BILL ANALYSIS Ó ----------------------------------------------------------------- | | | SENATE COMMITTEE ON NATURAL RESOURCES AND WATER | | Senator Fran Pavley, Chair | | 2011-2012 Regular Session | | | ----------------------------------------------------------------- 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 1 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 2 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 3