BILL ANALYSIS                                                                                                                                                                                                    


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                                 THIRD READING

          Bill No:  SB 808
          Author:   Wolk (D), et al
          Amended:  1/25/10
          Vote:     27 - Urgency

           SENATE NATURAL RES. & WATER COMMITTEE  :  9-0, 1/12/10
          AYES:  Pavley, Cogdill, Hollingsworth, Huff, Kehoe, Leno,  
            Padilla, Simitian, Wolk

           SENATE APPROPRIATIONS COMMITTEE  :  9-0, 1/21/10
          AYES:  Kehoe, Cox, Corbett, Denham, Leno, Liu, Price,  
            Walters, Yee

           SUBJECT  :    Delta levee maintenance

           SOURCE  :     Author

           DIGEST  :    This bill extends the sunset on the current  
          Delta levee maintenance subvention programs 75 percent-25  
          percent reimbursement rate from July 1, 2010 to July 1,  

           ANALYSIS  :    

           Existing law
          1. Establishes a delta levee maintenance program pursuant  
             to which a local agency may request reimbursement for  
             costs incurred in connection with the maintenance or  
             improvement of project or nonproject levees in the  


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             Sacramento-San Joaquin Delta.

          2. Declares legislative intent to reimburse eligible local  
             agencies under this program, until July 1, 2010, in an  
             amount not to exceed 75 percent of those costs that are  
             incurred in excess of $1,000 per mile of levee, and on  
             and after that date, in an amount not to exceed 50  
             percent of those described costs.

          3. Authorizes, until July 1, 2001, the Central Valley Flood  
             Protection Baord to provide funds to an eligible local  
             agency under this program in the form of an advance in  
             an amount that does not exceed 75 percent of the  
             estimated state shares.

          This bill extends the sunset on the current Delta levee  
          maintenance subvention program's 75 percent, 25 percent  
          reimbursement rate from July 1, 2010 to July 1, 2013, and  
          directs the program to reflect specified priorities and be  
          consistent with the Delta plan.

          The Delta levees help maintain 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 (Way), Chapter 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:  (1) zero if the  
          entire cost incurred per mile of levee is $1,000 or less;  
          and (2) up to 75 percent 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.


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          On July 1, 2010 the reimbursement rate will become: (1)  
          zero if the entire cost incurred per mile of levee is  
          $1,000 or less (no change); and (2) 50 percent 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.

           The Delta Plan  - AB 798 (Wolk), Chapter 548, Statutes of  
          2006 provided a four-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), Chapter 573, Statutes of 2005.

          AB 1200 required the Department of Water Resources (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), Chapter 5, Statutes of  
          the 7th Extraordinary Session '09 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.  

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  No

          According to the Senate Appropriations Committee analysis:


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                          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

           ARGUMENTS IN SUPPORT  :    According to the author's office,  
          "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."  This bill continues  
          the Delta Levee Subventions program and supports levee  
          maintenance while "the State reassesses the direction it  
          will pursue in protecting the Delta."

          CTW:do  1/25/10   Senate Floor Analyses 


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