BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
SB 461 (Leno) - State tide and submerged lands: mineral
extraction leases: revenues.
Amended: April 30, 2013 Policy Vote: NR&W 7-2
Urgency: No Mandate: No
Hearing Date: May 23, 2013 Consultant: Marie Liu
SUSPENSE FILE. AS PROPOSED TO BE AMENDED.
Bill Summary: SB 491 would establish the Coastal Adaptation Fund
(fund) which would be used to fund activities by specified state
agencies that address sea level rise and coastal climate change.
This bill would require an unspecified amount to be appropriated
to the fund in the annual budget act.
Fiscal Impact (as approved on May 23, 2013):
Up to $10 million from the General Fund for activities by
state agencies to address and adapt to sea level rise and
coastal climate change.
Minor and absorbable costs to the Natural Resources Agency
from the General Fund for reporting costs.
Background: State tidelands in Long Beach are leased for oil
extraction activities. Lease revenues are shared between the
state and City of Long Beach, who manages these lands on behalf
of the state. Section 6217.8 of the Public Resources Code
specifies that $2 million or 50% of the state's lease revenue be
deposited into the Oil Trust Fund monthly with the remainder
going to the General Fund. Monies in the Oil Trust Fund may only
be expended to fund costs associated with the removal of oil and
gas facilities from the Long Beach tidelands that are not the
responsibility of other parties. The monthly deposits are
required to continue until the Oil Trust Fund has a balance of
$300 million, at which time all revenues will be transferred to
the General Fund. The Oil Trust Fund is expected to reach its
cap in the near future, depending on oil prices.
From 1997 to 2006, lease revenues received by the state from oil
extraction activities on state tidelands in excess of the
required transfers to the Oil Trust Fund were largely dedicated
to coastal and natural resource protections that benefited the
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state. Revenues provided funding for programs including the
Housing Trust Fund, the Resources Trust Fund for Salmon and
Steelhead Trout Restoration, marine life and marine reserve
management, state parks deferred maintenance, land acquisition
for natural community conservation plans, and environmental
review and monitoring. The 2006-07 budget redirected all
tidelands revenue in excess of that that goes to the Oil Trust
Fund to the General Fund.
In December 2009, the Resources Agency released the California
Climate Adaptation Strategy, pursuant to Executive Order
S-13-2008 which directed the Resources Agency to identify how
state agencies can respond to rising temperatures, changing
precipitation patterns, sea level rise, and extreme natural
events. The report noted that climate change is already
affecting California with increased average temperatures, more
extreme hot days, fewer cold nights, shifts in the water cycle,
and the lengthening of the growing season. The report stated
that not addressing these changes could cause significant
economic damages to the state in the trillions of dollars; thus,
the state must address climate change challenges with both
climate adaptation and mitigation. The Natural Resources Agency
is currently updating this strategy and anticipates releasing
the update this year.
Proposed Law: This bill would establish the Coastal Adaptation
Fund and would authorize annual expenditures of up to $15
million by the Ocean Protection Council, the Department of Fish
and Wildlife, the California Coastal Commission, the State Lands
Commission, the State coastal Conservancy, and the San Francisco
Bay Conservation and Development Commission to fund activities
that prepare, plan, and implement measures designed to address
and adapt to sea level rise and coastal climate change. Funded
activities would be required to be in accordance with the
Natural Resources Agency's California Climate Adaptation
Strategy. The Natural Resources Agency would be required to make
available on its website annually, all activities funded with
the fund.
This bill would require an unspecified amount to be appropriated
to the fund in the annual budget act.
Staff Comments: This bill requires the Natural Resources Agency
to post on its website information regarding activities funded
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pursuant to this section. This reporting activity is likely to
cause minor and absorbable costs.
Staff notes that the Senate Budget Sub-committee #2 recently
took an action at its April 25th hearing that would direct up to
$4 million from tidelands oil revenue in FY 2013-14 and FY
2014-15 to the Coastal Commission to update Local Coastal Plans.
Should this action be adopted in the budget, there will be
additional demands on tidelands oil revenue.
Proposed Author Amendments: The author intends on using
tidelands oil revenue to fund the Coastal Adaptation Fund,
although the only reference to these revenues is in the findings
and declaration section of this bill. The author plans on making
amendments to reflect this intent.
The committee amendments would cap the Coastal Adaptation Fund
at $10 million instead of $15 million.