SEC. 2.
(a) The Director of Finance may allocate an amount, not to exceed three million dollars ($3,000,000), from the Special Fund for Economic Uncertainties, to the Department of Water Resources for restoration and rehabilitation of flood, sediment, and erosion control projects, including deferred maintenance associated costs required by the United States Army Corps of Engineers. All expenditures shall be for the purpose of carrying out flood damage repair projects or nonstructural alternatives, if the nonstructural costs are equal to, or less than, the state’s cost of repair, to repair damage from the January 1997 flood event to state or federally constructed or owned flood, sediment, and erosion control projects. (b) Any amount of federal or local funds, received by the department for the purpose of offsetting expenditures made pursuant to subdivision (a) or prior to or after the encumbrance of funds allocated pursuant to this section, shall be deposited in the General Fund. No funds allocated pursuant to this section may be used for the purchase of property in connection with the implementation of nonstructural alternatives unless the acquisition is from willing sellers.
(c) On or before January 1, 1999, the Department of Water Resources shall submit a report to the Joint Committee on Legislative Budget summarizing the expenditure of the funds allocated pursuant to subdivision (a).