BILL ANALYSIS                                                                                                                                                                                                    Ó




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                          SB 551 (DeSaulnier)
          
          Hearing Date: 05/26/2011        Amended: 04/07/2011
          Consultant: Brendan McCarthy    Policy Vote: NR&W 9-0
          _________________________________________________________________
          ____
          BILL SUMMARY: SB 551 grants certain tide lands to the cities of 
          Pittsburg and Martinez. The bill requires these cities to use 
          the lands for the benefit of the public. The bill requires the 
          cities to remit to the state 20 percent of all gross revenues 
          generated from those lands.
          _________________________________________________________________
          ____
                            Fiscal Impact (in thousands)

           Major Provisions         2011-12      2012-13       2013-14     Fund
           
          Administrative costs   Minor costs, to be reimbursed by 
          granteesGeneral

          Lease revenue losses   $160       $320        $320      General

          Lease revenue gains    Unknown additional revenues over 
          timeGeneral /
                                                                  Special 
          *

          * Land Bank Fund.
          _________________________________________________________________
          ____

          STAFF COMMENTS: SUSPENSE FILE. AS PROPOSED TO BE AMENDED. 

          Under current law, the State Lands Commission may grant public 
          trust lands, such as tide lands and submerged lands, to local 
          governments with legislative permission. Local grantees are 
          required to manage such public trust lands for the public 
          benefit. Current law grants certain public trust lands to the 
          cities of Pittsburg and Martinez, respectively. In addition, the 
          State Lands Commission directly oversees some leases on tide 
          lands in Pittsburg and Martinez. Under both the existing grants 
          and the leases, the state General Fund receives all of the lease 
          revenues generated from these properties.








          SB 551 (DeSaulnier)
          Page 1



          SB 551 revises the existing grants and authorizes the grant of 
          additional public trust lands to the cities of Pittsburg and 
          Martinez. The bill requires both cities to submit a plan for the 
          public trust lands by 2017 and limits the duration of any lease 
          on those lands to 49 years. The bill requires both cities to 
          remit 20 percent of all gross lease revenues generated from the 
          granted lands to the state. Of these remittances, 80 percent are 
          to be deposited in the General Fund and 20 percent are to be 
          deposited in the Land Bank Fund. (The Land Bank Fund is used by 
          the State Lands Commission to purchase lands for public 
          benefit.) 

          Under the bill, any administrative costs incurred by the State 
          Lands Commission in administering the grants will be covered by 
          the grantees. Such costs are not expected to be significant.

          In the short term, the bill will reduce General Fund revenues by 
          about $330,000 per year. However, the State Lands Commission 
          believes that, over time, the bill will lead to increased state 
          revenues. The Commission indicates that the two cities are 
          better able to develop these properties in ways that will 
          generate lease revenues. Under the terms of the bill, the state 
          will potentially share in the increased revenues (in other 
          words, the state will get a smaller share of a larger revenue 
          stream). The extent of future revenues is unknown.

          The Land Bank Fund is continuously appropriated to the State 
          Lands Commission. By requiring the deposit of revenues in the 
          Land Bank Fund, this bill makes an appropriation.


          The proposed author's amendments delete the provisions of the 
          bill regarding tidelands in the City of Martinez.