BILL ANALYSIS AB 1788 Page 1 CORRECTED - 06/02/2010 Technical change (Member name) ASSEMBLY THIRD READING AB 1788 (Yamada) As Introduced February 10, 2010 Majority vote WATER, PARKS & WILDLIFE 12-0 APPROPRIATIONS 17-0 ----------------------------------------------------------------- |Ayes:|Huffman, Fuller, |Ayes:|Fuentes, Conway, Ammiano, | | |Anderson, Arambula, Tom | | | | |Berryhill, Blumenfield, | |Bradford, Charles | | |Caballero, De La Torre, | |Calderon, Coto, | | |Bill Berryhill, Bonnie | |Davis, Monning, Ruskin, | | |Lowenthal, Salas, Yamada | |Harkey, | | | | |Miller, Nielsen, Norby, | | | | |Skinner, | | | | |Solorio, Torlakson, | | | | |Torrico | |-----+--------------------------+-----+--------------------------| | | | | | ----------------------------------------------------------------- SUMMARY : Changes the eligibility criteria under which a flood control project may receive increased state funding and makes minor technical corrections. Specifically, this bill : 1)Makes a flood control project in an economically disadvantaged area eligible for an increase in state matching funds if the number of families in poverty in that area is at least 150% of the California average. 2)Corrects the name of the former Reclamation Board to the Central Valley Flood Protection Board. EXISTING LAW : 1)Requires specific percentages of nonfederal (i.e., state and local) cost sharing for federal flood control projects. 2)Allows the state to increase the state share of the nonfederal capital costs of a flood control project from 50% to up to 70% if the project would increase the level of flood protection in an area with a median household income that is less than 120 % AB 1788 Page 2 of the federal poverty level, as defined by the Department of Finance. 3)Changes the name of the Reclamation Board to the Central Valley Flood Protection Board. FISCAL EFFECT : According to the Assembly Appropriations Committee, cost pressures of an unknown amount, but potentially in the millions of dollars. This is because more flood control projects will qualify for state subvention funding, which is finite. To the extent the state wishes to fund all these flood control projects, there will be cost pressure to find new fund sources to do so. (Bond funds or special funds.) COMMENTS : Under the State Water Resources Law of 1945, the state may participate in funding local flood control projects that are authorized by the Legislature and that meet specified criteria. State authorization for funding of a flood control project is contingent upon preceding federal statutory authorization of the project. Consistent with state law (AB 1147 (Honda), Chapter 1071, Statutes of 2000), the state must contribute a portion of the capital costs of the non-federal share (meaning the costs paid by state or local governments of federal flood control projects that have been authorized by the state). In most cases, the state portion is 50% of the non-federal share. If the area to be benefited by that project is economically disadvantaged, the state can increase its share of the non-federal flood control project costs to up to 70%. The determination of whether an area is economically disadvantaged, and therefore qualifies for an increased state payment of the non-federal share, is currently based on a whether a project increases flood protection in an area with a median household income less than 120% of the federal poverty level. Such a comparison to federal median income levels doesn't take into consideration that, while California average income levels are higher, California costs of living are also higher. This bill would determine eligibility for the state to pay up to 70% of the non-federal share by comparing the number of families living in poverty in the area to be benefited against the median AB 1788 Page 3 percentage of families living in poverty in California. If the area to be benefited is at least 150% of the California average, it would be eligible. As of 2009, there were about $82 million in claims for subventions for approved flood control projects. There is about $350 million remaining in unappropriated Proposition 1E funds for flood control subventions. Supporters, including numerous local governments, contend this bill would result in increased funding for important flood control projects, especially in areas of the state with relatively high rates of poverty. There is no registered opposition to this bill. Analysis Prepared by : Tina Cannon Leahy / W., P. & W. / (916) 319-2096 FN: 0004617