BILL ANALYSIS Ó
SENATE COMMITTEE ON NATURAL RESOURCES AND WATER
Senator Fran Pavley, Chair
2015 - 2016 Regular
Bill No: SB 1020 Hearing Date: April 12,
2016
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|Author: |Wieckowski | | |
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|Version: |March 29, 2016 |
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|Urgency: |No |Fiscal: |No |
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|Consultant:|William Craven |
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Subject: Land use: mitigation lands
BACKGROUND AND EXISTING LAW
Existing law (Government Code Section 65967) authorizes an
agency required to mitigate its environmental impacts to pay for
that mitigation in several ways including transferring an
interest in land to a third party, providing funds to third
parties to acquire land or easements or to undertake the
mitigation, or to create an endowment under specified terms.
For mitigation that will not be completed prior to the start of
activities that will affect wildlife species listed under the
California endangered species act, the Department of Fish and
Wildlife (DFW) requires that a trust account or other form of
approved security document is established to ensure that funding
is available to carry out mitigation and monitoring measures in
the event the applicant fails to complete these activities. DFW
generally requires that the performance security be in the form
of an irrevocable letter of credit, surety bond, a bank trust or
escrow account, or another form of security approved in writing
in advance.
PROPOSED LAW
This bill would create another way for a public entity,
specifically the East Bay Regional Parks District, to fulfill
its mitigation responsibilities. The bill states that in lieu of
an endowment or other method mentioned above, that an entity may
do all of the following:
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A) Possess budget reserves in excess of the funds required
to meet the mitigation obligation;
B) Retain permanent stewardship and maintenance staff to
manage the resource; and does both of the following:
1) Acts as an agent for the state to acquire, plan, and
develop units of the state park system pursuant to
section 5003.03 of the Public Resources Code.
2) Works in collaboration with the state and other
local entities to implement a project pursuant to the
Natural Communities Conservation Planning Act.
ARGUMENTS IN SUPPORT
According to the author, East Bay Regional Parks District has an
80-year history of responsible fiscal and environmental
governance and is organized to serve a steward of parklands in
perpetuity. In his view, it is unreasonable to require districts
to set aside mitigation funds which could be better used for
staffing to actually manage protected land. He believes that the
district should be able to rely on proven asset liquidity as an
alternative form of mitigation.
Save Mount Diablo works closely with the district and stated
that any concern about changing the provisions in this law
should not apply to the district because of its record, funding,
staff, and experience that can't be matched by any other public
agency.
ARGUMENTS IN OPPOSITION
A coalition of land trusts and other conservation groups,
including the California Council of Land Trusts (CCLT), is in
opposition. CCLT and others have built California's endowment
procedures in a series of 5 bills over the past several years
that it considers to be the nation's premier law regarding how
mitigation endowments are held and managed. The coalition is
very concerned that the exception for East Bay Regional Parks
inevitably opens the door to a myriad of exceptions for every
agency not wishing to meet mitigation endowment requirements-a
policy it states has been rejected on three previous occasions
in both houses of the California Legislature.
The coalition points out that other funding mechanisms are
specifically allowed in existing law (such as performance bonds)
for the long-term stewardship of the mitigation property. It
considers SB 1020 as "jumping completely past other funding
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mechanisms to completely exempt selected public parties from any
form of dedicated financial assurance for mitigation lands."
COMMENTS
This bill is a work in progress and it may turn out that in this
case the absence of a bill may define success. In conversation
with the regional park district and DFW, staff is not convinced
the two entities are talking with each other as closely as they
could or should.
For example, the district's estimates of what may be required in
an endowment vastly exceed what the department thinks may be
required. The district's estimate is based on an array of
current and future projects that it is not sure DFW is aware of.
DFW thinks it may be aware of all the proposed projects.
That said, because this is an area of the law that DFW and other
parties worked for several years to solidify, DFW and many of
those other parties are very reluctant to carve out another
exemption that could be exploited by third parties that are far
less successful than the district in protecting natural
resources.
The proposed language on budget reserves does not work for the
department because a budget reserve one month may not be there
the next.
On the other hand, in a quick conversation with the district,
and based on the information on the DFW website, it appears that
at least some potential common ground exists regarding the use
of irrevocable letters of credit. These are relatively
inexpensive, would not tie up a lot of the district's capital,
and can be constructed to meet DFW's requirement of permanence.
The suggested amendments delete the budget reserve provision,
add a provision for an irrevocable letter of credit or trust
funds, and clarify that the district retains the obligation to
maintain the mitigation consistent with permit requirements
which ensures that the state will not be eventually liable for
any mitigation costs. It also narrows the applicability of this
proposed new section to special districts established to create
and operate parks. With those additional provisions it does not
seem necessary to include the other provisions regarding section
5003.3 of the Public Resources Code or the Natural Communities
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Conservation Planning Act.
These amendments are not intended to be a final work product.
They are intended to set the stage for continued conversations
between the parties and represent a good-faith effort based on
available information. Committee staff should be involved in
subsequent conversations and all future amendments and the
Committee of course reserves the right to re-hear the bill at a
future time.
SUGGESTED AMENDMENTS
1. Add restriction that the new language only applies to
entities created pursuant to Public Resources Code Section
5500.
2. Page 4, line 15. Delete budget reserves provision and
substitute irrevocable letter of credit or trust funds.
3. Page 4, line 17. Add provision that in addition to
entity retaining permanent stewardship and maintenance
staff, that it will also maintain mitigation obligations
consistent with permit requirements, and insure that there
will be no state financial liabilities incurred through a
failure to maintain those mitigation obligations.
4. Delete page 4, lines 19-25.
SUPPORT
East Bay Regional Park District (sponsor)
John Muir Land Trust
Save Mount Diablo
OPPOSITION
California Council of Land Trusts
Center for Natural Lands Management
Defenders of Wildlife
Sequoia Riverlands Trust
Sierra Foothill Conservancy
The Nature Conservancy
Wildlife Heritage Foundation
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