BILL ANALYSIS                                                                                                                                                                                                    





                                                                  AB 694

                                                                  Page  1


          GOVERNOR'S VETO
          AB 694 (Saldana)
          As Introduced  February 26, 2009
          2/3 vote

           ----------------------------------------------------------------- 
          |ASSEMBLY:  |48-30|(May 28, 2009)  |SENATE: |24-15|(September 3,  |
          |           |     |                |        |     |2009)          |
           ----------------------------------------------------------------- 
           
           Original Committee Reference:   NAT. RES.  

           SUMMARY  :  Repeals Chapter 642 of the Statutes of 1929 which  
          removed the "tidelands" designation on all land shoreward of the  
          bulkhead in City of San Diego and declared them to be free from  
          all public trusts and restrictions.  Specifically,  this bill:
           
          1)Repeals Chapter 642 of the Statutes of 1929.  All former  
            tidelands shoreward of the bulkhead, with the exception of the  
            parcels conveyed to the United States by the City of San Diego  
            within the Navy Broadway Complex, and tidelands or submerged  
            lands seaward of the bulkhead would therefore be subject to  
            public trust restrictions.

          2)States that the repeal of Chapter 642 may not be construed to  
            overturn or otherwise nullify the decision in United States of  
            America v. 15.320 Acres of Land, U.S. Dist. Lexis 21875 or any  
            title settlement agreement entered into by the State of  
            California acting by and through the State Lands Commission.

          3)Requires the State Lands Commission (Commission) to represent  
            the state and cooperate with the state's local trustees and  
            the United States in resolving their respective title and  
            boundary issues involving tidelands and submerged lands,  
            including, but not limited to, those involved in the 1993  
            federal Base Closure and Realignment Law.

           EXISTING LAW  :

          1)Section 3 of Article X of the California Constitution  
            prohibits all tidelands within two miles of any incorporated  










                                                                  AB 694

                                                                  Page  2


            city, city and county, or town from being granted or sold to a  
            private party; section 4 of Article X prohibits anyone from  
            excluding the right of access to or navigation of tidelands  
            whenever it is required for any public purpose.

          2)Chapter 700, Statutes of 1911 conveyed certain tideland  
            parcels to the City of San Diego to be held in public trust,  
            without the right to grant or convey such tidelands, on the  
            condition that it make certain harbor improvements.

          3)Chapter 250, Statutes of 1913 authorized any municipality to  
            which tidelands have been granted by the Legislature to grant  
            portions of such lands to the United States for the "public  
            purposes of the United States" if approved by a majority of  
            electors.

          4)Chapter 642 of the Statutes of 1929 removed the "tidelands"  
            designation on all land shoreward of the bulkhead in City of  
            San Diego and declared them to be free from all public trusts  
            and restrictions except that the city shall not grant or  
            convey these lands to anyone for any purpose.  The city is  
            permitted, however, to lease or rent these lands for a period  
            not to exceed 50 years.  The city may also use, lease or rent  
            all land lying seaward of the bulkhead line to any person or  
            corporation for a maximum of 50 years provided that the use or  
            lease does not interfere with public trust purposes such as  
            navigation, commerce or fisheries.

           FISCAL EFFECT  :  None

           COMMENTS  :  This bill responds to a federal district court  
          decision in 1991 upholding the Navy's assertion that about 15  
          acres of downtown waterfront land, former tidelands granted to  
          it by the City of San Diego for exclusive use of the Navy (known  
          as the Navy Broadway Complex), are free from the public trust  
          and associated use restrictions.  The U.S. brought this case in  
          order to "quiet title" or settle all claims to the property in  
          order to develop it.  In defense, the state argued that Chapter  
          642 did not terminate the public trust on the property but  
          simply lifted certain use restrictions and the absolute  
          prohibition, contained in the original 1911 grant to the city,  










                                                                  AB 694

                                                                  Page  3


          against its transfer (especially when read with Chapter 808,  
          passed by the Legislature in the same year as Chapter 642, which  
          defined to whom and for what purpose tidelands could be  
          granted).  Moreover, the state argued that even if the  
          Legislature intended to lift the public trust from the property,  
          it did not have the power to do so because such action would  
          conflict with common law precedent upholding the public's  
          unalienable interest in tidelands.

          The court rejected the state's position and ruled in favor of  
          the U.S. citing, in part, the plain, unambiguous language of  
          Chapter 642 and the fact that neither the Legislature nor a  
          court of law has taken any action to invalidate it.   
          Accordingly, and pursuant to federal authorization, the Navy  
          entered into a long-term lease in December 2006 with a private  
          developer in exchange for a new Navy Administration building on  
          the 15 acre property.  The developer is proposing 1.7 million  
          square feet of office use, 1.2 million square feet of hotels,  
          lesser amounts for retail and "public attraction" space, and a  
          1.9 acre public park.  The Navy has entered into a memorandum of  
          understanding with the City of San Diego to develop the  
          property.

          This bill only pertains to the remaining tidelands or submerged  
          lands, both filled and unfilled, subject to Chapter 642 and  
          outside of the Navy Broadway Complex.  While the author has no  
          intention of overturning the federal court decision, the intent  
          is to clarify that the remaining tidelands in the City of San  
          Diego are subject to the public trust and associated use  
          restrictions.  In fact, according to the Commission, the court's  
          decision is final, no longer subject to appeal, and irrespective  
          of this bill, cannot be re-tried with respect to the subject  
          tidelands.  The author's office is concerned that without this  
          bill, the Navy could assert a similar right to lease or dispose  
          of other tidelands for non-military or non-trust uses.  

          Chapter 250, Statutes of 1913 authorized any municipality to  
          which tidelands have been granted by the Legislature to grant  
          portions of such lands to the United States for the "public  
          purposes of the United States" if approved by a majority of  
          electors.   Between 1919 and 1940, the City of San Diego granted  










                                                                  AB 694

                                                                  Page  4


          to the United States government several parcels of land,  
          including the Navy Broadway Complex.  All of the grants, though  
          some obviously in vain, restricted use of the parcels to the  
          "purposes" of the U.S. Navy.  In 1962, the Legislature created  
          the Port of San Diego and transferred most of the remaining  
          tidelands subject to Chapter 642 to the Port.  On behalf of the  
          state, the Port holds in trust about 3415 acres of filled  
          tidelands and 3402 acres of submerged tidelands.  According to  
          the Port, these lands are all used to promote the public trust  
          (e.g., ship building, marinas; visitor-serving hotels and  
          restaurants; berths, ship channels; parks, open space).

          This bill is similar to AB 1832 (Salda?a), which the Governor  
          vetoed last year because it eliminated the authority of local  
          governments, upon voter approval, to grant tidelands and  
          submerged lands to the federal government for "public" or  
          "governmental" purposes.  This bill retains this authority.
           
          GOVERNOR'S VETO MESSAGE  :

                This bill would shift authority over a portion of  
                land from the City of San Diego to the State Lands  
                Commission, effectively removing the ability of the  
                city to cooperate with the United States government  
                in the protection and public use of these tidelands  
                and submerged lands.

                Last year, I vetoed a similar measure, AB 1832  
                (Saldana), which would have applied to tidelands and  
                submerged lands throughout California.  I recognize  
                that the author has limited the scope of this bill  
                to tidelands already granted within the City of San  
                Diego.  Unfortunately, this measure suffers the same  
                fatal flaw: it imposes trust restrictions on certain  
                tidelands parcels which could significantly  
                undermine the authority of local officials to  
                administer trust resources.

                Once again, I believe that local governments have an  
                inherent interest in creating partnerships with the  
                federal government and others in utilizing water  










                                                                  AB 694

                                                                  Page  5


                front lands for the benefit of the people of  
                California.  I remain firm in my belief that they  
                can do so in a way that balances both our  
                environmental and economic interests. 
           
          Analysis Prepared by  :  Dan Chia / NAT. RES. / (916) 319-2092 


                                                                FN: 0003420