BILL ANALYSIS Ó
SB 328
Page 1
Date of Hearing: June 14, 2011
ASSEMBLY COMMITTEE ON JUDICIARY
Mike Feuer, Chair
SB 328 (Kehoe) - As Amended: June 9, 2011
SENATE VOTE : 37-1
SUBJECT : Eminent Domain: Conservation Easement
KEY ISSUE : Should holders of conservation easements, and public
entities that may have funded or otherwise helped to create
those easements, receive adequate notice of all preliminary
eminent domain hearings and an opportunity to be heard at those
hearingS?
FISCAL EFFECT : As currently in print this bill is keyed fiscal.
SYNOPSIS
This bill would create new requirements for a person or entity
seeking through the use of eminent domain to acquire property
that is subject to a "conservation easement." Authorized by
statute in 1979 in order to help preserve more land in its
natural, scenic, historic, agricultural, and open-space
conditions, "conservation easements" are essentially agreements
between public or private entities, on the one hand, and
landowners, on the other hand, whereby the landowner agrees to
preserve the land in some specified condition and the easement
holder has the right and responsibility to monitor and enforce
the easement conditions. Prior to the creation of these
easements, non-profit land trusts and conservancies, as well as
government agencies, had to purchase land if they wished to set
it aside and protect it from environmentally destructive
developments. However, in the case of a conservation easement,
the easement holder only buys a right to keep the land in the
specified condition, while the owner continues to legally
possess and hold title to the land. According to the author, as
our communities move outward and demand public services, lands
once protected by conservation easements have been threatened by
entities exercising the power of eminent domain, which
effectively destroys the easement. Although existing law
requires notice to the holder of certain wildlife easements, it
does not provide notice for other conservation easements nor
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does it provide notice to interested public entities that may
have founded or otherwise contributed to the creation of the
conservation easements. This bill would require notice to all
conservation easement holders, as well as any interested public
entities. This bill is virtually identical to the enrolled
version of SB 555, which was vetoed by Governor Schwarzenegger.
However, the author has affirmatively engaged in discussions
with groups that opposed SB 555 and has apparently addressed
their concerns, since there is no registered opposition to this
bill, and some groups that opposed or expressed concerns about
have written in support of this year's bill. This bill is
supported by several environmental land trusts, nature
conservancies, and public utilities.
SUMMARY : Requires a person seeking to acquire, by eminent
domain, a property subject to a conservation easement to give
the holder of the conservation easement, and a public entity
that contributed to the creation of the easement, a notice
containing specified information and an opportunity to comment
on the acquisition. Specifically, this bill :
1)Defines "conservation easement" to mean any limitation in a
deed, will, or other instrument in the form of an easement,
restriction, covenant, or condition, which is or has been
executed by or on behalf of the owner of the land subject to
such easement and is binding upon successive owners of such
land, and the purpose of which is to retain land predominantly
in its natural, scenic, historical, agricultural, forested, or
open-space condition.
2)Specifies that a person or public entity authorized to acquire
property for public use by eminent domain shall exercise the
power of eminent domain to acquire property that is subject to
a conservation easement only as provided in this bill.
3)Provides that not later than 105 days prior to a hearing on a
resolution of necessity, or at the time that an offer is made
to an owner or owners, whichever occurs earlier, a person
seeking to acquire property subject to a conservation easement
shall send a notice by first-class mail to the holder of the
conservation easement and shall state all of the following:
a) A general description of the property subject to a
conservation easement;
b) A description of the public use or improvement that is
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being considered for the property;
c) That written comments on the acquisition may be
submitted no later than 45 days from the date that the
notice was mailed to the holder of the conservation
easement;
d) That the holder of the conservation easement, within 15
days of receipt of the notice, must send copies of the
notice to any public entity that provided funds or
otherwise contributed to the creation of the easement, as
specified.
4)Requires the holder of the conservation movement, within 15
days of receipt of the notice, to (1) send copies of the
notice to any public entity that provided funds for the
acquisition of the property, or imposed conditions on a
project satisfied by the conservation easement; (2) inform the
public entity that written comments may be submitted; and (3)
notify the person seeking to acquire the property, as
specified.
5)Provides that the holder of the conservation easement or any
public entity that provided funds for the purchase of the
easement, or both, may provide the person seeking to acquire
the property with written comments on the proposed
acquisition, including identifying any potential conflict
between the proposed public use and the terms of the
conservation easement. Written comments may be submitted no
later than 45 days from the date the person seeking to acquire
the property mailed the notice to the holder of the
conservation easement.
6)Requires the person seeking to acquire the property, within 30
days after receipt of the written comments described in 5)
above, to respond in writing to the comments, as specified.
7)Requires that notice of a hearing on the resolution of
necessity shall be sent to any holder of the conservation
easement or public entity noticed under 4) above to inform the
noticed parties of their right to appear and be heard on
matters relating to the acquisition and planned public use.
8)Provides that in any eminent domain proceeding to acquire
property subject to a conservation easement, the holder of the
conservation easement shall be named as a defendant in the
condemnation proceeding; may appear at the proceedings; and
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shall have the same rights and obligations as any other
defendant in the condemnation proceeding.
9)Provides that the holder of a conservation easement is an
owner of property entitled to compensation and specifies the
manner by which compensation shall be determined.
10)States that it is the intent of the Legislature to encourage
the parties in an eminent domain proceeding to acquire
property subject to a conservation easement to consult early
in the process and consider alternatives that will mitigate
the impact on the conservation easement and avoid delays in
the eminent domain proceeding.
EXISTING LAW :
1)Provides that private property may be taken or damaged for
public use only when just compensation is paid. Defines "just
compensation" as a property's fair market value as determined
by any method of valuation that is just and equitable.
(California Constitution Art. I, Sec. 19; Code of Civil
Procedure Sections 1263.310 to 1263.320.)
2)Provides that the power of eminent domain may be exercised to
acquire property only for a public use, and only if all of the
following are established: (1) the public interest and
necessity require the project; (2) the project is planned or
located in a manner that will be most compatible with the
greatest public good and the least private injury; and (3) the
property sought to be acquired is necessary for the project.
(Code of Civil Procedure Sections 1240.010, 1240.030.)
3)Provides that any person authorized to acquire by eminent
domain property that is already devoted to a public use may
exercise that power if (1) the proposed use will not
unreasonably interfere with or impair the continuance of the
public use as it then exists or may reasonably be expected to
exist in the future; or (2) the use for which the property is
sought to be taken is a more necessary public use than the use
to which the property was originally appropriated. (Code of
Civil Procedure Sections 1240.510, 1240.610.)
4)Finds and declares that the preservation of land in its
natural, scenic, agricultural, historical, forested, or
open-space condition is one of the most important
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environmental assets of California, and declares it to be the
public policy of this state to encourage the voluntary
conveyance of conservation easements to qualified nonprofit
organizations. (Civil Code Sec. 815.)
5)Permits the following entities or organizations to acquire and
hold conservation easements: (a) tax-exempt nonprofit
501(c)(3) organizations with a primary purpose of preserving,
protecting, or enhancing land in its natural, scenic,
historical, agricultural, forested, or open-space condition or
use; (b) the state or any city, county, city and county,
district, or other state or local government entity, as
specified; and (c) a California Native American tribe, as
specified. (Civil Code Sec. 815.3.)
6)Provides that no governmental entity may condemn any wildlife
conservation easement, as defined, unless, prior to the
initiation of condemnation proceedings by a governmental
entity, the entity: (a) gives notice to the holder of the
easement; (b) provides an opportunity for the holder of the
easement to consult with the governmental agency; and (c)
provides a response to objections. In the condemnation
proceedings, the condemning governmental entity shall be
required to prove by clear and convincing evidence that its
proposed use satisfies specified requirements under the
Eminent Domain Law. (Fish & Game Code Section 1348.3 and Code
of Civil Procedure Sections 1240.610 et seq.)
COMMENTS : This bill seeks to establish an opportunity for
thoughtful review whenever properties subject to conservation
easements are targeted for condemnation under eminent domain
law. In 1979, California statutorily created a "conservation
easement" to permit various government entities and non-profit
organizations to acquire and hold conservation easements. While
governmental and non-profit entities could always acquire
absolute title to land to ensure it remained in a natural and
relatively undisturbed state, a "conservation easement" allows
entities to acquire a conservation easement - one stick in the
bundle of property rights - while the original owner continued
to use, possess, and hold transferable title to the land. In
this way, the conservationist land trust does not own the land,
but simply monitors the easement. The conservation easement is
essentially an agreement between the holder of the easement and
the property owner to the effect that the land will not be used
in certain ways, so that it may remain, for example, in its
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natural, scenic, agricultural, historical, or open-space
condition. The easement is generally perpetual and runs with
the land, so that if the property is sold the new owner takes it
subject to the conservation easement.
However, competing development, transportation, or
infrastructure needs have sometimes led public and private
utilities authorized to exercise the power of eminent domain to
use that power to acquire property subject to a conservation
easement. If the public use for which the property is required
is not consistent with the uses permitted by the conservation
easement, then the easement is effectively destroyed. Although,
as noted above, conservation easements generally run with the
land and bind subsequent owners, this is usually not the case
when the land is acquired by eminent domain. Although an
acquiring entity may elect to maintain the easement, it does not
have to, since the "condemnation" in theory terminates the
existing title and, with it, the conservation easement.
According to the author and supporters, the use of eminent
domain in these instances not only threatens to destroy the
environmental value created by the conservation easement, it
also represents a considerable waste of public and private
investment. That is, government entities, as well as non-profit
agencies, may have purchased those conservation easements, and
their subsequent elimination means that government funds were
spent for naught. This bill does not seek to stop public
entities from using the power of eminent domain to acquire
property subject to conservation easement, nor does it
necessarily seek to ensure that when such properties are
acquired the conditions of the easement remain. Rather, the
purpose of this bill, according to the author, is simply to
ensure that whenever an entity seeks to acquire property subject
to a conservation easement that the easement holder, and any
other entities that contributed to acquisition of that easement,
are given ample notice and opportunity to be heard in any
condemnation proceedings.
Specifically, this bill amends existing eminent domain law in
the following ways:
Existing law requires, as a precursor to an eminent domain
taking, that the entity taking the property conduct a hearing
on a "resolution of necessity," which sets forth the
significant reasons that justify taking the property for
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public use, and the nature of that public use. Existing law
only requires, at this initial stage, that the entity seeking
to acquire the property notify the property owner, but not
necessarily the holder of an easement or any other public
entity that may have contributed to the creation of the
easement. This bill would require that notice be sent to any
holder of a conservation easement at least 105 days prior to
hearing on the resolution of necessity, and it would require
the easement holder, in turn, to notify any public entities
that contributed to the acquisition or creation of the
easement. In short, these provisions seek to ensure that all
major stakeholders, not just the owner, have advance knowledge
of the plan.
In addition, this bill creates a process that allows the
easement holder and interested public entities to be heard at
various points in the eminent domain proceedings, in order to
ensure a more robust public debate about whether the public
use for which the property is being required is consistent
with the policy objectives that prompted the creation of the
conservation easement in the first place. If the proposed
public use is not consistent with the conservation easement,
then, the author believes, there should be an opportunity for
public discussion about the merits of abandoning the
conservation easement in favor of the new proposed public use.
Governor's Veto Message of SB 555 : This bill is substantially
the same as the chaptered version of the author's SB 555 of
2009. Over the course of SB 555's legislative history, the
author took several amendments and removed most of the
opposition to the bill. However, that bill was vetoed by
Governor Schwarzenegger for the following reason:
While protecting the value of conservation easements is a
noble endeavor, this measure unintentionally provides
opponents of controversial infrastructure projects another
tool to impede or discourage vital public infrastructure
planning and development in energy, water, and
transportation which are crucial for our state's job
growth and economic well-being.
However, it should be noted that the prior governor's argument
in opposition is substantially the same as the argument made by
the opponents to SB 555. As noted above, the author spent
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considerable time in the past two years meeting with opponents
and answering their concerns, such that there is no registered
opposition to this year's bill. Thanks to the author's efforts,
the opponents now agree with the author that this is a fair and
reasonable bill that balances the goals of conservation and
infrastructure development.
ARGUMENTS IN SUPPORT : According to the author, this bill would
establish "common sense and clarifying procedures for condemning
properties with conservation easements in order to protect
public investment in easements." First, the author argues, this
bill will ensure that the holders of the conservation easement
will not be excluded from the condemnation process. Second,
even though conservation easements that receive public
investment have already been recognized as meeting one or more
conservation goals, they are "often perceived as the path of
least development for development."
The California Council of Land Trusts (CCLT), the bill's
sponsor, argues that conservation easements are a popular and
cost-effective way to accomplish the state's conservation
policies and goals. CCLT points out that while conservation
easements are often funded with public resources, the existing
process "for condemning these properties suffers from a lack of
communication between the easement holder and the condemning
agency that can create unnecessary challenges in the process."
This bill will protect both public investments and conservation
easements by requiring "that easement holders and public funders
receive early notice of a proposed condemnation, provides an
opportunity for comments to be submitted, allows the easement
holder to speak at a public hearing before the condemnation
proceeds, and recognizes the public investment and uses of the
conservation easement." CCLT contends that, as communities grow
outward, land subject to conservation easements is sometimes
seen as an easy target because it appears to be "empty" or
represents the "path of least resistance." CCLT believes that
this bill, by providing more timely notice to all interested
parties, will create a more thoughtful process in which the
condemning agency will engage in dialogue with easement holders
and other entities that have contributed to or otherwise have a
stake in the easement. A broad coalition of environmentalists,
land trusts, and conservancies strongly support this bill for
substantially the same reasons as those set forth by CCLT.
Although the Association of California Water Agencies (ACWA) had
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concerns about the original version of last year's SB 555, those
concerns have been answered or addressed. Indeed, ACWA, along
with the San Diego County Water Authority (SDCWA), the East Bay
Municipal Utility District (EBMUD), and the Metropolitan Water
District (MWD) of Southern California, now all support SB 328
because, as MWD writes, it "is a measure that fairly balances
the priorities of protecting conservation easements Ýwhile
ensuring] that necessary public works projects are allowed to
continue in a timely fashion." All of these groups applaud the
author's extensive efforts to hear and address the concerns of
all stakeholders over the past two years.
PRIOR LEGISLATION : AB 910 (Chapter 863, Stats. of 2001)
requires that before commencing condemnation proceedings on a
property that contains a wildlife conservation easement held by
a state agency, the condemning entity must give notice to the
easement holder, provide a consultation opportunity, accept the
easement holder's objections to the condemnation, and provide a
response to the objections. Finally, this law created a
presumption that wildlife conservation easements are the "best
and most necessary use" of the property and would require that
the governmental entity prove by "clear and convincing evidence"
that its proposed public use is of greater necessity. However,
this law applies narrowly to wildlife conservation easements
provided for in the Fish and Game Code.
REGISTERED SUPPORT / OPPOSITION :
Support
California Council of Land Trusts (sponsor)
Amargosa Conservancy
American Land Conservancy
American River Conservancy
Association of California Water Agencies
Bay Area Open Space Council
Bay Area Ridge Trail Council
Big Sur Land Trust
Bolsa Chica Land Trust
California Outdoor Heritage Alliance
Catalina Island Conservancy
Center for Natural Lands Management
East Bay Municipal Utility District
Eastern Sierra Land Trust
Lake County Land Trust
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Land Conservancy of San Luis Obispo County
Land Trust for Santa Barbara County
Land Trust of Santa Cruz County
Lassen land and Trails Trust
Marin Agricultural Land Trust
Mendocino Land Trust
Metropolitan Water District of Southern California
Pacific Forest Trust
Palos Verdes Peninsula Land Conservancy
Placer Land Trust
Redwood Coast Land Conservancy
San Diego County Water Authority
San Joaquin River Parkway and Conservation Trust
Save Mount Diablo
Sequoia Riverlands Trust
Shasta Land Trust
Sierra-Cascade Land Trust Council
Southern California Open Space Council
Transition Habitat Conservancy
Trust for Public Land
Wildlife Heritage Foundation
Opposition
None on file
Analysis Prepared by : Thomas Clark / JUD. / (916) 319-2334