BILL ANALYSIS �
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THIRD READING
Bill No: AB 118
Author: Assembly Environmental Safety and Toxic Materials
Committee
Amended: 6/17/13 in Senate
Vote: 21
SENATE ENVIRONMENTAL QUALITY COMMITTEE : 9-0, 6/12/13
AYES: Hill, Gaines, Calderon, Corbett, Fuller, Hancock,
Jackson, Leno, Pavley
SENATE HEALTH COMMITTEE : 9-0, 6/26/13
AYES: Hernandez, Anderson, Beall, De Le�n, DeSaulnier, Monning,
Nielsen, Pavley, Wolk
SENATE APPROPRIATIONS COMMITTEE : 7-0, 8/30/13
AYES: De Le�n, Walters, Gaines, Hill, Lara, Padilla, Steinberg
ASSEMBLY FLOOR : 78-0, 5/28/13 - See last page for vote
SUBJECT : Safe Drinking Water State Revolving Fund
SOURCE : Author
DIGEST : This bill declares certain water systems serving a
severely disadvantaged community as eligible for a grant instead
of a loan from the Safe Drinking Water State Revolving Fund
(SDWSRF) and allows loans from the SDWSRF to cover the full cost
of a project, subject to availability of funds and the
applicant's ability to repay.
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ANALYSIS :
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 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
interest, as specified.
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
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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 SDWSRF through
SB 1307 (Costa, Chapter 734, Statutes of 1997) to help fund the
state's drinking water needs. SDWSRF 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.
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.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
Unknown increased cost pressures on the SDWSRF (special) for
assistance issued as grants instead of loans.
Increased exposure to potential loan defaults in the
millions of dollars to the SDWSRF by allowing loans to be
issued for the full cost of the project.
SUPPORT : (Verified 9/3/13)
Association of California Water Agencies
East Bay Municipal Utility District
King River Conservation District
King River Water Association
Rural County Representatives of California
Sierra Club California
Silicon Valley Leadership Group
ARGUMENTS IN SUPPORT : According to the author's office, small
water systems throughout the state are facing great difficulty
in accessing state and federal funds for drinking watery system
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improvements to meet basic water quality standards. This bill
is part of a larger package of bill intended to improve the
state drinking water program for those Californians without safe
drinking water. This bill accomplishes the dual goal of
allowing more funds to be proved through SDWSRF 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. This bill 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.
ASSEMBLY FLOOR : 78-0, 5/28/13
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,
Blumenfield, Bocanegra, Bonilla, Bonta, Bradford, Brown,
Buchanan, Ian Calderon, Campos, Chau, Ch�vez, Chesbro, Conway,
Cooley, Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox,
Frazier, Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon,
Gorell, Gray, Grove, Hagman, Hall, Harkey, Roger Hern�ndez,
Jones, Jones-Sawyer, Levine, Linder, Logue, Lowenthal,
Maienschein, Mansoor, Medina, Melendez, Mitchell, Morrell,
Mullin, Muratsuchi, Nazarian, Nestande, Olsen, Pan, Patterson,
Perea, V. Manuel P�rez, Quirk, Quirk-Silva, Rendon, Salas,
Skinner, Stone, Ting, Wagner, Waldron, Weber, Wieckowski,
Wilk, Williams, Yamada, John A. P�rez
NO VOTE RECORDED: Holden, Vacancy
RM:k 9/3/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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