BILL ANALYSIS Ó SB 552 Page 1 Date of Hearing: August 3, 2016 ASSEMBLY COMMITTEE ON APPROPRIATIONS Lorena Gonzalez, Chair SB 552 (Wolk) - As Amended August 1, 2016 ----------------------------------------------------------------- |Policy |Environmental Safety and Toxic |Vote:|4-2 | |Committee: |Materials | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | |Water, Parks and Wildlife | |10- 5 | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: NoReimbursable: No SUMMARY: This bill revises the authority of the State Water Resources Control Board (SWRCB) with regard to public water system (PWS) consolidation and authorizes SWRCB to provide administrative and managerial services to the PWS, as specified. Specifically, this bill: 1) Updates and clarifies several provisions of law on water SB 552 Page 2 system consolidation. 2)Authorizes the SWRCB, in order to provide affordable, safe drinking water to disadvantaged communities and to prevent fraud, waste, and abuse, to do both of the following: a) Contract with an administrator to provide administrative and managerial services to a designated public water system to assist the designated public water system with the provision of an adequate and affordable supply of safe drinking water. b) Order the designated PWS to accept administrative and managerial services, including full management and control, from an administrator selected by SWRCB. FISCAL EFFECT: 1)Unknown, potentially significant costs, depending upon the number of PWSs placed under the control of, or provided assistance by, an administrator, as well as the extent and duration of the assistance. This bill does not identify a funding source. 2)According to the California Public Utilities Commission (PUC), there will be increased annual costs of approximately $130,000 to assist SWRCB in determining the fair market value of a privately-owned PWS for consolidation purposes. However, it is unclear if this bill actually increases costs or if the costs are associated with the recently enacted consolidation SB 552 Page 3 legislation. COMMENTS: 1)Purpose. This bill creates an additional tool for addressing lack of safe drinking water by authorizing the SWRCB to identify public water systems that are consistently unable to provide sufficient safe drinking water and to contract with a competent administrator. The SWRCB notes contracting with an administrator would provide technical and managerial capacity, economies of scale, and other efficiencies. According to the author, California is the 6th largest economy of the world, and it is unconscionable that so many Californians are living in Third World conditions without water. The author further contends that a third party administrator will bring stability to the water system and the community, and long-term sustainability to the water supply for disadvantaged communities. 2)Background. Last year, SB 88 (Committee on Budget), Chapter 27, Statues of 2015, authorized SWRCB to require certain water systems that consistently fail to provide safe drinking water, to consolidate with, or receive an extension of service from, another public water system. The consolidation provisions were largely based on recommendations in the Governor's "Resilient, Affordable, Safe Drinking Water for Disadvantaged Communities Framework", which was released May 2015. The framework identified three steps to ensure every Californian has access to an adequate supply of safe water to meet daily needs. SB 552 Page 4 The first two steps to improve technical, managerial, and financial capacity and to implement consolidation if improvements are not effective were contained in SB 88. The third step of contracting with a third party to manage the system to allow for it to be brought up to a sustainable condition is included in this bill. Analysis Prepared by:Jennifer Galehouse / APPR. / (916) 319-2081