BILL NUMBER: AB 115	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JUNE 17, 2013

INTRODUCED BY   Assembly Member Perea
   (Coauthor: Assembly Member Alejo)

                        JANUARY 14, 2013

   An act to amend Sections 116760.50, 116760.70, 116760.79,
116760.90, and 116761.20 of the Health and Safety Code, relating to
drinking water, and making an appropriation therefor.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 115, as amended, Perea. Safe Drinking Water State Revolving
Fund.
   Existing law, the California Safe Drinking Water Act, requires the
State Department of Public Health to administer provisions relating
to the regulation of drinking water to protect public health,
including, but not limited to, conducting research, studies, and
demonstration programs relating to the provision of a dependable,
safe supply of drinking water, enforcing the federal Safe Drinking
Water Act, adopting and enforcing regulations, and conducting studies
and investigations to assess the quality of water in domestic water
supplies.
   Existing law establishes the Safe Drinking Water State Revolving
Fund, which is continuously appropriated to the department for the
provision of grants and revolving fund loans to provide for the
design and construction of projects for public water systems that
will enable suppliers to meet safe drinking water standards. Existing
law requires the department to establish criteria for projects to be
eligible for the grant and loan program, including that a legal
entity exist that has the authority to enter into contracts and incur
debt on behalf of the community to be served and owns the public
water system or has the right to operate the public water system
under a lease with a term of at least 20 years, unless otherwise
authorized by the department.
   This bill would authorize the department to fund projects, by
grant, loan, or a combination of the two, where multiple water
systems apply for funding as a single applicant for the purpose of
consolidating water systems or extending services to households
relying on private wells, as specified. The bill would authorize
funding of a project to benefit a disadvantaged community that is not
the applying agency. The bill, for purposes of considering
eligibility for construction funding, would require a legal entity to
exist that is not necessarily the applicant, but that has the
authority to enter into contracts and incur debt on behalf of at
least one of the communities to be served and has the right to
operate at least one of the public water systems under a lease or
memorandum of understanding with a term of at least 20 years. By
authorizing the use of a continuously appropriated fund for new
purposes, this bill would make an appropriation. 
   This bill would, if legislation is enacted in 2013 that transfers
the statutory and regulatory authority for the California Safe
Drinking Water Act from the Department of Public Health, delay the
implementation of the provisions of the act for one year after the
effective date of the transfer of authority. 
   Vote: majority. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 116760.50 of the Health and Safety Code is
amended to read:
   116760.50.  The department shall establish criteria that shall be
met for projects to be eligible for consideration for funding under
this chapter. The criteria shall include all of the following:
   (a)  All preliminary design work for a defined project that will
enable the applicant or another public water system to supply water
that meets safe drinking water standards, including a cost estimate
for the project, shall be completed.
   (b)  For purposes of the department considering eligibility for
construction funding, a legal entity shall exist that has the
authority to enter into contracts and incur debt on behalf of at
least one of the communities to be served and owns the public water
system or has the right to operate at least one of the public water
systems under a lease or memorandum of understanding with a term of
at least 20 years, unless otherwise authorized by the department. The
applicant need not be the legal entity. If the proposed project is
funded by a loan under this chapter, the department may require the
applicant or other legal entity to secure a lease for the full term
of the loan if the loan exceeds 20 years.
   (c)  The applicant shall hold all necessary water rights.
   (d)  The applicant shall have completed any review required
pursuant to the California Environmental Quality Act (Division 13
(commencing with Section 21000) of the Public Resources Code) and the
guidelines adopted pursuant thereto, and have included plans for
compliance with that act in its preliminary plans for the project.
   (e)  The applicant has assembled sufficient financial data to
establish its ability to complete the proposed project and to
establish the amount of debt financing it can undertake.
  SEC. 2.  Section 116760.70 of the Health and Safety Code is amended
to read:
   116760.70.  (a) The department, after public notice and hearing,
shall, from time to time, establish a priority list of proposed
projects to be considered for funding under this chapter. In doing
so, the department shall determine if improvement or rehabilitation
of the public water system is necessary to provide pure, wholesome,
and potable water in adequate quantity and at sufficient pressure for
health, cleanliness, and other domestic purposes. The department
shall establish criteria for placing public water systems on the
priority list for funding that shall include criteria for priority
list categories. Priority shall be given to projects that meet all of
the following requirements:
   (1) Address the most serious risk to human health.
   (2) Are necessary to ensure compliance with requirements of
Chapter 4 (commencing with Section 116270) including requirements for
filtration.
   (3) Assist systems most in need on a per household basis according
to affordability criteria.
   (b) The department may, in establishing a new priority list, merge
those proposed projects from the existing priority list into the new
priority list.
   (c) In establishing the priority list, the department shall
consider the system's implementation of an ongoing source water
protection program or wellhead protection program.
   (d) In establishing the priority list categories and the priority
for funding projects, the department shall carry out the intent of
the Legislature pursuant to subdivisions (e) to (h), inclusive, of
Section 116760.10 and do all of the following:
   (1) Give priority to upgrade an existing system to meet drinking
water standards. This includes an upgrade to an existing system to
meet drinking water standards in a disadvantaged community that is
distinct from the applicant agency.
   (2) After giving priority pursuant to paragraph (1), consider
whether the applicant has sought other funds when providing funding
for a project to upgrade an existing system and to accommodate a
reasonable amount of growth.
   (e) Consideration of an applicant's eligibility for funding shall
initially be based on the priority list in effect at the time the
application is received and the project's ability to proceed. If a
new priority list is established during the time the application is
under consideration, but before the applicant receives a letter of
commitment, the department may consider the applicant's eligibility
for funding based on either the old or new priority list.
   (f) The department may change the ranking of a specific project on
the priority lists at any time following the publication of the list
if information, that was not available at the time of the
publication of the list, is provided that justifies the change in the
ranking of the project.
   (g) The department shall provide one or more public hearings on
the Intended Use Plan, the priority list, and the criteria for
placing public water systems on the priority list. The department
shall provide notice of the Intended Use Plan, criteria, and priority
list not less than 30 days before the public hearing. The Intended
Use Plan, criteria, and priority list shall not be subject to the
requirements of Chapter 3.5 (commencing with Section 11340) of Part 1
of Division 3 of Title 2 of the Government Code. The department
shall conduct duly noticed public hearings and workshops around the
state to encourage the involvement and active input of public and
affected parties, including, but not limited to, water utilities,
local government, public interest, environmental, and consumer
groups, public health groups, land conservation interests, health
care providers, groups representing vulnerable populations, groups
representing business and agricultural interests, and members of the
general public, in the development and periodic updating of the
Intended Use Plan and the priority list.
   (h) The requirements of this section do not constitute an
adjudicatory proceeding as defined in Section 11405.20 of the
Government Code and Section 11410.10 of the Government Code is not
applicable.
  SEC. 3.  Section 116760.79 of the Health and Safety Code is amended
to read:
   116760.79.  (a) Applications for funding under this chapter shall
be made in the form and with the supporting material prescribed by
the department.
   (b) The department shall establish a process by which multiple
water systems may apply for funding as a single applicant for the
purpose of consolidating water systems or extending services to
households relying on private wells. Funding shall be available to
these applicants if the following criteria are met:
   (1) At least one of the systems of private wells serves a
disadvantaged community or a severely disadvantaged community that is
in violation of Chapter 4 (commencing with Section 116270).
   (2) Fifty percent of the project funds support, facilitate, or
allow for planning and preliminary engineering studies, project
design, or construction to consolidate with, or extend services to,
existing water system facilities or private wells that are in
violation of Chapter 4 (commencing with Section 116270).
   (3) The purpose of the consolidation or service extension includes
providing safe and potable drinking water to a community, bringing
one or more of the applying water systems into compliance with this
chapter.
  SEC. 4.  Section 116760.90 of the Health and Safety Code is amended
to read:
   116760.90.  (a) The department shall not approve an application
for funding unless the department determines that the proposed study
or project is necessary to enable the applicant to meet safe drinking
water standards, and is consistent with an adopted countywide plan,
if any. The department may refuse to fund a study or project if it
determines that the purposes of this chapter may more economically
and efficiently be met by means other than the proposed study or
project. The department shall not approve an application for funding
a project with a primary purpose to supply or attract future growth.
The department may limit funding to costs necessary to enable
suppliers to meet primary drinking water standards, as defined in
Chapter 4 (commencing with Section 116270).
   (b) With respect to applications for funding of project design and
construction, the department shall also determine all of the
following:
   (1) Upon completion of the project, the applicant and other
beneficiaries of the project will be able to supply water that meets
safe drinking water standards.
   (2) The project is cost effective.
   (3) If the entire project is not to be funded under this chapter,
the department shall specify which costs are eligible for funding.
   (c) In considering an application for funding a project that meets
all other requirements of this chapter and regulations, the
department shall not be prejudiced by the applicant initiating the
project prior to the department approving the application for
funding. Preliminary project costs that are otherwise eligible for
funding pursuant to the provisions of this chapter shall not be
ineligible because the costs were incurred by the applicant prior to
the department approving the application for funding. Construction
costs that are otherwise eligible for funding pursuant to the
provisions of this chapter shall not be ineligible because the costs
were incurred after the approval of the application by the department
but prior to the department entering into a contract with the
applicant pursuant to Section 116761.50.
  SEC. 5.  Section 116761.20 of the Health and Safety Code is amended
to read:
   116761.20.  (a)  Planning and preliminary engineering studies,
project design, consolidation with or extension of services to an
existing water system, and construction costs may be funded under
this chapter by loans, or, in the case of public agencies or private
not-for-profit water companies, by grants or a combination of grants
and loans. Multiple water systems that apply under a single
application, as provided in subdivision (b) of Section 116760.79, may
be funded by grants, loans, or a combination thereof.
   (b)  The department shall determine what portion of the full costs
the public agency or private not-for-profit water company is capable
of repaying and authorize funding in the form of a loan for that
amount. The department shall authorize a grant only to the extent the
department finds the public agency or not-for-profit water company
is unable to repay the full costs of a loan.
   (c)  At the request of the department, the Public Utilities
Commission shall submit comments concerning the ability of suppliers,
subject to its jurisdiction, to finance the project from other
sources and to repay the loan.
   SEC.   6.    If legislation enacted in 2013
transfers the statutory and regulatory authority for the
implementation of the California Safe Drinking Water Act from the
State Department of Public Health, this act shall not become
operative until one year after the effective date of the transfer of
authority.