BILL ANALYSIS �
SB 1292
Page 1
SENATE THIRD READING
SB 1292 (Hueso)
As Amended August 18, 2014
Majority vote
SENATE VOTE :32-2
ENVIRONMENTAL SAFETY 7-0APPROPRIATIONS 17-0
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|Ayes:|Alejo, Dahle, Bloom, |Ayes:|Gatto, Bigelow, |
| |Donnelly, Gomez, | |Bocanegra, Bradford, Ian |
| |Lowenthal, Ting | |Calderon, Campos, |
| | | |Donnelly, Eggman, Gomez, |
| | | |Holden, Jones, Linder, |
| | | |Pan, Quirk, |
| | | |Ridley-Thomas, Wagner, |
| | | |Weber |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Increases, from $3 million to $5 million the maximum
amount of a construction grant award authorized under the Safe
Drinking Water State Revolving Fund (SDWSRF) to each
participating public water system serving a severely
disadvantaged community for the system's share of the cost of a
construction project.
EXISTING LAW :
1)Requires the State Water Resources Control Board (SWRCB) to
administer the SDWSRF.
2)Provides specified maximum amounts for grant and loan funding
from the SDWSRF and authorizes up to 100% grant funding for
eligible costs to a small water system that serves severely
disadvantaged communities.
3)Sets the maximum grant to each participating public water
system for its share of the costs of the construction at $3
million.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, unknown increased cost pressures, potentially in the
SB 1292
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millions of dollars on the SDWSRF (special fund) for grant
assistance.
In fiscal year 2013-14, 61% of grant recipients served a
severely disadvantaged community. The total amount of grants
issued is capped in statute at 30% with the remaining 70% issued
as loans. This bill does not increase the 30% grant cap.
COMMENTS :
Need for the bill: According to the author's office, "The
current grant cap of $3 million under the SDWSRF does not
reflect the needs and demands of current infrastructure costs.
Construction, labor, and equipment costs are high and have risen
since the grant cap was established in 2009. Local water
utilities must make costly investments to install, upgrade, or
replace equipment in order to deliver safe drinking water and
protect public health. Increasing the cap to $5 million will
ensure adequate funding for severely disadvantaged communities
with projects of high risk. Small rural water districts
struggle to maintain an acceptable ratio of the total
outstanding debt to the value of water treatment plant assets
while keeping the water rates affordable."
Safe Drinking Water State Revolving Fund: Congress established
the SDWSRF as part of the 1996 Safe Drinking Water Act
Amendments to better enable public water systems to comply with
national primary drinking water standards and to protect public
health. The SDWSRF provides financial assistance in the form of
capitalization grants to states to provide low interest loans
and other assistance to public water systems. In order to
receive these funds, states must provide a state match equal to
20% of the federal capitalization grants and must create a
drinking water state revolving fund program for public water
system infrastructure needs and other drinking water-related
activities. In response, California established the SDWSRF
through SB 1307 (Costa), Chapter 734, Statutes of 1997, to help
fund the state's drinking water needs.
Current law sets the maximum SDWSRF grant to each participating
public water system for its share of the costs of the
construction at $3 million; however, current statute authorizes
an increase of a planning grant award up to $10 million if
certain findings are made, including that the project
administrators must have applied for and been denied funding in
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a previous funding cycle. The author's office argues that the
existing requirements for an increased award are onerous and
time-consuming for communities most in need.
Drinking Water Program reorganization and the administration of
the SDWSRF: The 2014-15 Budget Act transferred the State's
Drinking Water Program from the California Department of Public
Health to the SWRCB effective July 1, 2014. This transfer of
responsibility aligns the state's drinking water and water
quality programs in an integrated organizational structure to
best position the state to both effectively protect water
quality and the public health as it relates to water quality,
while meeting current needs and future demands on water
supplies.
Pursuant to the SDWSRF realignment, the SWRCB will 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
(Health and Safety Code Section 116760.43).
This bill was amended to conform to the changes made in the
Budget Act. The policy handbook process, which is used by the
SWRCB for the Clean Water State Revolving Fund, involves public
review and comment, culminating in the adoption of the handbook
by the SWRCB at a duly noticed meeting.
Analysis Prepared By : Paige Brokaw / E.S. & T.M. / (916)
319-3965
FN: 0004991