Amended in Senate September 6, 2013

Amended in Senate June 17, 2013

California Legislature—2013–14 Regular Session

Assembly BillNo. 115


Introduced by Assembly Member Perea

(Coauthor: Assembly Member Alejo)

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(Coauthor: Senator Cannella)

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January 14, 2013


An act tobegin delete amend Sections 116760.50, 116760.70, 116760.79, 116760.90, and 116761.20 ofend deletebegin insert add Section 116760.55 toend insert the Health and Safety Code, relating to drinking water, and making an appropriation therefor.

LEGISLATIVE COUNSEL’S DIGEST

AB 115, as amended, 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 authorizebegin delete 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.end deletebegin insert a legal entity, as defined, to apply for grant funding on behalf of one or more public water systems serving disadvantaged or severely disadvantaged communities if specified requirements are met, including having a signed agreement with each public water system for which it is applying for funding. By authorizing the use of a continuously appropriated fund for new purposes, this bill would make an appropriation.end insert

This bill would, if legislation is enacted in 2013 that transfers the statutory and regulatory authority for the California Safe Drinking Water Act from the Department of Public Health, delay the implementation of the provisions of the act for one year after the effective date of the transfer of authority.

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

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

P2    1begin insert

begin insertSECTION 1.end insert  

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begin insertSection 116760.55 is added to the end insertbegin insertHealth and
2Safety Code
end insert
begin insert, to read:end insert

begin insert
P3    1

begin insert116760.55.end insert  

(a) For purposes of the department considering
2eligibility for grant funding for a planning project, a legal entity
3may apply on behalf of one or more public water systems serving
4disadvantaged or severely disadvantaged communities if all of the
5following requirements are met:

6(1) The legal entity has a signed agreement with each public
7water system for which it is applying for funding for a planning
8and feasability study project that indicates that the public water
9system agrees to the joint application and that the legal entity is
10acting on behalf of, and in place of, the public water system.

11(2) The application is for 100 percent grant funding for a
12planning and feasability project.

13(3) The planning and feasibility study project includes a study
14of the feasibility of consolidation, which may include expansion
15of service to communities not currently served by a public water
16system.

17(4) The applicant has demonstrated that the legal entity has the
18ability to complete the proposed planning project.

19(5) At least one of the project participating public water systems
20has a primary drinking water standard violation and is on the
21project priority list.

22(b) For purposes of this section, “legal entity” means an entity
23that is duly formed and operating under the laws of this state.

end insert
begin delete
24

SECTION 1.  

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

26

116760.50.  

The department shall establish criteria that shall
27be met for projects to be eligible for consideration for funding
28under this chapter. The criteria shall include all of the following:

29(a)  All preliminary design work for a defined project that will
30enable the applicant or another public water system to supply water
31that meets safe drinking water standards, including a cost estimate
32for the project, shall be completed.

33(b)  For purposes of the department considering eligibility for
34construction funding, a legal entity shall exist that has the authority
35to enter into contracts and incur debt on behalf of at least one of
36the communities to be served and owns the public water system
37 or has the right to operate at least one of the public water systems
38under a lease or memorandum of understanding with a term of at
39least 20 years, unless otherwise authorized by the department. The
40applicant need not be the legal entity. If the proposed project is
P4    1funded by a loan under this chapter, the department may require
2the applicant or other legal entity to secure a lease for the full term
3of the loan if the loan exceeds 20 years.

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

5(d)  The applicant shall have completed any review required
6pursuant to the California Environmental Quality Act (Division
713 (commencing with Section 21000) of the Public Resources
8Code) and the guidelines adopted pursuant thereto, and have
9included plans for compliance with that act in its preliminary plans
10for the project.

11(e)  The applicant has assembled sufficient financial data to
12establish its ability to complete the proposed project and to
13establish the amount of debt financing it can undertake.

14

SEC. 2.  

Section 116760.70 of the Health and Safety Code is
15amended to read:

16

116760.70.  

(a) The department, after public notice and hearing,
17shall, from time to time, establish a priority list of proposed projects
18to be considered for funding under this chapter. In doing so, the
19department shall determine if improvement or rehabilitation of the
20public water system is necessary to provide pure, wholesome, and
21potable water in adequate quantity and at sufficient pressure for
22health, cleanliness, and other domestic purposes. The department
23shall establish criteria for placing public water systems on the
24priority list for funding that shall include criteria for priority list
25categories. Priority shall be given to projects that meet all of the
26following requirements:

27(1) Address the most serious risk to human health.

28(2) Are necessary to ensure compliance with requirements of
29Chapter 4 (commencing with Section 116270) including
30requirements for filtration.

31(3) Assist systems most in need on a per household basis
32according to affordability criteria.

33(b) The department may, in establishing a new priority list,
34merge those proposed projects from the existing priority list into
35the new priority list.

36(c) In establishing the priority list, the department shall consider
37the system’s implementation of an ongoing source water protection
38program or wellhead protection program.

39(d) In establishing the priority list categories and the priority
40for funding projects, the department shall carry out the intent of
P5    1the Legislature pursuant to subdivisions (e) to (h), inclusive, of
2Section 116760.10 and do all of the following:

3(1) Give priority to upgrade an existing system to meet drinking
4water standards. This includes an upgrade to an existing system
5to meet drinking water standards in a disadvantaged community
6that is distinct from the applicant agency.

7(2) After giving priority pursuant to paragraph (1), consider
8whether the applicant has sought other funds when providing
9funding for a project to upgrade an existing system and to
10accommodate a reasonable amount of growth.

11(e) Consideration of an applicant’s eligibility for funding shall
12initially be based on the priority list in effect at the time the
13application is received and the project’s ability to proceed. If a
14new priority list is established during the time the application is
15under consideration, but before the applicant receives a letter of
16commitment, the department may consider the applicant’s
17eligibility for funding based on either the old or new priority list.

18(f) The department may change the ranking of a specific project
19on the priority lists at any time following the publication of the
20list if information, that was not available at the time of the
21publication of the list, is provided that justifies the change in the
22ranking of the project.

23(g) The department shall provide one or more public hearings
24on the Intended Use Plan, the priority list, and the criteria for
25placing public water systems on the priority list. The department
26shall provide notice of the Intended Use Plan, criteria, and priority
27list not less than 30 days before the public hearing. The Intended
28Use Plan, criteria, and priority list shall not be subject to the
29 requirements of Chapter 3.5 (commencing with Section 11340) of
30Part 1 of Division 3 of Title 2 of the Government Code. The
31department shall conduct duly noticed public hearings and
32workshops around the state to encourage the involvement and
33active input of public and affected parties, including, but not limited
34to, water utilities, local government, public interest, environmental,
35and consumer groups, public health groups, land conservation
36interests, health care providers, groups representing vulnerable
37populations, groups representing business and agricultural interests,
38and members of the general public, in the development and periodic
39updating of the Intended Use Plan and the priority list.

P6    1(h) The requirements of this section do not constitute an
2adjudicatory proceeding as defined in Section 11405.20 of the
3Government Code and Section 11410.10 of the Government Code
4is not applicable.

5

SEC. 3.  

Section 116760.79 of the Health and Safety Code is
6amended to read:

7

116760.79.  

(a) Applications for funding under this chapter
8shall be made in the form and with the supporting material
9prescribed by the department.

10(b) The department shall establish a process by which multiple
11water systems may apply for funding as a single applicant for the
12purpose of consolidating water systems or extending services to
13households relying on private wells. Funding shall be available to
14these applicants if the following criteria are met:

15(1) At least one of the systems of private wells serves a
16disadvantaged community or a severely disadvantaged community
17that is in violation of Chapter 4 (commencing with Section
18116270).

19(2) Fifty percent of the project funds support, facilitate, or allow
20for planning and preliminary engineering studies, project design,
21or construction to consolidate with, or extend services to, existing
22water system facilities or private wells that are in violation of
23Chapter 4 (commencing with Section 116270).

24(3) The purpose of the consolidation or service extension
25includes providing safe and potable drinking water to a community,
26bringing one or more of the applying water systems into
27compliance with this chapter.

28

SEC. 4.  

Section 116760.90 of the Health and Safety Code is
29amended to read:

30

116760.90.  

(a) The department shall not approve an application
31for funding unless the department determines that the proposed
32study or project is necessary to enable the applicant to meet safe
33drinking water standards, and is consistent with an adopted
34countywide plan, if any. The department may refuse to fund a
35study or project if it determines that the purposes of this chapter
36may more economically and efficiently be met by means other
37than the proposed study or project. The department shall not
38approve an application for funding a project with a primary purpose
39to supply or attract future growth. The department may limit
40funding to costs necessary to enable suppliers to meet primary
P7    1drinking water standards, as defined in Chapter 4 (commencing
2with Section 116270).

3(b) With respect to applications for funding of project design
4and construction, the department shall also determine all of the
5following:

6(1) Upon completion of the project, the applicant and other
7beneficiaries of the project will be able to supply water that meets
8safe drinking water standards.

9(2) The project is cost effective.

10(3) If the entire project is not to be funded under this chapter,
11the department shall specify which costs are eligible for funding.

12(c) In considering an application for funding a project that meets
13all other requirements of this chapter and regulations, the
14department shall not be prejudiced by the applicant initiating the
15project prior to the department approving the application for
16funding. Preliminary project costs that are otherwise eligible for
17funding pursuant to the provisions of this chapter shall not be
18ineligible because the costs were incurred by the applicant prior
19to the department approving the application for funding.
20Construction costs that are otherwise eligible for funding pursuant
21to the provisions of this chapter shall not be ineligible because the
22costs were incurred after the approval of the application by the
23department but prior to the department entering into a contract
24with the applicant pursuant to Section 116761.50.

25

SEC. 5.  

Section 116761.20 of the Health and Safety Code is
26amended to read:

27

116761.20.  

(a)  Planning and preliminary engineering studies,
28project design, consolidation with or extension of services to an
29existing water system, and construction costs may be funded under
30this chapter by loans, or, in the case of public agencies or private
31not-for-profit water companies, by grants or a combination of
32grants and loans. Multiple water systems that apply under a single
33application, as provided in subdivision (b) of Section 116760.79,
34may be funded by grants, loans, or a combination thereof.

35(b)  The department shall determine what portion of the full
36costs the public agency or private not-for-profit water company is
37capable of repaying and authorize funding in the form of a loan
38for that amount. The department shall authorize a grant only to the
39extent the department finds the public agency or not-for-profit
40water company is unable to repay the full costs of a loan.

P8    1(c)  At the request of the department, the Public Utilities
2Commission shall submit comments concerning the ability of
3suppliers, subject to its jurisdiction, to finance the project from
4other sources and to repay the loan.

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begin deleteSEC. 6.end delete
6begin insertSEC. 2.end insert  

If legislation enacted in 2013 transfers the statutory
7and regulatory authority for the implementation of the California
8Safe Drinking Water Act from the State Department of Public
9Health, this act shall not become operative until one year after the
10effective date of the transfer of authority.



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