BILL ANALYSIS                                                                                                                                                                                                    





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          |                                                                 |
          |         SENATE COMMITTEE ON NATURAL RESOURCES AND WATER         |
          |                   Senator Fran Pavley, Chair                    |
          |                    2013-2014 Regular Session                    |
          |                                                                 |
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          BILL NO: SB 753                    HEARING DATE: April 9, 2013
          AUTHOR: Steinberg                  URGENCY: No
          VERSION: April 1, 2013             CONSULTANT: Dennis O'Connor
          DUAL REFERRAL: No                  FISCAL: Yes
          SUBJECT: Central Valley Flood Protection Board: encroachments.
          
          BACKGROUND AND EXISTING LAW

          Under the Central Valley Flood Protection Act (Act), the Central  
          Valley Flood Protection Board (board) is responsible for  
          protection and oversight of facilities of the state plan of  
          flood control.  These are the levees, weirs, channels, and other  
          features of the federally and state-authorized flood control  
          facilities located in the Sacramento River and San Joaquin River  
          drainage basin for which the board or the Department of Water  
          Resources (DWR) has given the assurances of nonfederal  
          cooperation to the United States required for the project.   
          These are sometimes referred to as "project" levees or flood  
          facilities.

          The Act requires plans that involve the construction,  
          enlargement, or alteration of any levee, embankment, canal, or  
          other excavation in the bed of or along or near the banks of the  
          Sacramento or San Joaquin Rivers or any of their tributaries or  
          specified lands to be approved by the board before such activity  
          is commenced.

          The Act grants the board authority to issue an order directing a  
          person or public agency to cease and desist from undertaking, or  
          threatening to undertake, an activity that may encroach on  
          levees, channels, or other flood control works under the  
          jurisdiction of the board. The Act requires the cease and desist  
          order to be issued only if the person or public agency has  
          failed to respond in a satisfactory manner to a prescribed  
          notice provided, as specified. Cease and desist orders are  
          effective upon its issuance and copies are required to be served  
          immediately by certified mail upon the person or agency subject  
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          to the order.

          In 2003, the Court of Appeals held in  Paterno v. State of  
          California  that the state could be held liable, under a theory  
          of inverse condemnation, for property damages caused by the  
          failure of a state project levee.  Although the state played no  
          role in the design or construction of the failed levee, the  
           Paterno  court held that "[w]hen a public entity operates a flood  
          control system built by someone else, it accepts liability as if  
          had planned and built the system itself."  

          PROPOSED LAW
          This bill would delete the existing provisions governing  
          "Encroachments on Flood Control Works" and would establish a new  
          article titled "Enforcement of Unauthorized Activities and  
          Encroachments."

          The new article establishes a three step process of addressing  
          unauthorized activities and encroachments, as follows.

          1.Notices of violation
                 Authorizes the board, executive officer of the board, or  
               DWR to issue a notice of violation if the board, executive  
               officer, or DWR determines that there is an improper  
               encroachment, improvement, or other violation of the Act.
                 Authorizes, but does not require, the board to delegate  
               to a local agency that operates and maintains facilities  
               within the board's jurisdiction the authority to issue a  
               notice of violation.  Does not require the local agency to  
               accept the delegation of authority.
                 Requires the notice of violation to include information  
               regarding the nature of the violation, the corrective  
               actions that must be taken, consequences for failing to  
               act, and who to contract for further information.
                 Requires the notice of violation be served as described  
               below, requires a copy to be transmitted to the executive  
               officer within five business days of its issuance and  
               authorizes the board or the executive officer to amend the  
               notice of violation.

          1.Cease and desist orders
                 Authorizes the board or executive officer to issue a  
               cease and desist order if the board or executive officer  
               determines that any person or public agency has failed to  
               adequately respond to a notice of violation.
                 Requires the cease and desist order to include a copy of  
               the notice of violation, a requirement that the corrective  
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               actions described in the notice of violation be completed  
               within a specified time period, and that failure to comply  
               will subject the violator to an enforcement order.
                 Establishes that cease and desist orders are effective  
               upon issuance and requires them to be served immediately as  
               described below.
                 Requires cease and desist orders to allow the person or  
               agency subject to the order to request a hearing before the  
               board within 30 days of being served with the order, and  
               proscribes the process for conducting hearings.  At the  
               conclusion of the hearing, the board may affirm, amend, or  
               rescind the cease and desist order.
                 If a person or public agency subject to a cease and  
               desist order fails to comply with the order and does not  
               request a hearing, the cease and desist order shall be  
               recorded with the appropriate county recorder's office by  
               the board against the person or public agency's property  
               associated with the order.

          1.Enforcement orders
                 Authorizes the board to issue an enforcement order if  
               the board determines that any person or public agency has  
               failed to correct a violation as required in a cease and  
               desist order.
                 Authorizes the enforcement order to do the following:
               o      Order the removal and restoration of the  
                 encroachment, improvement, or activity causing the  
                 violation, the costs of which shall be collected from the  
                 responsible party.
               o      Assess and require the payment of administrative  
                 penalties described below.
               o      Order the initiation of a civil action by the board  
                 in the name of the state for mandamus, injunction, or  
                 other appropriate remedy authorized by law.
               o      Order any other actions or conditions the board may  
                 determine are necessary to avoid a potential adverse  
                 impact to public safety or to ensure compliance with the  
                 law.
                 Requires the enforcement order to be served immediately  
               as described below.
                 Authorizes a person or public agency against which the  
               board has issued an enforcement order to seek judicial  
               review of the enforcement. The enforcement order shall be  
               deemed effective upon issuance, but no removal actions may  
               be taken by the board until after the time for judicial  
               review has passed.
                 These provisions do not authorize the issuance of an  
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               enforcement order against a local public agency undertaking  
               any lawful activity pursuant to a declaration of emergency  
               by the governing body of the local public agency or the  
               board of supervisors of the county in which the activity is  
               being or may be undertaken.

          The new article establishes penalties for violations of the  
          Central Valley Flood Protection Act, as follows:
           Civil penalties of up to $15,000 per day for each day in which  
            the violation occurs or persists for an activity, improvement,  
            or encroachment that is in violation of the Central Valley  
            Flood Protection Act or that is inconsistent with any permit  
            or cease and desist order previously issued by the board or  
            executive officer. 
           Administrative penalties of not less than $500 or more than  
            $50,000 upon issuance of an enforcement order.
           The amount of the penalties are to be determined based on  
            factors such as the extent, and gravity of the violation,  
            whether the violation was committed intentionally or  
            knowingly, and whether the violation is susceptible to  
            restoration or other remedial measures.
           After the time for judicial review has passed, the board may  
            apply to the clerk of the appropriate court in the county in  
            which the administrative penalties were imposed for a judgment  
            to collect the penalties assessed. The judgment so entered has  
            the same force and effect, and is subject to all the  
            provisions of law relating to, a judgment in a civil action  
            and may be enforced in the same manner as any other judgment  
            of the court in which it is entered.
           After the time for judicial review has passed, the board may  
            also recover assessed penalties through a lien against the  
            property of the person or agency responsible for the  
            violation.

          The new article establishes notification provisions.  Notice and  
          service required by this article are required to be provided to  
          the person or public agency believed to be responsible for the  
          violation and the owner of the property on which the violation  
          occurred or is threatened to occur by one of the following  
          means:
           Hand delivery.
           Certified mail.
           If the person or agency cannot be reached or reasonably  
            notified via the first two methods, notice may be made by  
            placing a copy of the notice or order on the encroachment or  
            property.

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          The new article also makes a number of conforming and other  
          technical changes.

          In addition to the new article, the bill adds the following  
          provisions to the Central Valley Flood Protection Act:

           Establishes the right of any aggrieved person to judicial  
            review of any decision or action of the board, or the  
            executive officer acting pursuant to delegated authority, by  
            filing a petition for a writ of mandate in accordance with  
            Section 1094.5 of the Code of Civil Procedure, within 60 days  
            after the decision or action has become final.

           Establishes a process for obtaining an encroachment permit  
            from the board.  Requires the board, as a condition of  
            obtaining the permit, to collect either a reasonable fee or  
            the actual, reasonable costs of the board and the DWR to  
            review and process the application. Prohibits the placement of  
            an encroachment on lands or facilities under the jurisdiction  
            of the board without obtaining an encroachment permit from the  
            board.

           Establishes a process for obtaining flood facility improvement  
            permit from the board.  Requires the board, as a condition of  
            obtaining the permit, to collect either a reasonable fee or  
            the actual, reasonable costs of the board and the DWR to  
            review and process the application. Prohibits the construction  
            of any flood facility or flood facility improvement on lands  
            or facilities under the jurisdiction of the board without  
            obtaining a flood facility improvement permit from the board.

           Requires the board, before establishing the fees for  
            encroachment or flood facility improvement permits, to conduct  
            a study to consider whether, and for what services, filing  
            fees should be charged by the board. The board would be  
            required to provide the results of the study to the relevant  
            Senate and Assembly policy and fiscal committees.  In  
            conducting the study, the board is to consider the following:
                 The actual cost to the board of processing an  
               application.
                 Whether charging the actual cost would encourage  
               applicants to bypass the filing system and instead install  
               illegal encroachments.
                 Whether the work to be performed is an improvement to  
               the State Plan of Flood Control and inures to the benefit  
               of the state.
                 Whether different filing fees might be appropriate for  
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               different classes of applications.

           Requires any moneys collected from the filing be deposited in  
            the newly created Central Valley Flood Protection Board Permit  
            Fund. Moneys in the fund shall be available upon appropriation  
            by the Legislature for review and processing applications for  
            encroachment and flood facility improvement permits.

          ARGUMENTS IN SUPPORT
          According to the author, "Current law for addressing illegal  
          levee encroachments is simply unworkable.  The Flood Board can't  
          do anything without formally notifying the party responsible for  
          the encroachment, and if we can't identify and find the  
          responsible party, we're done.  If we do manage to find and  
          notify the responsible party, the Flood Board's only recourse is  
          to ask the Attorney General to sue them."

          "In the meantime, our levees remain compromised, threating  
          public safety.  In addition to the potential loss of life and  
          property, there is the potential for state liability under  
           Paterno  should a compromised levee fail.  Also, there is the  
          potential for us to become ineligible for federal flood funds if  
          the enforcement programs aren't fixed.  And finally, there is  
          the challenge of trying to get a Provisionally Accredited Levee  
          (PAL) when you have enforcement problems. Without a PAL, there's  
          the real possibility of increased FEMA rates.  None of this is  
          good."

          "SB 753 fixes all these problems.  It provides reasonable  
          notification provisions, including what to do if the responsible  
          party can't be identified or reached.  It provides for a clear  
          abatement process of notice of violation, cease and desist, and  
          finally enforcement orders, similar to what is done for building  
          code violations.  It eliminates awkward and obsolete provisions  
          and replaces with clear and direct language.  And finally, it  
          provides for fees sufficient to cover the flood board's costs  
          associated with permitting new encroachments and flood  
          facilities to ensure the flood board has sufficient resources to  
          properly evaluate such discretionary actions."
          
          ARGUMENTS IN OPPOSITION: None received

          
          COMMENTS 
           Article governing encroachments needs updating  .  In addition to  
          providing new, clearer, and more direct authorities to the board  
          to address encroachments, this bill reorganizes existing  
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          provisions of the code.  As important, it eliminates archaic and  
          arcane provisions of the code; provisions governing such issues  
          as maintenance of draws on bypass and overflow channels, opening  
          of draws, and fences designed to give way during high water  
          events.  Such provisions are never used and their presence  
          obscures the other important provisions of the law.

          Fees to recover the cost of processing permits.   This bill  
          provides the board fee authority for two types of permits,  
          encroachment permits and flood facility improvement permits.  

          Encroachment permits are for those who want to place things on,  
          under, or through flood facilities for non-flood related  
          purposes.  Encroachments include everything from home owners  
          wanting to put a fence on a levee to drinking water intake or  
          wastewater discharge facilities.  Flood facility improvement  
          permits are for projects intending to reduce flood risk.   
          Typical projects include widening levees, installing slurry  
          walls in levees to prevent underseepage, etc.

          While the motives behind the two types of permits might be  
          different, the question before the board is the same: "Does the  
          proposed action in any way diminish the integrity of the  
          existing management flood system, either in whole or in part?"  

          The issues associated with evaluating an encroachment permit are  
          unusually fairly straight forward - does the proposed  
          encroachment reduce the performance of the flood facility,  
          increase the necessary level of maintenance, impair the ability  
          to monitor performance of the facility during a flood event, or  
          respond to any sort of potential failure during a flood fight.

          The issues associated with evaluating a flood facility  
          improvement permit are often much more complex.  Not only must  
          the board and DWR determine whether the project would in fact  
          reduce flood risk for the project proponent, but the board and  
          DWR must also evaluate whether or not the proposed flood  
          facility improvement would increase flood risks to anyone beyond  
          the project boundaries.  Failing to do so could increase the  
          state's liability under the  Paterno  decision.  For example, some  
          projects would change the capacity or flow of the system.  This  
          can increase flood risks upstream or downstream of the project.   
          So while the intent of the flood improvement is to reduce flood  
          risk for the applicant, it is the job of the board to ensure  
          that it not only reduces flood risk for the applicant, but also  
          does not increase flood risk to anyone else.  

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          Under current law, the costs for evaluating both these types of  
          permit applications are funded by the general fund.  One could  
          argue that everyone in California is subsidizing the costs to  
          evaluate discretionary actions of others.  It is similar  
          constructing an addition on a house and not paying anything for  
          a building permit; or a developer proposing a new subdivision  
          and not having to pay to ensure that the new development doesn't  
          impair the city's sewer system.  By providing the board fee  
          authority for these two types of permits, this bill treats  
          applicants for these permits the same way local governments  
          treat applicants for permits that require local review and  
          approval.

           Not a blank check.   The bill directs the board to develop  
          "reasonable filing fee prescribed by the board pursuant to  
          regulation that covers but does not exceed the costs of the  
          board and the department to review and process the application  
          for the type of ? permit."  Some might be concerned that this  
          gives the board carte blanche for determining fees.  It does  
          not.  The fees must cover but not exceed the cost of review and  
          processing permits.  It could be that permits for different  
          types of encroachments or flood improvements may take different  
          levels of review, and so single fee may not be appropriate.  If  
          that is the case, as the bill moves forward, the author might  
          consider amendments authorizing the board to establish a  
          schedule of fees for permits covering different types of  
          encroachments or flood improvements as well as some guidance as  
          to criteria the board should consider when establishing such a  
          schedule.  
           
           Study provisions are needless.   The bill already directs the  
          board to develop "reasonable filing fee prescribed by the board  
          pursuant to regulation that covers but does not exceed the costs  
          of the board and the department to review and process the  
          application for the type of ? permit."  What else is there to  
          study?  The regulatory process provides ample opportunity for  
          interested or affected persons to opine on whether the fees are  
          in fact reasonable.  As the bill already states that there will  
          be a reasonable filing fee, the board should simply go through  
          the regulatory process of developing the fees.  (See Amendment  
          1)  
           
           Regulations will need updating.   The board is going to have to  
          update a number of regulations governing notice of violations,  
          cease and desist orders, etc. and adopt new regulations  
          regarding fees.  The administrative law process for adopting  
          such regulations can a significant amount of time.  In the  
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          meantime, the board wouldn't be able to use the new authorities.  
           It might be desirable to give the board the authority to  
          promulgate new and update existing regulations as "emergency  
          regulations."  This way, the draft regulations would be in  
          effect when they start the Office of Administrative Law approval  
          process, not at the end.  (See Amendments 2 & 3)

          SUGGESTED AMENDMENTS 

               AMENDMENT 1:  On page 13, delete lines 24 through 40; on  
               page 14, delete lines 1 through 5; on page 14, line 6,  
               delete "(b)" and insert "8710.4 (a)"
               
               AMENDMENT 2:  On page 14, between lines 11 and 12, insert:
                    (b) The board shall adopt emergency regulations  
               necessary to implement Sections 8710.2 and 8710.3 in  
               accordance with Chapter 3.5 (commencing with Section 11340)  
               of Part 1 of Division 3 of Title 2 of the Government Code.  
               The adoption of emergency regulations shall be deemed to be  
               an emergency and necessary for the immediate preservation  
               of the public peace, health, and safety, or general  
               welfare.
               
               AMENDMENT 3:  On page 12, between lines 14 and 15, insert:
                    8709.  The board shall adopt emergency regulations  
               necessary to implement this Article in accordance with  
               Chapter 3.5 (commencing with Section 11340) of Part 1 of  
               Division 3 of Title 2 of the Government Code. The adoption  
               of emergency regulations shall be deemed to be an emergency  
               and necessary for the immediate preservation of the public  
               peace, health, and safety, or general welfare.
               
          SUPPORT: None Received

          OPPOSITION: None Received












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