BILL NUMBER: AB 54	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Solorio

                        DECEMBER 6, 2010

   An act to amend Sections 56375 and 56430 of the Government Code,
and to add Section 116760.65 to the Health and Safety Code, relating
to drinking water.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 54, as introduced, Solorio. Drinking water.
   Existing law, the California Safe Drinking Water Act, requires the
State Department of Public Health to administer provisions relating
to the regulation of drinking water to protect public health,
including, but not limited to, conducting research, studies, and
demonstration programs relating to the provision of a dependable,
safe supply of drinking water, enforcing the federal Safe Drinking
Water Act, adoption of enforcement regulations, and conducting
studies and investigations to assess the quality of water in domestic
water supplies.
   Existing law establishes the Safe Drinking Water State Revolving
Fund, continuously appropriated to the department 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
requires the department to establish criteria to be met for projects
to be eligible for consideration for this funding.
   This bill would allow the department to issue a letter of no
prejudice, as defined, to a public water system that is a lead
applicant for a project that may be funded by the Safe Drinking Water
Revolving Fund and would make expenditures related to the project
reimbursable in specified circumstances.
   Existing law, the Cortese-Knox-Hertzberg Local Government
Reorganization Act of 2000, sets forth the powers and duties of a
local agency formation commission, including, among others, the
powers to review and approve or disapprove with or without amendment,
wholly, partially, or conditionally, proposals for changes of
organization or reorganization, consistent with written policies,
procedures, and guidelines adopted by the commission.
   This bill would additionally authorize the commission to review
and approve or disapprove, at the commission's discretion, the
consolidation of territory within the jurisdiction of a mutual water
company into the jurisdiction of a city as a special district that
operates a public water system, with the consent of the respective
city and mutual water company.
   Under the Cortese-Knox-Hertzberg Local Government Reorganization
Act of 2000, each local agency formation commission is required to
develop and determine the sphere of influence of each local
governmental agency within the county and enact policies designed to
promote the logical and orderly development of areas within the
sphere of influence. In order to prepare and update spheres of
influence, the commission is required to conduct a service review,
including the review of growth and population projections for the
affected area, present and planned capacity of public facilities and
adequacy of public services, financial ability of agencies to provide
services, the status of, and opportunities for, shared facilities,
accountability for community service needs, and any other matter
related to effective or efficient service delivery, as required by
commission policy.
   This bill would authorize the commission to include in the service
review, a review of whether the available drinking water sources
within the area of review comply with safe drinking water standards.

   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  The Legislature finds and declares all of the
following:
   (a) Californians rely on a broad diversity of public and private
organizations to deliver clean and safe drinking water to their home
water taps. Regardless of the form of the organization that operates
a public water system, these organizations provide a public service
that remains one of the core duties of the people's government.
   (b) While the state's goal is to ensure clean and safe drinking
water, California's drinking water quality has deteriorated and some
public water systems continue to suffer poor water quality that are
inconsistent with safe drinking water standards.
   (c) The state provides funding to public water systems to improve
drinking water quality through the Safe Drinking Water Revolving
Fund, but demand far exceeds the available funding. The United States
Environmental Protection Agency's Drinking Water Infrastructure
Needs Survey and Assessment, which was performed in 2007, State
Department of Public Health estimates that the 20-year drinking water
infrastructure need for California is $39 billion. Funding for such
projects, however, for 1997-2008 totaled only 1.2 billion.
   (d) It is the intent of the Legislature to enact legislation that
would impose consistent fines and penalties on public water systems
across the state to ensure compliance with safe drinking water
standards.
  SEC. 2.  Section 56375 of the Government Code is amended to read:
   56375.  The commission shall have all of the following powers and
duties subject to any limitations upon its jurisdiction set forth in
this part:
   (a) (1) To review and approve or disapprove with or without
amendment, wholly, partially, or conditionally, proposals for changes
of organization or reorganization, consistent with written policies,
procedures, and guidelines adopted by the commission.
   (2) The commission may initiate proposals by resolution of
application for any of the following:
   (A) The consolidation of a district, as defined in Section 56036.
   (B) The dissolution of a district.
   (C) A merger.
   (D) The establishment of a subsidiary district.
   (E) The formation of a new district or districts.
   (F) A reorganization that includes any of the changes specified in
subparagraph (A), (B), (C), (D), or (E).
   (3) A commission may initiate a proposal described in paragraph
(2) only if that change of organization or reorganization is
consistent with a recommendation or conclusion of a study prepared
pursuant to Section 56378, 56425, or 56430, and the commission makes
the determinations specified in subdivision (b) of Section 56881.
   (4) A commission shall not disapprove an annexation to a city,
initiated by resolution, of contiguous territory that the commission
finds is any of the following:
   (A) Surrounded or substantially surrounded by the city to which
the annexation is proposed or by that city and a county boundary or
the Pacific Ocean if the territory to be annexed is substantially
developed or developing, is not prime agricultural land as defined in
Section 56064, is designated for urban growth by the general plan of
the annexing city, and is not within the sphere of influence of
another city.
   (B) Located within an urban service area that has been delineated
and adopted by a commission, which is not prime agricultural land, as
defined by Section 56064, and is designated for urban growth by the
general plan of the annexing city.
   (C) An annexation or reorganization of unincorporated islands
meeting the requirements of Section 56375.3.
   (5) As a condition to the annexation of an area that is
surrounded, or substantially surrounded, by the city to which the
annexation is proposed, the commission may require, where consistent
with the purposes of this division, that the annexation include the
entire island of surrounded, or substantially surrounded, territory.
   (6) A commission shall not impose any conditions that would
directly regulate land use density or intensity, property
development, or subdivision requirements.
   (7) The decision of the commission with regard to a proposal to
annex territory to a city shall be based upon the general plan and
prezoning of the city. When the development purposes are not made
known to the annexing city, the annexation shall be reviewed on the
basis of the adopted plans and policies of the annexing city or
county. A commission shall require, as a condition to annexation,
that a city prezone the territory to be annexed or present evidence
satisfactory to the commission that the existing development
entitlements on the territory are vested or are already at build-out,
and are consistent with the city's general plan. However, the
commission shall not specify how, or in what manner, the territory
shall be prezoned.
   (b) With regard to a proposal for annexation or detachment of
territory to, or from, a city or district or with regard to a
proposal for reorganization that includes annexation or detachment,
to determine whether territory proposed for annexation or detachment,
as described in its resolution approving the annexation, detachment,
or reorganization, is inhabited or uninhabited.
   (c) With regard to a proposal for consolidation of two or more
cities or districts, to determine which city or district shall be the
consolidated successor city or district.
   (d) To approve the annexation of unincorporated, noncontiguous
territory, subject to the limitations of Section 56742, located in
the same county as that in which the city is located, and that is
owned by a city and used for municipal purposes and to authorize the
annexation of the territory without notice and hearing.
   (e) To approve the annexation of unincorporated territory
consistent with the planned and probable use of the property based
upon the review of general plan and prezoning designations. No
subsequent change may be made to the general plan for the annexed
territory or zoning that is not in conformance to the prezoning
designations for a period of two years after the completion of the
annexation, unless the legislative body for the city makes a finding
at a public hearing that a substantial change has occurred in
circumstances that necessitate a departure from the prezoning in the
application to the commission.
   (f) With respect to the incorporation of a new city or the
formation of a new special district, to determine the number of
registered voters residing within the proposed city or special
district or, for a landowner-voter special district, the number of
owners of land and the assessed value of their land within the
territory proposed to be included in the new special district. The
number of registered voters shall be calculated as of the time of the
last report of voter registration by the county elections official
to the Secretary of State prior to the date the first signature was
affixed to the petition. The executive officer shall notify the
petitioners of the number of registered voters resulting from this
calculation. The assessed value of the land within the territory
proposed to be included in a new landowner-voter special district
shall be calculated as shown on the last equalized assessment roll.
   (g) To adopt written procedures for the evaluation of proposals,
including written definitions consistent with existing state law. The
commission may adopt standards for any of the factors enumerated in
Section 56668. Any standards adopted by the commission shall be
written.
   (h) To adopt standards and procedures for the evaluation of
service plans submitted pursuant to Section 56653 and the initiation
of a change of organization or reorganization pursuant to subdivision
(a).
   (i) To make and enforce regulations for the orderly and fair
conduct of hearings by the commission.
   (j) To incur usual and necessary expenses for the accomplishment
of its functions.
   (k) To appoint and assign staff personnel and to employ or
contract for professional or consulting services to carry out and
effect the functions of the commission.
   (l) To review the boundaries of the territory involved in any
proposal with respect to the definiteness and certainty of those
boundaries, the nonconformance of proposed boundaries with lines of
assessment or ownership, and other similar matters affecting the
proposed boundaries.
   (m) To waive the restrictions of Section 56744 if it finds that
the application of the restrictions would be detrimental to the
orderly development of the community and that the area that would be
enclosed by the annexation or incorporation is so located that it
cannot reasonably be annexed to another city or incorporated as a new
city.
   (n) To waive the application of Section 22613 of the Streets and
Highways Code if it finds the application would deprive an area of a
service needed to ensure the health, safety, or welfare of the
residents of the area and if it finds that the waiver would not
affect the ability of a city to provide any service. However, within
60 days of the inclusion of the territory within the city, the
legislative body may adopt a resolution nullifying the waiver.
   (o) If the proposal includes the incorporation of a city, as
defined in Section 56043, or the formation of a district, as defined
in Section 2215 of the Revenue and Taxation Code, the commission
shall determine the property tax revenue to be exchanged by the
affected local agencies pursuant to Section 56810.
   (p) To authorize a city or district to provide new or extended
services outside its jurisdictional boundaries pursuant to Section
56133.
   (q) To enter into an agreement with the commission for an
adjoining county for the purpose of determining procedures for the
consideration of proposals that may affect the adjoining county or
where the jurisdiction of an affected agency crosses the boundary of
the adjoining county. 
   (r) To review and approve or disapprove, at the commission's
discretion, the consolidation of territory within the jurisdiction of
a mutual water company formed pursuant to Chapter 2 (commencing with
Section 14310) of Part 7 of Division 3 of Title 1 of the
Corporations Code into the jurisdiction of a city as a special
district that operates a public water system, with the consent of the
respective city and mutual water company. 
  SEC. 3.  Section 56430 of the Government Code is amended to read:
   56430.  (a) In order to prepare and to update spheres of influence
in accordance with Section 56425, the commission shall conduct a
service review of the municipal services provided in the county or
other appropriate area designated by the commission. The commission
shall include in the area designated for service review the county,
the region, the subregion, or any other geographic area as is
appropriate for an analysis of the service or services to be
reviewed, and shall prepare a written statement of its determinations
with respect to each of the following:
   (1) Growth and population projections for the affected area.
   (2) Present and planned capacity of public facilities and adequacy
of public services, including infrastructure needs or deficiencies.
   (3) Financial ability of agencies to provide services.
   (4) Status of, and opportunities for, shared facilities.
   (5) Accountability for community service needs, including
governmental structure and operational efficiencies.
   (6) Any other matter related to effective or efficient service
delivery, as required by commission policy.
   (b) In conducting a service review, the commission shall
comprehensively review all of the agencies that provide the
identified service or services within the designated geographic area.

   (c) In conducting a service review, the commission may include a
review of whether the available drinking water sources within the
area of review comply with safe drinking water standards. 

   (c) 
    (d)  The commission shall conduct a service review
before, or in conjunction with, but no later than the time it is
considering an action to establish a sphere of influence in
accordance with Section 56425 or Section 56426.5 or to update a
sphere of influence pursuant to Section 56425.
  SEC. 4.  Section 116760.65 is added to the Health and Safety Code,
to read:
   116760.65.  (a) A public water system, as defined in Section
116275, that is a lead applicant for a project that may be funded
pursuant to this chapter may apply to the department for a letter of
no prejudice for the project or a component of the project. The
department may approve the letter of no prejudice for one or more
projects or project components that the department has determined to
be eligible for federal or state funding pursuant to established
funding priorities and has issued an invitation to apply for funding
from the Safe Drinking Water Revolving Fund. The letter of no
prejudice shall reference the project or component thereof and the
maximum amount of bond funding that may be allocated for that project
or project component.
   (b) Expenditures for the costs, up to the amount set forth in the
letter of no prejudice, of a project or project component for which a
letter of no prejudice has been issued shall be eligible for
reimbursement from the Safe Drinking Water Revolving Fund if all of
the following apply:
   (1) The project or project component for which the letter of no
prejudice was requested has commenced and expenditures on the project
or project component have been incurred by the local agency.
   (2) The expenditures made by the local agency are eligible for
reimbursement in accordance with state and federal laws and
procedures, and are permitted expenditures under the applicable
provisions of the federal Safe Drinking Water Act (42 U.S.C. Sec.
300f et seq.) or the California Safe Drinking Water Act. If
expenditures made are determined to be ineligible, then the state has
no obligation to reimburse for those expenditures.
   (3) The public water system complies with all legal requirements
for the project, including the requirements of the California
Environmental Quality Act (Division 13 (commencing with Section
21000) of the Public Resources Code).
   (4) The expenditures were incurred after the project or project
component was determined to be eligible for funding by the
department.
   (5) There is in the Safe Drinking Water Revolving Fund an amount
sufficient to make the reimbursement payment. Nothing in this section
requires the fund to be funded at a particular time or in a
particular amount.
   (c) The department and the public water system may enter into an
agreement or agreements governing reimbursement as described in this
section.
   (d) Without limiting the foregoing, nothing in this section or in
a letter of no prejudice shall eliminate or modify any condition or
requirement for granting, allocating, or reallocating funds or any
other provision relating to loans, grants, allocations, or
reallocations in the California Safe Drinking Water Act or related
statutes.
   (e) For purposes of this section, "letter of no prejudice" means
an agreement between a public water system and the department that
makes eligible for future reimbursement from the Safe Drinking Water
Revolving Fund the expenditure of funds under the control of the
public water system, subject to availability of bond funds, as
provided in this section. The timing and final amount of
reimbursement is dependent on the terms of the agreement and the
availability of funds. The final amount of reimbursement may be less
than the amount stated in the letter of no prejudice.