BILL NUMBER: SB 552	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  JULY 7, 2015
	AMENDED IN SENATE  APRIL 16, 2015

INTRODUCED BY   Senator Wolk

                        FEBRUARY 26, 2015

   An act to  add Section 116325.5 to   amend
Sections 116681 and 116682 of  the Health and Safety Code,
relating to water.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 552, as amended, Wolk. Public water systems: disadvantaged
communities:  drinking water standards.  
consolidation or extension of service.  
   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 within 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 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. Existing law, for these purposes,
defines "disadvantaged community" to mean a disadvantaged community
that is in an unincorporated area or is served by a mutual water
company.  
   This bill would allow a community to be a "disadvantaged community"
if the community is in a mobilehome park even if it is not in an
unincorporated area or served by a mutual water company. The bill
would limit the authority of the state board to order consolidation
or extension of service only with regard to a disadvantaged
community.  
   The act requires the state board, before ordering consolidation or
extension of service, to hold at least one initial public meeting,
as specified, and to obtain written consent from any domestic well
owner for consolidation or extension of service. The act provides
that any affected resident within the consolidation or extended
service area who does not provide written consent is ineligible,
until consent is provided, for any future water-related grant funding
from the state, except as specified.  
   This bill would provide that an initial public meeting is not
required for a potentially subsumed area that is served only by
domestic wells. The bill would require any domestic well owner,
instead of an affected resident, within the consolidation or extended
service area who does not provide written consent to be ineligible
for future water-related grant funding from the state.  
   The act requires the state board, upon ordering the consolidation
or extension of service, to adequately compensate the owners of a
privately owned subsumed water system for the fair market value of
the system as determined by the Public Unities Commission for water
corporations subject to the commission's jurisdiction or the state
board for all other systems. The act prohibits a consolidated water
system from increasing charges on existing customers of the receiving
water system solely as a consequence of the consolidation or
extension of service unless the customer receives a corresponding
benefit.  
   This bill would instead authorize the Public Utilities Commission
or the state board to determine the fair market value, without regard
to whether the system is a water corporation subject to the
commission's jurisdiction. The bill would prohibit fees or charges
imposed on a customer of a subsumed water system from exceeding the
cost of consolidating the water system or the extension of service to
the area.  
   Existing law, the California Safe Drinking Water Act, requires the
State Water Resources Control Board 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, adoption of enforcement regulations, and conducting
studies and investigations to assess the quality of water in domestic
water supplies. Existing law requires the state board to ensure that
all public water systems are operated in compliance with the act.
 
   This bill would require, by January 1, 2017, the state board to
develop a report identifying specific funding and enforcement
mechanisms necessary to ensure disadvantaged communities have water
systems that are in compliance with state and federal drinking water
standards. The bill would require the report to identify specific
legislative and administrative actions necessary to bring
disadvantaged communities into compliance with safe drinking water
standards.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


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

   SECTION 1.    Section 116681 of the   Health
and Safety Code   is amended to read: 
   116681.  The following definitions shall apply to this section and
Sections 116682 and 116684:
   (a) "Adequate supply" means sufficient water to meet residents'
health and safety needs.
   (b) "Affected residence" means a residence  within a
disadvantaged community that is  reliant on a water supply that
is either inadequate or unsafe.
   (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 not served by a public water system.
   (e) "Consolidation" means joining two or more public water
systems, state small water systems, or affected residences not served
by a public water system, into a single public water system.
   (f) "Disadvantaged community" means a disadvantaged community, as
defined in Section 79505.5 of the Water Code, that is in an
unincorporated  area   area, mobilehome park,
 or is served by a mutual water company.
   (g) "Extension of service" means the provision of service through
any physical or operational infrastructure arrangement other than
consolidation.
   (h) "Receiving water system" means the public water system that
provides service to a subsumed water system through consolidation or
extension of service.
   (i) "Safe drinking water" means water that meets all primary and
secondary drinking water standards.
   (j) "Subsumed water system" means the public water system, state
small water system, or affected residences not served by a public
water system consolidated into or receiving service from the
receiving water system.
   SEC. 2.    Section 116682 of the   Health
and Safety Code   is amended to read: 
   116682.  (a) Where a public water  system,  
system or a state small water system within a disadvantaged
 community,   community consistently fails
to provide an adequate supply of safe drinking water, the State Water
Resources Control Board 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 Water
Resources Control 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 State Water Resources Control
Board may set timelines and performance measures to facilitate
completion of consolidation.
   (b)  Prior to  Before  ordering
consolidation or extension of service as provided in this section,
the State Water Resources Control 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, 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.
   (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) 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.
   (A) During this period, the State Water Resources Control 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.
   (B) Upon a showing of good cause, the deadline may be extended by
the State Water Resources Control Board at the request of the
potentially receiving water system, potentially subsumed water
system, or the local agency formation commission with jurisdiction
over the potentially subsumed water system.
   (7) Obtain written consent from any domestic well owner for
consolidation or extension of service. Any  affected resident
  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.
   (8)  (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 Water Resources Control 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, and the potentially receiving water system an
opportunity to present testimony. The meeting shall provide an
opportunity for public comment. 
   (B) An initial public meeting shall not be required for a
potentially subsumed area that is served only by domestic wells.

   (c) Upon expiration of the deadline set by the State Water
Resources Control Board pursuant to paragraph (6) of subdivision (b),
the State Water Resources Control Board shall do the following:
   (1) Consult with the potentially receiving water system and the
potentially subsumed water system, if any.
   (2) Conduct a public hearing, in a location as close as feasible
to the affected communities.
   (A) The State Water Resources Control Board shall make reasonable
efforts to provide a 30-day notice of the hearing to the ratepayers,
renters, and property owners to receive water service through service
extension or in the area of the subsumed water system and to all
affected local government agencies and drinking water service
providers.
   (B) The hearing shall provide representatives of the potentially
subsumed water system, affected ratepayers, renters, property owners,
and the potentially receiving water system an opportunity to present
testimony.
   (C) The hearing shall provide an opportunity for public comment.
   (d)  Prior to   Before   
ordering consolidation or extension of service, the State Water
Resources Control 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) All 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 the most 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.
   (e) Upon ordering consolidation or extension of service, the State
Water Resources Control Board shall do all of the following:
   (1) As necessary and appropriate, make funds available, upon
appropriation by the Legislature, to the receiving water system for
the costs of completing the consolidation or extension of service,
including, but not limited to, replacing any capacity lost as a
result of the consolidation or extension of service, providing
additional capacity needed as a result of the consolidation or
extension of service, and legal fees. 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 Water Resources Control
Board shall provide appropriate financial assistance for the
infrastructure needed for the consolidation or extension of service.
The State Water Resources Control 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 Water Resources Control 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  for water corporations
subject to the commission's jurisdiction  or the State Water
Resources Control  Board for all other water systems.
  Board. 
   (4) Coordinate with the appropriate local agency formation
commission and other relevant local agencies to facilitate the change
of organization or reorganization.
   (f)  (1)    For the 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 cost of
consolidating the water system with a receiving system or the
extension of service to the area. 
   (g) Division 3 (commencing with Section 56000) of Title 5 of the
Government Code shall not apply to the consolidation or extension of
service required pursuant to this section. 
  SECTION 1.    The Legislature finds and declares
all of the following:
   (a) An estimated 500 public water systems in disadvantaged
communities rely on, and have to pay high rates for, sources of
drinking water that do not meet state and federal safe drinking water
standards.
   (b) Although funding sources are available to assist disadvantaged
communities with needed capital improvements, these communities
often lack governance infrastructure, technical expertise, and the
ability to pay for the ongoing operations and maintenance costs
necessary to continue to meet the state and federal drinking water
standards.  
  SEC. 2.    Section 116325.5 is added to the Health
and Safety Code, to read:
   116325.5.  (a) On or before January 1, 2017, the State Water
Resources Control Board shall develop a report identifying specific
funding and enforcement mechanisms necessary to ensure disadvantaged
communities have water systems that are in compliance with state and
federal drinking water standards.
   (b) The report shall identify specific legislative and
administrative actions necessary to bring the disadvantaged
communities into compliance with safe drinking water standards,
including the following:
   (1) Mechanisms for identification of the specific issues and
solutions for each community and any specific state or local
authority that is necessary to address these issues.
   (2) Identification of available, and any recommended new, sources
of revenue to fund ongoing operations and maintenance costs or any
other costs associated with providing water at an affordable rate.
   (3) Other recommendations for specific actions or authorities
necessary to address drinking water needs for these communities.