BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 141| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- CONSENT Bill No: SB 141 Author: McGuire (D), et al. Amended: 5/13/15 Vote: 21 SENATE NATURAL RES. & WATER COMMITTEE: 9-0, 3/24/15 AYES: Pavley, Stone, Allen, Fuller, Hertzberg, Hueso, Jackson, Monning, Wolk SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8 SUBJECT: Humboldt Bay Harbor, Recreation, and Conservation District Act: land grants, acquisitions, and dispositions SOURCE: Author DIGEST: This bill (1) clarifies the Humboldt Bay Harbor, Recreation, and Conservation District's (District) ability to dispose of after-acquired property, (2) clarifies the responsibility of the Chief Executive Officer and Treasurer of the board of commissioners of the District; and (3) requires the District to provide the State Lands Commission (Commission) 90 days written notice prior to expending trust moneys for the acquisition of real property and prior to the disposition of interest in real property. ANALYSIS: Existing law, under the Humboldt Bay Harbor, Recreation, and Conservation District Act: SB 141 Page 2 1)Regulates the use of specified tide and submerged lands within Humboldt Bay and provides for the fill, improvement, and reclamation of those tidelands, as prescribed. 2)Requires that all grants, franchises, leases, permits, rights or privileges be made in accordance with those rules and regulations as the board of commissioners of the District prescribes by resolution, and prohibits irrevocable grants of fee title from being granted or issued. 3)Authorizes the District to acquire, hold and enjoy, and lease and dispose of real and personal property of every kind, within the district, necessary to the full or convenient exercise of its powers. This bill: 1)Eliminates the ambiguity in the District's granting statutes and thus allows the District to dispose of after-acquired property by striking the sentence of its granting statutes. 2)Clarifies the responsibility of the Chief Executive Officer and Treasurer of the board of commissioners of the District. 3)Requires the District to provide the Commission 90 days written notice prior to expending trust moneys for the acquisition of real property and prior to the disposition of interest in real property. The Commission will have 90 days following the notice of intent to acquire real property with trust moneys to review and approve the acquisition. Background 1)The District is a trustee of sovereign lands granted to it by the Legislature in the 1970s. These lands are considered "granted lands" by the Commission, which maintains oversight SB 141 Page 3 authority. The District is governed by the specific granting statute(s), the common law Public Trust Doctrine and other applicable law. 2)Revenues generated by a trustee arising out of the use or operation of its granted lands are public trust assets of the State and must be reinvested back into the trust. These revenues must be kept separate from the general funds of a local government and may not be used for any purpose unconnected with the trust. Expenditures of trust funds by a trustee must be consistent with the common law Public Trust Doctrine and the statutory trust grant. 3)While granted public trust lands and assets are managed locally, the Legislature delegated the State's residual and review authority for granted lands to the Commission. The Commission is responsible for monitoring administration of each statutory grant by the trustee to ensure compliance with provisions of the granting statute and the Public Trust Doctrine. The Commission has the authority to investigate, audit, and review the administration of all statutory trust grants. The Commission also has the authority to investigate specific allegations of maladministration, to seek corrective measures by trustees, and make recommendations to the Legislature; the ultimate trustee of public trust lands. 4)In the course of conducting a review of a mismanagement allegation against the District (which the Commission did not find), Commission staff discovered an ambiguity in the granting statutes relative to the District's authority to dispose of property acquired after the initial grant ("after-acquired property"). Existing law bars any grantee from transferring, selling or otherwise alienating sovereign tide and submerged lands. However, the statute governing the District restricts its ability to dispose of any lands ("Irrevocable grants of fee title shall not be granted or issued." (see §23, Chapter 1040, Statutes of 1976)). SB 141 Page 4 Comments Stringent restrictions remain on the District. The District is still restricted in its purchasing and sale of land, particularly in regards to Public Trust property, by the remainder of its granting document, as well as by other existing law. In particular (from Chapter 1283 of the Statutes of 1970): SEC. 28. The district may take by grant, purchase, gift, devise, lease or otherwise acquire, hold and enjoy and lease and dispose of real and personal property of every kind, within the district, necessary to the full or convenient exercise of its powers. SEC. 77(7b). The district or its successors shall not, at any time, grant, convey, give or alienate said lands, or any part thereof, to any individual, firm or corporation for any purposes whatsoever; provided, that said district, or its successors, may grant franchises thereon for limited periods, not exceeding 66 years, for wharves and other public uses and purposes, and may lease said lands, or any part thereof, for limited periods, not exceeding 66 years, for purposes consistent with the trusts upon which said lands are held by the State of California, and with the requirements of commerce and navigation, and collect and retain rents and other revenues from such leases, franchises and privileges. Such lease or leases, franchises and privileges may be for any and all purposes which shall not interfere with commerce, navigation, fisheries, and ecological protection. Amendments have been made. Sections 2 and 3 were added by the Senate on May 13, 2015. Section 2 provides clarifying amendments as to the role and responsibility of the District Board Chief Executive Officer and Treasurer. Section 3 specifies that the Board must provide 90 day notice to the Commission prior to the purchase or selling of real property acquired with trust moneys, and the Commission must provide a response to a proposed purchase within 90 days of receiving that notice. SB 141 Page 5 FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: No SUPPORT: (Verified5/19/15) Board of Commissioners of the Humboldt Bay Harbor Recreation and Conservation District State Lands Commission Humboldt County Board of Supervisors OPPOSITION: (Verified5/19/15) None received ARGUMENTS IN SUPPORT: According to the State Lands Commission, "SB 141 eliminates the prohibition on transferring irrevocable grants of fee title as it related to after-acquired lands. Eliminating this restriction is intended to provide helpful clarification and assist the District in managing trust assets of the state. This clarification is beneficial to the District and to the state because the sale of after-acquired lands provides funds that the District can reinvest into administering and improving its trust lands within Humboldt Bay for the statewide public's use and enjoyment." Prepared by:Angee Doerr / N.R. & W. / (916) 651-4116 5/21/15 12:28:28 **** END **** SB 141 Page 6