BILL ANALYSIS �
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: AB 118
AUTHOR: Committee on Environmental Safety and Toxic
Materials
AMENDED: June 17, 2013
HEARING DATE: June 26, 2013
CONSULTANT: Moreno
SUBJECT : Safe Drinking Water State Revolving Fund.
SUMMARY : Deems a small community water system or non-transient
non-community water system that is owned by a public agency or a
private not-for-profit water company and is serving a severely
disadvantaged community, to have no ability to repay a loan.
Existing law:
1.Requires, under the California Safe Drinking Water Act, the
regulation of drinking water to protect public health by the
Department of Public Health (DPH).
2.Establishes the Safe Drinking Water State Revolving Fund
(SDWSRF), which is continuously appropriated DPH for grants
and revolving fund loans for the design and construction of
projects for public water systems that will enable suppliers
to meet safe drinking water standards. Permits the provision
of a grant only to the extent that DPH finds the public agency
or not-for-profit water company is unable to repay the full
costs of a loan.
3.Limits the maximum amount of a construction grant award to a
public water system for a single project to $3 million or, for
a public water system that serves a disadvantaged community,
$10 million, as specified.
This bill:
1.Deems a small community water system or non-transient
non-community water system that is owned by a public agency or
a private not-for-profit water company and is serving a
severely disadvantaged community, to have no ability to repay
a loan.
2.Permits, subject to the availability of funds and the
applicant's ability to repay, an applicant to receive up to
the full cost of a project in the form of a loan bearing
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interest, as specified.
FISCAL EFFECT : Not relevant.
PRIOR VOTES : (previous version)
Assembly Environmental Safety and Toxic Materials: 7- 0
Assembly Appropriations: 17- 0
Assembly Floor: 78- 0
Senate Environmental Quality: 9- 0
COMMENTS :
1.Author's statement. Small water systems throughout the state are
facing great difficulty in accessing state and federal funds for
drinking watery system improvements to meet basic water quality
standards. AB 118 is part of a larger package of bill intended to
improve the state drinking water program for those Californians
without safe drinking water. AB 118 accomplishes the dual goal of
allowing more funds to be proved through Safe Drinking Water
Revolving fund by increasing the allowable size of loans. This
removal of the current $20 million cap will allow larger loans and
decrease the current $450 million account balance. The second key
element increases the allowable percentage of projects eligible
funding for disadvantaged communities. AB 118 will improve the
state's drinking water by enabling DPH to be more flexible with
loans from the SDWSRF disbursement and help poor communities
afford the cost of correcting small water system deficiencies.
1.Background. Congress established the federal Drinking Water
State Revolving Fund (DWSRF) as part of the 1996 Safe Drinking
Water Act Amendments to better enable public water systems to
comply with national primary drinking water standards and to
protect public health. DWSRF 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 percent 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 SDWSRF through SB 1307
(Costa) Chapter 734, Statutes of 1997, to help fund the
state's drinking water needs. The fund provides public water
systems the opportunity to use subsidized funding to correct
infrastructure problems, assess and protect source water, and
improve technical, managerial, and financial capability.
AB 118 | Page
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2.SDWSRF. The SDWSRF is largely federally funded and subject to
extensive federal law and regulations. Pursuant to the
federal Safe Drinking Water Act (SDWA), DPH cannot provide
funding to an entity which does not have the technical,
managerial, and financial capacity to achieve and maintain
compliance with the federal SDWA and state law. Severely
disadvantaged communities have difficulty accessing funds due
to their limited financial capacity to charge adequate water
rates. According to the author, DPH intends to provide
increased support to these severely disadvantaged communities
by facilitating access to SDWSRF monies and, at the same time,
ensure compliance with the federal law and regulations.
3.Double referral. This bill was heard in the Senate
Environmental Quality Committee on June 12, 2013, and passed
with a 9-0 vote.
SUPPORT AND OPPOSITION :
Support: East Bay Municipal Utility District
Sierra Club California (previous version)
Silicon Valley Leadership Group (previous version)
Oppose: None received.
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