BILL ANALYSIS                                                                                                                                                                                                    �




                   Senate Appropriations Committee Fiscal Summary
                            Senator Kevin de Le�n, Chair


          SB 1292 (Hueso) - Safe Drinking Water State Revolving Fund.
          
          Amended: As introduced          Policy Vote: EQ 4-2
          Urgency: No                     Mandate: No
          Hearing Date: May 12, 2014      Consultant: Marie Liu
          
          This bill meets the criteria for referral to the Suspense File.
          
          
          Bill Summary: SB 1292 would increase the maximum award for a  
          construction grant from the State Drinking Water State Revolving  
          Fund (SDWSRF) from $3 million to $5 million if that project  
          serves a severely disadvantaged community.

          Fiscal Impact: 
           Unknown increased cost pressures, likely in the millions of  
            dollars, on the SDWSRF (special) for assistance issued as  
            grants.

          Background: The Department of Public Health (DPH), under the  
          California Safe Drinking Water Act (act), administers grants and  
          loans from the SDWSRF to provide for the design and construction  
          of public water systems projects that will enable suppliers to  
          meet safe drinking water standards. The act requires DPH to  
          establish eligibility criteria within specified parameters and  
          to establish a priority list of proposed projects. Specifically,  
          under HSC �116761.23, the maximum award for a construction grant  
          is $3 million. However, if the project meets specified criteria,  
          including that the eligible public water system serves a  
          disadvantaged community, DPH may grant up to $10 million. No  
          more than 30% of the SDWSRF may be expended for grants to serve  
          disadvantaged communities with the remainder of the fund to be  
          distributed as loans (HSC �116761.21). 

          Proposed Law: This bill would increase the maximum construction  
          grant for a water system that serves a severely disadvantaged  
          community from $3 million to $5 million. The water system would  
          remain eligible to receive up to $10 million in a grant if it  
          meets existing criteria. 

          Related Legislation: AB 118 (Asm. Environmental Safety and Toxic  
          Materials Committee) Chapter 631, Statutes of 2013 allowed  








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          certain water systems serving severely disadvantaged communities  
          eligible to receive up to 100 percent of eligible project costs  
          as a grant if DPH determined that it could not afford a loan.

          Staff Comments: This bill would likely increase the amount of  
          assistance requested in grants from the SDWSRF as 61% of grant  
          recipients in FY 2013-14 served a severely disadvantaged  
          community. Because the total amount of grants issued is capped  
          in statute at 30% of the SDWSRF, this bill would not increase  
          the total amount of grants awarded. However, by allowing some of  
          the individual grants to be larger, this bill creates a cost  
          pressure on the SDWSRF. Given the size of the SDWSRF, this cost  
          pressure would likely be in the millions of dollars.