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AB-2060 Water: grants: advanced payments.(2017-2018)



Current Version: 06/28/18 - Amended Senate        


AB2060:v96#DOCUMENT

Amended  IN  Senate  June 28, 2018
Amended  IN  Assembly  May 25, 2018
Amended  IN  Assembly  April 12, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 2060

Introduced by Assembly Member Eduardo Garcia
(Coauthors: Senators Stone and Vidak)

February 06, 2018

An act to amend Section 13477.6 of, and to add Section 79724.5 to, the Water Code, relating to water.


LEGISLATIVE COUNSEL'S DIGEST


AB 2060, as amended, Eduardo Garcia. Water: grants: advanced payments.
(1) Existing law, the Porter-Cologne Water Quality Control Act, establishes the State Water Pollution Control Revolving Fund program pursuant to which state and federal funds are continuously appropriated from the State Water Pollution Control Revolving Fund to the State Water Resources Control Board for loans and other financial assistance for the construction of publicly owned treatment works by a municipality, the implementation of a management program, the development and implementation of a conservation and management plan, and other related purposes in accordance with the federal Clean Water Act. Existing law authorizes the board to assess a specified annual charge in connection with any financial assistance made pursuant to the revolving fund program in lieu of interest that otherwise would be charged and requires the proceeds generated from the imposition of that charge to be deposited in the State Water Pollution Control Revolving Fund Small Community Grant Fund, along with any interest earned upon the moneys in that grant fund. Existing law authorizes the board to expend the moneys in the grant fund, upon appropriation by the Legislature, for grants for eligible projects under the revolving fund program that serve small communities, as defined.
Existing law, the Water Quality, Supply, and Infrastructure Improvement Act of 2014, approved by the voters as Proposition 1 at the November 4, 2014, statewide general election, authorizes the issuance of general obligation bonds in the amount of $7,545,000,000 to finance a water quality, supply, and infrastructure improvement program. The bond act provides that the sum of $520,000,000 is to be available, upon appropriation by the Legislature, for expenditures, grants, and loans for projects that improve water quality or help provide clean, safe, and reliable drinking water to all Californians. The bond act provides that $260,000,000 is available for deposit in the grant fund for grants for wastewater treatment projects.
This bill would require the board, within 60 days of awarding a grant from the grant fund, to provide a project proponent that requests and demonstrates a need for an advanced payment and satisfies certain criteria with advanced payment of $500,000 or 50% of the grant award, whichever is less, for projects in which the project proponent is a nonprofit organization or a disadvantaged community, or the project benefits a disadvantaged community. The bill would require the advanced funds to be handled as prescribed. The bill would authorize the board to adopt additional requirements for the recipient regarding the use of the advanced payment to ensure that the funds are used properly.
(2) Proposition 1 provides that of the $520,000,000 available for projects that improve water quality or help provide clean, safe, and reliable drinking water to all Californians, the sum of $260,000,000 is available for grants and loans for public water system infrastructure improvements and related actions to meet safe drinking water standards, ensure affordable drinking water, or both. The bond act requires that eligible recipients serve disadvantaged communities and are public water systems or public agencies. The bond act prohibits more than 25% of the grant from being awarded in advance of actual expenditures.
This bill would require the board, within 60 days of awarding a grant for these purposes under the bond act, to provide a project proponent that requests and demonstrates a need for an advanced payment and satisfies certain criteria with advanced payment of $500,000 or 25% of the grant award, whichever is less. The bill would require the advanced funds to be handled as prescribed. The bill would authorize the board to adopt additional requirements for the recipient regarding the use of the advanced payment to ensure that the funds are used properly.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 Section 13477.6 of the Water Code is amended to read:

13477.6.
 (a) The State Water Pollution Control Revolving Fund Small Community Grant Fund is hereby created in the State Treasury.
(b) The following moneys shall be deposited in the grant fund:
(1) Moneys transferred to the grant fund pursuant to subdivision (c).
(2) Notwithstanding Section 16475 of the Government Code, any interest earned upon the moneys deposited in the grant fund.
(3) Any moneys deposited pursuant to Section 79723.
(c) (1) For any financing made pursuant to Section 13480, the board may assess an annual charge to be deposited in the grant fund in lieu of interest that would otherwise be charged.
(2) The charge authorized by this subdivision may be applied at any time during the term of the financing, and, once applied, shall remain unchanged unless the board determines that the application of the charge is any of the following:
(A) No longer consistent with federal requirements regarding the fund.
(B) No longer necessary.
(C) Negatively affecting the board’s ability to fund projects that support its water quality goals.
(3) The charge shall not increase the financing repayment amount as set forth in the terms and conditions imposed pursuant to this chapter.
(4) If the board ceases collecting the charge before the financing repayment is complete, the board shall replace the charge with an identical interest rate.
(d) (1) Moneys in the grant fund, upon appropriation by the Legislature to the board, may be expended, in accordance with this chapter, for grants for wastewater projects described in subdivision (c) of Section 1383 of Title 33 of the United States Code that serve small communities as defined in subdivision (a) of Section 30925 of the Public Resources Code. The board shall expend moneys appropriated from the grant fund within four years from the date of encumbrance.
(2) For the purpose of approving grants, the board shall give priority to projects that serve severely disadvantaged communities.
(3) In addition to the uses set forth in paragraph (1), moneys deposited in the grant fund pursuant to Section 79723, upon appropriation by the Legislature to the board, may be expended for technical assistance as authorized by Section 79725.
(e) (1) Within 60 days of awarding a grant under this section, the board shall provide a project proponent that requests and demonstrates a need for an advanced payment with advanced payment of five hundred thousand dollars ($500,000) or 50 percent of the grant award, whichever is less, for projects in which the project proponent is a nonprofit organization or a disadvantaged community, or the project benefits a disadvantaged community. provided the project satisfies all of the following criteria:
(A) The project proponent is a nonprofit organization or a disadvantaged community, or the project benefits a disadvantaged community.
(B) The project proponent has demonstrated to the board’s satisfaction a need for an advanced payment.
(C) (i) The project proponent has demonstrated to the board’s satisfaction that the project proponent is sufficiently qualified to manage the project and the finances of the project.
(ii) If the board is not satisfied that the project proponent is sufficiently qualified to manage the project and the finances of the project, the board may impose additional requirements on the project proponent, including requiring additional partners to manage the project, the financing, or both.
(2) Funds advanced pursuant to paragraph (1) shall be handled as follows:
(A) The recipient shall place the funds in a noninterest-bearing account until expended.
(B) The funds shall be spent within six months of the date of receipt, unless the board waives this requirement.
(C) The recipient shall, on a quarterly basis, provide an accountability report to the board regarding the expenditure and use of any advanced grant funds that provides, at a minimum, the following information:
(i) An itemization as to how advanced payment funds provided under this section have been expended.
(ii) A project itemization as to how any remaining advanced payment funds provided under this section will be expended over the period specified in subparagraph (B).
(iii) Whether the funds are placed in a noninterest-bearing account, and if so, the date that occurred and the dates of withdrawals of funds from that account, if applicable.
(iv) An evaluation of whether the project is on schedule or not. If the project is behind schedule, the report shall identify what has caused the delay and actions taken or being taken to remedy the delay.
(D) If funds are not expended, the unused portion of the grant shall be returned to the board within 60 days after project completion or the end of the grant performance period, whichever is earlier.
(E) The board may adopt additional requirements for the recipient regarding the use of the advanced payment to ensure that the funds are used properly. properly, including provisions for random audits and other verifications of the authorized use of funds.
(3) If the project proponent rejects additional requirements imposed by the board pursuant to clause (ii) of subparagraph (C) of paragraph (1) or if the board determines that no additional requirements it may impose could make the project proponent sufficiently qualified to manage the project and the finances of the project, the board may reject the request.

(3)

(4) As used in this subdivision, “disadvantaged community” and “nonprofit organization” have the same meanings as defined in Section 79702.

SEC. 2.

 Section 79724.5 is added to the Water Code, to read:

79724.5.
 (a) Within 60 days of awarding a grant under subdivision (a) of Section 79724, the state board shall provide a project proponent that requests and demonstrates a need for an advanced payment with advanced payment of five hundred thousand dollars ($500,000) or 25 percent of the grant award, whichever is less. less, provided the project satisfies all of the following criteria:
(1) The project proponent is a nonprofit organization or a disadvantaged community, or the project benefits a disadvantaged community.
(2) The project proponent has demonstrated to the state board’s satisfaction a need for an advanced payment.
(3) (A) The project proponent has demonstrated to the state board’s satisfaction that the project proponent is sufficiently qualified to manage the project and the finances of the project.
(B) If the state board is not satisfied that the project proponent is sufficiently qualified to manage the project and the finances of the project, the state board may impose additional requirements on the project proponent, including requiring additional partners to manage the project, the financing, or both.
(b) Funds advanced pursuant to subdivision (a) shall be handled as follows:
(1) The recipient shall place the funds in a noninterest-bearing account until expended.
(2) The funds shall be spent within six months of the date of receipt, unless the state board waives this requirement.
(3) The recipient shall, on a quarterly basis, provide an accountability report to the state board regarding the expenditure and use of any advanced grant funds that provides, at a minimum, the following information:
(A) An itemization as to how advanced payment funds provided under this section have been expended.
(B) A project itemization as to how any remaining advanced payment funds provided under this section will be expended over the period specified in paragraph (2).
(C) Whether the funds are placed in a noninterest-bearing account, and if so, the date that occurred and the dates of withdrawals of funds from that account, if applicable.
(D) An evaluation of whether the project is on schedule or not. If the project is behind schedule, the report shall identify what has caused the delay and actions taken or being taken to remedy the delay.
(4) If funds are not expended, the unused portion of the grant shall be returned to the state board within 60 days after project completion or the end of the grant performance period, whichever is earlier.
(5) The state board may adopt additional requirements for the recipient regarding the use of the advanced payment to ensure that the funds are used properly. properly, including provisions for random audits and other verifications of the authorized use of funds.
(c) If the project proponent rejects additional requirements imposed by the state board pursuant to subparagraph (B) of paragraph (3) of subdivision (a) or if the state board determines that no additional requirements it may impose could make the project proponent sufficiently qualified to manage the project and the finances of the project, the state board may reject the request.