BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                       SB 
                                                                 328
                                                                       Page  
                                                                 1


          SENATE THIRD READING
          SB 328 (Kehoe)
          As Amended  June 22, 2011
          Majority vote 

           SENATE VOTE  :37-1  
           
           JUDICIARY           10-0        APPROPRIATIONS      14-2         
           
           ----------------------------------------------------------------- 
          |Ayes:|Feuer, Wagner, Atkins,    |Ayes:|Fuentes, Harkey,          |
          |     |Dickinson, Beth Gaines,   |     |Blumenfield, Bradford,    |
          |     |Huber, Huffman, Jones,    |     |Charles Calderon, Campos, |
          |     |Monning, Wieckowski       |     |Gatto, Hall, Hill, Lara,  |
          |     |                          |     |Mitchell, Norby, Solorio, |
          |     |                          |     |Wagner                    |
          |     |                          |     |                          |
          |-----+--------------------------+-----+--------------------------|
          |     |                          |Nays:|Donnelly, Nielsen         |
          |     |                          |     |                          |
           ----------------------------------------------------------------- 

           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.








                                                                       SB 
                                                                 328
                                                                       Page  
                                                                 2



          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 
               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; and,

             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:  a) 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; b) inform the public 
            entity that written comments may be submitted; and, c) 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 








                                                                       SB 
                                                                 328
                                                                       Page  
                                                                 3


            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, 
            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.

           FISCAL EFFECT  :  According to the Assembly Appropriations 
          Committee, likely minor annual reimbursable costs for local 
          agencies seeking to acquire property meeting criteria specified 
          above by eminent domain to make the required notifications and to 
          respond in writing to comments from entities having a 
          conservation easement interest.
           
          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.  









                                                                       SB 
                                                                 328
                                                                       Page  
                                                                 4


          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 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. 
           This bill does not seek to stop public entities from using the 
          power of eminent domain to acquire property subject to 
          conservation easement or even to ensure that the conditions of 
          the easement remain; rather, this bill seeks 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.  Specifically, 
          this bill amends existing eminent domain law in the following 
          ways:

          1)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 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.  









                                                                       SB 
                                                                 328
                                                                       Page  
                                                                 5


          2)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.  

          This bill is substantially the same as the enrolled version of 
          the author's SB 555 of 2009, which was vetoed by the prior 
          Governor.  However, the prior Governor's veto message was 
          substantially the same as the arguments made by the opponents of 
          SB 555.   Since that time, the author has reached out to those to 
          better explain the purpose of the bill, and those opponents now 
          agree that this is a fair and reasonable bill that balances the 
          goals of conservation and infrastructure development.  

          According to the author, this bill would establish "common sense" 
          procedures for condemning properties with conservation easements 
          in order to protect public investment in easements by ensuring 
          that holders of the conservation easement will not be excluded 
          from the condemnation process.   The California Council of Land 
          Trusts (CCLT), argues that the existing process "for condemning 
          these properties suffers from a lack of communication between the 
          easement holder and the condemning agency" and thereby "creates 
          unnecessary challenges in the process."  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 a stake in the easement.  


           Analysis Prepared by  :    Thomas Clark / JUD. / (916) 319-2334 
                                                                 FN: 
                                                            0001504












                                                                       SB 
                                                                 328
                                                                       Page  
                                                                 6