Amended in Assembly August 18, 2016

Amended in Senate April 27, 2016

Senate Bill No. 1456

Introduced by Senator Galgiani

February 19, 2016

An act to amend Section 116761.20 of the Health and Safety Code, relating to drinking water, and making an appropriation therefor.

LEGISLATIVE COUNSEL’S DIGEST

SB 1456, as amended, Galgiani. Safe Drinking Water State Revolving Fund Law of 1997: begin delete public end delete water systems: financing.

Existing law establishes the Safe Drinking Water State Revolving Fund, and moneys in the fund are continuously appropriated to the State Water Resources Control Board 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, for community public water systems and not-for-profit noncommunity public water systems, allows planning and preliminary engineering studies, project design, and construction costs incurred by those public water systems to be funded by loans and other repayable financing. Existing law additionally allows, if those public water systems are owned by public agencies or not-for-profit water companies, those specified costs to be funded by grants, principal forgiveness, or a combination of grants and loans or other financial assistance. begin insert Existing law requires the board to determine what portion of the full costs the public agency or private not-for-profit water company is capable of repaying and requires the board to authorize a grant or principal forgiveness only to the extent the board finds the public agency or private not-for-profit water company is unable to repay the full costs of the financing. end insert

This bill would authorize the above-described costs to be funded by loans or other repayable financing, grants, principal forgiveness, or a combination of grants and loans or other financial assistance, regardless of whether the begin delete public water system is a end delete community begin delete public end delete water system or begin delete a end delete not-for-profit noncommunity begin delete public end delete water begin delete system, or whether the public water end delete system is owned by a public agency or private not-for-profit water company. By expanding the use of moneys in a continuously appropriated fund, this bill would make an appropriation. begin insert The bill would only authorize a grant or principal forgiveness to a community water system or not-for-profit noncommunity water system that serves a disadvantaged community. end insert The bill, for a begin delete public end delete water system that is a water corporation regulated by the Public Utilities Commission, would limit the principal forgiveness to capital improvements begin insert made by the water system end insert serving begin delete severely end delete disadvantaged communities with fewer than begin delete 200 end delete begin insert 3,300 end insert service connections.

Existing law deems a public agency or private not-for-profit water company serving a severely disadvantaged community with fewer than 200 service connections and that owns a small community water system or nontransient community water system to have no ability to repay any financing for a project serving the severely disadvantaged community.

This bill would apply this finding to a begin delete public end delete begin insert community end insert water system begin insert or not-for-profit noncommunity water system end insert that is not a water corporation regulated by the Public Utilities Commission and that serves a severely disadvantaged community with fewer than 200 service connections.

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

116761.20.  

(a) Planning and preliminary engineering studies,
project design, and construction costs incurred by a begin delete public water end delete
begin insert community water system or not-for-profit noncommunity water end insert
system may be funded under this begin delete chapter by loans or other
repayable financing, grants, principal forgiveness, or a combination
of grants and loans or other financial assistance. end delete begin insert chapter. end insert

(b) (1) The board shall determine what portion of the full costs
the begin delete public end delete water system is capable of repaying and authorize
funding in the form of a loan or other repayable financing for that
amount. The board begin delete shall end delete begin insert may end insert authorize a grant or principal
forgiveness begin insert to a system eligible under subdivision (a) that serves
a disadvantaged community and end insert only to the extent the board finds
the begin delete public end delete water system is unable to repay the full costs of the
financing.

(2) Where the begin delete public end delete begin insert otherwise eligible end insert water system is a water
corporation regulated by the Public Utilities Commission, principal
forgiveness shall be limited to capital improvements begin insert made by a
water system end insert serving begin delete severely end delete disadvantaged communities with
fewer than begin delete 200 end delete begin insert 3,300 end insert service begin delete connections end delete begin insert connections, end insert and the
board shall begin delete consider the realized end delete begin insert incorporate consideration of the
water system’s end insert rate of return for the begin delete public water system as a
criteria for determining the public water system’s ability to repay
the costs of the financing. end delete begin insert three fiscal years before the timeframe
in which the board is considering financial assistance. end insert

(3) Where begin delete a public end delete begin insert an otherwise eligible end insert water system is not a
water corporation described in paragraph (2) and serves a severely
disadvantaged community with fewer than 200 service connections,
the begin delete public end delete water system is deemed to have no ability to repay any
financing for a project serving the severely disadvantaged
community.

(c) At the request of the board, the Public Utilities Commission
shall submit comments concerning the ability of begin delete public end delete water
systems, subject to its jurisdiction, to finance the project from other
sources and to repay the financing.