BILL ANALYSIS ----------------------------------------------------------------- | | | SENATE COMMITTEE ON NATURAL RESOURCES AND WATER | | Senator Fran Pavley, Chair | | 2009-2010 Regular Session | | | ----------------------------------------------------------------- BILL NO: SB 808 HEARING DATE: January 12, 2010 AUTHOR:Wolk URGENCY: Yes VERSION: January 4, 2010 CONSULTANT: Katharine Moore DUAL REFERRAL: No FISCAL: Yes SUBJECT: Delta levee maintenance BACKGROUND AND EXISTING LAW The Delta levees are the key physical element maintaining the Delta in its current state and are essential for the protection from flooding of human life, property (e.g. buildings, equipment, and crops, among others), water quality and wildlife habitat. While the Delta levees are mostly private, the State relies upon them to maintain the Delta in its current state as a water conveyance system for the State Water Project (SWP) and the federal Central Valley Project (CVP). The Delta levee maintenance subvention program was created by SB 541 in 1973 (Way, c. 717, Statutes of 1973). The program has been modified periodically since its inception and currently provides reimbursement funds to local agencies for costs incurred in any year for the maintenance or improvement of project or non-project levees. Until June 30, 2010 the reimbursement rate is: zero if the entire cost incurred per mile of levee is $1,000 or less up to 75% of any costs incurred in excess of $1,000 per mile of levee would be paid by the State based upon an assessment of the agency's ability to pay. On July 1, 2010 the reimbursement rate will become: zero if the entire cost incurred per mile of levee is $1,000 or less (no change) 50% of any costs incurred in excess of $1,000 per mile of levee would be paid by the State. General Fund contributions to this program are capped at $2 million per year. 1 PROPOSED LAW This bill extends the sunset on the current Delta levee maintenance subvention program's 75%-25% reimbursement rate from July 1, 2010 to July 1, 2016. ARGUMENTS IN SUPPORT According to the author, "the Delta levee system serves both local and substantial State interests. Regardless of future decisions on [water] conveyance within the Delta, in the near term, Delta levees will continue to be the sole tool for water conveyance for the SWP and CVP. The Delta Levee Subvention Program's 75-25 cost-sharing formula has allowed local reclamation districts to afford to maintain and improve their levees, thereby protecting the system. If the formula returns to a 50-50 split, then the many small districts with a limited economic base would not be able to afford to maintain the Delta levees adequately." "The Delta Levee Subventions Program needs a 6-year extension (to 2016) in order to sustain Delta maintenance programs during a time of transition. Last year, the Legislature required [the] newly-created Delta Stewardship Council to develop priorities for levee investments within the Delta as part of the Delta Plan. The Delta Plan is due January 1, 2012." An extension of the program through 2016 "will allow the subventions and Delta levee maintenance to continue while the Delta Stewardship Council develops and begins to implement the [Delta] plan." SB 808 continues the Delta Levee Subventions program and supports levee maintenance while "the State reassesses the direction it will pursue in protecting the Delta." ARGUMENTS IN OPPOSITION None received COMMENTS The Delta Plan - AB 798 (Wolk, c. 548, Statutes of 2006) provided a 4-year extension (2006 to 2010) to the Delta levee maintenance subventions program. The 2010 sunset date in AB 798 was based on the anticipated completion of levee funding priorities, as required by AB 1200 (Laird, c. 573, Statutes of 2005). AB 1200 required DWR to study the risks posed to the integrity of the Delta by various hazards (see Water Code sections 139.2 and 139.4) and to prioritize options for their mitigation. This report, produced in January 2008, provided the preliminary results of Delta Risk Management Strategy (DRMS). DWR, in 2 collaboration with other organizations, created DRMS in response to AB 1200. Phase I of DRMS - an analysis of the various risks to levees and the local and statewide consequences of levee failure - was completed in early 2009. Phase II of the DRMS, which identifies and analyzes various scenarios to reduce the risks and consequences of levee failure, is not yet completed. According to DWR, the timeline for completion of Phase II is uncertain at this point due to the State's budget issues. Last November, SB7X 1 (Simitian, c. 5, Statutes of the 7th extraordinary session, 2009 - 2010) established a new planning framework for the Delta - the Delta Plan. The Delta Plan will likely incorporate the levee risk management results of the DRMS studies and is due in January 2012. The committee may wish to consider that the Delta levee management subvention program be required to be consistent with the Delta Plan upon the Plan's completion. (see amendment 1) Recent expenditures - From FY 1996 - 97 through FY 2007 - 08, the total expenditure through the Delta levee maintenance subventions program was approximately $131 million with the State paying about 62% ($80 million) and the local agencies the rest. The total cost-share for any particular project depends upon how well it meets priorities established for the subventions program and the availability of State funding. The average total expenditure during this time period was about $9.8 million per year. The availability of bond funds due to the passage of Propositions 84 and 1E in 2006 has increased funding for this program. Between FY 2006 - 07 and FY 2007 - 08, the State's annual expenditure increased from about $6 million to $16 million. SUGGESTED AMENDMENTS AMENDMENT 1 On page 3, after line 31, insert: (c) This program shall reflect the priorities and be consistent with the Delta plan pursuant to chapter 1, part 4, division 35 of the California Water Code. SUPPORT None Received OPPOSITION None Received 3 4