BILL ANALYSIS
AB 1438
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Date of Hearing: May 20, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
AB 1438 (Conway) - As Amended: May 4, 2009
Policy Committee: Environmental
Safety Vote: 7-0
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill expands eligibility for grants under the state's Safe
Drinking Water Revolving Fund. Specifically, this bill:
1)Adds fire flow demand-the amount of water flow needed to
extinguish a fire-as a criterion to consider when determining
"reasonable amount of growth" for project funding from the
revolving fund.
2)Requires the Department of Public Health (DPH), in order to
implement the revolving fund, to establish a wellhead
protection account pursuant to the federal Safe Drinking Water
Act.
3)Adds environmental documentation as an activity eligible for
funding from the revolving fund.
4)Repeals the current $1 million limit on revolving fund grants
and authorizes DPH to establish a new limit.
FISCAL EFFECT
1)Ongoing annual costs to DPH of approximately $175,000 to
establish a wellhead protection account and to establish and
regularly update the administratively determined limit on
revolving fund grants. (Federal funds)
2)Cost pressure to DPH, possibly in the millions of dollars,
resulting from the potential for larger revolving fund grants,
resulting from the modifications to criteria and limits made
by this bill. (Federal funds)
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COMMENTS
1)Rationale . The sponsors of this bill contend the $1 million cap
prevents low-income communities from upgrading their drinking
water infrastructure. This bill, by allowing DPH to
administratively determine maximum grant amounts, will provide
flexibility in the administration of the program to allow
projects that may be more costly, but more effective and more
sustainable.
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2)Background.
a) Drinking Water State Revolving Fund . Congress
established the Drinking Water State Revolving Fund (DWSRF)
as part of the 1996 Safe Drinking Water Act amendments to
better enable public water systems to comply with national
drinking water standards and to protect public health.
DWSRF provides financial assistance to states to provide
low-interest loans and other assistance to public water
systems. In order to receive these funds, states must
provide a 20% state match and create a drinking water state
revolving fund program for public water system
infrastructure needs and other drinking water-related
activities. In response, California established its own
Safe Drinking Water State Revolving Fund through SB 1307
(Costa, Chapter 734, Statutes of 1997).
b) Federal Stimulus Funds : On February 17, 2009, President
Obama signed the American Recovery and Reinvestment Act of
2009 (ARRA). Among its provisions, ARRA provides
approximately $160 million to the revolving fund for
infrastructure development of California's drinking water
systems.
c) SB 27XXX (Negrete McLeod, Chapter 25, Statutes of 2009-10,
Third Extraordinary Session) expanded authorized uses for
clean drinking water and wastewater funding from the federal
government pursuant to ARRA.
3)Supporters , including several environmental justice and public
health organizations, contend the administrative flexibility
provided by this bill will enable DPH to more effectively fund
drinking water projects in communities with diverse needs and
therefore best assist disadvantaged communities. This is
because DPH will be able to adjust the funding cap to reflect
future changes in costs and financial conditions. At the same
time, the federal requirement that the revolving fund remain
sustainable will ensure that DPH does not set the cap too high.
The recent infusion of federal stimulus money makes this an
opportune time to allow for flexibility so DPH can best respond
to current needs.
There is no opposition registered to this bill.
Analysis Prepared by : Jay Dickenson / APPR. / (916) 319-2081
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