BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



           ----------------------------------------------------------------- 
          |SENATE RULES COMMITTEE            |                        AB 115|
          |Office of Senate Floor Analyses   |                              |
          |1020 N Street, Suite 524          |                              |
          |(916) 651-1520         Fax: (916) |                              |
          |327-4478                          |                              |
           ----------------------------------------------------------------- 
           
                                           
                                    THIRD READING


          Bill No:  AB 115
          Author:   Perea (D), et al.
          Amended:  9/6/13 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  :  76-0, 4/18/13 (Consent) - See last page for  
            vote


           SUBJECT  :    Safe Drinking Water State Revolving Fund

           SOURCE  :     Author


           DIGEST  :    This bill limits the eligibility of multi-agency Safe  
          Drinking Water State Revolving Fund (SDWSRF) applications or  
          applications submitted by a legal entity on behalf of a  
          community, as specified.

           Senate Floor Amendments  of 9/6/13 allow multi-agency SDWSRF  
          applications or applications submitted by a legal entity on  
          behalf of a community for grant applications (not loan  
          applications) for planning projects (not construction).

           ANALYSIS  :    
                                                                CONTINUED





                                                                     AB 115
                                                                     Page  
          2


          Existing law:

          1.Under the federal Safe Drinking Water Act:

             A.   Requires the federal Environmental Protection Agency  
               (U.S. EPA) to set standards for drinking water quality and  
               oversee the states, localities, and water suppliers who  
               implement those standards.  California has authority over  
               drinking water, delegated by U.S. EPA.

             B.   Establishes the federal Drinking Water State Revolving  
               Fund, which provides states with a financing mechanism to  
               ensure safe drinking water to the public.

          1.Under the California Safe Drinking Water Act (SDWA):

             A.   Requires DPH 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 SDWA, adopting and enforcing  
               regulations, and conducting studies and investigations to  
               assess the quality of water in domestic water supplies.

             B.   Establishes the SDWSRF, which is continuously  
               appropriated to the DPH 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.   
               Requires DPH 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 DPH.

          This bill:

          1.Authorizes 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  

                                                                CONTINUED





                                                                     AB 115
                                                                     Page  
          3

            specified requirements are met, including having a signed  
            agreement with each public water system for which it is  
            applying for funding.

          2.Limits the eligibility of multi-agency SDWSRF applications or  
            applications submitted by a legal entity on behalf of a  
            community to:

             A.   Only grant applications (not loan applications).
             B.   Only grant funding for planning projects (not  
               construction).

          1.Delays the implementation if legislation is enacted in 2013  
            that transfers the statutory and regulatory authority for the  
            SDWA from DPH.

           Background
           
          Many small disadvantaged communities throughout California  
          suffer from contaminated ground water that residents use for  
          drinking and other domestic uses.  Consumption of contaminated  
          groundwater has been linked to many medical conditions such as  
          cancer and birth defects.  Water treatment facilities are  
          routinely installed to treat the contaminated groundwater,  
          ensuring safe drinking water for residents.  These water  
          infrastructure improvements come with high capital costs and  
          require financial assistance from outside sources such as state  
          and federal funds.  Beyond the capital costs of infrastructure,  
          the costs to operate and maintain a water treatment facility are  
          also very high for a small disadvantaged community to pay on its  
          own.

          In these instances, alternative methods are needed to solve a  
          community's water problems such as consolidating its water  
          system with another nearby system.  Consolidating water systems  
          creates economies of scale, lowering the individual costs to  
          each residential customer, making water systems more affordable  
          to operate and maintain.  Consolidating water systems involves  
          multiple communities joining together to solve each other's  
          similar water problems using a regional approach.

          Small disadvantaged communities seeking a regional solution can  
          take years to appropriately apply for state funds, usually  
          applying several times, until funds are finally awarded.  This  

                                                                CONTINUED





                                                                     AB 115
                                                                     Page  
          4

          delay in funding can be attributed to the complexity of regional  
          projects that include the consolidation of public water systems,  
          private water systems, irrigation systems and other water  
          systems.  State funds for water systems vary, depending on the  
          type of water system, it can be challenging for the state to  
          find the appropriate funds for a regional project without using  
          funds for unintended purposes outside of its authority.

          Regional projects often include multiple entities that are in  
          state drinking water compliance and others that are in  
          violation.  Typically, the larger water system in a regional  
          project applies as the lead applicant because the larger water  
          system has greater resources, such as a board of directors and  
          staff, to apply for state funds.  In some cases the lead  
          applicant applying for the regional water system is in  
          compliance with drinking water standards while the smaller  
          systems not designated as the lead applicant are in violation.   
          Unfortunately the state awards funding to drinking water systems  
          that are in violation of drinking water standards.  In these  
          cases the regional project becomes ineligible for state funding.

          The diversity of water systems throughout the state and the  
          complexity of the state funding process for consolidating water  
          systems have hindered the possibilities of regionalization of  
          water systems.  Because of this, small disadvantaged communities  
          in violation of drinking water compliance are unable to receive  
          funding for projects that could make water affordable by  
          consolidating water systems.

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

           SUPPORT  :   (Verified  9/9/13)

          Association of California Water Agencies
          California Municipal Utilities Association
          California Rural Legal Assistance Foundation
          California Special Districts Association
          Clean Water Action
          Community Water Center
          East Bay Municipal Utility District
          Rural County Representatives of California
          Santa Clara Valley Water District
          Sierra Club California

                                                                CONTINUED





                                                                     AB 115
                                                                     Page  
          5

          Silicon Valley Leadership Group
          Western Growers Association

           ASSEMBLY FLOOR  :  76-0, 4/18/13
          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, Gordon, Gorell,  
            Gray, Grove, Hagman, Hall, Harkey, Roger Hernández, Jones,  
            Jones-Sawyer, Levine, Linder, Logue, Maienschein, Mansoor,  
            Medina, Melendez, Morrell, Mullin, Muratsuchi, Nazarian,  
            Nestande, Olsen, Pan, Patterson, Perea, V. Manuel Pérez,  
            Quirk, Quirk-Silva, Rendon, 
          Salas, Skinner, Stone, Ting, Torres, Wagner, Waldron, Weber,  
            Wieckowski, Wilk, Williams, Yamada, John A. Pérez
          NO VOTE RECORDED:  Holden, Lowenthal, Mitchell, Vacancy


          RM:ej  9/9/13   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

                                   ****  END  ****





















                                                                CONTINUED