BILL ANALYSIS Ó SENATE COMMITTEE ON APPROPRIATIONS Senator Ricardo Lara, Chair 2015 - 2016 Regular Session SB 937 (McGuire) - Disaster relief: County of Lake: fires ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: February 2, 2016 |Policy Vote: G.O. 12 - 0 | | | | |--------------------------------+--------------------------------| | | | |Urgency: Yes |Mandate: No | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: April 11, 2016 |Consultant: Mark McKenzie | | | | ----------------------------------------------------------------- This bill meets the criteria for referral to the Suspense File. Bill Summary: SB 937, an urgency measure, would provide state disaster-related relief to local agencies impacted by the wildfires that occurred in Lake County in 2015. Fiscal Impact: Estimated General Fund costs of approximately $2 million, payable over several fiscal years beginning in 2016-17, based upon preliminary estimates of eligible disaster-related costs. Background: Lake County experienced three major forest fires in 2015. While the Rocky and Jerusalem fires were destructive, scorching 94,556 acres, the Valley Fire was the third largest wildfire in California history. This devastating fire burned for over a month after it started on September 12, 2015, destroying over 1,900 structures, including 1,300 homes, and displacing nearly 20,000 residents of the area. The author indicates that the SB 937 (McGuire) Page 1 of ? Valley fire ultimately burned 170,623 acres and caused more than $1.3 billion in damage. Existing law provides that the Federal Emergency Management Agency (FEMA) pays local governments for 75 percent of eligible disaster mitigation costs for federally-declared natural disasters. Existing state law, the California Disaster Assistance Act (CDAA), requires the state to pay 75 percent of the remaining 25 percent of eligible costs for any state-declared emergency. Local governments cover the remaining amount. Eligible costs include local expenditures for debris removal, emergency work, and repair or replacement of public facilities damaged as a result of a disaster event. Existing law, AB 2140 (Hancock), Ch. 739/2006, prohibits the state share for any eligible project from exceeding 75 percent of state eligible costs unless the local agency has adopted a local hazard mitigation plan as part of the safety element of its general plan. For some statutorily specified disasters, the state has paid 100 percent of the non-federal eligible disaster mitigation costs. Proposed Law: SB 937, an urgency bill, would add the forest fires that occurred in Lake County in 2015 to the statutory list of natural disasters for which the state will pay up to 100 percent of the non-federal portion of local disaster-related costs that are eligible for reimbursement. Related Legislation: The following measures were intended to provide CDAA disaster relief to local agencies, but none of them were enacted: AB 18 (Dodd), which was held on this Committee's Suspense File last year, would have added the South Napa Earthquake that occurred on August 24, 2014 to the list of disasters eligible for full state reimbursement of local costs. AB 1429 (Chesbro), which was vetoed by Governor Brown in 2011, would have added the tsunami that affected Del Norte County in March of 2011 to the list of disasters eligible for full state reimbursement of local costs. The veto message stated the SB 937 (McGuire) Page 2 of ? following: The state has not paid for a local government's share of disaster costs since 2006 and this measure would cost the state over $1 million. In addition, if I sign this measure, other counties that sustain similar damages would likely request the same relief -- a precedent that the state currently cannot afford. Staff notes that AB 1308 (Cox) and SB 1537 (Kehoe), both of which would have provided full state reimbursement of local disaster-related costs related to specified wildfires, were chaptered by Governor Schwarzenegger in 2008, but failed to become operative because they were contingent upon the enactment of SB 1764 (Kehoe), which was vetoed. As noted in the above veto message of AB 1429 (Chesbro), the state has not provided full reimbursement of local agency disaster-related costs since 2006, when AB 1798 (Berg), Chap 896/2006, added severe rainstorms in specified northern California counties to the list of disasters eligible for full state reimbursement of local agency costs. Staff Comments: Payment of local shares of disaster-related costs is made with a Budget Act appropriation to the California Emergency Management Agency, based on preliminary estimates. Because the state attempts to reimburse all claims received in the budget year, and does not control when claims are submitted, the amount appropriated rarely matches the amount ultimately required in any given year. When claims exceed the budget appropriation, a supplemental appropriation may be made. The Office of Emergency Services' preliminary estimates indicate that total local agency costs associated with the Valley, Rocky, and Jerusalem fires that are eligible for reimbursement are estimated to be approximately $32.15 million, $24.1 million of which is covered by the federal government. Under this bill, the state would pay its share of $6,027,000, and assume the local share of $2,009,000. SB 937 (McGuire) Page 3 of ? -- END --