BILL ANALYSIS �
AB 2636
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Date of Hearing: May 25, 2014
ASSEMBLY COMMITTEE ON WATER, PARKS AND WILDLIFE
Anthony Rendon, Chair
AB 2636 (Gatto) - As Amended: March 18, 2014
SUBJECT : CalConserve Water Use Efficiency Revolving Fund
SUMMARY : Creates the CalConserve Water Use Efficiency
Revolving Fund (CalConserve) in the State Treasury in order to
provide low-interest loans for water use efficiency projects.
Specifically, this bill :
1)Makes multiple findings included, but not limited, to the
finite nature of water resources, the uncertainty of water
supplies due to drought and climate change, water use
efficiency as an effective strategy to address those
uncertainties, and the need for a stable funding source for
water efficiency projects.
2)Requires CalConserve funded projects to result in:
a) Measurable reductions in urban per capita potable water
use;
b) Improved agricultural water use efficiency and reduced
agricultural water use;
c) Increased use of recycled water; or,
d) Measurable reductions in greenhouse gas emissions.
3)Specifies that CalConserve funds provided to investor-owned
utilities (IOUs) should benefit ratepayers and not investors.
4)Makes CalConserve funds available to the Department of Water
Resources (DWR) upon appropriation by the Legislature.
5)Transfers remaining Proposition 13 bond funds for agricultural
water use efficiency loans and grants to CalConserve to
acquire and construct agricultural conservation projects.
6)Allows DWR to:
a) Deposit any available and necessary moneys into
CalConserve;
b) Enter into agreements with local governments or
investor-owned utilities that provide water or recycled
water service to provide loans for the purposes of the
fund;
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c) Provide appropriate auditing and administration of the
CalConserve; and,
d) Take actions necessary to secure federal funds for
CalConserve.
7)Specifies that CalConserve fund shall be used for loans that
are at or below market interest rates and for a maximum
repayment of 20 years or up to 25 for disadvantaged
communities.
8)Allows CalConserve funds to earn interest and be used for
multiple purposes including, but not limited to, technical
assistance, bond repayment for bond funds deposited in
CalConserve; and, federal capitalization grant purposes if
those grant funds are deposited.
9)Limits administrative costs to 4% of the fund.
10)Allows implementation of water use efficiency loan programs
through on-bill financing but prohibits CalConserve funds from
being expended for those administrative costs.
EXISTING LAW : Requires the state to achieve a 20% reduction in
urban per capita water use in California by December 31, 2020
and requires each urban retail water supplier to comply with
that target. Also requires agricultural water suppliers to
implement efficient water management practices, including water
measurement.
FISCAL EFFECT : Unknown
COMMENTS : There is no existing program like CalConserve in DWR,
but comparisons to the State Water Resources Control Board's
Clean Water State Revolving Fund Program (CWSRF) are useful. The
CWSRF receives money from the federal government pursuant to the
Clean Water Act and disburses $200 to $300 million annually for
the construction of publicly-owned wastewater, stormwater, and
water reclamation facilities. The CWSRF charges a rate that is
equivalent to 1/2 of the most recent General Obligation Bond
Rate.
In 2010 the federal government added a new CWSRF requirement
that, provided there were sufficient eligible projects, at least
20% of the grants should be used for projects to address green
infrastructure, water or energy efficiency improvements or other
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environmentally innovative activities. However, the federal
program does not allow for the funding of projects on private
property.
Support Arguments : The author states that while the Department
of Public Health and the State Water Resources Control Board
both administer grant programs which offer low-cost loans for
public entities to finance high water-use efficiency retrofits,
there are no similar low-cost loan programs available to private
entities, including homeowners, to finance retrofits. The
author also points out that a revolving fund would provide a
self-renewing source of funding for water-use efficiency, which
would continue to be available to the public between water bonds
while also leveraging private investment in water-use
efficiency. Supporters state CalConserve will promote statewide
conservation and help the state to reach its 20 percent
conservation by 2020 goal, as well as encourage the use of
recycled water.
Prior Legislation : This bill is similar to AB 2011 (Gatto) and
AB 1349 (Gatto) both of which would also have created
CalConserve. However, AB 2011 differed in that it allocated an
anticipatory $50 million from the Safe, Clean, and Reliable
Drinking Water Supply Act of 2012 (Water Bond), if that act were
to pass. It did not. The Water Bond was moved to the 2014
ballot. Both AB 2011 and AB 1349 were held in the Assembly
Appropriations Committee pending firmer identification of
potential funding sources.
REGISTERED SUPPORT / OPPOSITION :
Support
California Landscape Contractors' Assoc.
East Bay Municipal Utility District
Nexus eWater
Opposition
None on file
Analysis Prepared by : Tina Cannon Leahy / W., P. & W. / (916)
319-2096
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