BILL ANALYSIS �
AB 2636
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ASSEMBLY THIRD READING
AB 2636 (Gatto and Skinner)
As Amended May 23, 2014
Majority vote
WATER, PARKS & WILDLIFE 13-0 APPROPRIATIONS 12-0
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|Ayes:|Allen, Bocanegra, Dahle, |Ayes:|Gatto, Bocanegra, |
| |Fong, Frazier, Beth | |Bradford, |
| |Gaines, Gatto, Gomez, | |Ian Calderon, Campos, |
| |Gonzalez, Gray, | |Eggman, Gomez, Holden, |
| |Patterson, Rodriguez, | |Pan, Quirk, |
| |Yamada | |Ridley-Thomas, Weber |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Creates a CalConserve Water Use Efficiency Revolving Fund
(CalConserve) funded by Legislative appropriations and administered
by the Department of Water Resources (DWR) for the principal purpose
of providing low-interest loans for water use efficiency projects.
Specifically, this bill :
1)Makes multiple findings including, 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) Reductions in greenhouse gas emissions.
3)Defines a local agency that is eligible for CalConserve funds as a
city, county, city and county, municipal utility district,
community services district, sanitary district, sanitation
district, water district, public water system, or a private water
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company under the jurisdiction of the Public Utilities Commission.
Specifies that CalConserve funds provided to private water
companies should benefit ratepayers and not investors.
4)Transfers remaining Proposition 13 of 2000 bond funds for
agricultural water use efficiency loans and grants to CalConserve
for loans and grants to acquire and construct agricultural
conservation projects.
5)Specifies that the Legislature may appropriate money from the
Greenhouse Gas Reduction Fund to CalConserve for water use
efficiency projects that will contribute to achieving and
maintaining greenhouse gas emission reductions.
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;
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)Allows up to 4% of the fund for repayment of the reasonable cost
of administering the fund itself, but prohibits CalConserve funds
from being used for local agency 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
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requires agricultural water suppliers to implement efficient water
management practices, including water measurement.
FISCAL EFFECT : According to the Assembly Appropriations Committee,
this bill transfers $17 million in Proposition 13 funds to
CalConserve and results in annual administrative costs to DWR in the
hundreds of thousands of dollars range.
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
environmentally innovative activities. However, the federal program
does not allow for the funding of projects on private property.
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% by 2020
conservation goal, as well as encourage the use of recycled water.
This bill is similar to AB 2011 (Gatto) of 2012 and AB 1349 (Gatto)
of 2013. Both AB 2011 and AB 1349 were held in the Assembly
Appropriations Committee pending firmer identification of potential
funding sources.
Analysis Prepared by : Tina Cannon Leahy / W., P. & W. / (916)
319-2096 FN:
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