BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 1588


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          (Without Reference to File)





          ASSEMBLY THIRD READING


          AB  
          1588 (Mathis and Alejo)


          As Amended  May 31, 2016


          2/3 vote.  Urgency


           ------------------------------------------------------------------ 
          |Committee       |Votes|Ayes                  |Noes                |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |----------------+-----+----------------------+--------------------|
          |Water           |13-0 |Levine, Bigelow,      |                    |
          |                |     |Dababneh, Dodd,       |                    |
          |                |     |Gordon, Cristina      |                    |
          |                |     |Garcia, Gomez,        |                    |
          |                |     |Harper, Lopez,        |                    |
          |                |     |Mathis, Medina,       |                    |
          |                |     |Olsen, Salas          |                    |
          |                |     |                      |                    |
          |----------------+-----+----------------------+--------------------|
          |Appropriations  |20-0 |Gonzalez, Bigelow,    |                    |
          |                |     |Bloom, Bonilla,       |                    |
          |                |     |Bonta, Calderon,      |                    |
          |                |     |Chang, Daly, Eggman,  |                    |
          |                |     |Gallagher, Eduardo    |                    |








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          |                |     |Garcia, Roger         |                    |
          |                |     |Hernández, Holden,    |                    |
          |                |     |Jones, Obernolte,     |                    |
          |                |     |Quirk, Santiago,      |                    |
          |                |     |Wagner, Weber, Wood   |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
           ------------------------------------------------------------------ 


          SUMMARY:  Transfers $10 million General Fund 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  
          improvements.  Specifically, this bill:


          1)Requires SWRCB to establish a program of low-interest loans  
            and grants for counties to provide funds to eligible  
            applicants for specified water or wastewater improvements.


          2)Establishes the Water and Wastewater Loan and Grant Fund  
            (LGF).  Transfers $10 million General Fund to the LGF for  
            appropriation by the Legislature to the SWRCB for the purposes  
            of the bill.  


          3)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.


          4)Allows a county to apply to SWRCB for funds to award grants  
            and/or loans to residents within its jurisdiction.


          5)Requires counties receiving LGF to annually provide specified  








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            information to the board regarding projects and funding  
            recipients.


          6)Requires eligible loan applicants to meet the following  
            specified criteria:


                  a)        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.  
                  b)        Allows counties to enter into contracts with  
                    private financial institutions to provide loans as  
                    specified.


          1)Requires eligible grant recipients to meet the following  
            specified criteria:


                  a)        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.


                  b)        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.










                                                                    AB 1588


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          EXISTING LAW: 


          1)Under the federal Clean Water Act: 


               a)     Establishes federal guidelines for surface water  
                 quality protection. 


               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. 


          1)Establishes the Clean Water State Revolving Fund (CWSRF) to  
            offer financial assistance for water quality projects. 


          2)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  








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                Fund (SDWSRF) to offer financial assistance for safe  
                drinking water projects.


          3)Under the Porter-Cologne Water Quality Control Act: 


              a)    Establishes the State Water Resources Control Board  
                (State Water Board) and Regional Water Quality Control  
                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.


          4)Transferred the Drinking Water Program and the SDWSRF from the  
            Department of Public Health to the State Water Board effective  
            July 1, 2014.


          5)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:  According to the Assembly Appropriations  








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          Committee: 


          1)Transfers $10 million General Fund to the newly created LGF  
            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 (General Fund) over  
            three years.




          COMMENTS:  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.


          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.  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 programs.   
          This bill provides for assistance on private property similar to  
          what exists for public systems.











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          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.


          Analysis Prepared by:                                             
                          Ryan Ojakian / W., P., & W. / (916) 319-2096   
          FN: 0003313