BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 37| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: SB 37 Author: Nielsen (R), et al. Amended: 2/12/15 Vote: 27 - Urgency SENATE NATURAL RES. & WATER COMMITTEE: 9-0, 3/24/15 AYES: Pavley, Stone, Allen, Fuller, Hertzberg, Hueso, Jackson, Monning, Wolk SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8 SUBJECT: Water: floods SOURCE: Sutter Butte Flood Control Agency DIGEST: This bill authorizes the Department of Water Resources (DWR) to reimburse local project sponsors of flood projects funded under the Urban Flood Risk Reduction (UFRR) program for costs incurred after July 1, 2014, and before issuance of a funding commitment, or amendment or execution of the funding agreement, but no later than December 31, 2015. ANALYSIS: Under existing law, DWR has provided funding under Proposition 1E to local flood project sponsors for projects that reduce urban flood risks. The funding guidelines provide that only work performed after a Funding Agreement is executed may be eligible for reimbursement. However, if a project receives additional funding from a SB 37 Page 2 subsequent round of funding, the local flood project sponsor may reimbursed for expenditures incurred after July 1, 2014, and before issuance of a funding commitment, or amendment or execution of the funding agreement, but no later than October 1, 2015. This bill extends the period in which a local flood project sponsor may be reimbursed for expenditures incurred after July 1, 2014, to before issuance of a funding commitment, or amendment or execution of the funding agreement, but no later than December 31, 2015. Background The Legislature appropriated $155 million in the 2014/15 budget for this program. The schedule for this next round of funding is: January 21, 2015UFRR Program Guidelines and Project Solicitation Package approved by the Director, finalized and released to the public. March 9, 2015 Concept Proposals due (or postmarked) by 5:00 P.M. May 15, 2015 State notifies local agencies of results of funding decisions. Under that schedule, DWR would have four and a half months to complete the funding package before it's reimbursement authority would end. The proponents of this bill are concerned that DWR will miss the October 1, 2015 deadline. Comments Is this really a problem? It depends on your expectations of SB 37 Page 3 DWR. If you believe DWR will meet its May 15 date to award grants and would then work expeditiously to execute funding agreements before October 1, then no, it's not a real problem. If, on the other hand, you think DWR is liable to run into some difficulty causing it to miss the October 1 funding deadline, then yes, it is a real problem. What is the harm in passing this anyway? This bill was drafted fairly narrowly. Should the bill be enacted and it was later found to be unnecessary, there wouldn't likely be any lingering consequence. FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: No SUPPORT: (Verified4/15/15) Sutter Butte Flood Control Agency (source) Association of California Water Agencies California Association of Realtors California Central Valley Flood Control Association OPPOSITION: (Verified4/15/15) None received ARGUMENTS IN SUPPORT: According to the author, "Suspending work on the Feather River West Levee Project could cost the State and local sponsor tens of millions of dollars in construction contract claims, expired right-of-way agreements, extended overhead and increased financing costs. SB 37 facilitates construction moving forward without delay, avoids burdening the local sponsor with expenditures above the local project cost share, and avoids the negative consequences that would result from unforeseen delays in state contract approval of the final phase of the project. Without this certainty, ongoing construction operations may be forced to shut down, SB 37 Page 4 reducing public safety, cost effectiveness and eroding public trust." Prepared by:Dennis O'Connor / N.R. & W. / (916) 651-4116 4/15/15 16:29:07 **** END ****