BILL ANALYSIS �
AB 1527
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CONCURRENCE IN SENATE AMENDMENTS
AB 1527 (Perea)
As Amended August 20, 2014
Majority vote
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|ASSEMBLY: |54-24|(May 28, 2014) |SENATE: |31-0 |(August 25, |
| | | | | |2014) |
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Original Committee Reference: E.S. & T.M.
SUMMARY : Requires the State Water Resources Control Board
(SWRCB) to provide incentives for the consolidation of public
water systems for funding under the Safe Drinking Water State
Revolving Fund (SDWSRF) based on a service review developed by a
local agency formation commission (LAFCO).
The Senate amendments :
1)Delete the contents of this bill approved by the Assembly.
2)Require the SWRCB to provide incentives for the consolidation
of public water systems based upon a service review developed
by a LAFCO.
3)Sunset the provisions of this bill after the SWRCB has adopted
a policy handbook to implement the SDWSRF Law of 1997.
EXISTING LAW :
1)Establishes the SDWSRF Law of 1997. (Health and Safety Code
(HSC) Section 116760)
2)Provides funding for public water systems through the SDWSRF
to correct deficiencies and problems that pose public health
risks and to meet safe drinking water standards. (HSC Section
116760.20)
3)Requires the SWRCB to establish criteria that shall be met for
projects to be eligible for consideration for funding (HSC
Section 116760.50) and, after public notice and hearing,
requires the SWRCB to establish a priority list of proposed
projects to be considered for funding. (HSC Section 116760.70)
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4)Requires the California Department of Public Health (CDPH), in
administering programs to fund improvements and expansions of
small community water systems, to give priority to funding
projects in disadvantaged communities and 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. (HSC Section 116326)
5)Establishes that it is the objective of a LAFCO to make
studies and to obtain and furnish information that will
contribute to the logical and reasonable development of local
agencies in each county and to shape the development of local
agencies so as to advantageously provide for the present and
future needs of each county and its communities. (Government
Code Section 56301)
6)Requires a LAFCO to conduct a service review of the municipal
services provided in the county or other appropriate area
designated by the LAFCO. (Government Code Section 56430)
AS PASSED BY THE ASSEMBLY , this bill established new
requirements that the CDPH must follow 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 LAFCO.
FISCAL EFFECT : According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS :
Need for the bill: According to the author, "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 water quality concerns or have the capacity to
serve them with drinking water through service extension.
"More and more, local agencies, including LAFCOs, are
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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, [C]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 [C]DPH to review and consider LAFCOs'
recommendations will avoid missed opportunities to provide
Californians with safe, clean, and affordable drinking water."
LAFCOs: LAFCOs are local agencies mandated by the State
Legislature to encourage the orderly formation of local
governmental agencies, to preserve agricultural land resources,
and to discourage urban sprawl. LAFCOs are required to conduct
a service review of the municipal services provided in the
county when determining a plan for the probable physical
boundaries and service area of a local agency, known as the
sphere of influence.
When conducting the service review, the LAFCO must consider
various factors, including, among others, adequacy of public
services, infrastructure needs or deficiencies, including needs
or deficiencies related to sewers, municipal and industrial
water, financial ability of agencies to provide services, status
of, and opportunities for shared facilities, and accountability
for community service needs, including governmental structure
and operational efficiencies.
In these reviews, a LAFCO may assess various alternatives for
improving efficiency and affordability of infrastructure and
service delivery within and contiguous to the sphere of
influence, including the consolidation of governmental agencies.
In conducting a service review, a LAFCO may include a review of
whether the public water system is in compliance with the
California Safe Drinking Water Act.
Drinking Water Program reorganization and the administration of
the SDWSRF: The 2014-15 Budget Act transferred the State's
Drinking Water Program from the CDPH to the SWRCB, effective
July 1, 2014.
Pursuant to the SDWSRF realignment, the State Water Board will
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set the requirements for the SDWSRF through its policy handbook
process rather than through the formal rulemaking process.
Existing statute and regulations governing the SDWSRF will be
repealed and replaced with a policy handbook, when approved by
the SWRCB. (HSC Section 116760.43) The policy handbook
process, which is currently used by the SWRCB for the Clean
Water State Revolving Fund, involves public review and comment,
culminating in adoption of the handbook by the SWRCB at a duly
noticed meeting.
Prioritizing projects: Under current law, the SWRCB is required
to establish a priority list of projects to be considered for
funding from the SDWSRF. The SWRCB will develop criteria for
placing public water systems on the priority list for funding;
current law determines priority shall be given to projects that
address the most serious risk to human health, are necessary to
ensure compliance with requirements of the Safe Drinking Water
Act requirements, including filtration, and assist systems most
in need on a per household basis according to affordability
criteria.
In establishing the priority list, the SWRCB shall consider the
system's implementation of an ongoing source water protection
program or wellhead protection program. Consistent with the
intent of the SDWSRF, the SWRCB is required to provide priority
to upgrade an existing system to meet drinking water standards.
Though this bill would not require the SWRCB to prioritize
consolidation of public systems for SDWSRF funding, it would
require the SWRCB to provide incentives to encourage the
consolidation of public water systems. Such incentives that the
SWRCB could provide could include higher grant amounts, lower
interest rates on loans, and longer loan terms.
CDPH consolidation requirements: According to the United States
Environmental Protection Agency, 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 SDWSRF 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
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water systems. To promote consolidation, CDPH established the
Consolidation Incentive Program, which provides an incentive to
encourage larger systems to consolidate nearby noncompliant
systems. Typically, CDPH 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
don't usually receive SDWSRF invitations can become eligible for
SDWSRF funding. By agreeing to consolidate a neighboring
noncompliant system, CDPH will re-rank a low-ranked project into
a fundable category.
In order to provide further support and direction for CDPH's
consolidation efforts, AB 783 (Arambula), Chapter 614, Statutes
of 2007, required CDPH to prioritize funding of water projects
in disadvantaged communities and directs CDPH to encourage,
provide funds for studies on, and prioritize funding for
projects that consolidate small public water systems in certain
situations.
Analysis prepared by : Paige Brokaw / E.S. & T.M. / (916)
319-3965
FN: 0005181