Water: affordability and system stabilization.

Section 12968(e) changed from 'all moneys in the fund are continuously appropriated to the department, without regard to fiscal year' to 'All moneys in the fund are available to the department, without regard to fiscal year, upon appropriation by the Legislature.' This means the fund no longer automatically releases money to the department; the Legislature must appropriate it each time.

The bill summary was updated to match: changed from 'continuously appropriate moneys in the fund to the department' to 'make moneys in the fund available to the department... upon appropriation by the Legislature, as provided.'

In Section 12967, the phrase 'revenue moneys' was changed to simply 'moneys' in two places describing transfers from the General Fund to the trust fund, slightly broadening the description of what can be transferred.

Typo corrections: 'Heath and Safety Code' corrected to 'Health and Safety Code,' 'previous prior fiscal year' simplified to 'prior fiscal year,' and 'Community Water Assistance Affordability Program' corrected to 'Community Water Affordability Program.'

Definition numbering in Section 12968(a) appears scrambled in the new version, with items renumbered inconsistently (e.g., blank entries at positions 2, 4, and 5 while definitions are renumbered to 1, 3, 2, 3). This appears to be a drafting error rather than an intentional policy change.

The bill was renamed from 'Community Water Affordability Program' to 'Water Affordability and System Stabilization,' expanding its scope to cover both direct rate assistance for low-income households and infrastructure cost stabilization for water systems statewide.

Removed the prior Section 1 stating the Legislature's intent to enact subsequent legislation relating to groundwater, which had been a placeholder provision in the earlier version.

Creates the Water Affordability and System Stabilization Trust, a perpetual charitable trust in the State Treasury. During the first 25 years after the Legislature's first General Fund transfer, 45% of trust income goes to the Water Rate Assistance Fund, 45% to the Community Water Affordability Assistance Fund, and 10% is reinvested as principal. After 25 years, the split becomes 50/50. Up to 1% of income may be used for trust administration.

The Community Water Affordability Assistance Fund is now continuously appropriated (previously it was available only upon legislative appropriation). Up to 5% of annual fund revenue may be used for administration. The fund can accept federal contributions, voluntary contributions, gifts, grants, and bequests, and the department may enter agreements with federal, state, local, private, or nonprofit entities.

The Treasurer serves as trustee with fiduciary duties under the Uniform Prudent Investor Act. The trustee must not invade the principal, must provide annual accountings and income forecasts to the State Water Resources Control Board and the Department of Water Resources, and the trust is subject to Attorney General supervision as a charitable trust.

Program guidelines must now establish a methodology for evaluating projects based on factors including net present value of cost avoided per account over 25 years, the applicant's ability to complete the project in a timely manner, and the number of households benefited. The methodology is prohibited from considering an applicant's ability to meet the minimum match or from penalizing applicants who request hardship waivers.

Before adopting program guidelines, the department must hold at least three public workshops statewide on draft guidelines and provide at least 45 days of public comment. The department must also annually post a report on its website covering fund revenues, expenditures, benefits, cumulative households benefited, and estimated costs avoided.

The minimum local match requirement for grant applicants was reduced from 50% to 25% of total project funding. Federal funding and other state loans and grants may still count toward this amount, and the department retains authority to waive or reduce it for extreme financial hardship.

The bill's vote requirement was changed from a simple majority to two-thirds of each house, indicating it now requires supermajority support. The appropriation designation changed from 'no' to 'yes,' and the fiscal committee designation changed from 'no' to 'yes.'

Added extensive legislative findings (Section 12965.5) documenting the state's policy on water affordability, the impact of Proposition 218 on rate-setting, climate change cost pressures, and the rationale for a perpetual trust fund. Also added definitions for 'beneficiary,' 'trust property,' 'net income,' and other trust-related terms.

The distribution of trust income is now handled by the Controller, after coordination with the trustee, rather than by the trustee alone. This applies to both the first 25-year period and the post-25-year period.

New Section 12966.7 authorizes the trustee to enter into a trust agreement with a fiscal intermediary to support its duties, and permits the trust funds to be invested in the Surplus Money Investment Fund consistent with Government Code Section 16430.

The Community Water Affordability Assistance Fund is no longer continuously appropriated. Funds are now available to the department only upon appropriation by the Legislature, removing the 'notwithstanding Section 13340' language that had made all moneys continuously available without regard to fiscal year.

A new subsection (c)(5) allows the department to award grants for less than 75 percent of project cost if the annual appropriation for fund expenditures is less than the cumulative amount of grants awarded for that fiscal year, providing flexibility when funding falls short.

A new evaluation criterion (b)(2)(B)(iii) requires program guidelines to consider project characteristics that demonstrate reduced long-term operation or maintenance costs, improved financial sustainability, improved operational efficiency, strengthened service delivery, or enhanced long-term resilience of drinking water systems in ways that lower system costs over time.

A typo was corrected: 'Heath Health and Safety Code' changed to 'Health and Safety Code' in the project evaluation methodology section.

The minimum local match rate for grant applicants was reduced from 50 percent to 25 percent of total project funding. Federal funding and other state loans and grants still count toward this amount, and the department can still waive or reduce it for extreme financial hardship.

A new factor was added to the project evaluation methodology: the benefits a system received in the past year from the Water Rate Assistance Fund (Section 116932 of the Health and Safety Code), averaged across the system's total residential connections. This means systems already receiving rate assistance will be considered when ranking grant applications.

The Community Water Affordability Assistance Fund was changed from requiring annual legislative appropriation to being continuously appropriated to the department without regard to fiscal year, per Section 13340 of the Government Code. The bill's appropriation designation changed from 'no' to 'yes' in the legislative counsel digest.

Minor corrections throughout: section cross-reference fixed from 12965.5 to 12966.5 in the Principal definition, 'previous fiscal year' changed to 'prior fiscal year,' 'revenue' clarified to 'revenue moneys,' and a program name typo ('Community Water Assistance Program') corrected to 'Community Water Affordability Program' in the annual reporting requirement.

Added new Part 7.5 (Section 12965) to Division 6 of the Water Code establishing the Community Water Affordability Program, which provides grants to local water suppliers for water system repairs, rehabilitation, enhancements, water safety and quality, and other infrastructure projects to reduce ratepayer burden.

The bill's scope expanded from a single-section intent statement about future groundwater legislation to a multi-part program bill covering water affordability, while retaining the original groundwater intent as a separate final section.

Established the Community Water Affordability Assistance Fund in the State Treasury. Moneys in the fund become available to the Department of Water Resources upon appropriation by the Legislature.

Fiscal committee designation changed from 'no' to 'yes,' indicating the amended bill now has fiscal impact requiring fiscal review.

Set a minimum 50 percent local match requirement for grant applicants, meaning applicants must provide at least half of total project funding. Federal funding and other state loans and grants count toward this amount. The department may waive or reduce the match if it would cause extreme financial hardship.

Required the Department of Water Resources to develop and adopt program guidelines and project solicitation documents before disbursing any grant funds. These guidelines are exempt from the Administrative Procedure Act (Government Code Section 11340 et seq.).