BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Kevin de León, Chair SB 753 (Steinberg) - Central Valley Flood Protection Board. Amended: April 29, 2013 Policy Vote: NR&W 7-1 Urgency: No Mandate: No Hearing Date: May 6, 2013 Consultant: Marie Liu This bill meets the criteria for referral to the Suspense File. Bill Summary: SB 753 would establish an enforcement process for the Central Valley Flood Protection Board (board), the Department of Water Resources, and local agencies for unauthorized activities and encroachments that interfere with flood control facilities. Fiscal Impact: Likely costs of $75,000 to $150,000 from the General Fund to prepare emergency regulations for the new enforcement procedures. Background: Under the Central Valley Flood Protection Act (act), the Central Valley Flood Protection Board (board) is responsible for protection and oversight of flood facilities located in the Sacramento River and San Joaquin River draining basin. The act requires plans that involve the construction or alteration of any levee, embankment, or canal along or near the banks of the Sacramento or San Joaquin Rivers to be approved by the board before such activity is commenced. The board has the authority to issue an order directing a person to cease and desist from undertaking an activity that may encroach on levees, channels, or other flood control works under the jurisdiction of the board. The cease and desist order may only be issued if the person has failed to respond satisfactorily to a prescribed notice. The board may remove a violation but cannot recover removal costs without court action. Civil penalties between $500 and $30,000 may be imposed by the superior court. Proposed Law: This bill would delete the existing notice and cease and desist order process to address encroachments and would instead establish a three-step enforcement process SB 753 (Steinberg) Page 1 consisting of (1) notice of violation, (2) cease and desist orders, (3) enforcement orders. The board would be authorized under the enforcement order to order the removal and restoration of the encroachment. This bill would also authorize civil or administrative penalties for violations of the act. Civil penalties would be up to $15,000 per day and administrative penalties would be between $500 and $50,000 upon issuance of an enforcement order. All penalties would be deposited in to the Flood Risk Management Fund, created by this bill, and may be appropriated by the Legislature to fund the board's enforcement activities. This bill would allow the board to recover costs from removing and restoring a violation, civil or administrative penalties, and attorney's fees. These costs may be recovered through a lien against the property of the person responsible for the violation. This bill would also amend the act so that any aggrieved person has the right to judicial review of any decision or action of the board by filing a petition for a writ of mandate. Staff Comments: The following is enforcement activity information for the past two year and the current year to date provided by the board: ---------------------------------------------------------- | | 2011 | 2012 | 2013 (to | | | | | date) | |---------------------------+---------+---------+----------| |Encroachments Entered into | 160| 43| 432| |Data Base | | | | |---------------------------+---------+---------+----------| |Fact Finding Letters Sent | 5| 17| 6| |---------------------------+---------+---------+----------| |Notice of Violation Sent | 113| 7| 10| |---------------------------+---------+---------+----------| |Cease & Desist Notice Sent | 0| 1| 1| |---------------------------+---------+---------+----------| |Board Hearing Held | 58| 62| 1| |---------------------------+---------+---------+----------| |Compliance Letters Issued | 1| 2| 4| SB 753 (Steinberg) Page 2 |---------------------------+---------+---------+----------| |Encroachments Closed | 81| 13|21 | ---------------------------------------------------------- According to the board, this bill would create a new enforcement process that would substantially reduce the cost and time required to resolve unpermitted encroachment on state flood control facilities. Specifically, the board notes that this bill would allow local levee districts to assist with the initial notice of violations (which may increase the likelihood of landowner cooperation), allow violations to be removed at the landowner's cost, allow the board to assess administrative penalties, encourage voluntary compliance by giving the board more enforcement powers and penalties, and allow the board to recover attorney's fees should a violation require court action for resolution. While this bill would make enforcement actions less costly, staff does not anticipate any savings because the board hopes to increase enforcement activity in order to increase the enrollment of levees in a federal program (PL 84-99) that provides federal funding for repair work in the event of a flood. Levees with maintenance and encroachment problems are removed from the federal program. The passage of this bill would require the adoption of emergency regulations to implement the new enforcement process. As much of the process is outlined in the bill and the board is currently undergoing a regulation update, staff believes the regulations should be relatively uncomplicated and estimates that the cost of developing regulations is likely between $75,000 and $150,000. The penalties assessed for violations of this bill would be placed in the Flood Risk Management Fund in the State Treasury. Upon appropriation by the Legislature, moneys in the fund would be available to the board to carry out enforcement actions. Staff notes that allowing program implementation to be paid for by fines and penalties can be a perverse incentive, or create the illusion of a perverse incentive, for the board to be overly aggressive in enforcing these provisions. However, requiring the Legislature to appropriate these monies does create some separation between penalty revenues and enforcement program funding. SB 753 (Steinberg) Page 3