BILL NUMBER: AB 2529 AMENDED
BILL TEXT
AMENDED IN SENATE AUGUST 24, 2012
AMENDED IN SENATE AUGUST 21, 2012
AMENDED IN SENATE AUGUST 6, 2012
AMENDED IN ASSEMBLY MAY 1, 2012
AMENDED IN ASSEMBLY MARCH 29, 2012
INTRODUCED BY Assembly Members Wieckowski and Beall
FEBRUARY 24, 2012
An act to amend Sections 116760.43, 116760.50, 116761.20,
116761.21, 116761.23, 116761.50, 116761.65, and 116761.70 of the
Health and Safety Code, relating to safe drinking water
Section 748.5 of the Public Utilities Code, relating to
greenhouse gases .
LEGISLATIVE COUNSEL'S DIGEST
AB 2529, as amended, Wieckowski. Safe Drinking Water
State Revolving Fund. California Global Warming
Solutions Act of 2006: electrical corporations.
The California Global Warming Solutions Act of 2006 designates the
State Air Resources Board as the state agency charged with
monitoring and regulating sources of emissions of greenhouse gases.
The state board is required to adopt a statewide greenhouse gas
emissions limit equivalent to the statewide greenhouse gas emissions
level in 1990 to be achieved by 2020, and to adopt rules and
regulations in an open public process to achieve the maximum,
technologically feasible, and cost-effective greenhouse gas emissions
reductions. The act authorizes the state board to include use of
market-based compliance mechanisms. Existing law requires all moneys,
except for fines and penalties, collected by the state board from
the auction or sale of allowances as part of a market-based
compliance mechanism to be deposited in the Greenhouse Gas Reduction
Fund and to be available upon appropriation by the Legislature.
Under the Public Utilities Act, the Public Utilities Commission
has regulatory jurisdiction over public utilities, including
electrical corporations. A violation of the Public Utilities Act or
any order, decision, rule, direction, demand, or requirement of the
commission is a crime.
This bill would require the commission to credit directly, in
proportion to the increase in electricity cost, to all retail
delivery customers of an electrical corporation all revenues, as
specified, the electrical corporation receives as a direct result of
the direct allocation of greenhouse gas allowances in proportion to
the increase in electricity costs those customers incur as a result
of the state board adopting a market-based compliance mechanism.
Because a violation of this requirement is a crime, this bill would
impose a state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
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. The
department's duties include, but are 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, adopting and enforcing
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, which is 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 authorizes the department to establish specified separate
accounts or subaccounts within the fund.
Existing law requires applicants for loans or grants to provide
specified information to the department. Existing law authorizes the
department to enter into contracts with applicants for grants or
loans, and requires and authorizes these contracts to contain
specified information.
This bill would require an applicant for funding to demonstrate
that it has the technical, managerial, and financial capacity to
operate and maintain its water system for at least 20 years, as
specified. The bill would authorize an applicant, subject to
specified conditions, to receive up to 80% of the full cost of a
construction project in the form of a loan. The bill would require
that contracts entered into between the department and an applicant
include certain additional information, and authorize the contracts
to include certain additional information.
This bill would make other related changes.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no yes .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 748.5 of the Public
Utilities Code is amended to read:
748.5. (a) Except as provided in subdivision (c), the
The commission shall require all
revenues, including any accrued interest, received by an electrical
corporation as a result of the direct allocation of greenhouse gas
allowances to electric utilities pursuant to subdivision (b) of
Section 95890 of Title 17 of the California Code of Regulations to be
credited directly to the residential, small business, and
emissions-intensive trade-exposed all retail
delivery customers of the electrical corporation in
proportion to the increase in electricity costs those customers incur
as a result of a market-based compliance mechanism adopted by the
State Air Resources Board pursuant to Part 5 (commencing with Section
38570) of Division 25.5 of the Health and Safety Code .
(b) Not later than January 1, 2013, the commission shall require
the adoption and implementation of a customer outreach plan for each
electrical corporation, including, but not limited to, such measures
as notices in bills and through media outlets, for purposes of
obtaining the maximum feasible public awareness of the crediting of
greenhouse gas allowance revenues. Costs associated with the
implementation of this plan are subject to recovery in rates pursuant
to Section 454.
(c) The commission may allocate up to 15 percent of the revenues,
including any accrued interest, received by an electrical corporation
as a result of the direct allocation of greenhouse gas allowances to
electrical distribution utilities pursuant to subdivision (b) of
Section 95890 of Title 17 of the California Code of Regulations, for
clean energy and energy efficiency projects established pursuant to
statute that are administered by the electrical corporation and that
are not otherwise funded by another funding source.
SEC. 2. No reimbursement is required by this act
pursuant to Section 6 of Article XIII B of the California
Constitution because the only costs that may be incurred by a local
agency or school district will be incurred because this act creates a
new crime or infraction, eliminates a crime or infraction, or
changes the penalty for a crime or infraction, within the meaning of
Section 17556 of the Government Code, or changes the definition of a
crime within the meaning of Section 6 of Article XIII B of the
California Constitution.
SECTION 1. Section 116760.43 of the Health and
Safety Code is amended to read:
116760.43. (a) The department may adopt emergency regulations
pursuant to Chapter 3.5 (commencing with Section 11340) of Part 1 of
Division 3 of Title 2 of the Government Code necessary or convenient
to implement this chapter and to meet requirements pursuant to the
federal act.
(b) The adoption of any emergency regulations that are filed with
the Office of Administrative Law within 18 months of the effective
date of this act shall be deemed to be an emergency and necessary for
the immediate preservation of the public peace, health and safety,
or general welfare.
(c) Applicable regulations in effect at the time a complete
application for funding a planning and preliminary design project
pursuant to this chapter is received by the department shall apply to
the planning and preliminary design project or construction project
funding, unless the department determines a regulation adopted later,
but prior to the date a funding agreement is issued for a planning
and a preliminary design project or a construction project, would be
more beneficial to the project applicant, in which case the later
adopted regulation may be applied.
SEC. 2. Section 116760.50 of the Health and
Safety Code is amended to read:
116760.50. The department shall establish criteria that shall be
met for projects to be eligible for consideration for funding under
this chapter. The criteria shall include all of the following:
(a) All preliminary design work for a defined project that will
enable the applicant to supply water that meets safe drinking water
standards, including a cost estimate for the project, shall be
completed.
(b) A legal entity shall exist that has the authority to enter
into contracts and incur debt on behalf of the community to be served
and owns the public water system or has the right to operate the
public water system under a lease with a term of at least 20 years,
unless otherwise authorized by the department. If the proposed
project is funded by a loan under this chapter, the department may
require the applicant to secure a lease for the full term of the loan
if the loan exceeds 20 years.
(c) The applicant shall hold all necessary water rights.
(d) The applicant shall have completed, prior to receiving a
funding agreement, environmental review and documentation of the
defined project, including, but not limited to, any review required
pursuant to the California Environmental Quality Act (Division 13
(commencing with Section 21000) of the Public Resources Code) and the
guidelines adopted pursuant thereto. Any measures required for
compliance with applicable environmental laws and regulations shall
be included in the final plans for the defined project.
(e) The applicant has assembled sufficient financial data to
establish its ability to complete the proposed project and to
establish the amount of debt financing it can undertake.
(f) The applicant shall demonstrate that it has the technical,
managerial, and financial capacity to operate and maintain its water
system, including the construction project, in accordance with
Section 300j-12(a)(3) of the federal act, state law, and applicable
regulations for at least 20 years, or shall submit an acceptable plan
for achieving this capacity by the time the project is scheduled to
be completed.
SEC. 3. Section 116761.20 of the Health and
Safety Code is amended to read:
116761.20. (a) Planning and preliminary engineering studies,
project design, and construction costs incurred by community and
not-for-profit noncommunity public water systems may be funded under
this chapter by loans, and, if these systems are owned by public
agencies or private not-for-profit water companies, by grants, or a
combination of grants and loans.
(b) (1) The department shall determine what portion of the full
costs the public agency or private not-for-profit water company is
capable of repaying and authorize funding in the form of a loan for
that amount. The department shall authorize a grant only to the
extent the department finds the public agency or not-for-profit water
company is unable to repay the full costs of a loan.
(2) Notwithstanding any other provision of this chapter, a small
community water system or nontransient noncommunity water system that
is owned by a public agency or a private not-for-profit water
company and serving a severely disadvantaged community, is deemed to
have no ability to repay a loan.
(c) At the request of the department, the Public Utilities
Commission shall submit comments concerning the ability of suppliers,
subject to its jurisdiction, to finance the project from other
sources and to repay the loan.
SEC. 4. Section 116761.21 of the Health and
Safety Code is amended to read:
116761.21. Not more than 30 percent and not less than 15 percent,
provided that there are projects eligible for funding as prescribed
in Section 116760.70, of the total amount of the capitalization grant
may be expended for grants. This amount shall be limited to
disadvantaged communities specified in Section 1452(d) of the federal
act (42 U.S.C. Sec. 300j-12).
SEC. 5. Section 116761.23 of the Health and
Safety Code is amended to read:
116761.23. (a) The maximum amount of a planning grant permitted
under this chapter for each participating public water system's share
of the costs of the planning, engineering studies, environmental
documentation, and design of a single project shall be no more than
five hundred thousand dollars ($500,000).
(b) Unless the department approves an increase pursuant to this
subdivision, the maximum amount of a construction grant award
authorized under this chapter to each participating public water
system for its share of the cost of the construction of a single
project shall be no more than three million dollars ($3,000,000). The
department may approve an increase in the maximum amount for a
construction grant award authorized under this chapter so that the
maximum amount of the construction grant award does not exceed ten
million dollars ($10,000,000) only if the department makes all of the
following findings:
(1) A public water system that serves a disadvantaged community
has a defined project need that exceeds the maximum grant amount of
three million dollars ($3,000,000).
(2) The defined project has been bypassed in at least one funding
cycle due to a lack of funds.
(3) The defined project is eligible for funding pursuant to the
program regulations.
(4) The defined project represents the highest public health risk
among unfunded projects, as determined by the department according to
its standard criteria.
(c) Total funding under this article for planning, engineering
studies, environmental documentation, project design, and
construction costs of a single project, whether in the form of a loan
or a grant, or both, shall be determined by an assessment of
affordability using criteria established by the department.
(d) Subject to all other limitations of this chapter, a small
community water system or nontransient noncommunity water system,
owned by a public agency or private not-for-profit water company,
serving severely disadvantaged communities shall be eligible to
receive up to 100 percent of eligible project costs in the form of a
grant, to the extent the system cannot afford a loan as determined by
the department pursuant to Section 116761.20.
(e) Subject to the availability of funds and the applicant's
ability to repay, an applicant may receive up to 80 percent of the
full cost of the construction project in the form of a loan bearing
interest at the rate established pursuant to subdivision (a) of
Section 116761.65.
SEC. 6. Section 116761.50 of the Health and
Safety Code is amended to read:
116761.50. (a) The department may enter into contracts with
applicants for grants or loans for the purposes set forth in this
chapter. Any contract entered into pursuant to this section shall
include only terms and conditions consistent with this chapter and
the regulations established under this chapter.
(b) The contract shall include all of the following terms and
conditions that are applicable:
(1) An estimate of the reasonable cost of the project or study.
(2) An agreement by the department to loan or grant, or loan and
grant, the applicant an amount that equals the portion of the costs
found by the department to be eligible for a state loan or grant. The
agreement may provide for disbursement of funds during the progress
of the study or construction, or following completion of the study or
construction, as agreed by the parties.
(3) An agreement by the applicant to proceed expeditiously with
the project or study.
(4) An agreement by the applicant to commence operations of the
project upon completion of the project, and to properly operate and
maintain the project in accordance with the applicable provisions of
law.
(5) In the case of a loan, an agreement by the applicant to repay
the state, over a period not to exceed the useful life of the project
or 20 years, whichever is shorter, except as provided in the federal
act, or in the case of a study, over a period not to exceed five
years, that includes all of the following:
(A) The amount of the loan.
(B) The administrative fee specified in subdivision (a) of Section
116761.70.
(C) Interest on the principal, which is the amount of the loan
including, if applicable, an administrative fee.
(6) In the case of a grant, an agreement by the public agency or
private not-for-profit water company to operate and maintain the
water system for a period of 20 years, unless otherwise authorized by
the department.
(7) (A) The time for the completion of the planning and
preliminary design project. Subject to any requirements of the
federal act and its implementing regulations and guidelines, in the
case of a project for planning and a preliminary design, pursuant to
Section 116760.80, and except as specified in subparagraph (B), the
funding recipient shall complete the project within 18 months from
the date of the execution of the funding agreement.
(B) If the funding recipient cannot complete the project within
18 months, the department may grant an extension of up to 18 months
upon request of the funding recipient.
(c) The contract may include any of the following terms and
conditions:
(1) An agreement by the funding recipient to adopt a fee structure
that provides for the proper maintenance and operations of the
project and includes a sinking fund for repair and replacement of the
facilities in cases where appropriate. The fee structure shall also
provide an acceptable dedicated source of revenue for the repayment
of the amount of the loan, and the payment of administrative fees and
interest.
(2) If the entire project is not funded pursuant to this chapter,
the department may include a provision requiring the applicant to
share the cost of the project or obtain funding from other sources.
(3) An agreement by the funding recipient to complete, as part of
the planning and preliminary design project or construction project,
a rate study pursuant to guidelines established by the department.
(4) An agreement by the funding recipient to implement, not later
than the conclusion of the construction project, the approved plan
for achieving technical, managerial, and financial capacity as
specified in subdivision (f) of Section 116760.50.
(5) If the funding recipient is a small community water system or
nontransient noncommunity water system, owned by a public agency or
private not-for-profit water company receiving grant funding, an
agreement by the funding recipient to review and consider guidelines
adopted by the department for any procurement of engineering,
environmental compliance, or architectural services.
(d) The department may require applicants to provide security for
loan contracts.
SEC. 7. Section 116761.65 of the Health and
Safety Code is amended to read:
116761.65. (a) The department shall annually establish the
interest rate for loans made pursuant to this chapter at 50 percent
of the average interest rate, computed by the true interest cost
method, paid by the state on general obligation bonds issued in the
prior calendar year. All loans made pursuant to this chapter shall
carry the interest rate established for the calendar year in which
the funds are committed to the loan, as of the date of the issuance
of the funding commitment. The interest rate set for each loan shall
be applied throughout the repayment period of the loan. Interest on
the loan shall not be deferred.
(b) Notwithstanding subdivision (a), if the loan applicant is a
public water system that is a disadvantaged community or provides
matching funds, the interest rate on the loan shall be 0 percent.
SEC. 8. Section 116761.70 of the Health and
Safety Code is amended to read:
116761.70. (a) Not more than 4 percent of the capitalization
grant may be used by the department for administering this chapter.
The department may establish a reasonable schedule of administrative
fees for loans, which shall be paid by the funding recipient to
reimburse the state for the costs of the state administration of this
chapter.
(b) Charges incurred by the Attorney General in protection of the
state's interest in the use of repayment of grant and loan funds
under this chapter shall be paid. These charges shall not be paid
from funds allocated for administrative purposes, but shall be
treated as a program expense not to exceed one-half of 1 percent of
the total amount deposited in the fund.