The Safe Drinking Water, Water Quality and Supply, Flood Control, River and Coastal Protection Bond Act of 2006, an initiative statute approved by the voters as Proposition 84 at the November 7, 2006, statewide general election, makes approximately $5.4 billion in bond funds available for safe drinking water, water quality and supply, flood control, natural resource protection, and park improvements. The initiative bond act makes $60,000,000 available to the State Water Resources Control Board for the purpose of loans and grants for projects to prevent or reduce contamination of groundwater that serves as a source of drinking water and requires repayment for costs that are subsequently recovered from parties responsible for the contamination. Existing law requires the State Department of Public Health, in collaboration with the Department of Toxic Substances Control and the state board, to develop and adopt regulations governing the repayment of costs that are subsequently recovered from parties responsible for the contamination of groundwater.

This bill would eliminate the requirement to develop and adopt regulations and instead would require that costs subsequently recovered from a party responsible for the contamination, as defined, be repaid to the state board and deposited, and separately accounted for, in the Groundwater Contamination Cleanup Project Fund, which this bill would create in the State Treasury. This bill would require moneys in the fund to be available, upon appropriation by the Legislature, to the state board for a grant to the grantee that received a grant to prevent or reduce contamination of groundwater pursuant to Proposition 84 and subsequently recovered costs from a responsible party and repaid those costs to the state. This bill would require the state board to disburse the funds upon the approval of an expenditure plan submitted by the grantee. This bill would prohibit the total amount of a grant from the fund and a grant received to prevent or reduce contamination of groundwater pursuant to Proposition 84 from exceeding the grantee’s total costs to cleanup contaminated groundwater or prevent the contamination of groundwater. This bill would require moneys recovered from a responsible party in excess of the amount that may be awarded as a grant to be available from the fund to the state board, upon appropriation by the Legislature, for expenditure on orphan groundwater contamination cleanup projects and would require the state board to consult with the Department of Toxic Substances Control when considering expenditures on orphan groundwater contamination cleanup projects. The bill would authorize the state board, upon appropriation, to use moneys in the fund for its administrative costs and for directly recovering moneys from a party responsible for contamination of groundwater addressed by a grant or loan under Proposition 84, and would require that if moneys from the fund are used for legal costs in directly recovering moneys, the moneys recovered by the judgment in favor of the state board be deposited into the fund.