BILL ANALYSIS Senate Appropriations Committee Fiscal Summary Senator Christine Kehoe, Chair 808 (Wolk) Hearing Date: 01/21/2010 Amended: 01/15/2010 Consultant: Brendan McCarthy Policy Vote: NR&W 9-0 _________________________________________________________________ ____ BILL SUMMARY: SB 808, an urgency measure, extends the current maximum state contribution of 75 percent for levee maintenance projects in the Delta until 2016. _________________________________________________________________ ____ Fiscal Impact (in thousands) Major Provisions 2010-11 2011-12 2012-13 Fund Bond fund availability Cost pressures in the millions Bonds * * Propositions 1E and 84. _________________________________________________________________ ____ STAFF COMMENTS: Suspense File. The state provides subvention funding to local agencies for levee maintenance or improvement projects in the Sacramento-San Joaquin River Delta. Under current law, the Department of Water Resources may provide reimbursements for up to 75 percent of projects costs in excess of $1,000 per levee mile. On July 1, 2010 the maximum reimbursement rate will drop to 50 percent of a project's cost. Current law also caps General Fund contributions to this program at $2 million per year. In recent years, the state has funded this subvention program using general obligation bond funds (rather than the General Fund). Over the last decade, the state has provided between $5 million and $15 million per year in subvention funding in the Delta. SB 808, an urgency measure, will extend the current 75 percent maximum state contribution until July 1, 2016. Because the bill will increase the maximum state cost share for maintenance projects, it will put pressure on existing bond funds, which can be used for a variety of flood control projects, including Delta subventions. The total cost pressures are unknown, because the number and size of future funding requests from local districts are unknown. Staff notes that the Department of Water Resources is currently undertaking a Delta Risk Management Strategy, which aims to determine the risks associated with potential levee failures in the Delta. Phase I of the Delta Risk Management Strategy was completed in January 2008 and Phase II of the report is projected to be completed by February 2011. Also, SB x7 1 (Simitian) requires the development of a Delta Plan, which is intended to provide comprehensive planning for the Delta, including ecosystem restoration, water supply reliability, and infrastructure protection. The Delta Plan is due in January 2012.