Fiscal Note - SB 0123 - Revises Public Drinking Water Law Regarding Loans, Administrative Penalties and Permits
L.R. NO. 0344-03
BILL NO. SB 123
SUBJECT: Public Drinking Water Law
TYPE: Original
DATE: January 24, 1997
FISCAL SUMMARY
ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
General Revenue ($109,688) ($5,450,000) ($5,450,000)
Total Estimated
Net Effect on All
State Funds ($109,688) ($5,450,000) ($5,450,000)
ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
DNR Federal Fund $0 $0 $0
Total Estimated
Net Effect on All
Federal Funds $0 $0 $0
ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
Local Government Unknown Unknown Unknown
FISCAL ANALYSIS
ASSUMPTION
The Department of Economic Development assumes this proposal would have no
fiscal impact to the Public Service Commission or the Office of Public
Counsel.
The Department of Health (DOH) assumes no fiscal impact to the DOH as a
result of this proposal.
The Department of Natural Resources (DNR) assumes they would administer the
drinking water state revolving loan fund as it does the wastewater state
revolving fund, under the Water and Wastewater Loan Fund established under
644.122 RSMo.
DNR assumes Missouri s share of the capitalization grant for federal fiscal
year 1997 is $21.8 million. A 20% state match will be required. Funds may
be allocated to the programs listed below; unused funds will be available for
drinking water state revolving fund (DWSRF) loans.
Failure of the state to implement an adequate TMF capacity strategy and an
adequate operator certification program will result in a loss of 40 % of the
DWSRF capitalization grant. DNR plans to implement both of these programs in
accordance with federal requirements. DNR assumes the requirement for
greater public access to drinking water data can best be achieved by adopting
the federal SDWIS computer system.
States may annually use up to 10 % of the DWSRF for public water systems
supervision programs, to administer or provide technical assistance through
source water protection programs, to develop and implement a TMF capacity
strategy and for operator certification program. The state must match such
expenditures with at least an equal amount of state funds, at least half of
which must be in addition to the amount the state expended in FY 93.
An additional up to 4 % annually of the DWSRF may be used to cover cost of
administration of the program and to provide technical assistance to public
water systems.
An additional 2% of the funds may be allocated by the states to provide
technical assistance to public water systems serving less than 10,000 people.
Also, up to 15% of the DWSRF may be allocated by the states for source water
delineation and wellhead protection programs. As required, more thorough
assessments and delineations of public water system sources will be made to
retain water quality monitoring flexibility commensurate with the
susceptibility to contamination.
The DNR assumes, as a result of this legislation, they would request 24 FTE
and related equipment and expenses, including rent, during the fiscal note
period. The FTE and their corresponding duties are listed below by program
activity. DNR has requested two Environmental Engineers, one Management
Analysis Specialist, one Environmental Specialist, and one Computer
Information Specialist in their FY 1998 Budget Request. DNR would expect to
request the remaining staff in FY 1999.
DWSRF Technical Management - (1 FTE) One Environmental Engineer III to
develop an intended use plan, including criteria for loan assistance
priorities and for determining disadvantaged communities; review
engineering documents to ensure compliance with construction
requirements, evaluate the technical aspects of projects for compliance
with design criteria and for effectiveness in protecting human health,
responsible for approving engineering documents for DWSRF projects, and
propose legislative and regulatory changes needed to fully implement the
DWSRF.
DWSRF Financial Management - (3 FTE) Two Management Analysis Specialists
to provide project financial coordination activities. Review financial
aspects of applications submitted for drinking water SRF and coordinate
the financing of the project. This will involve debt services
evaluation/development, project management, response to information
requests, user charges, and loan documents processing. One Accountant
to process payments, provide projections, track and financially evaluate
the fund on a continuing basis.
Technical Assistance - (2 FTE) One Management Analysis Specialist to assist
local government securing loans and grants. One Water Specialist to
provide technical assistance to public water systems, which includes
on-site assistance with operations and compliance issues; and assist in
developing and implementing Community Based Environmental Programs.
TMF Capacity Program - (4 FTE) One Environmental Engineer to develop and
implement a TMF capacity program that requires the department have the
authority to ensure that all new community water systems demonstrate the
technical, managerial and financial capacity to comply with the Safe
Drinking Water Act, including regulations, training and bonding
requirements. Three Environmental Specialist to work with small public
water systems on options to maintain TMF capacity.
Source Water Protection Program - (3 FTE) Three Environmental Specialists
to develop and implement the source water protection program including
delineation and assessments of source water protection areas and
establishment of source water quality partnership petition program. Work
with small public water systems on options to implement the source water
protection program and to provide assistance related to the source water
quality partnership petition program.
Source Water Delineation - (3 FTE) Three Geologists to evaluate reasonably
available geohydrologic data for each public water supply well, including
water flow recharge, discharge, aquifer characteristics, etc., and apply
appropriate scientific models and calculations to determine the extent of
area around each well that is susceptible to contamination. Determine the
"degree of susceptibility" with respect to microbiological and chemical
contaminants for each water source. Monitor well network, prepare
reports such as groundwater use trends and assure good quality reliable
data to delineate boundaries of recharge areas and perform vulnerability
assessments. Support work in surface and subsurface hydrogeology with
special emphasis on subsurface geologic conditions to determine best rock
sources for safe groundwater supplies relative to boundary conditions and
vulnerability.
Administrative Orders and Penalties - (1 FTE) One Environmental Specialist
to develop and implement procedures for using administrative orders and
penalties; conduct compliance activities, including enforcement of
capacity development mandates and new contaminant and construction
standards; develop and implement a small system variance program.
SDWIS Adoption - (2 FTE) One Research Analyst to develop and implement the
Safe Drinking Water Information System in Missouri. The person will
serve as the primary link between the program technical staff and the
DNR/EPA computer development staff. This involves overseeing
installation of the system, including developing test plans, assembling
test data, supervising procedures, coordinating reviews, and making
recommendations to computer staff for resolution of problems. One
Computer Information Specialist to support the PDWP development
projects in all the regions.
Clerical Support - (4 FTE) Four Clerk Typists for general clerical support.
DNR assumes they would require one-time costs of $80,000 for legal consulting
services. These costs are the development costs for a cooperative agreement
between the department, Public Service Commission, EIERA, Clean Water
Commission, and the Safe Drinking Water Commission; for legal fees and
expenses to develop notes and loan agreements and review and revise existing
indentures and trust agreements; and for expenses involved in the development
and review of bid processes for receivership and custodial documents. In
addition, DNR would request $25,000 annually for on-going custodial/banking
fees for direct loan program and legal fees and expenses for the leveraged
program.
DNR assumes they would request $20,000 for audit costs as the federal act
requires an audit of the funds.
DNR assumes they would also request approximately $50,000 for three vehicles,
$77,000 for water level recorders, and $2,500 for data downloading field
equipment.
DNR assumes if the work included in the federal guidance documents exceeds
the department expectations, the department may need to request additional
resources.
Oversight has adjusted DNR's equipment costs and expenses to bring them
in-line with Office of Administration Guidelines.
As no fund is specified in the proposal, Oversight assumes the state's
matching share will come from the General Revenue Fund. For purposes of this
fiscal note, Oversight assumes the DNR will receive the entire federal award.
However, if DNR does not receive the anticipated level of federal funding,
staff costs should be reduced accordingly.
Oversight assumes local governments and water districts will incur additional
costs to implement the requirements of the federal safe drinking water act
amendment of 1996; Oversight assumes this proposal would enable the DNR to
provide grants and loans to the local governments for water projects.
Oversight assumes the net fiscal impact of this proposal on local governments
and water districts is unknown.
FISCAL IMPACT - State Government FY 1998 FY 1999 FY 2000
(10 Mo.)
GENERAL REVENUE FUND
Costs - DNR
State Matching Funds ($109,688) ($5,450,000) ($5,450,000)
DNR FEDERAL FUND
Income - DNR
January 27, 1997 $438,752 $21,800,000 $21,800,000
Costs - DNR
Personal Service (2 FTE) ($200,712)
Personal Service (24 FTE) ($525,255) ($538,384)
Fringe Benefits (57,263) (149,855) (153,601)
Expense and Equipment (50,000) (462,678) (127,308)
Other - Grants and DNR Administration (130,777) (20,662,212) (20,980,707)
Total Costs - DNR ($438,752)($21,800,000)($21,800,000)
ESTIMATED NET EFFECT ON
DNR FEDERAL FUND $0 $0 $0
FISCAL IMPACT - Local Government FY 1998 FY 1999 FY 2000
(10 Mo.)
Income - Counties, Municipalities, and Water Districts
Federal Grants and Loans for
Drinking Water Projects Unknown Unknown Unknown
FISCAL IMPACT - Small Business
Small businesses that operate a water system may be impacted by this proposal
as they must implement the requirements of the federal safe drinking water
act amendment of 1996; Oversight assumes this proposal would enable the DNR
to provide grants and loans to some small businesses.
DESCRIPTION
Generally, this act is enabling legislation for the requirements of the
federal Safe Drinking Water Act of 1996. The act broadens rulemaking
authority of the Safe Drinking Water Commission (SDWC) to cover safety and
adequacy of public drinking water. The SDWC shall establish criteria for
priorities for drinking water loans and shall develop an Intended Use Plan
for funding such loans to submit to the Clean Water Commission. The
Department of Natural Resources shall certify public water system operators
and backflow assembly testers. Political subdivisions are excluded from the
Laboratory Service and Program Administration fees assessed on public water
systems. The Department shall conduct inspections of water systems.
The act authorizes the SDWC to assess administrative penalties under the same
basic requirements and procedures already provided in law for several other
regulatory programs within the Department. The maximum penalty is five
thousand dollars per day for systems serving more than ten thousand persons
and two hundred and fifty dollars per day for smaller systems. The maximum
penalty per violation is twenty-five thousand dollars. Penalties may be
appealed to the Commission and then to circuit court.
The Department may issue administrative orders pertaining to public water
systems. Civil penalties are increased to five thousand dollars per day,
from fifty dollars for the first day and one hundred dollars thereafter.
Civil penalties may be sought for violations of orders and rules, as well as
violations of law. The Department shall not seek civil penalty if
administrative penalties were assessed and collected. The Department shall
seek to resolve violations with conference, conciliation and persuasion.
Permitted public water systems must designate an organization to serve as the
"continuing authority" for the system. After Oct. 1, 1999, new community and
other nontransient water systems must show that they have and will maintain
the resources and capability to comply with safe drinking water law. Any
community or other nontransient water system subject to an administrative
order or found in violation of law or regulations shall be required to
designate a "continuing authority" and demonstrate the capability to comply
with safe drinking water law.
The Department may require treatment techniques and may allow testing under a
federally-authorized "flexible monitoring program". Each water supplier
shall provide each customer with the federally-required report of test
results.
The Department may establish a voluntary, source water petition protection.
The Department may provide assistance under Chapter 644, RSMo, to state
agencies and community and nonprofit, noncommunity water systems. The Water
and Wastewater Loan Fund may also be used to provide assistance to community
and nonprofit, noncommunity water systems. The Clean Water Commission shall
establish priorities for wastewater. The act contains penalty provisions.
The changes in this proposal are mandated by the Safe Drinking Water Act
Amendment of 1996. It would not duplicate any other program, however, it
would require additional capital improvements or rental space.
SOURCES OF INFORMATION
Department of Natural Resources
Department of Health
Department of Economic Development
This Fiscal Note is not an official copy and should not be quoted or cited.