BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 982|
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THIRD READING
Bill No: AB 982
Author: Skinner (D)
Amended: 8/30/11 in Senate
Vote: 21
SENATE GOVERNMENTAL ORG. COMMITTEE : 13-0, 6/28/11
AYES: Wright, Anderson, Berryhill, Calderon, Cannella,
Corbett, De León, Evans, Hernandez, Padilla, Strickland,
Wyland, Yee
SENATE APPROPRIATIONS COMMITTEE : 9-0, 8/25/11
AYES: Kehoe, Walters, Alquist, Emmerson, Lieu, Pavley,
Price, Runner, Steinberg
ASSEMBLY FLOOR : 78-0, 5/31/11 - See last page for vote
SUBJECT : Energy: land exchange for renewable
energy-related projects
SOURCE : Author
DIGEST : This bill, contingent on the cooperation of the
United States Secretary of the Interior, requires the State
Lands Commission (SLC) to enter into a memorandum of
agreement (MOA) by April 1, 2012, with the U.S. Secretary
of the Interior to facilitate land exchanges consolidating
school land parcels into contiguous holdings that are
suitable for renewable energy-related projects. This bill
requires the SLC, by January 1 of each year, to report to
the Legislature on the status of the MOA and school land
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consolidation efforts for renewable energy-related
projects.
ANALYSIS : Existing law:
1. Designates administrative control of specified state
lands to the SLC, including property the federal
government granted to the state to be held in trust for
the benefit of California public schools.
2. Vests the SLC, as a trustee, with the exclusive
jurisdiction and authority to administer the School Land
Bank Fund and the interest in land acquired pursuant to
that act.
3. The School Land Bank Act authorizes the SLC acting as a
trustee, to acquire interest in real property for the
purposes of facilitating the management of school lands
to generate income, for the benefit of the California
State Teachers' Retirement System.
This bill:
1. Requires SLC to enter into a MOA by April 1, 2012, with
the U. S. Secretary of the Interior to facilitate land
exchanges that consolidate school land parcels into
contiguous holdings that are suitable for renewable
energy-related projects, contingent upon the cooperation
of Interior.
2. States that, to the extent feasible, the MOA shall be
tailored to prioritize land exchanges that are best
suited for large-scale commercial renewable energy
project development, including for mitigation of its
effects.
3. Requires that within 240 days of the execution of the
MOA, SLC shall prepare and submit to the Department of
Interior a proposal for land exchanges that consolidate
all school land parcels in the California desert into
contiguous holdings that are suitable for renewable
energy-related projects.
4. Requires SLC, in developing the land exchange proposal,
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to give priority to land exchanges that will facilitate
the development of large-scale commercial renewable
energy projects.
5. Requires the land exchange proposal to be based on an
acre-for-acre exchange with the U.S. unless SLC
reasonably believes, based on existing and reliable
information, that an acre-for-acre exchange would
not provide the state with compensation that is equal to
or greater than fair market value. If the U.S. is not
authorized to enter into such an agreement, the SLC may
propose an exchange based on equivalent appraised
values.
6. Requires SLC to consult with the California Energy
Commission (CEC) to identify areas that are best suited
for renewable energy projects.
7. Requires SLC to consult with the Department of Fish and
Game (DFG) to identify areas that are best suited for
renewable energy projects because they do not support
direct habitat or habitat corridor values or that serve
as potential mitigation area to offset environmental
impacts of renewable energy projects.
8. Requires SLC to report to the Legislature by January 1
of each year on the status of the MOA and school land
consolidation efforts in the California desert.
9. Notwithstanding Section 6217.5, a portion of the
revenues generated from renewable energy leases pursuant
to this chapter shall be made available to SLC, upon
appropriation by the Legislature, to cover the SLC's
costs attributable to the land exchange process.
Comments
Rationale . The author's office states that large-scale
renewable projects are a primary source of renewable energy
that can be used to meet California's renewable portfolio
standard, which requires retail sellers of electricity to
procure at least 33 percent of electricity delivered to
retail customers from renewable energy resources by the
year 2020. The author's office notes that, according to
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the U.S. Department of Energy, California has some of the
best locations on which to produce renewable energy, but
much of this public land is not contiguous. This bill is
intended to help consolidate some of this land so that
large-scale renewable projects can be built on the lands.
Background . After California achieved statehood, the
federal government granted approximately 5.5 million acres
of land to California to be used for the support of
schools. This land consisted of the sixteenth and
thirty-sixth section of each township. Approximately 90
percent of the school lands
were sold prior to the creation of the SLC in 1938.
Proceeds were used primarily to pay for school
construction.
In 1984, the California Legislature directed that school
lands be retained and managed by the SLC to generate
revenue to provide COLAs for retired teachers. The school
lands are difficult to manage because they are broken up
into noncontiguous, square-mile parcels. The Legislature
found the "consolidation of school land parcels into
contiguous holdings is essential to sound and effective
management." The law authorizes SLC to sell the isolated,
non-economic school lands and use the funds from the sales
to purchase real property that will generate additional
revenues to benefit California's retired teachers.
Proceeds from sales are required to be held in trust by the
Commission for the teachers and are deposited in the School
Land Bank Fund (SLBF).
Over time, the state sold several millions of acres of
school lands, but the state owns surface and mineral rights
on approximately 468,600 acres of school lands, and retains
the mineral rights to an additional 790,000 acres.
Approximately 370,000 acres of these state lands are
located in the California desert and are landlocked,
remote, and non-revenue generating.
Under the School Land Bank Act, the SLC may take all action
necessary to fully develop school lands into a permanent
and productive revenue source. Revenues generated are
deposited in the State Treasury to the credit of the
Teachers' Retirement Fund. The money collected from the
Pre-1984 sale of school lands was deposited into the SLBF.
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SLC is required to use this money to make investments that
produce revenue for CalSTRS. In 2008, the state borrowed
$59 million from the SLBF to deal with the state's budget
issues. The loan is technically scheduled to be paid back
into the fund by fiscal year 2012-2013.
Desert Protection Act . The federal California Desert
Protection Act (CDPA) became law in 1994. The CDPA
designates 3.6 million acres in southern California as
wilderness lands, administered primarily by the Bureau of
Land Management (BLM), and designated an additional four
million acres in southern California as national park
lands.
There are large sections of the desert that are optimal for
large-scale commercial renewable energy related projects.
Renewable energy developers are interested in leasing
desert school lands for their projects, but school lands
are generally scattered across the desert in 640 acre
sections-
large-scale commercial renewable energy projects generally
require thousands of acres. Several school land parcels
are surrounded by BLM lands that are not protected by the
CDPA. Land exchanges with BLM could consolidate school
land parcels into large contiguous holdings that would be
useful for substantial renewable energy development.
Purpose of this bill . This bill requires SLC to enter
into a MOA with the Secretary of the Interior to facilitate
land exchanges that consolidate school land parcels into
contiguous holdings that are suitable for renewable energy
related projects and the associated mitigation.
The Secretary of the Interior is currently authorized to
enter into an MOA with SLC pursuant to the CDPA; however,
there is no current MOA between the parties that focuses on
renewable energy related projects.
This bill requires SLC to make every effort to consolidate
school land parcels in the California desert into
contiguous holdings for use in developing renewable energy
related projects. This bill authorizes an acre-for-acre
exchange unless SLC reasonably believes, based on existing
and reliable information, that an acre-for-acre exchange
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would not provide the state with compensation that is equal
to or greater than the fair market value of a parcel.
Additionally, SLC will be required to work with CEC and DFG
to establish a state coordinated effort to obtain desert
lands that are optimal for renewable energy projects
without significantly impacting the environment.
Senator Diane Feinstein has introduced the California
Desert Protection Act of 2011 that includes provisions to
facilitate land exchanges between SLC and BLM for renewable
energy related projects.
Prior Legislation
SB 1272 (Harman), Chapter 701, Statutes of 2005, authorizes
the sale of school lands trust mineral rights beneath a
proposed landfill in Riverside County at full market value.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13 2013-14 Fund
Negotiating land $450 $900
$900 Special* exchanges
Lease revenues Unknown, potentially up to
($10,000) Special *
per year
* Land Bank Fund.
SUPPORT : (Per Senate Governmental Organization Committee
analysis of 6/23/11 - unable to reverify at time of
writing)
BrightSource Energy
California Retired Teachers Association
ARGUMENTS IN SUPPORT : Supporters believe that
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large-scale renewable projects are an essential component
to satisfying the state's renewable energy procurement
mandate. They believe that this bill will help to
establish renewable energy parks on government land on
parcels that are large enough for developers to build, and
provide meaningful mitigation lands in the process.
ASSEMBLY FLOOR : 78-0, 5/31/11
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall,
Block, Blumenfield, Bonilla, Bradford, Brownley,
Buchanan, Butler, Charles Calderon, Campos, Carter,
Cedillo, Chesbro, Conway, Cook, Davis, Dickinson,
Donnelly, Eng, Feuer, Fletcher, Fong, Fuentes, Furutani,
Beth Gaines, Galgiani, Garrick, Gatto, Gordon, Grove,
Hagman, Halderman, Hall, Harkey, Hayashi, Roger
Hernández, Hill, Huber, Hueso, Huffman, Jeffries, Jones,
Knight, Lara, Logue, Bonnie Lowenthal, Ma, Mansoor,
Mendoza, Miller, Mitchell, Monning, Morrell, Nestande,
Nielsen, Norby, Olsen, Pan, Perea, V. Manuel Pérez,
Portantino, Silva, Skinner, Smyth, Solorio, Swanson,
Torres, Valadao, Wagner, Wieckowski, Williams, Yamada,
John A. Pérez
NO VOTE RECORDED: Bill Berryhill, Gorell
PQ:kc 8/30/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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