BILL ANALYSIS Ó
AB 21
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator Jerry Hill, Chair
2013-2014 Regular Session
BILL NO: AB 21
AUTHOR: Alejo
AMENDED: February 14, 2013
FISCAL: Yes HEARING DATE: June 12, 2013
URGENCY: No CONSULTANT: Rachel Machi
Wagoner
SUBJECT : SAFE DRINKING WATER SMALL COMMUNITY EMERGENCY
GRANT FUND
SUMMARY :
Existing law,
1)Authorizes, pursuant to the federal Safe Drinking Water Act
(SDWA), the US EPA to make funds available to drinking water
systems to finance infrastructure improvements.
2)Requires, pursuant to Safe Drinking Water State Revolving
Fund (SDWSRF) Law, DPH to implement SDWSRF, which provides
funding to correct public water system deficiencies (Health
and Safety Code (HSC) Section 116760 et seq.).
This bill creates the Safe Drinking Water Small Community
Emergency Grant Fund and authorizes the Department of Public
Health (DPH) to assess an annual charge to be deposited in
this fund in lieu of interest that would otherwise be charged
on SDWSRF loans. Specifically, this bill :
1)Authorizes, for any loans made for projects meeting the
eligibility criteria of SDWSRF Law, DPH to assess an annual
charge to be deposited in the grant fund in lieu of interest
that would otherwise be charged.
2)Authorizes the monies in the grant fund to be for grants for
emergency drinking water projects that meet the requirements
stated in Emergency Clean Water Grant Fund (ECWGF)
provisions and that serve disadvantaged and severely
disadvantaged communities.
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3)Requires, for the purpose of approving grants, DPH to give
equal priority to projects that serve severely disadvantaged
communities.
4)Requires that charge in lieu of interest funds be expended
in a manner consistent with US EPA Drinking Water State
Revolving Fund (DWSRF) grant regulations.
COMMENTS :
1)Purpose of the bill : According to supporters, communities
with a single drinking water source are the most vulnerable
to interruption of their water supply. When that community
is very small and low-income, that vulnerability is
increased, as they lack the economies of scale and financial
resources to address their problem. While the state does
provide technical assistance and grants for capital
projects, it is very difficult for these communities to
access the funding. Some water systems have been on the
waiting list for SDWSRF since its inception in 1998; each
year they pass up the opportunity for funding because of the
onerous requirements attached to the funding.
Supporters contend that ECWGF was created within DPH to
provide immediate relief to water systems with a disruption
in their potable water supply, including exemptions from
contracting and procurement requirements as needed. While
DPH received $10 million in funding from Proposition 84 in
2006 to fund its emergency drinking water program, this
resource is not renewable, and DPH has only expended or
allocated about half of the funds.
2) Actions for addressing groundwater and drinking water
contamination : In June 2012, Governor Jerry Brown convened
a Drinking Water Stakeholder Group. The Drinking Water
Stakeholder Group, comprised of representatives from, among
others, California State and local agencies, the
agricultural community, the environmental justice
community, academia, and other water related entities,
submitted its "Final Report to the Governor's Office," on
August 20, 2012.
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On November 9, 2012, the Stakeholder Group submitted
"Recommendations for Amendments to the 2013 SDWSRF Intended
Use Plan (IUP)," which are intended to ensure that DPH's
SDWSRF IUP will most effectively implement the goals of the
Stakeholder Group. Among the recommendations was to,
"Consider establishing a fee in lieu of interest assessed
on a portion of the repayment stream to provide continuous
funding for eligible (capital) projects in the emergency
fund."
This bill is intended to expedite SDWSRF funding disbursal
for drinking water solutions for disadvantaged communities,
and is based on the above recommendations of the Drinking
Water Stakeholder Group.
3) Fee in lieu provisions : Charging a fee in lieu of
collecting interest on loans disbursed from the revolving
funds is not a new concept in California. AB 2356
(Arambula), Chapter 609, Statutes of 2008, created the
Clean Water State Revolving Fund (CWSRF) Small Community
Grant (SCG) Fund, which authorized SWRCB to assess an
annual charge on existing CWSRF financing agreements for
deposit into SCG Fund. The annual charge is in lieu of
interest that would otherwise be charged in association
with a CWSRF financing agreement.
Charging a fee in lieu of interest is an alternative means
of capitalizing on revolving fund loans. This funding
mechanism, since it falls outside of the requirements
associated with the collection of interest, may enable fund
disbursement to bypass some of the oft onerous disbursement
and grantee qualification requirements of the revolving
funds. Revolving fund moneys collected from loan
recipients, whether in the form of interest or a fee,
likely do, however, have to follow the general funding
criteria of each fund.
This bill intends to fund those projects that meet both the
state's drinking water emergency fund criteria and DWSRF
funding requirements. Allowable expenditures under the
emergency fund criteria that would also likely be allowable
under federal DWSRF requirements include:
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a) Improvements of the existing water
supply system;
b) Hookups with adjacent water systems;
and,
c) Design, purchase and installation of
water treatment technologies.
4) Double Referral to Senate Health Committee . If this measure
is approved by this committee, the do pass motion must include
the action to re-refer the bill to the Senate Health Committee.
SOURCE : Author
SUPPORT : California Latino Water Coalition
California Rural Legal Assistance Foundation
California State Grange
California Water Association
City of Salinas
Clean Water Action
Community Water Center
Environmental Justice Coalition for Water
Environmental Working Group
Monterey County Board of Supervisors
Pesticide Action Network
PolicyLink
Sierra Club California
Winnemem Wintu Tribe
OPPOSITION: None on file