BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
AB 2636 (Gatto) - CalConserve Water Use Efficiency Revolving
Fund.
Amended: June 30, 2014 Policy Vote: EQ 6-0, NR&W 8-0
Urgency: No Mandate: No
Hearing Date: August 14, 2014 Consultant:
Marie Liu
SUSPENSE. AS AMENDED.
Bill Summary (as approved on August 14, 2014): AB 2636 would
establish the CalConserve Water Use Efficiency Revolving Fund
which would be administered by the Department of Water Resources
(DWR) for the purpose of providing financial assistance for
projects that reduce urban per capita water use, reduce
agricultural water use, increase the use or availability of
recycled water supply, or reduce greenhouse gas (GHG) emissions
and water and energy use.
Fiscal Impact (as approved on August 14, 2014):
Cost pressures, likely in the millions of dollars, to the
General Fund to fund the CalConserve Fund.
Cost pressures in the hundreds of thousands of dollars to
the General Fund/CalConserve Fund to DWR to administer the
program.
Background: Existing law requires the state to achieve a 20%
reduction in urban per capita water use by December 31, 2020.
Existing law also requires agricultural water suppliers to adopt
a volumetric water pricing system and to implement locally cost
effective and technical feasible water use efficiency measures,
as specified. (SBx7 7 (Steinberg) Chapter 4, Statutes of 2009.
Proposition 13, which was approved by the voters in 2000, made
available $35 million to DFW to make loans to local agencies to
aid in the acquisition and construction of agricultural water
conservation projects and grants for feasibility studies.
Proposed Law: This bill would create the CalConserve Water Use
Efficiency Revolving Fund which would be available to DWR, upon
appropriation by the Legislature, to fund projects that have at
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least one of the following benefits:
Measurably reduce urban per capita potable water use.
Measurably reduce agricultural water use.
Increase the use or availability of recycled water supply
Reduce greenhouse gas emission and water and energy use.
DWR would be authorized to adopt rules and guidelines to
administer the program.
This bill would transfer Proposition 13 funds that were marked
for agricultural water conservation projects to the CalConserve
Fund and allows the Legislature to appropriate monies from the
Greenhouse Gas Reduction Fund (GGRF) to the CalConserve Fund.
DWR could not encumber any funds from the GGRF in this program
until the ARB publishes findings and reports on how all
operational aspects of the projects result in greenhouse gas
emission reductions.
Related Legislation: AB 2011 (Gatto, 2012) and AB 1349 (Gatto,
2013) both would have also created CalConserve. Both bills were
held in submission on the Assembly Appropriation's suspense
file.
Staff Comments: This bill would establish a new financial
assistance loan program to be administered by DWR. It is unclear
how much the administrative cost will be as it will depend on
the size and design of the program. However, staff anticipates
that minimum level of staffing will probably be in the hundreds
of thousands of dollars to develop the program with potentially
lower ongoing costs. Staff notes that the administration of a
revolving loan program has unique administrative costs compared
to a grant program. According to the Senate Natural Resources
Committee, DWR has not administered a revolving loan account in
several decades. Therefore the development of the program will
likely necessitate some assistance from Department of Finance
and other agencies that could manage revolving loan accounts.
This bill would direct proceeds from Proposition 13 that were
for the purpose of agricultural water conservation (�79157) to
be transferred to the CalConserve Fund. However, all remaining
Proposition 13 funds were appropriated in budget actions this
year.
This bill would also allow the GGRF to be used to the
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CalConserve Fund, which would place cost pressures on the GGRF
for this program. Furthermore, should the GGRF be used to
support this program, the ARB would be required to publish
findings and reports on how the projects result in GHG emission
reductions, which would require additional workload. In the
approved 2014-15 Budget, the ARB was allocated $1 million for
various responsibilities associated with the spending of the GHG
Reduction Fund, including the development of reduction metrics.
Some of this work is likely to overlap the required actions
under this bill. As such, staff believes ARB costs will likely
be no more than $500,000 from the GGRF.
Committee Amendments: Delete ability to use GGHF moneys for the
CalConserve program and associated requirements (all of �81023).