Amended in Senate May 28, 2014

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.

(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 lands 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 begin delete water dependent end delete begin insert water-dependent end insert commerce, navigation, and fisheries, begin delete and end delete 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 begin delete and the public trust doctrine end delete .

The bill would require the City of Martinez to submit to the commission by January 1, 2020, for its approval, 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 begin delete October 1 end delete begin insert December 31 end insert 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, begin delete 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, end delete begin insert commencing June 30, 2015, and at the end of every fiscal year thereafter, and subject to an exception, end insert 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 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 Cal.3d 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
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.

(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´ 53˝ East
488.36 feet; thence leaving said northerly line North 20° 03´ 30˝
West 130.00 feet; thence North 63° 50´ 00˝ East 85.00 feet to the
true point of beginning; thence North 03° 30´ 00˝ East 110.00 feet;
thence North 12° 10´ 00˝ East 660.00 feet; thence North 05° 05´
39˝ West 119.71 feet; thence North 88° 03´ 16˝ East 242.85 feet;
thence South 12° 10´ 00˝ West 797.24 feet; thence South 63° 50´
00˝ 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´ 53˝ East
488.36 feet; thence leaving said northerly line North 20° 03´ 30˝
West 130.00 feet; thence North 63° 50´ 00˝ East 318.84 feet to the
true point of beginning being the southeasterly corner of Parcel
“A” described above; thence North 12° 10´ 00˝ East 797.24 feet
along the east line of said Parcel “A”; thence leaving said east line
North 88° 03´ 16˝ East 156.26 feet; thence South 89° 00´ 00˝ East
100.00 feet; thence South 66° 20´ 00˝ East 120.00 feet; thence
South 25° 45´ 00˝ East 453.00 feet; thence South 68° 10´ 00˝ West
385.00 feet; thence South 63° 50´ 00˝ 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 begin delete east end delete begin insert west end insert 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˝
begin delete East380.00 end delete begin insert West 300.00 end insert feet; thence begin insert North 10° 12´ 12˝ West 200.00
feet; thence North 79° 47´ 48˝ East 380.00 feet; thence end insert North 69°
56´ 30˝ East 810.00 feet; thence South 81° 03´ 30˝ East begin delete 710 end delete begin insert 710.00 end insert
feet; thence South 07° 00´ 00˝ West 900.00 feet; thence South 05°
05´ 39˝ East 119.71 feet begin insert ; end insert 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 begin delete water dependent end delete begin insert water-dependent end insert commerce, navigation, and
fisheries, begin insert the end insert 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) begin delete and the public trust doctrine end delete . 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 begin delete the public trust doctrine and end delete 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, 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, in the trust lands
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 begin delete common law end delete 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 begin delete land end delete
begin insert lands end insert 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
the 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 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 begin insert the end insert 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 the 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 trust lands, subject
to a determination by the commission that the acquisition is
consistent with this act and in the best interest of the 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 begin delete October 1 end delete begin insert December 31 end insert 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 begin delete both end delete begin insert all end insert 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.

begin insert

(3) The statement shall include a summary explaining how the
trustee is using trust revenues to revitalize the marina and prevent
its closure.

end insert

(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 begin delete determine whether the capital
improvement is in the statewide interest and benefit and end delete begin insert determine end insert ,
if the filing is made on or before December 31, 2019, whether begin delete it end delete
begin insert the capital improvement end insert is consistent with subdivision (a) of
Section 3 of this act or, if the filing is made on or after January 1,
2020, whether begin delete it end delete begin insert the capital improvement end insert is consistent with the
trust lands use plan. The commission may request the opinion of
the Attorney General on the matter and, 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)  begin delete Except as provided in paragraph (2), on June 30, 2015,
and at the end of every fiscal year thereafter, 20 end delete begin insert Except as provided
in paragraph (2), commencing June 30, 2015, and at the end of
every fiscal year, 20 end insert percent of all gross revenues 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 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.

begin delete

(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.

end delete

begin insert (2) end insert begin insert   end insert begin insert In recognition of the deteriorated conditions at the marina,
commencing June 30, 2015, and until June 30, 2021, the
commission may, at its discretion, relieve the trustee of its
obligation to transmit the gross revenues as specified in paragraph
(1) so that the trustee can take action to address those conditions,
including the dredging of sediment to restore adequate depth for
launching, berthing, and safe navigation at the marina. end insert

(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
under 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.