BILL ANALYSIS Ó AB 69 Page 1 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 AB 69 Page 2 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, AB 69 Page 3 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 AB 69 Page 4 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. AB 69 Page 5 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). AB 69 Page 6 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 AB 69 Page 7 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 AB 69 Page 8 Opposition None received. Analysis Prepared by : Shannon McKinney / E.S. & T.M. / (916) 319-3965