California Legislature—2013–14 Regular Session

Assembly Bill No. 115

Introduced by Assembly Member Perea

(Coauthor: Assembly Member Alejo)

January 14, 2013

An act to amend Sections 116760.50, 116760.70, 116760.79, 116760.90, and 116761.20 of the Health and Safety Code, relating to drinking water, and making an appropriation therefor.

LEGISLATIVE COUNSEL’S DIGEST

AB 115, as introduced, Perea. Safe Drinking Water State Revolving Fund.

Existing law, the California Safe Drinking Water Act, requires the State Department of Public Health to administer provisions relating to the regulation of drinking water to protect public health, including, but not limited to, conducting research, studies, and demonstration programs relating to the provision of a dependable, safe supply of drinking water, enforcing the federal Safe Drinking Water Act, adopting and enforcing regulations, and conducting studies and investigations to assess the quality of water in domestic water supplies.

Existing law establishes the Safe Drinking Water State Revolving Fund, which is continuously appropriated to the department 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. Existing law requires the department to establish criteria for projects to be eligible for the grant and loan program, including that a legal entity exist that has the authority to enter into contracts and incur debt on behalf of the community to be served and owns the public water system or has the right to operate the public water system under a lease with a term of at least 20 years, unless otherwise authorized by the department.

This bill would authorize the department to fund projects, by grant, loan, or a combination of the two, where multiple water systems apply for funding as a single applicant for the purpose of consolidating water systems or extending services to households relying on private wells, as specified. The bill would authorize funding of a project to benefit a disadvantaged community that is not the applying agency. The bill, for purposes of considering eligibility for construction funding, would require a legal entity to exist that is not necessarily the applicant, but that has the authority to enter into contracts and incur debt on behalf of at least one of the communities to be served and has the right to operate at least one of the public water systems under a lease or memorandum of understanding with a term of at least 20 years. By authorizing the use of a continuously appropriated fund for new purposes, this bill would make an appropriation.

Vote: majority. Appropriation: yes. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 116760.50 of the Health and Safety Code
is amended to read:

116760.50.  

The department shall establish criteria that shall
be met for projects to be eligible for consideration for funding
under this chapter. The criteria shall include all of the following:

(a)  All preliminary design work for a defined project that will
enable the applicant begin insert or another public water system end insert to supply water
that meets safe drinking water standards, including a cost estimate
for the project, shall be completed.

(b)   begin delete A end delete begin insert For purposes of the department considering eligibility end insert
begin insert for construction funding, a end insert begin insert end insert legal entity shall exist that has the
authority to enter into contracts and incur debt on behalf of begin delete the end delete
begin delete community end delete begin insert at least one of the communities end insert to be served and owns
the public water system or has the right to operate begin insert at least one of end insert
the public water begin delete system end delete begin insert systems end insert under a lease begin insert or memorandum of end insert
begin insert understanding end insert with a term of at least 20 years, unless otherwise
authorized by the department. begin insert The applicant need not be the legal end insert
begin insert entity. end insert If the proposed project is funded by a loan under this
chapter, the department may require the applicant begin insert or other legal end insert
begin insert entity end insert to secure a lease for the full term of the loan if the loan
exceeds 20 years.

(c)  The applicant shall hold all necessary water rights.

(d)  The applicant shall have completed any review required
pursuant to the California Environmental Quality Act (Division
13 (commencing with Section 21000) of the Public Resources
Code) and the guidelines adopted pursuant thereto, and have
included plans for compliance with that act in its preliminary plans
for the project.

(e)  The applicant has assembled sufficient financial data to
establish its ability to complete the proposed project and to
establish the amount of debt financing it can undertake.

SEC. 2.  

Section 116760.70 of the Health and Safety Code is
amended to read:

116760.70.  

(a) The department, after public notice and hearing,
shall, from time to time, establish a priority list of proposed projects
to be considered for funding under this chapter. In doing so, the
department shall determine if improvement or rehabilitation of the
public water system is necessary to provide pure, wholesome, and
potable water in adequate quantity and at sufficient pressure for
health, cleanliness, and other domestic purposes. The department
shall establish criteria for placing public water systems on the
priority list for funding that shall include criteria for priority list
categories. Priority shall be given to projects that meet all of the
following requirements:

(1) Address the most serious risk to human health.

(2) Are necessary to ensure compliance with requirements of
Chapter 4 (commencing with Section 116270) including
requirements for filtration.

(3) Assist systems most in need on a per household basis
according to affordability criteria.

(b) The department may, in establishing a new priority list,
merge those proposed projects from the existing priority list into
the new priority list.

(c) In establishing the priority list, the department shall consider
the system’s implementation of an ongoing source water protection
program or wellhead protection program.

(d) In establishing the priority list categories and the priority
for funding projects, the department shall carry out the intent of
the Legislature pursuant to subdivisions (e) to (h), inclusive, of
Section 116760.10 and do all of the following:

(1) Give priority to upgrade an existing system to meet drinking
water standards. begin insert This includes an upgrade to an existing system end insert
begin insert to meet drinking water standards in a disadvantaged community end insert
begin insert that is distinct from the applicant agency. end insert

(2) After giving priority pursuant to paragraph (1), consider
whether the applicant has sought other funds when providing
funding for a project to upgrade an existing system and to
accommodate a reasonable amount of growth.

(e) Consideration of an applicant’s eligibility for funding shall
initially be based on the priority list in effect at the time the
application is received and the project’s ability to proceed. If a
new priority list is established during the time the application is
under consideration, but before the applicant receives a letter of
commitment, the department may consider the applicant’s
eligibility for funding based on either the old or new priority list.

(f) The department may change the ranking of a specific project
on the priority lists at any time following the publication of the
list if information, that was not available at the time of the
publication of the list, is provided that justifies the change in the
ranking of the project.

(g) The department shall provide one or more public hearings
on the Intended Use Plan, the priority list, and the criteria for
placing public water systems on the priority list. The department
shall provide notice of the Intended Use Plan, criteria, and priority
list not less than 30 days before the public hearing. The Intended
Use Plan, criteria, and priority list shall not be subject to the
requirements of Chapter 3.5 (commencing with Section 11340) of
Part 1 of Division 3 of Title 2 of the Government Code. The
department shall conduct duly noticed public hearings and
workshops around the state to encourage the involvement and
active input of public and affected parties, including, but not limited
to, water utilities, local government, public interest, environmental,
and consumer groups, public health groups, land conservation
interests, health care providers, groups representing vulnerable
populations, groups representing business and agricultural interests,
and members of the general public, in the development and periodic
updating of the Intended Use Plan and the priority list.

(h) The requirements of this section do not constitute an
adjudicatory proceeding as defined in Section 11405.20 of the
Government Code and Section 11410.10 of the Government Code
is not applicable.

SEC. 3.  

Section 116760.79 of the Health and Safety Code is
amended to read:

116760.79.  

begin insert (a) end insert begin insert   end insert Applications for funding under this chapter
shall be made in the form and with the supporting material
prescribed by the department.

begin insert

(b) The department shall establish a process by which multiple
water systems may apply for funding as a single applicant for the
purpose of consolidating water systems or extending services to
households relying on private wells. Funding shall be available
to these applicants if the following criteria are met:

end insert begin insert

(1) At least one of the systems of private wells serves a
disadvantaged community or a severely disadvantaged community
that is in violation of Chapter 4 (commencing with Section 116270).

end insert begin insert

(2) Fifty percent of the project funds support, facilitate, or allow
for planning and preliminary engineering studies, project design,
or construction to consolidate with, or extend services to, existing
water system facilities or private wells that are in violation of
Chapter 4 (commencing with Section 116270).

end insert begin insert

(3) The purpose of the consolidation or service extension
includes providing safe and potable drinking water to a community,
bringing one or more of the applying water systems into
compliance with this chapter.

end insert

SEC. 4.  

Section 116760.90 of the Health and Safety Code is
amended to read:

116760.90.  

(a) The department shall not approve an application
for funding unless the department determines that the proposed
study or project is necessary to enable the applicant to meet safe
drinking water standards, and is consistent with an adopted
countywide plan, if any. The department may refuse to fund a
study or project if it determines that the purposes of this chapter
may more economically and efficiently be met by means other
than the proposed study or project. The department shall not
approve an application for funding a project with a primary purpose
to supply or attract future growth. The department may limit
funding to costs necessary to enable suppliers to meet primary
drinking water standards, as defined in Chapter 4 (commencing
with Section 116270).

(b) With respect to applications for funding of project design
and construction, the department shall also determine all of the
following:

(1) Upon completion of the project, the applicant begin insert and other end insert
begin insert beneficiaries of the project end insert will be able to supply water that meets
safe drinking water standards.

(2) The project is cost-effective.

(3) If the entire project is not to be funded under this chapter,
the department shall specify which costs are eligible for funding.

(c) In considering an application for funding a project that meets
all other requirements of this chapter and regulations, the
department shall not be prejudiced by the applicant initiating the
project prior to the department approving the application for
funding. Preliminary project costs that are otherwise eligible for
funding pursuant to the provisions of this chapter shall not be
ineligible because the costs were incurred by the applicant prior
to the department approving the application for funding.
Construction costs that are otherwise eligible for funding pursuant
to the provisions of this chapter shall not be ineligible because the
costs were incurred after the approval of the application by the
department but prior to the department entering into a contract
with the applicant pursuant to Section 116761.50.

SEC. 5.  

Section 116761.20 of the Health and Safety Code is
amended to read:

116761.20.  

(a)  Planning and preliminary engineering studies,
project design, begin insert consolidation with or extension of services to an end insert
begin insert existing water system, end insert and construction costs may be funded under
this chapter by loans, or, in the case of public agencies or private
not-for-profit water companies, by grants or a combination of
grants and loans. begin insert Multiple water systems that apply under a single end insert
begin insert application, as provided in subdivision (b) of Section 116760.79, end insert
begin insert may be funded by grants, loans, or a combination thereof. end insert

(b)  The department shall determine what portion of the full
costs the public agency or private not-for-profit water company is
capable of repaying and authorize funding in the form of a loan
for that amount. The department shall authorize a grant only to the
extent the department finds the public agency or not-for-profit
water company is unable to repay the full costs of a loan.

(c)  At the request of the department, the Public Utilities
Commission shall submit comments concerning the ability of
suppliers, subject to its jurisdiction, to finance the project from
other sources and to repay the loan.