BILL NUMBER: AB 983 AMENDED
BILL TEXT
AMENDED IN SENATE SEPTEMBER 2, 2011
AMENDED IN SENATE JULY 1, 2011
AMENDED IN ASSEMBLY MAY 5, 2011
AMENDED IN ASSEMBLY MARCH 31, 2011
INTRODUCED BY Assembly Member Perea
(Coauthors: Assembly Members Eng, Fong, Mendoza, V. Manuel Pérez,
and Solorio)
(Coauthor: Senator Wolk)
FEBRUARY 18, 2011
An act to amend Sections 116760.20, 116760.40, 116760.70,
116761.24, and 116761.50 of 116760.70, and 116761.23
of, and to add Section 116760.39 to, the Health and Safety
Code, relating to public health, and making an appropriation
therefor.
LEGISLATIVE COUNSEL'S DIGEST
AB 983, as amended, Perea. Safe Drinking Water State Revolving
Fund.
Existing law, the California Safe Drinking Water Act, requires the
State Department of Public Health to administer provisions relating
to the regulation of drinking water to protect public health,
including, but not limited to, conducting research, studies, and
demonstration programs relating to the provision of a dependable,
safe supply of drinking water, enforcing the federal Safe Drinking
Water Act, adopting and enforcing regulations, and conducting studies
and investigations to assess the quality of water in domestic water
supplies.
Existing law establishes the Safe Drinking Water State Revolving
Fund, which is continuously appropriated to the department for the
provision of grants and revolving fund loans to provide for the
design and construction of projects for public water systems that
will enable suppliers to meet safe drinking water standards. Existing
law requires the department to establish criteria for projects to be
eligible for the grant and loan program.
This bill would authorize the department to take specified actions
to improve access to financial assistance for projects
serving small community water systems small community
water systems and not-for-profit nontransient noncommunity water
systems serving severely disadvantaged communities , as
defined. The bill would require the department to give priority in
funding to projects that include consolidation with a small community
water system and that will enable that system to meet drinking water
standards, without regard to the project proponent, as provided.
Under existing law, not less than 15% of the fund is required to
be expended for providing loans and grants to eligible projects by
public water systems that regularly serve fewer than 10,000 persons.
This bill would authorize the department to fund up to 100% of the
project costs for small community water systems serving severely
disadvantaged communities, as defined, in the form of principal
forgiveness or grant, if needed to ensure affordable water rates.
Existing law authorizes the department to enter into contracts
with applicants for loans, the term of which may not exceed the
useful life of the project or 20 years, whichever is shorter.
This bill would authorize the department to agree to extend the
term of a loan to a disadvantaged community, as defined, beyond 20
years, but not beyond the life of the project or 30 years, whichever
is less, in order to improve affordability.
This bill would require small community water systems or
nontransient noncommunity water systems, owned by a public agency or
private not-for-profit water company, serving severely disadvantaged
communities to be eligible to receive up to 100% of
eligible project costs in the form of a grant, to the extent the
system cannot afford a loan. By authorizing additional uses for
moneys in a continuously appropriated fund, this bill would make an
appropriation.
This bill would incorporate additional changes in Section
116761.23 of the Health and Safety Code proposed by AB 938, which
would become operative only if AB 938 and this bill are both
chaptered and become effective on or before January 1, 2012, and this
bill is chaptered last.
Vote: majority. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 116760.20 of the Health and Safety Code is
amended to read:
116760.20. Unless the context otherwise requires, the following
definitions govern the construction of this chapter:
(a) "Cost-effective project" means a project that provides
long-term access to safe drinking water at a reasonable cost, which
shall be calculated based upon the capital costs and long-term
viability of the project as well as the affordability of continuing
operation and maintenance charges to ratepayers.
(a) "Acceptable result" means the project that, when constructed,
solves the problem for which the project was placed on the project
priority list established pursuant to Section 116760.70, ensures the
owner and operator of the improved or restructured public water
system shall have long-term technical, managerial, and financial
capacity to operate and maintain the public water system in
compliance with state and federal safe drinking water standards, can
provide a dependable source of safe drinking water long-term, and is
both short-term and long-term affordable, as determined by applicable
regulations adopted by the department.
(b) "Cost-effective project" means a project that achieves an
acceptable result at the most reasonable cost.
(b)
(c) "Department" means the State Department of Public
Health.
(c)
(d) "Disadvantaged community" means a community that
meets the definition provided in Section 79505.5 of the
Water Code 116275 .
(d)
(e) "Federal Safe Drinking Water Act" or "federal act"
means the federal Safe Drinking Water Act (42 U.S.C. Sec. 300f et
seq.) and acts amendatory thereof or supplemental thereto.
(e)
(f) "Fund" means the Safe Drinking Water State
Revolving Fund created by Section 116760.30.
(f)
(g) "Funding" means a loan or grant, or both, awarded
under this chapter.
(g)
(h) "Matching funds" means state money that equals that
percentage of federal contributions required by the federal act to
be matched with state funds.
(h)
(i) "Project" means proposed facilities for the
construction, improvement, or rehabilitation of a public water
system, and may include all items set forth in Section 116761 as
necessary to carry out the purposes of this chapter. It also may
include refinancing loans, annexation or consolidation of water
systems, source water assessments, source water protection, and other
activities specified under the federal act.
(i)
(j) "Public agency" means any city, county, city and
county, whether general law or chartered, district, joint powers
authority, or other political subdivision of the state, that owns or
operates a public water system.
(j)
(k) "Public water system" or "public water supply
system" means a system for the provision to the public of water for
human consumption, as defined in Chapter 4 (commencing with Section
116270), as it may be amended from time to time.
(k)
(l) "Reasonable amount of growth" means an increase in
growth not to exceed 10 percent of the design capacity needed, based
on peak flow, to serve the water and fire flow demand in existence at
the time plans and specifications for the project are approved by
the department, over the 20-year useful life of a project. For
projects other than the construction of treatment plants including,
but not limited to, storage facilities, pipes, pumps, and similar
equipment, where the 10-percent allowable growth cannot be adhered to
due to the sizes of equipment or materials available, the project
shall be limited to the next available larger size.
(l)
(m) "Safe drinking water standards" means those
standards established pursuant to Chapter 4 (commencing with Section
116270), as they may now or hereafter be amended.
(m) "Small community water system" has the same meaning as set
forth in subdivision (aa) of Section 116275.
(n) "Severely disadvantaged community" means a community with a
median household income of less than 60 percent of the statewide
average.
(n)
(o) "Supplier" means any person, partnership,
corporation, association, public agency, or other entity that owns or
operates a public water system.
SEC. 2. Section 116760.40 of the Health and
Safety Code is amended to read:
116760.40. The department may undertake any of the following
actions to implement the Safe Drinking Water State Revolving Fund:
(a) Enter into agreements with the federal government for federal
contributions to the fund.
(b) Accept federal contributions to the fund.
(c) Use moneys in the fund for the purposes permitted by the
federal act.
(d) Provide for the deposit of matching funds and other available
and necessary moneys into the fund.
(e) Make requests, on behalf of the state, for deposit into the
fund of available federal moneys under the federal act.
(f) Determine, on behalf of the state, that public water systems
that receive financial assistance from the fund will meet the
requirements of, and otherwise be treated as required by, the federal
act.
(g) Provide for appropriate audit, accounting, and fiscal
management services, plans, and reports relative to the fund.
(h) Take additional incidental action as may be appropriate for
adequate administration and operation of the fund.
(i) Enter into an agreement with, and accept matching funds from,
a public water system. A public water system that seeks to enter into
an agreement with the department and provide matching funds pursuant
to this subdivision shall provide to the department evidence of the
availability of those funds in the form of a written resolution, or
equivalent document, from the public water system before it requests
a preliminary loan commitment.
(j) Charge public water systems that elect to provide matching
funds a fee to cover the actual cost of obtaining the federal funds
pursuant to Section 1452(e) of the federal act (42 U.S.C. Sec.
300j-12) and to process the loan application. The fee shall be waived
by the department if sufficient funds to cover those costs are
available from other sources.
(k) Use money returned to the fund under Section 116761.85 and any
other source of matching funds, if not prohibited by statute, as
matching funds for the federal administrative allowance under Section
1452(g) of the federal act (42 U.S.C. Sec. 300j-12).
( l ) Establish separate accounts or
subaccounts, as required or allowed in the federal act and related
guidance, for funds to be used for the administration of the fund and
other purposes. The department shall establish the following
accounts within the fund, including, but not limited to:
(1) A fund administration account for state expenses related to
administration of the fund pursuant to Section 1452(g)(2) of the
federal act.
(2) A water system reliability account for department expenses
pursuant to Section 1452(g)(2)(A), (B), (C), or (D) of the federal
act.
(3) A source protection account for state expenses pursuant to
Section 1452(k) of the federal act.
(4) A small system technical assistance account for department
expenses pursuant to Section 1452(g)(2) of the federal act.
(5) A state revolving loan account pursuant to Section 1452(a)(2)
of the federal act.
(6) A wellhead protection account established pursuant to Section
1452(a)(2) of the federal act.
(m) Deposit federal funds for administration and other purposes
into separate accounts or subaccounts, as allowed by the federal act.
(n) Determine, on behalf of the state, whether sufficient progress
is being made toward compliance with the enforceable deadlines,
goals, and requirements of the federal act and the California Safe
Drinking Water Act, Chapter 4 (commencing with Section 116270).
(o) Improve access to financial assistance for projects serving
small community water systems by doing both of the following:
(1) Establishing a payment process pursuant to which the recipient
of financial assistance would receive funds within 30 days of the
date on which the department receives a project payment request,
unless the department, within that 30-day period, determines that the
project payment would not be in accordance with the terms of the
program guidelines.
(2) Utilizing wire transfers or other appropriate payment
procedures to expedite project payments.
SEC. 2. Section 116760. 39 is added to
the Health and Safety Code , to read:
116760.39. In addition to the actions described in Section
116760.40, the department may, to implement the Safe Drinking Water
State Revolving Fund, improve access to financial assistance for
small community water systems and not-for-profit nontransient
noncommunity water systems serving severely disadvantaged communities
by doing both of the following:
(a) Working to establish a payment process pursuant to which the
recipient of financial assistance would receive funds within 30 days
of the date on which the department receives a complete project
payment request, unless the department, within that 30-day period,
determines that the project payment would not be in accordance with
the terms of the program guidelines.
(b) Investigating the use of wire transfers or other appropriate
payment procedures to expedite project payments.
SEC. 3. Section 116760.70 of the Health and Safety Code is amended
to read:
116760.70. (a) The department, after public notice and hearing,
shall, from time to time, establish a priority list of proposed
projects to be considered for funding under this chapter. In doing
so, the department shall determine if improvement or rehabilitation
of the public water system is necessary to provide pure, wholesome,
and potable water in adequate quantity and at sufficient pressure for
health, cleanliness, and other domestic purposes. The department
shall establish criteria for placing public water systems on the
priority list for funding that shall include criteria for priority
list categories. Priority shall be given to projects that meet all of
the following requirements:
(1) Address the most serious risk to human health.
(2) Are necessary to ensure compliance with requirements of
Chapter 4 (commencing with Section 116270) including requirements for
filtration.
(3) Assist systems most in need on a per household basis according
to affordability criteria.
(b) The department may, in establishing a new priority list, merge
those proposed projects from the existing priority list into the new
priority list.
(c) In establishing the priority list, the department shall
consider the system's implementation of an ongoing source water
protection program or wellhead protection program.
(d) In establishing the priority list categories and the priority
for funding projects, the department shall carry out the intent of
the Legislature pursuant to subdivisions (e) and (f)
(e) to (h), inclusive, of Section 116760.10 and
do all of the following:
(1) Give priority to upgrade an existing system to meet drinking
water standards.
(2) After giving priority pursuant to paragraph (1), consider
whether the applicant has sought other funds when providing funding
for a project to upgrade an existing system and to accommodate a
reasonable amount of growth.
(3) Give priority to projects that include consolidation with a
small community water system and that will enable that system to meet
drinking water standards without regard to the project proponent,
provided that the proponent is an eligible entity as defined in this
chapter.
(e) Consideration of an applicant's eligibility for funding shall
initially be based on the priority list in effect at the time the
application is received and the project's ability to proceed. If a
new priority list is established during the time the application is
under consideration, but before the applicant receives a letter of
commitment, the department may consider the applicant's eligibility
for funding based on either the old or new priority list.
(f) The department may change the ranking of a specific project on
the priority lists at any time following the publication of the list
if information, that was not available at the time of the
publication of the list, is provided that justifies the change in the
ranking of the project.
(g) The department shall provide one or more public hearings on
the Intended Use Plan, the priority list, and the criteria for
placing public water systems on the priority list. The department
shall provide notice of the Intended Use Plan, criteria, and priority
list not less than 30 days before the public hearing. The Intended
Use Plan, criteria, and priority list shall not be subject to the
requirements of Chapter 3.5 (commencing with Section 11340) of Part 1
of Division 3 of Title 2 of the Government Code. The department
shall conduct duly noticed public hearings and workshops around the
state to encourage the involvement and active input of public and
affected parties, including, but not limited to, water utilities,
local government, public interest, environmental, and consumer
groups, public health groups, land conservation interests, health
care providers, groups representing vulnerable populations, groups
representing business and agricultural interests, and members of the
general public, in the development and periodic updating of the
Intended Use Plan and the priority list.
(h) The requirements of this section do not constitute an
adjudicatory proceeding as defined in Section 11405.20 of the
Government Code and Section 11410.10 of the Government Code is not
applicable.
SEC. 4. Section 116761.24 of the Health and
Safety Code is amended to read:
116761.24. (a) Not less than 15 percent of the total amount
deposited in the fund shall be expended for providing loans and
grants to public water systems that regularly serve fewer than 10,000
persons to the extent those funds can be obligated for eligible
projects.
(b) Small community water systems serving severely disadvantaged
communities, as defined in Section 75005 of the Public Resources
Code, shall be eligible to receive up to 100 percent of their project
costs in the form of principal forgiveness or grant, if needed to
ensure affordable water rates.
SEC. 5. Section 116761.50 of the Health and
Safety Code is amended to read:
116761.50. (a) The department may enter into contracts with
applicants for grants or loans for the purposes set forth in this
chapter. Any contract entered into pursuant to this section shall
include only terms and conditions consistent with this chapter and
the regulations established under this chapter.
(b) The contract shall include all of the following terms and
conditions that are applicable:
(1) An estimate of the reasonable cost of the project or study.
(2) An agreement by the department to loan or grant, or loan and
grant, the applicant an amount that equals the portion of the costs
found by the department to be eligible for a state loan or grant. The
agreement may provide for disbursement of funds during the progress
of the study or construction, or following completion of the study or
construction, as agreed by the parties.
(3) An agreement by the applicant to proceed expeditiously with
the project or study.
(4) An agreement by the applicant to commence operations of the
project upon completion of the project, and to properly operate and
maintain the project in accordance with the applicable provisions of
law.
(5) In the case of a loan, an agreement by the applicant to repay
the state, over a period not to exceed the useful life of the project
or 20 years, whichever is shorter, except as provided in the federal
act, or in the case of a study, over a period not to exceed five
years, all of the following:
(A) The amount of the loan.
(B) The administrative fee specified in subdivision (a) of Section
116761.70.
(C) Interest on the principal, which is the amount of the loan
plus the administrative fee.
(6) In the case of a grant, an agreement by the public agency or
private not-for-profit water company to operate and maintain the
water system for a period of 20 years, unless otherwise authorized by
the department.
(c) The contract may include any of the following terms and
conditions:
(1) An agreement by the supplier to adopt a fee structure that
provides for the proper maintenance and operations of the project and
includes a sinking fund for repair and replacement of the facilities
in cases where appropriate. The fee structure shall also provide an
acceptable dedicated source of revenue for the repayment of the
amount of the loan, and the payment of administrative fees and
interest.
(2) If the entire project is not funded pursuant to this chapter,
the department may include a provision requiring the applicant to
share the cost of the project or obtain funding from other sources.
(d) The department may require applicants to provide security for
loan contracts.
(e) The department may agree to extend the term of the loan beyond
20 years, but shall not extend the term beyond the life of the
project or 30 years, whichever is less, for disadvantaged communities
in order to improve the affordability of the project.
SEC. 4. Section 116761.23 of the Health
and Safety Code is amended to read:
116761.23. (a) The maximum amount of a planning grant permitted
under this chapter for each participating public water system's share
of the costs of the planning, engineering studies, environmental
documentation, and design of a single project shall be no more than
five hundred thousand dollars ($500,000).
(b) Unless the department approves an increase pursuant to this
subdivision, the maximum amount of a construction grant award
authorized under this chapter to each participating public water
system for its share of the cost of the construction of a single
project shall be no more than three million dollars ($3,000,000). The
department may approve an increase in the maximum amount for a
construction grant award authorized under this chapter so that the
maximum amount of the construction grant award does not exceed ten
million dollars ($10,000,000) only if the department makes all of the
following findings:
(1) A public water system that serves a disadvantaged community
has a defined project need that exceeds the maximum grant amount of
three million dollars ($3,000,000).
(2) The defined project has been bypassed in at least one funding
cycle due to a lack of funds.
(3) The defined project is eligible for funding pursuant to the
program regulations.
(4) The defined project represents the highest public health risk
among unfunded projects, as determined by the department according to
its standard criteria.
(c) Total funding under this article for planning, engineering
studies, project design, and construction costs of a single project,
whether in the form of a loan or a grant, or both, shall be
determined by an assessment of affordability using criteria
established by the department.
(d) Subject to all other limitations of this chapter, a small
community water system or nontransient noncommunity water system,
owned by a public agency or private not-for-profit water company,
serving severely disadvantaged communities shall be eligible to
receive up to 100 percent of eligible project costs in the form of a
grant, to the extent the system cannot afford a loan as determined by
the department pursuant to Section 116761.20.
SEC. 4.5. Section 116761.23 of the
Health and Safety Code is amended to read:
116761.23. (a) The maximum amount of a planning grant permitted
under this chapter for each participating public water system's share
of the costs of the planning, engineering studies, environmental
documentation, and design of a single project shall be no more than
five hundred thousand dollars ($500,000).
(b) Unless the department approves an increase pursuant to this
subdivision, the maximum amount of a construction grant award
authorized under this chapter to each participating public water
system for its share of the cost of the construction of a single
project shall be no more than three million dollars ($3,000,000). The
department may approve an increase in the maximum amount for a
construction grant award authorized under this chapter so that the
maximum amount of the construction grant award does not exceed ten
million dollars ($10,000,000) only if the department makes all of the
following findings:
(1) A public water system that serves a disadvantaged community
has a defined project need that exceeds the maximum grant amount of
three million dollars ($3,000,000).
(2) The defined project has been bypassed in at least one funding
cycle due to a lack of funds.
(3) The defined project is eligible for funding pursuant to the
program regulations.
(4) The defined project represents the highest public health risk
among unfunded projects, as determined by the department according to
its standard criteria.
(c) Total funding under this article for planning, engineering
studies, environmental documentation, project design, and
construction costs of a single project, whether in the form of a loan
or a grant, or both, shall be determined by an assessment of
affordability using criteria established by the department.
(d) Subject to all other limitations of this chapter, a small
community water system or nontransient noncommunity water system,
owned by a public agency or private not-for-profit water company,
serving severely disadvantaged communities shall be eligible to
receive up to 100 percent of eligible project costs in the form of a
grant, to the extent the system cannot afford a loan as determined by
the department pursuant to Section 116761.20.
SEC. 5. Section 4.5 of this bill incorporates
amendments to Section 116761.23 of the Health and Safety Code
proposed by both this bill and Assembly Bill 938. It shall only
become operative if (1) both bills are enacted and become effective
on or before January 1, 2012, (2) each bill amends Section 116761.23
of the Health and Safety Code, and (3) this bill is enacted after
Assembly Bill 938, in which case Section 4 of this bill shall not
become operative.