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