BILL ANALYSIS                                                                                                                                                                                                    Ó






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          |SENATE RULES COMMITTEE            |                         SB 37|
          |Office of Senate Floor Analyses   |                              |
          |(916) 651-1520    Fax: (916)      |                              |
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                                   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  








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          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  







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          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,  







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          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


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