BILL NUMBER: AB 2503	AMENDED
	BILL TEXT

	AMENDED IN SENATE  AUGUST 10, 2010
	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   An act to add Chapter 5.5 (commencing with
Section 6600) to 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.   marine resources and preservation.

   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
  Resources Legacy  Act to establish a program
 of artificial reef research and development  
to allow partial   removal of offshore oil structures 
, 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
  partial removal of offshore oil structures  , 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 
 partial removal  provides a net environmental benefit and
substantial cost savings compared to the alternative of 
removing the facilities  full removal of these
structures  . The act would require the Ocean Protection
Council, for purposes of determining whether  such a
conversion   partial removal  provides a net
environmental benefit, to  determine   establish
specified  criteria  for biological evaluation of an
oil platform or production facility for use as an artificial reef
 , to consult with 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 
 partial removal  comply with the California Environmental
Quality Act. The act would require the State Lands Commission to
determine the cost savings of  a conversion  
partial removal  , and would require the owner or operator, upon
conditional approval for conversion, to apportion a percentage of
the  cost savings   cost-savings  funds in
accordance with a prescribed schedule to the California Endowment for
Marine Preservation, the county immediately adjacent to the location
of the facility,  the Coastal Act Services Fund,  and the
General Fund. The act would authorize the department to take title to
a decommissioned offshore oil  platform or production
facility   structure  in open coastal waters if
prescribed requirements are met.
   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.    Chapter 5.5 (commencing with Section
6600) is add  ed to Part 1 of Division 6 of the  
Fish and Game Code   , to read:  
      CHAPTER 5.5.  CALIFORNIA MARINE RESOURCES LEGACY ACT



      Article 1.  General Provisions


   6600.  This act shall be known, and may be cited, as the
California Marine Resources Legacy Act.
   6601.  The Legislature finds and declares all of the following:
   (a) 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
economic activities.
   (b) Although the state maintains various programs to protect,
restore, and enhance California's marine resources, the effect of
these programs is limited by inadequate and unstable funding.
   (c) There is an existing permitting process for decommissioning
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.
   (d) According to 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.
   (e) 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 decommissioning alternatives to full
rig removal and determined that the most likely alternative is to
remove the upper portion of the rig and leave the remainder of the
structure in place.
   (f) The California Ocean Science Trust report and other studies
indicate that the partial removal option can result in a net benefit
to the marine environment and substantial cost savings compared to
full removal of an oil platform or production facility.
   (g) Provided that partial removal of an oil rig would result in a
net benefit to the marine environment compared to full removal, it is
in the interest of the state that a portion of the cost savings that
result from partial removal should be shared with the citizens of
this state to protect and enhance the state's marine resources.
   (h) It is also in the interest of the state that any program to
allow partial removal of oil platforms meet all of the following
criteria:
   (1) Partial removal shall result in a net benefit to the marine
environment compared to full removal.
   (2) The determination of whether partial removal would result in a
net benefit to the marine environment should be made only after
scientific study and evaluation.
   (3) Because the location and depth of an oil platform, as well as
other ecological factors, create a unique environment, each oil
platform shall be subject to scientific study and evaluation before
partial removal is allowed.
   (4) The costs of the scientific study and evaluation should be
borne by the owner or operator of the oil platform for which partial
removal is being considered.
   6602.  For purposes of this chapter, the following terms have the
following meanings:
   (a) "Commission" means the State Lands Commission.
   (b) "Cost savings" means the difference between the estimated cost
to the owner or operator of an oil platform of complete removal of
an oil platform as required by state and federal leases and the
estimated costs to the owner or operator of partial removal of the
oil platform pursuant to this chapter.
   (c) "Council" means the Ocean Protection Council.
   (d) "Endowment" means the California Endowment for Marine
Preservation established in Division 37 (commencing with Section
71500) of the Public Resources Code.
   (e) "Exclusive economic zone (EEZ)" means the zone as measured
from the mean high tide line seaward to 200 nautical miles, as set
forth in 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.
   (f) "National Fishing Enhancement Act of 1984" means Title II of
Public Law 98-623.
   (g) "Offshore oil structure" means platforms, piers, and
artificial islands located seaward of mean lower low water, used for
oil and gas exploration, development, production, processing, or
storage.
   (h) "Oil" means any kind of petroleum, liquid hydrocarbons,
natural gas, or petroleum products or any fraction or residues
therefrom.
   (i) "Open coastal marine resources" means those marine resources
that use open coastal waters as their habitat.
   (j) "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.
   (k) "Partial removal" means an alternative to full removal of an
offshore oil structure, in compliance with all requirements of this
chapter.
   (l) "State waters" means waters within the seaward boundary of the
state as identified in Section 2 of Article III of the California
Constitution.
   6603.  (a) This chapter establishes a program through which an
owner or operator of an offshore oil structure may voluntarily apply
to the department to carry out partial removal of the structure.
   (b) The program established pursuant to this chapter shall be
deemed consistent with, and part of, the California Artificial Reef
Program pursuant to Article 2 (commencing with Section 6420) of
Chapter 5 for purposes of compliance with federal law including the
National Fishing Enhancement Act of 1984.
   (c) Except as specified in Section 6604, the department shall
serve as the primary authority for carrying out the program,
including review and approval of applications to partially remove an
offshore oil structure and management and operation of decommissioned
offshore oil structures approved pursuant to this chapter.
   (d) Final approval of an application shall not be granted until
the owner or operator complies with all requirements of the chapter,
including the payment of all costs to the state to review and approve
the proposed project as required by subdivision (b) of Section 6612
and the transmittal of the required portion of cost savings to the
endowment and other parties as required by Section 6618.
   (e) The department may obtain funds for the planning, development,
maintenance, and operation of an offshore oil structure transferred
to the department pursuant to this chapter and may accept gifts,
subventions, grants, rebates, and subsidies from any lawful source.
   (f) The department may adopt regulations to implement this
chapter.
   6604.  (a) A proposed project to partially remove an offshore oil
structure pursuant to this chapter 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 shall be reviewed pursuant to the time limits established
in Section 21100.2 of the Public Resources Code.
   (b) The commission shall serve as the lead agency for the
environmental review of any project proposed pursuant to this
chapter.
   6605.  (a) Nothing in this chapter 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 commission, the
council, and the California Coastal Commission.
   (b) Nothing in this chapter shall be construed to do any of the
following:
   (1) Relieve the prior owner or operator of an offshore oil
structure from any continuing liability under any of the following,
if the liability is associated with seepage or release of oil from an
offshore oil structure 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 partial
removal of an offshore oil structure.
   (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 or the
commission to modify, amend, or alter an existing oil and gas lease
to approve partial removal of an offshore oil structure.
   (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
structures.
   (7) Alter any existing law or policy that protects natural reefs.
   (8) Approve any particular method of abandonment.
   (c) Any partial removal of an offshore oil structure pursuant to
this chapter shall not be used or counted as mitigation for any
environmental impacts or natural resource damages.

      Article 2.  Partial Removal of Offshore Oil Structures


   6610.  (a) An owner or operator of an offshore oil structure may
apply to the department for approval to partially remove the
structure pursuant to the requirements of this chapter.
   (b) The department shall design and make available to potential
applicants an application process that will facilitate review of the
application by the department in a timely manner, consistent with
Section 6604.
   (c) Upon receipt of an application pursuant to this section, the
department shall transmit a copy of the application to the council,
the commission, and the endowment, which shall constitute notice to
these agencies.
   6611.  (a) The application for partial removal shall include, at a
minimum, all of the following:
   (1) The applicant's plan and schedule for partial removal of the
offshore oil structure, including removal of any portion of the
structure as appropriate to maintain navigational safety.
   (2) A determination of the estimated cost of partial removal and
the estimated cost of full removal.
   (3) A determination of the environmental impacts to the marine
environment from partial removal and full removal of the structure.
   (4) Identification of all permits, leases, and approvals required
by any governmental agency, including a permit issued by the United
States Corps of Engineers if required for offshore oil structures
located in federal waters, and a lease issued by the commission if
the proposed project involves state tidelands and submerged lands,
and a proposed schedule for the applicant to receive those permits,
leases, and approvals.
   (b) The department may require the applicant to submit a
management plan for the structure following partial removal,
including maintenance in a manner consistent with navigational
safety, enforcement, and monitoring.
   (c) The information submitted pursuant to subdivisions (a) and (b)
shall be used by the department for advisory purposes only. Final
determinations regarding the partial removal and management of the
offshore oil structure, net benefit to the marine environment from
partial removal, and cost savings from partial removal shall be made
solely by the department, council, and commission, as specified in
this chapter, based on their independent review and judgment.
   6612.  (a) Upon receipt of an application to partially remove an
offshore oil structure pursuant to this chapter, the department shall
determine whether the application is complete and includes all
information needed by the department.
   (b) (1) Upon a determination that the application is complete, the
applicant shall demonstrate to the satisfaction of the department
that it will provide sufficient funds to the department, council, and
commission to carry out all required activities pursuant to this
article, including all of the following:
   (A) Environmental review of the proposed project pursuant to
Section 6604.
   (B) A determination of net environmental benefit pursuant to
Section 6613.
   (C) A determination of cost savings pursuant to Section 6614.
   (D) Preparation of a management plan for the structure pursuant to
Section 6615.
   (E) Implementation of the management plan and ongoing maintenance
of the structure after the department takes title pursuant to Section
6620.
   (F) Other activities undertaken to meet the requirements of this
article, including the costs of reviewing, approving, and permitting
the proposed project, 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.
   (2) The department shall consult with the council and commission
in determining appropriate funding for activities to be carried out
by those agencies.
   (3) The funds provided pursuant to paragraph (1) shall not be
considered in the calculation of cost savings pursuant to Section
6614 or the apportionment of cost savings pursuant to Section 6618.
   (c) As soon as feasible after reaching the agreement pursuant to
subdivision (b), the lead agency shall begin the environmental review
of the proposed project as required pursuant to Section 6604.
   6613.  (a) The council shall determine whether the partial removal
of an offshore oil structure pursuant to this chapter provides a net
benefit to the marine environment compared to the full removal of
the structure.
   (b) As a necessary prerequisite to determining net environmental
benefit as required in subdivision (a), the council shall, upon
receipt of its initial application from the department pursuant to
Section 6610, establish appropriate criteria for evaluating the net
environmental benefit of full removal and partial removal of offshore
oil structures.
   (1) The criteria shall include, but are not limited to, the depth
of the partially removed structure in relation to its value as
habitat and the location of the structure, including its proximity to
other reefs, both natural and artificial.
   (2) The criteria shall not include any consideration of the funds
to be generated by the partial removal of the structure.
   (3) In determining the criteria, 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.
   (4) The council shall establish the criteria in time to use them
in making its initial determination of net environmental benefit
pursuant to this section.
   (c) Upon certification of environmental documents pursuant to the
California Environmental Quality Act, the council shall, based on the
criteria developed pursuant to subdivision (b) and other relevant
information, determine whether partial removal of the structure would
provide a net benefit to the marine environment compared to full
removal of the structure. In making the determination, the council
shall, at a minimum, take into account the following:
   (1) The contribution of the proposed structure to protection and
productivity of fish and other marine life.
   (2) Any adverse impacts to biological resources or water quality,
or any other marine environmental impacts, from the full removal of
the facility that would be avoided by partial removal as proposed in
the application.
   (3) Any adverse impacts to biological resources or water quality,
or any other marine environmental impacts, from partial removal of
the structure as proposed in the application.
   (4) Any benefits to the marine environment that would result from
the full removal of the structure or from partial removal as proposed
in the application.
   (5) Any identified management requirements and restrictions of the
partially removed structure, including, but not limited to,
restrictions on fishing or other activities at the site.
   (d) Benefits resulting from the contribution of cost savings to
the endowment shall not be considered in the determination of net
environmental benefit.
   (e) The council may contract or enter into a memorandum of
understanding with any other appropriate governmental or
nongovernmental entity to assist in its determination of net
environmental benefit.
   (f) The determination made pursuant to this section and submitted
to the department by the council shall constitute the final
determination and may not be revised except by the council.
   (g) The council shall take all feasible steps to complete its
determination in a timely manner that accommodates the department's
schedule for consideration of the application.
   6614.  (a) Upon certification of the appropriate environmental
documents by the lead agency, the commission shall determine, or
cause to be determined, the cost savings that will result from the
partial removal of an offshore oil structure as proposed in the
application compared to full removal of the structure.
   (b) The commission shall ensure that any cost savings are
accurately and reasonably calculated. The 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 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, and 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 applicant shall provide all necessary documentation, as
determined by the commission, to allow the commission to calculate
the amount of cost savings. Failure to provide information requested
by the commission in a timely manner may result in rejection of the
application.
   (e) The determination made pursuant to this section and submitted
to the department by the commission shall constitute the final
determination and may not be revised except by the commission.
   (f) The commission shall take all feasible steps to complete its
determination in a timely manner that accommodates the department's
schedule for consideration of the application.
   6615.  Prior to granting conditional approval of an application
for partial removal of an offshore oil structure, the department
shall do all of the following:
   (a) Prepare a plan to manage the offshore oil structure after its
partial removal. The plan shall include measures to manage fishery
and marine life resources at and around the structure in a manner
that will ensure that the net benefits to the marine environment
identified pursuant to Section 6613 are maintained or enhanced.
Management measures may include a buffer zone in which fishing or
removal of marine life is restricted or prohibited.
   (b) Provide an opportunity for public comment on the application
pursuant to the California Environmental Quality Act.
   (c) Hold a public hearing in the county nearest to the location of
the offshore oil structure that is the subject of the application.
   6616.  The department may grant conditional approval of an
application for partial removal of an offshore oil structure only if
all of the following criteria are satisfied:
   (a) The partial removal of the offshore oil structure and the
planning, development, maintenance, and operation of the structure
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 (33
U.S.C. Sec. 2101 et seq.).
   (3) The federal Coastal Zone Management Act (16 U.S.C. Sec. 1451
et seq.).
   (4) The California Coastal Management Program.
   (5) The Marine Life Management Act (Part 1.7 (commencing with
Section 7050)).
   (6) The Marine Life Protection Act (Chapter 10.5 (commencing with
Section 2850) of Division 3).
   (7) State and federal water quality laws.
   (8) Navigational safety laws.
   (b) The partial removal of the offshore oil structure provides a
net benefit to the marine environment compared to full removal of the
structure, as determined pursuant to Section 6613.
   (c) The cost savings that would result from the conversion of the
offshore oil platform or production facility have been determined
pursuant to Section 6614.
   (d) The owner or operator of the offshore oil structure has
provided sufficient funds pursuant to the agreement required in
subdivision (b) of Section 6612.
   (e) The department and the applicant have entered into a
contractual agreement whereby the applicant will provide sufficient
funds for overall management of the structure by the department,
including, but not limited to, ongoing management, operations,
maintenance, monitoring, and enforcement as these relate to the
structure.
   (f) The department has entered into an indemnification agreement
with the owner or operator of the structure 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
state for any actions the state 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 state for any actions the state
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.
   (g) The owner or operator of the structure has applied for and
received all required permits, leases, and approvals issued by any
governmental agency, including, but not limited to, a lease issued by
the commission if the proposed project involves state tidelands and
submerged lands. For structures located in federal waters, all of the
following requirements shall be met:
   (1) The department and the owner or operator of the structure
reach an agreement providing for the department to take title to the
platform or facility as provided in Section 6620.
   (2) The department acquires the permit issued by the United States
Army Corps of Engineers.
   (3) The partial removal of the structure is approved by the Bureau
of Ocean Energy Management, Regulation and Enforcement of the United
States Department of the Interior.

   6617.  Upon a finding that all the requirements of Sections 6615
and 6616 have been met, the department shall grant conditional
approval to an application for partial removal of an offshore oil
structure.
   6618.  (a) The cost savings from the partial removal of an
offshore oil structure, as determined pursuant to Section 6614, shall
be apportioned and transmitted as described in this section.
   (b) Upon receipt of conditional approval pursuant to Section 6617,
the owner or operator of the structure shall apportion and directly
transmit a portion of the total amount of the cost savings to the
entities in subdivision (c) as follows:
   (1) Fifty-five percent, if transmitted before January 1, 2017.
   (2) Sixty-five percent, if transmitted on or after January 1,
2017, and before January 1, 2023.
   (3) Eighty percent, if transmitted on or after January 1, 2023.
   (c) Of the total amount of the cost savings to be transmitted
pursuant to subdivision (b), the owner or operator of the structure
shall directly transmit the following amounts to the following
entities:
   (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) Three 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.
   (4) Two percent shall be deposited into the Coastal Act Services
Fund, established pursuant to Section 30620.1 of the Public Resources
Code, and shall be allocated to support state agency work involving
research, planning, and regulatory review associated with the
application and enforcement of coastal management policies in state
and federal waters pursuant to state and federal quasi-judicial
authority over offshore oil and gas development.
   6619.  Upon a determination by the department that the full amount
of cost savings has been transmitted pursuant to Section 6618, the
department shall grant final approval of the application for partial
removal of an offshore oil structure.
   6620.  The department shall not take title to a decommissioned
offshore oil structure in open coastal waters or take responsibility
for management of the structure pursuant to this article until
decommissioning and partial removal of the structure have been
completed and both of the following requirements are met:
   (a) The partial removal of the structure has been granted final
approval by the department.
   (b) The state is indemnified, as required in subdivision (f) of
Section 6616, from any liability that may result from approving the
partial removal of an offshore oil structure or any liability that
may result from the ownership of the structure.  
  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 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 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.
   (c) "Cost savings" 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.
   (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.
   (g) "National Fishing Enhancement Act of 1984" means Title II of
Public Law 98-623.
   (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.
   (i) "Oil" means any kind of petroleum, liquid hydrocarbons,
natural gas, or petroleum products or any fraction or residues
therefrom.
   (j) "Open coastal marine resource" means those marine resources
that use open coastal waters as their habitat.
   (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.
   (l) "Production" means increases in the biomass of a species or
number of species.
   (m) "Program" means the California Artificial Reef Program
administered pursuant to this article.
   (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.

   (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 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.
   6425.  The Legislature hereby finds and declares all of the
following:
   (a) There is an existing permitting process for decommissioning
    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.
   6425.5.  The department shall serve as the primary authority for
managing and operating 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 facilities and may accept gifts,
subventions, grants, rebates, and subsidies from any lawful source.
The department may adopt regulations to implement this article.
   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, and the planning, development, maintenance, and operation
of that platform or facility, 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 provides a net benefit to the
environment compared to the alternative of removing the facilities.
   , 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 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) 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 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.
   (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 shall not take title to a decommissioned
offshore oil platform or production facility in open coastal waters
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 6427.3.
   (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 or any
liability that may result from the ownership of the converted
platform or facility.
   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
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 council shall determine criteria for biological
evaluation of an oil platform or production facility for use as an
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 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 pursuant to Section
6427, the commission shall determine, or cause to be determined, the
cost savings that will result from the conversion.
   (b) The commission shall ensure that any cost savings are
accurately and reasonably calculated. The 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 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, 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 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. 
  SEC. 4.   SEC. 2.   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. 
   (3) Programs to conserve, protect, restore, and enhance the marine
resources of the state are needed because of past overfishing and
coastal pollution that have damaged marine habitats and their
ecosystems. These programs should be coordinated with efforts to
reduce overfishing and coastal pollution that damage marine habitats
and their ecosystems.  
   (3) Overfishing, coastal pollution, and other unsustainable marine
activities have damaged marine fisheries, habitats, and ecosystems.
Programs are needed to conserve, protect, restore, and enhance the
marine resources of the state and to improve the environmental
sustainability of marine-related activities and encourage those
activities that are environmentally sustainable. These programs
should be focused on, and coordinated with, efforts to reduce
overfishing and coastal pollution and to support sustainable marine
activities and improve the sustainability of all marine activities.

   (4) The State of California recognizes the need to formulate its
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
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) "Board" or "endowment board" means the Board of Directors of
the California Endowment for Marine Preservation.
   (b) "Endowment" means the California Endowment for Marine
Preservation.
   (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. 
   (d) "Nonprofit organization" means any nonprofit corporation
qualified to do business in California, and qualified under Section
501(c)(3) of the Internal Revenue Code.  
   (d) 
    (e)  "Open coastal marine resource" means those marine
resources that use open coastal waters as their habitat. 
   (e) 
    (f)  "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   exclusive economic zone  .
      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.  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.  
   (a) The Secretary of the Natural Resources Agency.  
   (b) The Secretary for Environmental Protection.  
   (b) Two members 
    (c)     One member  of the public
appointed by the Governor. 
   (c) 
    (d)  One member, appointed by the Speaker of the
Assembly, who shall be an expert in marine  science 
 fisheries 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) 
    (e)  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  
or  sustainable consumptive recreational activities.
   71532.  The term of office of each member of the board appointed
pursuant to subdivisions  (b)   (c)  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   subdivision (c) of Section
71531 is three years.
   71533.  Any vacancy on the board shall be filled by the 
Governor by appointment for   appointing authority for
the remainder of  the unexpired term.
   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 
 71533  .
   (d) Members of the board shall receive no salary but  members
appointed pursuant to subdivisions (c) to (e), inclusive, of Section
71531  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.   (a)    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. 
   (b) It is the intent of the Legislature that the endowment not be
incorporated until the endowment board has received its initial
notice of application from the Department of Fish and Game, pursuant
to Section 6610 of the Fish and Game Code. 
   71551.  The California Endowment for Marine Preservation shall
receive funds generated pursuant to the California Marine 
Resources  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  and programs  that will
conserve, protect, restore, and enhance the coastal and marine
resources of the state, with an emphasis on open coastal marine
resources , and that will improve the sustainability of marine
activities and encourage and support environmentally sustainable
marine activities  . To achieve this objective, the endowment
board may  allocate funding   award grants to
public agencies and nonprofit organizations  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,

    (1)     Applied 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.
  No more than 10 percent of funds awarded by the
endowment in any fiscal year shall be awarded for research. 
   (2) Projects in open coastal waters that enhance environmentally
sustainable marine activities.
   (3) Projects in open coastal waters to enhance the habitat for
open coastal marine life. 
   (4) 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 
    (4)     Enforcement   programs
that protect, conserve, and enhance natural resources and marine
habitat in and adjacent to open coastal waters, including regulating
the take of open coastal marine species and monitoring  of open
coastal marine species and habitat with an emphasis on innovative
approaches.
   (5) Programs to aid in the establishment of sustainable fishing
levels and reduce or prevent habitat damage in open coastal waters.
   (6) 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.
   (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
  this chapter  .
   (3) Loan funds to  private,  local, state, and
federal agencies, organizations, and institutions to carry out the
purposes of  the endowment   this chapter 
.
   (d) The endowment shall create a business plan for a five-year
period. The endowment shall update the plan annually.
   (e) On or before February 1 each year following incorporation
 , the endowment shall submit a report  for the preceding
fiscal year to the Governor and  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) (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 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.   to Section 71552, as grants for projects or
programs consistent with the purpose of this chapter within 24 months
of receipt of the funds. The majority of these funds shall be
granted to state agencies engaged in coastal and ocean protection.

   (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.