BILL ANALYSIS                                                                                                                                                                                                    




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                           808 (Wolk)
          
          Hearing Date:  01/19/2010           Amended: 01/15/2010
          Consultant: Brendan McCarthy    Policy Vote: NR&W 9-0
          _________________________________________________________________ 
          ____
          BILL SUMMARY:  SB 808, an urgency measure, extends the current  
          maximum state contribution of 75 percent for levee maintenance  
          projects in the Delta until 2016. 
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          ____
                            Fiscal Impact (in thousands)

           Major Provisions         2010-11      2011-12       2012-13     Fund
           
          Bond fund availability Cost pressures in the millions   Bonds *

          * Propositions 1E and 84.
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          ____

          STAFF COMMENTS: This bill meets the criteria for referral to the  
          Suspense File.

          The state provides subvention funding to local agencies for  
          levee maintenance or improvement projects in the Sacramento-San  
          Joaquin River Delta. Under current law, the Department of Water  
          Resources may provide reimbursements for up to 75 percent of  
          projects costs in excess of $1,000 per levee mile. On July 1,  
          2010 the maximum reimbursement rate will drop to 50 percent of a  
          project's cost. Current law also caps General Fund contributions  
          to this program at $2 million per year.

          In recent years, the state has funded this subvention program  
          using general obligation bond funds (rather than the General  
          Fund). Over the last decade, the state has provided between $5  
          million and $15 million per year in subvention funding in the  
          Delta.

          SB 808, an urgency measure, will extend the current 75 percent  
          maximum state contribution until July 1, 2016.

          Because the bill will increase the maximum state cost share for  










          maintenance projects, it will put pressure on existing bond  
          funds, which can be used for a variety of flood control  
          projects, including Delta subventions. The total cost pressures  
          are unknown, because the number and size of future funding  
          requests from local districts are unknown.

          Staff notes that the Department of Water Resources is currently  
          undertaking a Delta Risk Management Strategy, which aims to  
          determine the risks associated with potential levee failures in  
          the Delta. Phase I of the Delta Risk Management Strategy was  
          completed in January 2008 and Phase II of the report is  
          projected to be completed by February 2011. Also, SB x7 1  
          (Simitian) requires the development of a Delta Plan, which is  
          intended to provide comprehensive planning for the Delta,  
          including ecosystem restoration, water supply reliability, and  
          infrastructure protection. The Delta Plan is due in January  
          2012.