars ($20,000,000) is hereby
24transferred from the General Fund to the Water and Wastewater
25Loan and Grant Fund.

26

SEC. 4.  

This act is an urgency statute necessary for the
27immediate preservation of the public peace, health, or safety within
28the meaning of Article IV of the Constitution and shall go into
29immediate effect. The facts constituting the necessity are:

30In order to provide eligible households with access to safer,
31cleaner, and more reliable drinking water and wastewater treatment
32during California’s prolonged drought, it is necessary that this act
33take effect immediately.



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