Amended in Senate August 16, 2016

Amended in Senate June 15, 2016

Amended in Assembly May 31, 2016

Amended in Assembly March 16, 2016

Amended in Assembly March 9, 2016

Amended in Assembly February 29, 2016

California Legislature—2015–16 Regular Session

Assembly Bill No. 1588

Introduced by Assembly Members Mathis and Alejo

(Coauthors: Assembly Members Arambula, Chávez, Lackey, and Olsen)

(Coauthors: Senators Berryhill, Cannella, and Vidak)

January 6, 2016

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

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 begin delete would require end delete begin insert would, to the extent funding is made available, authorize end insert the State Water Resources Control Board to establish a program to provide funding to counties begin insert and qualified nonprofit organizations end insert to award low-interest loans and grants to eligible applicants for specified purposes relating to drinking water and wastewater treatment. This bill would authorize a county begin insert or qualified nonprofit organization end insert to apply to the board for a grant to award loans or grants, or both, to residents of the county, as prescribed. begin 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 to administer and implement the program. This bill would transfer to the Water and Wastewater Loan and Grant Fund $10,000,000 from the General Fund. end delete begin insert To fund this program, the bill would authorize the board to use funding appropriated in an item of the Budget Act of 2016 from the State Water Quality Control Fund, or to use any other funding source consistent with the purposes of the program. By expanding the purposes of an appropriation, the bill would make an appropriation. end insert

begin delete

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

end delete

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

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

begin delete

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 to address
drinking water and wastewater needs. Unfortunately, there is no
program in place to provide similar assistance to individuals 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 individual’s water, or
connecting to a local water or wastewater system.

end delete

begin delete SEC. 2. end delete

begin insert SECTION 1. end insert   

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)  begin delete The end delete begin insert To the extent the funding is made available,
the end insert board begin delete shall end delete begin insert may end insert establish a program in accordance with this
chapter to provide funding to counties begin insert and qualified nonprofit
organizations end insert to award 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 water standard, as defined
in Section 116275 of the Health and Safety Code.

(b) The board may adopt any guidelines it determines are
necessary to carry out the purposes of this chapter. A guideline
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.

begin insert

(c) As used in this chapter, “qualified nonprofit organization”
means an organization with experience in providing financial and
technical assistance to disadvantaged communities that is qualified
to operate in California and qualified for exempt status under
Section 501(c)(3) of the Internal Revenue Code.

end insert

begin 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 to administer and
implement the program in accordance with this chapter.

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

end delete begin insert

begin insert 13487. end insert   

(a) To fund the program authorized in this chapter,
the board may use funding appropriated in Item 3940-101-0679
in the Budget Act of 2016 (Chapter 23 of the Statutes of 2016), or
any other funding source that is consistent with the purposes of
this chapter.

(b) The board shall use reasonable and feasible efforts to secure
local matching funds for the purposes of funding projects pursuant
to this chapter.

end insert

13487.5.  

(a) A county begin insert or qualified nonprofit organization end insert 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.

begin delete

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

end delete begin delete

(c)

end delete

begin insert (b) end insert  A county begin insert or qualified nonprofit organization end insert 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.

begin insert

(c) The board may advance funds pursuant to an agreement
with a county or qualified nonprofit organization in accordance
with this chapter. Section 11019 of the Government Code does not
apply to an advance made pursuant to this subdivision.

end insert

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 county begin insert or end insert begin insert qualified nonprofit organization end insert may enter
into a contract with a private financial institution to provide loans
consistent with the purposes of this chapter.

13489.  

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

(1) Have a household income that is 80 percent or less of the
statewide median household income.

begin insert

(2) Have an ownership or leasehold interest in the residence.

end insert begin delete

(2)

end delete

begin insert ( end insert begin insert 3) end insert  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 county begin insert or end insert begin insert qualified
nonprofit organization 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 county begin insert or qualified
nonprofit organization end insert any unused grant funds.

begin delete

SEC. 3.  

Ten million dollars ($10,000,000) is hereby transferred
from the General Fund to the Water and Wastewater Loan and
Grant Fund.

end delete

begin delete

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.

end delete