Amended in Assembly February 29, 2016

California Legislature—2015–16 Regular Session

Assembly Bill No. 1588

Introduced by Assembly Member Mathis

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(Coauthors: Assembly Members Chávez and Lackey)

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(Coauthor: Senator Berryhill)

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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 amended, 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 begin insert funding to counties to award end insert low-interest loans and grants begin delete to local agencies for low-interest loans and grants end delete to eligible applicants for specified purposes relating to drinking water and wastewater treatment. begin insert This bill would authorize a county to apply to the board for a grant to award loans or grants, or both, to residents of the county, as prescribed. end insert 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 begin delete for expenditure for end delete begin insert to administer and implement end insert 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: ²⁄₃. 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 as
follows:

(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 distressed communities begin delete and
individuals end delete to address drinking water and wastewater needs.
Unfortunately, there is no program in place to provide similar
assistance to begin delete individual homeowners and renters end delete begin insert individuals end insert 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 assistance to individual homeowners and renters
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 begin delete homeowner’s end delete begin insert individual’s end insert
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
Program

 

13486.  

(a) The board shall establish a program in accordance
with this chapter to provide begin insert funding to counties to award end insert
low-interest loans and grants begin delete to local agencies for low-interest
loans and grants end delete 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 begin delete regulation end delete begin insert guidelines end insert it determines
begin delete is end delete begin insert are end insert necessary to carry out the purposes of the chapter. A
begin delete regulation end delete begin insert guideline end insert adopted pursuant to this subdivision shall not
be subject to the rulemaking requirements of Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title
2 of the Government Code.

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 begin delete for expenditure end delete begin insert to
administer end insert begin insert and implement the program end insert in accordance with this
chapter.

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

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

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(2)

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begin insert ( end insert begin insert b) end insert  Notwithstanding Section 16475 of the Government Code,
any interest earned upon the moneys in the Water and Wastewater
Loan and Grant begin delete Fund. end delete begin insert Fund shall be deposited in the Water and
Wastewater Loan and Grant Fund. end insert

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begin insert 13487.5. end insert   

(a) A county may apply to the board for a grant to
award loans or grants, or both, to residents of the county in
accordance with this chapter.

(b) The board shall develop guidelines that determine how to
apportion funds among the counties.

(c) A county that receives funding pursuant to this chapter shall
annually provide the following information to the board:

(1) The number of loans and grants awarded.

(2) The types of projects funded.

(3) Project costs.

(4) Whether there is demand for additional funding.

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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 begin delete board end delete begin insert county end insert may enter into a contract with a private
financial institution to provide loans consistent with the purposes
of this chapter. begin delete 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. end delete

13489.  

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

(1) Have a household income that is begin delete 60 end delete begin insert 80 end insert percent or less of the
statewide median household income.

(2) 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 begin delete board end delete begin insert county end insert 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 begin delete board end delete begin insert county end insert any unused
grant funds.

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begin insert 13489.5. end insert   

Funding provided pursuant to this chapter is not
considered “water-related grant funding” for purposes of
paragraph (7) of subdivision (b) of Section 116682 of the Health
and Safety Code.

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SEC. 3.  

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

SEC. 4.  

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:

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.