BILL ANALYSIS Senate Appropriations Committee Fiscal Summary Senator Christine Kehoe, Chair 1788 (Yamada) Hearing Date: 08/02/2010 Amended: 07/15/2010 Consultant: Brendan McCarthy Policy Vote: NR&W 9-0 _________________________________________________________________ ____ BILL SUMMARY: AB 1788 changes the income threshold for additional flood control funding provided by the state to local governments, such that more low income communities will qualify for increased funding. _________________________________________________________________ ____ Fiscal Impact (in thousands) Major Provisions 2010-11 2011-12 2012-13 Fund Revising guidelines Absorbable within existing resourcesBond * Cost pressure on bond funds Likely in the millionsBond * * Propositions 1E and 84. _________________________________________________________________ ____ STAFF COMMENTS: This bill meets the criteria for referral to the Suspense File. Under current law, the state provides funding for local, federally-authorized flood control projects. The state generally provides 50 percent of the non-federal share of a project's cost. However, if the project meets certain criteria, the state may provide up to 70 percent of the non-federal cost share. For example, a project is eligible for additional state funding if the project protects or enhances wildlife habitat, protects or enhances recreational opportunities, or if the project provides flood protection for areas that have a median household income that is less than 120 percent of the federal poverty level. Recommendations for additional funding are made by the Central Valley Flood Protection Board to the Department of Water Resources. AB 1788 changes the standard for providing additional state funding based on median incomes in a community. Under the bill, the state may provide up to 70 percent of the non-federal cost share for "disadvantaged communities" which is defined in the Water Code as a community with annual median household income less than 80 percent of the statewide median household income. In 2008, 120 percent of the federal poverty level was about $25,000. On the other hand, 80 percent of the statewide median household income was about $49,000. Therefore, under the bill, more communities would be eligible for additional flood control funding. This will put pressure on existing bond funds for additional funding, reducing the amount of funding available for other projects. The amount of this cost pressure is unknown and will depend on future flood control project applications.