BILL NUMBER: AB 444	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 15, 2009

INTRODUCED BY   Assembly Member Caballero

                        FEBRUARY 24, 2009

   An act to amend Section 65965 of the Government Code, relating to
land use.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 444, as amended, Caballero. Land use: natural resources:
transfer of long-term management funds.
   Existing law allows a state or local public agency to authorize a
nonprofit organization to hold title to, and manage an interest in,
real property that the state or local public agency requires a
property owner to transfer to the agency to mitigate any adverse
impact upon natural resources caused by permitting the development of
a project or facility, provided the nonprofit organization meets
certain requirements. Existing law also authorizes an agency that, in
the development of its own project, is required to transfer an
interest in real property to mitigate an adverse impact upon natural
resources, to transfer the interest to a nonprofit organization that
meets the specified requirements.
   This bill would authorize funds set aside for the long-term
management of any lands or easements conveyed to a nonprofit
organization pursuant to the above provisions to also be conveyed to
the nonprofit organization. The bill would also  authorize
  require  the nonprofit organization to hold,
manage, invest  ,  and disburse the funds in furtherance of
managing and stewarding the land or easement for which the funds were
set aside.  The bill would authorize the state or local agency
to impose certain requirements on the nonprofit organization and
impose on the state or local agency specified due diligence
requirements. 
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 65965 of the Government Code is amended to
read:
   65965.  (a) For the purposes of this section, the following
definitions apply:
   (1) "Direct protection" means the protection and preservation of
natural lands or resources, including, but not limited to,
agricultural lands, wildlife habitat, wetlands, endangered species
habitat, open-space areas, or outdoor recreational areas.
   (2) "Stewardship" encompasses the range of activities involved in
controlling, monitoring, and managing for conservation purposes a
property, or a conservation or open-space easement, as defined by the
terms of the easement, and its attendant resources.
   (b) Notwithstanding any other  provision of  law
to the contrary, if a state or local public agency requires a
property owner to transfer to the agency an interest in real property
to mitigate any adverse impact upon natural resources caused by
permitting the development of a project or facility, the state or
local public agency may authorize a nonprofit organization to hold
title to and manage that interest in real property, provided that the
nonprofit organization is all of the following:
   (1) Exempt from taxation as an organization described in Section
501(c)(3) of the Internal Revenue Code, and qualified to do business
in the state.
   (2) A "qualified organization" as defined in Section 170(h)(3) of
the Internal Revenue Code.
   (3) An organization that has as its principal purpose and activity
the direct protection or stewardship of natural land or resources,
or cultural or historic resources, including, but not limited to,
agricultural lands, wildlife habitat, wetlands, endangered species
habitat, open-space areas, and outdoor recreational areas.
   (c) If a state or local public agency, in the development of its
own project, is required to transfer an interest in real property to
mitigate an adverse impact upon natural resources, the agency may
transfer the interest to a nonprofit organization that meets the
requirements set forth in paragraphs (1) to (3), inclusive, of
subdivision (b).
   (d)  (1)    Funds set aside for the long-term
management of any lands or easements conveyed to a nonprofit
organization pursuant to subdivisions (b) and (c) may also be
conveyed to the nonprofit organization. The nonprofit organization
 may   shall  hold, manage, invest, and
disburse the funds in furtherance of managing and stewarding the land
or easement for which the funds were set aside. 
   (2) The state or local public agency may require the nonprofit
organization to submit a report not more than every 12 months and for
a specified number of years that details the management and
condition of the property or easement and the accompanying funds. The
mitigation or funding agreement shall specify the reporting due
dates and elements of the report.  
   (3) If, after submission of the report described in paragraph (2),
the agency determines there is cause to consider that the terms of
the mitigation or funding agreement may have been violated, the
agency may review the accounting documents involving the funds or
require an audit of the funds to be performed and the audit report
submitted to the agency. 
   (e) The recorded instrument that places title with a nonprofit
organization pursuant to subdivision (b) shall include, at a minimum,
a provision that if the state or local public agency that authorized
the nonprofit organization to hold the title, or its successor
agency, determines that the interest in real property that is held by
the nonprofit organization is not being held, monitored, or managed
for conservation purposes in the manner specified in that instrument
or in the mitigation agreement between the state or local public
agency and the nonprofit organization, the interest in real property
shall revert to the state or that local public agency, or to another
public agency or nonprofit organization qualified pursuant to
subdivision (b), approved by the state or local public agency. 
   (f) The funds of a nonprofit organization holding funds for the
long-term management of property shall revert to the state or local
public agency or to another public agency or nonprofit organization
approved by the state or local agency and qualified under subdivision
(b) if the nonprofit organization does any of the following: 

   (A) Ceases operations.  
   (B) Is dissolved.  
   (C) Becomes bankrupt or insolvent.  
   (D) Fails to perform its duties for any reason.  
   (f) 
    (g)     (1)    A state or
local public agency shall exercise due diligence in reviewing the
qualifications of a nonprofit organization to effectively manage and
steward natural land or resources, as well  as the
accompanying funds. The state or local public agency may adopt
guidelines to assist the agency in that review process. 
 as the accompanying funds.  
   (2) In furtherance of its exercise of due diligence:  
   (A) The state or local public agency may adopt guidelines to
assist the agency in the review process.  
   (B) With regard to accompanying funds, the state or local public
agency shall determine that the holder of the funds does all of the
following:  
   (i) Has the capacity to effectively manage the mitigation funds.
 
   (ii) Has the capacity to achieve over the life of the agreement
reasonable rates of return on investment of those funds similar to
those of other prudent investors.  
   (iii) Utilizes generally accepted accounting practices, and will
be able to ensure that funds are accounted for, and tied to, a
specific property or project.  
   (iv) Has an adopted investment policy that is consistent with the
Uniform Management of Institutional Funds Act (Part 7 (commencing
with Section 18501) of Division 9 of the Probate Code) with regard to
endowment funds and that is consistent with Sections 18505 and 18506
of the Probate Code with regard to nonendowment funds.