BILL ANALYSIS �
AB 1527
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator Jerry Hill, Chair
2013-2014 Regular Session
BILL NO: AB 1527
AUTHOR: Perea
AMENDED: June 9, 2014
FISCAL: Yes HEARING DATE: June 18, 2014
URGENCY: No CONSULTANT: Rachel Machi
Wagoner
SUBJECT : PUBLIC WATER SYSTEMS: DRINKING WATER
SUMMARY :
Existing law :
1)Pursuant to the federal Safe Drinking Water Act (federal
SDWA), authorizes the United States Environmental Protection
Agency (US EPA) to set standards for drinking water quality
and to oversee the states, localities, and water suppliers who
implement those standards.
2)Pursuant to the California Safe Drinking Water Act (SDWA)
(Health and Safety Code (HSC) �116275 et seq.), requires the
Department of Public Health (DPH) to regulate drinking water
and to enforce the federal SDWA and other regulations.
3)Requires DPH, in administering SDWA programs to fund
improvements and expansions of small community water systems,
to do all of the following:
a) Give priority to funding projects in disadvantaged
communities;
b) 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 improve water quality and reliability and reduce
drinking water costs;
c) Allow funding for feasibility studies performed prior to
a construction project to include studies of the
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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; and,
d) In instances where it is shown that small community
water system consolidation will further specified goals,
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.
4)Provides that regional solutions to water contamination
problems are often more effective, efficient, and economical
than solutions designed to address solely the problems of a
single small public water system, and it is in the interest of
the people of the State of California to encourage the
consolidation of the management and the facilities of small
water systems to enable those systems to better address their
water contamination problems.
5)Provides, pursuant to the Safe Drinking Water, Water Quality
and Supply, Flood Control, River and Coastal Protection Bond
Act of 2006 (Proposition 84), as approved by the voters,
funding for safe drinking water, water quality and supply,
flood control, natural resource protection, and park
improvements.
6)Requires Local Agency Formation Commissions (LAFCos) to
comprehensively review all of the agencies that provide the
identified service or services within the designated
geographic area and authorizes LAFCos to assess various
alternatives for improving efficiency and affordability of
infrastructure and service delivery within and contiguous to
the sphere of influence, including, but not limited to, the
consolidation of governmental agencies.
7)Authorizes LAFCos, when conducting a service review, to
include a review of whether the agencies under review,
including any public water system, are in compliance with the
California SDWA.
8)Establishes the Strategic Growth Council (SGC) and requires
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the SGC to 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, encourage sustainable land use
planning, and revitalize urban and community centers in a
sustainable manner. Requires the SGC to manage and award
grants and loans to support the planning and development of
sustainable communities.
This bill : Establishes new requirements for DPH when
administering programs to fund improvements of small community
water systems, including a requirement to review and consider
specified documents and recommendations made by the affected
local agency formation commission (LAFCo). Specifically, this
bill :
1)Establishes new requirements for DPH when administering
programs to fund improvements of small community water
systems, including a requirement to review and consider
specified documents and recommendations made by LAFCo.
2)Requires DPH, in administering existing programs to fund
improvements and expansions of small community water systems
and other water systems, to 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, and the
state meet specified goals.
3)Provides that DPH, pursuant to (2) above, shall 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
extraterritorial service extension, a disadvantaged community,
unless DPH makes a written determination that the service
delivery alternatives are not feasible under the
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circumstances.
4)Requires DPH, during its assessment of feasibility pursuant to
(3) above, to do the following:
a) Review and consider the determinations and
recommendations made by the affected LAFCo, within the
previous five calendar years, as follows:
i) A special study of governmental agencies;
ii) A sphere of influence study; and,
iii) A service review.
b) Consult with the executive officer of the affected LAFCo
to determine whether any circumstances have changed since
the studies and reviews were conducted and completed
pursuant to (a) above, and if there is any additional
information that would assist DPH in its determination;
and,
c) Review and consider the conclusion and recommendation of
other local and regional studies designed to develop and
identify regional solutions for drinking water delivery.
5)Requires DPH, if it is shown that an alternative service
delivery option will further the specified goals in current
law, to fund construction projects that include alternative
service delivery options, unless DPH makes a written
determination that the alternative service delivery option is
not feasible under the circumstances.
6)Specifies, if an applicant submits an application that
includes a service delivery alternative that furthers the
goals specified in current law, the applicant does not need to
be a small community water system and allows DPH to increase
the priority of the application.
7)Requires the SGC to manage and award financial assistance to a
city, county, LAFCo, special district, nonprofit organization,
or other specified entity, for the preparation, planning, and
implementation of a public water system consolidation, merger,
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or extension of services project for the purposes of promoting
water conservation, and specifies that the SGC must give
priority to funding projects proposed by a disadvantaged
community.
8)Provides the financial assistance provided in (7) above, shall
be funded by moneys made available pursuant to Proposition 84
(2006).
9)Declares it is the intent of the Legislature to encourage
LAFCos 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.
10) Makes other technical and conforming changes.
COMMENTS :
1) Purpose of Bill . According to the author, "According to the
State Water Resources Control Board AB 2222 report,
Communities That Rely on a Contaminated Groundwater Source
for Drinking Water , over 2 million Californians do not have
access to safe drinking water. Treating contaminated water
is unaffordable for many disadvantaged communities. Many
Californians cannot access funding to address their drinking
water problems because they (a) rely on private wells, (b)
rely on a water system that has fewer than 15 connections,
(c) live in disadvantaged communities that simply do not have
the technical and managerial capacity to support its own
drinking water infrastructure.
"One of the best ways to provide safe, clean, affordable
drinking water delivery to small, disadvantaged communities
who rely on contaminated drinking water is to consolidate
their water system with another district or extend services
from another district. One advantage of consolidating or
extending water delivery services is that it increases
economies of scale, making water infrastructure more
affordable for ratepayers. Fortunately, many of these
communities are close to other communities that have similar
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water quality concerns or have the capacity to serve them with
drinking water though service extension.
"More and more, local agencies, including LAFCo's, are
identifying how and where consolidations and service
extensions may offer the best solution to drinking water
problems, especially in disadvantaged communities. These
studies and reports to identify solutions are good, however,
the state agency responsible for funding many of these
projects, DPH, is not required to include or consider the
significant work that has been performed by LAFCos. The
intent of this bill would be to connect the work locals have
conducted with how the state funds projects. Requiring DPH to
review and consider LAFCos' recommendations will avoid missed
opportunities to provide Californians with safe, clean, and
affordable drinking water."
2) Recent State Drinking Water Policy . In 2012, the Legislature
and Governor Brown recognized the principle that all people
have a right to safe drinking water by enacting AB 685 (Eng).
This state policy declares that every human being has the
right to clean, affordable, and accessible water adequate for
human consumption, cooking, and sanitary purposes. While in
California the majority of residents receive drinking water
that meets public health standards, recent studies have shown
that many disadvantaged and rural communities have not had,
and continue not to have access to safe, accessible, and
affordable drinking water.
3) Prevalence of Contaminated Drinking Water Sources . The
January 2013 SWRCB report "Communities that Rely on
Contaminated Groundwater," identified 682 community public
water systems (PWSs) that rely on contaminated groundwater as
a primary source of drinking water. These water systems
serve nearly 21 million people. The SWRCB report also
revealed that 265 community PWSs that rely on contaminated
groundwater and serve a little over two million people had
received at least one drinking water quality violation within
the last DPH compliance cycle. The findings from this report
and a January 2012, University of California at Davis study,
"Addressing Nitrate in California's Drinking Water," suggest
that drinking water contamination in California
disproportionally affects small, rural, and low-income
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communities that depend mostly on groundwater as their
drinking water source.
4) DPH Consolidation Requirements . According to US EPA,
restructuring can be an effective means to help small water
systems achieve and maintain technical, managerial, and
financial capacity, and to reduce the oversight and resources
that states need to devote to these systems.
The goal of consolidation and regional projects was
recognized from the inception of the Safe Drinking Water
State Revolving Fund (SDWSRF) (SB 1307, Statutes of 1997),
which is the state program to implement the federal funding
program, when the Legislature declared that it is in the
interest of the people to encourage the consolidation of the
management and the facilities of small water systems. To
promote consolidation, DPH established the Consolidation
Incentive Program, which provides an incentive to encourage
larger systems to consolidate nearby noncompliant systems.
Typically, DPH only invites drinking water systems that are
out of compliance with drinking water standards to submit
applications for SDWSRF funding. However, through the
consolidation incentive process, lower-ranked projects that
do not usually receive SDWSRF invitations can become eligible
for SDWSRF funding. By agreeing to consolidate a neighboring
noncompliant system, DPH will re-rank a low-ranked project
into a fundable category.
In order to provide further support and direction for DPH's
consolidation efforts, AB 783 (Arambula), Chapter 614,
Statutes of 2007, required DPH to prioritize funding of water
projects in disadvantaged communities and directs DPH to
encourage, provide funds for studies on, and prioritize
funding for projects that consolidate small public water
systems in certain situations.
AB 1527 replaces AB 783's language regarding prioritization
for small community water systems. Existing law directs DPH
to give priority to funding projects that "encourage the
consolidation of small community water systems that serve
disadvantaged communities;"
AB 1527 replaces that language with "promote service delivery
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alternatives that improve efficiency and affordability of
infrastructure and service delivery?" The bill also requires
funding for feasibility studies performed prior to a
construction project to include studies of service delivery
alternatives that improve efficiency and affordability of
capital improvements and service delivery, instead of
authorizing the funding to include studies of the feasibility
of consolidating two or more community water systems, as
current law allows.
5) Strategic Growth Council (SGC) requirements . SB 732
(Steinberg), Chapter 729, Statutes of 2008, created SGC, a
cabinet level committee, within the provisions of Proposition
84. SGC is tasked with coordinating the activities of member
state agencies to provide, fund, and distribute data and
information to local governments and regional agencies that
will assist in developing and planning sustainable
communities and to manage and award grants and loans to
support the planning and development of sustainable
communities.
This bill requires SGC to manage and award Proposition 84
financial assistance to a city, county, LAFCo, special
district, nonprofit organization, or entities in a joint
powers agreement, 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 requires SGC to give
priority to funding projects proposed by a disadvantaged
community.
6) Arguments in Support . Sierra Club California writes that,
"There are hundreds of thousands of Californians who are
deprived of the most basic human needs, clean and affordable
water? This bill would help promote the consolidation of
water systems and infrastructure expansion that could help
small and disadvantaged communities clean up their drinking
water."
7) Arguments in Opposition . The California Special Districts
Association argues that the intent language in the bill
should be amended so as not to "support consolidation for
consolidation's sake;" the bill should be amended to "ensure
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this legislation does not further delay existing applications
in process;" and, the bill should be amended to address some
of the "very real obstacles" that entities face when
attempting to achieve consolidation.
8)Is It Appropriate to Make Changes to the Drinking Water
Program as it May be Transferred from DPH to SWRCB ? Over the
last five years, the Senate Environmental Quality Committee
has considered numerous bills making changes to the
administration of the Drinking Water Program.
In 2013, the Senate Environmental Quality committee heard AB
145 (Perea) that would have transferred, during the 2014-15
fiscal year, the duties and responsibilities related to the
regulation and oversight of drinking water, including the
authority to administer SDWSRF from DPH to SWRCB. In that
hearing, the committee heard testimony over DPH's
non-compliance with federal regulation of the administration
of SDWSRF. The committee contemplated various solutions and
ultimately concluded that a comprehensive change to SDWSRF
was necessary to effectively fix this funding program. The
Senate Environmental Quality Committee passed AB 145, however
the bill was held in the Senate Appropriations Committee.
In January 2014, Governor Brown proposed to transfer the
Drinking Water Program from DPH to SWRCB on July 1, 2014 as
part of the State Budget. Both the Assembly and Senate
Budget Committees have considered this proposal and the item
has been left open as part of the final budget discussion.
9) Are These New Responsibilities Appropriate for the SGC?
The SGC was established as a cross-agency platform to deal
with climate and climate-related aspects of transportation,
land use planning, affordable housing, etc. It was allocated
Prop 84 funds for planning to implement "smart growth"
infrastructure projects, most of which is all gone, and the
last of which will be spent in the current grant cycle.
While it is laudable to identify new funds for the costs
associated with consolidating, merging, or extending public
water systems, that is not an area of expertise of the SGC
nor does it require a cross-platform or cross-sector
analysis.
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Further, funds that have been identified to fund the SGC will
be related solely to cap and trade projects. It is required
that a nexus between greenhouse gas reduction and the
projects that are funded be established. There is nothing in
the bill that conditions the requirement to pay for these
projects to that nexus. There is no other money for the SGC
to fund what the bill requires.
The SGC role with water does have a limited role in current
law to a coordination role that would revitalize urban and
community centers in a sustainable manner, insofar as it
relates to climate related issues. However, there is no
funding for the SGC for this specific purpose.
It is unclear what funding would become available for the
purpose of requiring the SGC to manage and award financial
assistance to a city, county, LAFCo, special district,
nonprofit organization, or other specified entity, 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 or if it is
even appropriate for the SGC to do so. Because funds cannot
be identified, it is not appropriate to statutorily direct SGC
to meet the requirements of this bill.
10)Previous legislation . AB 2238 (Perea), as amended July 25,
2012, would have required DPH to consider specified
information from the appropriate LAFCO when processing an
application for SDWSRF funding, but was subsequently gutted
and amended to address emergency funding from the Emergency
Clean Water Grant Fund. AB 2238 failed passage in the Senate
Appropriations Committee.
AB 2356 (Arambula), Chapter 609, Statutes of 2008, required
the SWRCB to take specified actions when allocating funds to
small, disadvantaged communities for wastewater collection,
treatment or disposal projects.
AB 2222 (Caballero), Chapter 670, Statutes of 2008, required
the SWRCB to submit a report to the Legislature to identify
communities that rely on contaminated groundwater as a primary
source of drinking water, the principal contaminants in
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groundwater, and potential solutions and funding sources to
clean up groundwater.
AB 115 (Perea), Chapter 630, Statutes of 2013, expands the
eligibility for planning grants from the SDWSRF by allowing
multi-agency grant applications when at least one of the
communities served by the construction project will meet safe
drinking water standards.
AB 983 (Perea), Chapter 515, Statutes of 2011, made several
changes to the laws governing the state program providing
grants and loans for safe drinking water projects, including
allowing certain disadvantaged communities to be eligible for
grants up to 100% of project costs.
SB 244 (Wolk), Chapter 513, Statutes of 2011, required LAFCos,
in determining the sphere of influence of each local agency,
to additionally consider, for a city or special district that
provides public facilities or services related to sewers,
municipal and industrial water, or structural fire protection,
the present and probable need for those public facilities and
services of any disadvantaged unincorporated communities
within the existing sphere of influence.
AB 453 (Mullin) of 2013 and AB 2624 (Smyth) of 2012 both
failed passage in the Senate Appropriations Committee and
would have added LAFCos to the list of eligible applicants for
financial assistance grants and loans made by SGC for the
purpose of developing, adopting, and implementing a regional
plan or other planning instrument to support the planning and
development of sustainable communities.
10)Double Referral to Senate Natural Resources & Water
Committee . If this measure is approved by the Senate
Environmental Quality Committee, the do pass motion must
include the action to re-refer the bill to the Senate Natural
Resources & Water Committee.
SOURCE : Author
SUPPORT : City of Salinas
Sierra Club California
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OPPOSITION : California Special Districts Association