BILL ANALYSIS Ó
AB 1043
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator Jerry Hill, Chair
2013-2014 Regular Session
BILL NO: AB 1043
AUTHOR: Chau
AMENDED: May 19, 2014
FISCAL: Yes HEARING DATE: June 18, 2014
URGENCY: No CONSULTANT: Rachel Machi
Wagoner
SUBJECT : SAFE DRINKING WATER, WATER QUALITY AND SUPPLY,
FLOOD CONTROL, RIVER AND COASTAL PROTECTION BOND
ACT OF 2006: GROUNDWATER CONTAMINATION
SUMMARY :
Existing law :
1) Under the California Safe Drinking Water Act (SDWA),
requires the Department of Public Health (DPH) to regulate
drinking water and enforce the federal Safe Drinking Water
Act and other regulations.
2) Under the Safe Drinking Water, Water Quality and Supply,
Flood Control, River and Coastal Protection Bond Act of
2006 (Proposition 84):
a) Authorizes $5.388 billion in general obligation bonds
to fund safe drinking water, water quality and supply,
flood control, waterway and natural resource protection,
water pollution and contamination control, state and
local park improvements, public access to natural
resources, and water conservation efforts. (Public
Resources Code §75001 et seq.).
b) Provides $60 million to DPH for loans and grants for
projects to prevent or reduce contamination of
groundwater that serves as a source of drinking water
for the San Gabriel Valley. (§75025).
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c) Requires DPH, when implementing the provisions of
Proposition 84, among other things, to develop and adopt
guidelines and regulations for establishing a project,
grant, loan or other financial assistance program,
including specific provisions for the repayment of costs
that are subsequently recovered from parties responsible
for the contamination. (§§75100 and 75101).
d) Requires repayment to DPH of costs that are
subsequently recovered from parties responsible for the
contamination. (§75025).
This bill :
1) Eliminates the requirement for DPH to develop and adopt
regulations for the repayment of grants where the costs are
subsequently recovered from a responsible party (RP) and
instead would require that costs subsequently recovered
from an RP for the contamination, as defined, be repaid to
DPH to be deposited, and separately accounted for, in the
Groundwater Contamination Cleanup Project Fund, which this
bill would create in the State Treasury.
2) Requires moneys in the fund to be continuously
appropriated, without regard to fiscal years, to the
Department of Toxic Substances Control (DTSC) for a grant
to the grantee that received a grant to prevent or reduce
contamination of groundwater pursuant to Proposition 84 and
subsequently recovered costs from an RP and repaid those
costs to the state.
3) Requires DTSC to disburse the funds upon receipt of an
expenditure plan from the grantee if the department reviews
the plan and concurs that the proposed expenditures by the
grantee are consistent with certain requirements.
4) Prohibits the total amount of a grant from the fund and a
grant received to prevent or reduce contamination of
groundwater pursuant to Proposition 84 from exceeding the
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grantee's total costs to cleanup contaminated groundwater
or prevent the contamination of groundwater.
COMMENTS :
1) Purpose of Bill . According to the author, "AB 1043
authorizes a Proposition 84 grantee who recovers funds from
a polluter to use those recovered funds for ongoing
treatment and remediation for the projects for which the
Proposition 84 grants were awarded and for similar projects
within the grantee's jurisdiction.
On November 7, 2006, voters passed Proposition 84, which
includes $60 million for groundwater contamination
projects in Section 75025 of the Public Resources Code
(PRC). This is the first time a bond included an
allocation for cleanup of groundwater contamination.
Those funds can only be used for a project's capital
costs and not for the actual treatment of groundwater.
Furthermore, the bond requires DPH to require repayment
of costs that are subsequently recovered from parties
responsible for the contamination.
DPH is responsible for implementing the program. PRC
Section 75025 includes the following language, 'The
Department of Health Services shall require repayment for
costs that are subsequently recovered from parties
responsible for the contamination. The Legislature may
enact legislation necessary to implement this section.
SB 732 (Steinberg), Chapter 729, Statutes of 2008,
requires DPH to develop and adopt regulations governing
the repayment of costs that are subsequently recovered
from parties responsible for the contamination. DPH has
not yet developed regulations addressing the disposition
of funds that local agencies recover from responsible
parties.
Should those funds be deposited into a fund administered
by DPH or any other State agency, the department will
incur costs to administer a new grant award cycle and
will likely assess administrative costs to re-award the
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funds. Other State agencies, like the State Controller
and the Department of Finance, will also incur costs for
their responsibilities in the administration of the
funds. These costs are typically budgeted at 5% of the
total amount for the administering department (DPH) and
additional administrative costs are charged by the other
involved agencies. Therefore, local cleanup efforts would
lose a minimum of $2.5 million if the full $50.4 million
in grant awards is subsequently recovered.
Further, with respect to the actual disposition of cost
recoveries, no fund has been designated to receive
repayments from responsible parties. Legislation is
necessary to ensure that recovered funds can be used by
the local agency that recovered the funds for ongoing
cleanup activities within its jurisdiction in furtherance
of the program goals."
2) Background . SB 1679 (Russell), Chapter 776, Statutes of
1992, enacted the San Gabriel Basin Water Quality Authority
Act. The State Water Resources Control Board and the Los
Angeles Regional Water Quality Control Board had
investigated the groundwater conditions since 1979. The
basin is the primary drinking water source for residents
and the U.S. Environmental Protection Agency (US EPA) had
placed four areas of the basin on its Superfund list in
1984. US EPA released a "San Gabriel Basinwide Technical
Plan" in 1990, describing a strategy to remediate
groundwater pollution. The above three entities prepared a
"white paper" describing institutional and financial
aspects of a comprehensive local groundwater management
program and concluded that a local program must possess
powers to construct and operate cleanup works, to
coordinate and regulate groundwater extraction and cleanup,
and to finance activities.
The three water agencies in the basin formed a joint powers
authority (JPA) and the watermaster ( i.e. , a judicially
created association of private and public groundwater
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users) obtained authority to regulate pumping for water
quality protection. However, because of concerns that the
JPA was not effective, SB 1679 created the act with certain
powers to address the contamination problems.
In 1992, the Legislature considered SB 44 (Torres), a bill
giving the JPA more power to address the problem. AB 2173
(Margett), Chapter 281, Statutes of 1996, extended a 1998
sunset to 2002, reduced the cap on the annual pumping right
assessment from $35 to $20 per acre foot, and established a
"limited function status" provision. AB 2544 (Calderon),
Chapter 905, Statutes of 2000, increased the number of
board members from five to seven and required two members
to be producer members, reduced the annual pumping right
assessment cap from $20 to $13, revised the board voting
practices for certain actions, and made various other
changes to the act. SB 334 (Romero), Chapter 192, Statutes
of 2003, reduced the annual pumping right assessment cap
from $13 to $10.
SB 822 (Margett), Chapter 271, Statutes of 2005, authorized
the San Gabriel Basin Water Quality Authority to receive
state funds for the purpose of meeting certain nonfederal
matching fund requirements.
3) Prior Legislation . AB 467 (Eng, 2012) would have:
a) Authorized DPH to enter into an agreement with a
recipient of a Proposition 84 grant that would require
the grantee to attempt to recover the costs from
responsible parties and would allow grantees to utilize
the repayments to fund other groundwater cleanup
projects within the grantees jurisdiction as authorized
in the agreement as specified.
b) Specified that the guidelines prepared by DPH for
allocation of Proposition 84 funds may include a
provision to allocate up to 3 percent of the recovered
funds to pay for DPH oversight costs to ensure the
grantee expends the recovered funds on additional
groundwater cleanup activities.
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AB 467 was vetoed by Governor Brown.
In the veto message the Governor suggested a simpler
structure for addressing the issue of cost recovered funds,
specifically;
"I support the leveraging of all available funding by
ensuring that recovered funds are effectively used in the
jurisdictions that recover them. Unfortunately, the
structure that was developed is cumbersome and
inefficient. I am directing the Department of Public
Health and the Department of Toxic Substances Control, to
once again work with the Legislature to develop a more
streamlined way to reinvest these funds."
4) Double Referral to Senate Rules Committee . If this measure
is approved by the Senate Environmental Quality Committee,
the do pass motion must include the action to re-refer the
bill to the Senate Rules Committee.
SOURCE : San Gabriel Basin Water Quality Authority
SUPPORT : Association of California Water Agencies
California Groundwater
Coalition
OPPOSITION : None on file