SB1125 - Water Rate Assistance Program.

Enrolled August 28, 2026 Passed IN Senate August 26, 2026 Passed IN Assembly August 25, 2026 Amended IN Assembly August 19, 2026 Amended IN Assembly August 13, 2026 Amended IN Assembly June 09, 2026 Amended IN Senate May 14, 2026 Amended IN Senate March 25, 2026 CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION Senate Bill No. 1125 Introduced by Senator Menjivar (Coauthors: Senators Durazo and Gonzalez) (Coauthors: Assembly Members Calderon and Schiavo) February 17, 2026 An act to add Chapter 6.2 (commencing with Section 116930) to Part 12 of Division 104 of the Health and Safety Code, relating to drinking water. LEGISLATIVE COUNSEL'S DIGEST SB 1125, Menjivar. Water Rate Assistance Program. Existing law requires the State Water Resources Control Board to develop a plan for the funding and implementation of the Low-Income Water Rate Assistance Program. Existing law requires the plan to include, among other things, a description of the method for collecting moneys to support and implement the program and a description of the method for determining the amount of moneys that may need to be collected from water ratepayers to fund the program. This bill would establish the Water Rate Assistance Program. As part of the program, the bill would establish the Water Rate Assistance Fund in the State Treasury, available upon appropriation by the Legislature, to provide water affordability assistance for residential water services to low-income residential ratepayers, as specified. The bill would establish separate implementation procedures depending on whether the state board determines that the Legislature appropriated enough moneys from the fund for a partial implementation of the program or a statewide implementation of the program. The bill would require the state board to take various actions in administering the fund, including, among other things, tracking and managing revenue in the fund separately from all other revenue. The bill would require the state board, in consultation with relevant agencies and after a public hearing, to adopt guidelines for implementation of the program and to adopt and submit a report to the Legislature or post the report on its internet website, as specified. The bill would require the guidelines to include minimum requirements for eligible systems, including the ability to confirm eligibility for enrollment through a request for self-certification of eligibility under penalty of perjury. By expanding the crime of perjury, the bill would impose a state-mandated local program. The bill would require the state board to take various actions in administering the program, including, but not limited to, providing guidance, oversight, and funding for low-income rate assistance for residential ratepayers of eligible systems. The bill would authorize the Attorney General, at the request of the state board, to bring an action in state court to restrain the use of any method, act, or practice in violation of these provisions, except as provided. The bill would make the implementation of all of these provisions contingent upon an appropriation by the Legislature. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YES Bill Text The people of the State of California do enact as follows: SECTION 1. Chapter 6.2 (commencing with Section 116930) is added to Part 12 of Division 104 of the Health and Safety Code, to read: CHAPTER 6.2. Water Rate Assistance Program 116930. (a) The Legislature finds and declares all of the following: (1) Existing state law declares that it is the established policy of the state that every human being has the right to safe, clean, affordable, and accessible water adequate for human consumption, cooking, and sanitary purposes. (2) In 2015, the Legislature passed Assembly Bill 401 (Chapter 662 of the Statutes of 2015) that required the State Water Resources Control Board to develop a plan, informed by the public and the State Board of Equalization, for a statewide low-income rate assistance for water. (3) In 2020, the state board released a report pursuant to Assembly Bill 401 (Chapter 662 of the Statutes of 2015), which is entitled “Recommendations for Implementation of a Statewide Low-Income Water Rate Assistance Program,” that found that it would take over one hundred forty million dollars ($140,000,000) annually to create a low-income water rate assistance program. (4) The cost of water has continued to rise, outpacing the rate of inflation and putting too many California families at risk of water shutoffs. (5) Climate change adds additional cost pressure to water and sewer systems, which increasingly must invest in climate resilience. (6) While many public water systems offer some form of bill assistance to a limited number of customers, Proposition 218, as approved by the voters at the November 5, 1996, statewide general election, limits their ability to fully fund those programs. (7) California must continue to lead the nation by establishing statewide low-income rate assistance for water and sewer and, by doing so, help to ensure universal access to essential services. (8) Due to the urgent need to improve water affordability, it is appropriate to begin implementing a low-income rate assistance program as soon as enough funding for partial implementation is available, as long as partial implementation is an interim step toward statewide implementation, that the state shall work toward achieving within the next five years. (b) It is the intent of the Legislature that funding for a water affordability program be progressive, not create affordability challenges for ratepayers, and be durable. 116931. For purposes of this chapter, the following definitions apply: (a) “Community water system” has the same meaning as defined in Section 116275. (b) “Effective date” means the date that the state board gives public notice pursuant to paragraph (2) of subdivision (c) of Section 116932. (c) “Eligible system” means a community water system, or a participating tribal water system. (d) “Fund” means the Water Rate Assistance Fund created pursuant to Section 116932. (e) “Local water rate assistance program” means a drinking water low-income rate assistance program that is established, funded, and administered by a community water system to provide water rate assistance to its eligible low-income ratepayers. Local water rate assistance programs may be funded through any funding a community water system has available to provide water rate assistance to its ratepayers, provided it does not use any funding derived from a fee or charge levied pursuant to Article XIII D of the California Constitution. (f) “Low-income” means an annual household income that is no greater than 200 percent of the federal poverty guideline level and consistent with the guidelines established for the California Alternative Rates for Energy (CARE) program pursuant to subdivision (a) of Section 739.1 of the Public Utilities Code. (g) “Minimum implementation amount” means an amount of money determined by the state board that is sufficient to allow the state board to administer the program with at least three years of ratepayer assistance for the systems selected pursuant to subdivision (e) of Section 116932, including all reasonable costs associated with the administration of this chapter. (h) “Program” means the Water Rate Assistance Program established pursuant to this chapter. (i) “Relevant agencies” means those agencies that have a role, through data collection, regulation, or enforcement, in providing services, oversight, and assistance to public water systems and low-income ratepayers. (j) “Residential ratepayer” means a resident of a single-family or multifamily residence who receives a bill for residential water. (k) “State board” means the State Water Resources Control Board. 116932. (a) The Water Rate Assistance Fund is hereby established in the State Treasury to provide water affordability assistance for residential water services to low-income residential ratepayers. Moneys in the fund shall be available, upon appropriation by the Legislature, to the state board to provide, in consultation with relevant agencies, direct water bill assistance to low-income residential ratepayers served by eligible systems. (b) The program shall be entirely funded by the fund or other available state or federal funding. (c) (1) The state board shall, upon appropriation by the Legislature of a minimum implementation amount, expend moneys from the fund for reasonable costs associated with the administration of this chapter. (2) Within 30 days after a determination by the state board that a minimum implementation amount has been appropriated from the fund by the Legislature to the state board, the state board shall provide public notice of that determination. (3) Within 30 days after a determination by the state board that the Legislature appropriated from the fund a sufficient amount for statewide implementation of the program, the state board shall provide public notice of that determination. (4) The state board shall begin distributing ratepayer assistance within three years of the effective date. (5) Commencing three years from the effective date, funds for the reasonable costs associated with the administration of this chapter shall not exceed 10 percent of the average annual budget for implementation of the program. “Reasonable costs associated with the administration of this chapter” includes relevant agencies’ administrative costs associated with this chapter. The state board shall pay eligible systems for reasonable costs associated with the administration of this chapter, including contracting with third-party providers pursuant to paragraph (3) of subdivision (d) of Section 116933, which shall not count toward the 10-percent limitation. (6) Commencing four years from the effective date, a minimum of 80 percent of future expenditures from the fund shall be directly applied to residential ratepayer accounts. (d) The state board may undertake any of the following actions to implement this chapter: (1) Provide for the deposit of any of the following moneys into the fund: (A) Federal or state funding. (B) Voluntary contributions, including, but not limited to, gifts, grants, or bequests. (C) Any previously distributed funds returned to the fund pursuant to the provision adopted pursuant to paragraph (7) of subdivision (b) of Section 116934 or a process developed pursuant to paragraph (10) of subdivision (b) of Section 116934. (2) Enter into funding agreements with the federal government, local or state agencies, private entities, or nonprofit organizations. (3) (A) Develop data systems necessary to receive customer enrollment information from the California Public Utilities Commission and other relevant state and federal entities. (B) Notwithstanding any other law, procurement of data systems pursuant to this paragraph shall not be subject to the California Department of Technology procurement pathway, including, but not limited to, Chapter 3 (commencing with Section 12100) of Part 2 of Division 2 of the Public Contract Code, Sections 11545 and 11546 of the Government Code, and processes established in the Statewide Information Management Manual and the State Administrative Manual. (4) Take additional action as necessary and appropriate for adequate administration and operation of the fund and provision of direct residential water bill assistance. (e) If the state board determines that the fund contains a minimum implementation amount pursuant to paragraph (2) of subdivision (c), but that the fund does not contain enough moneys for statewide implementation of the program, this chapter shall be implemented as follows: (1) The state board shall solicit applications from eligible systems to participate in the program. (2) If sufficient funding is available, the state board shall select all eligible systems that applied to participate in the program pursuant to paragraph (1). (3) If sufficient funding is not available to select all eligible systems that applied to participate in the program pursuant to paragraph (1), the state board shall select for participation in the program a representative sample of eligible systems that applied considering geography, number of connections, and service to disadvantaged and severely disadvantaged communities. (4) Systems that have been identified by the state board as having a history of waste, fraud, or abuse of moneys shall not be prioritized for the program until the state board or the Attorney General determines that the prior behavior of the system has been addressed. (5) Participation by eligible systems shall be voluntary unless the state board determines that sufficient funding is available pursuant to paragraph (3) of subdivision (c). (6) Nothing in this chapter shall require statewide implementation unless the state board determines that sufficient funding is available pursuant to paragraph (3) of subdivision (c). (7) Upon a subsequent appropriation of moneys to the state board from the fund that is greater than the minimum implementation amount, the state board is authorized to expand the program to additional eligible systems. 116933. The state board shall do all of the following in administering the fund: (a) Track and manage revenue in the fund separately from all other revenue. (b) Develop and implement a process for the state board to disburse program funds to eligible systems for direct application to the system’s low-income residential ratepayer accounts, including controls to prevent fraud, waste, and abuse. (c) Manage and maintain fund balances in conjunction with the Controller, the Treasurer, the California State Auditor’s Office, and the Department of Finance, as appropriate. (d) (1) Expend, upon appropriation by the Legislature of a minimum implementation amount, moneys in the fund for grants, contracts, or services to provide benefits to eligible residential ratepayers. (2) Services may include technical assistance to eligible systems serving fewer than 3,300 connections to administer the application of funds to low-income residential ratepayer accounts, including initial startup costs. (3) The state board shall identify and contract with one or more third-party providers, for the purpose of providing assistance to eligible systems with customer enrollment and disenrollment, to the extent authorized by Section 19130 of the Government Code. The scope of work for a third-party provider shall include, but not be limited to, the receipt of California Alternate Rates for Energy (CARE) enrollment data pursuant to the mechanism established pu [Text truncated for display. Full text available on LegiScan.]