An act to add Chapter 6.6 (commencing with Section 13486) to Division 7 of the Water Code, relating to water, and declaring the urgency thereof, to take effect immediately.

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


SECTION 1.
The Legislature hereby finds and declares
the following:
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 communities to address drinking water and wastewater needs. Unfortunately, there is no program in place to provide similar assistance to individual homeowners 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 low-interest loans, grants, or both, to individual homeowners 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 homeowner’s water, or connecting to a local water or wastewater system.
SEC. 2.
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) The board shall establish a program in accordance with this chapter to provide low-interest loans and grants to local agencies for 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 standard, as defined in Section 116275 of the Health and Safety Code.
(b) The board may adopt any regulation it determines is necessary to carry out the purposes of the chapter. A regulation 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.
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 for expenditure in accordance with this chapter.
(b) The following moneys shall be deposited in the Water and Wastewater Loan and Grant Fund:
(1) Moneys repaid to the board pursuant to a grant or loan made in accordance with this chapter, including interest payments.
(2) Notwithstanding Section 16475 of the Government Code, any interest earned upon the moneys in the Water and Wastewater Loan and Grant Fund.
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 board may enter into a contract with a private financial institution to provide loans consistent with the purposes of this chapter. If the board exercises this authority, the board may utilize a portion of the moneys in the Water and Wastewater Loan and Grant Fund to provide a loan guarantee or similar loss mitigation mechanism.
13489.
(a) An eligible applicant for a grant shall meet all of the following criteria:
(1) Have a household income that is 60 percent or less of 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.
(b) A grant recipient shall repay to the board 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 board any unused grant funds.
SEC. 3.
Ten million dollars ($10,000,000) is hereby transferred from the General Fund to the Water and Wastewater Loan and Grant Fund.
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.

Summary: 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 would require the State Water Resources Control Board to establish a program to provide low-interest loans and grants to local agencies for low-interest loans and grants to eligible applicants for specified purposes relating to drinking water and wastewater treatment. 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 for expenditure for the program. This bill would transfer to the Water and Wastewater Loan and Grant Fund $10,000,000 from the General Fund.
This bill would declare that it is to take effect immediately as an urgency statute.