Amended in Assembly April 9, 2014

Amended in Assembly March 17, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 1527

Introduced by Assembly Member Perea

January 17, 2014

begin delete An act to add Article 13 (commencing with Section 116756) to Chapter 4 of Part 12 of the Health and Safety Code, relating to drinking water. end delete begin insert An act to amend Section 116326 of the Health and Safety Code, and to amend Section 75125 of, and to add Section 75129.5 to, the Public Resources Code, relating to public water systems. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 1527, as amended, Perea. Public water systems: drinking water.

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Existing law, known as 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, including, but not limited to, administering programs to fund improvements and expansion of small community water systems using specified priorities. Existing law requires the department to encourage the consolidation of small community water systems that serve disadvantaged communities if consolidation will help the affected agencies and the state meet specified goals. Existing law allows funding of studies regarding the feasibility of consolidating 2 or more community water systems, at least one of which is a small community water system that serves a disadvantaged community, and requires the department to give funding priority to projects that involve the physical restructuring of 2 or more community water systems, as specified, when it is shown that the consolidation would further specified goals.

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This bill would require the department, in administering programs to fund improvements and expansions of small community water systems and other water systems, as specified, to promote service delivery alternatives that improve efficiency and affordability of infrastructure and service delivery, as specified.

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The Safe Drinking Water, Water Quality and Supply, Flood Control, River and Coastal Protection Bond Act of 2006, an initiative measure, provides funding for safe drinking water, water quality and supply, flood control, natural resource protection, and park improvements. Existing law establishes the Strategic Growth Council and appropriates $500,000 from the funding provided by the initiative to support the council and its activities. Existing law requires the council to manage and award grants and loans to support the planning and development of sustainable communities, as specified.

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This bill would require the council to manage and award financial assistance to a city, county, local area formation commission, special district, nonprofit organization, or entity, as specified, for the preparation, planning, and implementation of a public water system consolidation, merger, or extension of services project for the purposes of promoting water conservation, and would require that the financial assistance be provided from available moneys pursuant to a specified provision of the bond act described above.

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Existing law, known as 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, including, but not limited to, programs to fund improvements and expansion of small community water systems using specified priorities. Existing law requires the department to encourage the consolidation of small community water systems that serve disadvantaged communities in instances where consolidation will help the affected agencies and the state to meet specified goals.

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This bill would authorize an assuming water system, as defined, to voluntarily consolidate with another water system. This bill would define “assuming water system” as a water system that will obtain legal ownership of another water system or systems, and that has a permit to operate from the department, and would define “subsumed water system” as the water system that will transfer legal ownership to the assuming water system. This bill would require the assuming water system to file a voluntary consolidation plan with the department that includes, but is not limited to, a list of current deficiencies in the subsumed water system, proposed remedies to those deficiencies, and a timeline for correcting the subsumed water system. This bill would require the department to approve the voluntary consolidation plan within 60 days, and if the department does not disapprove of the plan within those 60 days the plan will be deemed approved. This bill would also provide that an assuming water system that begins voluntary consolidation pursuant to an approved plan, is not liable for any good faith, reasonable effort to assume possession of, and to operate, the subsumed water system in compliance with the plan and other statutes and regulations. This bill would also require the department to adopt regulations relating to the required content of a voluntary consolidation plan and the process for approval.

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Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

end insert begin insert

It is the intent of the Legislature to encourage
local area formation commissions to focus on the consolidation,
merger, or extension of public water systems, especially those
located in disadvantaged communities, by seeking financial
assistance in order to perform the necessary service reviews and
other appropriate studies.

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begin insert SEC. 2. end insert   

end insert

begin insert Section 116326 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

116326.  

begin insert (a) end insert begin insert   end insert In administering programs to fund improvements
and expansions of small community water systems begin insert and end insert , begin insert pursuant
to subdivision (b), other water systems, end insert the department shall do
all of the following:

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(a)

end delete

begin insert (1) end insert  Give priority to funding projects in disadvantaged
communities.

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(b) Encourage the consolidation of small community water
systems that serve disadvantaged communities in instances where
consolidation will help the affected agencies

end delete

begin insert (2) end insert begin insert   end insert begin insert Promote service delivery alternatives that improve efficiency
and affordability of infrastructure and service delivery, including,
but not limited to, the consolidation of governmental agencies,
consolidation of water systems, and the extension of services, in
and to disadvantaged communities, where service delivery options
will help affected agencies, communities, end insert and the state to meet all
of the following goals:

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(1)

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begin insert (A) end insert  Improvement in the quality of water delivered.

begin delete

(2)

end delete

begin insert (B) end insert  Improvement in the reliability of water delivery.

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(3)

end delete

begin insert (C) end insert  Reduction in the cost of drinking water for ratepayers.

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(c) Pursuant to subdivision (b), allow funding for feasibility
studies performed prior to a construction project to include studies
of the feasibility of consolidating two or more community water
systems, at least one of which is a small community water system
that serves a disadvantaged community.

end delete begin delete

(d) In instances where it is shown that small community water
system consolidation will further the goals of subdivision (b), give
priority to funding construction projects that involve the physical
restructuring of two or more community water systems, at least
one of which is a small community water system that serves a
disadvantaged community, into a single, consolidated system.

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(3) Pursuant to paragraph (2) of subdivision (a), require that
funding for feasibility studies performed prior to a construction
project include studies of service delivery alternatives that improve
efficiency and affordability of capital improvements and service
delivery, if at least one of the potentially affected agencies serves,
or would serve by way of an extraterritorial service extension, a
disadvantaged community, unless the department makes a written
determination that the service delivery alternatives are not feasible
under the circumstances. In making this determination, the
department shall do all of the following:

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(A) Review and consider the determinations and
recommendations made by the affected local agency formation
commission within the previous five calendar years in any of the
following:

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(i) A special study conducted pursuant to Section 56378 of the
Government Code.

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(ii) A sphere of influence study conducted pursuant to Section
56425 of the Government Code.

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(iii) A service review conducted pursuant to Section 56430 of
the Government Code.

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(B) Consult with the executive officer of the affected local agency
formation commission to determine whether any circumstances
have changed since the studies and review conducted pursuant to
subparagraph (A) were completed or if there is any additional
information that would assist the department in its determination.

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(C) Review and consider the conclusions and recommendations
of other local and regional studies designed to develop and identify
regional solutions for drinking water delivery.

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(4) If it is shown that an alternative service delivery option will
further the goals of paragraph (2) of subdivision (a), fund
construction projects that include the alternative service delivery
option, unless the department makes a written determination that
the alternative service delivery option is not feasible under the
circumstances.

end insert begin insert

(b) If an applicant submits an application that includes a service
delivery alternative that furthers the goals specified in paragraph
(2) of subdivision (a), the applicant need not be a small community
water system and the department may increase priority of the
application.

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begin insert SEC. 3. end insert   

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begin insert Section 75125 of the end insert begin insert Public Resources Code end insert begin insert is
amended to read: end insert

75125.  

The council shall do all of the following:

(a) Identify and review activities and funding programs of
member state agencies that may be coordinated to improve air and
water quality, improve natural resource protection, increase the
availability of affordable housing, improve transportation, meet
the goals of the California Global Warming Solutions Act of 2006
(Division 25.5 (commencing with Section 38500) of the Health
and Safety Code), encourage sustainable land use planning, and
revitalize urban and community centers in a sustainable manner.
At a minimum, the council shall review and comment on the
five-year infrastructure plan developed pursuant to Article 2
(commencing with Section 13100) of Chapter 2 of Part 3 of
Division 3 of the Government Code and the State Environmental
Goals and Policy Report developed pursuant to Section 65041 of
the Government Code.

(b) Recommend policies and investment strategies and priorities
to the Governor, the Legislature, and to appropriate state agencies
to encourage the development of sustainable communities, such
as those communities that promote equity, strengthen the economy,
protect the environment, and promote public health and safety,
consistent with subdivisions (a) and (c) of Section 75065.

(c) Provide, fund, and distribute data and information to local
governments and regional agencies that will assist in developing
and planning sustainable communities.

(d) Manage and award grants and loans to support the planning
and development of sustainable communities, pursuant to Sections
75127, 75128, begin delete and end delete 75129 begin insert , and 75129.5 end insert . To implement this
subdivision, the council may do all of the following:

(1) Develop guidelines for awarding financial assistance,
including criteria for eligibility and additional consideration.

(2) Develop criteria for determining the amount of financial
assistance to be awarded. The council shall award a revolving loan
to an applicant for a planning project, unless the council determines
that the applicant lacks the fiscal capacity to carry out the project
without a grant. The council may establish criteria that would allow
the applicant to illustrate an ongoing commitment of financial
resources to ensure the completion of the proposed plan or project.

(3) Provide for payments of interest on loans made pursuant to
this article. The rate of interest shall not exceed the rate earned by
the Pooled Money Investment Board.

(4) Provide for the time period for repaying a loan made
pursuant to this article.

(5) Provide for the recovery of funds from an applicant that fails
to complete the project for which financial assistance was awarded.
The council shall direct the Controller to recover funds by any
available means.

(6) Provide technical assistance for application preparation.

(7) Designate a state agency or department to administer
technical and financial assistance programs for the disbursing of
grants and loans to support the planning and development of
sustainable communities, pursuant to Sections 75127, 75128, begin delete and end delete
75129 begin insert , and 75129.5 end insert .

(e)  begin insert (1) end insert begin insert   end insert No later than July 1, begin delete 2010, and every end delete begin insert of each end insert year
begin delete thereafter end delete , provide a report to the Legislature that shall include,
but is not limited to, all of the following:

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(1)

end delete

begin insert (A) end insert  A list of applicants for financial assistance.

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(2)

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begin insert (B) end insert  Identification of which applications were approved.

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(3)

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begin insert (C) end insert  The amounts awarded for each approved application.

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(4)

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begin insert (D) end insert  The remaining balance of available funds.

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(5)

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begin insert (E) end insert  A report on the proposed or ongoing management of each
funded project.

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(6)

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begin insert (F) end insert  Any additional minimum requirements and priorities for a
project or plan proposed in a grant or loan application developed
and adopted by the council pursuant to subdivision (c) of Section
75126.

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(2) A report submitted pursuant to paragraph (1) shall be
submitted in accordance with Section 9795 of the Government
Code.

end insert

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begin insert SEC. 4. end insert   

end insert

begin insert Section 75129.5 is added to the end insert begin insert Public Resources Code end insert begin insert ,
to read: end insert

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begin insert 75129.5. end insert   

To support the planning and development of
sustainable communities, the council shall manage and award
financial assistance to a city, county, local area formation
commission, special district, nonprofit organization, or entity
formed pursuant to Chapter 5 (commencing with Section 6500) of
Division 7 of Title 1 of the Government Code, or a local agency
formation commission formed pursuant to Chapter 4 (commencing
with Section 56425) of Part 2 of Division 3 of Title 5 of the
Government Code, if at least one of the parties to the joint powers
agreement qualifies as an eligible applicant, for the preparation,
planning, and implementation of a public water system
consolidation, merger, or extension of services project for the
purposes of promoting water conservation. The financial assistance
provided pursuant to this section shall be funded from moneys
made available pursuant to subdivision (c) of Section 75065. The
council shall give priority to funding projects proposed by a
disadvantaged community.

end insert

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SECTION 1.  

Article 13 (commencing with Section 116756)
is added to Chapter 4 of Part 12 of Division 104 of the Health and
Safety Code, to read:

 

Article 13.  Voluntary Consolidation

 

116756.  

For purposes of this article the following definitions
apply:

(a) “Assuming water system” means a public water system that
obtains legal ownership of another public water system or systems
pursuant to Section 116757 and has a permit to operate pursuant
to Section 116525.

(b) “Subsumed water system” means a public water system that
transfers legal ownership to an assuming water system.

116757.  

An assuming water system may voluntarily consolidate
with another water system. The assuming water system shall file
a written plan for voluntary consolidation with the department that
includes, but is not limited to, a list of the current deficiencies in
the subsumed water system, planned remedies to fix the current
deficiencies, and a timeline for correction of the subsumed water
system. The department shall have 60 days to approve the voluntary
consolidation plan. If the department does not disapprove the
voluntary consolidation plan within 60 days, the plan shall be
deemed approved. If an assuming water system begins voluntary
consolidation pursuant to an approved voluntary consolidation
plan, the assuming water system shall not be liable for any good
faith, reasonable effort to assume possession of and operate the
subsumed water system in compliance with the plan, this chapter
and other applicable laws and regulations.

116758.  

The department shall adopt regulations relating to the
required content of a voluntary consolidation plan and the process
for approval.

end delete