BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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                                    THIRD READING


          Bill No:  AB 21
          Author:   Alejo (D), et al.
          Amended:  9/3/13 in Senate
          Vote:     21

           
           SENATE ENVIRONMENTAL QUALITY COMMITTEE  :  9-0, 6/12/13
          AYES:  Hill, Gaines, Calderon, Corbett, Fuller, Hancock,  
            Jackson, Leno, Pavley

           SENATE APPROPRIATIONS COMMITTEE  :  7-0, 8/30/13
          AYES:  De León, Walters, Gaines, Hill, Lara, Padilla, Steinberg

           ASSEMBLY FLOOR  :  77-0, 5/28/13 - See last page for vote


           SUBJECT  :    Safe Drinking Water Small Community Emergency Grant  
          Fund

          SOURCE  :     Author


           DIGEST  :    This bill creates the Safe Drinking Water Small  
          Community Emergency Grant Fund (grant fund) which would be  
          administered by the Department of Public Health (DPH) and used  
          to provide grants for emergency drinking water projects that  
          serve disadvantaged and severely disadvantaged communities.

          ANALYSIS  :    Existing law:

          1.Authorizes, pursuant to the federal Safe Drinking Water Act,  
            the federal Environmental Protection Agency to make funds  
            available to drinking water systems to finance infrastructure  
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            improvements. 

          2.Requires, pursuant to Safe Drinking Water State Revolving Fund  
            Law, DPH to implement the Safe Drinking Water State Revolving  
            Fund (SDWSRF), which provides funding to correct public water  
            system deficiencies. 

          This bill:

          1.Requires any amounts collected to be deposited in the grant  
            fund.  Provides that no more than $50,000,000 will be  
            deposited into the grant fund.

          2.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. 

          3.Authorizes the monies in the grant fund to be for grants for  
            emergency drinking water projects that meet the requirements  
            stated in the Emergency Clean Water Grant Fund provisions and  
            that serve disadvantaged and severely disadvantaged  
            communities. 

          4.Requires, for the purpose of approving grants, DPH to give  
            priority to projects that serve severely disadvantaged  
            communities. 

          5.Requires that charge in lieu of interest funds be expended in  
            a manner consistent with federal Environmental Protection  
            Agency Drinking Water State Revolving Fund grant regulations. 

           Background
           
          The California Safe Drinking Water Act requires DPH to regulate  
          drinking water and the SDWSRF, which provides funding to correct  
          public water system deficiencies.  The SDWSRF provides funding  
          for projects that correct public water system deficiencies,  
          including financial assistance for the capital costs associated  
          with water quality infrastructure projects, but not ongoing  
          operations and maintenance costs.  The majority of SDSRF funds  
          are allocated to construction projects, though funding is also  
          available for planning and feasibility studies for certain  
          eligible applicants. Financial assistance is given in several  

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          forms including low-interest loans, zero-interest loans, debt  
          refinancing, principal forgiveness, and grants.

          Under the California Porter-Cologne Water Quality Control Act,  
          the SWRCB also administers the Clean Water State Revolving Fund  
          (CWSRF) in order to fund grants to small communities for  
          wastewater management.  Until January 1, 2014, the SWRCB is  
          authorized to assess an annual surcharge on loans issued from  
          the CWSRF in lieu of interest on the loans.  This surcharge is  
          then deposited into the Small Communities Grant Fund (SCG Fund)  
          for the purpose of funding the construction of wastewater  
          collection, treatment, or disposal projects for small  
          communities.  No more than $50 million in surcharges may be  
          collected.  Projects that serve severely disadvantaged  
          communities have priority for grants from the SCG Fund.  The  
          surcharge may be authorized at any time during the loan  
          repayment schedule, but once the surcharge is applied, it must  
          remain unchanged unless the SWRCB is ceasing collection of the  
          surcharge.

           FISCAL EFFECT  :    Appropriation:  Yes   Fiscal Com.:  Yes    
          Local:  No

          According to the Senate Appropriations Committee:

           Unknown on-going costs, possibly in hundreds of thousands to  
            millions of dollars, in the form of reduced revenues to the  
            SDWSRF (special) due to forgone interest payments.

           One-time costs of approximately $100,000 from the SDWSRF for  
            the development of regulations guiding the allocation of the  
            fund.
           Unknown, but likely minimal, increases administrative costs to  
            SDWSRF for the administration of the fund. 

           SUPPORT  :   (Verified  8/30/13)

          California Latino Water Coalition
          California Rural Legal Assistance Foundation
          California State Grange
          California Water Association
          City of Salinas
          Clean Water Action
          Community Water Center

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          Environmental Justice Coalition for Water
          Environmental Working Group
          Monterey County Board of Supervisors
          Pesticide Action Network
          PolicyLink
          Sierra Club California
          Winnemem Wintu Tribe


           ARGUMENTS IN SUPPORT  :    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 in the waiting list for 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. 

          Supporters continue that the Emergency Clean Water Grant Fund  
          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. 


           ASSEMBLY FLOOR  :  77-0, 5/28/13
          AYES:  Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,  
            Blumenfield, Bocanegra, Bonilla, Bonta, Bradford, Brown,  
            Buchanan, Ian Calderon, Campos, Chau, Chávez, Chesbro, Conway,  
            Cooley, Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox,  
            Frazier, Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon,  
            Gorell, Gray, Hagman, Hall, Harkey, Roger Hernández, Jones,  
            Jones-Sawyer, Levine, Linder, Logue, Lowenthal, Maienschein,  
            Mansoor, Medina, Melendez, Mitchell, Morrell, Mullin,  
            Muratsuchi, Nazarian, Nestande, Olsen, Pan, Patterson, Perea,  
            V. Manuel Pérez, Quirk, Quirk-Silva, Rendon, Salas, Skinner,  
            Stone, Ting, Wagner, Waldron, Weber, Wieckowski, Wilk,  
            Williams, Yamada, John A. Pérez

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          NO VOTE RECORDED:  Grove, Holden, Vacancy


          RM:nl  8/31/13   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

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