BILL ANALYSIS                                                                                                                                                                                                    Ó




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                          AB 565 (Monning)
          
          Hearing Date: 08/25/2011        Amended: 04/25/2011
          Consultant: Brendan McCarthy    Policy Vote: NR&W 8-1
          _________________________________________________________________
          ____
          BILL SUMMARY: AB 565 authorizes the State Coastal Conservancy to 
          make a grant to a for-profit company in order to facilitate the 
          removal or alteration of the San Clemente Dam on the Carmel 
          River.
          _________________________________________________________________
          ____
                            Fiscal Impact (in thousands)

           Major Provisions         2011-12      2012-13       2013-14     Fund
           
          Grants for dam removal $18,000                          Bond *
                                 $7,000                           Federal
          * Various general obligation bond funds.
          _________________________________________________________________
          ____

          STAFF COMMENTS: SUSPENSE FILE. AS PROPOSED TO BE AMENDED.

          Current law prohibits the State Coastal Conservancy from 
          awarding grants to for-profit companies

          AB 565 authorizes the Conservancy to make a grant to a 
          for-profit company in order to facilitate the removal of the San 
          Clemente Dam on the Carmel River.

          According to the Conservancy, the reservoir behind the dam is 
          almost entirely filled with sediment and provides little water 
          supply benefit to the California American Water Company, its 
          owner. In addition, the dam is seismically unstable and requires 
          a retrofit. The Conservancy and the owner have been in talks to 
          remove the dam, allowing for a restoration of the steelhead 
          trout fishery on the Carmel River. Under the proposed agreement, 
          the owner would pay $49 million towards the removal 
          (approximately the cost to buttress the dam to improve seismic 
          safety) and the Conservancy will take the lead on providing 
          public funds for the remaining $34 million needed to remove the 
          dam. Working with other state agencies, the Conservancy has 








          > (>)
          Page 1


          identified $18 million in bond funds (primarily from Proposition 
          84) and $7 million in federal funds that the Conservancy and 
          other state agencies will contribute. The Conservancy is also 
          working with private and federal partners to secure the 
          remaining funds. 

          The proposed committee amendments limit the use of general 
          obligation bond funds for the project to $18 million.