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.