Amended in Assembly March 18, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 2636

Introduced by Assembly Members Gatto and Skinner

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(Coauthors: Assembly Members Rendon, Rodriguez, Ting, and Williams)

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February 21, 2014

An act to add Division 30 (commencing with Section 81000) to the Water Code, relating to water begin delete , and making an appropriation therefor end delete .

LEGISLATIVE COUNSEL’S DIGEST

AB 2636, as amended, Gatto. CalConserve Water Use Efficiency Revolving Fund.

The California Constitution requires the reasonable and beneficial use of water.

This bill would establish the CalConserve Water Use Efficiency Revolving Fund begin delete administered by end delete begin insert and provide that the moneys in the fund are available to end insert the Department of Water Resources begin delete and would continuously appropriate moneys in the fund, without regard to fiscal year, to the department end delete , begin insert upon appropriation by the Legislature, end insert for the purpose of water use efficiency projects. This bill would require moneys in the fund to be used for purposes that include, but are not limited to, at-or-below market interest rate loans and would permit the department to enter into agreements with local governments or investor-owned utilities that provide water or recycled water service to provide loans.

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Existing law, the Costa-Machado Water Act of 2000, a bond act approved by the voters as Proposition 13 at the March 7, 2000, statewide primary election, authorizes the issuance of general obligation bonds in the amount of $1,970,000,000 for grants, loans, and direct expenditures for the purposes of financing a safe drinking water, clean water, watershed protection, and flood protection program.

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This bill would transfer to the CalConserve Water Use Efficiency Revolving Fund from the bond act specified bond proceeds issued and available for agricultural water projects. This bill would require the department to use these moneys for loans and grants to local agencies to acquire and construct agricultural water conservation projects consistent with provisions of the bond act.

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Vote:  begin delete ²⁄₃ end delete begin insert majority end insert . Appropriation:  begin delete yes end delete begin insert no end insert . Fiscal committee: yes. State-mandated local program: no.

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

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begin insert SECTION 1. end insert   

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begin insert The Legislature finds and declares all of the
following: end insert

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(a) Water is a finite resource in California, and dry hydrologic
conditions caused by drought and climate change increase the
uncertainty of water supplies.

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(b) Reliable water supplies are essential for public health and
safety, stability of local, regional, and statewide economies, and
food security.

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(c) Water use efficiency, including conservation and recycled
water, is an effective strategy to improve management of water
resources at the local and regional levels. Improved resource
management will help local communities withstand drought and
other conditions that limit water supplies.

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(d) Water use efficiency projects will become more complex
and costly in order to increase the water savings potential.

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(e) A sustainable source of funding is needed for urban and
agricultural water use efficiency projects to assist water and
recycled water providers in expanding local and regional
programs.

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(f) A revolving fund program is a mechanism to provide a
sustainable funding source that provides incentives for matching
local funds and accelerates local water supply development.

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begin delete SECTION 1. end delete
begin insert SEC. 2. end insert   

Division 30 (commencing with Section 81000) is added
to the Water Code, to read:

 

Division 30.  CalConserve Water Use Efficiency
Revolving Loan Program

 

PART 1.  General Provisions

 

81000.  

(a) It is the intent of the Legislature in establishing the
CalConserve Water Use Efficiency Revolving Fund to create a
sustainable funding source for water use efficiency projects.

(b) It is further the intent of the Legislature that the funds from
the CalConserve Water Use Efficiency Revolving Fund be used
for the following purposes:

(1)  begin delete Reduce end delete begin insert Measurable reductions in end insert urban per capita water
use.

(2)  begin delete Improve end delete begin insert Improvements in end insert agricultural water use efficiency
begin insert and a measurable reduction in agricultural water use end insert .

(3)  begin delete Increase end delete begin insert Increased end insert use of recycled water.

(4)  begin delete Reduce end delete begin insert Measurable reductions in end insert greenhouse gas emissions
begin delete through water efficiency improvements end delete begin insert , and water and energy
use end insert .

(c) It is the intent of the Legislature that any public funds made
available by this division to investor-owned utilities regulated by
the Public Utilities Commission should be for the benefit of the
ratepayers or the public and not the investors pursuant to oversight
by the Public Utilities Commission.

81005.  

For purposes of this division, begin delete “fund” end delete begin insert the following terms
have the following meanings: end insert

begin insert (a) end insert begin insert   end insert begin insert “Fund” end insert means the CalConserve Water Use Efficiency
Revolving Fund established pursuant to Section 81020.

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(b) “Technical assistance” means costs incurred for providing
advice, training, or other assistance to local government and water
utilities, such as the following:

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(1) Conducting specialized studies to identify water conservation
opportunities that meet the intent of Section 81000.

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(2) Planning of specific remodeling, renovation, repair,
replacement, or other projects related to water conservation.

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(3) Developing a project proposal for funding from the fund.

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PART 2.  CalConserve Water Use Efficiency
Revolving Fund

 

81020.  

The CalConserve Water Use Efficiency Revolving
Fund is hereby created in the State Treasury. begin delete Notwithstanding
Section 13340 of the Government Code, all moneys end delete begin insert Moneys end insert in
the fund are begin delete continuously appropriated, without regard to fiscal
year, end delete begin insert available, upon appropriation by the Legislature, end insert to the
department for expenditure in accordance with this division. The
department is the state agency responsible for administering the
fund.

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begin insert 81022. end insert   

The proceeds of any bonds authorized to be issued and
available for the purposes of Section 79157 shall be transferred
to the fund and used by the department for loans and grants to
local agencies to acquire and construct agricultural water
conservation projects consistent with Article 3 (commencing with
Section 79157) of Chapter 8 of Division 26.

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begin delete 81025. end delete
begin insert 81024. end insert   

The department may undertake any of the following:

(a) Provide for the deposit of any available and necessary
moneys into the fund.

(b) Enter into agreements with local governments or
investor-owned utilities that provide water or recycled water service
to provide loans for the purposes described in subdivision (b) of
Section 81000.

(c) Provide for appropriate audit, accounting, and fiscal
management services, plans, and reports relative to the fund.

(d) Take additional incidental action as appropriate for the
adequate administration and operation of the fund.

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(e) Make requests on behalf of the state for deposit into the fund
of available federal moneys.

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(f) Enter into agreements with the federal government for federal
contributions to the fund.

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(g) Accept federal contributions to the fund.

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begin insert 81026. end insert   

(a) The department may enter into an agreement with
the federal government for federal contributions to the fund only
if both of the following conditions are met:

(1) The state identifies any required matching funds.

(2) The department is prepared to commit to the expenditure of
any minimum amount in the fund in the manner required by the
federal government.

(b) Any agreement between the department and the federal
government shall contain those provisions, terms, and conditions
required by the federal government and any implementing federal
rules, regulations, guidelines, and policies, including, but not
limited to, agreement to expend moneys in the fund in an
expeditious and timely manner.

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81030.  

Moneys in the fund shall be used for the following
purposes:

(a) Loans that meet all of the following requirements:

(1) Are made at-or-below market interest rates.

(2) Require annual payments of principal and any interest, with
repayment commencing not later than one year after loan funding
and full amortization not later than begin delete 15 end delete begin insert 20 end insert years after loan funding.
Full amortization for loans to disadvantaged communities shall be
not later than begin delete 20 end delete begin insert 25 end insert years after loan funding.

(3) Require the loan recipient to establish an acceptable
dedicated source of revenue for repayment of a loan.

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(b) To guarantee, or purchase insurance for, local obligations
if that action would improve credit market access or reduce interest
rates.

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(b)

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begin insert (c) end insert  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.

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(c)

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begin insert (d) end insert  To earn interest.

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(d)

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(e) Technical assistance.

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begin insert (f) end insert  For payment of the reasonable costs of administering the
fund begin insert , not to exceed 4 percent of the fund end insert .

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(g) Grants, principal forgiveness, negative interest rates, and
any other type of, or variation on, the types of assistance described
in this section that is authorized by a federal capitalization grant
deposited in the fund to the extent authorized and funded by that
federal capitalization grant.

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81035.  

Any repayment of fund moneys, including interest
payments, and all interest earned on, or accruing to, any moneys
in the fund, shall be deposited in the fund and shall be available
for expenditure for the purposes and uses authorized by this
division.

 

PART 3.  Implementation

 

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begin insert 81040. end insert   

Projects shall have one or more of the following
benefits:

(a) Measurably reduce urban per capita potable water use.

(b) Measurably reduce agricultural water use.

(c) Increase the use or availability of recycled water supply.

(d) Reduce greenhouse gas emission and water and energy use.

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begin delete 81040. end delete
begin insert 81042. end insert   

Subject to all applicable constitutional restrictions, a
local government may borrow money and incur indebtedness
pursuant to this division.

begin delete 81045. end delete
begin insert 81044. end insert   

The department may adopt rules and begin delete regulations end delete
begin insert guidelines end insert necessary or convenient to implement this division.

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begin insert 81046. end insert   

(a) A local government, municipal utility, or
investor-owned utility may implement water-use efficiency loan
programs pursuant to this section through on-bill financing.

(b) Funds available pursuant to this section shall not be
expended by local governments, municipal utilities, or
investor-owned utilities for administrative costs.

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