BILL NUMBER: AB 1531	CHAPTERED
	BILL TEXT

	CHAPTER  673
	FILED WITH SECRETARY OF STATE  OCTOBER 9, 2015
	APPROVED BY GOVERNOR  OCTOBER 9, 2015
	PASSED THE SENATE  AUGUST 20, 2015
	PASSED THE ASSEMBLY  AUGUST 24, 2015
	AMENDED IN SENATE  AUGUST 18, 2015
	AMENDED IN SENATE  JULY 16, 2015
	AMENDED IN SENATE  JULY 9, 2015
	AMENDED IN SENATE  JUNE 19, 2015
	AMENDED IN SENATE  JUNE 8, 2015
	AMENDED IN ASSEMBLY  APRIL 20, 2015

INTRODUCED BY   Committee on Environmental Safety and Toxic Materials
(Assembly Members Alejo (Chair), Gonzalez, McCarty, and Ting)

                        MARCH 23, 2015

   An act to amend Sections 6103.4 and 53082.5 of the Government
Code, to amend Sections 116270, 116275, 116551, 116650, 116655,
116735, 116751, 116760.20, 116761.20, 116761.65, and 117125 of, to
add Sections 116365.03, 116701, and 116760.38 to, to repeal Section
116379 of, and to repeal and add Section 116761.70 of, the Health and
Safety Code, and to amend Sections 13176, 13177, 13177.5, 13177.6,
13178, 13181, 13275, 13285, 13304.1, 13392, 13392.5, 13393.5, 13400,
13426, 13476, 13477.6, 13480, and 79702 of, to add Section 79726 to,
and to repeal Section 13331.2 of, the Water Code, relating to water,
and making an appropriation therefor.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1531, Committee on Environmental Safety and Toxic Materials.
State Water Resources Control Board.
   (1) Existing law, the California Safe Drinking Water Act (state
act), requires the State Water Resources Control Board to administer
provisions relating to the regulation of drinking water to protect
public health. The state board's duties include, but are 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 (federal act), and
adopting and enforcing regulations. Existing law requires the state
board to appoint a deputy director to oversee the issuance and
enforcement of public water system permits and delegates certain
authorities of the state board to the deputy director.
   This bill would authorize the state board to adopt as an emergency
regulation, a regulation that is not more stringent than, and is not
materially different in substance and effect than, the requirements
of a regulation promulgated under the federal act, with a specified
exception. The bill would require that these emergency regulations
not be subject to review by the Office of Administrative Law and
remain in effect until revised by the state board.
   The state act authorizes the deputy director to issue an order
directing certain actions whenever the deputy director determines
that a person has violated or is violating the act, or any permit,
regulation, or standard issued or adopted pursuant to the act. The
act authorizes an aggrieved party 30 days after service of a copy of
the order or decision to file with the superior court a petition for
a writ of mandate for review of the order or decision.
   The bill would authorize, within 30 days of issuance of a certain
order or decision issued by the deputy director, an aggrieved person
to petition the state board for reconsideration and would authorize
the state board to refuse to reconsider the order or decision, to
deny the petition, or to set aside or modify the order or decision,
as specified. The bill would provide that the filing of a petition
for reconsideration is an administrative remedy that must be
exhausted before filing a petition for writ of mandate.
   The state act authorizes the state board to take certain actions
relating to the inspection of public water systems, including
inspecting and copying any records, reports, test results, or other
information required to carry out the provisions of the act. Existing
law makes it a crime for any person to knowingly commit certain
acts, including making a false statement or representation in any
application, record, report, or other document submitted, maintained,
or used for the purposes of compliance with the act or withholding
information requested by the state board regarding imminent and
substantial danger to the public health or safety, as specified.
   This bill would require an owner of a public water system to
provide to the state board reports, test results, and certain other
information within 15 business days of receiving a request for those
records from a duly authorized representative of the state board. To
the extent that a person knowingly makes a false statement or
representation when providing these reports, results, or information
to the state board, this bill would expand the scope of a crime and
thereby impose a state-mandated local program.
   This bill would declare the intent of the Legislature that the
state act be construed to ensure consistency with the requirements
for states to obtain and maintain primary enforcement responsibility
for public water systems under the federal act.
   (2) Existing law generally grants various powers to cities,
counties, and certain special districts, including the power to issue
bonds and incur indebtedness for certain purposes and subject to
certain restrictions. Existing law authorizes counties, cities, and
special districts that provide or intend to provide wastewater
treatment facilities or services, subject to applicable
constitutional restrictions, to borrow money and incur indebtedness
for purposes of the State Water Pollution Control Revolving Fund.
   Existing law, the Safe Drinking Water State Revolving Fund Law of
1997, continuously appropriates state and federal funds in the Safe
Drinking Water State Revolving Fund to the State Water Resources
Control Board for grants or revolving fund loans for the design and
construction of projects for public water systems that will enable
those systems to meet safe drinking water standards. The revolving
fund law defines "public agency," for purposes of the act, to mean a
city, county, city and county, joint powers authority, or other
political subdivision of the state, that owns or operates a public
water system.
   This bill would expand the definition of "public agency" to
include a municipality, as defined in the federal act. The bill would
extend the authorization to borrow money and incur indebtedness to
cities, counties, and special districts that provide or intend to
provide water treatment facilities or services and for purposes of
the Safe Drinking Water State Revolving Fund or the California Safe
Drinking Water Act.
   This bill would require certain funds, appropriated and available
for grants and loans for public water system infrastructure
improvements and related actions, as specified, to be available for
deposit in the revolving fund for the purpose of providing the state
share needed to leverage federal funds to assist communities in
providing safe drinking water.
   The revolving fund law requires the state board to annually
establish the interest rate for repayable financing made pursuant to
these provisions, as specified. The revolving fund law authorizes the
State Water Resources Control Board to undertake certain actions to
implement the revolving fund law, including engaging in the transfer
of capitalization grant funds, as specified. Existing law prohibits
more than 4% of the capitalization grant from being used by the state
board for administering the revolving fund law and authorizes the
state board to establish a reasonable schedule for administrative
fees to be paid by the grant applicant to reimburse the state for the
costs of the administration of these provisions.
   The bill would delete the requirement that the state board
establish the interest rate annually and would instead authorize the
state board to adjust the interest rate periodically. The bill would
delete the prohibition against using more than 4% of the
capitalization grant for administrating the Safe Drinking Water
Revolving Fund Law and would delete the authorization permitting the
state board to establish a reasonable schedule for administrative
fees. The bill would instead create the Safe Drinking Water State
Revolving Fund Administrative Fund and would require moneys
transferred to pay for the costs incurred by the state board for
administering the act, moneys collected for financial assistance
services, and interest earned upon these moneys to be deposited into
the fund. The bill would authorize, where financial assistance is
made and is to be repaid to the state board, the state board to
assess an annual charge for financial assistance services, not to
exceed 1% of the financial assistance balance. The bill would make
moneys in the administration fund available to the state board, upon
appropriation by the Legislation, for payment of reasonable costs of
administering the fund. The bill would require the state board to set
the total amount of revenue that is collected each year though the
annual charge for financial assistance services at an amount that is
equal as practicable to the appropriation amount set forth in the
annual Budget Act. The bill would require, at least once each fiscal
year, the state board to adjust the financial assistance service
charge to conform with the annual Budget Act.
   Existing law requires the state board to determine what portion of
the full costs a public agency or private not-for-profit water
company is capable of repaying, and authorizes the state board, to
the extent the state board finds that the public agency or
not-for-profit water company is able to repay the full costs of the
financing, to authorize a grant or principal forgiveness.
Notwithstanding those and other specified provisions, existing law
deems a small community water system or nontransient noncommunity
water system that is owned by a public agency or a private
not-for-profit water company and serving a severely disadvantaged
community to have no ability to repay any financing.
   This bill would, notwithstanding those same provisions, instead
deem a public agency or private not-for-profit water company that
serves a severely disadvantaged community with fewer than 200 service
connections and that owns a small community water system or
nontransient noncommunity water system to have no ability to repay
any financing, as specified.
   Existing law creates the State Water Pollution Control Revolving
Fund Small Community Grant Fund in the State Treasury, and requires
moneys from specified sources to be deposited in the grant fund.
Existing law requires a specified amount of money to be available for
deposit in the State Water Pollution Control Revolving Fund Small
Community Grant Fund for grants for wastewater treatment projects.
   This bill would specifically require those moneys to be deposited
in the grant fund, and would authorize those moneys to be expended
for technical assistance, as specified, in addition to other
specified uses.
   (3) Existing law, the Porter-Cologne Water Quality Control Act,
establishes the State Water Pollution Control Revolving Fund program
pursuant to which state and federal funds are continuously
appropriated from the State Water Pollution Control Revolving Fund to
the state board for permissible purposes authorized by the federal
Clean Water Act or a federal capitalization grant deposited into the
fund, including loans and other financial assistance for the
construction of publicly owned treatment works by a municipality, the
implementation of a management program, the development and
implementation of a conservation and management plan, and other
related purposes in accordance with the federal Clean Water Act and
the Porter-Cologne Water Quality Control Act.
   This bill would instead require that moneys in the fund be used
only for purposes allowed by the federal Clean Water Act or a federal
grant, and would delete the specifications of the types of projects
and programs eligible for this financial assistance. By allowing
moneys in the fund to be used for purposes allowed by a federal
grant, thereby expanding the purposes for which moneys in a
continuously appropriated revolving fund may be expended, this bill
would make an appropriation.
   Existing law requires the loans to meet certain criteria,
including full amortization not later than 20 years after project
completion, unless otherwise authorized by a federal capitalization
grant deposited into the fund. Existing law also authorizes loan
forgiveness to the extent it is authorized by a federal
capitalization grant deposited into the fund.
   The bill would extend the loan amortization requirement to not
later than 30 years after project completion unless otherwise
authorized by a federal grant deposited in the fund and would
authorize loan forgiveness to the extent it is authorized by a
federal grant deposited into the fund without regard to whether it is
a capitalization grant.
   Existing law also authorizes moneys in the fund to be used for
payment of the reasonable cost of administering the fund and
conducting certain activities relating to the federal Clean Water
Act. Existing law prohibits those costs from exceeding 4% of all
federal contributions into the fund except, if permitted by federal
and state law, interest payments into the fund and other moneys into
the fund are authorized to be used to defray additional
administrative and activity costs.
   The bill would instead prohibit the costs used for administering
the fund and conducting the federal Clean Water Act activities from
exceeding 4% of all federal contributions in the fund, $400,000 per
year, or 1/5 of 1% per year of the current valuation of the fund,
whichever is greater, plus the amount of fees collected by the state
for these purposes, regardless of source.
   (4) This bill would make various nonsubstantive changes, including
repealing obsolete provisions and updating cross-references.
   (5) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   Appropriation: yes.


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

  SECTION 1.  Section 6103.4 of the Government Code is amended to
read:
   6103.4.  Section 6103 does not apply to any fee or charge for
official services required by any of the following:
   (a) The Environmental Laboratory Accreditation Act (Article 3
(commencing with Section 100825) of Chapter 4 of Part 1 of Division
101 of the Health and Safety Code).
   (b) Article 3 (commencing with Section 106875) of Chapter 4 of
Part 1 of Division 104 of the Health and Safety Code.
   (c) The California Safe Drinking Water Act (Chapter 4 (commencing
with Section 116270) of Part 12 of Division 104 of the Health and
Safety Code).
   (d) The Safe Drinking Water State Revolving Fund Law of 1997
(Chapter 4.5 (commencing with Section 116760) of Part 12 of Division
104 of the Health and Safety Code).
   (e) Article 2 (commencing with Section 116800) and Article 3
(commencing with Section 116825) of Chapter 5 of Part 12 of Division
104 of the Health and Safety Code.
   (f) Part 5 (commencing with Section 4999) of Division 2 of the
Water Code.
   (g) Division 7 (commencing with Section 13000) of the Water Code.
  SEC. 2.  Section 53082.5 of the Government Code is amended to read:

   53082.5.  Subject to all applicable constitutional restrictions, a
county, a city, or a special district that provides, or intends to
provide, water or wastewater treatment facilities or services may
borrow money and incur indebtedness pursuant to Chapter 4.5
(commencing with Section 116760) of Part 12 of Division 104 of the
Health and Safety Code or Chapter 6.5 (commencing with Section 13475)
of Division 7 of the Water Code.
  SEC. 3.  Section 116270 of the Health and Safety Code is amended to
read:
   116270.  The Legislature finds and declares all of the following:
   (a)  Every resident of California has the right to pure and safe
drinking water.
   (b)  Feasible and affordable technologies are available and shall
be used to remove toxic contaminants from public water supplies.
   (c)  According to the State Department of Health Services, over 95
percent of all large public water systems in California are in
compliance with health-based action levels established by the
department for various contaminants.
   (d)  It is the policy of the state to reduce to the lowest level
feasible all concentrations of toxic chemicals that, when present in
drinking water, may cause cancer, birth defects, and other chronic
diseases.
   (e)  This chapter is intended to ensure that the water delivered
by public water systems of this state shall at all times be pure,
wholesome, and potable. This chapter provides the means to accomplish
this objective.
   (f)  It is the intent of the Legislature to improve laws governing
drinking water quality, to improve upon the minimum requirements of
the federal Safe Drinking Water Act Amendments of 1996, to establish
primary drinking water standards that are at least as stringent as
those established under the federal Safe Drinking Water Act, and to
establish a program under this chapter that is more protective of
public health than the minimum federal requirements.
   (g)  It is the further intent of the Legislature to establish a
drinking water regulatory program within the state board to provide
for the orderly and efficient delivery of safe drinking water within
the state and to give the establishment of drinking water standards
and public health goals greater emphasis and visibility within the
state.
   (h) This act shall be construed to ensure consistency with the
requirements for states to obtain and maintain primary enforcement
responsibility for public water systems under the federal Safe
Drinking Water Act and acts amendatory thereof or supplementary
thereto.
  SEC. 4.  Section 116275 of the Health and Safety Code is amended to
read:
   116275.  As used in this chapter:
   (a) "Contaminant" means any physical, chemical, biological, or
radiological substance or matter in water.
   (b) "Department" means the state board.
   (c) "Primary drinking water standards" means:
   (1) Maximum levels of contaminants that, in the judgment of the
state board, may have an adverse effect on the health of persons.
   (2) Specific treatment techniques adopted by the state board in
lieu of maximum contaminant levels pursuant to subdivision (j) of
Section 116365.
   (3) The monitoring and reporting requirements as specified in
regulations adopted by the state board that pertain to maximum
contaminant levels.
   (d) "Secondary drinking water standards" means standards that
specify maximum contaminant levels that, in the judgment of the state
board, are necessary to protect the public welfare. Secondary
drinking water standards may apply to any contaminant in drinking
water that may adversely affect the odor or appearance of the water
and may cause a substantial number of persons served by the public
water system to discontinue its use, or that may otherwise adversely
affect the public welfare. Regulations establishing secondary
drinking water standards may vary according to geographic and other
circumstances and may apply to any contaminant in drinking water that
adversely affects the taste, odor, or appearance of the water when
the standards are necessary to ensure a supply of pure, wholesome,
and potable water.
   (e) "Human consumption" means the use of water for drinking,
bathing or showering, hand washing, oral hygiene, or cooking,
including, but not limited to, preparing food and washing dishes.
   (f) "Maximum contaminant level" means the maximum permissible
level of a contaminant in water.
   (g) "Person" means an individual, corporation, company,
association, partnership, limited liability company, municipality,
public utility, or other public body or institution.
   (h) "Public water system" means a system for the provision of
water for human consumption through pipes or other constructed
conveyances that has 15 or more service connections or regularly
serves at least 25 individuals daily at least 60 days out of the
year. A public water system includes the following:
   (1) Any collection, treatment, storage, and distribution
facilities under control of the operator of the system that are used
primarily in connection with the system.
   (2) Any collection or pretreatment storage facilities not under
the control of the operator that are used primarily in connection
with the system.
   (3) Any water system that treats water on behalf of one or more
public water systems for the purpose of rendering it safe for human
consumption.
   (i) "Community water system" means a public water system that
serves at least 15 service connections used by year-long residents or
regularly serves at least 25 year-long residents of the area served
by the system.
   (j) "Noncommunity water system" means a public water system that
is not a community water system.
   (k) "Nontransient noncommunity water system" means a public water
system that is not a community water system and that regularly serves
at least 25 of the same persons over six months per year.
   (  l  ) "Local health officer" means a local health
officer appointed pursuant to Section 101000 or a local comprehensive
health agency designated by the board of supervisors pursuant to
Section 101275 to carry out the drinking water program.
   (m) "Significant rise in the bacterial count of water" means a
rise in the bacterial count of water that the state board determines,
by regulation, represents an immediate danger to the health of water
users.
   (n) "State small water system" means a system for the provision of
piped water to the public for human consumption that serves at least
five, but not more than 14, service connections and does not
regularly serve drinking water to more than an average of 25
individuals daily for more than 60 days out of the year.
   (o) "Transient noncommunity water system" means a noncommunity
water system that does not regularly serve at least 25 of the same
persons over six months per year.
   (p) "User" means a person using water for domestic purposes. User
does not include a person processing, selling, or serving water or
operating a public water system.
   (q) "Waterworks standards" means regulations adopted by the state
board entitled "California Waterworks Standards" (Chapter 16
(commencing with Section 64551) of Division 4 of Title 22 of the
California Code of Regulations).
   (r) "Local primacy agency" means a local health officer that has
applied for and received primacy delegation pursuant to Section
116330.
   (s) "Service connection" means the point of connection between the
customer's piping or constructed conveyance, and the water system's
meter, service pipe, or constructed conveyance. A connection to a
system that delivers water by a constructed conveyance other than a
pipe shall not be considered a connection in determining if the
system is a public water system if any of the following apply:
   (1) The water is used exclusively for purposes other than
residential uses, consisting of drinking, bathing, and cooking, or
other similar uses.
   (2) The state board determines that alternative water to achieve
the equivalent level of public health protection provided by the
applicable primary drinking water regulation is provided for
residential or similar uses for drinking and cooking.
   (3) The state board determines that the water provided for
residential or similar uses for drinking, cooking, and bathing is
centrally treated or treated at the point of entry by the provider, a
passthrough entity, or the user to achieve the equivalent level of
protection provided by the applicable primary drinking water
regulations.
   (t) "Resident" means a person who physically occupies, whether by
ownership, rental, lease, or other means, the same dwelling for at
least 60 days of the year.
   (u) "Water treatment operator" means a person who has met the
requirements for a specific water treatment operator grade pursuant
to Section 106875.
   (v) "Water treatment operator-in-training" means a person who has
applied for and passed the written examination given by the state
board but does not yet meet the experience requirements for a
specific water treatment operator grade pursuant to Section 106875.
   (w) "Water distribution operator" means a person who has met the
requirements for a specific water distribution operator grade
pursuant to Section 106875.
   (x) "Water treatment plant" means a group or assemblage of
structures, equipment, and processes that treats, blends, or
conditions the water supply of a public water system for the purpose
of meeting primary drinking water standards.
   (y) "Water distribution system" means any combination of pipes,
tanks, pumps, and other physical features that deliver water from the
source or water treatment plant to the consumer.
   (z) "Public health goal" means a goal established by the Office of
Environmental Health Hazard Assessment pursuant to subdivision (c)
of Section 116365.
   (aa) "Small community water system" means a community water system
that serves no more than 3,300 service connections or a year-long
population of no more than 10,000 persons.
   (ab) "Disadvantaged community" means the entire service area of a
community water system, or a community therein, in which the median
household income is less than 80 percent of the statewide average.
   (ac) "State board" means the State Water Resources Control Board.
   (ad) "Deputy director" means the deputy director appointed by the
state board pursuant to subdivision (k) of Section 116271.
  SEC. 5.  Section 116365.03 is added to the Health and Safety Code,
to read:
   116365.03.  The state board may adopt as an emergency regulation,
a regulation, except a regulation that establishes maximum
contaminant levels for primary and secondary drinking water
standards, that is not more stringent than, and is not materially
different in substance and effect than, the requirements of a
regulation promulgated pursuant to the federal Safe Drinking Water
Act (42 U.S.C. Sec. 300f et seq.). The adoption of a regulation
pursuant to this section is an emergency and shall be considered by
the Office of Administrative Law as necessary for the immediate
preservation of the public peace, health, safety, and general
welfare. Notwithstanding Chapter 3.5 (commencing with Section 11340)
of Part 1 of Division 3 of Title 2 of the Government Code, an
emergency regulation adopted by the state board pursuant to this
section is not subject to review by the Office of Administrative Law
and shall remain in effect until revised by the state board.
  SEC. 6.  Section 116379 of the Health and Safety Code is repealed.
  SEC. 7.  Section 116551 of the Health and Safety Code is amended to
read:
   116551.  The state board shall not issue a permit to a public
water system or amend a valid existing permit for the use of a
reservoir as a source of supply that is directly augmented with
recycled water, as defined in subdivision (n) of Section 13050 of the
Water Code, unless the state board does all of the following:
   (a)  Performs an engineering evaluation that evaluates the
proposed treatment technology and finds that the proposed technology
will ensure that the recycled water meets all applicable primary and
secondary drinking water standards and poses no significant threat to
public health.
   (b)  Holds at least three duly noticed public hearings in the area
where the recycled water is proposed to be used or supplied for
human consumption to receive public testimony on that proposed use.
The state board shall make available to the public, not less than 10
days prior to the date of the first hearing held pursuant to this
subdivision, the evaluations and findings made pursuant to
subdivision (a).
  SEC. 8.  Section 116650 of the Health and Safety Code is amended to
read:
   116650.  (a) If the state board determines that a public water
system is in violation of this chapter or any regulation, permit,
standard, citation, or order issued or adopted thereunder, the state
board may issue a citation to the public water system. The citation
shall be served upon the public water system personally or by
certified mail. Service shall be deemed effective as of the date of
personal service or the date of receipt of the certified mail. If a
person to whom a citation is directed refuses to accept delivery of
the certified mail, the date of service shall be deemed to be the
date of mailing.
   (b) Each citation shall be in writing and shall describe the
nature of the violation or violations, including a reference to the
statutory provision, standard, order, citation, permit, or regulation
alleged to have been violated.
   (c) A citation may specify a date for elimination or correction of
the condition constituting the violation.
   (d) A citation may include the assessment of a penalty as
specified in subdivision (e).
   (e) The state board may assess a penalty in an amount not to
exceed one thousand dollars ($1,000) per day for each day that a
violation occurred, and for each day that a violation continues to
occur. A separate penalty may be assessed for each violation and
shall be in addition to any liability or penalty imposed under any
other law.
  SEC. 9.  Section 116655 of the Health and Safety Code is amended to
read:
   116655.  (a)  Whenever the state board determines that any person
has violated or is violating this chapter, or any order, permit,
regulation, or standard issued or adopted pursuant to this chapter,
the state board may issue an order doing any of the following:
   (1)  Directing compliance forthwith.
   (2)  Directing compliance in accordance with a time schedule set
by the state board.
   (3)  Directing that appropriate preventive action be taken in the
case of a threatened violation.
   (b)  An order issued pursuant to this section may include, but
shall not be limited to, any or all of the following requirements:
   (1)  That the existing plant, works, or system be repaired,
altered, or added to.
   (2)  That purification or treatment works be installed.
   (3)  That the source of the water supply be changed.
   (4)  That no additional service connection be made to the system.
   (5)  That the water supply, the plant, or the system be monitored.

   (6)  That a report on the condition and operation of the plant,
works, system, or water supply be submitted to the state board.
  SEC. 10.  Section 116701 is added to the Health and Safety Code, to
read:
   116701.  (a) Within 30 days of issuance of an order or decision
issued by the deputy director under Article 8 (commencing with
Section 116625) or Article 9 (commencing with Section 116650), an
aggrieved person may petition the state board for reconsideration.
Where the order or decision of the deputy director is issued after a
hearing under Chapter 5 (commencing with Section 11500) of Part 1 of
Division 3 of Title 2 of the Government Code, this section shall
apply instead of Section 11521 of the Government Code.
   (b) The petition shall include the name and address of the
petitioner, a copy of the order or decision for which the petitioner
seeks reconsideration, identification of the reason the petitioner
alleges the issuance of the order was inappropriate or improper, the
specific action the petitioner requests, and other information as the
state board may prescribe. The petition shall be accompanied by a
statement of points and authorities of the legal issues raised by the
petition.
   (c) The evidence before the state board shall consist of the
record before the deputy director and any other relevant evidence
that, in the judgment of the state board, should be considered to
implement the policies of this chapter. The state board may, in its
discretion, hold a hearing for receipt of additional evidence.
   (d) The state board may refuse to reconsider the order or decision
if the petition fails to raise substantial issues that are
appropriate for review, may deny the petition upon a determination
that the issuance of the order or decision was appropriate and
proper, may set aside or modify the order or decision, or take other
appropriate action. The state board's action pursuant to this
subdivision shall constitute the state board's completion of its
reconsideration.
   (e) The state board, upon notice and hearing, if a hearing is
held, may stay in whole or in part the effect of the order or
decision of the deputy director.
   (f) If an order of the deputy director is subject to
reconsideration under this section, the filing of a petition for
reconsideration is an administrative remedy that must be exhausted
before filing a petition for writ of mandate under Section 116625 or
116700.
  SEC. 11.  Section 116735 of the Health and Safety Code is amended
to read:
   116735.  (a)  (1) In order to carry out the purposes of this
chapter, a duly authorized representative of the state board may, at
a reasonable hour of the day, do any of the following:
   (A) Enter and inspect a public water system or a place where the
public water system records are stored, kept, or maintained.
   (B) Inspect and copy records, reports, test results, or other
information required to carry out this chapter.
   (C) Set up and maintain monitoring equipment for purposes of
assessing compliance with this chapter.
   (D) Obtain samples of the water supply.
   (E) Photograph a portion of the system, activity, or a sample
taken.
   (2) An owner of a public water system shall provide to the state
board reports, test results, and other information required to carry
out this chapter within 15 business days of receiving a request for
those records from a duly authorized representative of the state
board.
   (b) The state board shall inspect each public water system as
follows:
   (1) A system with any surface water source with treatment shall be
inspected annually.
   (2) A system with any groundwater source subject to treatment with
only groundwater sources shall be inspected biennially.
   (3) A system with only groundwater sources not subject to
treatment shall be inspected every three years.
   (c) Nothing in this section shall prohibit the state board from
inspecting public water systems on a more frequent basis. An
opportunity shall be provided for a representative of the public
water system to accompany the representative of the state board
during the inspection of the water system.
   (d)  It shall be a misdemeanor for a person to prevent, interfere
with, or attempt to impede in any way a duly authorized
representative of the state board from undertaking the activities
authorized by paragraph (1) of subdivision (a). A person who violates
paragraph (2) of subdivision (a) shall be subject to the provisions
of Section 116730, as applicable.
  SEC. 12.  Section 116751 of the Health and Safety Code is amended
to read:
   116751.  The Department of Fish and Wildlife shall not introduce a
poison to a drinking water supply for purposes of fisheries
management unless the state board determines that the activity will
not have a permanent adverse impact on the quality of the drinking
water supply or wells connected to the drinking water supply. In
making this determination, the state board shall evaluate the short-
and long-term health effects of the poison in drinking water, ensure
that an alternative supply of drinking water is provided to the users
of the drinking water supply while the activity takes place, and, in
cooperation with the Department of Fish and Wildlife, develop and
implement a monitoring program to ensure that no detectable residuals
of the poison, breakdown products, and other components of the
poison formulation remain in the drinking water supply or adjoining
wells after the activity is completed.
  SEC. 13.  Section 116760.20 of the Health and Safety Code is
amended to read:
   116760.20.  Unless the context otherwise requires, the following
definitions govern the construction of this chapter:
   (a) "Acceptable result" means the project that, when constructed,
solves the problem for which the project was placed on the project
priority list, ensures the owner and operator of the improved or
restructured public water system shall have long-term technical,
managerial, and financial capacity to operate and maintain the public
water system in compliance with state and federal safe drinking
water standards, can provide a dependable source of safe drinking
water long-term, and is both short-term and long-term affordable, as
determined by the board.
   (b) "Administrative fund" means the Safe Drinking Water State
Revolving Fund Administration Fund created by Section 116761.70.
   (c) "Board" means the State Water Resources Control Board.
   (d) "Cost-effective" means achieves an acceptable result at the
most reasonable cost.
   (e) "Disadvantaged community" means a community that meets the
definition provided in Section 116275.
   (f) "Federal Safe Drinking Water Act" or "federal act" means the
federal Safe Drinking Water Act (42 U.S.C. Sec. 300f et seq.) and
acts amendatory thereof or supplemental thereto.
   (g) "Fund" means the Safe Drinking Water State Revolving Fund
created by Section 116760.30.
   (h) "Financing" means financial assistance awarded under this
chapter, including loans, refinancing, installment sales agreements,
purchase of debt, loan guarantees for municipal revolving funds, and
grants.
   (i) "Matching funds" means state money that equals that percentage
of federal contributions required by the federal act to be matched
with state funds.
   (j) "Project" means cost-effective facilities for the
construction, improvement, or rehabilitation of a public water
system. It also may include the planning and design of the
facilities, annexation or consolidation of water systems, source
water assessments, source water protection, and other activities
specified under the federal act.
   (k) "Public agency" means any city, county, city and county,
whether general law or chartered, district, joint powers authority,
or other political subdivision of the state, that owns or operates a
public water system, or any municipality, as that term is defined in
the federal act.
   (l) "Public water system" or "public water supply system" means a
system for the provision to the public of water for human
consumption, as defined in Section 116275.
   (m) "Safe drinking water standards" means those standards
established pursuant to Chapter 4 (commencing with Section 116270),
as they may now or hereafter be amended.
   (n) "Severely disadvantaged community" means a community with a
median household income of less than 60 percent of the statewide
average.
   (o) "Small community water system" has the meaning set forth in
Section 116275.
   (p) "Supplier" means any person, partnership, corporation,
association, public agency, or other entity that owns or operates a
public water system.
  SEC. 14.  Section 116760.38 is added to the Health and Safety Code,
to read:
   116760.38.  Subject to all applicable constitutional restrictions,
a city, county, or special district may borrow money and incur
indebtedness pursuant to this chapter.
  SEC. 15.  Section 116761.20 of the Health and Safety Code is
amended to read:
   116761.20.  (a) Planning and preliminary engineering studies,
project design, and construction costs incurred by community and
not-for-profit noncommunity public water systems may be funded under
this chapter by loans or other repayable financing, and, if these
systems are owned by public agencies or private not-for-profit water
companies, by grants, principal forgiveness, or a combination of
grants and loans or other financial assistance.
   (b) (1) The board 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 or other
repayable financing for that amount. The board shall authorize a
grant or principal forgiveness only to the extent the board finds the
public agency or not-for-profit water company is unable to repay the
full costs of the financing.
   (2) Notwithstanding any other provision of this chapter, where a
public agency or private not-for-profit water company serving a
severely disadvantaged community with fewer than 200 service
connections owns a small community water system or nontransient
noncommunity water system, the public agency or private
not-for-profit serving the severely disadvantaged community is deemed
to have no ability to repay any financing for a project serving the
severely disadvantaged community.
   (c) At the request of the board, 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 financing.

       SEC. 16.  Section 116761.65 of the Health and Safety Code is
amended to read:
   116761.65.  (a) The board shall establish, and may periodically
adjust, the interest rate for repayable financing made pursuant to
this chapter at a rate not to exceed 50 percent of the average
interest rate, computed by the true interest cost method, paid by the
state on general obligation bonds issued in the prior calendar year,
rounded up to the closest one-tenth of 1 percent.
   (b) Notwithstanding subdivision (a), if the financing is for a
public water system that serves a disadvantaged community with a
financial hardship as determined by the board or if the financing is
for a public water system that provides matching funds, the interest
rate shall be 0 percent.
  SEC. 17.  Section 116761.70 of the Health and Safety Code is
repealed.
  SEC. 18.  Section 116761.70 is added to the Health and Safety Code,
to read:
   116761.70.  (a) The Safe Drinking Water State Revolving Fund
Administration Fund is hereby created in the State Treasury.
   (b) The following moneys shall be deposited into the
administration fund:
   (1) Moneys transferred to pay the costs incurred by the state
board in connection with the administration of this chapter.
   (2) The amounts collected for financial assistance services
pursuant to subdivision (c).
   (3) Notwithstanding Section 16475 of the Government Code, any
interest earned upon the moneys in the fund.
   (c) (1) For financial assistance made pursuant to this chapter,
where that financial assistance is to be repaid to the state board,
the state board may assess an annual charge for financial assistance
services with regard to the financial assistance, not to exceed 1
percent of the financial assistance balance, computed according to
the true interest cost method.
   (2) The financial assistance service rate authorized by this
subdivision may be applied at any time during the term of the
financial assistance, and once applied, shall remain unchanged for
the duration of the financial assistance and shall not increase the
financial assistance repayment amount, as set forth in the terms and
conditions imposed pursuant to this chapter.
   (d) Upon appropriation by the Legislature, moneys in the
administration fund may be expended by the state board for payment of
the reasonable costs of administering the fund.
   (e) The state board shall set the total amount of revenue
collected each year through the charge authorized by subdivision (c)
at an amount that is equal as practicable to the appropriation amount
set forth in the annual Budget Act for this activity. At least once
each fiscal year, the state board shall adjust the financial
assistance service charge imposed pursuant to subdivision (c) to
conform with the appropriation amount set forth in the annual Budget
Act.
  SEC. 19.  Section 117125 of the Health and Safety Code is amended
to read:
   117125.  Notwithstanding any other law, the Department of Fish and
Wildlife may stock with fish any body of water opened to public
fishing pursuant to this article.
  SEC. 20.  Section 13176 of the Water Code is amended to read:
   13176.  (a) (1) The analysis of any material required by this
division shall be performed by a laboratory that has accreditation or
certification pursuant to Article 3 (commencing with Section 100825)
of Chapter 4 of Part 1 of Division 101 of the Health and Safety
Code.
   (2) This requirement does not apply to field tests, such as tests
for color, odor, turbidity, pH, temperature, dissolved oxygen,
conductivity, and disinfectant residual.
   (b) A person or public entity of the state shall not contract with
a laboratory for environmental analyses required by paragraph (1) of
subdivision (a) unless the laboratory has valid accreditation or
certification.
  SEC. 21.  Section 13177 of the Water Code is amended to read:
   13177.  (a) It is the intent of the Legislature that the state
board continue to implement the California State Mussel Watch
Program.
   (b) The Legislature finds and declares that the California State
Mussel Watch Program provides the following benefits to the people of
the state:
   (1) An effective method for monitoring the long-term effects of
certain toxic substances in selected fresh, estuarine, and marine
waters.
   (2) An important element in the state board's comprehensive water
quality monitoring strategy.
   (3) Identification, on an annual basis, of specific areas where
concentrations of toxic substances are higher than normal.
   (4) Valuable information to guide the state and regional boards
and other public and private agencies in efforts to protect water
quality.
   (c) To the extent funding is appropriated for this purpose, the
state board, in conjunction with the Department of Fish and Wildlife,
shall continue to implement the long-term coastal monitoring program
known as the California State Mussel Watch Program. The program may
consist of, but is not limited to, the following elements:
   (1) Removal of mussels, clams, and other aquatic organisms from
relatively clean coastal sites and placing them in sampling sites.
For purposes of this section, "sampling sites" means selected waters
of concern to the state board and the Department of Fish and
Wildlife.
   (2) After specified exposure periods at the sampling sites,
removal of the aquatic organisms for analysis.
   (3) Laboratory analysis of the removed aquatic organisms to
determine the amounts of various toxic substances that may have
accumulated in the bodies of the aquatic organisms.
   (4) Making available both the short- and long-term results of the
laboratory analysis to appropriate public and private agencies and
the public.
  SEC. 22.  Section 13177.5 of the Water Code is amended to read:
   13177.5.  (a) The state board, in consultation with the Office of
Environmental Health Hazard Assessment, shall develop a comprehensive
coastal monitoring and assessment program for sport fish and
shellfish, to be known as the Coastal Fish Contamination Program. The
program shall identify and monitor chemical contamination in coastal
fish and shellfish and assess the health risks of consumption of
sport fish and shellfish caught by consumers.
   (b) The state board shall consult with the Department of Fish and
Wildlife, the Office of Environmental Health Hazard Assessment, and
regional water quality control boards with jurisdiction over
territory along the coast, to determine chemicals, sampling
locations, and the species to be collected under the program. The
program developed by the state board shall include all of the
following:
   (1) Screening studies to identify coastal fishing areas where fish
species have the potential for accumulating chemicals that pose
significant health risks to human consumers of sport fish and
shellfish.
   (2) The assessment of at least 60 screening study monitoring sites
and 120 samples in the first five years of the program and an
assessment of additional screening study sites as time and resources
permit.
   (3) Comprehensive monitoring and assessment of fishing areas
determined through screening studies to have a potential for
significant human health risk and a reassessment of these areas every
five years.
   (c) Based on existing fish contamination data, the state board
shall designate a minimum of 40 sites as fixed sampling locations for
the ongoing monitoring effort.
   (d) The state board shall contract with the Office of
Environmental Health Hazard Assessment to prepare comprehensive
health risk assessments for sport fish and shellfish monitored in the
program. The assessments shall be based on the data collected by the
program and information on fish consumption and food preparation.
The Office of Environmental Health Hazard Assessment, within 18
months of the completion of a comprehensive study for each area by
the state board, shall submit to the board a draft health risk
assessment report for that area. Those health risk assessments shall
be updated following the reassessment of areas by the board.
   (e) The Office of Environmental Health Hazard Assessment shall
issue health advisories when the office determines that consuming
certain fish or shellfish presents a significant health risk. The
advisories shall contain information for the public, and particularly
the population at risk, concerning health risks from the consumption
of the fish or shellfish. The office shall notify the appropriate
county health officers, the State Department of Public Health, and
the Department of Fish and Wildlife before the issuance of a health
advisory. The notification shall provide sufficient information for
the purpose of posting signage. The office shall urge county health
officers to conspicuously post health warnings in areas where
contaminated fish or shellfish may be caught including piers,
commercial passenger fishing vessels, and shore areas where fishing
occurs. The Department of Fish and Wildlife shall publish the office'
s health warnings in its Sport Fishing Regulations Booklet.
  SEC. 23.  Section 13177.6 of the Water Code is amended to read:
   13177.6.  To the extent funding is appropriated for this purpose,
the state board, in consultation with the Department of Fish and
Wildlife and Office of Environmental Health Hazard Assessment, shall
perform a monitoring study to reassess the geographic boundaries of
the commercial fish closure off the Palos Verdes Shelf. The
reassessment shall include collection and analysis of white croaker
caught on the Palos Verdes Shelf, within three miles south of the
Shelf, and within San Pedro Bay. Based on the results of the
reassessment, the Department of Fish and Wildlife, with guidance from
the Office of the Environmental Health Hazard Assessment, shall
redelineate, if necessary, the commercial fish closure area to
protect the health of consumers of commercially caught white croaker.
The sample collection and analysis shall be conducted within 18
months of the enactment of this section and the reassessment of the
health risk shall be conducted within 18 months of the completion of
the analysis of the samples.
  SEC. 24.  Section 13178 of the Water Code is amended to read:
   13178.  (a) The state board, in conjunction with the State
Department of Public Health and a panel of experts established by the
state board, shall develop source investigation protocols for use in
conducting source investigations of storm drains that produce
exceedences of bacteriological standards established pursuant to
subdivision (c) of Section 115880 of the Health and Safety Code. The
protocols shall be based upon the experiences drawn from previous
source investigations performed by the state board, regional boards,
or other agencies, and other available data. The protocols shall
include methods for identifying the location and biological origins
of sources of bacteriological contamination, and, at a minimum, shall
require source investigations if bacteriological standards are
exceeded in any three weeks of a four-week period, or, for areas
where testing is done more than once a week, 75 percent of testing
days that produce an exceedence of those standards.
   (b) The development of source investigation protocols pursuant to
subdivision (a) is not subject to Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code.
  SEC. 25.  Section 13181 of the Water Code is amended to read:
   13181.  (a) (1) On or before December 1, 2007, the California
Environmental Protection Agency and the Natural Resources Agency
shall enter into a memorandum of understanding for the purposes of
establishing the California Water Quality Monitoring Council, which
shall be administered by the state board.
   (2) As used in this section, "monitoring council" means the
California Water Quality Monitoring Council established pursuant to
this section.
   (3) The monitoring council may include representatives from state
entities and nonstate entities. The representatives from nonstate
entities may include, but need not be limited to, representatives
from federal and local government, institutions of higher education,
the regulated community, citizen monitoring groups, and other
interested parties.
   (4) The monitoring council shall review existing water quality
monitoring, assessment, and reporting efforts, and shall recommend
specific actions and funding needs necessary to coordinate and
enhance those efforts.
   (5) (A) The recommendations shall be prepared for the ultimate
development of a cost-effective, coordinated, integrated, and
comprehensive statewide network for collecting and disseminating
water quality information and ongoing assessments of the health of
the state's waters and the effectiveness of programs to protect and
improve the quality of those waters.
   (B) For purposes of developing recommendations pursuant to this
section, the monitoring council shall initially focus on the water
quality monitoring efforts of state agencies, including, but not
limited to, the state board, the regional boards, the department, the
Department of Fish and Wildlife, the California Coastal Commission,
the State Lands Commission, the Department of Parks and Recreation,
the Department of Forestry and Fire Protection, and the Department of
Pesticide Regulation.
   (C) In developing the recommendations, the monitoring council
shall seek to build upon existing programs, rather than create new
programs.
   (6) Among other things, the memorandum of understanding shall
describe the means by which the monitoring council shall formulate
recommendations to accomplish both of the following:
   (A) Reduce redundancies, inefficiencies, and inadequacies in
existing water quality monitoring and data management programs in
order to improve the effective delivery of sound, comprehensive water
quality information to the public and decisionmakers.
   (B) Ensure that water quality improvement projects financed by the
state provide specific information necessary to track project
effectiveness with regard to achieving clean water and healthy
ecosystems.
   (b) The monitoring council shall report, on or before December 1,
2008, to the California Environmental Protection Agency and the
Natural Resources Agency with regard to its recommendations for
maximizing the efficiency and effectiveness of existing water quality
data collection and dissemination, and for ensuring that collected
data are maintained and available for use by decisionmakers and the
public. The monitoring council shall consult with the United States
Environmental Protection Agency in preparing these recommendations.
The monitoring council's recommendations, and any responses submitted
by the California Environmental Protection Agency or the Natural
Resources Agency to those recommendations, shall be made available to
decisionmakers and the public by means of the Internet.
   (c) The monitoring council shall undertake and complete, on or
before April 1, 2008, a survey of its members to develop an inventory
of their existing water quality monitoring and data collection
efforts statewide and shall make that information available to the
public.
   (d) All state agencies, including institutions of higher education
to the extent permitted by law, that collect water quality data or
information shall cooperate with the California Environmental
Protection Agency and the Natural Resources Agency in achieving the
goals of the monitoring council as described in this section.
   (e) In accordance with the requirements of the federal Clean Water
Act (33 U.S.C. Sec. 1251 et seq.) and implementing guidance, the
state board shall develop, in coordination with the monitoring
council, all of the following:
   (1) A comprehensive monitoring program strategy that utilizes and
expands upon the state's existing statewide, regional, and other
monitoring capabilities and describes how the state will develop an
integrated monitoring program that will serve all of the state's
water quality monitoring needs and address all of the state's waters
over time. The strategy shall include a timeline not to exceed 10
years to complete implementation. The strategy shall be comprehensive
in scope and identify specific technical, integration, and resource
needs, and shall recommend solutions for those needs so that the
strategy may be implemented within the 10-year timeframe.
   (2) Agreement, including agreement on a schedule, with regard to
the comprehensive monitoring of statewide water quality protection
indicators that provide a basic minimum understanding of the health
of the state's waters. Indicators already developed pursuant to
environmental protection indicators for statewide initiatives shall
be given high priority as core indicators for purposes of the network
described in subdivision (a).
   (3) Quality management plans and quality assurance plans that
ensure the validity and utility of the data collected.
   (4) Methodology for compiling, analyzing, and integrating readily
available information, to the maximum extent feasible, including, but
not limited to, data acquired from discharge reports, volunteer
monitoring groups, local, state, and federal agencies, and recipients
of state-funded or federally funded water quality improvement or
restoration projects.
   (5) An accessible and user-friendly electronic data system with
timely data entry and ready public access via the Internet. To the
maximum extent possible, the geographic location of the areas
monitored shall be included in the data system.
   (6) Production of timely and complete water quality reports and
lists that are required under Sections 303(d), 305(b), 314, and 319
of the federal Clean Water Act and Section 406 of the federal Beaches
Environmental Assessment and Coastal Health Act of 2000, that
include all available information from discharge reports, volunteer
monitoring groups, and local, state, and federal agencies.
   (7) An update of the state board's surface water ambient
monitoring program needs assessment in light of the benefits of
increased coordination and integration of information from other
agencies and information sources. This update shall include
identification of current and future resource needs required to fully
implement the coordinated, comprehensive monitoring network,
including, but not limited to, funding, staff, training, laboratory
and other resources, and projected improvements in the network.
   (f) The state board shall identify the full costs of
implementation of the comprehensive monitoring program strategy
developed pursuant to subdivision (e), and shall identify proposed
sources of funding for the implementation of the strategy, including
federal funds that may be expended for this purpose. Fees collected
pursuant to paragraph (1) of subdivision (d) of Section 13260 may be
used as a funding source for implementation of the strategy to the
extent that the funding is consistent with subparagraph (B) of
paragraph (1) of subdivision (d) of Section 13260.
   (g) Data, summary information, and reports prepared pursuant to
this section shall be made available to appropriate public agencies
and the public by means of the Internet.
   (h) (1) Commencing December 1, 2008, the Secretary of the
California Environmental Protection Agency shall conduct a triennial
audit of the effectiveness of the monitoring program strategy
developed pursuant to subdivision (e). The audit shall include, but
need not be limited to, an assessment of the following matters:
   (A) The extent to which the strategy has been implemented.
   (B) The effectiveness of the monitoring and assessment program and
the monitoring council with regard to both of the following:
   (i) Tracking improvements in water quality.
   (ii) Evaluating the overall effectiveness of programs administered
by the state board or a regional board and of state and federally
funded water quality improvement projects.
   (2) The Secretary of the California Environmental Protection
Agency shall consult with the Secretary of the Natural Resources
Agency in preparing the audit, consistent with the memorandum of
understanding entered into pursuant to subdivision (a).
   (i) The state board shall prioritize the use of federal funding
that may be applied to monitoring, including, but not limited to,
funding under Section 106 of the Federal Water Pollution Control Act,
for the purpose of implementing this section.
   (j) The state board shall not use more than 5 percent of the funds
made available to implement this section for the administrative
costs of any contracts entered into for the purpose of implementing
this section.
  SEC. 26.  Section 13275 of the Water Code is amended to read:
   13275.  (a) Notwithstanding any other law, a public water system
regulated by the state board pursuant to Chapter 4 (commencing with
Section 116270) of Part 12 of Division 104 of the Health and Safety
Code shall have the same legal rights and remedies against a
responsible party, when the water supply used by that public water
system is contaminated, as those of a private land owner whose
groundwater has been contaminated.
   (b) For purposes of this section, "responsible party" has the same
meaning as defined in Section 25323.5 of the Health and Safety Code.

  SEC. 27.  Section 13285 of the Water Code is amended to read:
   13285.  (a) A discharge from a storage tank, pipeline, or other
container of methyl tertiary-butyl ether (MTBE), or of any pollutant
that contains MTBE, that poses a threat to drinking water, or to
groundwater or surface water that may reasonably be used for drinking
water, or to coastal waters shall be cleaned up to a level
consistent with subdivisions (a) and (b) of Section 25296.10 of the
Health and Safety Code.
   (b) (1) A public water system, or its customers, shall not be
responsible for remediation or treatment costs associated with MTBE,
or a product that contains MTBE. However, the public water system
may, as necessary, incur MTBE remediation and treatment costs and
include those costs in its customer rates and charges that are
necessary to comply with drinking water standards or directives of
the state board or other lawful authority. A public water system that
incurs MTBE remediation or treatment costs may seek recovery of
those costs from parties responsible for the MTBE contamination, or
from other available alternative sources of funds.
   (2) If the public water system has included the costs of MTBE
treatment and remediation in its customer rates and charges, and
subsequently recovers all, or a portion of, its MTBE treatment and
remediation costs from responsible parties or other available
alternative sources of funds, it shall make an adjustment to its
schedule of rates and charges to reflect the amount of funding
received from responsible parties or other available alternative
sources of funds for MTBE treatment or remediation.
   (3) Paragraph (1) does not prevent the imposition of liability on
any person for the discharge of MTBE if that liability is due to the
conduct or status of that person independently of whether the person
happens to be a customer of the public water system.
  SEC. 28.  Section 13304.1 of the Water Code is amended to read:
   13304.1.  (a) A groundwater cleanup system that commences
operation on or after January 1, 2002, and that is required to obtain
a discharge permit from the regional board pursuant to the regional
board's jurisdiction, and that discharges treated groundwater to
surface water or groundwater, shall treat the groundwater to
standards approved by the regional board, consistent with this
division and taking into account the beneficial uses of the receiving
water and the location of the discharge and the method by which the
discharge takes place.
   (b) In making its determination of the applicable water quality
standards to be achieved by the operator of a groundwater cleanup
system that commences operation on or after January 1, 2002, that
draws groundwater from an aquifer that is currently being used, or
has been used at any time since 1979 as a source of drinking water
supply by the owner or operator of a public water system, and that
discharges treated groundwater to surface water or groundwater from
which a public water system draws drinking water, the regional board
shall consult with the affected groundwater management entity, if
any, affected public water systems, and the state board to ensure
that the discharge, spreading, or injection of the treated
groundwater will not adversely affect the beneficial uses of any
groundwater basin or surface water body that is or may be used by a
public water system for the provision of drinking water.
  SEC. 29.  Section 13331.2 of the Water Code is repealed.
  SEC. 30.  Section 13392 of the Water Code is amended to read:
   13392.  The state board and the regional boards, in consultation
with the State Department of Public Health and the Department of Fish
and Wildlife, shall develop and maintain a comprehensive program to
(1) identify and characterize toxic hot spots, as defined in Section
13391.5, (2) plan for the cleanup or other appropriate remedial or
mitigating actions at the sites, and (3) amend water quality control
plans and policies to incorporate strategies to prevent the creation
of new toxic hot spots and the further pollution of existing hot
spots. As part of this program, the state board and regional boards
shall, to the extent feasible, identify specific discharges or waste
management practices that contribute to the creation of toxic hot
spots, and shall develop appropriate prevention strategies,
including, but not limited to, adoption of more stringent waste
discharge requirements, onshore remedial actions, adoption of
regulations to control source pollutants, and development of new
programs to reduce urban and agricultural runoff.
  SEC. 31.  Section 13392.5 of the Water Code is amended to read:
   13392.5.  (a) Each regional board that has regulatory authority
for one or more enclosed bays or estuaries shall, on or before
January 30, 1994, develop for each enclosed bay or estuary, a
consolidated database that identifies and describes all known and
potential toxic hot spots. Each regional board shall, in consultation
with the state board, also develop an ongoing monitoring and
surveillance program that includes, but is not limited to, the
following components:
   (1) Establishment of a monitoring and surveillance task force that
includes representation from agencies, including, but not limited
to, the State Department of Public Health and the Department of Fish
and Wildlife, that routinely monitor water quality, sediment, and
aquatic life.
   (2) Suggested guidelines to promote standardized analytical
methodologies and consistency in data reporting.

    (3) Identification of additional monitoring and analyses that are
needed to develop a complete toxic hot spot assessment for each
enclosed bay and estuary.
   (b) Each regional board shall make available to state and local
agencies and the public all information contained in the consolidated
database, as well as the results of new monitoring and surveillance
data.
  SEC. 32.  Section 13393.5 of the Water Code is amended to read:
   13393.5.  On or before January 30, 1994, the state board, in
consultation with the State Department of Public Health and the
Department of Fish and Wildlife, shall adopt general criteria for the
assessment and priority ranking of toxic hot spots. The criteria
shall take into account the pertinent factors relating to public
health and environmental quality, including, but not limited to,
potential hazards to public health, toxic hazards to fish, shellfish,
and wildlife, and the extent to which the deferral of a remedial
action will result, or is likely to result, in a significant increase
in environmental damage, health risks, or cleanup costs.
  SEC. 33.  Section 13400 of the Water Code is amended to read:
   13400.  As used in this chapter, unless otherwise apparent from
the context:
   (a) "Facilities" means any of the following:
   (1) Facilities for the collection, treatment, or export of waste
when necessary to prevent water pollution.
   (2) Facilities to recycle wastewater and to convey recycled water.

   (3) Facilities or devices to conserve water.
   (4) Any combination of the facilities described in paragraph (1),
(2), or (3).
   (b) "Fund" means the State Water Quality Control Fund.
   (c) "Not-for-profit organization" means an organization operated
on a not-for-profit basis, including, but not limited to, an
association, cooperative, or private corporation that is a public
water system, as defined in Section 116275 of the Health and Safety
Code, that meets technical, managerial, and financial capacity
criteria specified by the state board for public water systems, or
that is subject to regulatory authority pursuant to this division."
Not-for-profit organization" includes only an organization that is
either controlled by a local public body or bodies or has a broadly
based ownership by, or membership of, people of the local community.
   (d) "Public agency" means any city, county, city and county,
district, or other political subdivision of the state.
  SEC. 34.  Section 13426 of the Water Code is amended to read:
   13426.  The state board, subject to approval by the Director of
Finance, may agree to provide a guarantee pursuant to this article
for all or a specified part of the proposed local agency bond issue
upon making all of the following determinations:
   (a) The facilities proposed by an applicant are necessary to the
health or welfare of the inhabitants of the state and are consistent
with water quality control plans adopted by regional boards.
   (b) The proposed facilities meet the needs of the applicant.
   (c) The proposed bond issue and plan repayment are sound and
feasible.
   (d) In the case of facilities proposed under paragraph (2) of
subdivision (a) of Section 13400, the facilities will produce
recycled water and the applicant has adopted a feasible program for
the use of the facilities. The state board may adopt criteria for
ranking and setting priorities among applicants for those guarantees.

  SEC. 35.  Section 13476 of the Water Code is amended to read:
   13476.  Unless the context otherwise requires, the following
definitions govern the construction of this chapter:
   (a) "Administration fund" means the State Water Pollution Control
Revolving Fund Administration Fund.
   (b) "Board" means the State Water Resources Control Board.
   (c) "Federal Clean Water Act" or "federal act" means the Clean
Water Act (33 U.S.C. Sec. 1251 et seq.) and acts amendatory thereof
or supplemental thereto.
   (d) (1) "Financial assistance" means assistance authorized under
Section 13480. Financial assistance includes loans, refinancing,
installment sales agreements, purchase of debt, and loan guarantees
for municipal revolving funds, but excludes grants.
   (2) Notwithstanding paragraph (1), financial assistance may
include grants or other assistance directed by a federal grant
deposited in the fund to the extent authorized and funded by that
grant.
   (e) "Fund" means the State Water Pollution Control Revolving Fund.

   (f) "Grant fund" means the State Water Pollution Control Revolving
Fund Small Community Grant Fund.
   (g) "Matching funds" means money that equals that percentage of
federal contributions required by the federal act to be matched with
state funds.
   (h) "Municipality" has the same meaning and construction as in the
federal act and also includes all state, interstate, and
intermunicipal agencies.
   (i) "Publicly owned" means owned by a municipality.
   (j) "Severely disadvantaged community" means a community with a
median household income of less than 60 percent of the statewide
median household income.
  SEC. 36.  Section 13477.6 of the Water Code is amended to read:
   13477.6.  (a) The State Water Pollution Control Revolving Fund
Small Community Grant Fund is hereby created in the State Treasury.
   (b) The following moneys shall be deposited in the grant fund:
   (1) Moneys transferred to the grant fund pursuant to subdivision
(c).
   (2) Notwithstanding Section 16475 of the Government Code, any
interest earned upon the moneys deposited in the grant fund.
   (3) Any moneys deposited pursuant to Section 79723.
   (c) (1) For any financing made pursuant to Section 13480, the
board may assess an annual charge to be deposited in the grant fund
in lieu of interest that would otherwise be charged.
   (2) The charge authorized by this subdivision may be applied at
any time during the term of the financing, and, once applied, shall
remain unchanged unless the board determines that the application of
the charge is any of the following:
   (A) No longer consistent with federal requirements regarding the
fund.
   (B) No longer necessary.
   (C) Negatively affecting the board's ability to fund projects that
support its water quality goals.
   (3) The charge shall not increase the financing repayment amount
as set forth in the terms and conditions imposed pursuant to this
chapter.
   (4) If the board ceases collecting the charge before the financing
repayment is complete, the board shall replace the charge with an
identical interest rate.
   (d) (1) Moneys in the grant fund, upon appropriation by the
Legislature to the board, may be expended, in accordance with this
chapter, for grants for wastewater projects described in subdivision
(c) of Section 1383 of Title 33 of the United States Code that serve
small communities as defined in subdivision (a) of Section 30925 of
the Public Resources Code. The board shall expend moneys appropriated
from the grant fund within four years from the date of encumbrance.
   (2) For the purpose of approving grants, the board shall give
priority to projects that serve severely disadvantaged communities.
   (3) In addition to the uses set forth in paragraph (1), moneys
deposited in the grant fund pursuant to Section 79723, upon
appropriation by the Legislature to the board, may be expended for
technical assistance as authorized by Section 79725.
  SEC. 37.  Section 13480 of the Water Code is amended to read:
   13480.  (a) Moneys in the fund shall be used only for the
permissible purposes allowed by the federal act or a federal grant
deposited in the fund, to the extent authorized and funded by that
grant.
   (b) Consistent with expenditure for authorized purposes, moneys in
the fund may be used for the following purposes:
   (1) Loans that meet all of the following requirements:
   (A) Are made at or below market interest rates.
   (B) Require annual payments of principal and any interest, with
repayment commencing not later than one year after completion of the
project for which the loan is made and full amortization not later
than 30 years after project completion unless otherwise authorized by
a federal grant deposited in the fund to the extent authorized and
funded by that grant. Loan forgiveness is permissible to the extent
authorized by a federal grant deposited in the fund to the extent
authorized and funded by that grant.
   (C) Require the loan recipient to establish an acceptable
dedicated source of revenue for repayment of a loan.
   (D) (i) Contain other terms and conditions required by the board
or the federal act or applicable rules, regulations, guidelines, and
policies. To the extent permitted by federal law, the combined
interest and loan service rate shall be set at a rate that does not
exceed 50 percent of the interest rate paid by the state on the most
recent sale of state general obligation bonds and the combined
interest and loan service rate shall be computed according to the
true interest cost method. If the combined interest and loan service
rate so determined is not a multiple of one-tenth of 1 percent, the
combined interest and loan service rate shall be set at the multiple
of one-tenth of 1 percent next above the combined interest and loan
service rate so determined. A loan from the fund used to finance
costs of facilities planning, or the preparation of plans,
specifications, or estimates for construction of publicly owned
treatment works shall comply with Section 603(e) of the federal act
(33 U.S.C. Sec. 1383(e)).
   (ii) Notwithstanding clause (i), if the loan applicant is a
municipality, an applicant for a loan for the implementation of a
management program pursuant to Section 319 of the federal act (33
U.S.C. Sec. 1329), or an applicant for a loan for nonpoint source or
estuary enhancement pursuant to Section 320 of the federal act (33
U.S.C. Sec. 1330), and the applicant provides matching funds, the
combined interest and loan service rate on the loan shall be 0
percent. A loan recipient that returns to the fund an amount of money
equal to 20 percent of the remaining unpaid federal balance of an
existing loan shall have the remaining unpaid loan balance refinanced
at a combined interest and loan service rate of 0 percent over the
time remaining in the original loan contract.
   (2) To buy or refinance the debt obligations of municipalities
within the state at or below market rates if those debt obligations
were incurred after March 7, 1985.
   (3) To guarantee, or purchase insurance for, local obligations
where that action would improve credit market access or reduce
interest rates.
   (4) As a source of revenue or security for the payment of
principal and interest on revenue or general obligation bonds issued
by the state, if the proceeds of the sale of those bonds will be
deposited in the fund.
   (5) To establish loan guarantees for similar revolving funds
established by municipalities.
   (6) To earn interest.
   (7) For payment of the reasonable costs of administering the fund
and conducting activities under Subchapter VI (commencing with
Section 601) of the federal act (33 U.S.C. Sec. 1381 et seq.). Those
costs shall not exceed 4 percent of all federal contributions to the
fund, four hundred thousand dollars ($400,000) per year, or one-fifth
of 1 percent per year of the current valuation of the fund,
whichever amount is greatest, plus the amount of any fees collected
by the state for this purpose regardless of the source.
   (8) For financial assistance toward the nonfederal share of the
costs of grant-funded treatment works projects, to the extent
permitted by the federal act.
   (9) Grants, principal forgiveness, negative interest rates, and
any other type of, or variation on the above types of, assistance
authorized by a federal grant deposited in the fund, to the extent
authorized and funded by that grant.
  SEC. 38.  Section 79702 of the Water Code is amended to read:
   79702.  Unless the context otherwise requires, the definitions set
forth in this section govern the construction of this division, as
follows:
   (a) "Acquisition" means obtaining a fee interest or any other
interest in real property, including easements, leases, water, water
rights, or interest in water obtained for the purposes of instream
flows and development rights.
   (b) "CALFED Bay-Delta Program" means the program described in the
Record of Decision dated August 28, 2000.
   (c) "Commission" means the California Water Commission.
   (d) "Committee" means the Water Quality, Supply, and
Infrastructure Improvement Finance Committee created by Section
79787.
   (e) "Delta" means the Sacramento-San Joaquin Delta, as defined in
Section 85058.
   (f) "Delta conveyance facilities" means facilities that convey
water directly from the Sacramento River to the State Water Project
or the federal Central Valley Project pumping facilities in the south
Delta.
   (g) "Delta counties" means the Counties of Contra Costa,
Sacramento, San Joaquin, Solano, and Yolo.
   (h) "Delta plan" has the meaning set forth in Section 85059.
   (i) "Director" means the Director of Water Resources.
   (j) "Disadvantaged community" has the meaning set forth in
subdivision (a) of Section 79505.5, as it may be amended.
   (k) "Economically distressed area" means a municipality with a
population of 20,000 persons or less, a rural county, or a reasonably
isolated and divisible segment of a larger municipality where the
segment of the population is 20,000 persons or less, with an annual
median household income that is less than 85 percent of the statewide
median household income, and with one or more of the following
conditions as determined by the department:
   (1) Financial hardship.
   (2) Unemployment rate at least 2 percent higher than the statewide
average.
   (3) Low population density.
   (  l  ) "Fund" means the Water Quality, Supply, and
Infrastructure Improvement Fund of 2014 created by Section 79715.
   (m) "Instream flows" means a specific streamflow, measured in
cubic feet per second, at a particular location for a defined time,
and typically follows seasonal variations.
   (n) "Integrated regional water management plan" has the meaning
set forth in Part 2.2 (commencing with Section 10530) of Division 6,
as that part may be amended.
   (o) "Long-term" means for a period of not less than 20 years.
   (p) "Nonprofit organization" means an organization qualified to do
business in California and qualified under Section 501(c)(3) of
Title 26 of the United States Code.
   (q) "Proposition 1E" means the Disaster Preparedness and Flood
Prevention Bond Act of 2006 (Chapter 1.699 (commencing with Section
5096.800) of Division 5 of the Public Resources Code).
   (r) "Proposition 84" means the Safe Drinking Water, Water Quality
and Supply, Flood Control, River and Coastal Protection Bond Act of
2006 (Division 43 (commencing with Section 75001) of the Public
Resources Code).
   (s) "Public agency" means a state agency or department, special
district, joint powers authority, city, county, city and county, or
other political subdivision of the state.
   (t) "Rainwater" has the meaning set forth in subdivision (c) of
Section 10573.
   (u) "Secretary" means the Secretary of the Natural Resources
Agency.
   (v) "Severely disadvantaged community" has the meaning set forth
in Section 116760.20 of the Health and Safety Code.
   (w) "Small community water system" means a community water system
that serves no more than 3,300 service connections or a year-long
population of no more than 10,000 persons.
   (x) "State board" means the State Water Resources Control Board.
   (y) "State General Obligation Bond Law" means the State General
Obligation Bond Law (Chapter 4 (commencing with Section 16720) of
Part 3 of Division 4 of Title 2 of the Government Code).
   (z) "State small water system" has the meaning set forth in
subdivision (n) of Section 116275 of the Health and Safety Code.
   (aa) "Stormwater" has the meaning set forth in subdivision (e) of
Section 10573.
   (ab) "Water right" means a legal entitlement authorizing water to
be diverted from a specified source and put to a beneficial,
nonwasteful use.
  SEC. 39.  Section 79726 is added to the Water Code, to read:
   79726.  For the purpose of providing the state share needed to
leverage federal funds to assist communities in providing safe
drinking water, any funds appropriated for the purposes of Section
79724 shall be available for deposit in the Safe Drinking Water State
Revolving Fund, created by Section 116760.30 of the Health and
Safety Code, prior to expenditure.
  SEC. 40.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.