BILL ANALYSIS �
SB 1130
Page 1
Date of Hearing: June 17, 2014
ASSEMBLY COMMITTEE ON ENVIRONMENTAL SAFETY AND TOXIC MATERIALS
Luis Alejo, Chair
SB 1130 (Roth) - As Amended: April 21, 2014
SENATE VOTE : 36-0
SUBJECT : Drinking water: County Water Company of Riverside
water system: liability.
SUMMARY : Provides limited immunities from liability for the
Elsinore Valley Municipal Water District (EVMWD), the Eastern
Municipal Water District (EMWD), the Western Municipal Water
District (WMWD), and the Metropolitan Water District of Southern
California (the Met) for claims by past or existing County Water
Company of Riverside (CWC) customers, or those who consumed
water provided through the CWC water system, prior to and during
an interim operation period. Specifically, this bill :
1)Makes legislative findings that specify that the provisions of
this bill are tailored to address the unique circumstances
facing the customers of the CWC and are not intended to apply
to other water districts.
2)Exempts the EVMWD, the EMWD, the WMWD, and the Met from
liability from claims by past or existing CWC customers, or by
those who consumed water provided through the CWC water
system, concerning the operation and supply of water from the
CWC water system during the interim operation period for any
good faith, reasonable effort using ordinary care to assume
possession of, to operate, or to supply water to the CWC water
system.
3)Exempts the EVMWD, the EMWD, the WMWD, and the Met from
liability from claims by past or existing CWC customers, or by
those who consumed water provided through the CWC water
system, for any injury that occurred prior to the commencement
of the interim operation period.
4)Specifies that the immunities from liability granted shall
only apply if the water supplied by the WMWD and the Met
through the temporary potable service pipeline to the CWC
water system meets or exceeds federal and state drinking water
quality standards.
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5)Requires the interim operation period to commence upon the
connection of a temporary potable service pipeline by either
the EVMWD or the EMWD to the CWC water system, or upon the
execution of an agreement between the EVMWD, the EMWD, and the
CWC.
6)Provides that the interim operation period shall last until
permanent replacement facilities are accepted by the EVMWD and
the EMWD with the concurrence of the State Department of
Public Health (DPH), or December 31, 2015, whichever occurs
first.
7)Requires, upon the showing of good cause, the interim
operation period to be extended by DPH for up to three
successive one-year periods at the request of the EVMWD and
the EMWD.
8)Requires the acceptance date of permanent replacement
facilities to be publicly noticed by the EVMWD and the EMWD.
9)Specifies that the immunities from liability granted only
apply if the EVMWD and the EMWD provide water to the CWC water
system in accordance with all of the following conditions:
a) The EVMWD and the EMWD comply with the special terms and
conditions established by DPH safe drinking water emergency
for the interim operation period.
b) Water provided by the EVMWD and the EMWD through the
temporary potable service pipeline to the CWC water system
meets or exceeds federal and state drinking water quality
standards.
c) Reasonable water system flow and pressure through the
temporary potable service pipeline is maintained during the
interim operation period based upon the condition and
integrity of the existing CWC water system and any
disruptions to water delivery resulting from
construction-related activities associated with the
installation of permanent replacement facilities is
minimal.
d) The EVMWD and the EMWD notify Riverside County fire
officials serving the CWC service area of the condition and
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firefighting support capabilities of the existing CWC water
system and planned improvements with the installation of
permanent replacement facilities thereto. The EVMWD and
the EMWD maintain or improve the condition and firefighting
support capabilities of the existing CWC water system
during the interim operation period.
e) Customers of the CWC receive written notice upon any
change in possession, control, or operation of the water
system.
10)Specifies that the immunities granted in this bill do not:
a) Relieve any water district, water wholesaler, or any
other entity from complying with any provision of federal
or state law pertaining to drinking water quality.
b) Impair any cause of action by the Attorney General, a
district attorney, a city attorney, or any other public
prosecutor, or impair any other action or proceeding
brought by or on behalf of a regulatory agency.
c) Impair any claim alleging the taking of property without
compensation within the meaning of either the Fifth
Amendment to the United States Constitution or Section 19
of Article I of the California Constitution.
11)Provides that this bill is an urgency statute.
EXISTING LAW :
Establishes as the policy of the state that every human being
has the right to safe, clean, affordable, and accessible water
adequate for human consumption, cooking, and sanitary purposes.
(Water Code �106.3)
Under the California Safe Drinking Water Act:
1)Requires DPH to regulate drinking water and to enforce the
federal Safe Drinking Water Act and other related regulations
(Health and Safety Code �116275 et seq.).
2)Authorizes, whenever DPH determines that any public water
system is unable or unwilling to adequately serve its users,
has been actually or effectively abandoned by its owners, or
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is unresponsive to its rules or orders, DPH to petition the
superior court, as specified, for the appointment of a
receiver to assume possession of its property and to operate
its system. Authorizes the court to provide, as a condition
of its order, that the receiver appointed pursuant to the
order not be held personally liable for any good faith,
reasonable effort to assume possession of, and to operate the
system in compliance with the order. (Health and Safety Code
�116665)
3)Authorizes DPH to exempt a public water system from compliance
with a maximum containment (sic) level or treatment technique
requirement for up to two years if DPH finds, and continues to
find, that a plan submitted by the water system may reasonably
be expected to bring the water system into compliance by any
of the following means: the physical consolidation of the
system with one or more other systems; the consolidation of
significant management and administrative functions of the
system with one or more other systems; or, the transfer of
ownership of the system. (Health and Safety Code �116425.
(h))
4)Upon a showing by DPH of specified violations, the superior
court shall enjoin the practices and may do any of the
following: enforce a reasonable plan of compliance, including
the appointment of a competent person, to be approved by DPH,
and paid by the operator of the public water system, who shall
take charge of and operate the system so as to secure
compliance; enjoin further service connections to the public
water system; and, afford any further relief that may be
required to insure compliance with the Safe Drinking Water
Act. (Health and Safety Code �116660)
Under the Government Claims Act:
1)Provides that a public entity is not liable for an injury,
whether such injury arises out of an act or omission of the
public entity or a public employee or any other person.
Provides that the liability of a public entity, as specified,
is subject to any immunity of the public entity provided by
statute and is subject to any defenses that would be available
to the public entity if it were a private person. (Government
Code �815)
2)Provides that a public entity is not liable for an injury
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caused by adopting or failing to adopt an enactment or by
failing to enforce any law. (Government Code �818.2)
3)Provides, except as exempted by statute, that a public entity
is liable for injury caused by a dangerous condition of its
property if the plaintiff establishes that the property was in
a dangerous condition at the time of the injury, that the
injury was proximately caused by the dangerous condition, that
the dangerous condition created a reasonably foreseeable risk
of the kind of injury which was incurred, and that either:
a) A negligent or wrongful act or omission of an employee
of the public entity within the scope of his employment
created the dangerous condition; or,
b) The public entity had actual or constructive notice of
the dangerous condition a sufficient time prior to the
injury to have taken measures to protect against the
dangerous condition. (Gov. Code �835.)
Under the Public Utilities Act:
1)Authorizes, whenever the Public Utilities Commission (PUC)
determines that any water or sewer system corporation is
unable or unwilling to adequately serve its ratepayers, or has
been actually or effectively abandoned by its owners, or is
unresponsive to the rules or orders of the PUC, the PUC to
petition the superior court for the county within which the
corporation has its principal office or place of business for
the appointment of a receiver to assume possession of its
property and to operate its system upon such terms and
conditions as the court shall prescribe. Requires the court
to provide for disposition of the facilities and system in
like manner as any other receivership proceeding in this
state. (Public Utilities Code �855)
FISCAL EFFECT : Unknown.
COMMENTS :
Need for the bill : According to the author, "The County Water
Company of Riverside (CWC) is a small privately owned,
non-mutual water company located in western Riverside County.
For decades CWC has "flown under the radar" of any state or
local administrative oversight agency and has continually failed
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to deliver safe and reliable water to its customers due to
nitrate contamination and a failing infrastructure system. The
residents of this community rely on either contaminated water,
bottled water or more recently, water from an emergency water
tank to service their daily needs. County of Riverside health
officials and CDPH have asked the two adjacent public water
districts of Elsinore Valley Municipal Water District and
Eastern Municipal Water District for assistance in providing
both a short-term and a long-term solution to the health and
safety risks the CWC customers face as a result of this failing
water system. Such assistance comes with the risk of liability
for past administrative actions or operational deficiencies of
the existing water system; as well as, potential costs to the
existing ratepayers of the water districts providing assistance.
In this situation, neither the County of Riverside nor CDPH are
willing/able to indemnify the public water districts from the
liability associated with taking over the CWC system.
Furthermore, the existing owners of CWC have already proceeded
to discontinue service to the community and are seeking to 'walk
away'? This bill would allow the public water districts of EMWD
and EVMWD to provide the necessary assistance to CWC customers
without being held liable for past administrative actions or
operational deficiencies of the existing water system. This
legislation would provide necessary protections to the existing
public water district customers, while working to secure the
health and safety of the CWC customers. EMWD and EVMWD are
seeking legal protections for the two public water districts and
the two urban water wholesale agencies to move forward with
assisting those families in crisis."
The situation in Riverside County : According to the EMWD, the
sponsor of the bill, the CWC currently serves approximately 140
customers near the communities of Wildomar and Menifee in
Riverside County from a single well that far exceeds the state's
standard for nitrate in drinking water. This well is
operationally unreliable and occasionally unable to pump water
or meet fire flow criteria, leaving residents without a supply
of piped water or fire protection for extended periods of time.
Recently, CWC representatives announced the company is going
broke and getting out of the business, and the system is in
danger of complete failure.
Responding to residents' complaints, EMWD and EVMWD, which
service nearby communities, have agreed to take over service to
the neighborhood. According to DPH, DPH awarded Proposition 84
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(Safe Drinking Water, Water Quality and Supply, Flood Control,
River and Coastal Protection Bond Act of 2006) emergency funds
to EVMWD, on behalf of the CWC, on July 30, 2013, in the amount
of $250,000, for the purposes of constructing an emergency
intertie until a more permanent solution can be constructed.
Proposition 84 planning funds were also awarded on September 4,
2013, to EMWD in the amount of $500,000, to fund the planning
and design for the eventual split consolidation of CWC into EMWD
and EVMWD. In addition, the SDWSRF program issued letters of
commitment to EMWD and EVMWD on October 31, 2013, for $6 million
($3 million each) in construction funding for the eventual
construction of the split consolidation project pending
completion of the Proposition 84 funded planning project.
While funds have been awarded to commence this project, both
EMWD and EVMWD have indicated that they are unable to connect to
CWC until SB 1130 is effective. EMWD argues that during the
interim construction period during which they must continue to
supply water through the existing dilapidated system, they, and
therefore their existing customers, are vulnerable to lawsuits
potentially relating to water quality or quantity, or
insufficient pressure for fire protection. They contend that
this bill is an effort to protect the public water agencies'
existing customers, while the districts work to secure the
health and safety of the CWC residents through reconstruction
and future operation of the system in a manner consistent with
all health and safety standards. They maintain that these legal
protections will allow the public agencies to move forward with
assisting families in crisis, without financially jeopardizing
the existing customers of the public water agencies.
Government immunity in California : California law generally
provides public entities with broad immunity that insulates them
from civil liability. The Government Claims Act (Gov. Code �810
et seq.) states that "a public entity is not liable for an
injury, whether such injury arises out of an act or omission of
the public entity or a public employee or any other person"
unless otherwise provided by statute. (Gov. Code �815(a).)
Thus, in order to hold a public entity liable for any tort, a
plaintiff would first have to identify a specific relevant
statute that exposed it to liability.
Supporters of the bill argue that there are a number of statutes
that may expose public entities to civil liability. For
example, Government Code �835 removes immunity when a public
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entity maintains its property in a dangerous condition, as
specified. The risk of civil liability is a deterrent for
compliant water systems to provide assistance to failing or
non-compliant systems.
Restructuring small water systems: The January 2013, SWRCB
report "Communities that Rely on Contaminated Groundwater,"
identified 682 community public water systems (PWSs) in
California that rely on contaminated groundwater as a primary
source of drinking water. These water systems serve nearly 21
milling 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 communities that depend mostly on
groundwater as their drinking water source.
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. AB 783 (Arambula),
Chapter 614, Statutes of 2007, requires 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 which consolidate small public
water systems in certain situations.
This intent of this bill is to encourage compliant water systems
to participate in the efforts to restructure a failing small
water system.
Double referral : This bill was double referred to the Assembly
Judiciary Committee, which heard it on June 10, 2014, and passed
it on a 9-0 vote.
Related legislation :
1)SB 772 (Roth, 2013). Would have exempted the Elsinore Valley
Municipal Water District and the Eastern Municipal Water
District from liability for claims by customers or those
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consuming water provided through the County Water Company of
Riverside water system concerning the operation and supply of
water from the County Water Company of Riverside, as
specified, for any good faith, reasonable effort using
ordinary care to assume possession of, and to operate and
supply water to, the County Water Company of Riverside water
system. This bill was referred to the Senate Committee on
Environmental Quality and Judiciary, but was never heard and
subsequently died.
2)AB 2442 (Gordon, 2014). Provides the State Water Resources
Control Board and Regional Water Quality Control Boards with
explicit protection from civil liability related to water
quality cleanup actions. This bill passed the Assembly floor
was referred to the Senate Environmental Quality and Judiciary
Committees.
REGISTERED SUPPORT / OPPOSITION :
Support :
California Special Districts Association
Eastern Municipal Water District (co-sponsor)
Elsinore Valley Municipal Water District (co-sponsor)
Mesa Water District
Metropolitan Water District of Southern California
Riverside County Board of Supervisors
Riverside LAFCO
Western Municipal Water District
Opposition :
None received.
Analysis Prepared by : Shannon McKinney / E.S. & T.M. / (916)
319-3965