BILL ANALYSIS Ó
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: AB 21
AUTHOR: Alejo and Perez
AMENDED: February 14, 2013
HEARING DATE: June 26, 2013
CONSULTANT: Valderrama
SUBJECT : Safe Drinking Water Small Community Emergency Grant
Fund.
SUMMARY : Authorizes the Department of Public Health to assess
an annual charge to be deposited in this fund in lieu of
interest that would otherwise be charged on Safe Drinking Water
State Revolving Fund loans. Creates the Safe Drinking Water
Small Community Emergency Grant Fund in the State Treasury and
requires moneys collected to be deposited into the fund.
Existing law:
1.Authorizes, pursuant to the federal Safe Drinking Water Act,
the United States Environmental protection agency (US EPA) to
make funds available to drinking water systems to finance
infrastructure improvements.
2.Establishes the Safe Drinking Water State Revolving Fund
(SDWSRF), which is continuously appropriated to the Department
of Public Health (DPH) 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.
3.Requires DPH to establish criteria to be met for projects to
be eligible for consideration for this funding.
This bill:
1.Authorizes DPH to assess an annual charge to be in lieu of
interest that would otherwise be charged on SDWSRF loans.
2.Creates the Safe Drinking Water Small Community Emergency
Grant Fund (Fund) in the State Treasury and requires the
moneys collected pursuant to 1) above to be deposited in this
fund.
3.Permits the charge to be applied at any time during the term
of the financing and, once applied, is required to remain
Continued---
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unchanged.
4.Prohibits the charge from increasing the financing repayment
amount, as specified.
5.Permits moneys in the Fund to be expended on grants for
projects that meet specified requirements and that serve
disadvantaged and severely disadvantaged communities.
6.Requires DPH, for purpose of approving grants, to give
priority to projects that serve severely disadvantaged
communities.
7.Requires funds expended pursuant to this bill to be expended
in a manner consistent with the federal EPA grant regulations,
as specified.
FISCAL EFFECT : According to Assembly Appropriations Committee
potential fund shift from the SDWSRF to the Safe Drinking Water
Small Community Emergency Grant Fund in the millions of dollars
and absorbable ongoing costs to DPH to administer the grant
program.
PRIOR VOTES :
Assembly Environmental Safety and Toxic Materials: 6- 0
Assembly Appropriations: 17- 0
Assembly Floor: 77- 0
Senate Environmental Quality: 9-0
COMMENTS :
1.Author's statement. 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 has SDWSRF funds to address drinking water issues,
these communities often lack the technical and financial
resources to access the funding. Some water systems have been
in the waiting list for funding from the SDWSRF since its
inception in 1998; each year they pass up the opportunity for
funding because of the onerous requirements attached to the
funding. This bill makes use of a funding tool, an in-lieu
charge assessed in place of interest on SDWSRF loans, to
provide a renewable funding source addressing drinking water
emergencies, and targets the funds raised at disadvantaged
communities. Also, by removing these funds from the corpus of
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the SDWSRF, applicants will not have to comply with the same
level of requirements that make the SDWSRF so difficult to
access. The solution in this bill was proposed by the
Governor's Drinking Water Stakeholder Group, a diverse group
of agricultural, water agency and environmental justice
representatives.
2.Prevalence of ground water contamination in disadvantaged
communities. AB 2222 (Caballero), Chapter 670, Statues of
2008, required State Water Resources Control Board (SWRCB) to
submit a report to the Legislature to identify the following:
communities that rely on contaminated groundwater as a primary
source of drinking water, the principal contaminants in
groundwater, and potential solutions and funding sources to
clean up groundwater.
The SWRCB report "Communities that Rely on Contaminated
Groundwater" identified 2,584 community Public Water Systems
(PWS) in California that rely on groundwater as their primary
source of drinking water. Out of those, 682 were reported to
rely on contaminated groundwater as a primary source of
drinking water. The SWRCB report also compared the list of 682
community PWS with a list of PWS that had received a drinking
water quality violation within the most recent compliance
cycle (2002-2010). This comparison revealed that a total of
265 community PWS that rely on contaminated groundwater and
serve a little over two million people had received at least
one drinking water quality violation within the last CDPH
compliance cycle.
According to this report, most of the community PWS with
violations of drinking water standards are located in the
Southern California Inland Empire, the east side of San
Joaquin Valley, the Salinas Valley and the Santa Maria Valley.
The findings from this report and the UC Davis study suggest
that drinking water contamination in California
disproportionally affects small, rural and low-income
communities that depend mostly on groundwater as their
drinking water source.
3.Efforts to mitigate 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
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environmental justice community, academia, and other water
related entities, submitted its "Final Report to the
Governor's Office," on August 20, 2012.
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."
According to the author, 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.
4.Fee in lieu of collecting interest. Charging a fee in lieu of
interest is an alternative means of capitalizing on revolving
fund loans. The annual charge is in lieu of interest that
would otherwise be charged in association with a SDWSRF loan.
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.
5.Double referral. This bill was heard in the Senate Committee
on Environmental Quality on June 12, 2013 and passed with a
9-0 vote.
6.Prior legislation. AB 2356 (Arambula), Chapter 609, Statues
of 2008, created the Clean Water State Revolving Fund (CWSRF)
Small Community Grant (SCG) Fund, which authorized the SWRCB
to asses an annual charge on existing CWSRF financing
agreements for deposit into the SCG fund.
7.Support. Supporters of this bill argue that the application
to apply for funding from the SDWSRF is arduous and expensive,
and the difficulty of this process creates such a barrier that
many communities with the greatest needs cannot apply.
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Supports believe this bill will improve the ability of
disadvantaged communities to access the funding necessary to
undertake critical capital projects that will enhance the
water quality of their residents.
SUPPORT AND OPPOSITION :
Support: Audubon California
California Environmental Justice Alliance
California Rural Legal Assistance Foundation
California State Grange
City of Salinas
California Latino Water Coalition
California Rural Legal Assistance Foundation
California Water Association
Clean Water Action
Community Water Center
Environmental Justice Coalition for Water
Environmental Working Group
Leadership Council for Justice and Accountability
Monterey County Board of Supervisors
Pesticide Action Network
Planning and Conservation League
PolicyLink
Sierra Club California
Unitarian Universalist Service Committee
Winnemem Wintu Tribe
Western Growers Association
Oppose: None received.
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