BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 2636
                                                                  Page  1

          Date of Hearing:   April 9, 2014

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                    AB 2636 (Gatto) - As Amended:  March 18, 2014 

          Policy Committee:                              Water, Parks and  
          Wildlife     Vote:                            13-0

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              

           SUMMARY  

          This bill establishes the CalConservation Water Use Efficiency  
          Revolving Fund (CalConserve) to be administered by the  
          Department of Water Resources (DWR). Upon appropriation by the  
          Legislature, funds will be available to DWR for expenditures on  
          specified water conservation, efficiency and water use reduction  
          projects.  Specifically, this bill: 

          1)Requires eligible projects to 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 use or availability of recycled water supply. 
             d)   Reduce greenhouse gas emissions and water and energy  
               use.

          1)This bill transfers the fund balances remaining from the  
            Proposition 13 Agricultural Water Conservation Local  
            Assistance Loan Fund to CalConserve for agricultural water  
            conservation projects.
             
           FISCAL EFFECT  

          1) The fund balance remaining from the Proposition 13  
            Agricultural Water Conservation Local Assistance Loan Fund is  
            about $17 million.

            After the introduction of this bill, the Department of Finance  
            issued an amendment to the Governor's proposed 2014-15 budget  
            in a letter dated April 1, 2014 to appropriate the remaining  








                                                                  AB 2636
                                                                  Page  2

            balance in the fund to DWR.   If the Legislature approves this  
            budget amendment, there will not be funds available to  
            transfer for the purposes of this bill.

          2)Annual administrative costs to DWR in the hundreds of  
            thousands of dollars range.

           COMMENTS  

           1)Rationale.  This bill authorizes the Department of Water  
            Resources to administer a state revolving fund program that  
            will (a) be a self-renewing source of funding for water-use  
            efficiency, available to the public between water bonds, (b)  
            be a means of leveraging local investment in water-use  
            efficiency, including investments by private entities, and (c)  
            provide state financial support to help cities, counties,  
            urban and  agricultural water providers, and recycled water  
            providers improve water efficiency throughout the state and  
            meet California's water-use reduction goals.
             
          2)Background.   SB 7X 7 (Steinberg), 2009, requires the state to  
            reduce urban per capita water use by 20% by 2020.The State  
            Water Resources Control Board and the Department of Public  
            Health both administer state revolving loan programs used for  
            specific water treatment projects to address water system  
            deficiencies.  There is no similar loan program to facilitate  
            water-use efficiency for local communities and farms.  

          3)Prior legislation  . This bill is similar to AB 1349 (Gatto)  of  
            2013 that would have created CalConserve and continuously  
            appropriated funds for the program.   AB 1349 was held on this  
            committee's Suspense File.

           Analysis Prepared by  :    Jennifer Galehouse / APPR. / (916)  
          319-2081