Bill Text: CA AB2501 | 2017-2018 | Regular Session | Enrolled

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Drinking water: state administrators: consolidation and extension of service.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Passed) 2018-09-28 - Chaptered by Secretary of State - Chapter 871, Statutes of 2018. [AB2501 Detail]

Download: California-2017-AB2501-Enrolled.html

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Enrolled  September 05, 2018

Passed  IN  Senate  August 30, 2018

Passed  IN  Assembly  August 31, 2018

Amended  IN  Senate  August 24, 2018

Amended  IN  Senate  June 27, 2018

Amended  IN  Senate  June 11, 2018

Amended  IN  Assembly  April 17, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill

No. 2501

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Introduced by Assembly Member Chu
(Coauthor: Assembly Member Friedman)

February 14, 2018

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An act to amend Sections 116355, 116681, 116682, and 116686 of the Health and Safety Code, relating to drinking water.

LEGISLATIVE COUNSEL'S DIGEST

AB 2501, Chu. Drinking water: state administrators: consolidation and extension of service.

(1) Existing law declares it to be the established 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. Existing law, the California Safe Drinking Water Act, provides for the operation of public water systems and imposes on the State Water Resources Control Board various responsibilities and duties. The act authorizes the state board to order consolidation with a receiving water system where a public water system or a state small water system, serving a disadvantaged community, consistently fails to provide an adequate supply of safe drinking water. The act authorizes the state board to order the extension of service to an area within a disadvantaged community that does not have access to an adequate supply of safe drinking water so long as the extension of service is an interim extension of service in preparation for consolidation. The act requires the state board, before ordering consolidation or extension of service, to fulfill certain requirements, including, among other things, holding a public meeting, and to establishing a reasonable deadline, as prescribed, for a potentially receiving water system and a potentially subsumed water system to negotiate consolidation or another means of providing an adequate supply of affordable, safe drinking water. The act requires the state board to conduct a public hearing at the expiration of the reasonable deadline, as specified.

This bill would revise and recast these provisions. The bill would authorize the state board to order consolidation with a receiving water system if a public water system or state small water system, serving a disadvantaged community, consistently fails to provide an adequate supply of safe drinking water or if a disadvantaged community is reliant on a domestic well that consistently fails to provide an adequate supply of safe drinking water. The bill would require the state board, instead of a public hearing at the expiration of the deadline, to conduct a 2nd public meeting if the consolidation has not concluded within 6 months of the first public meeting.

The bill would require the state board, as necessary and appropriate, to compensate a receiving water system for any capacity lost as a result of the consolidation or extension of service, as provided. The bill would prohibit a receiving water system from charging any fees to, or placing conditions on, customers of the subsumed water system that it does not charge to, or impose on, new customers that are not subject to the consolidation with the receiving water system. The bill would prohibit the state board from funding public works or upgrades unrelated to the delivery of an adequate supply of affordable, safe drinking water. The bill would authorize the state board to order a receiving water system to consolidate or extend service to a public water system operated by a local educational agency only if certain additional conditions are met.

(2) The act also authorizes the state board, for the purpose of providing affordable, safe drinking water to disadvantaged communities and preventing fraud, waste, and abuse, to contract with an administrator to provide administrative and managerial services to a designated public water system and to order the designated public water system to accept those administrative and managerial services, including full management and control, if sufficient funding is available and if the state board finds that consolidation with another system or extension of service from another system is either not appropriate or not technically and economically feasible.

This bill would revise and recast these provisions. The bill would authorize the state board to contract with, or provide a grant to, an administrator to provide administrative, technical, operational, or managerial services, or any combination of those services, to a designated water system to assist with the provision of an adequate supply of affordable, safe drinking water. The bill would also authorize the state board to order a designated water system to accept those services from an administrator appointed by the state board for full oversight of construction or development projects related to a consolidation or extension of service. The bill would require the state board, before ordering a designated water system to accept those services from an administrator, to develop certain standards, terms, and procedures in a policy handbook for purposes of these provisions.

Digest Key

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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Bill Text

The people of the State of California do enact as follows:

SECTION 1.

 Section 116355 of the Health and Safety Code is amended to read:

116355.

 (a) Once every five years the state board shall submit to the Legislature a comprehensive Safe Drinking Water Plan for California.

(b) The Safe Drinking Water Plan shall include, but not be limited to, the following information:

(1) An analysis of the overall quality of California’s drinking water and the identification of specific water quality problems.

(2) Types and levels of contaminants found in public drinking water systems that have less than 10,000 service connections. The discussion of these water systems shall include the following:

(A) Estimated costs of requiring these systems to meet primary drinking water standards and public health goals.

(B) Recommendations for actions that could be taken by the Legislature, the department, and these systems to improve water quality.

(3) A discussion and analysis of the known and potential health risks that may be associated with drinking water contamination in California.

(4) An evaluation of how existing water quality information systems currently maintained by local or state agencies can be more effectively used to protect drinking water.

(5) An evaluation of the research needed to develop inexpensive methods and instruments to ensure better screening and detection of waterborne chemicals, and inexpensive detection methods that could be used by small utilities and consumers to detect harmful microbial agents in drinking water.

(6) An analysis of the technical and economic viability and the health benefits of various treatment techniques that can be used to reduce levels of trihalomethanes, lead, nitrates, synthetic organic chemicals, micro-organisms, and other contaminants in drinking water.

(7) A discussion of alternative methods of financing the construction, installation, and operation of new treatment technologies, including, but not limited to user charges, state or local taxes, state planning and construction grants, loans, and loan guarantees.

(8) A discussion of sources of revenue presently available, and projected to be available, to public water systems to meet current and future expenses.

(9) An analysis of the current cost of drinking water paid by residential, business, and industrial consumers based on a statewide survey of large, medium, and small public water systems.

(10) Specific recommendations, including recommendations developed pursuant to paragraph (6), to improve the quality of drinking water in California and a detailed five-year implementation program.

(11) A review of the use of administrators pursuant to Section 116686 in the state, including, but not limited to, the number of communities that have achieved access to safe drinking water through use of an administrator, the costs and duties of the administrator and a comparison of costs, whether rate structures for communities served by an administrator have resulted in significantly higher rates and whether those rates are affordable, and whether the administrator program should be modified to better serve communities.

(12) A review of the consolidations pursuant to Section 116682 in the state, including, but not limited to, the number of communities that have achieved access to safe drinking water through consolidation, whether rate structures for communities are affordable following consolidation, barriers to consolidation, and whether the consolidation program should be modified to better serve communities.

SEC. 2.

 Section 116681 of the Health and Safety Code is amended to read:

116681.

 The following definitions shall apply to this section and Sections 116682, 116684, and 116686:

(a) “Adequate supply” means sufficient water to meet residents’ health and safety needs at all times.

(b) “Affected residence” means a residence within a disadvantaged community that is reliant on a water supply that is either inadequate or unsafe and that is not served by a public water system or state small water system.

(c) “Consistently fails” means a failure to provide an adequate supply of safe drinking water.

(d) “Consolidated water system” means the public water system resulting from the consolidation of a public water system with another public water system, state small water system, or affected residences.

(e) “Consolidation” means joining two or more public water systems, state small water systems, or affected residences into a single public water system.

(f) “Disadvantaged community” means a disadvantaged community, as defined in Section 79505.5 of the Water Code.

(g) “Domestic well” means a groundwater well used to supply water for the domestic needs of an individual residence or a water system that is not a public water system and that has no more than four service connections.

(h) “Extension of service” means the provision of service through any physical or operational infrastructure arrangement other than consolidation.

(i) “Infill site” means a site within the area served by a subsumed water system that, as of the date of consolidation, is adjacent to a parcel that is developed for qualified urban uses.

(j) “Qualified urban use” means any residential, commercial, public institutional, industrial, transit or transportation facility, or retail use, or any combination of those uses.

(k) “Receiving water system” means the public water system that provides service to a subsumed water system through consolidation or extension of service.

(l) “Safe drinking water” means water that meets all primary and secondary drinking water standards.

(m) “State small water system” has the same meaning as provided in Section 116275.

(n) “Subsumed water system” means the public water system, state small water system, or affected residences consolidated into or receiving service from the receiving water system.

SEC. 3.

 Section 116682 of the Health and Safety Code is amended to read:

116682.

 (a) (1) The state board, in circumstances described in either subparagraph (A) or (B), may order consolidation with a receiving water system as provided in this section and Section 116684. The consolidation may be physical or operational. The state board may also order the extension of service to an area within a disadvantaged community that does not have access to an adequate supply of safe drinking water so long as the extension of service is an interim extension of service in preparation for consolidation. The consolidation shall occur within six months of the initiation of the extension of service. The state board may set timelines and performance measures to facilitate completion of consolidation.

(A) A public water system or a state small water system, serving a disadvantaged community, consistently fails to provide an adequate supply of safe drinking water.

(B) A disadvantaged community is reliant on a domestic well that consistently fails to provide an adequate supply of safe drinking water.

(2) The state board shall develop and adopt a policy that provides a process by which members of a disadvantaged community may petition the state board to consider ordering consolidation. The state board shall adopt the policy in a policy handbook consistent with the process provided for in subdivision (a) of Section 116760.43.

(b) Before ordering consolidation or extension of service as provided in this section, the state board shall do all of the following:

(1) Encourage voluntary consolidation or extension of service.

(2) Consider other enforcement remedies specified in this article.

(3) Consult with, and fully consider input from, the relevant local agency formation commission regarding the provision of water service in the affected area, the recommendations for improving service in a municipal service review, whether the consolidation or extension of service is cost effective, and any other relevant information.

(4) Consult with, and fully consider input from, the Public Utilities Commission when the consolidation would involve a water corporation subject to the commission’s jurisdiction. If a receiving water system is regulated by the Public Utilities Commission, the state board shall inform the commission at least 60 days before the consolidation order, and upon issuance of the order the commission shall open a proceeding to determine cost allocation, ratemaking, and commission public participation requirements for the consolidation process.

(5) Consult with, and fully consider input from, the local government with land use planning authority over the affected area, particularly regarding any information in the general plan required by Section 65302.10 of the Government Code.

(6) Consult with, and fully consider input from, all public water systems in the chain of distribution of the potentially receiving water systems.

(7) (A) Notify the potentially receiving water system and the potentially subsumed water system, if any, and establish a reasonable deadline of no less than six months, unless a shorter period is justified, for the potentially receiving water system and the potentially subsumed water system, if any, to negotiate consolidation or another means of providing an adequate supply of safe drinking water.

(B) During this period, the state board shall provide technical assistance and work with the potentially receiving water system and the potentially subsumed water system to develop a financing package that benefits both the receiving water system and the subsumed water system.

(C) Upon a showing of good cause, the deadline may be extended by the state board at the request of the potentially receiving water system, potentially subsumed water system, the local agency formation commission with jurisdiction over the potentially subsumed water system, or the Public Utilities Commission.

(8) Consider the affordability of the anticipated monthly rates for drinking water service to residential customers of the potentially subsumed water system.

(9) Obtain written consent from any domestic well owner for consolidation or extension of service. Any domestic well owner within the consolidation or extended service area who does not provide written consent shall be ineligible, until the consent is provided, for any future water-related grant funding from the state other than funding to mitigate a well failure, disaster, or other emergency.

(10) (A) Hold at least one public meeting at the initiation of this process in a place as close as feasible to the affected areas. The state board shall make reasonable efforts to provide a 30-day notice of the meeting to the ratepayers, renters, and property owners to receive water service through service extension or in the area of the subsumed water system and all affected local government agencies and drinking water service providers. The meeting shall provide representatives of the potentially subsumed water system, affected ratepayers, renters, property owners, the potentially receiving water system, and the public an opportunity to present oral and written comments.

(B) The state board shall provide an opportunity to submit comments by mail or electronically during the notice period and for at least one week after the meeting.

(C) The state board shall review comments received during the meeting and received by mail and electronically during the notice period and for one week after the public meeting.

(c) If a consolidation or other means of providing an adequate supply of safe drinking water has not been negotiated by the potentially receiving water system and the potentially subsumed water system before the expiration of the deadline set by the state board pursuant to paragraph (7) of subdivision (b), the state board shall do the following:

(1) Consult with the potentially receiving water system and the potentially subsumed water system, if any.

(2) (A) If the consolidation has not concluded within six months following the first public meeting held pursuant to paragraph (10) of subdivision (b), conduct a public meeting in a location as close as feasible to the affected communities. The meeting shall be held after the state board has made the findings described in subdivision (d).

(B) The state board shall make reasonable efforts to provide a 30-day notice of the meeting to the ratepayers, renters, property owners to receive water service through service extension or in the area of the subsumed water system, and the public and to all affected local government agencies and drinking water service providers.

(C) The meeting shall provide representatives of the potentially subsumed water system, affected ratepayers, renters, property owners, and the potentially receiving water system an opportunity to present oral and written comments.

(D) The meeting shall provide an opportunity for public comment.

(3) The state board shall make reasonable efforts to ensure that a receiving water system and a subsumed water system are informed on a regular basis of progress regarding actions taken pursuant to this section.

(d) Before ordering consolidation or extension of service, the state board shall find all of the following:

(1) The potentially subsumed water system has consistently failed to provide an adequate supply of safe drinking water.

(2) Reasonable efforts to negotiate consolidation or extension of service were made.

(3) Consolidation of the receiving water system and subsumed water system or extension of service is appropriate and technically and economically feasible.

(4) There is no pending local agency formation commission process that is likely to resolve the problem in a reasonable amount of time.

(5) Concerns regarding water rights and water contracts of the subsumed and receiving water systems have been adequately addressed.

(6) Consolidation or extension of service is an effective and cost-effective means to provide an adequate supply of safe drinking water.

(7) The capacity of the proposed interconnection needed to accomplish the consolidation is limited to serving the current customers of the subsumed water system, infill sites within the community served by the subsumed water system, residents of disadvantaged communities in existence as of the date of consolidation and that are located along the service line connecting the subsumed water system and the receiving water system, and vacant lots within the community served by the subsumed water system that are zoned for residential use and have no more than one other vacant lot between that parcel and an infill parcel, including capacity needed for services such as firefighting.

(e) Upon ordering consolidation or extension of service, the state board shall do all of the following:

(1) As necessary and appropriate, as determined by the state board, compensate the receiving water system for any capacity lost as a result of the consolidation or extension of service either by paying the water system’s capacity connection fee set out in the water system’s adopted rate structure or by providing additional capacity needed as a result of the consolidation or extension of service, and by paying legal fees. If capacity beyond what is needed for consolidation is provided by a project funded through the state board, the state board shall retain an option to utilize that capacity for future consolidations, without paying additional capacity charge fees, for five years, unless it releases that option in writing. Funding pursuant to this paragraph is available for the general purpose of providing financial assistance for the infrastructure needed for the consolidation or extension of service and does not need to be specific to each individual consolidation project. The state board shall provide appropriate financial assistance for the water infrastructure needed for the consolidation or extension of service. The state board’s existing financial assistance guidelines and policies shall be the basis for the financial assistance.

(2) Ensure payment of standard local agency formation commission fees caused by state board-ordered consolidation or extension of service.

(3) Adequately compensate the owners of a privately owned subsumed water system for the fair market value of the system, as determined by the Public Utilities Commission or the state board.

(4) Coordinate with the appropriate local agency formation commission and other relevant local agencies to facilitate the change of organization or reorganization.

(5) If ordering consolidation or extension of service between two water systems, consider any existing domestic wells within the service area that could also be subject to consolidation or extension of service pursuant to this section.

(f) If funds are appropriated for this purpose, the state board may make funds available for the purposes of subdivision (e), as necessary and appropriate, to the receiving water system, the subsumed water system, or an administrator providing full oversight of construction or development projects related to a consolidation or extension of service.

(g) (1) For purposes of this section, the consolidated water system shall not increase charges on existing customers of the receiving water system solely as a consequence of the consolidation or extension of service unless the customers receive a corresponding benefit.

(2) For purposes of this section, fees or charges imposed on a customer of a subsumed water system shall not exceed the costs of the service.

(3) For purposes of this section, the receiving water system shall not charge any fees to, or place conditions on, customers of the subsumed water system that it does not charge to, or impose on, new customers that are not subject to the consolidation with the receiving water system.

(4) (A) Notwithstanding paragraph (2) or (3), for purposes of this section, if costs incurred by the receiving water system in completing the consolidation or extension of service are not otherwise recoverable as provided in subparagraph (B), the receiving water system may charge fees to customers of the subsumed water system to recover those costs.

(B) A receiving water system shall not charge a fee pursuant to subparagraph (A) for costs that are otherwise recoverable from the state, the federal government, programs administered by local agencies, parties responsible for causing contamination that the consolidation or extension of service is designed to address, or other sources, as determined by the state board.

(h) The state board shall not, pursuant to this section, fund public works or upgrades unrelated to the delivery of an adequate supply of affordable, safe drinking water, including, but not limited to, the installation of street lights, sidewalks, curbs, and gutters. A local agency’s decision whether to provide these public works or upgrades shall not delay the consolidation or extension of service.

(i) When a public water system is operated by a local educational agency, the state board may order a receiving water system to consolidate or extend service to a public water system operated by a local educational agency pursuant to this section if both the following additional conditions are met:

(1) The local educational agency serves students from one or more census blocks that are disadvantaged communities.

(2) The state board obtains a written determination from the local educational agency that the state board’s analysis in the financing package, developed pursuant to subparagraph (B) of paragraph (7) of subdivision (b), indicates that consolidating or extending service would not result in additional unacceptable costs to the local educational agency and would result in safe drinking water being available to the local educational agency.

(j) Division 3 (commencing with Section 56000) of Title 5 of the Government Code shall not apply to an action taken by the state board pursuant to this section.

SEC. 4.

 Section 116686 of the Health and Safety Code is amended to read:

116686.

 (a) (1) To provide an adequate supply of affordable, safe drinking water to disadvantaged communities and to prevent fraud, waste, and abuse, the state board may do any of the following, if sufficient funding is available:

(A) (i) Contract with, or provide a grant to, an administrator to provide administrative, technical, operational, or managerial services, or any combination of those services, to a designated water system to assist the designated water system with the provision of an adequate supply of affordable, safe drinking water.

(ii) To fulfill the requirements of this section, the state board may contract with more than one administrator, but only one administrator may be assigned to provide services to a given designated water system.

(iii) An administrator may provide administrative and managerial services to more than one designated water system.

(B) Order the designated water system to accept administrative, technical, operational, or managerial services, including full management and control of all aspects of the designated water system, from an administrator selected by the state board.

(C) Order the designated water system to accept administrative, technical, operational, or managerial services from an administrator appointed by the state board for full oversight of construction or development projects related to a consolidation or extension of service, including, but not limited to, accepting loans and grants issued by the state board and entering into contracts on behalf of the designated water system.

(2) In performing its duties pursuant to paragraph (1), the state board may use criteria from the policy handbook adopted pursuant to subdivision (g).

(b) Before the state board determines that a public water system or state small water system is a designated water system, the state board shall do all of the following:

(1) Provide the public water system or state small water system with notice and an opportunity to show either of the following:

(A) That the public water system or state small water system has not consistently failed to provide an adequate supply of affordable, safe drinking water.

(B) That the public water system or state small water system has taken steps to timely address its failure to provide an adequate supply of affordable, safe drinking water.

(2) (A) Conduct a public meeting in a location as close as feasible to the affected community.

(B) The state board shall make reasonable efforts to provide a 30-day notice of the meeting to affected ratepayers, renters, and property owners.

(C) Representatives of the public water system or state small water system, affected ratepayers, renters, and property owners shall be provided an opportunity to present oral and written comments at the meeting.

(D) The meeting shall provide an opportunity for public comment.

(3) Provide an opportunity to submit comments by mail or electronically during the 30-day notice period and for at least one week after the public meeting described in paragraph (2).

(4) If the public water system is operated by a local educational agency, obtain the local educational agency’s agreement, in writing, to the appointment of an administrator.

(c) The state board shall make financial assistance available to an administrator for a designated water system, as appropriate and to the extent that funding is available.

(d) The authority granted to an administrator by the state board pursuant to subdivision (a) may include, but shall not be limited to, the authority to do all of the following:

(1) Expend available moneys for capital infrastructure improvements that the designated water system needs to provide an adequate supply of affordable, safe drinking water.

(2) Set and collect user water rates and fees, subject to approval by the state board. The state board shall consider affordability when approving water rates and fees. The provisions of this section are subject to all applicable constitutional requirements, including Article XIII D of the California Constitution.

(3) Expend available moneys for operation and maintenance costs of the designated water system.

(e) The state board shall work with the administrator of a designated water system and the communities served by that designated water system to develop, within the shortest practicable timeframe, adequate technical, managerial, and financial capacity to deliver an adequate supply of affordable, safe drinking water so that the services of the administrator are no longer necessary.

(f) A designated water system shall not be responsible for any costs associated with an administrator that are higher than the costs necessary to maintain the designated water system and provide an adequate supply of affordable, safe drinking water.

(g) Before ordering a designated water system to accept administrative, technical, operational, or managerial services from an administrator pursuant to subdivision (a), the state board shall develop standards, terms, and procedures in a policy handbook adopted consistent with the process provided for in subdivision (a) of Section 116760.43 for all of the following:

(1) Ensuring compliance with subdivision (f).

(2) Providing opportunity for public comment on selection of an administrator and the services to be provided.

(3) Providing public access to budgets, financial information, and other documents and records related to the provision of water service to the designated water system or affected residences and to the management of the designated water system by the administrator.

(4) Providing regular public meetings, notifications, opportunities for public comment, and other forms of engagement with customers of the designated water system for significant decisions or actions made on behalf of the designated water system, including, but not limited to, establishing operating budgets, altering water rates, adopting system policies, entering into long-term contracts or financing commitments, and developing system projects or plans.

(5) Formal requests to the state board to reverse or modify a decision of an administrator or to request substitution of an administrator.

(6) Ensuring an administrator acts in the best interests of the community served.

(7) Development and approval of a post-administrator drinking water service plan to ensure compliance with subdivision (e). Development of the plan shall include, but is not limited to, an evaluation of long-term public governance or community ownership options.

(h) Administrative and managerial contracts pursuant to this section shall be exempt from Chapter 2 (commencing with Section 10290) of Part 2 of Division 2 of the Public Contract Code and may be awarded on a noncompetitive bid basis as necessary to implement the purposes of this section.

(i) For purposes of this section, a local government, as defined in Article XIII C of the California Constitution, that sets water rates in accordance with Article XIII D of the California Constitution shall be deemed to be providing affordable water.

(j) This section does not apply to a charter city, charter county, or charter city and county.

(k) For purposes of this section, an administrator is authorized to act on behalf of an affected residence to the same extent, and in the same manner, as a designated water system with the consent of the affected residence.

(l) The Legislature finds and declares that the funding provided to a state small water system, affected residence, public water system, or administrator for purposes of this section serves a public purpose and does not constitute a gift of public funds within the meaning of Section 6 of Article XVI of the California Constitution.

(m) For purposes of this section, the following terms have the following meanings:

(1) “Administrator” means a person whom the state board has determined is competent to perform the administrative, technical, operational, or managerial services required for purposes of this section, pursuant to criteria set forth in the policy handbook adopted pursuant to subdivision (g). Notwithstanding any other law, a privately owned public utility may serve as an administrator for purposes of this section.

(2) “Designated water system” means a public water system or state small water system that serves a disadvantaged community, as defined in Section 116681, and that the state board finds consistently fails to provide an adequate supply of affordable, safe drinking water.