BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 554| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- VETO Bill No: SB 554 Author: Wolk (D) Amended: 8/17/16 Vote: 21 SENATE NATURAL RES. & WATER COMMITTEE: 9-0, 1/12/16 AYES: Pavley, Stone, Allen, Hertzberg, Hueso, Jackson, Monning, Vidak, Wolk SENATE APPROPRIATIONS COMMITTEE: 7-0, 1/21/16 AYES: Lara, Bates, Beall, Hill, Leyva, Mendoza, Nielsen SENATE FLOOR: 39-0, 1/27/16 AYES: Allen, Anderson, Bates, Beall, Block, Cannella, De León, Fuller, Gaines, Galgiani, Glazer, Hall, Hancock, Hernandez, Hertzberg, Hill, Hueso, Huff, Jackson, Lara, Leno, Leyva, Liu, McGuire, Mendoza, Mitchell, Monning, Moorlach, Morrell, Nguyen, Nielsen, Pan, Pavley, Roth, Runner, Stone, Vidak, Wieckowski, Wolk NO VOTE RECORDED: Berryhill SENATE FLOOR: 36-3, 8/26/16 AYES: Allen, Anderson, Beall, Berryhill, Block, Cannella, De León, Fuller, Gaines, Galgiani, Glazer, Hall, Hancock, Hernandez, Hertzberg, Hill, Hueso, Huff, Jackson, Lara, Leno, Leyva, Liu, McGuire, Mendoza, Mitchell, Monning, Moorlach, Nielsen, Pan, Pavley, Roth, Stone, Vidak, Wieckowski, Wolk NOES: Bates, Morrell, Nguyen ASSEMBLY FLOOR: 72-4, 8/24/16 - See last page for vote SUBJECT: Delta levee maintenance SOURCE: Central Valley Flood Control Association SB 554 Page 2 DIGEST: This bill extends the July 1, 2018, sunset date for the Delta Levee Subventions program by two years. Specifically, this bill maintains the state's 75% maximum share for Delta levee maintenance costs in excess of $1,000 per mile until July 1, 2020. ANALYSIS: Existing law: 1)Creates the Delta levee maintenance subvention program. This program provides reimbursement funds to local agencies for costs of maintaining or improving project or nonproject levees. 2)Provides that the reimbursement rate is up to 75 percent of any costs incurred in excess of $1,000 per mile, based on an assessment of the agency's ability to pay. 3)Provides that the 75 percent reimbursement rate ends July 1, 2018, at which time the reimbursement rate would become 50 percent of any costs incurred in excess of $1,000 per mile. This bill extends the current 75 percent reimbursement rate for Delta levee maintenance costs in excess of $1,000 per mile to July 1, 2020. Background Legislature has extended the 75 percent reimbursement rate three times. The Legislature created the Delta levee subvention program in 1996. The 75 percent reimbursement rate was to be in SB 554 Page 3 effect for 10 years, at which time the rate would drop to 50 percent. The Legislature has subsequently delayed the reduction in the reimbursement rate in 2006, 2010, and 2012. Comments One of the few Delta bright spots. The 2010 Public Policy Institute of California publication Comparing Futures for the Sacramento - San Joaquin Delta noted, "The Delta Levee Subventions Program, in particular, has significantly reduced levee failures and is the most important state investments in Delta levees today." It is still true five years later. Moreover, it is also one of the few Delta programs that have shown tangible results. FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: No According to the Assembly Appropriations Committee, "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 decrease from 75% to 50% on July 1, 2018." SUPPORT: (Verified10/6/16) Central Valley Flood Control Association (source) Association of California Water Agencies Bethel Island Municipal Improvement District California State Association of Counties Collinsville Levee District Contra Costa County Delta Counties Coalition Delta Protection Commission East Bay Municipal Utilities Commission Reclamation District No. 3 SB 554 Page 4 Reclamation District No. 150 Reclamation District No. 548 Reclamation District No. 756 Reclamation District No. 799 Reclamation District No. 2025 Reclamation District No. 2026 Reclamation District No. 2028 Reclamation District No. 2029 Reclamation District No. 2041 Reclamation District No. 2044 Reclamation District No. 2060 Reclamation District No. 2065 Rural County Representatives of California San Joaquin County Solano County Solano County Farm Bureau Yolo County Farm Bureau OPPOSITION: (Verified10/6/16) Calleguas Municipal Water District Cucamonga Valley Water District East Orange County Water District Eastern Municipal Water District Inland Empire Utilities Agency Las Virgenes Municipal Water District Long Beach Water Commission Mesa Water District Metropolitan Water District of Southern California Municipal Water District of Orange County Santa Margarita Water District South Coast Water District Three Valleys Municipal Water District Upper San Gabriel Valley Municipal Water District Walnut Valley Water District Yorba Linda Water District ARGUMENTS IN SUPPORT: According to the author, "By continuing the current cost share formula, SB 554 ensures that Delta reclamation districts can afford to maintain and improve Delta SB 554 Page 5 levees. Maintenance of the Delta levees is important to reduce flood risk and ensure the Delta can continue to serve its many valuable uses - as fertile farmland, a water conveyance, and a rich estuary ecosystem." ARGUMENTS IN OPPOSITION: According to a coalition of Southern California water agencies, "We recommend that a further amendment be made to SB 554 to direct DWR to enlist an independent entity, with financial expertise, to conduct an affordability and benefits assessment for the Delta Levee Subventions Program. It is simply unclear which Delta islands, if any, lack the economic standing to underwrite their own levee maintenance, and whether statewide interests merit a public subsidy for those levee improvements. "We, the undersigned agree with the author, that levee improvements in the Delta are important to protect public health and safety, critical infrastructure and the fragile ecosystem. But it is also important to ensure the best use of limited state resources. An assessment of the program and accountability for the level of funding expended to date and in the future is long overdue. "Absent the further amendment as noted above, we urge your NO vote on SB 554." GOVERNOR'S VETO MESSAGE: I am returning Senate Bill 554 without my signature. A number of efforts are underway to determine the levee protection needs in the Delta. The Delta Stewardship Council is currently in the middle of identifying state priorities for levee investments in the Delta, and the Department of Water Resources has been working with the Delta Protection Commission evaluating new financing mechanisms. SB 554 Page 6 The existing 75 percent state cost share does not sunset until July 2018, and as such, consideration of this bill is premature. ASSEMBLY FLOOR: 72-4, 8/24/16 AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Roger Hernández, Holden, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Salas, Santiago, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon NOES: Bigelow, Harper, Irwin, Melendez NO VOTE RECORDED: Chau, Daly, Rodriguez, Steinorth Prepared by:Dennis O'Connor / N.R. & W. / (916) 651-4116 10/14/16 12:54:08 **** END ****