BILL ANALYSIS                                                                                                                                                                                                    

                                                                     SB 141

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          Date of Hearing:  July 1, 2015


                              Brian Maienschein, Chair

          141 (McGuire) - As Amended June 22, 2015

          SENATE VOTE:  38-0

          SUBJECT:  Humboldt Bay Harbor, Recreation, and Conservation  
          District Act: land grants, acquisitions, and dispositions.

          SUMMARY:  Clarifies that the Humboldt Bay Harbor, Recreation,  
          and Conservation District (District) is authorized to sell or  
          transfer certain property, and makes several other changes to  
          the District's Act.  Specifically, this bill:  

          1)Enacts several changes to the District's Act, including the  

             a)   Deletes language requiring that irrevocable grants of  
               fee title be granted or issued, thereby deleting an  
               inconsistency in the District's Act;

             b)   Clarifies the responsibilities of the chief executive  
               officer (CEO) and the Treasurer of the District;  


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             c)   Prohibits the District from making an expenditure of  
               trust moneys from the Humboldt Bay, Harbor, Recreation, and  
               Conservation District Fund (Fund) to purchase or otherwise  
               acquire real property without first having provided at  
               least 90 days' written notice of the proposed expenditure  
               to the State Lands Commission (SLC);

             d)   Requires the notice to include the total amount of the  
               proposed expenditure from the Fund, the location of the  
               real property, the purpose of the purchase or acquisition,  
               and an explanation of how the purchase or acquisition is  
               consistent with the terms of the trust grant;

             e)   Provides, in the event that the SLC does not object  
               within 90 days of receipt of the notice, the District, may  
               proceed with the purchase or acquisition; and,

             f)   Requires the District to give the SLC at least 90 days'  
               written notice of a proposed disposition of any interest in  
               real property if the interest was acquired by the District  
               with revenue generated from the granted lands, and requires  
               the notice to include the proposed consideration to be  
               received by the District, the location of the real  
               property, and the purpose of the disposal.

          EXISTING LAW:   

          1)Establishes the District, and provides, through the District's  
            Act, for the District's powers and authority, the territory of  
            the District, the jurisdiction of the District, the conduct of  
            the District's hearings, election of the Board of  
            Commissioners (Board), and the powers and duties of the Board  
            and of the District.


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          2)Requires, for the District, that all grants, franchises,  
            leases, permits, rights, or privileges must be made in  
            accordance with such rules and regulations as the Board shall  
            prescribe by resolution, and requires irrevocable grants of  
            fee title to be granted or issued.

          3)Allows the Board to employ engineers, attorneys and any other  
            officers and employees necessary in the work of the District.   

          4)Requires the CEO to appoint a treasurer whose duty it shall be  
            to receive and safely keep all moneys of the District, and  
            requires the CEO to comply with all provisions of law  
            governing the deposit and securing of public funds.  Requires  
            the CEO to pay out moneys only as authorized by the Board and  
            not otherwise, provided, however, that no authorization shall  
            be necessary for the payment of principal and interest on  
            bonds of the District.  Requires the CEO, at regular  
            intervals, at least once each month, to submit to the  
            secretary of the District a written report and accounting of  
            all receipts and disbursements and fund balances, a copy of  
            which report the CEO shall file with the Board.  Requires the  
            treasurer to execute a bond covering the faithful performance  
            by him of the duties of his office and his duties with respect  
            to all moneys coming into his hands as treasurer in such an  
            amount as shall be fixed by resolution of said Board.   
            Requires the surety bond to be executed only by a surety  
            company authorized to do business in California and the  
            premium therefor to be paid by the District.  Requires the  
            bond to be approved by the Board and filed with the secretary  
            of the District.  Requires the treasurer, before entering upon  
            the duties of the office, to take and file with the secretary  
            of the District the oath of office required by the California  


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          5)Allows the District to 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.

          FISCAL EFFECT:  According to the Senate Appropriations  
          Committee, pursuant to Senate Rule 28.8, this bill contains  
          negligible state costs.


          1)Bill Summary.  This bill clarifies that the District is  
            authorized to sell or transfer certain property, and makes  
            several other changes to the District's Act. This bill is  
            sponsored by the SLC.

          2)Background.  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 SLC which maintains  
            oversight authority.  The District is governed by the specific  
            granting statute(s), the common law Public Trust Doctrine and  
            other applicable law. 

            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.


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            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 SLC.   The SLC 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 SLC  
            has the authority to investigate, audit, and review the  
            administration of all statutory trust grants.  The SLC 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.

            In the course of conducting a review of a mismanagement  
            allegation against the District (which the SLC did not find),  
            SLC 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, c. 1040,  
            Statutes of 1976)).

          3)Author's Statement.  According to the author, "The Humboldt  
            Bay Harbor, Recreation and Conservation District (District) is  
            trustee of lands granted to it by the Legislature when  
            California became a state.  SB 141 seeks to clarify that the  
            District is authorized to sell or transfer property that has  
            been acquired or deeded to it since the original land grant.

            "California acquired ownership of submerged lands, tidelands  
            and waterways (sovereign lands) in 1850, and made the District  
            the trustee for these lands.  The District and state manage  
            these lands for the benefit of the public for the use of  


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            aquaculture such as oysters and clams, fisheries, navigation,  
            visitor-serving facilities, water related recreation, open  
            space and habitat preservation.  The state constitution  
            prevents these lands from being sold, and the District is not  
            looking to sell any of these lands. 

            "In 1970, the Legislature passed a law (Chapter 1283, Statutes  
            of 1970, Section 28) that authorized the District to acquire  
            and dispose of other property, referred to as "after acquired  
            lands." While the 1970 law intended to give the District  
            permission to buy, own and sell "after acquired lands"  
            (non-sovereign lands), it appears that was not written  
            precisely enough to allow the District to actually sell these  

            "SB 141 simply deletes this prohibition relating to the  
            transfer of irrevocable grants of fee title, specific to after  
            acquired lands.  This solution was suggested by the State  
            Lands Commission.  By eliminating this restriction it will  
            provide much needed clarification of the District's ability to  
            manage lands it is entrusted to oversee by the state.  This is  
            necessary so that the District can dispose of after-acquired  
            lands.  The funds can then be used by the District to reinvest  
            into improving and administering its trust lands within the  
            Humboldt Bay Harbor, Recreation, and Conservation District for  
            the public's benefit, use and enjoyment."

          4)Arguments in Support.  Supporters argue that the District's  
            Act has a vague provision that has the potential to restrict  
            the District's ability to sell or transfer after-acquired  
            property, which is typically allowed because these lands do  
            not have the restrictions on alienation that exist with  
            sovereign tide and submerged lands, and that this bill  
            eliminates the prohibition on transferring irrevocable grants  
            of fee title as it related to after-acquired lands.


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          5)Arguments in Opposition.  None on file.



          State Lands Commission [SPONSOR]

          California Special Districts Association

          Humboldt Bay Harbor, Recreation, and Conservation District

          Humboldt County Board of Supervisors


          None on file

          Analysis Prepared by:Debbie Michel / L. GOV. / (916)  


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