BILL NUMBER: AB 2503 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 21, 2010
AMENDED IN ASSEMBLY MAY 28, 2010
AMENDED IN ASSEMBLY APRIL 20, 2010
AMENDED IN ASSEMBLY APRIL 5, 2010
INTRODUCED BY Assembly Member John A. Perez
FEBRUARY 19, 2010
An act to repeal Section 6429.5 of, and to repeal and add Article
2 (commencing with Section 6420) of Chapter 5 of Part 1 of Division 6
of, the Fish and Game Code, and to add Division 37 (commencing with
Section 71500) to the Public Resources Code, relating to ocean
resources.
LEGISLATIVE COUNSEL'S DIGEST
AB 2503, as amended, John A. Perez. Ocean resources: artificial
reefs.
Existing law establishes a California Artificial Reef Program,
administered by the Department of Fish and Game, to include the
placement of artificial reefs, as defined, in state waters and a
prescribed study of existing successful reefs and new reefs to
determine design criteria.
This bill would repeal those provisions and, instead, would enact
the California Marine Life Legacy Act to establish a program of
artificial reef research and development, administered by the
department. The act would authorize the department to
conditionally approve the conversion of an offshore oil
platform or production facility into an artificial reef, if specified
criteria are satisfied, including a finding that the alternative of
converting the decommissioned offshore oil platform or production
facility into an artificial reef provides a net environmental
benefit to the environment and
substantial cost savings compared to the alternative of
removing the facilities. The act would require the
department Ocean Protection Council , for
purposes of determining whether such a conversion provides a net
environmental benefit, to determine criteria for biological
evaluation of an oil platform or production facility for use as an
artificial reef and , to consult with
and advise the department, the
California Coastal Commission, the State Lands Commission, the
California Ocean Service Trust and other responsible agencies
as to those criteria , and would require that the conversion
comply with the California Environmental Quality Act . The act
would require the department State Lands
Commission to determine the cost savings of a conversion, and
would require the owner or operator, upon conditional approval for
conversion, to apportion a percentage of the cost savings funds in
accordance with a prescribed schedule to the California Endowment for
Marine Preservation and , the county
immediately adjacent to the location of the facility , and the
General Fund . The act would authorize the department to take
title to a decommissioned offshore oil platform or production
facility in open coastal waters if prescribed requirements are met.
The act, until January 1, 2014, would establish an
accelerated platform decommissioning program for the conversion of
oil platforms or production facilities into artificial reefs, which
would include expedited review and an alternate apportionment
schedule.
The bill would establish the California Endowment for Marine
Preservation, subject to the Nonprofit Public Benefit Corporation
Law, in order to create a permanent source of funding for projects
and programs that will conserve, protect, restore, and
enhance the open coastal and marine resources of the
state. The endowment would be governed by a board of directors, with
membership and duties prescribed by the bill.
The bill would require the endowment to coordinate its activities
with the Department of Fish and Game, the California Coastal
Commission, the San Francisco Bay Conservation and Development
Commission, the State Lands Commission, and appropriate federal
agencies. The bill would require the endowment to allocate 10%
of any funds received pursuant to the act to qualified state agencies
within 24 months of receipt of the funds.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. It is the intent of the Legislature that the process
for evaluating the proposed conversion of decommissioned offshore oil
platforms and facilities into artificial reefs take into account
the findings and recommendations of the study being
coordinated by the California Ocean Science Trust, with support from
the California Ocean Protection Council and others, entitled "Study
to Provide Information Related to Oil and Gas Platform
Decommissioning Alternatives in California," which is due to be
released in June 2010. the findings and
recommendations of the June 2010 study produced by the California
Ocean Science Trust, with support from the Ocean
Protection Council and others, entitled "Evaluating Alternatives to
Decommissioning California's Offshore Oil and Gas Platforms: A
Technical Analysis to Inform State Policy."
SEC. 2. Article 2 (commencing with Section 6420) of Chapter 5 of
Part 1 of Division 6 of the Fish and Game Code is repealed.
SEC. 3. Article 2 (commencing with Section 6420) is added to
Chapter 5 of Part 1 of Division 6 of the Fish and Game Code, to read:
Article 2. California Marine Life Legacy Act
6420. The Legislature finds and declares all of the following:
(a) This act shall be known, and may be cited, as the California
Marine Life Legacy Act.
(b) California's extraordinary marine biological diversity is a
vital asset to the state and nation. The diversity of species and
ecosystems found in the ocean waters off the state is important to
public health and well-being, ecological health, and ocean-dependent
industries.
(c) A program of artificial reef research and development,
including reef design, placement, and monitoring, is in the public
interest and can best be accomplished under the administration of the
department with the cooperation and assistance of the University of
California, the California State University, the State Lands
Commission, the Ocean Protection Council, the California Ocean
Science Trust, other established, appropriate academic institutions,
and other organizations with demonstrated expertise in the field.
(d) This state is currently implementing a system of marine
protected areas in order to protect habitat and ecosystems, conserve
biological diversity, provide a sanctuary for fish and other sea
life, enhance recreational and educational opportunities, and provide
a reference point against which scientists can measure changes
elsewhere in the marine environment, and may help rebuild depleted
fisheries.
(e) Efforts to enhance marine diversity through the placement of
artificial reefs need to be investigated.
(f) A state artificial reef research and construction program
under the administration of the department is necessary to coordinate
ongoing studies and construction of artificial reefs in waters of
the state.
(g) It is important to provide adequate funding to meet
legislatively imposed mandates.
6421. For purposes of this article, the following terms have the
following meanings:
(a) "Artificial reef" means manmade or natural objects
intentionally placed or allowed to remain in place in selected areas
of the marine environment to duplicate those
create conditions that induce production of fish and
invertebrates on natural reefs and rough bottoms, support additional
biomass, enhance biodiversity and that stimulate the growth of kelp
or other midwater plant life that creates natural habitat for those
species.
(b) "Commission" means the State Lands Commission.
(b)
(c) "Cost savings" are means
the difference between the estimated cost to the operator or
owner of complete removal of an offshore oil platform or production
facility and the costs incurred by the operator or owner of
converting a platform or facility into an artificial reef.
(d) "Council" means the Ocean Protection Council.
(c)
(e) "Endowment" means the California Endowment for
Marine Preservation established in Division 37 (commencing with
Section 71500) of the Public Resources Code.
(f) "Exclusive economic zone (EEZ)" means the zone as measured
from the mean high tide line seaward to 200 nautical miles as set
forth in the Presidential Proclamation 5030 of March 10, 1983, in
which the United States proclaimed jurisdiction over the resources of
the ocean within 200 miles of the coastline.
(d)
(g) "National Fishing Enhancement Act of 1984" means
Title II of Public Law 98-623.
(e)
(h) "Offshore oil platform or production facility"
means platforms, piers, and artificial islands located seaward of
mean lower low water, used for oil and gas exploration, development,
production, processing, or storage.
(f)
(i) "Oil" means any kind of petroleum, liquid
hydrocarbons, natural gas, or petroleum products or any fraction or
residues therefrom.
(g)
(j) "Open coastal marine resource" means those marine
resources that use open coastal waters as their habitat.
(h)
(k) "Open coastal waters" means the area composed of
the submerged lands of the state that are below the mean lower low
water extending seaward to the boundaries of the Exclusive Economic
Zone.
(i)
(l) "Production" means increases in the biomass of a
species or number of species.
(j)
(m) "Program" means the California Artificial Reef
Program administered pursuant to this article.
(k)
(n) "Reef materials" include only materials allowed
under the National Artificial Reef Plan, adopted under the
federal National Fishing Enhancement Act of 1984 for
construction of artificial reefs.
(l)
(o) "State waters" means waters within the seaward
boundary of the state as identified in Section 2 of Article III of
the California Constitution.
6422. The department shall administer the program.
6423. The program shall include all of the following elements:
(a) The placement of artificial reefs, including, but not limited
to, decommissioned offshore oil platforms and production
facilities allowed to remain in place as artificial
reefs in state and federal waters.
(b) A study of existing successful reefs and all new reefs placed
by the program to determine the design criteria needed to construct
artificial reefs capable of increasing marine biomass and
biodiversity in state and federal waters.
(c) A determination of the requirements for reef siting and
placement.
(d) Consideration of modification and use of existing marine
structures in both state and federal waters as artificial reefs.
6424. The amount allocated for the administration of the program
in any fiscal year shall not exceed the amount authorized by
applicable state and federal policy guidelines.
6426. 6425. The Legislature hereby
finds and declares all of the following:
(a) There is an existing permitting process for decommissioning
of offshore oil platforms or production facilities.
(b) Decommissioning of the offshore oil platforms or production
facilities has already occurred and as part of the permitting process
there was some consideration given to converting platforms or
facilities into artificial reefs.
(c) The operator or owner of offshore oil platforms or production
facilities could save a considerable sum of money if the
decommissioned offshore oil platform or production facility is
allowed by permitting local, state, and federal agencies to remain in
place and be converted into an artificial reef.
(d) The savings that result from that conversion should be shared
with the citizens of this state.
(e) A mechanism is needed to ensure that if local, state, and
federal agencies allow the conversion of an offshore oil platform or
production facility to an artificial reef, the citizens of this state
would share in the savings and those shared funds would be used to
benefit the open coastal marine resources that lie offshore of this
state.
(f) Offshore oil
platforms may function as artificial reefs and provide habitat for
many species, including threatened and endangered species.
and fully removing offshore oil platforms or production
facilities. Owners and operators are currently responsible for the
full cost of decommissioning and remediating those facilities.
(b) According to the Minerals Management Service of the United
States Department of the Interior, the 23 oil and gas platforms in
federal waters off the California coast are expected to reach the end
of their useful production lifetimes and be decommissioned between
2015 and 2030.
(c) The California Ocean Science Trust in its June 2010 study,
titled "Evaluating Alternatives for Decommissioning California's
Offshore Oil and Gas Platforms: A Technical Analysis to Inform State
Policy," analyzed a number of options for decommissioning in addition
to full rig removal, but found that the only other feasible option
is partial removal and conversion to an artificial reef.
(d) The California Ocean Science Trust report and other studies
indicate that the partial removal option can result in net
environmental benefits and substantial cost savings compared to full
removal of an oil platform or production facility.
(e) It is in the interest of the state that a portion of the cost
savings that result from that conversion should be shared with the
citizens of this state to protect and enhance the state's marine
resources.
(f) A mechanism is needed to ensure that, if local, state, and
federal agencies allow the conversion of an offshore oil platform or
production facility to an artificial reef, the citizens of this state
would share in the savings and those shared funds would be used to
benefit the open coastal marine resources of the state.
6426.1. 6425.5. The department
shall serve as the primary authority for managing and operating
artificial reefs created from decommissioned
offshore oil platforms or production facilities approved
pursuant to this article . The department may obtain funds for
the planning, development, maintenance, and operation of those
artificial reefs facilities and may
accept gifts, subventions, grants, rebates, and subsidies from any
lawful source. The department may adopt regulations to implement this
article.
6427. This article establishes a program through which an owner
or operator of an offshore oil platform or production facility may
voluntarily choose to create an artificial reef from the offshore oil
platform or production facility if the requirements of this article
and other applicable legal requirements are met. The department may
conditionally approve the conversion of an offshore oil platform or
production facility into an artificial reef only if the following
criteria are satisfied:
6426. (a) The Legislature hereby finds and declares all of the
following:
(1) The conversion of offshore oil platforms or production
facilities should not be done until there has been a thorough
scientific study and evaluation.
(2) The costs of such a study should be borne by the operators of
offshore oil platforms or production facilities.
(3) Each offshore oil platform or production facility creates a
unique environment because of its location, depth, and other
ecological factors.
(4) Because of significant variations, those scientific studies
and evaluations should be done for each offshore oil platform or
production facility for which an application for the conversion of
the oil platform or production facility has been made to the
department.
(b) This article establishes a program through which an owner or
operator of an offshore oil platform or production facility may
voluntarily apply to the department to convert an offshore oil
platform or production facility to an artificial reef. In addition to
meeting the other requirements of this article, an owner or operator
that chooses to apply to convert an offshore oil platform or
production facility shall meet application requirements to be
designed by the department to receive information needed to
facilitate review of the application in a timely manner, including as
specified in subdivision (d). In order to facilitate timely review,
the department may require the applicant to include either or both of
the following in the application:
(1) A plan for converting the offshore oil platform or production
facility into an artificial reef, including removal of any portion of
the platform or facility as appropriate to maintain navigational
safety.
(2) A management plan for the artificial reef, including
maintenance in a manner consistent with navigational safety,
enforcement and monitoring.
(c) The information submitted pursuant to paragraphs (1) and (2)
of subdivision (b) shall be used by the department for advisory
purposes only. Final determinations regarding the conversion and
management of the offshore oil platform or production facility shall
be made solely by the department based on its independent review and
judgment.
(d) A proposed project to convert an offshore oil platform or
production facility into an artificial reef pursuant to this article
is a project as defined in subdivision (c) of Section 21065 of the
Public Resources Code and is therefore subject to the California
Environmental Quality Act (Division 13 (commencing with Section
21000) of the Public Resources Code) and qualifies for the time
limits established in Section 21100.2 of the Public Resources Code.
6427. The department may conditionally approve the
conversion of an offshore oil platform or production facility only
if all of the following criteria are satisfied, and in accordance
with Sections 6427.2 and 6427.3:
(a) The conversion of the offshore oil platform or production
facility into an artificial reef , and the
planning, development, maintenance, and operation of that platform or
facility as an artificial reef , would be
consistent with all applicable state, federal, and international
laws, including, but not limited to, all of the following:
(1) The federal Magnuson-Stevens Fishery Conservation
and Management Act (16 U.S.C. Sec. 1801 et seq.).
(2) The federal National Fishing Enhancement Act of
1984.
(3) The California Coastal Management Program.
(4) The Marine Life Management Act of 1998 (Chapter 1052 of the
Statutes of 1998).
(5) The Marine Life Protection Act (Chapter 10.5 (commencing with
Section 2850) of Division 3).
(6) State and federal water quality laws.
(7) Navigational safety laws.
(b) The alternative of converting the decommissioned offshore oil
platform or production facility into an artificial reef
provides a net benefit to the environment compared to the
alternative of removing the facilities , as determined
pursuant to Section 6428.1 .
(c) The cost savings that would result from the conversion of the
offshore oil platform or production facility into an artificial reef
have been determined pursuant to Section 6429.
(d) The owner or operator of the offshore oil platform or
production facility provides sufficient funds to the department for
the department to make the determinations required in this section
and Section 6427.5, including, but not limited to, all of the
following:
(1) An evaluation, including any necessary research, of the
platform or facility to determine the benefits of the artificial reef
sites to biotic productivity.
(2) A determination
pursuant to Section 6428.1 whether the , as
determined pursuant to Section 6428. The determination made pursuant
to Section 6428 and submitted to the department by the council shall
constitute the determination of whether the proposed conversion
provides a net environmental benefit for purposes of
meeting the requirements of this section.
(c) The cost savings that would result from the conversion of the
offshore oil platform or production facility have been determined
pursuant to Section 6429. The determination made pursuant to Section
6429 and submitted to the department by the commission shall
constitute the determination of cost savings for purposes of meeting
the requirements of this section.
(d) The owner or operator of the offshore oil platform or
production facility provides sufficient funds to the department,
council, and commission for each agency to carry out all required
activities pursuant to this article, including, but not limited to,
all of the following:
(1) Environmental review of the proposed project pursuant to
subdivision (d) of Section 6426.
(2) A determination pursuant to Section
6428 whether the conversion of the offshore oil platform or
production facility into an artificial reef provides a net benefit to
the environment compared to the alternative of removing the
facilities from the environment.
(3) A determination pursuant to Section 6429 of the cost savings
of the proposed conversion of the offshore oil platform or production
facility into an artificial reef.
(4) Other activities undertaken to meet the requirements of this
section and Section 6427.5, including the costs of reviewing,
approving, and permitting the proposed projects, which includes the
costs of determining whether the project meets the requirements of
all applicable laws and regulations and the costs of environmental
assessment and review.
(5) Overall management of the reef, including enforcement,
research, and monitoring, and long-term management, operations, and
maintenance.
(e) The owner or operator of the oil platform or production
facility indemnifies the state against any and all liability that may
result, including defending the state against any claims against the
department for any actions the department undertakes pursuant to
this article. In adopting indemnification requirements under this
article, the department may consider a variety of mechanisms,
including an agreement to indemnify the state, an insurance policy, a
cash settlement, or any other mechanism that ensures that the state
can defend itself against any liability claims against the department
for any actions the department undertakes pursuant to this article
and pay any resulting judgments.
(5) Overall management of the reef by the department that
includes, but is not limited to, preparation of a reef management
plan pursuant to paragraph (2) of subdivision (a) of Section 6427.3,
enforcement, research and monitoring, long-term management,
operations, and maintenance.
(e) The owner or operator of the oil platform or production
facility indemnifies the state by entering into an agreement that
meets all the requirements of paragraph (3) of subdivision (a) of
Section 6427.3.
(f) The owner or operator of the offshore oil platform or
production facility applies for, and receives, all required permits
and approvals issued by any governmental agency, including, but not
limited to, the permit issued by the United States Army Corps of
Engineers if the department does not take title to the platform or
facility as provided in Section 6427.5 and a lease issued by the
commission if the proposed project involves state tidelands and
submerged lands .
(g) For oil platforms or production facilities located in federal
waters all of the following requirements are met:
(1) The department and the owner or operator of the platform or
facility reach an agreement providing for the department to take
title to the platform or facility as provided in Section 6427.5.
(2) The department acquires the permit issued by the United States
Army Corps of Engineers.
(3) The conversion to an artificial reef is approved by the United
States Minerals Management Service.
6427.1. (a) Upon receipt of conditional approval of the
conversion of an offshore oil platform or production facility into an
artificial reef
6427.1. (a) When the department receives an application to
convert an offshore oil platform or oil production facility pursuant
to this article, it shall submit a copy of the application to the
council and the commission. The submittal of the application shall
serve as notice as required by Sections 6428 and 6429.
(b) When the department makes a determination that an application
for conversion of a decommissioned offshore oil platform or
production facility has satisfied all the criteria in this section,
it shall immediately notify the California Endowment for Marine
Preservation, established pursuant to Division 37 (commencing with
Section 71500) of the Public Resources Code, of its determination.
6427.2. If the department determines that all the criteria for
conditional approval specified in Section 6427 have been satisfied,
the department shall, prior to granting conditional approval, provide
public notice of its determination, provide an opportunity for
public comment, and hold a public hearing.
6427.3. (a) In addition to the requirements of
Section 6427.2, prior to the conditional approval of the conversion
of an offshore oil platform or production facility pursuant to
Section 6427, the department shall do all of the following:
(1) Conduct an environmental review of the project pursuant to
Division 13 (commencing with Section 21000) of the Public Resources
Code.
(2) Prepare a plan to manage the offshore oil platform or
production facility after its conversion. The plan shall include
measures to manage fishery and marine life resources at and around
the reef, which may include a buffer zone in which fishing or removal
of marine life is restricted or prohibited.
(3) Enter into an indemnification agreement with the owner or
operator of the offshore oil platform or production facility that
indemnifies the state, to the extent permitted by law, against any
and all liability that may result, including, but not limited to,
active negligence, and including defending the state against any
claims against the department for any actions the department
undertakes pursuant to this article. In adopting indemnification
requirements for the agreement, the department shall ensure that the
state can defend itself against any liability claims against the
department for any actions the department undertakes pursuant to this
article and pay any resulting judgments. The department shall
consult with and, as necessary, use the resources of the office of
the Attorney General in preparing and entering into the
indemnification agreement.
(4) Determine that the conversion would be consistent with all
applicable laws identified in subdivision (a) of Section 6427.
(5) Make all the findings required in Section 6427. If the
department determines the applicant for conversion of an oil platform
or production facility has satisfied all the criteria in Section
6427, it shall grant the applicant conditional approval.
(b) Upon receipt of conditional
approval pursuant to Section 6427, the owner or operator of the
platform or facility shall apportion and directly transmit an amount
equaling 50 percent of the cost savings, as determined by
the department pursuant to Section 6429, to the following
in the following amounts:
(1) Ninety Eighty-five percent shall
be deposited into the California Endowment for Marine Preservation
established pursuant to Division 37 (commencing with Section 71500)
of the Public Resources Code.
(2) Ten Five percent shall be
deposited with the board of supervisors of the county immediately
adjacent to the location of the facility prior to its
decommissioning. The amount paid to the county shall be managed
pursuant to the provisions of paragraph (1) of subdivision (d) of
Section 6817 of the Public Resources Code.
(3) Ten percent shall be deposited into the General Fund.
(b) The department shall not grant final approval of the
conversion of an offshore oil platform or production facility into an
artificial reef until all requirements of subdivision (a) are met.
(c) Moneys deposited pursuant to this section shall be held in
trust for the purposes described in this section.
6427.5. The department may shall not
take title to a decommissioned offshore oil platform or
production facility in open coastal waters only if
or take responsibility for implementation of a management plan
pursuant to this article until decommissioning and
conversion of the offshore oil platform or production facility have
been completed and both of the following requirements are met:
(a) The conversion of the oil platform or production facility has
been approved by the department pursuant to Sections 6427 and
6427.1. 6427.3.
(b) The state is indemnified, as
required in subdivision (e) of Section 6427, from any liability that
may result from approving the conversion of an offshore oil platform
or production facility to an artificial reef or
any liability that may result from the ownership of the reef
converted platform or facility .
6428. The Legislature hereby finds and declares all of the
following:
(a) The conversion of offshore oil platforms or production
facilities should not be done until there has been a thorough
scientific study and evaluation.
(b) The costs of such a study should be borne by the operators of
offshore oil platforms or production facilities.
(c) Each offshore oil platform or production facility creates a
unique environment because of its location, depth, and other
ecological factors.
(d) Because of significant variations, those scientific studies
and evaluations should be done for each offshore oil platform or
production facility for which an application for the use of the oil
platform or production facility as an artificial reef has been made
to the department.
6428.1. (a) The department shall determine whether
6428. (a) Prior to the
conditional approval of the conversion of an oil platform or
production facility pursuant to Section 6427, the council shall
determine whether the conversion of a specified oil platform or
production facility for use as an artificial reef provides a net
benefit to the environment compared to the alternative of removing
the oil platform or production facility.
(b) In making the determination pursuant to subdivision (a), the
department council shall take into
account the contribution of the proposed artificial reef to
protection and productivity of fish and other marine life, any
adverse impacts to biological resources, water quality, air quality,
or any other offshore or onshore environmental impacts from the full
removal of the facility that would be avoided by conversion to an
artificial reef, and any adverse impacts to biological resources,
water quality, air quality, or any other offshore or onshore
environmental impacts from the decommissioning and conversion of the
facility into an artificial reef. Benefits resulting from the
contribution of cost savings to the endowment shall not be considered
in the determination of net environmental benefit.
(c) (1) The department council shall
determine criteria for biological evaluation of an oil platform or
production facility for use as an artificial reef and shall
consult with and advise the California Coastal Commission, the State
Lands Commission, and other responsible agencies as to that criteria
articifical reef . The criteria shall include,
but are not limited to, the depth of the artificial reef in relation
to its value as habitat and the location of the artificial reef in
relation to other reefs, both natural and artificial. The criteria
shall not include any consideration of the funds to be generated by
the conversion to an artificial reef. In determining the
criteria for biological evaluation, the council shall
consult with appropriate entities, including, but not limited to, the
department, the commission, the California Coastal Commission, and
the California Ocean Science Trust.
(2) The department shall commence developing the criteria required
by this subdivision upon receiving an application for the use of the
oil platform or production facility as an artificial reef. The
department's determination of that criteria is a necessary part of
any consideration of an application and the costs of determining that
criteria shall be borne by the applicant or applicants, as required
in subdivision (d) of Section 6427.
(2) The council shall commence developing the criteria required by
this subdivision upon receiving a copy of the application pursuant
to subdivision (a) of Section 6427.1. The council's determination of
those criteria is a necessary part of any consideration of an
application to convert an offshore oil platform or production
facility pursuant to this article, and the costs of determining those
criteria shall be borne by the applicant or applicants, as required
in subdivision (d) of Section 6427.
(d) The council shall take all feasible steps to complete its
determination in a timely manner that accommodates the time limits
for environmental review required pursuant to Section 6427.
6429. (a) Prior to the conditional approval of a
conversion of an offshore oil platform or production facility
into an artificial reef pursuant to Section 6427,
the department commission shall
determine, or cause to be determined, the cost savings that will
result from the conversion.
(b) The department commission shall
ensure that any cost savings are accurately and reasonably
calculated. The department commission
may contract or enter into a memorandum of understanding with any
other appropriate governmental agency or other party, including an
independent expert, to ensure that cost savings are accurately and
reasonably calculated.
(c) The department commission shall
consider any estimates of cost savings made by any governmental
agency, including, but not limited to, the Internal Revenue Service,
the Franchise Tax Board, the Minerals Management Service of
the United States Department of the Interior, and the State Lands
Commission. If the department disagrees with the estimate made by any
other agency, the department shall prepare a public report that
explains any discrepancies and differences between those estimates
and provides the basis for the department's finding that other
estimates are less reliable and the department's use of a different
cost savings estimate. and the Minerals Management
Service of the United States Department of the Interior. The
commission shall include in its determination a written explanation,
which shall be available to the public, of the differences, and the
reasons for the differences, between the commission's determination
of cost savings and any other estimates of cost savings the
commission considered.
(d) The commission shall commence its determination of cost
savings as required in subdivision (a) upon receiving a copy of the
application pursuant to subdivision (a) of Section 6427.1. The
commission's determination of the cost savings is a necessary part of
any consideration of an application to convert an oil platform or
oil production facility pursuant to this article, and the costs of
making that determination shall be borne by the applicant or
applicants, as required in subdivision (d) of Section 6427.
(e) The commission shall take all feasible steps to complete its
determination in a timely manner that accommodates the time limits
for the department whether to grant conditional approval pursuant to
Section 6427.
6429.1. The oil platform or production facility owner or operator
at any time prior to transfer of title to the state, at its sole
discretion, shall have the right to cease participation in the
artificial reef conversion and pursue full decommissioning, subject
to reimbursement to the state of the reasonable costs and expenses
incurred by the state.
6429.2. (a) Nothing in this article is intended, and it shall not
be construed, to limit or affect the authority or duties of any
state or local agency, including, but not limited to, the
State Lands Commission council, the commission,
and the California Coastal Commission.
(b) Nothing in this article shall be construed to do any of the
following:
(1) Relieve the prior owner or operator of an offshore oil
platform or production facility from any continuing liability under
any of the following if the liability is associated with seepage or
release of oil from an offshore oil platform or production facility
that was decommissioned pursuant to an order of, or any action taken
by, and in accordance with, any applicable rule or regulation of, any
federal or state agency:
(A) Any state statute or regulation regarding liability for the
spilling of oil.
(B) The federal Oil Pollution Act of 1990 (33 U.S.C. Sec. 2701 et
seq.).
(C) Any other provision of law.
(2) Establish any new liability on the part of the state.
(3) Require any agency with jurisdiction to approve the artificial
reef conversion, in whole or in part, of an offshore oil platform or
production facility.
(4) Promote, encourage, or facilitate offshore oil exploration,
development, and production within California's open coastal waters.
(5) Require the United States Department of the Interior's
Minerals Management Service or the State Lands Commission to modify,
amend, or alter an existing oil and gas lease to approve conversion
of an offshore oil platform or production facility.
(6) Alter any existing law or applicable rule or regulation of any
federal or state agency that establishes liability for damages
arising with respect to artificial reefs or reef materials,
including, but not limited to, components of decommissioned oil
facilities.
(7) Alter any existing law or policy that protects natural reefs.
(8) Approve any particular method of abandonment.
(c) Any conversion of an offshore oil platform or production
facility for use as an artificial reef shall not be used or counted
as mitigation for any environmental impacts or natural resource
damages.
6429.5. (a) The Accelerated Platform Decommissioning Program is
hereby established as an expedited program for meeting the
requirements for approval of the conversion of an offshore oil
platform or production facility into an artificial reef pursuant to
this article. For purposes of this section, "accelerated program"
means the Accelerated Platform Decommissioning Program as established
by this section.
(b) (1) A proposed project to convert an offshore oil platform or
production facility into an artificial reef pursuant to the
accelerated program is a project as defined in subdivision (c) of
Section 21065 of the Public Resources Code and is therefore subject
to the California Environmental Quality Act (Division 13 (commencing
with Section 21000) of the Public Resources Code) and qualifies for
expedited review pursuant to Section 21100.2 of the Public Resources
Code.
(2) Upon receipt of an application for expedited review pursuant
to this section, the department shall review the application and make
a determination within the time periods set forth in paragraph (1)
of subdivision (a) of Section 21100.2 of the Public Resources Code
whether the proposed project meets all of the requirements of this
section and this article for conversion into an artificial reef.
(3) Prior to making a final determination as provided in paragraph
(2), the department shall do all of the following:
(A) Consult with all responsible agencies and trustee agencies, as
defined in Sections 21069 and 21070 of the Public Resources Code.
(B) Provide opportunity for public comment and hold a public
hearing.
(C) Determine the cost savings as provided in Section 6429.
(c) The owner or operator of an offshore oil platform or
production facility may apply to enroll the facility in the
accelerated program. In addition to meeting the other requirements of
this article, the owner or operator of an offshore oil platform that
chooses to apply as part of the accelerated program shall meet
application requirements to be designed by the department to receive
information needed to facilitate review of the application within an
accelerated timeline. In order to facilitate an accelerated review,
the department may require the applicant to include any or all of the
following in the application:
(1) A reefing plan for converting the oil platform or production
facility into an artificial reef, including removal of any portion of
the platform or facility as appropriate to maintain navigational
safety.
(2) A management plan for the artificial reef, including
maintenance in a manner consistent with navigational safety and
enforcement and monitoring, and, if applicable, a buffer zone in
which fishing or removal of marine life may be limited or prohibited.
(3) A proposed determination of the net environmental benefit of
conversion of the facility into an artificial reef, compared to the
alternative of removing the facility. The proposed determination of
net environmental benefit shall be based on criteria established by
the department pursuant to Section 6428.1.
(4) A proposed determination of the cost savings. The proposed
determination shall be consistent with the requirements of Section
6429.
(d) The information submitted pursuant to paragraphs (1) to (4),
inclusive, of subdivision (c) shall be used by the department for
advisory purposes only. Final determinations regarding a reefing
plan, a management plan, net environmental benefit of the proposed
conversion, cost savings resulting from the conversion, and all other
determinations shall be made solely by the department based on its
independent review and judgment.
(e) If the department fails to make a final determination within
the time periods set forth in paragraph (1) of subdivision (a) of
Section 21100.2 of the Public Resources Code, the department shall
remove the application from the accelerated program and the
application shall be considered by the department on a nonaccelerated
schedule. The applicant shall be required to make applicable
payments as provided in Section 6427.1, in lieu of payments as
required in subdivision (g).
(f) If the department makes a final determination that the
proposed project meets all of the requirements of this section and
this article, the department and the applicant may enter into an
agreement which shall enroll the facility in the accelerated program
and require the applicant to perform the decommissioning and
conversion of the facility in accordance with a reefing plan approved
by the department. The department shall not take title to the
artificial reef or take responsibility for implementation of the
management plan until decommissioning and conversion of the reef have
been completed and all the conditions of Section 6427.5 have been
met.
(g) Upon execution of an agreement by the department and the
applicant pursuant to subdivision (f), the applicant shall apportion
and directly transmit 50 percent of the cost savings, as determined
pursuant to Section 6429, to the following in the following amounts:
(1) Eighty-five percent shall be deposited into the California
Endowment for Marine Preservation established pursuant to Division 37
(commencing with Section 71500) of the Public Resources Code.
(2) Five percent shall be deposited with the board of supervisors
of the county immediately adjacent to the location of the facility
prior to its decommissioning. The amount paid to the county shall be
managed pursuant to the provisions of paragraph (1) of subdivision
(d) of Section 6817 of the Public Resources Code.
(3) Ten percent shall be deposited into the General Fund.
(h) If the department and the applicant enter into an agreement
and the applicant pays funds to the department for deposit into the
General Fund pursuant to subdivision (g), and that agreement or any
required federal, state, or local permit or approval is challenged in
court and found to be invalid or unenforceable for any reason, or is
rejected, rescinded, or withdrawn for any reason, the state shall
return those funds to the applicant within 90 days and the
application shall be considered by the department on a nonaccelerated
schedule.
(i) The applicant shall provide sufficient funds to the department
for the cost of enrolling the facility in the accelerated program,
as determined by the department, including the costs of reviewing and
approving the application and determining whether the proposed
project meets the requirements of this section, this article, and all
other applicable laws.
(j) This section shall remain in effect only until January 1,
2014, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2014, deletes or extends
that date.
SEC. 4. Division 37 (commencing with Section 71500) is added to
the Public Resources Code, to read:
DIVISION 37. CALIFORNIA ENDOWMENT FOR MARINE PRESERVATION
CHAPTER 1. FINDINGS AND DECLARATIONS
71500. (a) The Legislature hereby finds and declares all of the
following:
(1) The Pacific Ocean and its rich marine living resources are of
great environmental, economic, aesthetic, recreational, educational,
scientific, social, cultural, and historic importance to the people
of California.
(2) California's marine living resources depend on a healthy
marine environment, which comprises open coastal waters as well as
coastal estuaries, wetlands, rivers and streams, and lands within the
coastal zone.
(2)
(3) Programs to conserve, protect, restore, and enhance
the marine fishery resources of the state are
needed because of past overfishing and damage to
coastal pollution that have damaged marine habitats and
their ecosystems. These programs should be coordinated with efforts
to reduce overfishing and damage to coastal
pollution that damage marine habitats and their ecosystems.
(3) A program that will speed up the decommissioning of offshore
oil platforms will enhance the environmental, aesthetic, and
recreational features of the coastal environment. Any offshore oil
platforms that are nearing possible retirement should be removed as
quickly as possible to improve the aesthetic character of the areas
of the California coast that have been adversely impacted by offshore
oil activities.
(4) The State of California recognizes the need to formulate its
environmental and coastal and ocean
resource management policies based on the best available scientific
information and should utilize the University of California, the
California State University, other institutions of higher learning,
and marine science research institutions to the fullest
extent possible extent feasible to assist it in
achieving that goal.
(5) The California Ocean Resources Management Act of 1990 is
designed to ensure that the state's ocean resources are managed,
conserved, and enhanced in a comprehensive and coordinated manner.
The California Ocean Protection Act furthered that mission by
establishing the Ocean Protection Council, whose duties include
coordination of state activities to protect coastal waters and ocean
ecosystems, establishment of a science advisory team of distinguished
scientists from a range of disciplines related to coastal and ocean
resources, and contracting with the California Ocean Science Trust
and other academic and nonprofit organizations to carry out
scientific and educational activities consistent with that act.
(6) The ability of the state to carry out the mission of the
California Ocean Protection Act is constrained by the availability of
funds appropriated in the state budget.
(7) It is in the interest of the people of the state to establish
an endowment, which would be independent of the state's budget
process and would impose no cost on the General Fund of the state, to
provide a stable and ongoing source of funding in perpetuity to
conserve, protect, restore, and enhance the marine resources of the
state in a manner that is consistent with the California Ocean
Protection Act.
CHAPTER 2. DEFINITIONS
71520. Unless the context requires otherwise, the following
definitions govern the construction of this division:
(a) "Artificial reef" means manmade or natural objects
intentionally placed or allowed to remain in place in selected areas
of the marine environment to duplicate those conditions that induce
production of fish and invertebrates on natural reefs and rough
bottoms, support additional biomass, enhance biodiversity, and
stimulate the growth of kelp or other midwater plant life that
creates natural habitat for those species.
(b)
(a) "Board" or "endowment board" means the Board of
Directors of the California Endowment for Marine Preservation.
(c) "Cost savings" are the difference between the estimated cost
to the operator or owner of complete removal of an offshore oil
platform or production facility and the costs incurred by the
operator or owner of converting a platform or facility into an
artificial reef.
(d)
(b) "Endowment" means the California Endowment for
Marine Preservation.
(e) "National Fishing Enhancement Act of 1984" means Title II of
Public Law 98-623.
(f) "Offshore oil platform or production facility" means
platforms, piers, and artificial islands located seaward of mean
lower low water, used for oil and gas exploration, development,
production, processing, or storage.
(g) "Oil" means any kind of petroleum, liquid hydrocarbons,
natural gas, or petroleum products or any fraction or residues
therefrom.
(c) "Exclusive economic zone (EEZ)" means the zone as measured
from the mean high tide line seaward to 200 nautical miles as set
forth in the Presidential Proclamation 5030 of March 10, 1983, in
which the United States proclaimed jurisdiction over the resources of
the ocean within 200 miles of the coastline.
(h)
(d) "Open coastal marine resource" means those marine
resources that use open coastal waters as their habitat.
(i)
(e) "Open coastal waters" means the area composed of
the submerged lands of the state that are below the mean lower low
water extending seaward to the boundaries of the Exclusive Economic
Zone.
(j) "Reef materials" includes only materials allowed under the
National Artificial Reef Plan, adopted under the National Fishing
Enhancement Act of 1984 for construction of artificial reefs.
(k) "State waters" means waters within the seaward boundary of the
state as identified in Section 2 of Article III of the California
Constitution.
CHAPTER 3. ESTABLISHMENT AND GOVERNANCE
71530. The California Endowment for Marine Preservation is hereby
established. The endowment is subject to this division and to the
Nonprofit Public Benefit Corporation Law (Part 2 (commencing with
Section 5110) of Division 2 of Title 1 of the Corporations Code). If
there is a conflict between this division and the Nonprofit Public
Benefit Corporation Law, this division shall prevail.
71531. (a) Nothing in this division is intended, and it shall not
be construed, to limit or affect the authority or duties of any
state or local agency, including, but not limited to, the State Lands
Commission and the California Coastal Commission.
(b) Nothing in this division shall be construed to do any of the
following:
(1) Relieve the prior owner or operator of an oil facility from
any continuing liability under any of the following, if the liability
is associated with seepage or release of oil from an oil facility
that was decommissioned pursuant to an order of, or any action taken
by, and in accordance with, any applicable rule or regulation of any
federal or state agency:
(A) Any state statute or regulation regarding liability for the
spilling of oil.
(B) The federal Oil Pollution Act of 1990 (33 U.S.C. Sec. 2701 et
seq.).
(C) Any other provision of law.
(2) Establish any new liability on the part of the state.
(3) Require, authorize, or in any way encourage any agency with
jurisdiction to approve the reefing, in whole or in part, of an oil
platform.
(4) Promote, encourage, or facilitate offshore oil exploration,
development, and production within California's open coastal waters.
(5) Require the United States Department of the Interior's
Minerals Management Service or the State Lands Commission to modify,
amend, or alter an existing oil and gas lease to approve the reefing
of an oil platform in place.
(6) Alter any existing law that establishes liability for damages
arising with respect to artificial reefs or reef materials,
including, but not limited to, components of decommissioned oil
facilities.
(7) Alter any existing law or policy that protects or
otherwise favors natural reefs.
(8) Promote or encourage any particular method of decommissioning.
(c) Any decommissioning of an offshore oil platform or production
facility for use as an artificial reef shall not be used or counted
as mitigation for any environmental impacts or natural resources
damages.
CHAPTER 4. BOARD OF DIRECTORS
71540. The endowment is governed by the Board of Directors of the
California Endowment for Marine Preservation. The board consists of
nine members appointed by the Governor as follows:
(a) One member who shall be an expert in marine science from the
University of California, the California State University, or other
accredited university.
(b) One member who shall be an expert in marine fisheries from the
University of California, the California State University, or other
accredited university.
(c) One member who shall be from a nonprofit, public interest
organization with emphasis on marine conservation.
(d) One member who shall be from a nonprofit public interest
organization with an emphasis on marine conservation and sustainable
consumptive recreational activities.
(e) One member who shall be from a nonprofit public interest
organization with an emphasis on marine conservation and sustainable
nonconsumptive recreational activities.
(f) The Secretary of the Natural Resources Agency, or his or her
designee, who shall also serve as chairperson.
(g) One person who is serving as an elected local government
official for a local governmental agency with jurisdiction over, or
directly adjacent to, open coastal waters containing oil platforms or
production facilities.
(h) Two representatives of the public.
71541. The term of office of each member of the board is six
years. However, the term of office for the first board member
appointed pursuant to subdivisions (a), (b), and (c) of Section 71540
is two years. The term of office for the first board members
appointed pursuant to subdivisions (f) and (g) of Section 71540 is
four years.
71531. The endowment is governed by the Board of Directors of the
California Endowment for Marine Preservation, consisting of the
following members:
(a) The three voting nonpublic members of the Ocean Protection
Council established pursuant to Section 35600.
(b) Two members of the public appointed by the Governor.
(c) One member, appointed by the Speaker of the Assembly, who
shall be an expert in marine science from the University of
California, the California State University, or other accredited
university.
(d) One member, appointed by the Speaker of the Assembly, who
shall be from a nonprofit, public interest organization with emphasis
on marine conservation.
(e) One member, appointed by the Senate Committee on Rules, who
shall be an expert in marine fisheries from the University of
California, the California State University, or other accredited
university.
(f) One member, appointed by the Senate Committee on Rules, who
shall be from a nonprofit public interest organization with an
emphasis on marine conservation and sustainable consumptive
recreational activities.
71532. The term of office of each member of the board appointed
pursuant to subdivisions (b) to (e), inclusive, of Section 71531 is
six years. However, the term of office for the first board member
appointed pursuant to subdivisions (b) and (c) of Section 71531 is
three years.
71542. 71533. Any vacancy on the
board shall be filled by the Governor by appointment for the
unexpired term.
71543. 71534. (a) The board shall
conduct its initial meeting as soon as possible after incorporation.
(b) The board shall meet as often as required, but at least twice
per year.
(c) Members of the board shall attend at least 50 percent of all
duly convened meetings of the board in a calendar year. A member who
fails to attend at least 50 percent of all duly convened meetings of
the board in a calendar year forfeits membership on the board. The
vacancy shall be filled pursuant to Section 71542.
(d) Members of the board shall receive no salary but shall be paid
one hundred dollars ($100) per day for each meeting and shall be
reimbursed for all necessary travel expenses.
(e) The Ocean Protection Council shall provide staff services that
the endowment board needs to carry out its duties pursuant to this
division.
CHAPTER 5. POWERS AND DUTIES
71550. The members of the board first appointed shall serve as
incorporators of the endowment and shall take whatever actions are
necessary to establish the endowment pursuant to the Nonprofit Public
Benefit Corporation Law (Part 2 (commencing with Section 5110) of
Division 2 of Title 1 of the Corporations Code) once a majority of
the board is appointed.
71551. It is the intent of the Legislature that the endowment not
be incorporated until funds are made available pursuant to the
California Marine Legacy Act (Article 2 (commencing with Section
6420) of Chapter 5 of Part 1 of Division 6 of the Fish and Game
Code).
71552. (a) The purpose of the endowment is to create a permanent
source of funding for projects that will conserve, protect, restore,
and enhance the open coastal marine resources of the state. To
achieve this objective, the endowment board may allocate funding to
do any or all of the following:
(1) Support applied research into open coastal marine fisheries,
marine habitat, or other related research in support of projects to
71551. The California Endowment for Marine Preservation shall
receive funds generated pursuant to the California Marine Legacy Act
(Article 2 (commencing with Section 6420) of Chapter 5 of Part 1 of
Division 6 of the Fish and Game Code). It is the intent of the
Legislature that the endowment not be incorporated until the
endowment board has been notified for the first time by the
Department of Fish and Game, pursuant to Section 6427.1 of the Fish
and Game Code.
71552. (a) The purpose of the endowment is to
create a permanent source of funding for projects that will conserve,
protect, restore, and enhance the coastal and marine resources of
the state, with an emphasis on open coastal marine resources. To
achieve this objective, the endowment board may allocate funding to
support any or all of the following activities:
(1) Applied research into open coastal
marine fisheries, marine habitat, or other related research,
including, but not limited to, monitoring and data
collection, in support of projects to conserve, protect,
restore, and enhance the open coastal marine resources of the state.
In so doing, the board shall endeavor to take maximum advantage of
the scientific research expertise available from the University of
California, the California State University, other institutions of
higher learning, and marine science research institutions with
expertise in marine resource issues. Funding for research projects
shall not exceed 10 percent of the overall funding in any fiscal
year.
(2) Support projects Projects in
open coastal waters that enhance environmentally sustainable marine
activities.
(3) Support projects Projects in
open coastal waters to enhance the habitat for open coastal marine
life.
(4) Support programs Programs in
open coastal waters that lead to enforcement of laws regulating the
take of open coastal marine species, the protection of habitat, and
the protection and monitoring of open coastal marine species and
habitat with an emphasis on innovative approaches.
(5) Support programs Programs
to aid in the establishment of safe
sustainable fishing levels and reduce or prevent habitat damage
in open coastal waters.
(6) Support programs Programs to
monitor catch and bycatch and to reduce bycatch in fisheries managed
by the State of California and by the United States.
(7) Programs, projects, and activities that are directly related
to the conservation, protection, restoration, and enhancement of
coastal and marine resources of the state, with an emphasis on open
coastal marine resources, and that are authorized by either paragraph
(2) of subdivision (b) of Section 35650 or by Section 75060.
(b) Funds provided by the endowment are not intended, and shall
not be used, to supplant funding provided through the annual budget
process to support existing obligations and activities related to
coastal and marine resources.
(b)
(c) The endowment board may also do all of the
following:
(1) Obtain grants from, and contract with, individuals and with
private, local, state, and federal agencies, organizations, and
institutions.
(2) Contract with, or make grants to, conservation and educational
organizations; marine institutes; aquariums and museums;
institutions of higher education; and local, state, and federal
agencies to carry out the purposes of the endowment .
(3) Loan funds to private, local, state, and federal agencies,
organizations, and institutions to carry out the purposes of the
endowment .
(c)
(d) The endowment shall create a business plan for a
five-year period. The endowment shall update the plan annually.
(d)
(e) On or before February 1 each year, the endowment
shall submit a report to the appropriate fiscal and policy committees
of the Legislature for the preceding fiscal year. The report shall
include all of the following:
(1) The updated business plan created pursuant to subdivision (c).
(2) A comprehensive and detailed report of the endowment's
operations, activities, financial condition, and accomplishments
under this section.
(3) A listing of each recipient of a grant from the endowment and
the purposes and amount of that grant.
(4) A listing of any loan that the endowment has received and the
plan for repaying the loan.
(5) A report of each independent audit required pursuant to
subdivision (e) of Section 71560.
71553. Members of the board and appropriate staff shall be
available to testify before appropriate committees of the
Legislature.
71554. The endowment shall not contribute to, or otherwise
support, any political party, candidate for elective public office,
or ballot measure.
71555. The endowment may hire employees and may obtain legal
counsel. No employee of the endowment is an employee of the State of
California. No employee of the endowment is subject to Chapter 10.3
(commencing with Section 3512) of, or Chapter 10.5 (commencing with
Section 3525) of, Division 4 of Title 1 of the Government Code.
Employees of the endowment have the right to representation
consistent with the federal National Labor Relations Act (29 U.S.C.
Sec. 151 et seq.).
71556. The endowment shall coordinate its activities with the
Department of Fish and Game, the California Coastal Commission, the
San Francisco Bay Conservation and Development Commission, the State
Lands Commission, and appropriate federal agencies, including the
National Marine Fisheries Service and the Minerals Management Service
of the United States Department of the Interior. Nothing in this
division limits the authority and responsibility of any of these
agencies.
CHAPTER 6. FINANCIAL TRANSACTIONS AND AUDITS
71560. (a) The endowment may receive charitable contributions or
any sources of income that may be lawfully received, including loans
from the state.
(b) The endowment shall administer any funds it receives in
accordance with this division.
(c) The (1) Except
as provided in paragraph (2), the endowment shall invest and
manage any funds it receives so that the investments shall provide a
source of income in perpetuity and the principal amount consisting of
charitable contributions and donations, including cost savings
donated pursuant to Sections 6427.1 and 6429.5
Section 6427.3 of the Fish and Game Code, shall not be
spent. Any returns on investments made by the endowment are the only
funds that shall be available for expenditure by the endowment.
(2) Ten percent of any funds received by the endowment pursuant to
Section 6427.3 of the Fish and Game Code in a calendar year shall be
allocated by the endowment board, pursuant to Section 71552, to
qualified state agencies within 24 months of receipt of the funds.
(d) The endowment shall invest and manage any funds it receives in
accordance with the Nonprofit Public Benefit Corporation Law (Part 2
(commencing with Section 5110) of Division 2 of Title 1 of the
Corporations Code).
(e) The accounts of the endowment shall be audited annually in
accordance with generally accepted auditing standards by independent
certified public accountants.
(f) The financial transactions of the endowment for any fiscal
year may be audited by the Bureau of State Audits. A report of each
audit completed pursuant to this subdivision shall be made to the
Legislature and the Governor.
(g) Each recipient of assistance by grant, contract, or loan
pursuant to this division shall keep records reasonably necessary to
disclose fully the amount of the assistance, the disposition of the
assistance, the total cost of the project or undertaking in
connection with which the assistance is given or used, the amount and
nature of that portion of the cost of the project or undertaking
supplied by other sources, and other records that will facilitate an
effective audit. Each recipient of a fixed price contract awarded
pursuant to competitive bidding procedures is exempt from the
requirements of this subdivision.
(h) The endowment, or its authorized representative, and the
Bureau of State Audits shall have access to any records necessary for
the purpose of auditing and examining all funds received or expended
by the recipients of assistance.
71561. The endowment funds shall be administered and managed in
accordance with all of the following:
(a) Reasonably prudent investor standards that will give the fund
the capacity to achieve reasonable rates of return on investment
similar to those of other prudent investors for long-term
investments.
(b) Use of generally accepted accounting practices, and
expenditure and investing procedures.
(c) Investment policies that are consistent with the Uniform
Prudent Investor Act (Article 2.5 (commencing with Section 16045) of
Chapter 1 of Part 4 of Division 9 of the Probate Code), and with the
Uniform Management of Institutional Funds Act (Part 7 (commencing
with Section 18501) of Division 9 of the Probate Code), as
applicable.
71562. Funds held by the endowment shall revert to the state or
to another public agency or nonprofit organization approved by the
state if the endowment does any of the following:
(a) Ceases operations.
(b) Is dissolved.
(c) Becomes bankrupt or insolvent.
(d) Fails to perform its fiduciary duties.
____ CORRECTIONS Text--Pages
14 and 16.
____