BILL NUMBER: SBX3 27 INTRODUCED
BILL TEXT
INTRODUCED BY Senator Negrete McLeod
(Coauthors: Assembly Members Carter, Cook, Huber, V. Manuel Perez,
Portantino, and Torres)
MARCH 16, 2009
An act to add Section 116760.45 to the Health and Safety Code, and
to amend Sections 10631.5, 13476, and 13480 of the Water Code,
relating to drinking water, and making an appropriation, therefor.
LEGISLATIVE COUNSEL'S DIGEST
SB 27, as introduced, Negrete McLeod. Drinking water: federal
stimulus funding.
Existing law establishes the Safe Drinking Water State Revolving
Fund in the State Treasury to be administered by the State Department
of Public Health. Under existing law, the fund is continuously
appropriated for the purpose of providing grants or revolving fund
loans for the design and construction of projects for public water
systems that will enable suppliers to meet safe drinking water
standards.
This bill would allow the department to expend federal moneys in
the fund that are received from the American Recovery and
Reinvestment Act of 2009 in accordance with the guidelines of that
act. The bill would provide that the maximum amount of a grant is
$10,000,000 per project.
Because this bill would provide for the expenditure of moneys from
a continuously appropriated fund it would constitute an
appropriation.
Existing law requires every urban water supplier to prepare and
adopt an urban water management plan, in accordance with specified
requirements, for submission to the Department of Water Resources and
other entities.
Existing law creates a grant and loan program for urban water
suppliers, to fund programs or projects for surface water and
groundwater storage, recycling, desalination, water conservation,
water supply reliability, and water supply augmentation, subject to
specified conditions.
This bill would exempt projects funded by the American Recovery
and Reinvestment Act of 2009 from those conditions.
Existing law establishes the continuously appropriated State Water
Pollution Control Revolving Fund, administered by the State Water
Resources Control Board, to provide financial assistance, as defined,
for various purposes allowed by the federal Clean Water Act.
This bill would include grants in the definition of financial
assistance and would allow the funds in the fund to be used for
grants. The bill would also allow for loan forgiveness to the extent
authorized by federal law.
Because the bill would expand the purposes for which continuously
appropriated funds may be used, the bill would constitute an
appropriation.
The California Constitution authorizes the Governor to declare a
fiscal emergency and to call the Legislature into special session for
that purpose. The Governor issued a proclamation declaring a fiscal
emergency, and calling a special session for this purpose, on
December 19, 2008.
This bill would state that it addresses the fiscal emergency
declared by the Governor by proclamation issued on December 19, 2008,
pursuant to the California Constitution.
Vote: 2/3. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 116760.45 is added to the Health and Safety
Code, to read:
116760.45. (a) For purposes of this section "act" means the
American Recovery and Reinvestment Act of 2009.
(b) Notwithstanding any other provision of this chapter or any
regulations adopted pursuant to this chapter, the department may
expend moneys in the fund, received from the federal government
pursuant to the American Recovery and Reinvestment Act of 2009
(Public Law 111-5), in accordance with the provisions of the act and
federal guidelines implementing the act. To the extent that any law
or regulation of the state is in conflict with the provisions and
requirements of the act, to the extent that the conflict prevents or
prohibits the effective and efficient expenditure of federal moneys
received, the provisions and requirements of the act shall prevail.
(c) The department may develop criteria necessary to implement the
act. These criteria shall not be subject to the Administrative
Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1
of Division 3 of Title 2 of the Government Code). The department
shall publish the criteria on its Internet Web site and shall provide
opportunity for public review and comment, to include at least one
public hearing conducted upon not less than 20 days notice.
(d) For the implementation of the act, the maximum amount of a
grant to an applicant under this chapter is ten million dollars
($10,000,000) per project.
SEC. 2. Section 10631.5 of the Water Code is amended to read:
10631.5. (a) (1) Beginning January 1, 2009, the terms of, and
eligibility for, a water management grant or loan made to an urban
water supplier and awarded or administered by the department, state
board, or California Bay-Delta Authority or its successor agency
shall be conditioned on the implementation of the water demand
management measures described in Section 10631, as determined by the
department pursuant to subdivision (b).
(2) For the purposes of this section, water management grants and
loans include funding for programs and projects for surface water or
groundwater storage, recycling, desalination, water conservation,
water supply reliability, and water supply augmentation.
This funding includes, but is not limited to, funds made available
pursuant to Section 75026 of the Public Resources Code.
This section does not apply to water management projects funded by
the American Recovery and Reinvestment Act of 2009 (Public Law
111-5).
(3) Notwithstanding paragraph (1), the department shall determine
that an urban water supplier is eligible for a water management grant
or loan even though the supplier is not implementing all of the
water demand management measures described in Section 10631, if the
urban water supplier has submitted to the department for approval a
schedule, financing plan, and budget, to be included in the grant or
loan agreement, for implementation of the water demand management
measures. The supplier may request grant or loan funds to implement
the water demand management measures to the extent the request is
consistent with the eligibility requirements applicable to the water
management funds.
(4) (A) Notwithstanding paragraph (1), the department shall
determine that an urban water supplier is eligible for a water
management grant or loan even though the supplier is not implementing
all of the water demand management measures described in Section
10631, if an urban water supplier submits to the department for
approval documentation demonstrating that a water demand management
measure is not locally cost effective. If the department determines
that the documentation submitted by the urban water supplier fails to
demonstrate that a water demand management measure is not locally
cost effective, the department shall notify the urban water supplier
and the agency administering the grant or loan program within 120
days that the documentation does not satisfy the requirements for an
exemption, and include in that notification a detailed statement to
support the determination.
(B) For purposes of this paragraph, "not locally cost effective"
means that the present value of the local benefits of implementing a
water demand management measure is less than the present value of the
local costs of implementing that measure.
(b) (1) The department, in consultation with the state board and
the California Bay-Delta Authority or its successor agency, and after
soliciting public comment regarding eligibility requirements, shall
develop eligibility requirements to implement the requirement of
paragraph (1) of subdivision (a). In establishing these eligibility
requirements, the department shall do both of the following:
(A) Consider the conservation measures described in the Memorandum
of Understanding Regarding Urban Water Conservation in California,
and alternative conservation approaches that provide equal or greater
water savings.
(B) Recognize the different legal, technical, fiscal, and
practical roles and responsibilities of wholesale water suppliers and
retail water suppliers.
(2) (A) For the purposes of this section, the department shall
determine whether an urban water supplier is implementing all of the
water demand management measures described in Section 10631 based on
either, or a combination, of the following:
(i) Compliance on an individual basis.
(ii) Compliance on a regional basis. Regional compliance shall
require participation in a regional conservation program consisting
of two or more urban water suppliers that achieves the level of
conservation or water efficiency savings equivalent to the amount of
conservation or savings achieved if each of the participating urban
water suppliers implemented the water demand management measures. The
urban water supplier administering the regional program shall
provide participating urban water suppliers and the department with
data to demonstrate that the regional program is consistent with this
clause. The department shall review the data to determine whether
the urban water suppliers in the regional program are meeting the
eligibility requirements.
(B) The department may require additional information for any
determination pursuant to this section.
(3) The department shall not deny eligibility to an urban water
supplier in compliance with the requirements of this section that is
participating in a multiagency water project, or an integrated
regional water management plan, developed pursuant to Section 75026
of the Public Resources Code, solely on the basis that one or more of
the agencies participating in the project or plan is not
implementing all of the water demand management measures described in
Section 10631.
(c) In establishing guidelines pursuant to the specific funding
authorization for any water management grant or loan program subject
to this section, the agency administering the grant or loan program
shall include in the guidelines the eligibility requirements
developed by the department pursuant to subdivision (b).
(d) Upon receipt of a water management grant or loan application
by an agency administering a grant and loan program subject to this
section, the agency shall request an eligibility determination from
the department with respect to the requirements of this section. The
department shall respond to the request within 60 days of the
request.
(e) The urban water supplier may submit to the department copies
of its annual reports and other relevant documents to assist the
department in determining whether the urban water supplier is
implementing or scheduling the implementation of water demand
management activities. In addition, for urban water suppliers that
are signatories to the Memorandum of Understanding Regarding Urban
Water Conservation in California and submit biennial reports to the
California Urban Water Conservation Council in accordance with the
memorandum, the department may use these reports to assist in
tracking the implementation of water demand management measures.
SEC. 3. Section 13476 of the Water Code is amended to read:
13476. Unless the context otherwise requires, the following
definitions govern the construction of this chapter:
(a) "Administration fund" means the State Water Pollution Control
Revolving Fund Administration Fund.
(b) "Board" means the State Water Resources Control Board.
(c) "Federal Clean Water Act" or "federal act" means the Clean
Water Act (33 U.S.C. Sec. 1251 et seq.) and acts amendatory thereof
or supplemental thereto.
(d) "Financial assistance" means assistance authorized under
Section 13480. Financial assistance includes loans, refinancing,
installment sales agreements, purchase of debt, and loan guarantees
for municipal revolving funds , but excludes grants
.
(e) "Fund" means the State Water Pollution Control Revolving Fund.
(f) "Grant fund" means the State Water Pollution Control Revolving
Fund Small Community Grant Fund.
(g) "Matching funds" means money that equals that percentage of
federal contributions required by the federal act to be matched with
state funds.
(h) "Municipality" has the same meaning and construction as in the
federal act and also includes all state, interstate, and
intermunicipal agencies.
(i) "Publicly owned" means owned by a municipality.
SEC. 4. Section 13480 of the Water Code is amended to read:
13480. (a) Moneys in the fund shall be used only for the
permissible purposes allowed by federal law and the
federal act, including providing financial assistance for the
following purposes:
(1) The construction of publicly owned treatment works, as defined
by Section 212 of the federal act (33 U.S.C. Sec. 1292), by any
municipality.
(2) Implementation of a management program pursuant to Section 319
of the federal act (33 U.S.C. Sec. 1329).
(3) Development and implementation of a conservation and
management plan under Section 320 of the federal act (33 U.S.C. Sec.
1330).
(4) Financial assistance, other than a loan, toward the nonfederal
share of costs of any grant-funded treatment works project, but only
if that assistance is necessary to permit the project to proceed.
(b) Consistent with expenditure for authorized purposes, moneys in
the fund may be used for the following purposes:
(1) Loans that meet all of the following requirements:
(A) Are made at or below market interest rates.
(B) Require annual payments of principal and any interest, with
repayment commencing not later than one year after completion of the
project for which the loan is made and full amortization not later
than 20 years after project completion unless otherwise
authorized by federal law. Loan forgiveness is permissible to the
extent permitted by federal law .
(C) Require the loan recipient to establish an acceptable
dedicated source of revenue for repayment of a loan.
(D) (i) Contain other terms and conditions required by the board
or the federal act or applicable rules, regulations, guidelines, and
policies. To the extent permitted by federal law, the combined
interest and loan service rate shall be set at a rate that does not
exceed 50 percent of the interest rate paid by the state on the most
recent sale of state general obligation bonds and the combined
interest and loan service rate shall be computed according to the
true interest cost method. If the combined interest and loan service
rate so determined is not a multiple of one-tenth of 1 percent, the
combined interest and loan service rate shall be set at the multiple
of one-tenth of 1 percent next above the combined interest and loan
service rate so determined. A loan from the fund used to finance
costs of facilities planning, or the preparation of plans,
specifications, or estimates for construction of publicly owned
treatment works shall comply with Section 603(e) of the federal act
(33 U.S.C. Sec. 1383(e)).
(ii) Notwithstanding clause (i), if the loan applicant is a
municipality, an applicant for a loan for the implementation of a
management program pursuant to Section 319 of the federal Clean Water
Act (33 U.S.C. Sec. 1329), or an applicant for a loan for nonpoint
source or estuary enhancement pursuant to Section 320 of the federal
Clean Water Act (33 U.S.C. Sec. 1330), and the applicant provides
matching funds, the combined interest and loan service rate on the
loan shall be 0 percent. A loan recipient that returns to the fund an
amount of money equal to 20 percent of the remaining unpaid federal
balance of an existing loan shall have the remaining unpaid loan
balance refinanced at a combined interest and loan service rate of 0
percent over the time remaining in the original loan contract.
(2) To buy or refinance the debt obligations of municipalities
within the state at or below market rates if those debt obligations
were incurred after March 7, 1985.
(3) To guarantee, or purchase insurance for, local obligations
where that action would improve credit market access or reduce
interest rates.
(4) As a source of revenue or security for the payment of
principal and interest on revenue or general obligation bonds issued
by the state, if the proceeds of the sale of those bonds will be
deposited in the fund.
(5) To establish loan guarantees for similar revolving funds
established by municipalities.
(6) To earn interest.
(7) For payment of the reasonable costs of administering the fund
and conducting activities under Title VI (commencing with Section
601) of the federal act (33 U.S.C. Sec. 1381 et seq.). Those costs
shall not exceed 4 percent of all federal contributions to the fund,
except that if permitted by federal and state law, interest
repayments into the fund and other moneys in the fund may be used to
defray additional administrative and activity costs to the extent
permitted by the federal government and approved by the Legislature
in the Budget Act.
(8) For financial assistance toward the nonfederal share of the
costs of grant-funded treatment works projects to the extent
permitted by the federal act.
(9) Grants and any other type of, or variation on the above types
of, assistance authorized by federal law.
SEC. 5. This act addresses the fiscal emergency declared by the
Governor by proclamation on December 19, 2008, pursuant to
subdivision (f) of Section 10 of Article IV of the California
Constitution.