BILL ANALYSIS Ó
AB 1588
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Date of Hearing: April 6, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
1588 (Mathis) - As Amended March 16, 2016
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Urgency: Yes State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill transfers $20 million GF to a newly created fund, and
requires the State Water Resources Control Board (SWRCB) to
implement a low-interest loan and grant pilot program for
counties to fund water and wastewaster facilities and
improvements. Specifically, this bill:
1)Requires SWRCB to establish a program of low-interest loans
AB 1588
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and grants for counties to provide funds to eligible
applicants for any of the following:
a) Extending or connecting service lines from a water or
wastewater service to the applicants' residence or
plumbing.
b) Paying reasonable charges or fees for connecting to a
water or wastewater system.
c) Closing abandoned septic tanks or water wells to protect
health and safety.
d) Deepening an existing groundwater well.
e) Improving an existing groundwater well, including
associated equipment.
f) Installing a water treatment system if the groundwater
exceeds primary or secondary drinking water standards, as
defined.
1)Establishes the Water and Wastewater Loan and Grant Fund
(LGF). Transfers $20 million GF to the LGF for appropriation
by the Legislature to the SWRCB for the purposes of the bill.
Allows moneys repaid from any grant or loan under the program
to be deposited in the fund as well as and any interest on
those moneys.
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2)Allows SWRCB to adopt guidelines for administering the program
exempt from the Administrative Procedures Act (APA). Requires
SWRCB to develop guidelines to apportion funds among the
counties.
3)Allows a county to apply to SWRCB for funds to award grants
and/or loans to residents within its jurisdiction.
4)Requires counties receiving Water and Wastewater Loan and
Grant Funds to annually provide specified information to the
board regarding projects and funding recipients.
5)Requires eligible loan applicants to meet the following
criteria:
a) Household income is below the statewide median.
b) There is an ownership interest in the residence.
c) Applicants are unable to obtain financial assistance at
reasonable terms from private lenders and lack personal
resources to undertake the improvements.
d) Applicants are able to demonstrate the ability to repay
the loan, including by having another party join the
application as co-signer.
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1)Requires loans to be secured by a mortgage on the residence
and repaid within 20 years in accordance with terms
established by SWRCB. Limits the loan interest rate to 1%.
Requires loan recipients to maintain homeowners insurance
during the life of the loan.
2)Allows counties to enter into contracts with private financial
institutions to provide loans as specified.
3)Requires eligible grant recipients to meet the following
criteria:
a) Household income is 80% or less of the statewide median
b) Applicants are unable to obtain financial assistance at
reasonable terms from private lenders and lack personal
resources to undertake the improvements.
1)Requires grant recipients to repay the county in full if the
recipient sells the residence less than five years from
signing the grant agreement. Requires the grant recipient to
repay the county any unused grant funds.
2)Exempts funding received from this program from certain
requirements of the law that authorize the SWRCB to order
consolidations and service extensions. Specifically, the
provisions that prevent residents from receiving any future
water-related state grant funding until written consent to
consolidate or extend service is received.
FISCAL EFFECT:
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1)This bill transfers $20 million GF to the newly created Water
and Wastewater Loan and Grant Fund for appropriation by the
Legislature to the SWRCB.
2)Unknown annual costs, likely in the $500,000 to $800,000
range, for SWRCB to administer the program (GF) over three
years.
COMMENTS:
1)Purpose. According to the author, 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)Drought Water System Consolidation. Last year, in response to
the multi-year drought, and lack of safe, clean water in
multiple communities throughout the state, the Legislature
Authorized the SWRCB to require water systems serving
disadvantaged communities with unreliable and unsafe drinking
water to consolidate with or receive service from public water
systems with safe, reliable, and adequate drinking water.
This bill exempts eligible grant or loan recipients from
sanctions designed to encourage consolidation and delivery of
water in disadvantaged communities. This exemption may
conflict with the Legislature's intent in enacting the
consolidation provisions. The author may wish to consider
removing or modifying this provision.
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3)Prior Legislation. AB 954 (Mathis) of 2015 passed out of this
committee but was held in the Senate Appropriations Committee.
This bill is similar to AB 954 but increases the amount of
funding available from $10 million to $20 million.
Analysis Prepared by:Jennifer Galehouse / APPR. / (916)
319-2081