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: SB 207                    HEARING DATE: April 28, 2009   

          AUTHOR: Florez                     URGENCY: No  
          VERSION: March 31, 2009            CONSULTANT: Bill Craven  
          DUAL REFERRAL: No                  FISCAL: Yes  
          SUBJECT: Delta smelt.  
          
          BACKGROUND AND EXISTING LAW
          The California Endangered Species Act (CESA) authorizes the  
          Department of Fish and Game (DFG) to list species that are  
          threatened or endangered based on appropriate scientific  
          information. Such species are then entitled to receive  
          additional legal protections, such as a prohibition on "taking"  
          such listed species, in order to avoid extinction. 

          Section 2081 of the Fish and Game Code authorizes, but does not  
          require, DFG to grant incidental take permits to applicants if  
          various conditions are met. The conditions include provisions  
          requiring the DFG to ensure that endangered and threatened  
          wildlife are adequately protected, that the direct and indirect  
          impacts from a project are fully mitigated, and that the  
          issuance of the permit would not jeopardize the continued  
          existence of the species. 

          The delta smelt is a species of tiny fish that are unique to the  
          Sacramento-San Joaquin Delta (Delta).  Annually, they migrate  
          from spawning areas in the upper Delta, where water is less  
          saline, downstream to Suisun Marsh, and then return upstream to  
          spawn and die.  They were listed as threatened under the federal  
          and state ESA in 1993.  On March 4, 2009, they were downgraded  
          to "endangered" under CESA. 

          In recent years, federal/state monitoring has shown the delta  
          smelt population dropping precipitously.  Delta smelt monitoring  
          dates back 40 years and includes more than 30 Delta monitoring  
          sites.  In the last decade, the Fall Mid-Water Trawl Abundance  
          Index for delta smelt dropped from a high of 864 (1999) to 2  in  
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          2008. The population of this species has clearly crashed. 

          During the recent catastrophic decline in delta smelt, the State  
          Water Project substantially increased Delta pumping, to  
          record-high levels.  Then, in 2007, the Delta smelt decline  
          prompted federal Judge Oliver Wanger (E.D. Cal/Fresno) to  
          restrict Delta pumping by the federal/state water projects,  
          after he found that the federal "biological opinions" violated  
          the federal ESA.

          SB 207 proposes creation of a delta smelt hatchery and  
          additional refuge population to reverse this decline and obtain  
          for those parties who "take" delta smelt the legal permission  
          for their take, at least under state law.  The eligible parties  
          include state and federal agencies that export water from the  
          Delta, and others who qualify as "banking partners" and enter  
          into agreements with DFG to participate in the program. 

          State and federal agencies already have begun programs to  
          preserve a refuge population of delta smelt.  Before the 2007  
          prohibition on taking delta smelt for scientific purposes, UC  
          Davis acquired approximately 600 delta smelt for breeding a  
          refuge population, located at the State Water Project's Delta  
          pumping facility.  The Department of Water Resources and the  
          State Water Resources Control Board have committed $2.1 million  
          to expand the facility and staff at the UC Davis Fish  
          Conservation and Culture Lab.  The Fish and Wildlife Service  
          (FWS) also transferred 200 of those delta smelt to create a  
          separate refuge population at its hatchery at Lake Shasta.
          Last year, Senator Florez authored a similar bill, SB 994, that  
          was held in Assembly Appropriations. 


          PROPOSED LAW
          This bill would require the Department of Fish and Game (DFG) to  
          develop, by January 1, 2011, the Delta Smelt Hatchery Program  
          that would be designed to preserve and restore the delta smelt,  
          and serve as a mitigation bank. The bill would require that the  
          hatchery program accomplish all of the following: 

              a)    Design a fish propagation facility to establish a  
                genetic refugia population for research brood stock and  
                source for supplementing wild populations.
              b)    Identify three potential sites within, or immediately  
                adjacent to the Delta that are suitable for the design,  
                construction and operation of the delta smelt hatchery and  
                construct at least one delta smelt hatchery by January 1,  
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                2011. DFG would also be required to develop a hatchery  
                management plan to ensure success of the program.
              c)    Establish a mitigation banking program, with  
                guidelines for agreements to provide "banking partners"  
                with authorization of take of delta smelt under CESA. 
              d)    Requires DFG to enter into mitigation banking  
                agreements providing authorization of take of delta smelt  
                under the state ESA, provided the agreements require  
                participation in the bank at a level "roughly  
                proportional" to the impact of the banking partner on  
                delta smelt, and that the partner contributes sufficient  
                funding for the purpose of obtaining take authorization  
                under CESA. 
              e)    Requires DFG to issue a take authorization to  
                mitigation banking partners under the state ESA.
              f)    Requires delta smelt reared in the hatchery to be  
                applied toward mitigation credits for mitigation bank  
                partners, including credits to satisfy federal ESA  
                obligations consistent with a mitigation plan approved by  
                the United States Fish and Wildlife Service (USFWS).
              g)    Requires banking partners to pay for long-term  
                operation and maintenance of the hatchery, and dedicates  
                banking partner funding exclusively to the hatchery.
              h)    Requires an audit of the hatchery program every three  
                years.
              i)    Transfers an unspecified sum of money from an  
                unspecified source of funding to DFG, and continuously  
                appropriates such funding.
              j)    Allows DFG to contract with public agencies outside of  
                state government and partner with USFWS for construction  
                and operation of delta smelt hatchery.
              aa)          Requires DFG to cooperate in the development of  
                long-term, comprehensive Delta ecosystem solutions to  
                ensure consistency with the hatchery program.
              bb)          Requires DFG to incorporate the hatchery into  
                "any state-adopted comprehensive Delta ecosystem program."




          ARGUMENTS IN SUPPORT
          According to the author, the crisis with the delta smelt has  
          triggered a series of regulatory and legal actions that has  
          severely impacted the Central Valley, specifically including a  
          reduction in water deliveries for agriculture. The affect has  
          been significant in many communities. Not only is there a  
          decrease in agricultural production, but corresponding decreases  
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          in agricultural employment. The restrictions on Delta pumping  
          have not improved the long-term prospects for the smelt, he  
          contends. 

          The author believes that the ongoing, small-scale captive  
          breeding programs for delta smelt are insufficient to replenish  
          the population. A larger-scale hatchery program, paid for by  
          water users, would be a part of a comprehensive Delta solution,  
          in his view. 

          ARGUMENTS IN OPPOSITION
          A coalition of conservation organizations opposes the bill. The  
          coalition, consisting of the Natural Resources Defense Council,  
          Environmental Defense Fund, Bay Institute, Planning and  
          Conservation League, Friends of the River, The Nature  
          Conservancy, Defenders of Wildlife, and others, make these  
          points: (1) the bill requires that mitigation bank partners  
          receive "take" authorization without regard to whether the  
          normal provisions of Sec. 2081 of the Fish and Game Code have  
          been met by an applicant for incidental take permit authority;  
          (2) The bill requires that a delta smelt hatchery be included in  
          any "comprehensive Delta ecosystem program" regardless of  
          whether such a hatchery is recommended by the ongoing  
          legislative, executive branch, or stakeholder working groups  
          currently underway. (None of the already completed efforts such  
          as the Delta Vision Blue Ribbon Task Force recommended a delta  
          smelt hatchery). 

          The coalition is concerned that a hatchery program will not  
          address the systemic problems in California's water supply  
          system or ameliorate the conditions that have caused the  
          downward spiral in smelt numbers over the last few years. 

          COMMENTS 
          The author is clearly concerned about the health of the Delta  
          and the consequences that are posed to those who depend on water  
          supplies from that source. This bill presents the issue of  
          whether a delta smelt hatchery should be among the first major  
          projects that is undertaken not only to create more fish, but  
          also to provide Delta water exporters with incidental take  
          authorizations under the state endangered species act. This  
          Committee's oversight hearings conducted by then-Chairman  
          Darrell Steinberg conclusively proved the absence of lawful  
          permitting by DWR or the operation of the pumps that clearly  
          "take" delta smelt, and nothing has changed in the past three or  
          four years since those hearings. 

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          These new legislatively-mandated incidental take permits would  
          be granted prior to the enactment of any recommendation of the  
          ongoing bicameral, bipartisan legislative working groups on the  
          Delta convened by the Pro Tem and the Speaker that are  
          considering a comprehensive approach to the Delta, and prior to  
          consideration of any of the pending Delta legislation or pending  
          agency actions such as the proposed Bay Delta Conservation Plan  
          (BDCP) by the Natural Resources Agency. 

          The proposed BDCP is specifically proposed in order to confer  
          ESA take permits for the federal/state water project export  
          pumps in the South Delta.  The BDCP does not include any  
          proposal for a delta smelt fish hatchery.  Instead, it focuses  
          on Delta water conveyance and developing new delta smelt  
          habitat.  Neither state nor federal biologists have recommended  
          a new delta smelt refuge population as a conservation  
          recommendation in federal ESA biological opinions or the BDCP. 

          Last year, the Assembly policy committee analysis of SB 994  
          quoted Dr. Peter Moyle, a UC Davis professor and one of the  
          foremost experts on delta smelt, on the hatchery concept:

                         "Trying to keep delta smelt going by raising them  
          in  
                         hatcheries and releasing them is like trying to  
          raise sheep  
                         in a drought-seared pasture surrounded by a  
          forest full of  
                         hungry wolves. Life expectancy of the animals  
          would be  
                         short, probably measured in days or hours.  The  
          environment  
                         for smelt has to be there if they are to survive  
          in the  
                         wild."

          Moyle, who oversees the UC Davis refuge population, has stated  
          that smelt can survive and reproduce in captivity, but he is  
          convinced that such efforts are "prone to failure" for a range  
          of reasons.  He added that it is "worth noting that the salmon  
          fishery has collapsed despite hatcheries releasing millions of  
          young each year, into the wild."

          TECHNICAL AMENDMENT
          
               AMENDMENT 1  
               Page 2, line 12, add: In 2009, the delta smelt was listed  
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               as endangered under state law.

               
          SUPPORT
          None received 

          OPPOSITION
          California Sportfishing Protection Alliance
          Defenders of Wildlife
          Environmental Defense Fund
          Environmental Water Caucus 
          Friends of the River
          Natural Resources Defense Council
          Northern California Council, Federation of Fly Fishers
          Pacific Coast Federation of Fishermen's Associations
          Planning and Conservation League
          Sierra Club California 
          The Bay Institute 
          The Nature Conservancy
                     
           
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