BILL ANALYSIS
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| SENATE COMMITTEE ON NATURAL RESOURCES AND WATER |
| Senator Fran Pavley, Chair |
| 2009-2010 Regular Session |
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BILL NO: AB 2092 HEARING DATE: June 22, 2010
AUTHOR: Huffman URGENCY: No
VERSION: June 15, 2010 CONSULTANT: Dennis O'Connor
DUAL REFERRAL: No FISCAL: Yes
SUBJECT: Delta plan: financing.
BACKGROUND AND EXISTING LAW
Last November, the Legislature passed the Sacramento-San Joaquin
Delta Reform Act (SBX7 1(Simitian)). Among other things, SBX7 1
established the Delta Stewardship Council, a seven member body
charged with developing, adopting, and implementing a
comprehensive Delta Plan management plan for the Delta by
January 1, 2012.
PROPOSED LAW
1.This bill would require the Delta Stewardship Council, by
January 1, 2013, to develop a long-term finance plan to pay
for the costs of implementing the Delta Plan, including all
projects, programs, and related administrative costs
identified in the Delta Plan.
2.The finance plan would be required to include all of the
following information:
An annual expenditure plan for implementation of the
Delta Plan.
An estimate of all existing state and federal funds.
An evaluation of existing programs and projects to
determine if funding could be redirected to the Delta Plan.
A definition of public and private benefits.
An analysis and description of the basis for allocating
program and project costs among private and public
interests.
An enforceable mechanism that ensures that fees,
contractual payments, cost-share agreements, and
contributions are expended as intended, and not diverted to
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other purposes.
1.The finance plan would be required to identify and evaluate
the benefits to all groups resulting from the implementation
of the Delta Plan. The plan would further be required to
identify and evaluate the negative impacts caused by all
groups to the Delta that the Delta Plan seeks to address. The
plan would identify and evaluate the benefits to, and impacts
caused by, all of the following:
The public.
Urban and agricultural water users diverting water in
the Delta.
Urban and agricultural water users diverting water in
the Bay-Delta tributaries and watershed.
Delta landowners, including, but not limited to,
reclamation districts and public and private landowners,
and building and transportation interests.
Delta recreational users.
Dischargers into the Delta or its tributaries, including
wastewater dischargers.
Commercial fishing.
Other interests with infrastructure or operations in the
Delta.
1.The finance plan would be required to allocate costs based on
the beneficiary pays principle. Financing proposals to pay
for public benefits or impacts would include new and existing
state and federal funding including proceeds from the sale of
bonds. Financing proposals to pay for private benefits or
impacts would include new and existing fees, contractual
payments, and cost-share agreements.
2.The council would be required to review the finance plan at
least once every five years and update the plan as the council
deems appropriate.
3.The council would be prohibited from adopting new fees unless
a statute is enacted that specifically authorizes the council
to adopt such a fee.
4.The council would be required to seek to obtain early funding
contributions from groups that may benefit from the
implementation of the Delta Plan, for purposes of funding the
council's planning and administrative activities. The council
would be required to track early funding contributions and
provide credit for those contributions against future funding
requirements.
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ARGUMENTS IN SUPPORT
According to the Author, "The 2009 water legislation was in
large part based on the Delta Vision Strategic Plan prepared by
the Blue Ribbon Task Force in 2008. The Strategic Plan states:
"Successful governance of the Delta will depend on a
coherent, effective, and reliable financing structure.
That system must include financing to pay capital costs,
whether by GO bond or Revenue bonds, and Council authority
to impose reasonable fees related to implementation of the
Delta Plan."
"The Delta Vision Strategic Plan includes Finance
recommendations (Strategy 7.3) and indicates that financing
should come from multiple sources and the new system of
financing 'must be premised on beneficiaries of improvements
paying commensurate to their benefit.'"
"Successful implementation of the Delta Plan will require a
financing structure that includes funding from the primary
beneficiaries of the Delta Plan and from those groups that are
continuing to impose negative impacts on the Delta watershed.
The Delta Plan will include actions related to ecosystem
restoration, improved water quality, improved water supply
reliability, and Delta levee improvements and stability. A
finance plan for implementing the Delta Plan should recognize
that public and private interests should contribute in
proportion to the benefits received or negative impacts caused."
ARGUMENTS IN OPPOSITION
Opponents are largely concerned that they might be
inappropriately required to pay fees to fund the Delta Plan.
The Northern California Water Association's concerns are
typical:
"If fees are to be established to pay for the Delta Stewardship
Council and the Delta Plan, then they should be tied to direct
benefits that will be derived from the implementation of the
Plan. It is difficult to see any benefits to upstream water
users that are not statewide or public benefits. For example,
the potential recovery of listed fish species is a public
benefit that would be realized at the state level. Suggestions
that this would be a measurable benefit to specific water users
assumes that the recovery would occur and that the actions
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implemented as part of the plan would be less onerous than
actions that would be taken if the Plan is not implemented."
"We are also concerned with the potential perception that
allowing pre-payment of fees could bias the decision as to who
will pay fees and how much they will pay. Specifically, the
likely candidates to pre-pay fees are those who will benefit
from the implementation of the Delta Plan. If the group
required to pay fees is expanded to include those who do not
directly benefit from the Plan (and obviously did not pre-pay
fees), it will be difficult to not see this as rewarding those
who pre-pay."
COMMENTS
Financing Plan Is Critical. One of the more prominent problems
with CalFed was the lack of a funded program plan. Instead, it
relied on diminishing contributions from the general fund,
sporadic federal appropriations, and periodic bond
authorizations.
Beneficiaries Pay. While everyone agrees with the concept,
precisely defining it has been elusive. In 2005, then Senator
Machado introduced SB 113. Through that bill, he tried to
define the beneficiaries pay principle as it would apply to
financing Delta improvements through the CalFed Program. That
effort was unsuccessful for a number of reasons, not the least
of which was lack of agreement on definitions.
Also a 2005 budget trailer bill required the development of a
Sacramento-San Joaquin Delta Strategic Plan. While the delta
vision process did result in a lot of good product, it did not
include "A strategic financing plan, including provisions for
delta beneficiaries to pay their share for the benefits that
they receive."
SUGGESTED AMENDMENTS: None
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SUPPORT
Audubon California
California Council of Land Trusts
Contra Costa Water District
Cucamonga Valley Water District
Eastern Municipal Water District
Irvine Ranch Water District
Metropolitan Water District of Southern California
Natural Resources Defense Council
Santa Clara Valley Water District
The Nature Conservancy
Three Valleys Municipal Water District
Westlands Water District
OPPOSITION
City of Sacramento
Friant Water Authority
Glenn-Colusa Irrigation District
Placer County Water Agency
Regional Council of Rural Counties
Sacramento Regional Water Alliance
Sacramento Valley Water Alliance
The Northern California Water Association
Valley Ag Water Coalition
Western Growers
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