BILL ANALYSIS Ó
AB 484
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Date of Hearing: May 11, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 484 (Alejo) - As Amended: March 29, 2011
Policy Committee: Water, Parks and
Wildlife Vote: 9-0
Local Government 13-0
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill clarifies that state and local agencies can allow
nonprofit organizations and special districts to hold and manage
funds dedicated for the long-term management of lands or
easements that are also held by the same nonprofit organization
or special district.
FISCAL EFFECT
1)Potentially significant shift in the formal management and
disposition of millions of dollars of funds from the State
Treasury to individual nonprofit organizations, to the extent
that state agencies convey such funds in response to this
bill.
2)Significant start-up costs of an unknown amount, likely in the
hundreds of thousands of dollars (GF or bond fund), to the
Department of Fish and Game (DFG) during 2011-12 and 2012-13
to establish tracking systems and guidelines for due-diligence
review of proposals to allow nonprofit organizations and
special districts to manage funds.
The exact amount of these start-up costs is unknown, but DFG
indicates that it will need to establish strict guidelines and
adequate safeguards to ensure the state's financial interests
are protected. DFG estimates start-up costs at $1.8 million
for the equivalent to a half-year's work by an attorney, an
accountant and an investment officer, and two-year's work by
staff environmental scientists and program analysts.
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3)Significant ongoing annual costs of an unknown amount, likely
in the hundreds of thousands of dollars (GF or bond funds) to
DFG beginning in 2012-13 to process requests, review proposals
and establish and manage contracts. Again, the exact amount
of these ongoing costs is unknown, but DFG estimates them to
vary between $900,000 and $2.7 million, depending upon the
number of proposals it receives, approves and manages.
COMMENTS
1)Rationale. Existing law clearly allows a state or local
agency to transfer land or conservation easements to a
nonprofit agency for management of the land or easement.
Existing law however, does not explicitly state that a state
or local agency also may transfer funds to the nonprofit,
known as endowment funds, dedicated for the management of the
property or easement. According to the author, because of
this statutory silence, some state and local agencies are
reluctant to transfer endowment funds to a nonprofit, even
though doing so would simplify and streamline management of
the land or easement. The author and sponsor contend this
bill would clarify state and local government authority,
thereby resulting in greater transfer of endowments to
nonprofits.
2)Background. State and local governments have the authority to
issue permits to allow the development of land within their
respective jurisdictions. In some cases, the state or local
agency issuing the land development permit requires the
applicant to transfer to the agency an interest in real
property to mitigate any adverse impact upon natural resources
caused by permitting the development. In many cases, the
state or local agency does not want to hold or manage the
mitigation property. State law expressly allows such a state
or local agency to authorize certain categories of nonprofit
organizations to hold title to and manage those mitigation
properties.
Statute, however, does not explicitly allow a state or local
agency to transfer to a nonprofit agency endowment funds for
the management of mitigation property, even if the state or
local agency has transferred to the nonprofit the mitigation
lands to which the endowment funds are dedicated. Despite
this lack of explicit statutory authorization, Legislative
Counsel concluded in 2006 that existing statute allows a state
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agency to authorize nonprofit organizations to hold and manage
funds set aside for the purpose of long-term management of
mitigation lands. Indeed, the bill's sponsor reports that it
is common practice among some public agencies to transfer
endowment funds to nonprofit agencies for the management of
mitigation properties.
3)Fish and Game Mitigation Accounts. Existing law requires
funds received by the Department of Fish and Game (DFG) for
management of mitigation lands to be deposited in the Fish and
Game Mitigation and Protection Endowment Account or the Fish
and Game Mitigation Expendable Funds Account, which are held
in the State Special Deposit Fund. Interest generated on
endowment funds deposited in the former account is to be made
available to DFG, upon appropriation by the Legislature, to
fund long-term management of habitat lands. Funds other than
endowment funds received by DFG and deposited in the latter
account are continuously appropriated to DFG for expenditure
for management of lands set aside for mitigation.
4)Related Legislation.
a) AB 2746 (Blakeslee, Chapter 577, Statutes of 2006) and
AB 1246 (Blakeslee, Chapter 330, Statutes of 2007)
clarified the authority of state and local agencies to
allow nonprofit land trusts to hold mitigation lands. Both
bills passed the Legislature with unanimous support.
b) SB 436 (Kehoe) , sponsored by the California Council of
Land Trusts, is similar to this bill and is under
consideration in the Senate.
c) AB 444 (Caballero, 2010) , which was similar to this
bill, passed the Assembly 78-0 and the Senate 34-0 but was
vetoed by the governor, who cited concerns about a lack of
fiscal controls.
5)Support. This bill is supported by, among others, the
Transportation Agency of Monterey County (sponsor) and the
County of Monterey, both of which would benefit from the
expedition of transportation projects that would result from
this bill.
6)There is no registered opposition to this bill.
AB 484
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Analysis Prepared by : Jay Dickenson / APPR. / (916) 319-2081