BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Christine Kehoe, Chair AB 982 (Skinner) Hearing Date: 08/25/2011 Amended: 08/15/2011 Consultant: Brendan McCarthy Policy Vote: GO 13-0 _________________________________________________________________ ____ BILL SUMMARY: AB 982 requires the State Lands Commission to enter into an agreement with the federal Department of the Interior to facilitate land exchanges between the state and federal government, to allow for the development of renewable energy project on state lands. _________________________________________________________________ ____ Fiscal Impact (in thousands) Major Provisions 2011-12 2012-13 2013-14 Fund Negotiating land exchanges $450 $900 $900Special * Lease revenues Unknown, potentially up to ($10,000)Special * per year * Land Bank Fund. _________________________________________________________________ ____ STAFF COMMENTS: SUSPENSE FILE. Under current law, the State Land Commission manages lands owned by the state and referred to as "School Lands". These school lands were given to the state by the federal government in the 19th century with the stipulation that they be used for the benefit of public education. (Of the 5.5 million acres granted, about 90 percent have been sold.) In general, the remaining school lands are located in the desert region of the state and are divided into many non-contiguous parcels, often with limited economic value. Revenues that are generated from state lands (through lease revenues, mining royalties, or other uses) are deposited in the Land Bank Fund and are used to support the California Teacher's Retirement System. Last year, school lands generated about $6 million in revenue. AB 982 (Skinner) Page 1 AB 982 requires the State Lands Commission to enter into an agreement with the federal Department of the Interior, by April 1, 2012, to facilitate land exchanges between the state and federal government. The bill provides that its requirements are contingent on cooperation by the federal government. The bill generally directs the Commission to perform the land exchanges on an acre-for-acre basis, but allows the Commission to request additional lands or reject a proposed exchange if a specific school land parcel has greater potential value that an equivalent amount of federal land. The bill directs the Commission to consult with the Department of Fish and Game to identify lands suitable for renewable energy development or use as mitigation habitat lands for endangered species. The purpose of the proposed land exchanges is to allow the state to consolidate parcels into properties that are large enough to allow for the development of renewable energy projects. The intention is to assist the state in meeting its renewable energy goals and to increase the potential of the school lands to generate revenues for the state. The Commission indicates that it will need six additional positions to plan for potential land exchanges, negotiate with the federal government, and then negotiate lease agreements with renewable energy developers. Staff estimates these additional positions will cost about $900,000 per year for the foreseeable future. By facilitating additional development of school lands, the bill is likely to result in increased revenues to the state. The actual revenue increases will depend on the Commission's ability to put together properties that are large enough and located in areas conducive to such development. Based on current and proposed renewable energy projects in the desert region of the state, the Commission indicates that potential future revenues under the bill could be up to $10 million per year.