BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 994
                                                                  Page  1

          Date of Hearing:   June 4, 2008

                   ASSEMBLY COMMITTEE ON WATER, PARKS AND WILDLIFE
                                  Lois Wolk, Chair
                      SB 994 (Florez) - As Amended:  May 1, 2008

           SENATE VOTE  :   (vote not relevant)
           
          SUBJECT  :   Delta smelt hatchery

           SUMMARY  :   Creates a Delta Smelt Hatchery Program to preserve  
          and restore the Delta smelt.  Specifically,  this bill  :   

          1)Requires the Department of Fish and Game (DFG) to develop the  
            Delta Smelt Hatchery Program to preserve and restore the delta  
            smelt, and serve as a mitigation bank, requiring that the  
            Hatchery do all of the following:

             a)   Be designed to establish a sustainable population of  
               delta smelt sufficient to warrant the species removal from  
               the endangered species list under the federal and state  
               Endangered Species Act (ESA);

             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.

             c)   Construct at least one delta smelt hatchery by January  
               1, 2011.

             d)   Implement research methods and strategies to help  
               increase the population of delta smelt.

             e)   Establish a mitigation banking program, including costs  
               and agreements for mitigation.

          2)Requires DFG to enter into mitigation banking agreements  
            providing authorization of take of delta smelt under the state  
            ESA, provided the agreements require:

             a)   Mitigation bank partners to participate in the bank "at  
               a level that is roughly proportional to the impact of the  
               banking partner's activity on delta smelt."

             b)   Financial contributions sufficient to meet the  








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               mitigation obligation of the banking partner for the  
               purposes of obtaining a take authorization.

          3)Requires DFG to issue a take authorization to mitigation bank  
            partners.

          4)Provides for excess hatchery production to create mitigation  
            credits for future activities.

          5)Pays hatchery costs with an unspecified transfer from an  
            unspecified source.

          6)Makes legislative findings regarding the deteriorating  
            condition of the delta smelt population and its effects on  
            water resources from the Delta.

           EXISTING LAW  provides for DFG to list species that are  
          threatened or endangered for additional legal protections, such  
          as a prohibition on "taking" such listed species, in order to  
          avoid extinction.

           FISCAL EFFECT  :   Unknown

           COMMENTS  :   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.  

          In recent years, federal/state monitoring has shown the delta  
          smelt population dropping precipitously.  Delta smelt monitoring  
          dates back 40 years and includes 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 28 (2007).   
          During the recent catastrophic decline in delta smelt, the State  
          Water Project substantially increased Delta pumping, to  
          record-high levels.  Then, last August, Delta smelt was the  
          ESA-listed fish that led to federal Judge Oliver Wanger (E.D.  
          Cal/Fresno) restricting Delta pumping by the federal/state water  
          projects, after he found that the federal "biological opinions"  
          violated the ESA.

          SB 994 proposes creation of a delta smelt hatchery to reverse  
          this decline and help those parties who "take" delta smelt to  








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          get authorization for their take.  ("Take" of an ESA-listed  
          species may include destruction, harassment or alteration of  
          habitat.)  Such parties may include state and federal agencies  
          that export water from the Delta, and possibly those who  
          contract for delivery of such export water. 

          The bill sets objectives for the hatchery that are difficult, if  
          not impossible, to achieve, including removal of the delta smelt  
          from its listing as threatened under the ESA and using research  
          methods/strategies to increase the population.  First, a  
          hatchery population cannot be counted as a sustainable  
          population.  Federal courts have upheld the federal government's  
          distinction between wild salmon and hatchery salmon.  Therefore,  
          even if hatchery salmon thrived, the wild salmon would remain on  
          the ESA list.  A similar principle would apply to delta smelt,  
          making removal from the ESA list based on hatchery fish an  
          impossible objective.

          Second, a hatchery or a refuge population may impair the  
          likelihood of the delta smelt's survival. Federal biologists  
          have identified salmon hatcheries as a stressor on wild salmon,  
          due to problems with spreading of disease and other problems.   
          The existing process to "salvage" Delta smelt at water export  
          pumps and transport them to the North Delta, away from the  
          pumps, has led to substantial delta smelt losses.  A research  
          population of delta smelt was recently destroyed, due to disease  
          in that population.

          Third, the concept of a hatchery has not been proposed by ESA  
          regulators. Neither federal nor state biologists that administer  
          the ESA have proposed a hatchery for delta smelt in a biological  
          opinion, conservation recommendation, or in the Delta  
          Multi-Species Conservation Strategy.  The DFG report submitted  
          by the author, for example, mentions mitigation banks, but for  
          land and habitat, not for creating a hatchery.  


















                                                                  SB 994
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          Federal and state agencies are now developing a "Bay-Delta  
          Conservation Plan" (BDCP), in order to obtain 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.

          A hatchery does not address the underlying problems in the Delta  
          that impair delta smelt habitat.  Dr. Peter Moyle, a UC Davis  
          professor and one of the foremost experts on delta smelt,  
          commented 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 oversees a refuge population of delta smelt, which has  
          shown that they can survive and reproduce in captivity, but  
          notes that such refuge programs are "prone to failure" for a  
          range of reasons.  He adds that it "is worth noting that the  
          salmon fishery has collapsed despite hatcheries releasing  
          millions of young each year, into the wild."

          The California Farm Bureau Federation (CFBF) opposes SB 994  
          because DFG would operate the mitigation bank, which conflicts  
          with CFBF policy against governmental regulators operating  
          mitigation banks.  CFBF has proposed amendments to move the  
          mitigation bank operation to the Department of Water Resources  
          and the University of California, but the author declined to  
          accept the amendments.

           REGISTERED SUPPORT / OPPOSITION  :

           Support 
           
          Association of CA Water Agencies (if amended)
          Friant Water Authority (if amended)
          Kern County Water Agency
          Metropolitan Water District (if amended)
          San Diego County Water Authority
          Santa Clara Valley Water District (in concept)








                                                                  SB 994
                                                                  Page  5

          Southern California Water Committee
          Westlands Water District
           
            Opposition 
           
          The Bay Institute
          California Farm Bureau Federation (unless amended)
          Defenders of Wildlife
          Environmental Defense Fund
          Natural Resources Defense Council
          Sierra Club California

           Analysis Prepared by  :    Alf W. Brandt / W., P. & W. / (916)  
          319-2096