BILL ANALYSIS                                                                                                                                                                                                    Ó





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          |                                                                 |
          |         SENATE COMMITTEE ON NATURAL RESOURCES AND WATER         |
          |                   Senator Fran Pavley, Chair                    |
          |                    2011-2012 Regular Session                    |
          |                                                                 |
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          BILL NO: SB 551                    HEARING DATE: April 26, 2011  

          AUTHOR: DeSaulnier                 URGENCY: No  
          VERSION: April 7, 2011             CONSULTANT: Marie Liu  
          DUAL REFERRAL: No                  FISCAL: Yes  
          SUBJECT: State property: tidelands transfer: City of Pittsburg 
          and City of Martinez Marina.  
          
          BACKGROUND AND EXISTING LAW
          The State Lands Commission (commission) is charged with managing 
          and protecting the state's tide and submerged lands for the 
          public trust. With legislative approval, the commission may 
          grant state tidelands to local governments for their use and 
          maintenance.

          Article 4 of Chapter 4 of Part 1 of Division 6 of the Public 
          Resources Code (commencing with 6361) grants tide and submerged 
          lands to City of Pittsburg for the development of commerce, 
          navigation, fishing, recreation, and the other public trust 
          uses. These lands are to be held by the city for public trust 
          purposes under a number of conditions, including:
          1.Pittsburg must submit its plan to develop and preserve the 
            granted lands to the Commission for approval by July 1, 2008. 
          2.Pittsburg may not lease any of the trust lands for terms 
            exceeding 66 years.
          3.At the end of every third fiscal year, 85% of the excess trust 
            revenues that are not being reserved for future capital 
            expenditures will be transferred to the Kapiloff Land Bank 
            Fund.

          Chapter 815 of the Statutes of 1976 and Chapter 387 of the 
          Statutes of 2002 grant certain tidelands to the City of 
          Martinez.

          The commission is the trustee of the Land Bank Fund (LBF) 
          created pursuant to the Kapiloff Land Bank Act of 1982 
          (commencing with Section 8600 of the Public Resources Code. The 
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          LBF may receive funds for mitigation or from title settlements. 
          Additionally, the LBF can receive revenues from any party for 
          the purpose of providing management and  improvement of real 
          property held by the commission for the public trust.

          PROPOSED LAW
          This bill would grant additional tide and submerged lands to the 
          City of Pittsburg and the City of Martinez. The new grant would 
          be an expansion of the current Pittsburg grant and would make 
          the following changes to the existing grant agreement:
          1.Pittsburg must submit a trust lands use plan by January 1, 
            2017.
          2.Pittsburg may not lease any of the trust lands for terms 
            exceeding 49 years.
          3.Pittsburg must report to the commission every five years, 
            beginning in 2022, regarding the utilization of trust lands 
            for the five preceding years.
          4.Require that at the end of every fiscal year beginning on June 
            30, 2012, Pittsburg to transmit 20% of all gross revenue 
            generated from the trust lands to the commission. Of this 
            amount, 80% would be deposited in the General Fund and the 
            remaining 20% would be deposited in the LBF.

          The terms of the agreement for the Martinez grant would be 
          substantially similar to grant terms proposed for the Pittsburg 
          grant.

          ARGUMENTS IN SUPPORT
          The City of Pittsburg, co-sponsor of the bill, states, "This 
          amendment will extend the area of the grant from the State Lands 
          commission to include the area to the west that was annexed into 
          the City of Pittsburg in 2009. The City is very interested in 
          developing our shoreline which includes old underutilized 
          industrial properties which we feel can be developed into 
          productive uses that will benefit the people of Pittsburg and 
          the region as a whole."

          The City of Martinez, co-sponsor of the bill, states, "The City 
          of Martinez is undertaking a true public and private 
          partnership, to piece together the needed funding to do a major 
          renovation to their Marina?The reasoning behind this Legislative 
          land grant request is to control and fix the annual lease 
          payments made by the city of Martinez to the State of 
          California, while improving the revenue stream to the city of 
          Martinez Marina enterprise fund."

          ARGUMENTS IN OPPOSITION
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          None received.

          COMMENTS 
           New revenue sharing provisions to motivate grantees to use 
          granted lands for appropriate and revenue generating purposes.  
          For most past land grants, the commission has only required that 
          excess trust revenues shall be returned to the state, which 
          effectively has meant that the state never receives any revenues 
          from granted trust lands. Both grants proposed in this bill 
          however would allow the state to receive 20% of gross revenues. 
          The commission feels that these new revenue sharing provisions 
          will encourage grantees to appropriately develop tidelands while 
          assuring revenues for the General Fund and the commission's 
          operating cost for grant oversight. 

          The committee should note that the City of Martinez would like 
          to continue negotiating the revenue sharing provisions with the 
          commission, partly because these provisions affect the city's 
          repayment plan for a loan from the Department of Boating and 
          Waterways for a marina rehabilitation project. The committee may 
          wish to direct the author to keep committee staff appraised of 
          any potential changes to the grant agreements, particularly the 
          revenue sharing provisions.

          SUPPORT
          City of Martinez (co-sponsor)
          City of Pittsburg (co-sponsor)

          OPPOSITION
          None Received

















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