BILL ANALYSIS Ó AB 1588 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 1588 (Mathis and Alejo) As Amended August 16, 2016 2/3 vote -------------------------------------------------------------------- |ASSEMBLY: |76-0 |(June 2, 2016) |SENATE: |39-0 |(August 17, | | | | | | |2016) | | | | | | | | | | | | | | | -------------------------------------------------------------------- Original Committee Reference: W., P., & W. SUMMARY: To the extent funds are available, authorizes the State Water Resources Control Board (SWRCB) to implement low-interest loan and grant programs for counties and qualified nonprofit organizations, as defined, to fund water and wastewater facilities improvements. Specifically, this bill: 1)Permits the SWRCB to use funds out of $15 million appropriated in the Budget Act of 2016 (SB 826 (Leno), Chapter 23, Statues of 2016) to fund the low-interest loan and grant programs or any other funding source consistent with the purposes of this chapter. Requires the SWRCB to use reasonable and feasible efforts to secure local matching funds for the purposes of funding projects pursuant to this chapter. AB 1588 Page 2 2)Authorizes the SWRCB to establish a program of low-interest loans and grants for counties and qualified nonprofit organizations to provide funds to eligible applicants for specified water or wastewater improvements. 3)Allows the SWRCB to adopt any guidelines it determines are necessary to administer the program and exempts a guideline adopted for this chapter from the Administrative Procedures Act. 4)Allows a county or qualified nonprofit organization to apply to the SWRCB for funds to award grants and/or loans to residents of the county. 5)Requires counties or qualified nonprofit organizations receiving a grant or a loan under this chapter to annually provide specified 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 the SWRCB. Limits the loan interest rate to 1%. Requires loan recipients to maintain homeowners insurance during the life of the loan. b) Allows counties or qualified nonprofit organizations to enter into contracts with private financial institutions to provide loans consistent with the purposes of this chapter. 7)Requires eligible grant recipients to meet the following specified criteria: a) Requires grant recipients to repay the county or AB 1588 Page 3 qualified nonprofit organization 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 or qualified nonprofit organization any unused grant funds. The Senate amendments: Permits instead of requires, the SWRCB to create the low-interest loan and grant programs. Eliminates a $10 million General Fund Transfer and replaces with the ability to access funds from a $15 million appropriation in the 2016 Budget Act, to create the low-interest loan and grant programs. Defines and allows qualified nonprofit organizations in addition to counties, to apply to the SWRCB to administer low-interest loan and grant programs. Permits the SWRCB to enter into agreements to advance funds to counties or qualified nonprofit organizations. Removes an urgency clause from the bill. 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. AB 1588 Page 4 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 the SDWA if the state establishes drinking water standards that are at least as stringent as those developed by the US EPA, as required by the SDWA. c) Establishes the Safe Drinking Water State Revolving 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: AB 1588 Page 5 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: Unknown. 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 safe, 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 allows for assistance on private property similar to what exists for public systems. AB 1588 Page 6 Analysis Prepared by: Ryan Ojakian / W., P., & W. / (916) 319-2096 FN: 0004342