BILL ANALYSIS �
AB 983
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ASSEMBLY THIRD READING
AB 983 (Perea)
As Amended May 5, 2011
Majority vote
ENVIRONMENTAL SAFETY 9-0
APPROPRIATIONS 17-0
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|Ayes:|Wieckowski, Miller, |Ayes:|Fuentes, Harkey, |
| |Campos, Chesbro, Davis, | |Blumenfield, Bradford, |
| |Feuer, | |Charles Calderon, Campos, |
| |Bonnie Lowenthal, | |Davis, Donnelly, Gatto, |
| |Morrell, Valadao | |Hall, Hill, Lara, |
| | | |Mitchell, Nielsen, Norby, |
| | | |Solorio, Wagner |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Authorizes the Department of Public Health (DPH) to
take specified actions, when implementing the Safe Drinking
Water State Revolving Fund (SDWSRF), to improve access to
financial assistance for projects serving small community water
systems and disadvantaged communities. Specifically, this bill :
1)Updates the definition of "cost-effective project" to mean a
project that provides long-term access to safe drinking water
at a reasonable cost, which shall be calculated based upon the
capital costs and long-term viability of the project as well
as the affordability of continuing operation and maintenance
charges to ratepayers.
2)Authorizes DPH, when implementing the SDWSRF, to improve
access to financial assistance for projects serving small
community water systems by doing both of the following:
a) Establishing a payment process by which the recipient of
financial assistance would receive funds within 30 days of
the date DPH receives a project payment request, unless
DPH, within that 30-day period, determines the project
payment would not be in accordance with the terms of the
SDWSRF guidelines; and,
b) Utilizing wire transfers or other appropriate payment
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procedures to expedite project payments.
3)Requires DPH, in establishing the priority list categories for
funding projects from the SDWSRF, to, after giving priority to
upgrade existing systems to meet drinking water standards,
prioritize projects that include consolidation with a small
water system that will enable that system to meet drinking
water standards without regard to the project proponent,
provided the proponent is an eligible entity, as defined.
4)Makes small water systems serving severely disadvantaged
communities eligible to receive up to 100% of their project
costs in the form of principal forgiveness or grant from the
SDWSRF, if needed to ensure affordable water rates.
5)Authorizes DPH, for disadvantaged communities, to extend the
term of a loan from the SDWSRF beyond 20 years, but not beyond
the life of the project, in order to improve the affordability
of the project.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, cost pressure to DPH of an unknown amount, but
potentially in the millions of dollars, to fund up to 100%,
rather than up to 80%, of project costs for small water systems
serving severely disadvantaged communities (SDWSRF); and,
potential delay in loan repayment by disadvantaged communities,
consistent with this bill (SDWSRF).
COMMENTS :
Safe Drinking Water State Revolving Fund (SDWSRF) : The SDWSRF,
which was established in the federal 1996 Safe Drinking Water
Act Amendments, provides financial assistance in the form of
capitalization grants to states to provide low interest loans
and other assistance to public water systems. In order to
receive these funds, states must provide a state match equal to
20% of the federal capitalization grants and must create a
drinking water state revolving fund program for public water
system infrastructure needs and other drinking water-related
activities. In response, California established the state
SDWSRF, which is administered by DPH.
Expedited payment process for loans to disadvantaged
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communities : Proponents of the bill argue that because of the
significance of water quality projects to the public health,
small communities need loans to be disbursed without delay for
water quality project improvements. The Legislature passed, and
the Governor signed, AB 2356 (Arambula), Chapter 609, Statutes
of 2008, which requires the State Water Resources Control Board
(SWRCB) to establish a payment process by which the recipient of
financial assistance for water quality projects receives funds
within 30 days of the date on which the SWRCB receives a project
payment request. This bill authorizes DPH, when implementing
the SDWSRF, to establish a similar expedited payment process.
Loans for severely disadvantaged communitie s: Proponents of the
bill argue that severely disadvantaged communities are often
unable to take advantage of existing funds for drinking water
projects because they are unable to repay even modest loans.
Last year the Legislature passed, and the Governor signed, AB
2515 (V. Manuel P�rez), Chapter 601, Statutes of 2010, which
authorizes DPH to provide a grant from the SDWSRF for
point-of-entry and point-of-use water treatment systems if that
system serves a severely disadvantaged community. Similarly,
this bill makes small water systems serving severely
disadvantaged communities eligible to receive up to 100% of
their project costs in the form of principal forgiveness or
grant from the SDWSRF.
Consolidation : The author asserts that DPH does not provide
sufficient incentive to make consolidation of water systems
occur, and that it restricts the capacity of the project based
on the size of the community most in need. According to DPH,
funding for consolidation projects is both authorized and
encouraged by the SDWSRF program. Consistent with the SDWSRF
Intended Use Plan, funds may be used for consolidation projects
that enable noncompliant water systems lacking the necessary
technical, managerial, and financial capacity to achieve
compliance with safe drinking water standards by consolidating
with another water system that is in compliance. This bill
requires DPH, in establishing the priority list categories for
funding projects from the SDWSRF, to prioritize projects that
include consolidation with a small water system without regard
to the project proponent, as specified.
Analysis Prepared by : Shannon McKinney / E.S. & T.M. / (916)
319-3965 FN: 0000967
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