BILL ANALYSIS Ó AB 367 Page 1 Date of Hearing: April 14, 2015 ASSEMBLY COMMITTEE ON WATER, PARKS, AND WILDLIFE Marc Levine, Chair AB 367 (Dodd) - As Introduced February 17, 2015 SUBJECT: Clear Lake SUMMARY: Appropriates $2.4 million from the Fish and Game Preservation Fund (FGPF) to Lake County for projects related to Clear Lake. Specifically, this bill: 1)States legislative findings and declarations regarding Clear Lake, its natural resource values which include fish, birds, and other wildlife, and problems at the lake such as toxic algal blooms, mercury pollution, and the listing of Clear Lake as an impaired water body. 2)States legislative intent to assist Lake County in restoring Clear Lake to protect fish and wildlife and preserve recreational and economic opportunities. 3)Appropriates $2.4 million from the FGPF to Lake County for the purposes of restoring Clear Lake wetlands, maintaining Clear Lake water quality, and preventing and controlling the spread of invasive species in or to Clear Lake. AB 367 Page 2 EXISTING LAW: 1)Establishes the FGPF, a state special fund, to support the work of the Department of Fish and Wildlife (DFW) in administering and enforcing the Fish and Game Code. Revenue sources to the FGPF include fishing and hunting license, tag, permit, and stamp fees, fines and penalties, and other miscellaneous revenues, including state property rental and investment income. The FGPF includes both non-dedicated and dedicated accounts. Dedicated accounts may be used only for the specific purposes for which the accounts were created. FGPF expenditures are subject to appropriation by the Legislature. 2)Requires, unless otherwise provided, all money collected under the Fish and Game Code and any other law relating to the protection and preservation of birds, mammals, fish, reptiles, or amphibia to be paid into the State Treasury to the credit of the FGPF. 3)States legislative intent that nongame fish and wildlife programs and free fishing licenses shall not be funded from the FGPF, and that sport hunting and sport fishing programs are to be funded from license revenues, federal reimbursements, federal funds, and other funds appropriated by the Legislature for this purpose. Provides that programs which benefit commercial fishing programs are to be funded solely from revenue generated from commercial uses. FISCAL EFFECT: Appropriates $2.4 million from the FGPF. COMMENTS: AB 367 Page 3 1)Purpose: The author has introduced this bill to provide state funding to Lake County to restore Clear Lake wetlands, maintain water quality in Clear Lake, and prevent the spread of invasive species. The author notes that in 1973 the State of California conveyed the submerged lands in Clear Lake in trust to Lake County in furtherance of navigation, commerce and fisheries, and to provide for government management of the lake. The state reserved certain rights including the right to use without charge any transportation, landing, or betterments on the lake, and mineral rights, including geothermal resources. The legislation granting title of the bed of Clear Lake to Lake County included language requiring that the lake be used for purposes for which there is a general statewide interest, including, among other things, protection of wildlife habitats and fish resources, public access and recreation, and prevention of pollution of the lake. The author asserts that given these state interests, the state has an obligation to help the county maintain the lake and eradicate its problems so that the state's general interest in the lake is sustained. Clear Lake is the largest naturally created freshwater surface lake located entirely in California, with 68 miles of surface area. (Lake Tahoe is larger, but is located partially in Nevada. The Salton Sea is also larger but was created by a man-caused faulty levee break and today is saltier than the ocean.) Clear lake supports large populations of sport fish, including bass, crappie, bluegill carp, and catfish. The lake also provides habitat for numerous bird and mammal species, including ducks, pelicans, grebes, egrets, osprey, and bald eagles. Deer, bear, mountain lion, and bobcat are among the mammal species found in the basin. The native Clear Lake Hitch fish is endemic to the Clear Lake watershed and is classified as a species of special concern. The author also indicates that Clear Lake is a source of drinking water for disadvantaged communities. AB 367 Page 4 The author notes that Clear Lake is beset by numerous problems that threaten fish and wildlife, reduce the quality of drinking water sourced from the lake, and diminish lake recreational opportunities important to the county's local economy. The problems include, but are not limited to, excess phosphorus which contributes to impairment of water quality, toxic algal blooms, invasive species, and contamination by heavy metals such as mercury. The author also notes that Clear Lake has lost 79% of its historic wetlands, which contributes to toxic algal blooms and nutrient loads, resulting in the State Water Resources Control Board (Water Board) listing Clear Lake as impaired. The Water Board has issued Total Maximum Daily Loads (TMDLs) for Clear Lake for both mercury and nutrients. The author further notes that as a rural county, Lake County lacks the resources to effectively address all of the problems at Clear Lake on its own. Since Clear Lake is a valuable state resource, as well as a local resource, the author asserts that appropriation of state funds is needed and appropriate to help Lake County resolve the Lake's problems. 2)Water Management at Clear Lake: Clear Lake is within the Upper Cache Creek Watershed which drains to the Sacramento River. The water storage capacity of the lake is 1.1 to 1.4 million acre feet. The Lake County Board of Supervisors is responsible for land use planning management of the bed of Clear Lake, municipal storm water, implementation of the two Clear Lake TMDLs for mercury and nutrients, recreational planning and maintenance, and oversight of numerous water supply and wastewater districts. The Lake County Watershed Protection District coordinates activities between agencies within Lake County, and has also worked with the Yolo County Flood Control and Water Conservation District to address Clear Lake issues and identify projects of mutual benefit, with a focus on the Cache Creek watershed which includes Clear Lake. AB 367 Page 5 The sole outlet for Clear Lake is Cache Creek. Yolo County acquired riparian rights to Cache Creek's water in 1855. The Cache Creek Dam at Clear Lake was constructed by the Yolo County Water and Power Company in 1914. Today the Yolo County Flood Control and Water Conservation District owns and operates the dam, which is located 5 miles downstream from the creek's outlet at Clear Lake. The dam is operated according to court decrees which regulate how much water can be stored in Clear Lake during non-flood and flood conditions. Yolo County Flood Control and Water Conservation District stores up to 150,000 acre feet of water per year in Clear Lake for agricultural water uses in Yolo County. Yolo County Flood Control and Water Conservation District also owns the hydroelectric plant at the dam which has a hydroelectric generating capacity of 1.750 kilowatts. Management of the lake level is designed to avoid flooding, provide water to Yolo County and local municipal water companies, and to maintain water for recreational use. Raw water is also pumped and exported from Clear Lake to supplement treated effluent supplies delivered to the Geysers geothermal facility. 3)Westside Integrated Regional Water Management Plan: Clear Lake is located in the hydrologic region covered by the Westside Integrated Regional Water Management Plan (Westside IRWMP). The Westside IRWMP was released in June of 2013 and preliminarily approved by the Department of Water Resources in May of 2014. Lake County is a participant in the Westside IRWMP, which includes the Lake County Watershed Protection District (as the County's lead agency for the IRWMP), the Napa County Flood Control and Water Conservation District, the Colusa County Regional Conservation District, the Solano County Water Agency, and the Yolo County Water Resource Association. The major lakes and reservoirs in the region covered by the Westside IRWMP include Clear Lake, Indian Valley Reservoir, and Lake Berryessa. Focal points of the Westside IRWMP include improving habitat and ecosystem health, controlling invasive species, and addressing water quality AB 367 Page 6 concerns. The Westside IRWMP history indicates that in 2005 Lake County began the process of developing an IRWMP at the county level, but before a county-based plan was completed, the State indicated it prefers that the IRWMPs include larger, watershed-based regions. Lake County therefore chose to participate in the Westside IRWMP instead of proceeding with its own local plan, and the portions of Lake County located in the Cache Creek and Putah Creek watersheds are addressed in the Westside IRWMP. The Lake County Watershed Protection District is governed by the Lake County Board of Supervisors and is the lead agency for the county's participation in the Westside IRWMP. Significant concerns and priority objectives identified in the Westside IRWMP include nutrients in Clear Lake, restoration of Clear Lake Hitch, an endemic species of special concern, management of invasive species, providing safe and reliable water supplies, and mercury impairment. Toxic alga caused by cyanobacteria is also identified as an emerging contaminant of concern. Clear Lake is one of several primary water supply sources in the region identified in the Westside IRWMP, which emphasizes the importance of conjunctive water management to the region. The Westside IRWMP also notes that many of the Upper Cache Creek watershed communities meet the definition of a disadvantaged community. The Westside IRWMP indicates that while water resource managers and stakeholders agree erosion control, riparian and wetland restoration upstream of Clear Lake will have the greatest beneficial impact on Clear Lake water quality, challenges remain to prioritize specific actions. 4)State Activities at Clear Lake: The state has recognized the natural resource values at Clear Lake through a number of past actions. The DFW indicates it has identified two areas surrounding Clear Lake as important wetland resources. These AB 367 Page 7 areas have been incorporated into a Conceptual Area Protection Plan which allows DFW, through the Wildlife Conservation Board (WCB), to purchase lands or easements within the boundaries of the Plan area. Examples of past actions include a 1999 grant of $395,000 from the WCB to the Lake County Land Trust to acquire 97 acres of land on the northwest shore of Clear Lake to protect wetland, riparian and upland habitats. The state has also accepted donations of conservation easements from the Lake County Watershed Protection District protecting over 100 acres of historic wetland habitat near the town of Nice. The WCB is currently considering a potential grant to the Lake County Land Trust to acquire another 74 acres of waterfront property that represents the last remaining unprotected wetland on Clear Lake, known as the Big Valley Wetlands Conceptual Area Protection Plan. This acquisition would provide habitat linkages and corridors to a nearby wetland reserve that is already under conservation easements. The DFW also conducts monitoring for aquatic invasive species and conducts an annual two day watercraft screening and inspection training for Lake County staff and marine bait shop staff. Native fish assemblages in Clear Lake have also been identified as an important resource in DFW's 2015 update to the State Wildlife Action Plan. 5)Lake County Healthy Lake Tax: Lake County has attempted to raise local revenues to fund projects this bill would fund. The Lake County "Healthy Lake Tax", a local sales tax measure, was on the June 3, 2014 election ballot for voters in Lake County, California, but was defeated. Measure L would have authorized the county to impose an additional sales tax of 0.5 percent for 10 years to fund the eradication of weeds, algae and invasive mussels from Clear Lake, the restoration of wetlands in the county, and the improvement of water quality. A 2/3rds supermajority vote was required for the approval of Measure L, which failed on a vote of 65.2 % support, to 34.8% opposed. This was the county's third attempt to pass such a measure. AB 367 Page 8 6)Condition of the Fish and Game Preservation Fund: While the fiscal issues will be explored in more depth in the Assembly Appropriations Committee, the use of the FGPF as proposed in this bill is of interest to this committee because many of the policy objectives reviewed by this committee are funded through the FGPF. The DFW indicates that it relies on the FGPF statewide to fund DFW's responsibilities under the Fish and Game Code, including but not limited to, wildlife and fisheries management, resource assessments, habitat restoration, conservation planning, environmental review, permitting, water resource management, enforcement, public education, and response to spills. According to the Department of Finance, while the Governor's budget shows a $17 million reserve in the non-dedicated portion of the FGPF, DFW is currently operating at a structural deficit, with expenditures exceeding revenues, such that it is anticipated DFW's current expenditures will exhaust the reserve before the end of this year. 7)Other potential sources of state funding for Clear Lake Projects: The Water Bond (Proposition 1, approved by the voters in November 2014) contains several categories of funding for which Lake County and/or the region through the Westside IRWMP, may be eligible to apply through competitive grant processes. A key principle which the Legislature followed in developing the Water Bond was to prohibit earmarks for specific projects and instead allocate funds for categories or types of projects which entities could then apply for on a AB 367 Page 9 competitive basis. It should be noted that accessing bond funds can be a practical challenge for lower income communities, in part because applicants are often required to expend funds upfront for a project, and then get reimbursed for expenditures with the grant funds. Keeping these constraints in mind, potential alternative funding sources include: a) Section 79737 of the bond makes available $285 million for watershed restoration projects statewide. Eligible projects include, but are not necessarily limited to, projects to restore or enhance riparian and aquatic habitat, improve ecological function, provide fish passage, improve local watershed management, and remove sediment. DFW administers these funds and the draft solicitation guidelines for these grants are currently available on DFW's website. b) Section 79740 of the Water Bond makes available $810 million in competitive grants and loans for projects that are included in and implemented through an IRWMP. The Legislature, through the Water Bond and the IRWMP program, has encouraged communities to collaborate and focus on regional water management. The Water Bond requires a 50% local match for IRWMP projects, which can be waived or reduced for projects that benefit disadvantaged communities. Clear Lake is located in the Sacramento River hydrologic region, which was allocated $37 million of the IRWMP monies in the Water Bond. c) Section 79720 of the Water Bond makes $520 million available for safe drinking water, including specifically for mercury and nutrient remediation, the two contaminants that have resulted in TMDLs for Clear Lake. AB 367 Page 10 d) Section 79730 of the Water Bond makes $200 million available for enhancing instream flows. Projects to address issues involving smaller streams and tributaries that flow into Clear Lake may be eligible to apply for these funds which are being administered by the WCB. The draft solicitation guidelines for these funds are available on the WCB's website. Half of these funds are targeted for urban streams, but the other half is allocated statewide. e) The Department of Parks and Recreation's Division of Boating and Waterways administers a Quagga and Zebra mussel Infestation Prevention Grant Program, for which the Lake County Watershed Protection District submitted a funding application on October 20, 2014 for $200,000 for outreach and education, hiring and training of boat ramp monitors, and to hire an invasive species coordinator. The County was recently awarded a grant of $189,649 to implement this project. f) Many counties have a county fish and wildlife propagation fund composed of fines and penalties for wildlife violations, which could be allocated for wildlife and habitat restoration purposes. 8)Prior and related legislation: AB 1874 (Gonzalez) of 2013 did not include an appropriation, but would have required IRWMP funding appropriated by the Legislature to the Department of AB 367 Page 11 Water Resources for a region to be passed through directly to that region if that region is eligible for, and has completed, a streamlined application process and requests funding. The money would not have gone directly to a county, but would have allowed the participants in the IRWMP for that region to determine what projects to fund rather than the state. AB 1874 was held on the Assembly Appropriations Committee suspense file. 9)Suggested Amendment: Clear Lake faces significant natural resource challenges of state interest, but questions remain as to whether the FGPF, as proposed in this bill, is the most appropriate source of funding. Staff recommends, if the committee elects to approve this bill, that the reference to the FGPF be deleted, with the expectation that the author will work with the Assembly Appropriations Committee on identifying appropriate sources or approaches to funding. Amend SEC. 2, on page 2, lines 30-36 to read as follows: The sum of two million four hundred thousand dollars ($2,400,000) is hereby appropriated from the ___________Fish and Game PreservationFund to the County of Lake for the purposes of restoring Clear Lake wetlands, maintaining the water quality of Clear Lake, preventing the spread of invasive species to Clear Lake, and controlling invasive species in Clear Lake. Support Arguments: The County of Lake in support of this bill emphasizes that Clear Lake is California's largest natural freshwater lake. They note that water quality problems in the lake are impacting tourism, including specifically algal blooms in the summer, and invasive species are a constant threat. The county has tried three times to enact a half-cent sales tax dedicated to lake programs, but those measures, while garnering AB 367 Page 12 over 60% of the vote, have failed to meet the 2/3rd vote requirement for special purpose taxes. Additional background materials provided by the county indicate that if this bill were approved the county would propose to use the funds for long term monitoring of water quality TMDLs in the Lake and for small stream and wetland restoration in the Clear Lake Upper Cache Creek watershed. Opposition Arguments: None received. REGISTERED SUPPORT / OPPOSITION: Support City of Lakeport County of Lake California Water Service Elem Indian Colony Featherbed Railroad Bed & Breakfast Resort High Country Security AB 367 Page 13 Lake County Association of Realtors Lake County Winery Association Ruzicka Associates, Consulting Engineers Save the Lake Committee Opposition None on file. Analysis Prepared by:Diane Colborn / W., P., & W. / (916) 319-2096