BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
SB 962 (Anderson) - Public water systems: point-of-use
treatment.
Amended: May 15, 2012 Policy Vote: EQ 7-0
Urgency: No Mandate: No
Hearing Date: May 24, 2012 Consultant: Marie Liu
SUSPENSE FILE
Bill Summary: SB 962 would require the Department of Public
Health (DPR) to expand their emergency regulations regarding the
permitted use of point-of-entry and point-of-use treatment to
apply to water systems with less than 500 service connections,
which may remain in effect until January 1, 2016. This bill also
adds requirements in order for a water system to receive a
permit to use point-of-entry and point-of-use treatment.
Fiscal Impact:
Ongoing costs of approximately $200,000 annually from the
General Fund beginning in 2013-14 through 2016-17 for
additional permit review and audits. These costs will be
recoverable through a fee.
Ongoing costs of $500,000 annually from the General Fund
beginning in 2013-14 for the certification of point-of-use
and point-of-entry treatment systems. This cost will be
partially offset by Water Device Certification Fees of
approximately $382,000 a year.
Background: Existing law requires DPR to regulate drinking water
and to provide funding to local governments for projects to
protect and provide safe drinking water. DPH is currently
developing guidelines for the use of point-of-entry and
point-of-use water treatment systems, which can be used to treat
drinking water to required standards when a centralized water
treatment system is unavailable, as required by AB 1540
(Committee on Health) Chapter 298/2009. The use of these systems
is limited to certain small communities that have already
applied for funding to correct violations of water quality
requirements. DPH may only issue a permit to a public water
system for use of point-of-entry and point-of-use treatment if
there is no substantial community opposition and the permit is
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not valid for more than three years or until funding for
centralized treatment is available. DPH is currently developing
regulations for such permits for systems with less than 200
connections.
While these guidelines are being developed, AB 2515 (V. M.
Perez) Chapter 601/2010, required DPH to adopt emergency
regulations for the use of point-of-entry and point-of-use water
treatment systems for water systems with less than 200 service
connections, which may remain in effect until January 1, 2014 or
the effective date of regular regulations under development.
These emergency regulations were developed and became effective
on December 21, 2010 for point-of-use and September 22, 2011 for
point-of-entry treatments.
Proposed Law: This bill would require DPH to amend its existing
emergency regulations regarding point-of-entry and point-of-use
and water treatment systems to apply to water systems of up to
500 service connections (up from 200) and would allow these
regulations to remain in place until January 1, 2016 (up from
2014) or until regular regulations are developed.
This bill further would require DPH, as part of a permit
application for the use of point-of-entry and point-of-use
treatment, to require the water system to submit a capital
outlay plan for the construction of centralized treatment that
meets all federal and state water quality standards that will be
completed within five years of the application of the permit.
A water system under such permit could not add additional
service connections until centralized treatment is available for
all connections and would be required to treatment devices that
are certified and approved by DPH.
DPH would also be required to conduct a full audit of water
systems utilizing point-of-entry and point-of-use treatment to
examine why the water system does not have the funding necessary
for the operations, maintenance, and capital improvements
necessary to meet present and future water requirements.
Staff Comments: This bill would impose additional
responsibilities to DPH to revise existing emergency
regulations, expand permit review, auditing, and certification
of treatment devices. DPH indicates that the costs of updating
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emergency regulations are minor and absorbable.
There are 158 water systems with less than 500 connections that
are on DPH's strategic goal priority list for having compliance
issues. Assuming that DPH may receive approximately 39
applications a year (a fourth of the eligible water systems),DPH
will likely the require the use of an Associate Sanitary
Engineer at an annual cost of $170,000 annually because of the
technical aspect of the review as well as $31,200 in audit costs
for a total annual cost of approximately $200,000.
Staff notes that permit fees for public water systems with less
than 1,000 service connections are capped in statute pursuant to
Health and Safety Code �116565(b). The permit amendment fee for
water systems with less than 500 service connections is between
$250 and $3000 depending on the actual number of connections,
but this fee does not cover the cost of processing the
application, let alone the additional review and audits required
under this bill and will thus cause General Fund pressures.
DPH currently certifies point-of-use and point-of-entry
treatment systems under its Water Treatment Device Certification
program. However, this program is slated for elimination under
the Governor's 2012-13 proposed budget. If this budget item is
approved, this bill would require the reestablishment of this
program at an annual cost of $500,000. This program is currently
partially supported by annual fees totaling $382,000 per year.
Committee amendments: Require DPH to recover its costs for extra
review as required by this bill from a fee on water systems who
apply for a new permit or amend a permit to use point-of-use or
point-of-entry treatment systems.