BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 69
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          Date of Hearing:   March 18, 2013

           ASSEMBLY COMMITTEE ON ENVIRONMENTAL SAFETY AND TOXIC MATERIALS
                                Luis A. Alejo, Chair
                   AB 69 (Perea) - As Introduced:  January 10, 2013
           
          SUBJECT  :   Groundwater:  Nitrate at Risk Area Fund.

          SUMMARY  :   Establishes the Nitrate at Risk Area Fund to fund  
          solutions for disadvantaged communities with  
          nitrate-contaminated drinking water.  Specifically,  this bill  :

          1)Establishes the Nitrate at Risk Area Fund in the State  
            Treasury, to be administered by the State Water Resources  
            Control Board (SWRCB), to, upon appropriation by the  
            Legislature, fund the development and implementation of  
            sustainable and affordable solutions for disadvantaged  
            communities with nitrate-contaminated drinking water.

          2)Requires the California Department of Public Health (CDPH) in  
            conjunction with the SWRCB, to, using existing data, designate  
            areas that are reliant on nitrate-contaminated groundwater for  
            drinking water and that do not have reliable access to safe,  
            affordable drinking water.  

           EXISTING LAW  :

          1)Pursuant to the California SDWA (Health and Safety Code (HSC)  
            § 116275 et seq.):
             a)   Requires CDPH to regulate drinking water and to enforce  
               the federal SDWA and other regulations.
             b)   Establishes a state MCL for nitrate in public water  
               systems.

          2)Pursuant to the Porter-Cologne Water Quality Control Act,  
            provides that the SWRCB and the California regional water  
            quality control boards are the principal state agencies with  
            authority over matters relating to water quality (Water Code  
            (WC) § 13000, et seq.).

          3)Requires the SWRCB to prepare and submit a report to the  
            Legislature that will improve understanding of the causes of  
            nitrate groundwater contamination, identify potential  
            remediation solutions and funding sources to recover costs  
            expended by the state to clean up or treat groundwater, and  








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            ensure the provision of safe drinking water to all communities  
            (WC § 83002.5).

          4)Requires the SWRCB to submit a report to the Legislature that  
            identifies communities in California that rely on contaminated  
            groundwater as a primary source of drinking water; the  
            principal contaminants and constituents of concern; and  
            potential solutions and funding sources to clean up or treat  
            groundwater, or provide alternative water supplies (WC §  
            10782).

          5)Pursuant to the SDWSRF Law of 1997, establishes California's  
            SDWSRF and continuously appropriates the SDWSRF to CDPH to  
            provide 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 (HSC §  
            116760 et seq.).

          6)Pursuant to the Water Security, Clean Drinking Water, Coastal  
            and Beach Protection Act of 2002 (Proposition 50), provides  
            funding for, among other things, water security for drinking  
            water programs, community treatment facilities and monitoring  
            programs, and matching funds for federal grants for public  
            water system infrastructure improvements (WC §79500, et seq.).

          7)Pursuant to the Safe Drinking Water, Water Quality and Supply,  
            Flood Control, River and Coastal Protection Act of 2006  
            (Proposition 84), provides funding for, among other things,  
            protection and reduction of contamination of groundwater and  
            small community drinking water system improvements (Public  
            Resources Code § 75001, et seq.)

          8)Authorizes the California Department of Food and Agriculture  
            to impose an assessment in an amount not to exceed one mill  
            ($0.001) per dollar of all sales of fertilizing materials to  
            provide funding for research and education regarding the use  
            and handling of fertilizing materials, including, but not  
            limited to, any environmental effects.  (Food and Agricultural  
            Code § 14611).

           FISCAL EFFECT  :   Unknown.

           COMMENTS  :   

           Need for the bill  :  AB 69 is a reintroduction of the May 01,  








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          2012 version of AB 1669 (Perea), which was very similar to the  
          April 9, 2012, version, which passed out of the Assembly ESTM  
          Committee on a 6 - 1 vote.  AB 1669 was subsequently held under  
          submission on the suspense file in the Assembly Appropriations  
          Committee.  

          According to the author, "Small, very low-income communities are  
          disproportionately impacted by the inaccessibility of safe  
          drinking water in areas with pervasive nitrate contamination.   
          In the agricultural regions of the state, most communities rely  
          on groundwater as their primary source of drinking water, and  
          that groundwater is increasingly contaminated by nitrates.  As  
          costs increase to address groundwater contamination, families in  
          many of our poorest communities are forced to pay for water  
          service and bottled water or are left without safe drinking  
          water in their homes, schools, and businesses because they can't  
          afford the costs.  Some communities pay more than 10 percent of  
          their income for drinking water alone.  In many rural areas,  
          schools must use funding intended for educational purposes to  
          purchase bottled water for children.

          Designation of those regions that are suffering from  
          nitrate-contaminated water or the effects of  
          nitrate-contaminated water (including those areas with  
          communities that have been forced to drill deeper wells to avoid  
          nitrate in the aquifer only to find their water supply  
          contaminated with arsenic at deeper groundwater levels), and the  
          creation of a fund that can channel much needed funding to these  
          regions more directly, will help streamline the process for  
          developing and funding drinking water solutions where there is a  
          critical need."

           Nitrates/ nitrites and public health  :  According to CDPH, the  
          presence of nitrates in groundwater is most often associated  
          with septic systems, confined animal feeding operations or  
          fertilizer use, which often occurs in rural settings.  Nitrates  
          are also present in treated wastewater, and thus are found in  
          surface water and groundwater recharge projects, which pose  
          risks to urban drinking water supplies.  Nitrates are also used  
          in the production of some products, such as fertilizers and  
          explosives.

          Nitrite is a chemical similar to nitrate, and it comes from the  
          same sources as nitrate.  Once consumed, nitrate is converted  
          into nitrite in the body.  Nitrite can interfere with the  








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          ability of red blood cells to carry oxygen to the tissues of the  
          body, producing a condition called methemoglobinemia.  This is  
          of greatest concern in infants, whose immature stomach  
          environment enables the conversion of nitrate into nitrite that  
          is absorbed into the blood stream.  The effects of nitrite are  
          often referred to as "blue baby syndrome."  High nitrate levels  
          may also affect the oxygen-carrying ability of the blood of  
          pregnant women.
           
          Nitrate contamination in California  :  Senate Bill SBX2 1  
          (Perata) Chapter 1, Statutes of 2008 Second Extraordinary  
          Session, required the SWRCB, in consultation with other  
          agencies, to prepare a report to the Legislature focusing on  
          nitrate groundwater contamination in the state and potential  
          remediation solutions.  In response, the SWRCB contracted with  
          the University of California to gather information to prepare  
          its report.

          The University of California at Davis (UCD) prepared and  
          released its resultant report, Addressing Nitrate in  
          California's Drinking Water, to the SWRCB in January 2012.   
          While the study only examined nitrate contamination in the  
          four-county Tulare Lake Basin and the Monterey County portion of  
          the Salinas Valley, its findings are helpful at informing the  
          discussion about nitrate contamination statewide.

          The UCD study showed that nitrate loading to groundwater in the  
          area is widespread and chronic, and is overwhelmingly the result  
          of crop and animal agricultural activities.  Urban wastewater,  
          septic systems, and other sources have significant localized  
          impact.  Due to long transit times, the impact of nitrates on  
          groundwater resources will likely worsen in scope and  
          concentration for several decades.

          The study indicated that about 2.6 million people in these  
          regions rely on groundwater for drinking water, including those  
          in some of the poorest communities in California.  Nitrate  
          contamination is increasing and currently poses public health  
          concerns for about 254,000 people in the study area.   
          Groundwater data show that 57% of the current population in the  
          study area uses a community public water system with recorded  
          raw (untreated) nitrate concentrations that have exceeded the  
          MCL at least once between 2006 and 2010.  Continued basin-wide  
          trends in nitrate groundwater concentration may raise the  
          affected population to nearly 80% by 2050.








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          In addition to the UCD report, AB 2222 (Caballero) Chapter 670,  
          Statutes of 2008, requires the SWRCB to submit a report to the  
          Legislature that identifies communities in California that rely  
          on contaminated groundwater as a primary source of drinking  
          water.  The SWRCB report was released in January 2013, and  
          identified 682 communities (excluding systems not regulated by  
          the state), serving more than 21 million people, which rely on  
          groundwater contaminated with one or more principal  
          contaminants.  The report also identified areas with nitrate  
          contamination. 

          This bill requires the CDPH, in conjunction with the SWRCB, to  
          designate areas that are reliant on nitrate-contaminated  
          groundwater for drinking water and that do not have reliable  
          access to safe, affordable drinking water.  Some of this  
          research may have been partially completed in previously  
          required reports.
           
          Addressing nitrate contamination in drinking water  :  Technical  
          Report 8 of the UCD study ascertains that a range of safe  
          drinking water actions (alternative water supplies or drinking  
          water treatment), groundwater remediation, and source reduction  
          actions are needed to provide residents with safe drinking  
          water.  Since nitrate source reduction or groundwater  
          remediation will take years to decades to significantly improve  
          drinking water quality, residents currently receiving unsafe  
          drinking water require other immediate alternatives.

           Funding to address nitrate contamination in drinking water  :  The  
          slow response of groundwater quality to source reduction efforts  
          implies that the most immediate path toward attaining safe  
          drinking water in nitrate contaminated areas is in the form of  
          safe drinking water actions.  However, the costs to provide safe  
          drinking water to affected communities in this region are high,  
          due to the large number of groundwater-contaminating nitrate  
          sources, the dispersed population, and the high incidence of  
          elevated nitrate levels in drinking water.  Consequently,  
          communities in the UCD study area have requested more SDWSRF  
          funds relative to other communities in the state ($29 per person  
          compared to $5 per person statewide).  Providing safe drinking  
          water or alternative water supplies to highly susceptible  
          populations in the study area is estimated to cost at least  
          $20-$36 million per year ($80-$142 per susceptible person  
          annually or $5-$9 per acre of irrigated land annually).








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          A variety of funding programs that currently exist to address  
          drinking water problems could be used to address nitrate  
          contamination, including funding through the SDWSRF, Proposition  
          50, and Proposition 84.  However, the UCD report finds that  
          these and other existing funding programs have not met systems'  
          stated need to ensure safe drinking water in the Salinas Valley  
          and Tulare Lake Basin.  Most current state funding to address  
          nitrate contamination is temporary (such as general obligation  
          bonds for loans through state propositions) and many programs  
          have already been fully allocated.  In addition, most safe  
          drinking water funding programs do not provide support for  
          operation and maintenance costs, which is necessary for many  
          disadvantaged communities, and the State of California  
          specifically does not fund operation and maintenance activities.

          Current funding programs could be revised to increase the funds  
          available to small systems and increase the effectiveness of  
          these funds in providing safe drinking water.  For example,  
          existing funds could be combined or restructured to focus on  
          encouraging and guiding disadvantaged communities to make good  
          long-term local decisions; on providing assistance to small  
          systems in the application and management process; and on  
          providing assistance for operations and maintenance of  
          facilities.  Encouraging regional consolidation of small water  
          systems could also help address nitrate contamination.  New  
          funding sources could also be examined, such as raising the  
          current fertilizer mill fee and other fees on fertilizers.

          Following the UCD report, the SWRCB submitted its final report  
          to Legislature, Recommendations Addressing Nitrate in  
          Groundwater, on February 20, 2013, which focused on specific  
          solutions for addressing nitrate contamination in groundwater.   
          According to the report, "The most critical recommendation in  
          this report is that a new funding source be established to  
          ensure that all Californians, including those in disadvantaged  
          communities, have access to safe drinking water, consistent with  
          AB 685 [Eng, 2012].  The Legislature should provide a stable,  
          long-term funding source for provision of safe drinking water  
          for small disadvantaged communities.  Funding sources include a  
          point-of-sale fee on agricultural commodities, a fee on nitrogen  
          fertilizing materials, or a water use fee.  In addition, the  
          Legislature also should authorize CDPH to assess a fee in lieu  
          of interest on Safe Drinking Water State Revolving Fund loans,  
          or to assess other fees associated with these loans, to generate  








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          funds for expanded assistance to water systems."

          This bill creates a new fund, the Nitrate at Risk Area Fund, to  
          specifically support disadvantaged communities facing nitrate  
          contamination in their drinking water.  However, the bill  
          currently does not identify a funding source.  The author of the  
          bill indicates that he plans to work closely with stakeholders  
          and the relevant state agencies to develop an appropriate source  
          of funding for the fund created in this bill.  Since  
          re-designating funds from existing sources could create a  
          shortfall in existing programs, the author may wish to consider  
          new sources of revenue.

           Related prior legislation:
           
          1)AB 1669 (Perea).  Would have created the Nitrate at Risk Area  
            Fund, administered by the SWRCB, funds within which, upon  
            appropriation, shall be used to pay for solutions for  
            disadvantaged communities suffering from nitrate-contaminated  
            groundwater.  Would have required the DPH, working with the  
            SWRCB, to designate such areas by using existing data on  
            public water systems.  This bill passed the Assembly Committee  
            on ESTM on a 6 - 1 vote and was subsequently held under  
            submission on the suspense file in the Assembly Appropriations  
            Committee.  

          2)AB 685 (Eng).  Declares that it is the established policy of  
            the state that every human being has the right to safe, clean,  
            affordable, and accessible water adequate for human  
            consumption, cooking, and sanitary purposes.  Requires all  
            relevant state agencies, including the Department of Water  
            Resources, the State Water Resources Control Board, and the  
            State Department of Public Health, to consider this state  
            policy when revising, adopting, or establishing policies,  
            regulations, and grant criteria.  Chapter 524, Statutes of  
            2012. 


           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          California Rural Legal Assistance Foundation
          Clean Water Action
          Community Water Center








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           Opposition 
           
          None received.
           

          Analysis Prepared by  :    Shannon McKinney / E.S. & T.M. / (916)  
          319-3965