BILL ANALYSIS �
AB 983
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 983 (Perea)
As Amended September 2, 2011
Majority vote
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|ASSEMBLY: |78-0 |(June 1, 2011) |SENATE: |37-0 |(September 7, |
| | | | | |2011) |
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Original Committee Reference: E.S. & T.M.
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.
The Senate amendments:
1)Define "acceptable result" as a project that, when
constructed, solves the drinking water problem for which the
project was placed on the project funding priority list,
ensures the owner and operator of the improved or restructured
public water system shall have long-term technical,
managerial, and financial capacity to operate and maintain the
public water system in compliance with state and federal safe
drinking water standards, can provide a dependable source of
safe drinking water long-term, and is both short-term and
long-term affordable, as determined by applicable regulations
adopted by the department.
2)Double joint this bill with Assembly Bill 938 (V. Manuel
P�rez), to avoid chaptering out conflicts.
3)Make technical and clarifying changes.
AS PASSED BY THE ASSEMBLY , this bill also authorized DPH to
agree to extend the term of the loan from the SDWSRF beyond 20
years, but limited the extension beyond the life of the project,
for disadvantaged communities in order to improve the
affordability of the project.
FISCAL EFFECT : According to the Assembly Appropriations
AB 983
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Committee, enactment of this bill could result in 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, a 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
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 community water systems or nontransient
AB 983
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noncommunity water systems owned by a public agency or private
not-for-profit water company serving severely disadvantaged
communities eligible to receive up to 100% of their eligible
project costs in the form of a grant, to the extent that the
system cannot afford a loan, 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.
Analysis Prepared by : Shannon McKinney / E.S. & T.M. / (916)
319-3965
FN:
0002807