BILL ANALYSIS                                                                                                                                                                                                    

                                                                  SB 808
                                                                  Page  1

          Date of Hearing:   May 19, 2010

                                Felipe Fuentes, Chair

                    SB 808 (Wolk) - As Amended:  January 25, 2010 

          Policy Committee:                              Water, Parks and  
          Wildlife     Vote:                            11-0

          Urgency:     Yes                  State Mandated Local Program:  
          No     Reimbursable:              No


          This bill extends the inoperative date of the Delta levee  
          maintenance subvention program, from July 1, 2010 to July 1,  
          2013, and makes program reimbursements consistent with the Delta  

           FISCAL EFFECT  

          Cost pressures of an unknown amount, potentially in the hundreds  
          of thousands of dollars annually, to fund local levee  
          maintenance projects.  This is because the bill maintains the  
          current cost-share ratio for local levee maintenance-75% state  
          funds to 25% local funds.  Absent this bill, the program  
          converts to a lower 50-50 cost-share ratio for local levee  
          maintenance.  (Most likely bond funds, though subvention  
          payments could come from the GF.)

          The Department of Water (DWR) Resources reports that, last year,  
          local agencies did not claim all available state funds (bond  
          funds) for levee maintenance projects because they could not  
          meet the 25% match.  DWR concludes that, should the program  
          convert to a 50-50 cost-share ratio, locals would be even less  
          able undertake levee maintenance projects.  As a result, DWR  
          surmises, the state will spend money to address emerging or  
          acute levee failures, spending which might exceed what the state  
          would have spent subvening local levee maintenance.


           1)Rationale  .  The author contends the Delta levee system serves  
            both local and state interests, including water conveyance.   


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            The author argues the Delta levee maintenance subvention  
            program's 75-25 cost-sharing formula has helped local  
            reclamation districts to maintain and improve their levees,  
            thereby protecting the system.  If the formula returns to a  
            50-50 split, the author fears, many small districts with  
            limited economic resources would not be able to afford to  
            maintain the Delta levees adequately.

           2)Background  .  

              a)   Delta Levee Maintenance Subvention Program.   The system  
               of public and private levees protects Delta land, life and  
               livelihood.  In addition to these local benefits, the  
               levees allow water conveyance as part of the State Water  
               Project and the federal Central Valley Project, both of  
               which provide water for drinking and agriculture in much of  
               the state.

               The Delta levee maintenance subvention program was created  
               1973.  The program recognizes the combined local and  
               statewide benefits provided by the levees.  For this  
               reason, the program reimburses local agencies for the costs  
               to maintain or improve the levees.  Until June 30, 2010,  
               the reimbursement rate is:

               i)      Zero if the entire cost incurred per mile of levee  
                 is $1,000 or less.

               ii)          Up to 75% of any costs incurred in excess of  
                 $1,000 per mile of levee, based upon an assessment of the  
                 agency's ability to pay.

               Absent this bill, the reimbursement rate will convert as  
               follows, effective July 1, 2010:

               i)           Zero if the entire cost incurred per mile of  
                 levee is $1,000 or less (no change).

               ii)          50% of any costs incurred in excess of $1,000  
                 per mile of levee.

               In recent years, the state has made available to the  
               subvention program between $18 and $26 million in bond  
               funds.  In each of these years, locals failed to avail  
               themselves of millions of these state subvention dollars,  


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               presumably because they could not raise the money to meet  
               their 25% cost share.

               Current law caps General Fund contributions to this program  
               at $2 million per year, a cap which remains unchanged by  
               this bill. The GF has not been used for this purpose in  
               recent years.

              b)   Delta Plan  .  Last year, the Legislature passed  SB7X 1,  
               Simitian (Chapter 5, Statutes of 2009) to create the Delta  
               Stewardship Council.  The legislation requires the council  
               to develop a Delta Plan, which is to include priorities for  
               levee investments within the Delta.  The Delta Plan is to  
               be completed by January 1, 2012, and submitted to the  
               Legislature for review.  This bill extends the Delta levee  
               maintenance subvention program only until January 2013,  
               which should prevent the program from interfering or  
               conflicting with Delta priorities identified in the Delta  

           3)Supporters  include the Association of California Water  
            Agencies (ACWA) and several other agencies and entities  
            interested in levee maintenance and improvements.

           4)There is no registered opposition to this bill.  

           Analysis Prepared by  :    Jay Dickenson / APPR. / (916) 319-2081