BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
AB 1943 (Chesbro) - Tidelands: City of Eureka.
Amended: June 30, 2014 Policy Vote: NR&W 8-1
Urgency: No Mandate: No
Hearing Date: August 4, 2014 Consultant:
Marie Liu
This bill meets the criteria for referral to the Suspense File.
Bill Summary: AB 1943 would release the City of Eureka (city)
from its statutory obligation to transmit 15% of its revenues
generated on its granted lands to the General Fund and would
instead require the city to transmit 4% of its gross revenue to
the Kapiloff Land Bank Fund
Fiscal Impact:
Revenue losses of $30,000 to $60,000 to the General Fund
from eliminated payments from the city.
Increased revenues of $8,000 to $16,000 to the Kapiloff
Land Bank Fund (special) from the city.
Background: Existing law grants certain state tide and submerged
lands to the City of Eureka. Revenues from activities on those
lands are required to be deposited into the Humboldt Bay Fund
(Harbor Fund) and may only be used to support the granted lands.
In 1971, the state loaned the city $250,000 to assist with legal
costs in a lawsuit initiated by the city to protect some of its
granted state lands. Only some of this original loan was ever
used. In 1978, this original loan was forgiven and a new loan of
$750,000 was awarded in exchanged for an obligation to transfer
to the state's General Fund 15% of its revenues deposited into
the Harbor Fund annually, less bond payments unrelated to this
bill, in perpetuity.
According to the city, since 1983, the city has paid $1.2
million to the General Fund. Annual payments generally range
between $30,000 and $60,000. In the past ten years, the average
payment has been approximately $47,000.
Proposed Law: This bill would delete the current requirement
that the city transmit 14% of its revenues (less specified
AB 1943 (Chesbro)
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costs) generated on its granted lands to the General Fund and
instead require that the city annually transmit 4% of all gross
revenue generated from the trust lands to the State Lands
Commission (commission) for deposit into the Kipiloff Land Bank
Fund for the commission's costs associated with managing granted
lands.
Related Legislation: SB 551 (DeSaulnier) Chapter 422, Statutes
of 2011 made a new grant to the City of Pittsburg which required
a revenue share agreement with the state based on gross
revenues.
AB 1424 (Wolk) would establish a new grant of state tide and
submerged lands with the City of Martinez with a revenue share
agreement with the state based on gross revenues. (Currently in
Assembly Appropriations)
Staff Comments: The city's obligation to share non-net revenues
is unique. Except for some recent land grant agreements (City of
Pittsburg and proposed for the City of Martinez), the state
generally only requires that net revenues generated on granted
state lands be transmitted to the state. In practice this means
that the state very rarely sees any revenues from its granted
lands. Grantees are generally only required to give net revenues
to the state to encourage the reinvestment of revenues back into
the granted lands. This bill would delete the city's unique
requirement and would instead replace it with a smaller
obligation to be paid to the Kapiloff Land Bank Fund.
The commission's request for 4% of the gross revenues be
transferred to the Kapiloff Land Bank Fund is consistent with
the recent City of Pittsburg and proposed City of Martinez
grants where 20% of the gross revenues from the tidelands are to
be shared the state, of which 20% is to be given to the Land
Bank Fund and the other 80% is deposited into the General Fund.
The Kapiloff Land Bank Fund is used by the commission to oversee
granted lands and to make additional land purchases.
Staff notes that Kapiloff Land Bank Fund is continuously
appropriated to the commission. By directing funds into this
fund, this bill makes an appropriation.
AB 1943 (Chesbro)
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