BILL ANALYSIS
AB 1438
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 1438 (Conway)
As Amended September 2, 2009
Majority vote
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|ASSEMBLY: |79-0 |(June 1, 2009) |SENATE: |40-0 |(September 9, |
| | | | | |2009) |
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Original Committee Reference: E.S. & T.M.
1)SUMMARY : Revises the requirements of the Safe Drinking Water
State Revolving Fund (State Revolving Fund), including
eliminating the $ 1 million maximum amount of a grant award
for single projects and instead setting specific statutory
caps for different types of grants.
The Senate amendments :
1)Cap the maximum amount of a planning grant for each
participating public water system's share of the costs of the
planning, engineering studies, environmental documentation,
and design of a single project at no more $500,000.
2)Specify that unless the Department of Public Health (DPH)
approves an increase, the maximum amount of a construction
grant award to each participating public water system for its
share of the cost of the construction of a single project
shall be no more than $3 million.
3)Authorize DPH to approve an increase in the maximum amount for
a construction grant award so that the maximum amount of the
construction grant award does not exceed $10 million only if
DPH makes all of the following findings:
a) A public water system that serves a disadvantaged
community has a defined project need that exceeds the
maximum grant amount of $3 million;
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b) The defined project has been bypassed in at least one
funding cycle due to a lack of funds;
c) The defined project is eligible for funding pursuant to
the program regulations; and,
d) The defined project represents the highest public health
risk among unfunded projects, as determined by the
department according to its standard criteria.
EXISTING LAW caps state grant awards, through the State
Revolving Fund, for engineering studies, design and construction
of projects at $1 million.
AS PASSED BY THE ASSEMBLY , this bill revised the requirements of
the State Revolving Fund, including eliminating the maximum
amount of a grant award for single projects and instead
authorizing DPH to set the amount of the grant.
FISCAL EFFECT : According to the Senate Appropriations
Committee, DPH indicates that it will need one additional
position to oversee the implementation of the requirements of
the bill. In addition, because the bill increases the amount of
funding that DPH can provide through grants, the bill may put
cost pressure on existing funds available for other projects.
(Less funding may be available for grants for other projects.
Also less funding may be used for loans that will ultimately be
repaid to the state.) The amount of this cost pressure is
unknown.
COMMENTS : Under federal law, the United States Environmental
Protection Agency (US EPA) provides funding to the states to
ensure safe drinking water is available to the public. In
recent years, the US EPA has provided about $70 million per year
to the state. The American Recovery and Reinvestment Act of
2009 provide $160 million in additional funding to California
for projects to develop drinking water infrastructure.
Under current law, DPH regulates drinking water and also
provides funding to local governments for projects to protect
and provide safe drinking water. The State Revolving Fund is
continuously appropriated to DPH to provide grants and loans for
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the design and construction of public water system projects.
The State Revolving Fund is supported by federal funds and
repayment of previous loans. Current law limits the amount that
DPH may provide as a grant to $1,000,000.
This bill makes several changes to the operation of the State
Revolving Fund including adding fire flow as a criterion that
must be considered by DPH when evaluating the reasonable rate of
growth for a proposed project and establishing a specific
wellhead protection account within the State Revolving Fund,
pursuant to federal law.
Additionally, this bill specifies that the maximum amount for a
planning grant (which can be used to pay for planning,
engineering studies, environmental documentation, and design)
shall be no more than $500,000. This bill also requires that
the maximum construction grant amount shall be no more than $3
million unless the maximum amount is increased administratively
by DPH. However, the bill provides that DPH may approve a
construction grant up to $10 million if it finds that: 1) a
disadvantaged community has a need for a project grant that
exceeds $3 million; 2) the disadvantaged community has been
bypassed in at least one previous funding cycle due to a lack of
funds; 3) the disadvantaged community meets all eligibility
criteria; and,
4) the project represents the highest public health risk amongst
unfunded projects.
Analysis Prepared by : Shannon McKinney / E.S. & T.M. / (916)
319-3965
FN: 0002953