Amended in Assembly May 23, 2014

Amended in Assembly March 18, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 2636

Introduced by Assembly Members Gatto and Skinner

(Coauthors: Assembly Members begin insert Bocanegra, end insert Rendon, Rodriguez, Ting, begin insert Wieckowski, end insert and Williams)

February 21, 2014

An act to add Division 30 (commencing with Section 81000) to the Water Code, relating to water.

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 and provide that the moneys in the fund are available to the Department of Water Resources, upon appropriation by the Legislature, 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 begin delete local governments or investor-owned utilities end delete begin insert local agencies, as defined, end insert that provide water or recycled water service to provide loans.

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.

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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Existing law, the California Global Warming Solutions Act of 2006, designates the State Air Resources Board as the state agency charged with monitoring and regulating sources of emissions of greenhouse gases. The act authorizes the state board to include use of market-based compliance mechanisms. Existing law requires all moneys, except for fines and penalties, collected by the state board from the auction or sale of allowances as part of a market-based compliance mechanism to be deposited in the Greenhouse Gas Reduction Fund and to be available upon appropriation. Existing law requires the Department of Finance, in consultation with the state board and any other relevant state agency, to develop, as specified, a 3-year investment plan for the moneys deposited in the Greenhouse Gas Reduction Fund. Existing law permits moneys from the fund to be allocated for the purpose of reducing greenhouse gas emissions in this state through specified investments.

end insert begin insert

This bill would provide that the Legislature may appropriate moneys in the Greenhouse Gas Reduction Fund for water-use efficiency projects under the CalConserve Water Use Efficiency Revolving Loan Program that reduce greenhouse gas emissions.

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

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

SECTION 1.  

The Legislature finds and declares all of the
following:

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

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

(c) Water use efficiency, including conservation and begin delete recycled end delete
begin insert recycling of end insert 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.

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

(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.

(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.

SEC. 2.  

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) Measurable reductions in urban per capita water use.

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

(3) Increased use of recycled water.

(4)  begin delete Measurable reductions end delete begin insert Reductions end insert in greenhouse gas
begin delete emissions, end delete begin insert emissions end insert and water and energy use.

(c) It is the intent of the Legislature that any public funds made
available by this division to begin delete investor-owned utilities end delete begin insert private water
companies end insert 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, the following terms have
the following meanings:

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

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(b) “Local agency” means a city, county, city and county,
municipal utility district, community services district, sanitary
district, sanitation district, water district as defined in Section
20200, public water system as defined in Section 116275 of the
Health and Safety Code, or private water company under the
jurisdiction of the Public Utilities Commission.

end insert begin delete

(b)

end delete

begin insert (c) end insert  “Technical assistance” means costs incurred for providing
advice, training, or other assistance to local begin delete government and water
utilities end delete begin insert agencies end insert , such as the following:

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

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

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

 

PART 2.  CalConserve Water Use Efficiency
Revolving Fund

 

81020.  

The CalConserve Water Use Efficiency Revolving
Fund is hereby created in the State Treasury. Moneys in the fund
are available, upon appropriation by the Legislature, to the
department for expenditure in accordance with this division. The
department is the state agency responsible for administering the
fund.

81022.  

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 insert 81023. end insert   

The Legislature may appropriate moneys in the
Greenhouse Gas Reduction Fund created pursuant to Section
16428.8 of the Government Code for projects under this division
that reduce greenhouse gas emissions through water use efficiency
improvements or improved water use efficiency consistent with
Chapter 4.1 (commencing with Section 39710) of Part 2 of Division
26 of the Health and Safety Code and Article 9.7 (commencing
with Section 16428.8) of Chapter 2 of Part 2 of Division 4 of Title
2 of the Government Code.

end insert

81024.  

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 begin delete governments or
investor-owned utilities end delete begin insert agencies end insert 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.

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

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

(g) Accept federal contributions to the fund.

begin insert

(h) Provide technical assistance to local agencies.

end insert

81026.  

(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.

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 20 years after loan funding.
Full amortization for loans to disadvantaged communities shall be
not later than 25 years after loan funding.

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

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

(c) 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.

(d) To earn interest.

(e) Technical assistance.

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

(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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begin insert 81033. end insert   

end insert begin insert

Funds made available pursuant to this division to a
local agency shall not be used for administrative costs.

end insert

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

 

81040.  

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.

81042.  

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

81044.  

The department may adopt rules and guidelines
necessary or convenient to implement this division.

81046.  

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

begin delete

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

end delete