BILL ANALYSIS Ó SB 200 Page 1 Date of Hearing: June 12, 2012 ASSEMBLY COMMITTEE ON WATER, PARKS AND WILDLIFE Jared Huffman, Chair SB 200 (Wolk) - As Amended: June 4, 2012 SENATE VOTE : 38-0 SUBJECT : Delta levee maintenance: cost reimbursement SUMMARY : Extends, until July 1, 2018, the authority of the California Department of Water Resources (DWR) to reimburse up to 75% of the costs in excess of $1,000 per mile that are incurred in any year for Delta levee maintenance. Requires that reimbursements be consistent with the long-term management plan for the Sacramento-San Joaquin Delta (Delta Plan) adopted and implemented by the Delta Stewardship Council (DSC). EXISTING LAW authorizes DWR, until July 1, 2013, to reimburse up to 75% of the annual Delta levee maintenance costs over $1,000 per mile. After July 1, 2013, the rate reverts to a 50% maximum reimbursement percentage and the maximum total reimbursement from the General Fund is capped at $2 million annually. FISCAL EFFECT : The Senate Appropriations Committee staff analysis states that an increase in the maximum state cost share for maintenance projects 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. COMMENTS : In 2005, the Legislature required DWR to conduct a study of the potential impacts of subsidence, earthquakes, floods, and climate change on the Delta and evaluate options for addressing those impacts. That study, known as the Delta Risk Management Study (DRMS), was to be completed by January 1, 2008. In 2006, the Legislature passed and the Governor signed AB 798 (Wolk). That bill included a provision extending the 75 % Delta subvention reimbursement rate to July 2010. Part of the justification was that changing the rate was premature, given that DWR had not completed the DRMS. SB 200 Page 2 In 2009, the Legislature passed and the Governor signed Senate Bill 1 (Simitian) Chapter 5, Statutes of the 2009-10 Seventh Extraordinary Session. SB 1 X7 codified the coequal goals for the Delta of providing a more reliable water supply for California and protecting, restoring, and enhancing the Delta ecosystem. It also required the coequal goals be achieved in a way that protects and enhances the cultural, recreational, natural resource and agricultural values of the Delta as a place. In addition, SB 1 X7 created the DSC and mandated it adopt and implement by January 1, 2012, a Delta Plan that meets the coequal goals. Among its many requirements for inclusion in the Delta Plan, SB 1 X7 set stated that the DSC, in consultation with the Central Valley Flood Protection Board (CVFPB), recommend "priorities for state investments in levee operation, maintenance, and improvements in the Delta, including both levees that are a part of the State Plan of Flood Control and nonproject levees." In 2010, the Legislature passed and the Governor signed SB 808 (Wolk), Chapter 23, which, among other provisions, extended the 75% Delta subvention rate to July 2013. Part of the justification was that changing the rate was premature, given that the Council had not had sufficient time to complete the Delta Plan. On May 14, 2012, the DSC staff released the sixth and final staff draft of the Delta Plan (Final Draft). The Final Draft contains both enforceable "policies" and unenforceable "recommendations." Chapter 7 of the Final Draft, entitled Reduce Risk to People, Property, and State Interest in the Delta, includes an enforceable policy that the DSC, in consultation with DWR, the CVFPB, and the California Water Commission, "shall develop priorities for State investments in Delta levees by January 1, 2015" and that upon "completion these priorities shall be considered for incorporation in the Delta Plan." This bill requires that future reimbursements will be made consistent with the Delta Plan, once it is adopted. Supporting arguments : The author points out that the statutory provision increasing the maximum cost share from 50% to 75% is due to expire on July 1, 2013 and that "because of the dire financial conditions of most local Delta levee agencies, and the important tie to California's drinking water supply and other infrastructure, the 75% State cost-share is necessary to continue protecting Delta levees." Supporters also state that SB 200 Page 3 this bill "will help ensure that local reclamation districts, particularly the smaller ones, can continue to maintain their levees within the Sacramento-San Joaquin Delta region - an area of statewide significance not only for water but agriculture, energy, transportation and economic interests. Providing the necessary flood protection will help ensure the sustainability of this critical region to the state." There is no opposition to this bill. REGISTERED SUPPORT / OPPOSITION : Support Association of California Water Agencies California Chamber of Commerce California Special Districts Association California State Association of Counties Central Valley Flood Control Association Delta Counties Coalition East Bay Municipal Utility District Planning and Conservation League Regional Council of Rural Counties Solano County Water Agency Opposition None on file Analysis Prepared by : Tina Cannon Leahy / W., P. & W. / (916) 319-2096