BILL ANALYSIS Senate Appropriations Committee Fiscal Summary Senator Christine Kehoe, Chair 2515 (V. M. Perez) Hearing Date: 08/02/2010 Amended: 08/02/2010 Consultant: Brendan McCarthy Policy Vote: EQ 7-0 AB 2515 (V. M. Perez), Page 2 _________________________________________________________________ ____ BILL SUMMARY: AB 2515, an urgency measure, requires the Department of Public Health to adopt emergency regulations governing the use of point-of-entry and point-of-use water treatment systems. The bill also authorizes the Department to award grants for the installation of point-of-entry and point-of-use water treatment systems. _________________________________________________________________ ____ Fiscal Impact (in thousands) Major Provisions 2010-11 2011-12 2012-13 Fund Regulation development and Absorbable within existing resources General / grant making Federal Cost pressure for grants Unknown Federal _________________________________________________________________ ____ STAFF COMMENTS: This bill meets the criteria for referral to the Suspense File. Under current law, the Department of Public Health regulates drinking water and also provides funding to local governments for projects to protect and provide safe drinking water. The Safe Drinking Water State Revolving Fund (Revolving Fund) is continuously appropriated to the Department to provide grants and loans for the design and construction of public water system projects. The Revolving Fund is supported by federal funds and repayment of previous loans. AB 1540 (Committee on Health, Chapter 298, Statutes of 2009) requires the Department of Public Health to develop guidelines for the use of point-of-entry and point-of-use water treatment systems. (These systems can be used to treat drinking water to required standards when a centralized water treatment system is unavailable.) The use of these systems is limited to certain small communities that have already applied for funding to correct violations of water quality requirements. The Department indicates that these regulations are under development, but will not be finalized until 2012. AB 2515 requires the Department to adopt emergency regulations AB 2515 (V. M. Perez), Page 2 for the use of point-of-entry and point-of-use water treatment systems. The emergency regulations would not be subject to the Administrative Procedures Act (beginning at Section 11340 of the Government Code). The emergency regulations would only remain in effect until January 1, 2014 or the effective date of the regular regulations under development. AB 2515 authorizes the Department to award grants for point-of-entry and point-of-use treatment systems, provided that the water system serves a severely disadvantaged community and that the grant meets other existing requirements. The bill specifies that any systems purchased with grant funds that have remaining useful life at the completion of the project be provided for use in other projects. The provisions of the bill sunset on January 1, 2014. This bill is an urgency measure. Because the bill authorizes an additional use of a continuously appropriated fund, the bill makes an appropriation. The Department indicates that the development of emergency regulations can be accommodated within existing resources dedicated to the development of the permanent regulations. In addition, the Department indicates that any costs for grant making can be accommodated within the existing grant program. Because the bill authorizes grants for additional water system projects, the bill will put cost pressures on existing funds. The amount of the cost pressure will depend on the demand for point-of-entry and point-of-use waster treatment systems and is unknown. AB 2669 (V. M. Perez) adds environmental documentation to the list of project costs that the Department of Public Health considers when determining affordability in order to award grants or loans for drinking water systems. That bill has been reported to the Second Reading File, pursuant to Senate Rule 28.8.