BILL ANALYSIS Ó
SB 554
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Date of Hearing: June 29, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
SB 554
(Wolk) - As Amended January 4, 2016
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|Policy |Water, Parks and Wildlife |Vote:|10 - 3 |
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill repeals the July 1, 2018 sunset date for the Delta
Levee Subventions program. Specifically, this bill permanently
establishes the state's 75% maximum share for Delta levee
maintenance costs in excess of $1,000 per mile.
FISCAL EFFECT:
Potential annual cost pressures, likely in the millions of
dollars (GF), to fund local projects to improve and maintain
levees. Without this bill, the state cost share formula would
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decrease from 75% to 50% on July 1, 2018.
According to the Department of Finance (DOF), eliminating the
sunset date will result in greater state expenditures per
project than would be the case under current law. However, the
Department of Water Resources (DWR) indicates many local
governments find it difficult to meet the current 25% local
match, so it is unclear how many projects would be eligible for
state funding at the 50% match level.
COMMENTS:
1)Purpose. According to the author, the maintenance of Delta
levees is important to reduce flood risk and ensure the Delta
can continue to serve its many valuable uses such as fertile
farmland, water conveyance, and a rich estuary ecosystem. By
continuing the current cost share formula, this bill will
ensure Delta reclamation districts are able to afford to
maintain and improve their levees.
2)Background. The Delta Levee Subventions Program provides
state funding to local agencies for the rehabilitation and
maintenance of levees in the Sacramento-San Joaquin Delta. In
1996, the Legislature temporarily established the
reimbursement rate to be up to 75% of any costs incurred in
excess of $1,000 per mile depending on the agency's ability to
pay. This rate was to be reduced to 50% on July 1, 2006.
However, the Legislature subsequently extended this date
several times and the higher reimbursement rates are currently
authorized until July 1, 2018.
3)Funding history. Chapter 718, Statutes of 2010 (SB 855)
allocated $170 million of Proposition 1E and $32 million of
Proposition 84 funding for projects intended to reduce the
risk of levee failure in the Sacramento-San Joaquin Delta.
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The 2016-17 Budget includes $60 million for local assistance
expenditures in the Delta. DWR indicates that an additional
$70 million is still available from the 2015-16 Budget Act. Of
these funds, about 40 percent, or $62 million, will go toward
the Subventions program. The state's share of program costs
ranges from $6 to$12 million annually, and state reimbursement
of eligible costs is typically near 75 percent for projects.
Based on annual costs of $6 to $12 million a year, DWR
predicts that available and eligible bond funding will last
between 5 and 10 years.
Proposition 1 provided $295 million to reduce the risk of
levee failure and flood in the Delta, of which local
assistance through the subventions program is an eligible use.
4)Water Action Plan. The Delta Stewardship Council, in
consultation with local agencies and various state agencies,
is in the process of developing state investment priorities
for Delta Levees consistent with the Delta Reform Act of 2009,
for levees that are a part of the State Plan of Flood Control,
and for nonproject levees.
The author may wish to consider extending rather than
eliminating the sunset provision to coincide with the
completion of the state's work to identify investment
priorities.
Analysis Prepared by:Jennifer Galehouse / APPR. / (916)
319-2081
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