BILL ANALYSIS Ó
AB 1588
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Date of Hearing: March 29, 2016
ASSEMBLY COMMITTEE ON WATER, PARKS, AND WILDLIFE
Marc Levine, Chair
AB 1588
(Mathis) - As Amended March 16, 2016
SUBJECT: Water and Wastewater Loan and Grant Program
SUMMARY: Appropriates $20 million general fund dollars to a
newly established program at the State Water Resources Control
Board (State Water Board) and requires the State Water Board to
establish a program to fund counties for the purposes of
providing low-interest loans and grants to eligible applicants
for water and wastewater. Specifically, this bill:
1)Requires the State Water Board to establish a program to
provide funding to counties to award 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.
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d) Installing a water treatment system if the
groundwater doesn't meet primary or secondary drinking
water standards.
2)Requires eligible loan applicants to:
a) Own their own home and be unable to obtain a
conventional loan.
b) 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.
c) 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.
3)Provides that due to drought this act is an urgency statute in
order to provide eligible households with access to safer,
cleaner, and more reliable drinking water and wastewater
treatment.
EXISTING LAW:
1)Under the federal Clean Water Act:
a) Establishes federal guidelines for surface water
quality protection.
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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.
2)Establishes the Clean Water State Revolving Fund (CWSRF) to
offer financial assistance for water quality projects.
3)Under the federal Safe Drinking Water Act (SDWA):
a) Establishes federal standards for contaminants in
drinking water.
b) Authorizes states to enter into primacy agreements
with the federal United States Environmental Protection
Agency (US EPA) to enforce SDWA if the state establishes
drinking water standards that are at least as stringent as
those developed by US EPA, as required by SDWA.
c) Establishes the Safe Drinking Water State Revolving
Fund (SDWSRF) to offer financial assistance for safe
drinking water projects.
4)Under the Porter-Cologne Water Quality Control Act:
a) Establishes the State Water Resources Control Board
(State Water Board) and Regional Water Quality Control
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Boards to regulate and protect water quality in
California.
b) Establishes the State Water Pollution Control
Revolving Fund to, among other things, implement the
federal CWSRF program.
5)Transferred the 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.
6)Under the California Safe Drinking Water Act:
a) Requires the State Water Board to protect the public
from contaminants in drinking water.
b) 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: One time appropriation of $20 million from the
General Fund for the financial assistance program.
COMMENTS: This bill creates an ability for the State Water
Board to provide financial assistance for needed water and
wastewater improvements to private home owners who otherwise
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cannot afford to make improvements.
1)Author's statement: Californians who are reliant on
groundwater wells need access to low-interest financing and
grants to undertake necessary repairs to provide safer,
reliable drinking water. 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.
Unfortunately, there are very few resources available to
individual homeowners who are reliant on their own groundwater
wells.
2)Background:
a) Human Right to water: It is the policy of the state
that every human being has the right to safe, clean,
affordable, and accessible water adequate for human
consumption, cooking, and sanitary purposes. All relevant
state agencies, including the State Water Board, must
consider this policy when revising, adopting, or
establishing policies, regulations, and grant criteria
when those policies, regulations, and grant criteria are
pertinent.
b) Privately-owned property is not eligible under CWSRF
or SDWSRF: 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
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programs.
c) Expands access to assistance: The threshold for
eligibility for the low-interest loans is below the
statewide median income. It may appear that at level of
income it would be difficult to take on a loan that must
be repaid. The bill allows for co-signers, including
non-profits, and creates access to loan rates that are
capped at 1 percent. This rate is far below what these
individuals would likely have access to through private
institutions, and relative to inflation will likely make
the recipient of the loan better off over the life of the
loan. Moreover, if household income is at or below 80
percent of the statewide median income the bill provides
access to grant funds.
3)Prior and Related Legislation:
a) AB 954 (Mathis) of 2015 was held in the Senate
Appropriations Committee. This bill is substantially
similar to AB 954. The difference between the two bills
is the process by which the State Water Board will
establish the programs and reporting requirements under
the programs to the State Water Board. AB 954 passed
this committee last year 15-0.
b) AB 91 (Committee on Budget), 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 rehabilitation.
c) AB 1471 (Rendon), Chapter 188, Statutes of 2014,
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placed Proposition 1, a $7.545 billion general obligation
bond for water-related projects and programs on the
November 4, 2014, ballot where it passed with 67% of the
vote.
d) AB 964 (Huffman), as introduced February 18, 2011,
sought to improve water quality by financing the
installation of onsite sewer and septic improvements on
private property including the conversion of a property
from a septic system to community sewer collection and
treatment service. AB 964 was later gutted and amended
into a water rights bill concerning Small Irrigation
Registrations after the federal Environmental Protection
Agency interpreted private property improvements to be
ineligible for CWSRF money.
4)Supporting Arguments: While some state and federal programs
provide financial assistance 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 and septic tanks. This
bill would provide funding to individual homeowners for
extending service lines, pay costs to close abandoned septic
tanks and water wells, deepening and improving existing wells,
and installing water treatment systems.
REGISTERED SUPPORT / OPPOSITION:
Support
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Association of California Water Agencies
Opposition
None of File
Analysis Prepared by:Ryan Ojakian / W., P., & W. / (916)
319-2096