Amended in Senate April 8, 2014

Senate Bill No. 1424

Introduced by Senator Wolk

(Principal coauthor: Assembly Member Bonilla)

(Coauthor: Senator DeSaulnier)

February 21, 2014

An act to repeal Section 3 of Chapter 815 of the Statutes of 1976, relating to tidelands, and making an appropriation therefor.

LEGISLATIVE COUNSEL’S DIGEST

SB 1424, as amended, Wolk. State property: tidelands transfer: City of Martinez begin insert . end insert

(1)  Existing law grants to the City of Martinez all right, title, and interest of the state to 3 specified parcels of land in the Straits of Carquinez, to be held in trust for specified uses. The Kapiloff Land Bank Act creates the Land Bank Fund and continuously appropriates moneys in the fund, subject to a statutory trust, to the State Lands Commission, acting as the Land Bank Trustee, to acquire real property or any interest in real property for the purposes of public trust title settlements.

This bill would repeal that grant of trust lands to the City of Martinez and would instead provide for a new grant of trust begin delete land end delete begin insert lands end insert to the City of Martinez that would include an additional 4th parcel. The bill would require the trust lands to be held by the city, as trustee, for the benefit of all the people of the state for purposes consistent with the public trust doctrine, including the protection of maritime or water dependent commerce, navigation, and fisheries, and the preservation of the lands in their natural state for scientific study, open space, wildlife habitat, and water-oriented recreation. The bill would authorize the city to lease trust lands under specified conditions for purposes consistent with the grant and the public trust doctrine begin insert . end insert

The bill would require the City of Martinez to submit to the commission by January 1, 2020, for its approval begin insert , end insert a trust lands use plan, as prescribed. The bill would require the city to file with the commission by September 30, 2025, and every 5 years thereafter, a detailed report of its trust lands uses and, by October 1 of each year, a statement of trust revenues and expenditures. The bill would require the city to file a specific document with the commission before expending trust revenues for any single capital improvement on the trust lands greater than $250,000 and would prohibit that expenditure of funds if the commission determines it is not authorized.

The bill would require, on June 30, 2015, if the Department of Parks and Recreation determines that specified loans have been repaid, and at the end of every fiscal year thereafter, that 20% of all gross revenues generated from the trust lands be transmitted to the commission, for allocation by the Treasurer, of which 80% would be deposited in the General Fund and 20% in the begin delete Kapiloff end delete Land Bank Fund, thereby making an appropriation.

By imposing new duties on the City of Martinez with respect to the trust lands, the bill would impose a state-mandated local program.

(2) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: ²⁄₃. Appropriation: yes. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

SECTION 1.  

Section 3 of Chapter 815 of the Statutes of 1976,
as amended by Section 1 of Chapter 387 of the Statutes of 2002,
is repealed.

SEC. 2.  

(a) For purposes of this act, the following definitions
shall apply:

(1) “Commission” means the State Lands Commission.

(2) “Public trust doctrine” means the common law doctrine, as
enunciated by the court in National Audubon Soc. v. Superior
Court (1983) 33 begin delete C.3d end delete begin insert Cal.3d end insert 419, and other relevant judicial
decisions, specifying the state’s authority as sovereign to exercise
continuous supervision and control over the navigable waters of
the state, the lands underlying those waters, and nonnavigable
tributaries to navigable waters, including the protection of maritime
or begin delete water dependent end delete begin insert water-dependent end insert commerce, navigation, and
fisheries, and the preservation of the lands in their natural state for
scientific study, open space, wildlife habitat, and water-oriented
recreation.

(3) “State” means the State of California.

(4) “Trustee” means the City of Martinez, a municipal
corporation.

(5) “Trust lands” means Parcel “A,” Parcel “B,” Parcel “C,”
and Parcel “D”, as described in subdivision (b), situated in the
County of Contra Costa. The descriptions of these parcels are based
on the California Coordinate System Zone 3 as shown on Map of
“City of Martinez Waterfront Area” filed March 10, 1955, in
Volume 16, Pages 39 to 43, Licensed Surveyor’s Maps in the
Office of the Contra Costa County Recorder.

(6) “Trust revenues” means all revenues received from trust
lands and trust assets.

(7) “Trust lands use plan” or “plan” means the trust lands use
plan required to be submitted by the trustee to the commission
pursuant to Section 4 of this act.

(8) “Trust lands use report” means the report of the trustee’s
utilization of the trust lands required to be submitted by the trustee
pursuant to Section 5 of this act.

(b) There is hereby granted in trust to the City of Martinez and
to its successors, all of the rights, title, and interest of the state,
held by the state by virtue of its sovereignty, in and to four parcels
of land situated in the County of Contra Costa and described as
follows:

Parcel “A”

Commencing at the intersection of the north line of Tideland
Survey No. 9 and the east line of North Court Street as shown on
Map of “City of Martinez Waterfront Area” filed March 10, 1955,
in Volume 16, Pages 39 to 43, Licensed Surveyor’s Maps in the
Office of the Contra Costa County Recorder; thence along said
northerly line of Tideland Survey No. 9 North 76° 56´ begin delete 53″ end delete begin insert 53˝ end insert
East 488.36 feet; thence leaving said northerly line North 20° 03´
begin delete 30″ end delete begin insert 30˝ end insert West 130.00 feet; thence North 63° 50´ begin delete 00″ end delete begin insert 00˝ end insert East 85.00
feet to the true point of beginning; thence North 03° 30´ begin delete 00″ end delete begin insert 00˝ end insert
East 110.00 feet; thence North 12° 10´ begin delete 00″ end delete begin insert 00˝ end insert East 660.00 feet;
thence North 05° 05´ begin delete 39″ end delete begin insert 39˝ end insert West 119.71 feet; thence North 88°
03´ begin delete 16″ end delete begin insert 16˝ end insert East 242.85 feet; thence South 12° 10´ begin delete 00″ end delete begin insert 00˝ end insert West
797.24 feet; thence South 63° 50´ begin delete 00″ end delete begin insert 00˝ end insert West 233.84 feet to the
point of beginning.

Parcel “B”

Commencing at the intersection of the north line of Tideland
Survey No. 9 and the east line of North Court Street as shown on
Map of “City of Martinez Waterfront Area” filed March 10, 1955,
in Volume 16, Pages 39 to 43, Licensed Surveyor’s Maps in the
Office of the Contra Costa County Recorder; thence along said
northerly line of Tideland Survey No. 9 North 76° 56´ begin delete 53″ end delete begin insert 53˝ end insert
East 488.36 feet; thence leaving said northerly line North 20° 03´
begin delete 30″ end delete begin insert 30˝ end insert West 130.00 feet; thence North 63° 50´ begin delete 00″ end delete begin insert 00˝ end insert East 318.84
feet to the true point of beginning being the southeasterly corner
of Parcel “A” described above; thence North 12° 10´ begin delete 00″ end delete begin insert 00˝ end insert East
797.24 feet along the east line of said Parcel “A”; thence leaving
said east line North 88° 03´ begin delete 16″ end delete begin insert 16˝ end insert East 156.26 feet; thence South
89° 00´ begin delete 00″ end delete begin insert 00˝ end insert East 100.00 feet; thence South 66° 20´ begin delete 00″ end delete begin insert 00˝ end insert
East 120.00 feet; thence South 25° 45´ begin delete 00″ end delete begin insert 00˝ end insert East 453.00 feet;
thence South 68° 10´ begin delete 00″ end delete begin insert 00˝ end insert West 385.00 feet; thence South 63°
50´ begin delete 00″ end delete begin insert 00˝ end insert West 416.16 feet to the point of beginning.

Parcel “C”

That parcel of land described in the lease to the Southern Pacific
Transportation Company by the City of Martinez per Resolution
No. 111 (1959 series) dated August 5, 1959, and Resolution No.
72-75 dated June 4, 1975.

Parcel “D”

Commencing at the intersection of the north line of Tideland
Survey No. 9 and the east line of North Court Street as shown on
Map of “City of Martinez Waterfront Area” filed March 10, 1955,
in Volume 16, Pages 39 to 43, Licensed Surveyor’s Maps in the
Office of the Contra Costa County Recorder; thence South 20°
03´ 30˝ East 240.00 feet to the true point of beginning; thence
South 69° 56´ 30˝ West 50.00 feet to the centerline of North Court
Street; thence North 20° 03´ 30˝ West 630.00 feet along the
centerline of North Court Street; thence leaving said centerline
North 63° 05´ 00˝ West 410.36 feet; thence North 20° 03´ 30˝
West 530.00 feet; thence North 17° 02´ 14˝ East 272.81 feet; thence
North 16° 00´ 00˝ West 380.00 feet; thence South 79° 47´ 48˝ East
380.00 feet; thence North 69° 56´ 30˝ East 810.00 feet; thence
South 81° 03´ 30˝ East 710 feet; thence South 07° 00´ 00˝ West
900.00 feet; thence South 05° 05´ 39˝ East 119.71 feet thence
South 12° 10´ 00˝ West 660.00 feet; thence South 03° 30´ 00˝
West 110.00 feet; thence South 63° 50´ 00˝ West 85.00 feet; thence
South 20° 03´ 30˝ East 130.00 feet to the intersection with the
northerly line of the Tideland Survey No. 9; thence along said
northerly line South 76° 56´ 53˝ West 35.00 feet; thence leaving
said northerly line South 20° 03´ 30˝ East 184.70 feet; thence South
69° 56´ 30˝ West 450.00 feet to the point of beginning.

SEC. 3.  

The trust grant specified in Section 2 of this act is
subject to all of the following express conditions:

(a) The trust lands shall be held by the trustee in trust for the
benefit of all the people of the state for purposes consistent with
the public trust doctrine, including, but not limited to, maritime
or water dependent commerce, navigation, and fisheries,
preservation of the lands in their natural state for scientific study,
open space, wildlife habitat, and water-oriented recreation.

(b) On and after January 1, 2020, the use of the trust lands shall
conform to an approved trust lands use plan, as required by Section
4 of this act.

(c) The trustee shall not, at any time, grant, convey, give, or
otherwise alienate or hypothecate the trust lands, or any part of
the trust lands, to any person, firm, entity, or corporation for any
purpose whatsoever.

(d) The trustee may lease the trust lands, or any part of the trust
lands, for limited periods, not exceeding 49 years, for purposes
consistent with the trust upon which those lands are held, as
specified in subdivision (a) and the public trust doctrine. The
trustee may collect and retain rents and other trust revenues from
those leases, under rules and regulations adopted in accordance
with Section 7 of this act, and in accordance with all of the
following requirements:

(1) On and after January 1, 2020, all leases or agreements
proposed or entered into by the trustee shall be consistent with the
trust lands use plan approved by the commission, as required by
Section 4 of this act. Any leases entered into prior to January 1,
2020, shall be consistent with the public trust doctrine and the
terms of subdivision (a).

(2) The lease rental rates shall be for a fair annual rent.

(3) The lease shall be in the best interest of the state.

(e) When managing, conducting, operating, or controlling the
trust lands or an improvement, betterment, or structure on the trust
lands, the trustee or his or her successor shall not discriminate in
rates, tolls, or charges for any use or service in connection with
those actions and shall not discriminate against or unlawfully
segregate any person or group of persons because of sex, race,
color, creed, national origin, ancestry, or physical disability for
any use or service in connection with those actions.

(f) The state shall have the right to use begin insert , end insert without charge, a
transportation, landing, or storage improvement, betterment, or
structure constructed upon the trust lands for a vessel or other
watercraft or railroad owned or operated by, or under contract to,
the state.

(g) The trust lands are subject to the express reservation and
condition that the state may, at any time, use those lands, or any
portion of those lands, for highway purposes without compensation
to the trustee or a person, firm, or public or private corporation
claiming a right to those lands, except that, if the improvements
have been placed with legal authority upon the property taken by
the state for highway purposes, compensation shall be made to the
person entitled to the value of the interest in the improvements
taken or the damages to that interest.

(h) There is reserved to the people of the state the right to fish
in the waters over the trust lands, with the right of convenient
access to those waters over the trust lands for this purpose.

(i) There is excepted and reserved to the state all remains or
artifacts of archaeological or historical significance and all deposits
of minerals, including, but not limited to, all substances specified
in Section 6407 of the Public Resources Code begin insert , end insert in the trust begin delete lands, end delete
begin insert lands end insert and the right to prospect for, mine, and remove those deposits
from the lands.

(j) The trustee shall reimburse the commission for all expenses
incurred in the administration of this act, including periodic audits
or investigations.

SEC. 4.  

(a) On or before January 1, 2020, the trustee shall
submit to the commission a trust lands use plan describing any
proposed development, preservation, or other use of the trust lands.
The trustee shall thereafter submit to the commission for approval
all changes of, amendments to, or extensions of, the trust lands
use plan.

(b) The commission shall review with reasonable promptness
the trust lands use plan submitted by the trustee and any changes
or amendments to determine whether they are consistent with the
public trust and the requirements of this act. Based upon its review,
the commission shall either approve or disapprove the plan. If the
commission disapproves the plan, the commission shall notify the
trustee and the trustee shall submit a revised plan to the commission
no later than 180 days after the date of notice of disapproval. If
the commission determines the revised plan is inconsistent with
the common law public trust doctrine and the requirements of this
act, all rights, title, and interest of the trustee in and to the trust
lands and improvements on the trust lands shall revert to the state.

(c) The trust lands use plan shall consist of a plan, program, or
other document that includes all of the following:

(1) A general description of the type of uses planned or proposed
for the trust lands. The location of these land uses shall be shown
on a map or aerial photograph.

(2) The projected statewide benefit to be derived from the
planned or proposed uses of the trust lands, including, but not
limited to, financial benefit.

(3) The proposed method of financing the planned or proposed
uses of the trust lands, including estimated capital costs, annual
operating costs, and anticipated annual trust revenues.

(4) An estimated timetable for implementation of the trust land
use plan or any phase of the plan.

(5) A description of how the trustee proposes to protect and
preserve natural and manmade resources and facilities located on
begin insert the end insert trust lands and operated in connection with the use of the trust
lands, including, but not limited to, addressing impacts from sea
level rise.

(d) The begin delete governing body of the end delete trustee shall also submit to the
commission, as part of the trust lands use plan, for its approval,
procedures, rules, and regulations to govern the use or development
of the trust lands. These rules and regulations shall include, but
are not limited to, lease rates, the basis upon which the rates are
established, lease terms and conditions, provisions for renegotiation
of rates and terms and assignments, and any other information as
may be required by the commission.

(e) Any use of the trust lands, including, but not limited to, all
leases or agreements proposed, or entered into, by the trustee after
January 1, 2020, shall be consistent with the trust lands use plan
submitted by the trustee and approved by the commission.

(f) Upon request, the trustee shall submit to the commission a
copy of all leases and agreements entered into, renewed, or
renegotiated.

SEC. 5.  

(a) On or before September 30, 2025, and on or before
September 30 of every succeeding fifth year, the trustee shall
submit a report of its utilization of the trust lands for each
immediately preceding five-calendar-year period ending with June
30 of the calendar year in which the report is required to be
submitted.

(b) The report required by this section shall include all of the
following:

(1) A general description of the uses to which the trust lands
have been placed during the period covered by the report.

(2) A list of the holders of leases or permits that have been
granted or issued by the trustee, which list shall specify all of the
following, as to each holder:

(A) The use to which the trust lands have been placed by the
holder.

(B) The consideration provided for in each lease or permit, and
the consideration actually received by the trustee for the lease or
permit granted or issued.

(C) An enumeration of the restrictions that the trustee has placed
on the use of the trust lands, and each area of the trust lands, for
the period covered by the report.

SEC. 6.  

(a) The trustee shall demonstrate good faith in carrying
out the provisions of its trust lands use plan and amending it when
necessary in accordance with Section 4 of this act.

(b) If the commission determines that the trustee has
substantially failed to improve, restore, preserve, or maintain the
trust lands, as required by the trust lands use plan, or has
unreasonably delayed implementation of the trust lands use plan,
all rights, title, and interest of the trustee in and to the trust lands
and improvements on the trust lands shall revert to the state.

SEC. 7.  

(a) (1) The trustee shall establish and maintain
accounting procedures, in accordance with generally accepted
accounting principles, providing accurate records of all revenues
received from the trust lands and trust assets and of all expenditures
of those revenues.

(2) All trust revenues received from begin insert the end insert trust lands and trust
assets shall be expended only for those uses and purposes consistent
with this act. The trustee shall provide for the segregation of funds
derived from the use of the trust lands by the trustee from other
city municipal funds, so as to ensure that trust revenues are only
expended to enhance or maintain the trust lands in accordance with
the uses and purposes for which the trust lands are held.

(3) Trust revenues may be expended to acquire appropriate
upland properties to benefit and enhance the begin delete trust, end delete begin insert trust lands, end insert
subject to a determination by the commission that the acquisition
is consistent with this act and in the best interest of begin delete this end delete begin insert the end insert state.
Property acquired with these trust revenues shall be considered an
asset of the trust and subject to the terms and conditions of this
act.

(b) On or before October 1 of each year, the trustee shall file
with the commission a detailed statement of all trust revenues and
expenditures relating to its trust lands and trust assets, including
obligations incurred but not yet paid, covering the fiscal year
preceding submission of the statement. The commission may
specify the form and content of this statement. The statement shall
meet both of the following requirements:

(1) The statement shall be prepared according to generally
accepted accounting principles.

(2) The statement shall be specific to the trust lands and trust
assets and shall not include city municipal financial or accounting
information unrelated to the trust lands and trust assets.

(c) (1) Before expending trust revenues for any single capital
improvement on the trust lands involving an amount in excess of
two hundred fifty thousand dollars ($250,000) in the aggregate,
the trustee shall file with the commission a detailed description of
the capital improvement not less than 120 days prior to the time
of any disbursement of trust revenues for, or in connection with,
that capital improvement.

(2) Within 120 days after the time of a filing specified in
paragraph (1), the commission shall determine whether the capital
improvement is in the statewide interest and benefit and, if the
filing is made on or before December begin delete 1, end delete begin insert 31, end insert 2019, whether it is
consistent with subdivision (a) of Section 3 of this act or, if the
filing is made on or after January 1, 2020, whether it is consistent
with the trust lands use plan. The commission may request the
opinion of the Attorney General on the matter begin delete , end delete and begin insert , end insert if the
commission makes this request, the Attorney General shall deliver
a copy of the opinion to the trustee with the notice of its
determination.

(3) If the commission notifies the trustee that the capital
improvement is not authorized, the trustee shall not disburse any
trust revenues for, or in connection with, the capital improvement,
unless it is determined to be authorized by a final order or judgment
of a court of competent jurisdiction.

(4) The trustee may bring suit against the state for the purpose
of securing an order or judgment for purposes of paragraph (3),
which suit shall have priority over all other civil matters. Service
shall be made upon the executive officer of the commission and
the Attorney General, and the Attorney General shall defend the
state in that suit. If judgment is given against the state in the suit,
no costs may be recovered.

(d) (1) Except as provided in paragraph (2), on June 30, 2015,
and at the end of every fiscal year thereafter, 20 percent of all gross
begin delete revenue end delete begin insert revenues end insert generated from the trust lands shall be transmitted
to the commission. Of this amount transmitted, the commission
shall allocate 80 percent to the Treasurer, for deposit in the General
Fund, and 20 percent to the Treasurer, for deposit in the begin delete Kapiloff end delete
Land Bank Fund for expenditure pursuant to Division 7
(commencing with Section 8600) of the Public Resources Code
for management of the commission’s granted lands program.

(2) The trustee shall not transmit the gross revenues to the
commission as specified in paragraph (1) until the Department of
Parks and Recreation determines the City of Martinez has repaid
the five outstanding loans that the city owes to the department.

(e) The commission may, from time to time, institute a formal
inquiry to determine that the terms and conditions of this act, and
amendments to this act, have been complied with, and that all other
applicable provisions of law concerning the trust lands are being
complied with in good faith.

(f) The commission shall approve any loan or expenditures of
nontrust revenues for improvements made to the trust lands prior
to the loan or expenditure. If not approved, those expenditures
shall be deemed a gift to the trust.

SEC. 8.  

(a) If the commission finds that the trustee has violated
or is about to violate the terms of its trust grant or any other
principle of law relating to its obligation under the public trust
doctrine or under this act, the commission shall notify the trustee
of the violation.

(b) The trustee shall have 30 days from receipt of a notice of
violation to conform to the terms of its grant and the principles
and laws under the public trust doctrine. If the trustee fails or
refuses to take those actions, the commission may bring an action
to enforce the rights of the state and people as settlor beneficiary
begin delete of end delete begin insert under end insert the public trust doctrine.

(c) The Attorney General shall represent the state and people
in all actions or proceedings taken pursuant to this section. If the
judgment is given against the state in the action or proceeding, no
costs shall be recovered from the state and people.

SEC. 9.  

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
a local agency or school district has the authority to levy service
charges, fees, or assessments sufficient to pay for the program or
level of service mandated by this act, within the meaning of Section
17556 of the Government Code.