BILL ANALYSIS Ó SB 328 Page 1 Date of Hearing: July 6, 2011 ASSEMBLY COMMITTEE ON APPROPRIATIONS Felipe Fuentes, Chair SB 328 (Kehoe) - As Amended: June 22, 2011 Policy Committee: JudiciaryVote:10-0 Urgency: No State Mandated Local Program: Yes Reimbursable: Yes SUMMARY This bill requires a person seeking to acquire, by eminent domain, a property subject to a conservation easement to give the holder of the conservation easement a notice containing specified information and an opportunity to comment on the acquisition. Specifically, this bill: 1)Requires that, not later than 105 days prior to the earlier of a hearing on a resolution of necessity or the time that an offer is made to an owner, a person or entity seeking to acquire property subject to a conservation easement shall send a notice, containing specified information, to the holder of the conservation easement. 2)Requires the holder of the conservation easement, within 15 days of receiving the notice, to send copies to any public entity that (a) provided funds for the acquisition of the property or (b) imposed conditions on approval of a project satisfied in whole or in part by the conservation easement. 3)Requires the holder of the conservation easement or any public entity that provided funds for the purchase of the easement, or both, to within 45 days 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. 4)Requires the person seeking to acquire the property, within 30 days after receipt of the written comments per (3) to respond in writing to the comments, as specified. SB 328 Page 2 5)Clarifies that the holder of a conservation easement is an owner of property entitled to compensation as specified. 6)Applies all of the above only to conservation easements in which any of the following apply: a) The conservation easement is held by a public entity. b) A public entity provided funds to acquire the easement. c) A public entity imposed conditions on approving or permitting a project that were satisfied, in whole or in part, by the easement. FISCAL EFFECT Likely minor annual reimbursable costs for local agencies seeking to acquire property meeting one of the criteria specified in #6 above by eminent domain to make the required notifications and to respond in writing to comments from entities having a conservation easement interest. COMMENTS 1)Background . In 1979, California statutorily created a "conservation easement" to permit various government entities and non-profit organizations to acquire and hold such 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 "one stick in the bundle of property rights" while the original owner continues 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 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. SB 328 Page 3 2)Purpose . 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 conservation easements generally run with the land and bind subsequent owners, this is usually not the case when 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 on the part of government entities, as well as non-profit agencies, which purchased those easements. According to the author, this bill is intended 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. 3)Prior Legislation . This bill is almost identical to SB 555 (Kehoe) of 2009, which was vetoed by Governor Schwarzenegger, who argued the bill would provide opponents of controversial infrastructure projects with another tool to impede or discourage such projects. Curiously, the governor's argument mirrored that of parties previously opposed to the bill but no longer in opposition. Similarly, SB 328 has no registered opposition. Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081