Existing law grants to the Central Valley Flood Protection Board the authority to carry out various flood control activities, including the authority to construct, maintain, and operate ditches, canals, pumping plants, and other drainage works. Existing law requires revenues, rents, and proceeds from sale of crops from lands under the control of the board be paid into the State Treasury, as specified, with the balance of the revenues, rents, and proceeds going to the credit of the General Fund.

Existing law establishes the Sacramento and San Joaquin Drainage District under the administration management and control of the board for the purposes of carrying out specified flood management activities within the boundaries of the district. Existing law authorizes the district to acquire, own, hold, use, and enjoy any and all properties necessary for the purposes of the district. Existing law requires all moneys collected upon sales or otherwise be deposited in the Sacramento and San Joaquin Drainage District Fund, as specified. Existing law requires moneys in the Sacramento and San Joaquin Drainage District Fund be paid out upon warrants of the Controller and requires the Controller to issue warrants upon the funds whenever drafts of the board are presented.

This bill would additionally authorize the district to sell, lease, rent, or otherwise dispose of a right-of-way, easement, or property, as specified, and to take, receive, and apply for purposes of flood control the income, profit, and revenue received from the sale, lease, rental, or other disposal. lease or rental of the property. By adding a new source of revenue to a continuously appropriated fund, this bill would make an appropriation.

This bill would make legislative findings and declarations as to the necessity of a special statute for the Sacramento and San Joaquin Drainage District.

Existing law grants to the Central Valley Flood Protection Board (board) the authority to carry out various flood control activities, including the authority to construct, maintain, and operate ditches, canals, pumping plants, and other drainage works. Existing law requires revenues, rents, and proceeds from sale of crops from lands under the control of the board be paid into the State Treasury, as specified, with the balance of the revenues, rents, and proceeds going to the credit of the General Fund.

Existing law establishes the Sacramento and San Joaquin Drainage District under the administration of the board for the purposes of carrying out specified flood management activities within the boundaries of the district. Existing law authorizes the district to acquire, own, hold, use, and enjoy any and all properties necessary for the purposes of the district. Existing law requires all moneys collected upon sales or otherwise be deposited in the Sacramento and San Joaquin Drainage District Fund, as specified. Existing law requires moneys in the Sacramento and San Joaquin Drainage District Fund be paid out upon warrants of the Controller and requires the Controller to issue warrants upon the funds whenever drafts of the board are presented.

This bill would additionally authorize the district to sell, lease, or rent, or otherwise dispose of a right of way, right-of-way, easement, or property, as specified, and to take, receive, and apply for purposes of flood control the income, profit, and revenue received from the sale, lease, rental, or other disposal. By adding a new source of revenue to a continuously appropriated fund, this bill would make an appropriation.

This bill would make legislative findings and declarations as to the necessity of a special statute for the Sacramento and San Joaquin Drainage District.

Existing law grants to the Central Valley Flood Protection Board (board) the authority to carry out various flood control activities, including the authority to construct, maintain, and operate ditches, canals, pumping plants, and other drainage works. Existing law requires revenues, rents, and proceeds from sale of crops from lands under the control of the board be paid into the State Treasury, as specified, with the balance of the revenues, rents, and proceeds going to the credit of the General Fund.

Existing law establishes the Sacramento and San Joaquin Drainage District under the administration of the board for the purposes of carrying out specified flood management activities within the boundaries of the district. Existing law authorizes the district to acquire, own, hold, use, and enjoy any and all properties necessary for the purposes of the district. Existing law requires all moneys collected upon sales or otherwise be deposited in the Sacramento and San Joaquin Drainage District Fund, as specified. Existing law requires moneys in the Sacramento and San Joaquin Drainage District Fund be paid out upon warrants of the Controller and requires the Controller to issue warrants upon the funds whenever drafts of the board are presented.

This bill would additionally authorize the district to sell, lease, or rent, or otherwise dispose of a right of way, easement, or property, as specified, and to take, receive, and apply for purposes of flood control the income, profit, and revenue received from the sale, lease, rental, or other disposal. By adding a new source of revenue to a continuously appropriated fund, this bill would make an appropriation.

This bill would make legislative findings and declarations as to the necessity of a special statute for the Sacramento and San Joaquin Drainage District.

SENATE COMMITTEE ON NATURAL RESOURCES AND WATER

Senator Fran Pavley, Chair

2015 - 2016 Regular

Bill No: AB 1061 Hearing Date: July 14, 2015

Subject: Sacramento and San Joaquin Drainage District: powers.

BACKGROUND AND EXISTING LAW

Background:

In 1911 the legislature created the California State Reclamation Board (Board), which was given regulatory authority over the Sacramento Valley’s Local Maintaining Agencies (LMAs), with the objectives of (1) assuring a logical, integrated system for controlling flooding along the Sacramento and San Joaquin Rivers and their tributaries in cooperation with US Army Corps of Engineers, (2) cooperating with various agencies in planning, constructing, operating, and maintaining flood control works, and (3) maintaining the integrity of the flood control system. In 1913 the Reclamation Board was given regulatory authority over the San Joaquin Valley’s LMAs. The same year, the Legislature created the Sacramento-San Joaquin Drainage District (District) to give the Reclamation Board the authority to acquire the necessary property and easements for flood control. Creation of the district allowed the State Engineer to procure data and perform surveys and examinations of the San Joaquin and Sacramento rivers and their tributaries to further the Board's plans to control the floodwaters of the rivers, improve and preserve navigation, and ensure the reclamation and protection of the lands that are susceptible to overflow from those rivers and their tributaries. Those plans culminated in the State Plan of Flood Control (SPFC), a State-Federal flood protection system in the Sacramento River and San Joaquin River watersheds. Property rights for the SPFC are held by the District.

According to statute, the Drainage District can acquire, own, hold, use, and enjoy any and all properties necessary for the purposes of the district. The District’s boundaries comprise more than 1.9 million acres in the Central Valley along the general course of the Sacramento and San Joaquin Rivers, stretching from Glenn and Butte Counties in the north to Madera and Fresno Counties in the south (see Figure in Comments). Management and control of the District are vested in the Board. In 2007 the Legislature restructured the Reclamation Board and renamed it the “Central Valley Flood Protection Board.” The legislation also gave the Board the responsibility to review and adopt the historic 2012 Central Valley Flood Protection Plan (CVFPP).

Existing law:

1. Provides the Board authority for the protection and oversight of levees, weirs, channels, and other features of federally and state-authorized flood control facilities located in the Sacramento River and San Joaquin River drainage basins (Water Code (WAT) Division 5, Part 4, Chapter 3).

2. Requires plans that involve the construction, enlargement, or alteration of any levee, embankment, canal, or other excavation in the bed of or along or near the banks of the Sacramento or San Joaquin Rivers or any of their tributaries or specified lands to be approved by the Board before such activity is commenced (WAT Division 5, Part 4 Chapter 3).

3. Vests management and control of the District in the Board (WAT Section 8502).

4. Authorizes the District to acquire, own, hold, use, and enjoy any and all properties necessary for the purposes of the District (WAT Section 8504).

PROPOSED LAW

This bill:

Amends WAT Section 8504 to allow the District to sell, lease, or rent properties, and use any revenue that is generated from the lease or rental of said properties for flood control purposes.

ARGUMENTS IN SUPPORT

Writing in support, the bill’s sponsor, the California Central Valley Flood Control Association (CCVFCA) states that AB1061 will “enable agricultural, oil, and gas lease proceeds to be directly available for the maintenance of flood control projects. Applying lease revenues directly to maintenance activities will help in completing repairs and preservation of levees, while also maximizing environmental mitigation and enhancement.”

ARGUMENTS IN OPPOSITION

None Received

COMMENTS

Who currently controls proceeds from the lease or renting of District lands? The management and control of the District is vested in the Board, which falls under the authority of DWR. Board leases include traditional grazing and agricultural leases as well as oil and gas leases that generate rent and royalties. Existing law requires all lease revenues from land where DWR is the lessor to be deposited directly into the General Fund.

Similar Legislation:

SB749 (Wolk, 2013, Chapter 387) amended Fish and Game Code Section 1745.1 to authorize the Department of Fish and Wildlife to lease department-managed lands for agricultural activities. In addition, the bill allowed any moneys collected from these agricultural leases to be used to support the management, maintenance, restoration, and operations of department-managed lands. One example of a successful management project is the Yolo Basin Wildlife Refuge, where lands leased for the growing of rice provide habitat for waterfowl and other wildlife species, and managed grazing in other parts of the refuge help to maintain vernal pool habitat. The revenues generated from the leases also assist the DFW in covering maintenance and operations costs for the refuge.

SUPPORT

California Central Valley Flood Control Association (CCVFCA) (Sponsor)

Association of California Water Agencies (ACWA)

OPPOSITION

None Received

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 1061

Author:(Gallagher)

As Amended Ver: June 1, 2015

2/3 vote

SUMMARY: Allows the Sacramento and San Joaquin Drainage District (District), which is under the management and control of the Central Valley Flood Protection Board (Board), to sell, lease, or rent properties, and use any revenue that is generated from the lease or rental of the properties for flood control purposes.

EXISTING LAW:

1. Provides the Board authority for the protection and oversight of levees, weirs, channels, and other features of federally and state-authorized flood control facilities located in the Sacramento River and San Joaquin River drainage basins.

2. Requires plans that involve the construction, enlargement, or alteration of any levee, embankment, canal, or other excavation in the bed of or along or near the banks of the Sacramento or San Joaquin Rivers or any of their tributaries or specified lands to be approved by the Board before such activity is commenced.

3. Vests management and control of the District in the Board.

4. Authorizes the District to acquire, own, hold, use, and enjoy any and all properties necessary for the purposes of the District.

FISCAL EFFECT: According to the Assembly Appropriations Committee, annual General Fund losses of $360,000 resulting from the transfer of revenue generated by leases to the District. Management and control of the district is vested in the Board. Board leases include traditional grazing and agricultural leases as well as oil and gas leases that generate rent and royalties.

COMMENTS: This bill gives the District broader property-related powers. In addition to being able to acquire, hold and enjoy property, this bill allows the District to sell, lease, or rent property, including rights-of-way and easements, and apply any revenue from the lease or rental of property to the flood control purposes of the District and the Board.

The author states that the District has property rights dating back to the 1900s and retains fee title, easements, and other land use agreements on about 18,000 parcels. According to the author, there are agreements that allow for agricultural crop production, which generates lease revenues to the state. But the author adds the revenues must go directly to the General Fund and cannot be used for the maintenance and repair of flood control projects.

The District boundaries comprise more than 1.9 million acres in the Central Valley along the general course of the Sacramento and San Joaquin Rivers, stretching from Glenn and Butte Counties in the north to Madera and Fresno Counties in the south. The District was created in 1913 to allow the State Engineer to prepare a report to the Reclamation Board, which was the current Board's predecessor agency. The purpose of the report was to further plans for controlling the floodwaters of the rivers and improve and preserve navigation, reclamation, and the protection of the lands that are susceptible to overflow from those rivers and their tributaries. Those plans culminated in the State Plan of Flood Control (SPFC), a State-Federal flood protection system in the Sacramento River and San Joaquin River watersheds. Property rights for the SPFC are held by the District.

A prior statutory change solved a similar issue for the Department of Fish and Wildlife (DFW): DFW supplemented the costs of maintenance and operations of DFW-managed lands by granting revenue-generating leases for agricultural activities, where compatible. A state audit conducted in 2012 raised questions regarding the accountability of the leasing process and the reporting of revenues. SB 749 (Wolk), Chapter 387, Statutes of 2013, authorized, among other provisions, that DFW could enter into contracts, agricultural leases, or other agreements, as specified, and use the revenues for the management and operation of DFW lands. One example of a successful project is the Yolo Basin Wildlife Refuge, where lands leased for the growing of rice provide habitat for waterfowl and other wildlife species, and managed grazing in other parts of the refuge help to maintain vernal pool habitat. The revenues generated from the leases also assist the DFW in covering maintenance and operations costs for the refuge.

Supporters state that allowing the lease revenue funding under this bill will improve maintenance, help maximize environmental mitigation and enhancement, and assist in offsetting mitigation costs.

There is no known opposition to this bill.

Analysis Prepared by: Tina Leahy / W., P., & W. / (916) 319-2096 FN: 0000834

Date of Hearing: May 13, 2015

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Jimmy Gomez, Chair

ABPCA Bill Id:AB 1061

Author:(Gallagher) – As Amended Ver:April 29, 2015

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill authorizes the Sacramento and San Joaquin Drainage District (District) to engage in specified property transactions and use any revenue generated for flood control purposes. Specifically, this bill authorizes the District to:

1. Sell or otherwise dispose of a right-of-way, easement, or property when the district determines that the right-of-way, easement, or property is no longer necessary.

2.  Lease or rent a right-of-way, easement, or property.

3. Take, receive, or apply the income, profit, or revenue received from the sale, lease, rental, or other disposal of property for flood control purposes.

FISCAL EFFECT:

1. Annual GF losses of $360,000 resulting from the transfer of revenue generated by leases to the District.

The management and control of the district is vested in the Central Valley Flood Protection Board (CVFPB). Board leases include traditional grazing and agricultural leases as well as oil and gas leases that generate rent and royalties.

2. Unknown future GF losses resulting from the disposal of District property deemed unnecessary.

COMMENTS:

1. Purpose. According to the author, the District has property rights including fee title, easements and other land use agreements on about 18,000 parcels. Any revenues generated on the lands go directly to the state General Fund. Instead, this bill allows the District to expend the revenues for the maintenance and repair of flood control projects.

2. Background. District boundaries comprise more than 1.9 million acres in the Central Valley along the Sacramento and San Joaquin Rivers, stretching from Glenn and Butte Counties in the north to Madera and Fresno Counties in the south. The District was created in 1913 to allow the State Engineer at the time, to procure data, and perform surveys and examinations of the San Joaquin and Sacramento rivers and their tributaries for the purpose of preparing a report to the Reclamation Board (now the Central Valley Flood Protection Board). The plans became what is now the State Plan of Flood Control (SPFC), a State-Federal flood protection system in the Sacramento River and San Joaquin River watersheds. Property rights for the SPFC are held by the District and lease revenues are deposited in the General Fund.

Analysis Prepared by: Jennifer Galehouse / APPR. / (916) 319-2081