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