Amended in Senate June 23, 2016

Amended in Senate June 6, 2016

Amended in Senate September 4, 2015

Amended in Senate June 18, 2015

California Legislature—2015–16 Regular Session

Assembly BillNo. 1463


Introduced by Assembly Member Gatto

February 27, 2015


begin deleteAn act to add Article 8 (commencing with Section 13558) to Chapter 7 of Division 7 of the Water Code, relating to recycled water. end deletebegin insertAn act to add Article 20.2 (commencing with Section 69996) to Chapter 2 of Part 42 of Division 5 of Title 3 of the Education Code, and to add Section 17131.12 to the Revenue and Taxation Code, relating to student financial aid.end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 1463, as amended, Gatto. begin deleteOnsite treated water. end deletebegin insertStudent financial aid: California Covenants Program: tuition certificates: gross income exclusion.end insert

begin insert

(1) Existing law establishes the California State University, under the administration of the Trustees of the California State University, and the University of California, under the administration of the Regents of the University of California, as 2 of the segments of public postsecondary education in this state.

end insert
begin insert

This bill would establish the California Covenants Program, under the administration of the Treasurer. The program would be a prepaid college tuition program, under which an individual could purchase a fixed percentage of the tuition and mandatory systemwide fees for an academic year of full-time enrollment as an undergraduate at a campus of the California State University, the University of California, or an independent institution of higher education, as specified, for a beneficiary who meets specified criteria.

end insert
begin insert

The bill would establish the California Covenants Program Fund. The bill would require that the moneys received by the Treasurer from the individuals who purchase tuition certificates under the program, as well as the proceeds from the sale of certain bonds authorized by the bill, be deposited in the fund. The bill would authorize the Treasurer, upon appropriation in the annual Budget Act, to allocate moneys deposited in the fund to the California State University, the University of California, or an independent institution of higher education to pay the tuition and mandatory systemwide fees of beneficiaries of the program during that fiscal year. The bill would require the Director of Finance to determine, at the commencement of each fiscal year, whether there are sufficient funds to implement the program in that fiscal year, and to communicate this determination to the Treasurer in a timely manner each fiscal year. The bill would specify that the California State University is required, and the University of California and independent institutions of higher education are requested to, comply with the bill’s provisions.

end insert
begin insert

These provisions would become operative on January 1, 2018.

end insert
begin insert

(2) The Personal Income Tax Law provides for various exclusions from gross income, including moneys received pursuant to specified grant programs.

end insert
begin insert

This bill would, for taxable years beginning on or after January 1, 2018, also exclude from gross income amounts invested in, and disbursed from, the California Covenants Program, as provided.

end insert
begin delete

Existing law requires the State Water Resources Control Board to establish uniform statewide recycling criteria for each varying type of use of recycled water where the use involves the protection of public health.

end delete
begin delete

This bill would authorize onsite treated water from a graywater or rainwater source, as prescribed, to be used for nonpotable uses in residential, commercial, or industrial buildings. The bill would require the state board, in consultation with the State Department of Public Health, the Department of Housing and Community Development, the California Building Standards Commission, and stakeholders, to establish monitoring and reporting requirements for the nonpotable use of onsite treated water from certain other sources prior to its use in the internal plumbing of multifamily residential, commercial, or industrial buildings. The bill would prohibit water from a toilet, sewer, or onsite wastewater treatment system or septic tank from being treated and used onsite in a single-family occupied building.

end delete

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

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

P3    1begin insert

begin insertSECTION 1.end insert  

end insert

begin insertArticle 20.2 (commencing with Section 69996) is
2added to Chapter 2 of Part 42 of Division 5 of Title 3 of the end insert
begin insert3
Education Code
end insert
begin insert, to read:end insert

begin insert

4 

5Article begin insert20.2.end insert  The California Covenants Program
6

 

7

begin insert69996.end insert  

(a) The California Covenants Program is hereby
8established under the administration of the Treasurer. The
9California Covenants Program shall be a prepaid college tuition
10program established to help families plan, save, and pay for the
11undergraduate college education of family members at campuses
12of the California State University, the University of California,
13and independent institutions of higher education, as defined in
14Section 66010.

15
(b) Under the program, the Treasurer shall issue tuition
16certificates in accordance with all of the following requirements:

17
(1) (A) The tuition certificate shall be issued by the Treasurer
18for the prepaid purchase of a fixed percentage of the tuition and
19mandatory systemwide fees for an academic year of full-time
20enrollment as an undergraduate at a campus of the California
21State University, the University of California, or an independent
22institution of higher education, as defined in Section 66010. The
23tuition certificate shall specify the percentage of tuition and
24mandatory fees that have been purchased thereby. The certificate
25covers annual tuition and fee increases of 7.5 percent or less.

26
(B) The Treasurer is authorized to determine the cost of the
27fixed percentage of tuition and mandatory systemwide fees for the
28participating institutions at the commencement of this program in
292018. The Treasurer shall have the discretion to periodically adjust
30the cost of the tuition certificates in light of changes in the cost of
P4    1living, the economy of the state, and the levels of tuition and
2mandatory systemwide fees charged by the participating segments.

3
(2) The purchaser of a tuition certificate shall specify its
4intended beneficiary. The intended beneficiary may be any person
5who has not yet commenced grade 11 or its equivalent. A tuition
6certificate shall be valid for up to 30 years from the date that it is
7purchased.

8
(3) At the time the tuition certificate is used, the beneficiary
9shall either be a California resident or a student who is exempt
10from nonresident tuition pursuant to Section 68130.5.

11
(4) An individual may purchase an initial tuition certificate, or
12additional tuition certificates, for a beneficiary only between May
131 and June 30 of calendar years commencing in 2018. The
14minimum amount of tuition certificates that an individual may
15purchase in a calendar year shall be three hundred dollars ($300).

16
(5) A tuition certificate shall be used only to cover the cost of
17undergraduate tuition and mandatory systemwide fees at the
18California State University, the University of California, or
19independent institutions of higher education, as defined in Section
2066010. A tuition certificate shall not be used to cover the cost of
21textbooks, supplies, or living expenses, including, but not
22necessarily limited to, food, housing, and transportation.

23
(6) If the intended beneficiary of a tuition certificate is unable
24to, or chooses not to, attend the institution issuing the certificate,
25the initial investment shall be returned to the individual who
26purchased the certificate, with interest equal to that earned by the
27Pooled Money Investment Fund, and shall not be subject to a tax
28penalty pursuant to Section 17131.12 of the Revenue and Taxation
29Code.

30
(c) The Treasurer, in collaboration with the Trustees of the
31California State University and the Regents of the University of
32California, may establish administrative guidelines and other
33requirements for purposes of implementing this article.

34

begin insert69996.3.end insert  

(a) The California Covenants Program Fund is
35hereby established. The moneys received by the Treasurer from
36the individuals who purchase tuition certificates under the
37program, and from the sale of bonds as authorized under
38subdivision (b), shall be deposited in the fund. Upon appropriation
39by the Legislature in the annual Budget Act, the moneys in the
40fund may be allocated by the Treasurer to the California State
P5    1University, the University of California, and participating
2independent institutions of higher education, as defined in Section
366010, to pay the tuition and mandatory systemwide fees of
4beneficiaries of the program during that fiscal year.

5
(b) The Treasurer is authorized to issue bonds backed by the
6tuition certificate revenues. The proceeds of any bonds sold
7pursuant to this subdivision shall be deposited in the California
8Covenants Program Fund established by subdivision (a).

9
(c) The Director of Finance shall determine, at the
10commencement of each fiscal year, whether there are sufficient
11funds to implement the program in that fiscal year. The Director
12of Finance shall communicate this determination to the Treasurer
13in a timely manner each fiscal year.

14
(d) The California State University shall, and the University of
15California and independent institutions of higher education, as
16defined in Section 66010, are requested to, comply with the
17requirements of this article.

18

begin insert69996.5.end insert  

This article shall become operative on January 1,
192018.

end insert
20begin insert

begin insertSEC. 2.end insert  

end insert

begin insertSection 17131.12 is added to the end insertbegin insertRevenue and Taxation
21Code
end insert
begin insert, to read:end insert

begin insert
22

begin insert17131.12.end insert  

For taxable years beginning on or after January 1,
232018, gross income does not include:

24
(a) Moneys invested by the taxpayer, including interest accrued
25by that investment, in the California Covenants Program
26established pursuant to Article 20.2 (commencing with Section
2769996) of Chapter 2 of Part 42 of Division 5 of Title 3 of the
28Education Code.

29
(b) (1) Disbursements to the taxpayer from the California
30Covenants Program for use by a beneficiary at an educational
31institution that participates in the program.

32
(2) Tax, additions to tax, and penalties shall not apply to an
33amount disbursed to a taxpayer where the beneficiary does not
34attend an educational institution that participates in the California
35Covenants Program if the full amount, including interest, is
36returned to the taxpayer.

end insert
begin delete
37

SECTION 1.  

Article 8 (commencing with Section 13558) is
38added to Chapter 7 of Division 7 of the Water Code, to read:

 

P6    1Article 8.  Onsite Treated Water
2

 

3

13558.  

For the purposes of this article, “onsite treated water”
4means water, including graywater, rainwater, and other water
5captured onsite, that has been sourced, used, and treated as needed
6onsite in a building.

7

13559.  

(a) (1) Onsite treated water from a graywater or
8rainwater source, as defined in and meeting the requirements of
9Chapters 16 and 17 of the California Plumbing Code, may be used
10for nonpotable uses in residential, commercial, or industrial
11buildings.

12(2) A local government may prescribe additional monitoring
13and reporting requirements for the use of onsite treated water from
14a graywater or rainwater source by ordinance.

15(b) The state board, in consultation with the State Department
16of Public Health, the Department of Housing and Community
17Development, the California Building Standards Commission, and
18stakeholders, shall establish monitoring and reporting requirements
19for the nonpotable use of onsite treated water sourced from a toilet,
20sewer, onsite wastewater treatment system or septic tank,
21stormwater capture, or industrial wastewater that otherwise meets
22the water quality standards defined in Section 60301.230 of Title
2322 of the California Code of Regulations prior to its use in the
24internal plumbing of multifamily residential, commercial, or
25industrial buildings.

26(c) Water from a toilet, sewer, or onsite wastewater treatment
27system or septic tank shall not be treated and used onsite in a
28single-family occupied building.

end delete


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