BILL ANALYSIS                                                                                                                                                                                                    

          |                                                                 |
          |                   Senator Fran Pavley, Chair                    |
          |                    2009-2010 Regular Session                    |
          |                                                                 |
          BILL NO: SB 808                    HEARING DATE: January 12,  
          AUTHOR:Wolk                        URGENCY: Yes  
          VERSION: January 4, 2010           CONSULTANT: Katharine Moore  
          DUAL REFERRAL: No                  FISCAL: Yes  
          SUBJECT: Delta levee maintenance  
          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.



          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.

          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."

          None received

           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  

          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  


          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.     

               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.

          None Received

          None Received